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2013-10-30 06:32:38.461017+00

Keady

615 F.Supp. 456 (1985) Oliver JONES and John Wilchie, Plaintiffs, v. MISSISSIPPI DEPARTMENT OF CORRECTIONS and Morris Thigpen, Commissioner of Corrections, Defendants. Civ. A. No. GC82-115-WK-O. United States District Court, N.D. Mississippi, Greenville Division. August 15, 1985. *457 *458 Charles Victor McTeer, Willie Griffin, Greenville, Miss., for plaintiffs. Sidney J. Martin, John Kitchens, Mississippi Atty. Gen. Office, Jackson, Miss., for defendants. MEMORANDUM OF DECISION KEADY, District Judge. On May 21, 1982, plaintiffs, Oliver Jones and John Wilchie, blacks, sued the Mississippi Department of Corrections (MDOC) and Morris Thigpen, Commissioner of Corrections, defendants,[1] to redress claims of racial discrimination in promotion employment practices. Federal jurisdiction was founded upon 28 U.S.C. § 1343(a)(4) for causes of action arising under 42 U.S.C. § 2000e, et seq., and 42 U.S.C. §§ 1981 and 1983. Plaintiffs sought back pay, reinstatement, injunctive relief, and attorney's fees and costs. Defendants denied the allegations of the complaint and in turn moved for an award of attorney's fees against plaintiffs for defending the action. After discovery and pretrial conference, the parties entered into a stipulation of facts contained in a pretrial order dated August 31, 1984. The court conducted an evidentiary hearing on August 12 and 13, 1985, at which time the parties appeared personally and by their attorneys, offered oral and documentary evidence, and the court heard argument of counsel. Being advised in the premises, the court now makes findings of fact and conclusions of law pursuant to Rule 52(a), Fed.R.Civ.P., as follows. FINDINGS OF FACT Oliver Jones Plaintiff Jones was initially employed by MDOC on July 15, 1974, as a Correctional Officer I (CO-I), the entry level position for employment as a guard at the Mississippi State Penitentiary. Jones's education consisted of two years of junior college, four years at Mississippi Valley State University, and two years in the United States Army, where he attained the rank of sergeant. He successfully completed training prescribed for correctional officers. On December 21, 1979, he applied for and was promoted to the position of Correctional Officer II/Correctional Administrator I (CO-II/CA-I), or sergeant. He served in that capacity until March 9, 1981, when he applied for promotion to the position of Correctional Officer III/Correctional Administrator II (CO-III/CA-II), or lieutenant, for Unit 22. Pursuant to a vacancy announcement for this position, Jones submitted a written application setting forth his educational background but left blank the sections on prior employment or work experience. The minimum job requirements set forth in the vacancy announcement were as follows: (2) Considerable knowledge of the custody and care of inmates at a state correctional institution; knowledge of *459 the principles and elements of supervision. (3) Ability to supervise and direct the work of subordinate officers; to plan work assignments; to command respect and obedience; to act quickly in an emergency; and to judge situations accurately. (4) Thorough knowledge of the rules and regulations, and policies of the institution or prison where employed. (P. Ex. 7). On March 31, 1981, the Mississippi State Personnel Board (Personnel Board) advised Jones by post card that his application was disapproved because of his failure to meet the experience requirement of "1½ years employment as a Correctional Officer II or Correctional Administrator I." (P. Ex. 20). Hence, Jones was not interviewed. The applications of several others were disapproved for the same reason. Jones made no inquiry of the Personnel Board and took no other steps until he learned that Tony Champion, a white male, had been promoted on July 1, 1981, to the position for which he had applied. During the next month, Jones discussed with James Harris, a penitentiary personnel officer, the fact that the job vacancy announcement had not mentioned a requirement of one and one-half years' experience as sergeant. Harris made inquiry of the State Personnel Board. On instructions from his superior, Hardy James, he prepared a letter stating that, effective July 1, 1981, the minimum qualifications for the lieutenant's position had been revised by the State Personnel Board to require one year and six months' employment as a sergeant to be eligible for a lieutenant's position. In September 1981, Jones talked to Associate Warden Upchurch and wrote to the Personnel Board complaining that Champion had less education, experience and work seniority than Jones and that the experience requirement set forth in Harris' directive had not been contained in the vacancy announcement. Jones also went to Jackson, where he conferred with J. Terrell May, an official with the State Personnel Board. May offered plaintiff an opportunity to submit supplemental data in order that the Personnel Board might re-evaluate him for the lieutenant's position; however, by that time the vacancy had been filled. The evidence shows that on June 4, 1980, the Mississippi Classification Commission, the state agency having the authority and responsibility to promulgate policies, rules, and regulations for the hiring and promotion of state employees, including MDOC employees, had established a job description for the position of CA-II, or lieutenant, requiring, among other things, one year and six months' employment as a CO-II or CA-I (i.e., sergeant). On February 1, 1981, by change in Mississippi statute, the functions of the Classification Commission were taken over by the State Personnel Board, which adopted the same policies, rules, and regulations governing the employment, promotion, and termination of state employees, including the job descriptions and minimum requirements which the Classification Commission had previously adopted. No applicant could be accepted for employment or promotion unless he was found to be eligible and was certified by the State Personnel Board. At the time Jones submitted his application, he had served for one year and three months as a sergeant, and thus fell three months short of the minimum qualifications prescribed by the State Personnel Board. "The revision" which Harris referred to as effective July 1, 1981, was merely a restatement of the requirements established in 1980 for the lieutenant's position. Eddie Lucas, black, the penitentiary warden, reviewed the several applicants for lieutenant who were certified as eligible by the Personnel Board and selected Champion as the applicant most qualified to be recommended to the Commissioner for promotion. Champion had been employed by MDOC since January 1974 and had been named sergeant on July 1, 1978. He had completed the MDOC basic and supervisory training and Mississippi law enforcement officer's training. His personnel file contained evaluations of satisfactory job performance. *460 At the time Champion submitted his application, he had satisfied the one and one-half years' requirement as a sergeant. On September 9, 1981, Jones filed a charge with the Equal Employment Opportunity Commission (EEOC) alleging racial discrimination because of his failure to be promoted since the position was awarded to a white person less qualified than he. The EEOC on February 18, 1982, issued a right-to-sue letter and advised Jones that it was unable to investigate and conciliate the charge within the time prescribed by law. The present action was timely filed. At trial Jones testified that he felt that he had been discriminated against on account of race and was of the opinion that white applicants were more readily promoted than blacks. He also testified that he actually served as lieutenant from November 1981 to March 1982 at Unit 24, where he performed the duties of unit administrator but received no increase in salary. He estimated that a lieutenant's compensation was 5% to 10% more than a sergeant's. The rules and regulations of the State Personnel Board, placed in evidence by Jones, specified in section 3.21(b), dealing with Applicant Processing, that "Incomplete Experience and Training Records shall be returned to individuals with instructions concerning proper completion." Jones did not timely receive instructions from the State Personnel Board on how to complete his application for lieutenant. He had, however, disclosed his work experience in earlier applications. Had such instructions been given, Jones could not have satisfied the prescribed minimum requirement. The court finds as a fact that Jones was not qualified for the lieutenant's position at the time he applied for it in March 1981. Jones is still employed as sergeant by MDOC. He is of the opinion that his work shift was changed and that he has been harassed in other ways by the penitentiary officials because of this suit. John Wilchie Plaintiff Wilchie was initially employed by MDOC in May 1977 as a CO-I, or guard. On August 24, 1981, he applied for the position of CO-II/CA-I, or sergeant, at Unit 29. He met the minimum requirements, was certified by the State Personnel Board as eligible for promotion, and appeared before a panel for oral interview on September 1, 1981. The promotion panel consisted of James Upchurch, Jerry Upton, and Kenneth Wayne Fleming, whites, and Thomas McDaniel, black. Each of the fifty-two applicants received an individual hearing at which questions were asked about the duties of sergeant and the penitentiary rules and regulations. At the commencement of the interview, James Upchurch, associate warden, handed each member of the panel a list of questions and a sheet headed "Promotion Scoring Profile," specifying nine criteria, to be rated on a score of one to five, enumerated as follows: 1. Attendance and Punctuality 2. Self-improvement efforts 3. Prior performance of duties at MDC [sic] 4. Current job knowledge 5. Knowledge of new grade responsibilities 6. Command presence/leadership qualities 7. Personal appearance and overall manner 8. Educational level (1 pt.-Complete high school; 2 pts.-some college; 3 pts.-complete college; 4 pts.-some graduate work; 5 pts.-complete graduate school.) (P.Ex. 23). For purposes of scoring each applicant, panel members were instructed that a "five" was the highest possible score in any category, with "one" being the lowest. Panel members were given no standard criteria regarding the meaning of each rating. For example, a "three" might denote a rating of "average" performance in the opinion of one panel member, while it might mean only "fair" in the opinion of *461 another interviewer. Moreover, the panel members received no guidance as to what criteria they should look for in answers given by the interviewees. Warden Eddie Lucas testified that, in fact, there were really no definitively correct or incorrect answers to the questions. The evidence shows that each panel member made an independent judgment in each category that resulted in a combined score for Wilchie of 102. In August 1981, there were twenty-nine positions of lieutenant to be filled in Unit 29, a new inmate facility scheduled to open in the fall of 1981. The State Personnel Board determined from the applications submitted that there were fifty-two applicants, including Wilchie, who were eligible for the positions. All fifty-two applicants were, as Wilchie, granted oral interviews and scored on the basis of their records, the information in their personnel files and their answers to questions. The highest score was 149 and the lowest score 61 (D.Ex. 10). After interviews, Warden Lucas made the selections for recommendation to the commissioner. He selected the twenty-nine applicants with the highest scores. Of this number, nineteen were black and ten were white. Eventually, four of the twenty-nine selected applicants declined promotion. In an attempt to fill those four vacancies, Lucas reviewed the applicants who ranked thirty to thirty-three numerically on the list. One white and one black, numbers thirty and thirty-two, respectively, were not selected because of problems reflected in their personnel files. Numbers thirty-one and thirty-three, a white and a black, were selected for promotion, thus filling two of the four remaining vacancies. William Turner, black, was the lowest-scoring applicant promoted from the pool of fifty-two, with a score of 107. Lucas, who held a master's degree and had nine years' experience at the prison before being named warden, testified that he decided that scores below 107 were unsatisfactory; therefore, Wilchie, with a score of 102, was not considered further for promotion. The remaining two vacancies were filled with two blacks from another applicant pool on January 1, 1982.[2] Lucas affirmed that he did not consider race as a factor in the selection process. No white applicant having a score lower than Wilchie was recommended by Lucas for promotion. In 1981, MDOC had 1,152 employees, 78% of whom were black, 21% of whom were white and 1% of other race. At that time, MDOC had a warden, who was black, two associate wardens, one white and the other black, a white deputy warden, five white majors and two black majors, six white lieutenants and one black lieutenant, fourteen white sergeants and twelve black sergeants. After Unit 29 was opened in the fall of 1981, the staff was substantially enlarged with seven black lieutenants and five white lieutenants added. Also, thirteen white sergeants and thirty-two black sergeants were added. A large number of the black administrative personnel was assigned to Unit 29. Plaintiff Wilchie filed a charge with the EEOC on February 16, 1982, alleging that he felt that he was discriminated against because of race since he had four years' experience as a CO-I and met the job requirements and, further, that a white officer, Herman Parker, with less experience was selected for the vacancy. On May 11, 1982, the EEOC made a determination that no reasonable cause was found to believe that the allegations in Wilchie's charge were true and issued the right-to-sue letter. The present action was timely filed. At trial, Wilchie testified that he had four and one-half years' experience as a *462 justice court judge, a part-time position he held while serving as a correctional officer, and that he had training at the University of Mississippi Judicial College for Justice Court Judges. He stated that the questions asked of him at the time of interview did not relate to the duties of the job that he was seeking. He felt that Upton, a member of the panel interviewing him, was biased against him since he had filed an incident report against Upton and another officer regarding an assault on an inmate. Wilchie stated that he was never called to testify although an investigator had looked into the matter. Jerry Upton testified that he was unaware of the charge at the time he served on the interview panel and affirmed that race had no part in the scoring he made of Wilchie or other applicants. Upton served only once on the promotion board and was obviously inexperienced in the task to which he had been assigned. Major McDaniel, the black member of the panel, who had veteran service on fifteen to twenty promotion panels, testified impressively as to the questions asked and that the scoring was on the basis of independent perception without prior consultation with other panel members. McDaniel also stated that race played no part in the scores he assigned to Wilchie and other applicants. In Wilchie's case, McDaniel gave Wilchie a score of twenty-nine points as compared to a range of twenty-two to twenty-six points by the white members of the panel. The court finds as a fact that the scoring procedure of the promotion panel was based in part on objective factors such as punctuality and attendance, education, training, work experience, and seniority of service. It also included subjective factors like current job knowledge, knowledge of new grade responsibilities, command presence, personal appearance, self-improvement efforts, and prior performance of duties at MDOC. Necessarily, a determination in these areas rested upon the perception of each interviewer. The court finds as a fact that the selection process was without racial bias or discriminatory intent. Defendants, however, failed to establish what were the specific questions and whether they were job related and were necessary to fairly assess one's ability to perform the duties of the sergeant's job. Wilchie contended that a white male, Herman Parker, who had scored 127 in the oral interview, was less qualified than he. According to Warden Lucas, Parker was promoted to sergeant after being employed by MDOC since May 1980 and was promoted to CA-I on October 1, 1981. Although Parker had not received academy training for a correctional officer, that requirement was not in effect at the date of his promotion. He had, however, several times attended the Mississippi Law Enforcement Training Academy, had served four years as a deputy sheriff of Sunflower County, and as the Ruleville police chief. His personnel file reflects that he had received excellent job performance evaluations. Had Wilchie been promoted to the rank of sergeant, he would have begun work in that position when Unit 29 opened on November 1, 1981. His earnings as a CO-I were $1,081.14 per month. As a sergeant, Wilchie would have earned $1,211.00 per month, amounting to a monthly increase of $129.86. On June 29, 1983, Wilchie was terminated for cause due to matters unrelated to his present suit. CONCLUSIONS OF LAW Oliver Jones In a disparate treatment case involving allegations of discrimination in promotion employment practices, a Title VII plaintiff carries the initial burden of establishing a prima facie case of discrimination. See Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 252-53, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207 (1981). Generally, the plaintiff must show that (1) he belongs to a group protected by the *463 statute; (2) he was qualified for the position to which he sought promotion; (3) he was not promoted; and (4) after his nonpromotion, the employer continued to seek applicants not in plaintiff's protected class or promoted those, having comparable or lesser qualifications, not in plaintiff's protected class. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973). Once a plaintiff has established a prima facie case, the defendant must attempt rebuttal by clearly articulating a legitimate, nondiscriminatory reason for the employment decision. Burdine, 450 U.S. at 254, 101 S.Ct. at 1094. A defendant does not bear the burden of persuading the court that he was actually motivated by the proferred reasons; rather, an employer need only raise a genuine issue of fact as to whether there was illegal discrimination involved in plaintiff's discharge. If an employer satisfies its burden of production, the burden again shifts to the plaintiff to prove that the proffered reasons are not merely pretextual. Id. at 254-56, 101 S.Ct. at 1094-1095. When Title VII and 42 U.S.C. § 1983 are used as parallel remedies in a disparate treatment suit, the same substantive elements are applicable for recovery under both statutes. Nilsen v. City of Moss Point, 701 F.2d 556, 559 n. 3 (5th Cir.1983). The same principles also apply when Title VII disparate treatment claims are brought in conjunction with claims under 42 U.S.C. § 1981. Adams v. McDougal, 695 F.2d 104, 109 (5th Cir.1983). As regards the instant suit, we conclude that Oliver Jones did not present a prima facie case of disparate treatment as defined under Title VII. Clearly, at the time that he applied for promotion to lieutenant, Jones lacked the requisite one year and six months' experience as a sergeant; therefore, he was not qualified for the position to which he sought promotion. Plaintiff's failure to meet the experience requirement for the lieutenant's position was the sole reason given by the Personnel Board for his non-certification. Although Jones suggests that the one year and six months' requirement was arbitrary and not job-related, the record is devoid of evidence to support such a contention. A cursory review of the job description for the position of CA-II, or lieutenant, discloses the many responsible duties required of one holding that position and the need for a well-rounded experience in dealing with penitentiary inmates. We hold that the experience requirement was reasonable and was job-related. Upon plaintiff's failure to establish a prima facie case under Title VII, we must also conclude that no recovery is available under 42 U.S.C. §§ 1981 and 1983. Defendants moved, in the event that judgment was granted in their favor, that plaintiff be required to pay their attorneys' fees and expenses pursuant to 42 U.S.C. § 1988. The motion is not well taken and is denied. Jones's suit was not frivolously brought. To the contrary, it was brought in good faith based on the omission of the one and one-half years' experience requirement from the vacancy announcement which prompted plaintiff's application for a lieutenancy. See E.E.O.C. v. Christianburg Garment Co., Inc., 550 F.2d 949, 951-52 (4th Cir.1977). John Wilchie Plaintiff Wilchie attacks the MDOC oral examination and scoring procedure on the basis of its disparate impact upon blacks seeking promotions.[3] To establish a prima facie case of disparate impact as defined under Title VII, a plaintiff must show that the challenged facially neutral *464 employment practice operates more harshly on one group than another. Carpenter v. Stephen F. Austin State University, 706 F.2d 608, 621 (5th Cir.1983). See also, Dothard v. Rawlinson, 433 U.S. 321, 329, 97 S.Ct. 2720, 2726-27, 53 L.Ed.2d 786 (1977). The employer then bears the burden of showing that the specific procedure bears "a demonstrable relationship to successful performance of the jobs for which it was used," Griggs v. Duke Power Co., 401 U.S. 424, 431, 91 S.Ct. 849, 853, 28 L.Ed.2d 158 (1971), for if "an employment practice which operates to exclude [the protected class] cannot be shown to be related to job performance, the practice is prohibited." Id. Besides providing evidence of the business necessity of an examination process, and thereby validating it, an employer may also attack the plaintiff's case by showing that the statistical proof is unacceptable. Johnson v. Uncle Ben's, Inc., 628 F.2d 419, 424 (5th Cir.1980), vacated on other grounds, 451 U.S. 902, 101 S.Ct. 1967, 68 L.Ed.2d 290 (1981). In the present case, plaintiff has presented a prima facie case under the Title VII disparate impact theory. The statistics for the promotion applicant pool of which Wilchie was a part show a significant 32.6% selection differential between blacks and whites. Also significant is the fact that the promotion rate for black applicants was only 58% that of white applicants. That more blacks than whites were actually promoted does not adversely affect Wilchie's prima facie case, since "bottom-line" adequate minority representation does not validate selection procedures that disproportionately exclude individual members of the protected class. See Connecticut v. Teal, 457 U.S. 440, 453-56, 102 S.Ct. 2525, 2533-35, 73 L.Ed.2d 130 (1982).[4] Defendants have not attacked these statistics' acceptability. The court concludes further that the defendants have not met their burden of showing that the oral examination process was job-related. Although Major McDaniel testified that the questions asked during the oral interview were job-related, the evidence of record as a whole highlights serious deficiencies in the interview process used by MDOC. Minimal evidence was available as to what questions were actually asked of each applicant for promotion, thereby making content validation of the process virtually impossible.[5] Moreover, no evidence was presented as to the criterion validity of the questions and scoring methods, i.e., their relationship to job performance. Defendants contend that any deficiencies in the oral examination process are remedied by the warden's independent examination of applicants' scores and personnel files prior to making his recommendations of candidates for promotion. We disagree. Few standards were provided by which the panel members could score interviewees consistently, and no criteria were set out to define proper and improper answers. Warden Lucas admittedly relied heavily on the scores reached in this manner in choosing those applicants who would be promoted. A further infirmity exists in the fact that there was no particular cutoff score for determining who had passed the oral exam and who had failed. No particular correlation was shown between scores lower than 107, the lowest score selected by Warden Lucas, and poor job performance. Having determined that Wilchie has prevailed on his Title VII disparate impact claim, we conclude that declaratory relief, back pay, and attorney's fees constitute reasonable remedial measures in this case. However, reinstatement will not be granted since Wilchie was terminated for cause unrelated to the instant suit. An award of *465 back pay is appropriate for the twenty months between November 1, 1981, and June 29, 1983, the date of Wilchie's termination; therefore, the recoverable sum amounts to $2,597.20.[6] Wilchie has made no showing of disparate treatment and thus is not entitled to relief under 42 U.S.C. §§ 1981 and 1983, which require proof of intentional discrimination. Let an order issue accordingly. JUDGMENT Pursuant to Memorandum of Decision this date issued, it is ORDERED as follows: 1. Plaintiff Oliver Jones take nothing from his suit, and his complaint is hereby DISMISSED with prejudice. 2. Plaintiff John Wilchie shall have of and recover from the defendants, Mississippi Department of Corrections and Morris Thigpen, Commissioner of Corrections, the sum of $2,597.20, together with interest from June 29, 1983, at the rate of 8.18% per annum until paid, and reasonable attorneys' fees against the defendants as the prevailing party, motion therefor to be made pursuant to Local Rule C-13 unless the parties can agree within ten (10) days on the amount of such award. Plaintiff Wilchie is further granted declaratory relief that the use of oral interviews which are not validated or directly related to the job in question as a selection device for promotion of Mississippi Department of Corrections employees is invalid because of racially discriminatory impact. Plaintiff Wilchie, however, is DENIED reinstatement or other injunctive relief. 3. The costs of this action, other than attorneys' fees assessed to plaintiff Wilchie against the defendants, shall be borne as follows: one-half by plaintiff Jones and one-half by defendants. NOTES [1] The suit was commenced as a Rule 23 class action on behalf of all past, present and future black applicants for employment and employees of the Mississippi State Department of Corrections. The class action allegations were abandoned by plaintiffs and the court has heretofore ordered that plaintiffs proceed in their individual capacities only. Also dismissed from the original suit are the individual members of the Board of Corrections. [2] The statistics reflecting promotions made from Wilchie's applicant pool are as follows: Applicants Numbers Actually Percentage Promotion Promoted Rate Black 39 White 13 17 44.4% __ 10 77% 52 __ 27 This indicates a 32.6% selection differential between blacks and whites. The promotion rate for black applicants was 58% that of white applicants. [3] Defendants argued at trial that Wilchie had asserted a disparate treatment, rather than a disparate impact, claim. However, the issues of law listed in the pretrial order do not so limit plaintiff's case, and the court believes that Wilchie has properly stated an impact claim. [4] The statistics cannot be viewed in terms of how many blacks passed or failed the oral examination as compared to whites since MDOC did not designate any particular cutoff score. [5] Content validity concerns the relationship of the interview questions to the knowledge/skills/abilities of an applicant at entry for successful performance of job duties. [6] Twenty months × $129.86 (the difference in pay per month between the rank of CO-I and sergeant).

2023-08-22 21:19:58.384513+00

Harris

HARRIS, Associate Judge: This is an appeal from the trial court’s order refusing to set aside a tax deed issued by appellee, the Mayor-Commissioner, to appellees Theodore and Geraldine Scheve. The property at issue had been owned by appellants (a mother and her daughter) since 1951, and was their family residence. The property was sold to satisfy delinquent real estate taxes. Appellants *137failed to redeem the property within the allowable two-year time period, and thereby forfeited ownership. They contend that the notification procedure followed by the District of Columbia concerning the tax sale and the expiration of the redemption period did not conform to the principles of due process, even though they concede that statutory requirements were satisfied. While we recognize appellants’ hardship, we reject their arguments as being contrary to established law in this jurisdiction and unsupported by decisions of the Supreme Court. For many years prior to 1971, real property on which District of Columbia taxes were in arrears was sold in January. Thus, a property owner would have until the month of January, two years after the property had been sold for nonpayment of taxes, within which to redeem it. D.C. Code 1973, § 47-1003. Over the years, appellants’ frequent tax delinquency had resulted in the sale of their property on 11 prior occasions. In each of those instances, appellants redeemed their property by paying the taxes due just as the two-year redemption period was about to expire. In May of 1971, pursuant to D.C.Code 1973, § 47-1001, the District of Columbia City Council changed the date for the sale of real property on which fiscal year 1971 taxes were in arrears to October 26, 1971. As a result of this change, appellants’ property was sold in October of 1971. When Mrs. Coleman, as had been her practice, attempted to redeem the property in January of 1974, the Assessment Services Division informed her that the time within which she legally could have done so had expired in October of 1973. The procedure followed by the District tax officials in giving notice of pending tax sales was outlined at trial by a representative of the assessor’s office. According to his undisputed testimony, appellants were sent a tax assessment in September 1970 which set forth the real property taxes owed for 1971 and warned of the consequences for nonpayment thereof. A similar notification was sent in February or March of 1971. In May or June of 1971, a third notice, reflecting the fact that the taxes were delinquent, was sent to appellants. In September 1971, the District mailed appellants a “tax sale notice”, advising them that if their taxes remained in arrears, their property would be sold in October 1971. Finally, the District’s records indicate that a “courtesy” letter (not required by statute) was sent to Mrs. Coleman informing her of the October 1973 expiration date of the two-year redemption period.1 *138Appellants do not contend that they were unaware that their property taxes were owing. Mrs. Coleman acknowledged having received notice that their 1971 taxes were delinquent, both through the mail and in person at the time she visited the Office of the Assessor to pay their 1970 real estate taxes. Appellants also knew that the continuance of such delinquency would result in the sale of their property. As noted, appellants’ failure to meet their tax obligations on time had resulted in the sale of their home on 11 previous occasions. Mrs. Coleman testified that she was familiar with the newspaper advertisement of tax sales, and had seen such publications often in the past, but that she did not see the notices for 1971. It is undisputed that the District of Columbia properly advertised the October 1971 tax sale by newspaper publication in compliance with the statutory requirements of D.C.Code 1973, § 47-1001, requirements which we construe stringently in order to protect the constitutional rights of property owners.2 Potomac Building Corp. v. Karkenny, D.C.App., 364 A.2d 809, 812 (1976). Appellants seem to argue that notice by publication, even though accompanied by notice through the mail, is per se deficient to permit divesting an individual of property consistent with due process of law. However, the question of whether the demands of due process have been satisfied in a given case cannot be answered by the mere recitation of concern as to the adequacy of notice by publication. While reasonable notice is, of course, constitutionally required, what constitutes such notice must be determined by the nature of the proceedings and all other attendant circumstances. See Walker v. City of Hutchinson, 352 U.S. 112, 115, 77 S.Ct. 200, 1 L. Ed.2d 178 (1956); Dodson v. Scheve, D.C.App., 339 A.2d 39, 40 (1975), cert. denied, 424 U.S. 909, 96 S.Ct. 1103, 47 L.Ed.2d 312 (1976). The existence of procedures for the assessment of taxes, for the collection of taxes, and for the imposition of penalties for nonpayment of taxes is a matter of common knowledge. Such procedures are particularly familiar to property owners, who are responsible for meeting annual— and often more frequent — tax obligations. In light of these facts, courts have found that taxation proceedings may be accompanied by less stringent notification provisions than may be required for other proceedings affecting property interests. See, e. g., City of Auburn v. Mandarelli, 320 A.2d 22, 29 (Me.), appeal dismissed for want of a substantial fed. question, 419 U. S. 810, 95 S.Ct. 25, 42 L.Ed.2d 37 (1974); Botens v. Aronauer, 32 N.Y.2d 243, 248-49, 344 N.Y.S.2d 892, 895, 298 N.E.2d 73, 74-75, appeal dismissed for want of a substantial fed. question, 414 U.S. 1059, 94 S.Ct. 562, 38 L.Ed.2d 464 (1973).3 Cf. Dodson v. Scheve, supra, 339 A.2d at 40 n.3. In this case, in addition to the notice provided in accordance with the tax statutes and by widespread public familiarity with the consequences of tax delinquency, the District of Columbia utilized a notice procedure which was “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950). Appellants had actual knowledge of (1) the tax debt, (2) the manner in which tax sales are announced, (3) the fact that a sale had occurred, and (4) the existence *139of the two-year redemption period. These circumstances readily distinguish this case from those in which the Supreme Court has found a deprivation of due process. Our dissenting colleague cites inapposite cases which dealt with indirect notice to individuals who had little or no reason to expect that their property interests were being affected and who did not, therefore, have adequate opportunity to protect themselves from forfeiture. The same hardly may be said in the case of appellants, in view of their extensive experience with tax sales and redemptions. The two-year redemption period following the sale provided appellants with ample opportunity to protect their property interests, particularly in light of Mrs. Coleman’s personal visits to the assessor’s office before the redemption period had expired. The only factor in this case which differentiates it from other cases in which we consistently have rejected a due process challenge to the tax sale notice procedure is the change in the date of the sale and appellants’ erroneous reliance on a redemption period which had been legislatively modified. This factor was not present in Dodson v. Scheve, supra, and Moore v. District of Columbia, D.C.App., 332 A.2d 749 (1975). However, this circumstance does not rise to the level of a due process deprivation, particularly in light of the District’s efforts to acquaint appellants with the expiring redemption period. Cf. Nelson v. City of New York, 352 U.S. 103, 109-09, 77 S.Ct. 195, 1 L.Ed.2d 171 (1956). Appellants can claim no vested right to a specific sale date, nor even to a constant length of the redemption period. As Justice (later Chief Justice) Stone wrote for a unanimous Supreme Court: Such [land taxation and condemnation] statutes are universally in force and are general in their application, facts of which the land owner must take account in providing for the management of his property and safeguarding his interest in it. Owners of real estate may so order their affairs that they may be informed of tax or condemnation proceedings of which there is published notice, and the law may be framed in recognition of that fact. In consequence, it has been uniformly held that statutes providing for taxation or condemnation of land may adopt a procedure summary in character, and that notice of such proceedings may be indirect, provided only that the period of notice of the initiation of proceedings and the method of giving it are reasonably adapted to the nature of the proceedings and their subject matter and afford to the property owner reasonable opportunity at some stage of the proceedings to protect his property from an arbitrary or unjust appropriation. [North Laramie Land Co. v. Hoffman, 268 U.S. 276, 283, 45 S.Ct. 491, 494, 69 L.Ed. 953 (1925). Cf. Mullane v. Central Hanover Bank & Trust Co., supra, 339 U.S. at 316, 70 S.Ct. 652.] The procedures employed by the District were reasonably calculated to notify appellants of the actions taken against their property, and afforded them adequate opportunity to protect their interests. The notices which were provided satisfied constitutional requirements. While we reiterate our suggestion that the tax laws might well be remodeled to better apprise possibly unwitting owners of the harsh consequences of delinquency, see Moore v. District of Columbia, supra, 332 A.2d at 751-52, that is a task for the legislature.4 The severe penalty of a loss of property for nonpayment of taxes which may be but a fraction of the property’s val*140ue does not constitute a denial of due process. See Nelson v. City of New York, supra, 352 U.S. at 109-11, 77 S.Ct. 195. While we share our dissenting colleague’s sensitivity to the personal loss which resulted to appellants because of their course of conduct, we are not free to redress the situation when we could do so only by declaring a perfectly valid procedure to be unconstitutional.5 Affirmed. . Mrs. Coleman claimed never to have received the letter advising her of the expiring redemption period, and the trial court found her testimony credible. The tax official’s testimony at trial was that the letter had been sent by regular mail, because the assessor’s office had experienced difficulty with the use of registered mail. According to the witness, registered letters often are unclaimed. In determining whether the District’s procedures were “reasonably calculated” to give proper notice to appellants, the’ fact that the letter was not received by Mrs. Coleman is only one factor to be considered, and is not dispositive of the case. See Dodson v. Scheve, D.C.App., 339 A.2d 39, 40 (1975), cert. denied, 424 U.S. 909, 96 S.Ct. 1103, 47 L.Ed.2d 312 (1976). Service by mail is reasonably calculated to give notice in most circumstances. See Schroeder v. City of New York, 371 U.S. 208, 214, 83 S.Ct. 279, 9 L.Ed.2d 255 (1962); Mullane v. Central Hanover Bank & Trust Co., 389 U.S. 306, 318, 70 S.Ct. 652, 94 L.Ed. 865 (1950). [For the exceptional cases, see Robinson v. Hanrahan, 409 U.S. 38, 93 S.Ct. 30, 34 L.Ed.2d 47 (1972); Covey v. Town of Somers, 351 U.S. 141, 76 S.Ct. 724, 100 L.Ed. 1021 (1956).] Assuming the accuracy of Mrs. Coleman’s testimony, the District government should not be charged with the Postal Service’s failure to deliver the letter. Cf. Nelson v. City of New York, 352 U.S. 103, 108, 77 S.Ct. 195, 1 L.Ed.2d 171 (1956). The government has sent such “courtesy” letters to taxpayers in other cases. Dodson v. Scheve, supra, 339 A.2d at 40; Moore v. District of Columbia, D.C.App., 332 A.2d 749, 751 n. 5 (1975). The record indicates that this is a regular practice. . The requirements were revised after this ease arose. See D.C.Code 1975 Supp., § 47-1001. . A Supreme Court decision dismissing an appeal for want of a substantial federal question is an adjudication on the merits and binds lower courts. Hicks v. Miranda, 422 U.S. 332, 343-45, 95 S.Ct. 2281, 45 L.Ed.2d 223 (1975); Cullinane v. Geisha House, Inc., D.C.App., 354 A.2d 515, cert. denied, - U.S. -, 96 S.Ct. 3234, 49 L.Ed.2d 1226 (1976). See McCarthy v. Philadelphia Civil Service Commission, 424 U.S. 645, 96 S.Ct. 1154, 47 L.Ed.2d 366 (1976). . Chapter 9 of Title 47 contains special provisions for owner-occupied family dwellings. This chapter authorizes quarterly tax payments, D.C.Code 1973, § 47-901, and, in proper circumstances, provides for special notice prior to a tax sale. Id. § 47-903. However, these sections are inapplicable unless a taxpayer has filed an affidavit of domicile and ownership. Id. § 47-905. Appellants concededly have not filed such a document. The dissent urges that it is the District’s obligation to advise all taxpayers of *140the provisions of Chapter 9 and provide them with the affidavit if they are eligible. Such an argument reads into an otherwise unambiguous statute a requirement which Congress easily could have stated affirmatively had it intended to impose such an obligation. Further, the dissent seems to suggest that its interpretation of §§ 47-903 and 47-905 is necessary to save the statute from due process attack. In our view, .the more natural reading of these legislative provisions is simply that those homeowners who wish to bring themselves within Chapter 9 must comply with the filing requirement of § 47-905. . The facts of this case — in which the statutory notice requirements were met and appellants had actual notice of everything except the legislatively altered tax sale date — make it an inappropriate vehicle for addressing the more difficult due process issue which would be presented if a completely uninformed or incompetent individual were subjected to a tax sale proceeding which ultimately resulted in the loss of property, see Covey v. Town of Somers, 351 U.S. 141, 76 S.Ct. 724, 100 L. Ed. 1021 (1956), or if the government knew ,the property owner was not at the place to which notice has been sent. See Robinson v. Hanrahan, 409 U.S. 38, 93 S.Ct. 30, 34 L.Ed.2d 47 (1972).

2023-08-22 21:19:58.38926+00

Mack

MACK, Associate Judge (dissenting): Two elderly District of Columbia women have been deprived of the home that they have struggled, financially, for twenty-three years to maintain. The loss of their domicile — representing a personal investment of over $20,000 — has come approximately one year after the mortgage was paid in full, and as a result of a sale for delinquent taxes netting the District of Columbia $294.09. These two “delinquent taxpayers” did not receive any personal notice of the pendency of the sale which took place three months earlier than the date which, for forty years, had been the customary date for tax sales. Their loss is one which the majority dismisses as not “ris[ing] to the level of a due process deprivation.” I respectfully disagree. One would find it hard to believe, from the majority’s recitation, that appellants have never received actual notice of the sale of their home or the expiration date for redemption.1 The fact is that the only notice given appellants of the actual date fixed for the sale was by newspaper publication. Such notice was concededly in compliance with Section 47-1001 of the D.C.Code. It does not follow that such notice, under the circumstances presented here, comports with due process. In Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950), the Supreme Court considered the constitutional sufficiency of notice by publication prior to depriving known persons, whose whereabouts are also known, of substantial property rights, and found such notice incompatible with the requirements of due process. “An elementary and fundamental requirement of due process ... is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” 339 U.S. *141at 314, 70 S.Ct. at 657. “[P]rocess which is a mere gesture is not due process,” and “[i]t would be idle to pretend that publication . . . is a reliable means” of informing someone that a certain matter is pending, so that he or she may decide how to respond. Id. at 315, 70 S.Ct. at 657. The general rule that emerges from Múlleme is that notice by publication is unacceptable with respect to a person whose name and address are known or very easily ascertainable and whose legally protected interests are directly affected by the action in question. “Where the names and post-office addresses of those affected by a proceeding are at hand, the reasons disappear for resort to means less likely than the mails to apprise them of its pendency.” Id. Accord, Schroeder v. City of New York, 371 U.S. 208, 213, 83 S.Ct. 279, 9 L.Ed.2d 255 (1962); Walker v. City of Hutchinson, 352 U.S. 112, 115-16, 77 S.Ct. 200, 1 L.Ed.2d 178 (1956); New York v. New York, N. H. & H. R.R., 344 U.S. 293, 296, 73 S.Ct. 299, 97 L.Ed. 333 (1953).2 I think the decision in the case before us is controlled by the rule enunciated in Mul-lane and applied ofttimes since. I would hold that the notice (by publication) given appellants prior to the tax sale of their home was constitutionally deficient and that the tax sale was therefore invalid.3 The sale, under the circumstances here, is, moreover, contrary to the scheme and purpose of statutory enactments. Thus D.C.Code 1973, § 47-903, states that: No family dwelling-house occupied by the owner thereof shall be sold for delinquent personal or real-estate taxes or special assessments unless notice has been personally served upon such owner or sent by registered mail, addressed to him at such dwelling-house, not less than thirty days prior to the date of such sale. However, appellees argue, and the majority seems to agree, that Section 47-903 is inapplicable to appellants by virtue of Section 47-905: This chapter shall be deemed as applying only to such occupant and owner as shall have filed with the assessor of the District of Columbia an affidavit as to domicile and ownership. The form of the affidavit shall be prepared by the assessor of the District of Columbia, and shall show the beginning of domicile, the time when ownership began, the street number, the number of the square and lot, and all trusts, if any, against the property. Appellees’ restrictive reading of Section 47-905 exalts form over substance. Moreover, it exposes the tax sale procedure to grave constitutional attack since by its operation, homeowners are denied any notice of sale other than by publication. But the statute’s constitutionality can be upheld and the intent of Congress furthered by a common sense interpretation. The provisions of Title 47, Chapter 9, directed to “Family Dwellings Occupied by Owners,” reflect a special concern for resident homeowners. The evident congressional intent was to prevent forfeiture whenever possible. Such intent, however, is totally defeated by *142the interpretation adopted by the majority. In order for Section 47-903 to have the effect Congress clearly intended, Section 47-905’s statement that “The form of the affidavit shall be prepared by the assessor of the District of Columbia . . must, I think, be read as placing on the District the burden of notifying resident homeowners of the provisions of Chapter 9 or at the very least providing them with the requisite affidavit.4 Certainly all of the information required by the affidavit was available in the Tax Assessor’s Office. Ms. Coleman went to that office in 1960 after her aunt’s death specifically to ensure that all official records were accurate. Moreover, she has visited that office many times since. It is inherently and grossly unfair for the District now to assert that her home can be sold without prior notice to her because she failed to file a paper which only it could provide.5 For all these reasons I am singularly unimpressed by the majority’s assertion that it feels constrained to affirm because of two prior decisions of this court, Dodson v. Scheve, D.C.App., 339 A.2d 39 (1975), and Moore v. District of Columbia, D.C.App., 332 A.2d 749 (1975). Neither decision is controlling here. Moore involved a challenge by nonresident heirs whose names did not appear as record owners in the Office of the Recorder of Deeds nor in the Office of the Tax Assessor, and the government showed that in that instance a notice of the impending tax sale had been sent to the record owner (decedent) at his last known address. In Dodson v. Scheve, the court expressly declined to reach either of the two grounds on which I would base reversal, namely, the constitutional sufficiency of notice prior to the sale and the proper construction of Sections 47-903 and 47-905.6 I share the sentiments expressed by Judge Pair in Dodson: I perceive basic unfairness in the system which on the one hand frustrates, in effect, the will of the Congress as expressed in D.C.Code 1973, § 47-903, and on the other gives aid and comfort to those who are permitted to profit a thousandfold at the expense of the poor, the ignorant and the less alert.7 [Dodson v. Scheve, supra, 339 A.2d at 42 (Pair, Associate Judge, Retired, concurring and dissenting).] I would reverse. . The lack of actual notice has been the basis of appellants’ claim from the beginning. The majority recitals as to purported mailings of notices by the District do nothing ,to diminish this claim. As the majority recognizes (likewise in a footnote) the trial court made a specific finding that appellant Coleman did not receive .the notice of expiration “courtesy” letter which is a part of the record. The purported “tax-sale notice” — described by a witness at first as a document which “would have been . . . mailed” and later as having been “mailed” — is not a part of the record and thus understandably was not treated in the trial court’s memorandum opinion, holding, “regrettably,” that compliance with publication requirements resulted in effective transfer. . “Notice by publication is a poor and sometimes a hopeless substitute for actual service of notice. Its justification is difficult at best.” New York v. New York, N. H. & H. R.R., supra at 296, 73 S.Ct. at 301. . Accord, Scoggin v. Schrunk, 344 F.Supp. 463 (D.Ore.1971), rev’d on other grounds, 622 F.2d 436 (9th Cir. 1975), cert. denied, 423 U.S. 1066, 96 S.Ct. 807, 46 L.Ed.2d 657 (1976); Johnson v. Hock, 19 Ariz.App. 283, 506 P.2d 1068 (1973); Laz v. Southwestern Land Co., 97 Ariz. 69, 397 P.2d 52 (1964) (en banc); Chapin v. Aylward, 204 Kan. 448, 464 P.2d 177 (1970); Pierce v. Bd. of County Comm’rs of Leavenworth County, 200 Kan. 74, 434 P.2d 858 (1967). See also Wisconsin Elec. Power Co. v. City of Milwaukee, 352 U.S. 948, 77 S.Ct. 324, 1 L.Ed. 2d 241 (1956) (per curiam), on remand, 275 Wis. 121, 81 N.W.2d 298 (1957); Wager v. Lind, 389 F.Supp. 213 (S.D.N.Y.1975). See generally Note, The Constitutionality of Notice by Publication in Tax Sale Proceedings, 84 Yale L.J. 1505 (1975). . According to the trial testimony of Mr. Alfred L. Richards of ,the D.C. Department of Finance and Revenue, Assessment Services Division, the District of Columbia Government makes no effort to inform citizens of • any of the special provisions of Title 47, Chapter 9. . Appellees suggest that the harshness of the result here is somehow mitigated by the fact that Ms. Coleman was familiar with tax sale and redemption procedures. It seems to me that the fact that she or other homeowners had for many years taken advantage of the two year redemption period is an added reason why personal notice was required, particularly when the sale date was changed after forty years. . See Dodson v. Scheve, supra 339 A.2d at 40 and nn. 1 & 3. . When Ms. Coleman called appellee Scheve to implore him to allow her to redeem her property, Mr. Scheve flatly rejected her request and instead offered to permit her to buy it back from him at its current market value or, alternatively, to lease it from him for two hundred dollars ($200.) per month. As noted above, Mr. Scheve paid $294.09 for the property.

2013-10-30 06:32:38.496634+00

Rogers

852 S.W.2d 150 (1993) 42 Ark.App. 5 James P. O'FLARITY, Conservator of the Estate of Jessie E. O'Flarity, Appellant, v. Gloria M. O'FLARITY, Appellee. No. CA 92-912. Court of Appeals of Arkansas, Division II. April 28, 1993. *152 W.J. Walker, Leonard L. Scott, Little Rock, for appellant. Robert S. Laney, Camden, for appellee. ROGERS, Judge. At issue in this appeal is the extent to which two co-depositors, Jessie E. O'Flarity and Gloria M. O'Flarity, appellee, own the funds in a joint account. Appellant, James P. O'Flarity, is conservator of the estate of his mother, Jessie E. O'Flarity. Appellant brings this appeal from the ruling of the probate judge that Jessie O'Flarity and appellee own fifty percent of the funds in the account in question. Because of Jessie O'Flarity's failing health, appellant was appointed conservator of her estate in 1991. Acting in that capacity, he then withdrew all the funds from the joint account in question held in the names of "Gloria M. or Jessie E. O'Flarity." Appellee then brought suit to recover such sums, claiming ownership of the money in the account she and her mother had. The probate judge found that all of the funds in the account, which had an ending balance of $106,262.31, could not be traced but concluded that appellee and her mother, Jessie, each were entitled to fifty percent of the account. On appeal, appellant first argues the probate judge erred in determining appellee was entitled to one-half of the joint account. In this regard, he asserts that appellee failed to carry the burden of proving a gift of the funds was made to her. We do not agree. Appellee and her mother lived together from 1968 to 1991. In 1968, appellee opened an account under the names of "Gloria M. or Jessie E. O'Flarity." The account was taxed under appellee's social security number, and deposits to the account were made from appellee's social security, disability, and retirement Veteran's payments, as well as other sources. Jessie O'Flarity purchased a house in 1969 and a second house in 1970. In 1971, she deeded both properties to Jessie E. O'Flarity and Gloria Marie O'Flarity as joint tenants with right of survivorship. Jessie and Gloria lived in one house and rented the other. In 1989, both properties were sold, and the proceeds were ultimately deposited in the joint account. In connection with the sale of one of the properties, the buyer executed a promissory note payable to both Jessie and Gloria, and the monthly payments were deposited in their joint account. Other funds contributed to the account were proceeds from the sale of school bonds originally purchased by Jessie and held jointly by Jessie and Gloria. Appellee testified that she made additional deposits to the account from the proceeds of her individual savings account, the sale of personal property, and various insurance proceeds. She also stated that, during the twenty-three years she and her mother lived together, she took care of making all the deposits to and withdrawals from their joint account and that their living expenses were paid for in part from the account. She testified that she and her mother both provided the funds deposited in the account and that her mother had told her she wanted appellee to have such funds. Appellee testified that she was the one that opened the bank account in 1968; because she was disabled, she put her mother's name on the account so that, if appellee died, her mother would have access to the money. She testified that all of her disability and social security checks were deposited into the account and that, in 1968, the monthly amount of those checks was approximately $1,000.00 and had increased to over $2,200.00 by the time of the hearing. She also testified that her mother had a separate bank account of her own, to which her mother deposited her own social security checks and various other funds. Gloria testified that she and her mother lived in one of the houses her mother had *153 purchased and rented the other and that Gloria paid all of the taxes, insurance, and upkeep on the rental house. She stated that she was aware that her mother deeded both pieces of property to Jessie E. O'Flarity and Gloria Marie O'Flarity as joint tenants with right of survivorship and that her mother did so because she wanted appellee to have that property. She also testified that, upon the sale of one of those properties, she and her mother received $3,648.00 as a down payment and subsequently received the balance of the amount due on the property in the sum of $65,487.50. These sums were deposited in the joint account. Appellee stated the money was placed in that account because she paid all the bills and "[M]other wanted me to have it." She testified that the furniture from one of the houses was subsequently sold for approximately $8,000.00 and that those proceeds were also placed in the joint checking account. Appellee testified that, when the second piece of property was sold, she and her mother received a down payment of $3,904.50, which was deposited in the joint account. The buyers of the property also executed a promissory note in the sum of $70,000.00 payable to appellee and her mother; those monthly payments of $629.18 were also deposited in the joint account. Appellee also indicated that, in 1968, she had her own savings account at First Federal with a balance of $10,267.50 and that she subsequently closed out that account and transferred the money to the joint account she shared with her mother. Appellee also testified that her mother had placed appellee's name on a Merrill Lynch account consisting of tax-free school bonds. She stated that, in January 1990, her mother sold the bonds and indicated she wanted appellee to have those proceeds. Appellee testified that, when her mother sold the bonds, Merrill Lynch sent the proceeds to her mother; her mother then gave the money to appellee and instructed her to deposit the funds in the joint account. Gloria testified that her mother had also given money and property to other family members. In this regard, Gloria testified: [My mother] has refused to make a will because she said, "I want to distribute my stuff and take care of all my children and make sure they all have a home and everything they need before I go." And that's what she thought she had done. She said, "I don't want anybody fighting over my estate when I'm gone." And she said, "I'll give everybody their houses, homes, money, whatever they need." And she had just enough. She said, "I have enough in my account now to bury me, and everybody else has their own share now, and I'm happy." Appellee indicated that she considered the funds in the joint account to be hers and that the only reason she initially put her mother's name on the account in 1968 was because "I wasn't expected to live when I got out of the service and I wanted whatever I had to go to Mother." She stated that her mother never exercised any control over the joint bank account, never wrote a check off of it, and never personally made any deposits into the account. Beverly Stamper, one of Jessie O'Flarity's daughters, testified that she lived in the Little Rock area until 1985. She testified she was aware of the transactions concerning the two pieces of real estate in question and that her mother had told her that, because appellee had taken care of the rental house, it should go to her and that the house in which the two of them lived was "their home." She stated that her mother was very generous with all of her children and had given each of them money or property from time to time. James P. O'Flarity testified that, although he borrowed $25,000.00 from his mother on one occasion, he subsequently repaid it and that his mother never gave him large sums of money. He also testified that, in 1986 or 1987, his mother telephoned him and indicated that she was in dire financial straits and also indicated that Gloria "does her own thing." Therefore, appellant testified that, for the following year, he sent his mother $750.00 to *154 $1,500.00 per month for her living expenses. He also testified that his mother had given him thirty-nine acres of property in east Mississippi, on which he has paid taxes since she deeded it to him. He stated that, when his mother's health failed to the point that he believed she needed additional care, Gloria refused to cooperate with family members concerning the records on his mother's bank account so that they could have access to funds to pay for her care. He testified that his mother put bank accounts and real estate in joint names for testamentary purposes and never intended to give away any of it during her lifetime. He also testified that, when the two parcels of property held in appellee's and his mother's names were sold, his mother did not endorse the checks and had no recollection of signing the deeds. Mary Kathryn Rogers, another daughter of Jessie O'Flarity, testified that she has lived a few doors away from her mother since 1970 and that her mother and appellee took care of each other. She testified that her mother deeded a house on Louisiana Street to her in 1986, which she and her mother had previously owned as joint tenants with right of survivorship. She testified that her mother did not intend for Gloria to have all the funds in the joint account. In this regard, Mary Kathryn stated: "[My mother is] alert and she knows that all of this is going on and it grieves her greatly. She says, `I trusted Gloria with everything I had. I didn't think she could do this to me.' She knows that Gloria wants all of it and it's really grieving her." The rule in Arkansas is that the law presumes a gift when the donor registers legal title in a family member's name. Perrin v. Perrin, 9 Ark.App. 170, 176, 656 S.W.2d 245, 248 (1983). Therefore, with regard to the proceeds from the sale of both parcels of real estate which were owned jointly by appellee and her mother, it is presumed that appellee is entitled to one-half of these amounts. Whether elements of an effective inter vivos gift have been proven with regard to the school bonds and other sources of revenue to the account is a question of fact. See Warren v. Warren, 33 Ark.App. 65, 800 S.W.2d 730, 731 (1990). The required elements for an effective inter vivos gift are that the donor knew and understood the effect of his act, and intended that effect; that the donor made actual delivery of the chattel to the donee or his agent; that the donor, by delivery, intended to pass title immediately; and that the donee actually accepted the chattel as a gift. McCune v. Brown, 8 Ark.App. 51, 57, 648 S.W.2d 811, 814 (1983). These elements must be proved by clear and convincing evidence. Id. Accord Kelley v. Pipkin, 268 Ark. 1009, 1014, 598 S.W.2d 102, 105 (1980). Even where the burden of proof is by clear and convincing evidence, we defer to the superior position of the chancellor to evaluate the evidence. Akin v. First Nat'l Bank, 25 Ark.App. 341, 345, 758 S.W.2d 14, 19 (1988). A requirement that the evidence be clear and convincing does not mean that the evidence must be uncontradicted. Freeman v. Freeman, 20 Ark.App. 12, 15, 722 S.W.2d 877, 879 (1987). Although probate cases are reviewed de novo on the record, we will not reverse the finding of the probate judge unless clearly erroneous. Winters v. Winters, 24 Ark.App. 29, 34, 747 S.W.2d 583, 586 (1988); Birch v. Coleman, 15 Ark.App. 215, 221, 691 S.W.2d 875, 878-79 (1985); Ark.R.Civ.P. 52(a). In this regard, we give due deference to the probate judge's superior position to determine the credibility of the witnesses and the weight to be accorded their testimony. Thomas v. Thomas, 30 Ark.App. 152, 156, 784 S.W.2d 173, 175 (1990). We find the evidence sufficient to prove the elements of a gift regarding appellee's interest in the joint account and cannot say that the finding of the probate judge that appellee is entitled to a fiftypercent share of the account is clearly erroneous. The creation of joint bank accounts is addressed in Ark.Code Ann. § 23-32-1005(1)(A) (1987). However, the present wording of subparagraph (1)(A) was included by amendment, Act 843 of 1983, and the amendment does not apply to deposits established *155 prior to the effective date of Act 843. Courtney v. Courtney, 296 Ark. 91, 95, 752 S.W.2d 40, 42 (1988); see also Martin v. First Security Bank, 279 Ark. 273, 274, 651 S.W.2d 70, 71 (1983). Instead, the former statute, Ark.Stat.Ann. § 67-521 (Repl.1980), applies. That statute provides in pertinent part: When a deposit shall have been made in the names of two (2) or more persons and in form to be paid to any of the persons so named, such deposit and any additions thereto made by any of the persons named in the account, shall become the property of such persons as joint tenants.... In Park v. McClemmens, 231 Ark. 983, 334 S.W.2d 709 (1960), the supreme court held that § 67-521 should be considered together with the testimony, facts, and circumstances disclosed by the record to arrive at the intent of the depositor. 231 Ark. at 986, 334 S.W.2d at 712. Based on this, the trial court could find that appellee intended to establish a joint tenancy when she created the account in question. Additionally, the record reflects that the actions of Jessie O'Flarity in commingling her funds with those of appellee in the account establish her intent to share such funds with appellee. Commingling of funds in a joint account leads to the conclusion that the parties intended all deposits to the account from whatever source to be held jointly by the parties, and it takes clear and convincing evidence to overcome this presumption. See Lofton v. Lofton, 23 Ark.App. 203, 209-10, 745 S.W.2d 635, 639 (1988). We cannot say that the actions of Jessie O'Flarity and appellee in dealing with the funds placed in the account fail to show an intent to own such funds jointly. We find there was insufficient evidence presented to overcome a presumption of owning the funds jointly. Appellant also argues that Jessie O'Flarity, as a joint tenant to the account, had the right to withdraw all of the funds in question and that, therefore, James P. O'Flarity, as conservator of the estate of Jessie E. O'Flarity, was equally entitled to exercise his mother's right to withdraw all of the funds in the account. While he may be entitled to withdraw the funds on her behalf, we cannot agree that he is entitled to retain the funds. Although a bank or savings and loan may rightfully pay all the funds in an account to either of the two co-depositors in a joint account, it does not necessarily follow that either of the co-depositors may withdraw such funds without accounting to the other co-depositor for such action. See Savage v. McCain, 21 Ark.App. 50, 52, 728 S.W.2d 203, 204 (1987); see also McEntire v. McEntire, 267 Ark. 169, 175, 590 S.W.2d 241, 244-45 (1979). Each depositor's right to the funds may depend on an agreement among the co-depositors as to their respective ownership rights in the account. See Haseman v. Union Bank of Mena & Haseman, 262 Ark. 803, 807, 562 S.W.2d 45, 48 (1978). Appellant also asserts that the probate judge erred in finding that appellee was entitled to one-half of the proceeds of the promissory note from the sale of the property made payable to appellee and her mother. In this regard, appellant argues that the ownership of the note was not an issue before the court. We cannot agree. Appellee correctly points out that appellant's own counsel asked the judge about the disposition of the real estate promissory note. At the conclusion of the hearing, the judge announced her findings regarding the joint account and asked if there were any additional questions. Appellant's counsel responded: "Judge, we have a real estate note involving one of the sales, about '75." The court then responded: "Well, that would mean each one of you get one-half of that real estate note." No further discussion of the note took place. Not only did appellant's counsel fail to object to the issue being addressed by the court, but it was appellant's own counsel who invited a ruling on the issue. Additionally, we disagree with appellant's alternative argument that the evidence does not support a finding that appellee owns fifty percent of the proceeds of the note. When considering ownership of a note payable to two parties, we can look to cases dealing *156 with notes payable to a husband and wife for guidance. In such a case, there is a presumption that the taking is by the parties as tenants by the entirety. See Ramsey v. Ramsey, 259 Ark. 16, 19, 531 S.W.2d 28, 30 (1975). The fact that the consideration for the note taken in the two names was given by only one of the parties is of little significance where that party is responsible for the note being taken in both names, and the presumption is that there was a gift of an interest by that party to the other. See 259 Ark. at 19, 531 S.W.2d at 30-31. Finally, appellant argues that the court erred in failing to grant a new trial pursuant to appellant's motion for rehearing and new trial. Arkansas Rule of Civil Procedure 59(a) (1992) provides in part: (a) Grounds. A new trial may be granted to all or any of the parties and on all or part of the issues on the application of the party aggrieved, for any of the following grounds materially affecting the substantial rights of such party: (1) any irregularity in the proceedings or any order of court or abuse of discretion by which the party was prevented from having a fair trial; (2) misconduct of the jury or prevailing party; (3) accident or surprise which ordinary prudence could not have prevented; (4) excessive damages appearing to have been given under the influence of passion or prejudice; (5) error in the assessment of the amount of recovery, whether too large or too small; (6) the verdict or decision is clearly contrary to the preponderance of the evidence or is contrary to the law; (7) newly discovered evidence material for the party applying, which he could not, with reasonable diligence, have discovered and produced at the trial; (8) error of law occurring at the trial and objected to by the party making the application. Appellant, however, fails to state any of the reasons listed in Rule 59, which would provide a basis for granting a new trial. Further, appellant stated in his motion that a new trial should be granted so Jessie O'Flarity could have an opportunity to testify as to her intent concerning ownership of the funds in question. In this regard, appellant stated in his motion: "It was not deemed wise by counsel to put [Jessie O'Flarity] through the trauma of coming to court to testify inasmuch as no allegation of the petition of Gloria O'Flarity was support [sic] at trial." The fact that appellant failed to call Jessie O'Flarity as a witness at trial is not an adequate ground for granting a new trial. It is well settled that the granting of a new trial addresses itself to the sound discretion of the trial court, and this court will not reverse unless it appears that the trial court abused its discretion. Franklin v. Griffith Estate, 11 Ark.App. 124, 128, 666 S.W.2d 723, 725-26 (1984). We find no abuse in the denial of appellant's motion. Affirmed. MAYFIELD and COOPER, JJ., agree.

2013-10-30 06:32:38.5306+00

Weinfeld

615 F.Supp. 1465 (1985) A.P.N. HOLDINGS CORP., Plaintiff, v. Ronald HART, Thelma Hart and Barbara Bergen, as Trustees of the Testamentary Trust of Mark M. Hart, deceased; Beatric Hart, as Custodian for Penny Hart and Dean Hart, Infants, Under the New York Uniform Gifts for Minors Act; Ronald Hart and Thelma Hart, Defendants, Counterclaim Plaintiffs, and Third Party Plaintiffs, v. Abe J. LIEBER; Miriam P. Lieber; Amford Bank & Trust Company, Ltd.; ABT Investments, Limited; Amdall Properties, Inc.; London Capital Corporation; Logistics Control Group International, Ltd., Third Party Defendants. No. 83 Civ. 4397 (EW). United States District Court, S.D. New York. August 22, 1985. *1466 Pollack & Kaminsky, New York City, for plaintiff and counterclaim defendant and third party defendants; Frederick P. Schaffer, New York City, of counsel. Hayt, Hayt & Landau, Great Neck, N.Y., for defendants and counterclaim plaintiffs and third party plaintiffs; Clifford J. Chu, Ralph Pernick, Great Neck, N.Y., of counsel. OPINION EDWARD WEINFELD, District Judge. This action arises from the 1982 sale of a controlling interest in the American Plan Corporation ("American Plan" or the "Company"), a New York corporation engaged through its subsidiaries in the property and casualty insurance business. Defendants Ronald, Thelma, and Beatrice Hart and Barbara Bergen, individually and in representative capacities, collectively controlled 520,691 shares, approximately thirty-five percent of the outstanding stock of American Plan. On June 25, 1982, plaintiff A.P.N. Holdings Corp. and defendants executed a stock purchase agreement (the "Agreement") whereby plaintiff agreed to purchase defendants' interest at a price of $10 per share, which totalled $5,206,910. Plaintiff paid defendants $520,000 when the Agreement was executed; an additional $1,230,000 when the transaction closed on October 5, 1982; and executed a promissory note for the balance of $3,456,910, which is unpaid and now past due. The Agreement was negotiated by Abe Lieber, plaintiff's principal shareholder, president, and chairman of the board, and Ronald Hart, then a director and paid consultant of American Plan and formerly its president and chairman of the board, who acted on behalf of all defendants. Plaintiff claims that Lieber and Hart agreed upon a purchase price of $10 per share with the understanding that such price was approximately twice the book value per share of American Plan stock as reflected in the Company's then most recent financial statements filed with the Securities and Exchange Commission ("SEC"); that Hart denied plaintiff access to the Company's books and records prior to the closing date but assured it that the SEC filings fairly and accurately represented the Company's financial condition and, indeed, so warranted *1467 in the Agreement; and that after the closing date when plaintiff gained access to the Company's books and records it discovered that the true book value of American Plan prior to the closing date was $0.51 per share, more than five dollars less than that reflected in the Company's most recent financial statements. In short, plaintiff charges that in assessing the Company's book value, which the parties allegedly understood was the basis of the $10 per share purchase price, it had no choice but to rely entirely upon the Company's publicly filed financial statements and that these statements were inaccurate and incomplete and far overstated the book value of American Plan. Plaintiff seeks to recover damages of $4,675,805, the difference between the purchase price of $10 per share of American Plan stock and the alleged true value of that stock. In the alternative, plaintiff seeks reformation of the Agreement to reflect a purchase price of $1.02 per share, or twice the Company's alleged true book value of $0.51 per share, and restitution in the amount of $1,218,895, the difference between the purchase price as reformed and the amount plaintiff previously paid defendants as of the closing date. Defendants, in addition to a general denial of plaintiff's claims, emphasize that under paragraph 3.1(c) of the Agreement plaintiff disclaimed reliance upon any representation or warranty by defendants concerning the financial condition of American Plan other than a limited warranty that, to the best of defendants' knowledge, no material adverse change had occurred after the first quarterly report was filed in 1982. Defendants also assert a counterclaim to recover $3,456,910, the balance of the agreed purchase price, from plaintiff under its promissory note and a third party claim against Abe Lieber, his wife, and various affiliates who executed a guaranty of payment by plaintiff (the "Guarantors"). The complaint alleges federal claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934[1] and section 17(a) of the Securities Act of 1933[2] and state claims for breach of contract, breach of warranty, mistake of fact, common law fraud, negligent misrepresentation, and violation of section 352-c of the New York General Business Law.[3] These claims involve different standards of culpability. For example, defendants may not be held liable under section 10(b) of the Securities Exchange Act of 1934 without proof of "scienter,"[4] whereas they may be held liable for damages caused by a breach of warranty upon proof that the warranted facts did not exist.[5] Yet, despite these differences, all these claims essentially rest upon the factual charge that the Company's publicly filed financial statements, upon which plaintiff allegedly relied in agreeing to pay defendants $10 per share for their interest in American Plan, contained errors that misrepresented the Company's book value. Thus, to recover upon any of the asserted grounds, plaintiff must establish by a preponderance of the evidence that the financial statements at issue in fact contained the errors as charged. Plaintiff's claims in large measure center about the application of accounting principles in the insurance industry and alleged errors in American Plan's financial filings, which served as the basis for restating those statements in subsequent filings. The specific financial statements in issue are those contained in the Company's Form 10K for 1981 ("1981 10K") and Forms 10Q for the first three quarters of 1982 ("1982 10Q's"). All parties acknowledge that annual and quarterly financial statements filed with the SEC must be prepared in *1468 accordance with generally accepted accounting principles ("GAAP"). Plaintiff contends that after it took control of the Company, new management and outside auditors discovered, during two successive audits, that these financial statements contained errors under GAAP. First, in conducting the 1982 annual audit, new management and the accounting firm of Alexander Grant & Company ("Alexander Grant") allegedly found the 1982 10Q's in error with respect to the adequacy of the Company's loss and loss adjustment expense reserves and to bad debts owed the Company by two of its agents. Thereafter, in conducting the 1983 annual audit, new management and Peat, Marwick, Mitchell & Company ("Peat, Marwick"), retained in place of Alexander Grant, allegedly found errors in the 1981 10K and additional errors in the 1982 10Q's. These alleged errors concerned reinsurance recoverable by the Company, contingent commissions owed to a leading agent, and the way the Company accounted for two surplus relief treaties, discussed hereafter. Plaintiff further contends that all of these discoveries were based upon information that was available to old management when it prepared the 1981 10K and 1982 10Q's and that therefore, under GAAP, they constituted "errors" and warranted restatements of the financial statements contained in those filings. As a result of these restatements, which new management included in the Company's Form 10K for 1982 and Form 10K for 1983, the book value of American Plan for the nine months ended September 30, 1982 — the last statement date before the closing—allegedly dropped more than $5 per share to $0.51 per share. An observation is warranted at the outset. After the occurrence of events in issue, Abe Lieber called in one "expert" after another who scrutinized the Company's financial statements and whose efforts, one is justified in concluding, were directed to turning up some "error" that would sustain plaintiff's claim that the book value of American Plan had been overstated. Many of the views of these experts who testified were highly conceptualized and were based upon their opinions as accountants. Against this testimony was that of American Plan's officers, who had been active in the day to day management of the Company's affairs and were familiar with the Company's insurance experience record, accounting practices and requirements. The fact that plaintiff's experts opined as to what they believed were errors in the Company's various financial projections and assignments of debits and credits does not entitle their views to greater consideration than that to be accorded lay persons who demonstrated a thorough understanding of the basic facts in issue.[6] Their credibility as witnesses is subject to appraisal by the same standards as those applied to ordinary witnesses. The Court accepts in substance the judgment of the Company's officers who had the experience of many years in evaluating the various financial matters to which the plaintiff's attack is directed. They were the day to day workers in the vineyard. Based upon the Court's trial notes, which include its contemporaneous appraisal of each witness, a word by word reading of the stenographic transcript of the trial, the demeanor of the witnesses, an evaluation of their credibility — which in this case played a critical role — and the reasonable inferences to be drawn from established facts and surrounding circumstances, the Court concludes that plaintiff has failed to discharge its burden of proof on the central factual charge in the complaint. It has not established that the old management of American Plan — and thus defendants — acted without justification in preparing the financial statements under attack or that these statements contained the errors charged. As to defendants' counterclaim, and third party claim, there is no dispute that plaintiff has defaulted on two installments of its promissory note. Its only defense — and that of the Guarantors — is *1469 the central charge set forth in the complaint, that the 1981 10K and 1982 10Q's contained errors under GAAP that misrepresented the book value of American Plan. Plaintiff's failure to sustain this charge is therefore dispositive of all claims, counterclaims and third party claims. LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES After the closing, Richard Pluschau, a certified public accountant who had served as the Company's outside auditor for over ten years and had considerable experience in the field of insurance, was engaged by new management of American Plan as chief financial officer. He conducted a statistical analysis of the Company's historical claim activity for several prior years in order to determine whether the Company's reserves for unpaid losses and loss adjustment expenses were adequate. Pluschau concluded that as of December 31, 1982 the reserves were inadequate and should be increased by between $2 million and $2.5 million. Thereafter, at Pluschau's suggestion, Huggins & Co., Inc. ("Huggins"), an actuarial firm, was retained by the Company to conduct an independent review of the reserves and it issued an opinion certifying the adequacy of the reserves as revised upward by Pluschau. The question then arose whether this revision should be reflected solely in the fourth quarter of 1982 or also in the first three quarters of that year, as to which the financial statements had already been filed. Pluschau specifically requested Alexander Grant, retained to conduct the 1982 annual audit, to determine whether the Company's financial statements in the 1982 10Q's filed previously should be restated in view of the revision of reserves. Alexander Grant concluded that the financial statements for the first two quarters of 1982 should be restated to reflect an increase in reserves of $774,108 and $1,322,130, respectively.[7] Plaintiff contends that the restatements were warranted under GAAP because the inadequacy of the reserves could have been discovered by old management when it prepared the 1982 10Q's. Pluschau so concluded because he found no evidence that old management had conducted an analysis of the company's "formula" reserves during the 1982 quarterly financial statement periods. Formula reserves, as distinct from case reserves, which are based upon individual claims already filed with the Company, are estimates of losses incurred but not yet reported to the Company ("IBNR's"), the cost of settling claims ("loss adjustment expense"), and the inflationary impact upon the case reserves. Unlike the case reserves, which are set on a case by case basis as claims are filed with the Company, formula reserves are determined by applying certain formulae to historical claim data; they require an empirical judgement about the likelihood that past loss experience will be repeated. In Pluschau's view, had old management reviewed the formula reserves as of September 30, 1982, it would have found them inadequate. Dominic Esposito, the Alexander Grant partner in charge of the 1982 annual audit, also found no evidence that old management had conducted an overall review of the formula reserves during 1982 and concurred in Pluschau's decision to restate the 1982 10Q's, although he also would have concurred in confining the revision to the final quarter of 1982.[8] The conclusion of Pluschau, Huggins, and Alexander Grant that the 1982 loss and loss adjustment expense reserves were inadequate was disputed by Murray Lemonik, who was president, chief executive officer, and chairman of the board of American Plan prior to the closing and has been in the service of the Company for fifteen years. While Lemonik did not participate *1470 in the reserves review conducted by new management, he opposed the decision to increase the 1982 reserves for two reasons. First, the New York State Department of Insurance had only recently, in mid-1980, completed its triennial examination of the Company and reported that the reserves were adequate, as Lemonik put it, "very close" to being "on the button."[9] Since there had been no change in the Company's personnel who analyzed the case and formula reserves, no change in the instructions given them, and no change in the Company's operations, Lemonik saw no reason to believe that a reserve adjustment was necessary. Second, new management did not conduct a review of "stale" claims in 1983. Stale claims are reported claims as to which the Company has set reserves but which are no longer active and may be closed out. In Lemonik's view, had new management conducted a case by case review of reported claims in order to identify stale claims, as had been done routinely by old management and as he urged new management to do in 1983, a large number of case reserves would have been reduced or eliminated. Lemonik asserted that his belief had been borne out when new management finally conducted a stale claim review in 1984 and found that case reserves should be reduced by approximately $3.5 million. Based upon prior Company experience, Lemonik stated, some sixty-five to seventy-five percent of that reduction would have related back to claims filed in 1982 or earlier. Lemonik also emphasized that in comparison to case reserves, which new management had not reviewed for stale claims, the formula reserves were only a small part of the Company's total reserves. In charging that the 1982 10Qs were in error concerning loss and loss adjustment expense reserves, plaintiff assumes that old management reasonably should have conducted a review of formula reserves in 1982. However, in view of Lemonik's testimony, which was highly persuasive, plaintiff has failed to show that old management acted without justification. Essentially, the Court is presented with a difference of opinion, that of the so-called experts from outside the Company, Pluschau, Huggins, and Alexander Grant, and that of Lemonik, an insider who, while not a certified public accountant, was involved in the day to day operations of the Company for fifteen years and had a realistic view of loss potential based upon his experience. As already noted, the Court is satisfied that this credibility issue should not be resolved in plaintiff's favor. Plaintiff's further argument that old management conducted a "one way" review of stale claims in the spring of 1982 — that is, a review designed to eliminate reserves on inactive claims without assessing the adequacy of reserves on active claims — adds nothing to its charge that the 1982 reserves were inadequate. Alan Brinn, the head of the Company's liability claims department in 1982, testified that such reviews were conducted routinely, though normally at year-end, and that this one was conducted in the usual and ordinary manner. The purpose and effect of such reviews are to bring the Company's reserves up to date to enhance their accuracy, at least with respect to case reserves. Nor is there any significance to Brinn's statement that sometime in 1982 he came to believe that the reserves set for claims under special multiperil policies "might have been a bit light," perhaps by as much as $750,000. He acknowledged that his belief was based upon "speculation" and that "nothing specifically [was] done" to verify it.[10] In sum, plaintiff has failed to prove that the reserves for losses and loss adjustment expenses reflected in the 1981 10K and 1982 10Q's were inadequate. BAD DEBTS OWED BY ESSEX AND BANKERS WAY Plaintiff charges that prior to the closing date, the Company should have established reserves to cover premiums owed by two *1471 agents, Essex Insurance Brokers, Inc. ("Essex") and Bankers Way Insurance Agency, Inc. ("Bankers Way"), that were not collectible. Because such reserves were not set up, plaintiff contends, the 1982 10Q's failed to reflect a potential loss of $650,000 in bad debts. Based upon the information available in 1982, however, the Court finds that old management did not act unreasonably in concluding that the bulk of these debts was collectible. As to Essex, new management and its auditors determined that a $400,000 reserve should have been set up during the third quarter of 1982 to cover premiums owed to American Plan by Essex when the agency was placed in conservatorship by the California Department of Insurance on August 20, 1982. Those involved in the day to day operations of the Company at that time, however, estimated that Essex's premium balance totalled between $250,000 and $300,000 and was fully collectible — a view that had substantial support. The principals of Essex had personally guaranteed payment of the agency premium balance, their guarantee was covered in part by an errors and omissions insurance policy, and they had posted collateral to secure some $118,000 of that balance. Moreover, the premiums in issue had been deposited into a trust account in favor of an American Plan subsidiary. In May 1982, Richard Sumner, then a vice president of American Plan, learned that Bankers Way had ceased producing business for the Company and that its principal, who had personally guaranteed the agency agreement with the Company, "had been removed from the Bankers Way corporate picture."[11] The following month, Sumner met with the principals of the successor corporation and, after determining that the Bankers Way premium balance totalled as much as $200,000, entered into an agreement with them whereby they promised to pay $50,000 to American Plan and to guarantee payment of an additional $50,000 if the premium balance could not be collected from the former principal of the agency. The Company in fact received the initial $50,000 under this agreement during the next eight months; previously, in June 1982, it had commenced an action to recover the remaining balance from the former principal who, in Lemonik's view, was not judgment proof. Plaintiff has offered no evidence to undermine old management's judgment that the Bankers Way debt was collectible. Rather, it relies solely on new management's contrary judgment that a reserve of $250,000 was necessary to cover the debt. Neither judgment is inherently unreasonable and both may be appropriate under GAAP. GAAP requires that a loss be recognized and a reserve established in a financial statement only when [i]nformation available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements. It is implicit in this condition that it must be probable that one or more future events will occur confirming the fact of the loss.[12] This standard leaves considerable room for judgment in deciding whether a reserve is needed. Indeed, Alexander Grant emphasized that estimating when a loss occurs for GAAP purposes is a difficult task and that new management had taken a "conservative approach" to both the Essex and Bankers Way debts.[13] Plaintiff has not shown it was probable in 1982 that the Essex and Bankers Way debts were uncollectible and that the 1982 10Q's should have reflected a reserve for bad debts. REINSURANCE RECOVERABLE FROM SECURITY MUTUAL In December 1981, the Security Mutual Insurance Co. ("Security Mutual"), one of American Plan's reinsurers, was placed in *1472 liquidation by the Illinois Department of Insurance. Despite this fact, American Plan continued to carry reinsurance recoverable from Security Mutual on its books throughout 1982. Peat, Marwick, which American Plan had retained in place of Alexander Grant to conduct the 1983 annual audit, concluded after an investigation that no reinsurance was recoverable from Security Mutual as a result of the liquidation. Accordingly, the auditors concurred in new management's determination that a net receivable of $329,178 listed on American Plan's books as reinsurance due from Security Mutual for losses incurred by the Company prior to the liquidation should have been written off during 1982. In addition, Peat, Marwick concurred in new management's determination that the Company had failed to take account of the fact that these prior losses would continue to develop and would involve loss adjustment expense, and thus would cost the Company even more in terms of unrecoverable reinsurance. Accordingly, Peat, Marwick found proper new management's conclusion that a total of $746,465 should have been written off during 1982 as a result of the liquidation of Security Mutual. The auditors further concluded that, because the write-off was based upon information available in 1982, new management's decision to restate the 1982 quarterly financial statements a second time, now in the Company's Form 10K for 1983, was proper and in accordance with GAAP.[14] Members of the Company's old management who were familiar with the Security Mutual reinsurance treaty testified that the liquidation of the reinsurer did not have a negative effect on American Plan. According to Luther Williams — who had been with the Company for thirty years, most recently as president and then vice chairman of the subsidiaries, and had primary responsibility for reinsurance — and Murray Lemonik, the Security Mutual treaty provided that when the loss ratio on the reinsured portfolio reached a certain level the Company became obligated to pay an additional, or penalty, premium to the reinsurer until such time as the total premium paid reached a maximum point. This penalty premium, referred to as the "burn cost," amounted to $1.33 for every $1.00 of losses recoverable as reinsurance from Security Mutual. Since the loss experience on the reinsured portfolio had placed the Company in a "penalty situation" at the time of the liquidation, the Company was required under the treaty to pay Security Mutual $1.33 in premiums for every $1.00 of reinsurance it otherwise would have received after the liquidation date, at least until the total premiums paid by the Company reached the maximum.[15] Old management determined, therefore, that any reinsurance receivable from Security Mutual was more than offset by the penalty premiums payable to Security Mutual, so that on balance the amount of reinsurance no longer recoverable from Security Mutual did not represent a net *1473 loss to American Plan and did not require a reserve.[16] According to Paul Zucconi, the Peat, Marwick partner in charge of the 1983 audit, and Robert McCausland, who joined American Plan in 1983 and served as the Company's liaison with Peat, Marwick during the 1983 audit, their determination that a reserve should have been established for reinsurance receivable but no longer recoverable from Security Mutual did take account of the burn cost — that even after a setoff in favor of American Plan, the net receivable from Security Mutual still amounted to $746,465, which should have been written off. However, several factors weaken the force of this testimony. First, and most important, neither Zucconi nor McCausland had the experience that Lemonik and Williams had in calculating the burn cost under the Security Mutual treaty over a period of many years. Although Zucconi stated that he was familiar with this type of reinsurance treaty, his testimony raised doubt about whether he fully understood the significance of the burn cost and how premiums payable were calculated under the treaty. As to McCausland, his accounting background did not include any work with insurance companies when he joined American Plan in 1983. The expertise of these men as certified public accountants is no substitute for a thorough understanding of the Security Mutual treaty, which Lemonik and particularly Williams demonstrated by their testimony. Second, Alexander Grant, which had conducted the 1982 audit for new management, disagreed with Peat, Marwick's determination that a reserve should have been set up with respect to Security Mutual. Thus, the dispute here is not only a battle between old management and new but in some instances a battle among plaintiff's own experts as well, each of whom plaintiff has chosen to rely on at different times and for different reasons. It should be noted that accounting principles themselves are by no means fixed or immutable. At times they are the subject of sharp controversy between the accounting profession and the business community and are revised accordingly from time to time.[17] This fact calls into question not only the authoritativeness of these experts' opinions but also, as was observed previously, the motives of plaintiff in retaining first one accounting firm and then another. Ultimately, plaintiff's claim that old management erred in failing to include a reserve for reinsurance unrecoverable from Security Mutual in the 1982 10Q's arises from a difference of opinion that the Court must resolve on the basis of evaluation of the witnesses. In this instance, the experience of Lemonik and Williams carries at least as much weight as the expertise of Zucconi and McCausland. Thus, it cannot be said that plaintiff has carried its burden of proof that old management acted unreasonably or erroneously in its treatment of the Security Mutual reinsurance treaty. CONTINGENT COMMISSIONS PAYABLE TO MARKET In the late 1960's, an American Plan subsidiary and Market Insurance Corp. ("Market"), a California based insurance agent, entered into an agency agreement that provided for a contingent commission payable to Market based upon the profitability of the book of business Market produced for *1474 the Company. Under this agreement, known as a retrospective commission agreement, Market retained thirty percent of the premiums it produced as a provisional advance commission and paid the remainder to American Plan, which allocated fifteen percent for profit and expenses and the remaining fifty-five percent for prospective payment of claims. Whatever portion of this fifty-five percent was not needed to pay claims was paid back to Market as an additional, or contingent, commission; conversely, if claims exceeded fifty-five percent of premiums, Market was required to return a portion of its provisional advance commission to the Company to make up the difference. Thus, Market's commission depended on the loss experience of the business it produced for the Company. In or about 1979, a dispute arose between the Company and Market over the determination of the contingent commission. Essentially, Market disagreed with the Company's projections as to losses on the Market book of business that had been incurred but not yet reported. Market believed that the reserves set by the Company for these so-called IBNR losses were excessive and should be reduced and that it was entitled to additional commissions. This dispute persisted until at some point in 1982 Market withdrew a major portion of its business from American Plan and the Company issued a notice of termination of the agency agreement. Thereafter, the termination became effective and Market took legal action against the Company to recover contingent commissions. In conducting the 1983 annual audit, new management and Peat, Marwick determined that the IBNR reserves set by the Company on the Market book of business in 1981 and 1982 were excessive in view of the loss experience on that book in prior years. As of December 31, 1982, they concluded, the Market IBNR reserves should have been reduced by approximately $1.23 million. Had the reserves been set at the proper levels, they determined, the Company's financial statements for 1981 and 1982 would have reflected contingent commissions payable to Market. Instead, the financial statements reflected no such payables in 1981 or 1982 and, indeed, in 1982 allegedly showed commissions receivable from Market in the amount of $780,000. Because the prior loss history on which this reserve adjustment was based was available to the Company in 1981 and 1982, new management and Peat, Marwick concluded, the financial statements were in error under GAAP for failing to reflect contingent commissions payable in 1981 and 1982 and for showing commissions receivable in 1982. Consequently, the fourth quarter results in both years were restated in the 1983 Form 10K to reflect a reduction in earnings of $389,000 and $841,000, respectively. The charge that old management erred by overstating the IBNR reserves on the Market book, and thereby failing to show contingent commissions payable to the agent in either year and showing commissions receivable from it in 1982, is without merit. The essential premise of the charge is that old management's projections as to losses incurred but not reported on the Market book were unjustified. Paul Zucconi, the Peat, Marwick audit partner, testified that the Company had available in 1981 and 1982 a lengthy history of claims actually reported on the Market book over a period of many years, and that this history indicated a steady reduction in loss ratio after 1979. In view of this trend, he asserted, old management should have set lower IBNR reserves. As Zucconi acknowledged, however, setting an IBNR reserve is a matter of judgment based upon historical experience — a projection must be made as to the frequency and severity of future claims. Consequently, in determining whether the Market IBNR was justified, the personal familiarity with the Market book of those who set the IBNR reserves and their reasoning are crucial factors to be considered. According to Murray Lemonik, the 1981 and 1982 IBNR reserves reflected the lessons that old management had learned as a result of past mistakes. In or about 1976, the Company had paid Market contingent commissions of approximately one million dollars only to see the loss ratio on the *1475 Market book rise steadily thereafter and place the Company for a long period in the position of having to seek recovery of the contingent commissions back from the agent. Old management had found the history of claims actually reported to be an unreliable indicator of future experience. Lemonik explained that because of the nature of the Market book — surety bond coverage — claims often were not reported until many years after the losses had been incurred. Thus, the Market loss experience matured slowly — for instance, what appeared to be a very favorable loss ratio of two percent in 1973 had risen to fifty or fifty-five percent by 1979. In order to protect itself against this phenomenon, known as the "long tail," the Company decided back in 1976, after prematurely paying contingent commissions to Market, to set up a very high supplemental reserve to cover claims incurred but not reported. In short, old management set the reserves for unreported claims at the disputed levels precisely because it had found the history of reported claims — the very history new management and Peat, Marwick relied upon in determining that the IBNR reserves were excessive — to be misleading. Indeed, Richard Pluschau, who joined new management in 1983, described old management's decision in 1976 to increase the Market IBNR reserves substantially as "a prudent business decision to make sure that the agent was not going to continue to receive contingent commission payments where the reserves might be underestimated."[18] While new management recognized that these reserves might have been redundant as of December 31, 1982, it, too, was reluctant to eliminate the potential redundancy in order to pay Market contingent commissions. Thus, even new management realized, at least initially, that the Company's only hedge against the "long tail" on the surety bond business was to set the IBNR reserves at a high level. Paul Zucconi emphasized that the loss ratio on the Market book had declined between 1979 and 1982, but Lemonik stated that this ratio had not "matured" enough to be reliable in 1981 and 1982.[19] Whether old management should have changed its view of the Market loss history between 1979 and 1982 is a matter of business judgment. Plaintiff has not shown that old management acted without justification in continuing to set the Market IBNR reserves at higher levels as they did in 1981 and 1982. THE SURPLUS RELIEF TREATY WITH CONTINENTAL This dispute centers about the accounting treatment given two treaties, or contracts, between American Plan and Continental Casualty Insurance Company ("Continental") in American Plan's 1981 10K and 1982 10Q's. In preparing the 1983 annual audit, new management determined, and Peat, Marwick concurred, that these treaties should not have been accounted for as reinsurance treaties because they did not provide for a transfer of risk from American Plan to Continental as required under GAAP — that they did not, as a practical matter, obligate Continental to indemnify the Company for losses the Company incurred under the policies covered by the treaties. In effect, they assert that the economic substance of the transactions governs rather than the terms of the treaty. In the view of new management and Peat, Marwick, the Continental treaties were intended merely to provide surplus relief,[20] not reinsurance, and should have been accounted for as such. They further determined that by accounting for the treaties as if reinsurance were in effect with Continental, the Company was able to defer *1476 more acquisition costs — costs such as taxes and commissions payable upon issuing the policies covered by the treaties — than was proper under GAAP, thereby overstating its earnings by $1,230,000 as of December 31, 1981 and by $2,433,000 as of December 31, 1982. Paul Zucconi and Robert McCausland testified that whether or not a transfer of risk occurs under GAAP is to be determined by examining the substance of a treaty rather than its form: A theoretical possibility that indemnification will occur under the treaty is not sufficient; GAAP requires that it be likely or probable. Both men found that no indemnification was likely because, while the terms of the treaties provided for indemnification under certain circumstances, none had occurred since at least 1970. Murray Lemonik, a member of old management, confirmed this history. During this prior period, Zucconi found, the only funds that had been transferred between American Plan and Continental had involved interest payments by the Company to Continental in return for surplus relief. In addition, McCausland calculated that under the terms of the treaties the indemnification provisions could not have come into play in 1981 or 1982 unless the loss ratios on the reinsured policies in those years had been double the historical average dating back to the mid-1970's. He further noted that, because Continental's obligation to indemnify the Company depended upon the cumulative loss experience on the reinsured portfolio, indemnification became less and less likely with each passing year of favorable loss experience. Murray Lemonik, Luther Williams, and Richard Pluschau, each of whom, as previously noted, had worked with the Continental treaties over a period of years, unequivocally testified that the treaties involved a transfer of risk. They all emphasized that just because no indemnification had occurred in the past did not mean that none could occur in the future and that it could occur if losses on the reinsured policies exceeded certain limits. Pluschau calculated that Continental would have incurred an underwriting loss under one of the treaties had the loss ratio on its own exposure exceeded approximately seventy percent. He acknowledged that the loss ratio as to American Plan's exposure would have to be higher because of the deductibles the Company was required to pay under the treaties, and he did not indicate whether the seventy percent figure reflected annual or cumulative loss experience. Nevertheless, even if indemnification would have occurred only when the annual losses reached unusually high levels, even double the historical average, as McCausland claimed, it is not unrealistic to conclude that such levels could be reached in the event of a catastrophic loss such as might result from a flood, landslide, lightening storm, or brushfire, with which, it may be noticed, certain parts of the country have recently been plagued. Plaintiff's witnesses did not address this possibility. It is also significant that the New York State Department of Insurance, to which the Continental treaties were submitted for regulatory approval, had in 1978 refused to approve one of them because in effect it did not provide for a transfer of risk. The treaty was redrafted in light of the Department's objections and thereafter was approved. Prior to the closing the most recent approval given by the Department was in 1981. Paul Zucconi emphasized that state regulators apply statutory accounting principles and are not concerned about transfer of risk, which is significant for accounting purposes only under GAAP. Nevertheless, that state regulators may not be concerned about transfer of risk in general does not mean that when they do consider the issue, as they did here, their views are entitled to no weight. As in many of the matters discussed herein, the dispute over the accounting treatment given the Continental treaties is, at bottom, one of opinion. Each side presented evidence that contradicted and in some degree weakened the force of the other side's position but ultimately did not disprove it. As noted earlier, the business judgment and personal experience of those responsible for managing the Company's affairs on a daily basis carry considerable *1477 weight when their conduct of those affairs is at issue. The Court finds that plaintiff has not shown that the accounting treatment given the Continental treaties was erroneous. In sum, plaintiff has failed to carry its burden of proof on the central factual charge in the complaint — that the 1981 10K and 1982 10Q's contained errors that misrepresented American Plan's book value. Thus, the degree of defendants' personal involvement, if any, in the preparation of those financial statements and of plaintiff's reliance upon them need not be determined. For the reasons that plaintiff has failed to sustain its claims, it and the Guarantors have failed to establish their affirmative defenses to defendants' counterclaim and third party claim. Judgment may be entered in defendants' favor, therefore, on the principal claims, the counterclaim against plaintiff, and the third party claim against the Guarantors in accordance with the terms of the guaranty. The foregoing shall constitute the Court's findings of fact and conclusions of law. Judgment may be entered accordingly. NOTES [1] 15 U.S.C. §§ 78j(b), 78t(a). [2] 15 U.S.C. § 77q(a). [3] N.Y.Gen.Bus.Law § 352-c (McKinney 1984). [4] Ernst & Ernst v. Hochfelder, 425 U.S. 185, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976). [5] See Metropolitan Coal Co. v. Howard, 155 F.2d 780, 784 (2d Cir.1946); Pittsburgh Coke & Chemical Co. v. Bollo, 421 F.Supp. 908, 928 (E.D.N.Y. 1976), aff'd, 560 F.2d 1089 (2d Cir.1977). [6] See Salem v. United States Lines Co., 370 U.S. 31, 35, 82 S.Ct. 1119, 1122, 8 L.Ed.2d 313 (1962) (quoting United States Smelting Co. v. Parry, 166 Fed. 407, 415 (8th Cir.1909)). [7] These restatements were included in note 13 to the Form 10K for 1982. Plaintiff's exhibit 6, at 43-44. [8] Later in 1983, a second actuarial firm, Tillinghast & Co. ("Tillinghast"), was retained to evaluate the adequacy of the reserves as of December 31, 1982 and concluded that they should be increased an additional $1.5 million beyond the increase recommended by Pluschau and Huggins. Tillinghast based its conclusion, however, on information that was not available until 1983. Record at 753 (testimony of Robert McCausland). [9] Id. at 412 (testimony of Murray Lemonik). [10] Id. at 106-07, 116-17 (testimony of Alan Brinn). [11] Id. at 173 (testimony of Richard Sumner). [12] Standards of Financial Accounting & Reporting, § 4311.08(a) (1978) (quoted in plaintiff's exhibit 10(a), at 1046) (footnote omitted). [13] Plaintiff's exhibit 10(a), at 1045, 1052; see record at 152 (testimony of Dominic Esposito). [14] This second restatement of the 1982 10Q's was contained, along with the restatement of the 1981 10K, in note 2 to the 1983 Form 10K. Plaintiff's exhibit 7, at 84-88. The evidence does not indicate precisely when the information on which the Security Mutual write-off was based became available or which of the quarterly statements for 1982 were in error and by how much. Note 2 to the 1983 Form 10K states that according to current management a reserve of one million dollars should have been established in the first quarter of 1982 as a result of the Security Mutual liquidation. Id. at 84-85. However, the work papers prepared by Peat, Marwick in connection with the 1983 audit focus on whether or not the information on which the Security Mutual write-off was based was available to the Company "at the time the 12/31/82 financial statements were being prepared" and conclude that "an oversight of information available in March 1983 appears to have occurred." Plaintiff's exhibit 11(a) (emphasis added). In view of these work papers, it is unclear whether the "oversight" was that of old management or of new management and its prior auditors, Alexander Grant, or of both groups. [15] Although neither side offered a precise calculation, Murray Lemonik estimated that once in the penalty situation the Company could incur losses amounting to hundreds of thousands of dollars and pay penalty premiums in the corresponding amount before the maximum would be reached. Absent other evidence, it cannot be assumed that the premiums paid were at or near the maximum and that the burn cost was not a significant factor in this instance. [16] Of course, as both Lemonik and Williams noted, the Company would still carry a net payable to Security Mutual in the amount of $0.33 for every dollar of reinsured loss incurred, to which the liquidator could lay claim. Plaintiff did not inquire into whether the Company had properly accounted for this net payable, although Lemonik indicated that the Company did have adequate funds and reserves to make good any claim by the liquidator. In any event, although the testimony is hazy on this point, it appears that as long as the Company was in the penalty situation it would have had to carry the $0.33 net payable on its books whether or not reinsurance was recoverable from Security Mutual. Based on old management's calculation of the burn cost, the mere fact of liquidation did not appear to have a negative effect upon the Company's financial condition. [17] For a recent example of the periodic controversies over accounting procedures, see N.Y. Times, Aug. 18, 1985, § 3 (Business), at 4. [18] Record at 677 (testimoney of Richard Pluschau). [19] Id. at 519 (testimony of Murray Lemonik). [20] A surplus relief treaty is a form of reinsurance treaty whereby the insurance company cedes a portion of a policy to a reinsurer in return for a ceding commission that minimizes the drain on the ceding company's surplus and allows it to write more policies. The ceding company pays the reinsurer a guaranteed profit — or interest — over the term of the ceded policy. Generally, surplus relief treaties do not provide for a transfer of risk.

2013-10-30 06:32:38.538845+00

Montgomery

852 S.W.2d 172 (1993) STATE of Missouri, Respondent, v. Martin John HIGGINS, Appellant. No. 18145. Missouri Court of Appeals, Southern District, Division Two. April 27, 1993. *174 John T. McMullan, Pelts, Stokley and Turnbow, Kennett, for appellant. Jeremiah W. (Jay) Nixon, Atty. Gen., Hugh L. Marshall, Asst. Atty. Gen., Jefferson City, for respondent. MONTGOMERY, Presiding Judge. Martin John Higgins (Defendant) waived jury trial and, upon trial by court, was found guilty of the class B felony of sodomy, in violation of § 566.060.[1] He was sentenced to three years' imprisonment and now brings this appeal. The information charged in pertinent part that on or about August 17, 1990, Defendant had deviate sexual intercourse with C.H. who was then less than fourteen years of age and to whom Defendant was not married. Defendant is the paternal grandfather of C.H. C.H. was eleven years old at the time she testified at trial and was nine years of age at the time of the incident charged. Prior to August 17, 1990, C.H. and her brother (an eighth grader at the time of trial) often visited with their paternal grandparents who lived in Clarkton, Missouri. During that time C.H. and her brother lived with their mother in Dexter, Missouri. C.H. testified that two weeks before school started in Dexter on August 21, 1990, her grandmother Higgins (wife of Defendant), her aunt Annette and cousin Brittany picked her and her brother up to go to her grandparents' home. They stopped at Wal-Mart, where her two-year-old cousin Brittany fell from a shopping cart and required an emergency trip to the hospital. C.H. and her brother were returned to Dexter rather than spending the night with their grandparents. That date was August 7, 1990. The weekend after the weekend following the Wal-Mart incident, C.H. testified her grandmother took her with her brother to Clarkton. That weekend commenced on Friday, August 17, 1990. They stopped at their grandparents' bar in Clarkton where her grandmother remained to work the evening shift. Defendant *175 took the children to the grandparents' home where supper was prepared. After supper Defendant and the children watched TV. Later, C.H.'s brother went to bed. Defendant was lying on the couch and asked C.H. to come over and sit with him. She testified that Defendant "played with my boobs and my vagina" after he "put his hands down my panties." She stated Defendant had done this about fifteen to twenty times previously. The deposition of C.H. was taken on February 27, 1992, before the trial commenced on March 11, 1992. In the deposition C.H. testified contrary to her trial testimony in that she stated the incident with Defendant occurred on the date of Brittany's injury. Defendant's first point claims the "trial court erred by admitting, over the objection of the [Defendant], testimonial evidence presented by the alleged victim which directly contradicted her deposition testimony, causing the [Defendant], who was improperly not apprised of such a change of testimony until the trial, unfair and prejudicial surprise." This point does not comply with Rule 30.06[2] which sets forth the requirements for briefs in appeals of criminal cases. Paragraph (d) of the rule provides, in part: The points relied on shall state briefly and concisely what actions or rulings of the court are sought to be reviewed and wherein and why they are claimed to be erroneous with citations of authorities thereunder. Defendant's point relied on does not state wherein and why the trial testimony of the victim caused Defendant to suffer "unfair and prejudicial surprise," nor does it reveal wherein and why it was improper that Defendant was not notified of such change in testimony. A point written in violation of Rule 30.06(d) that cannot be understood without resorting to the transcript or argument section of the brief preserves nothing for appellate review. State v. Smith, 770 S.W.2d 469, 472 (Mo.App. 1989); State v. Gamble, 649 S.W.2d 573, 576 (Mo.App. 1983). In addition, the only two cases cited by Defendant under this point are Pulitzer v. Chapman, 337 Mo. 298, 85 S.W.2d 400 (1935), and Woelfle v. Connecticut Mut. Life Ins. Co., 234 Mo.App. 135, 112 S.W.2d 865 (1938). Neither case is authority for the point made by Defendant, thus violating another requirement of Rule 30.06(d). We are not required to review points or arguments thereunder when they appear without citation of applicable authority. Gamble, 649 S.W.2d at 576. Absent proper explanation concerning why no authority is cited, points relied on without citations are deemed waived or abandoned. State v. Meadows, 785 S.W.2d 635, 641 (Mo.App.1990). Regardless, we may exercise our discretion to review this point for plain error resulting in manifest injustice or a miscarriage of justice. Rule 30.20. Resorting to Defendant's argument, the best we can determine is that he claims the prosecutor violated § 491.075.3.[3] Apparently the prosecutor talked to C.H. three days before trial and learned she would testify the incident in question occurred on August 17, 1990, in opposition to her deposition testimony. Defendant claims § 491.075.3 required the prosecutor to reveal the change in the child's testimony before trial which would have allowed him to prepare his alibi defense. Section 491.075 pertains to the admissibility of statements of a child under twelve years of age when certain offenses are involved. It reads, in pertinent part: 1. A statement made by a child under the age of twelve relating to an offense under chapter 565, 566 or 568, RSMo, performed with or on a child by another, not otherwise admissible by statute or court rule, is admissible in evidence in criminal proceedings in the courts of this state as substantive evidence to prove the truth of the matter asserted if: (1) The court finds, in a hearing conducted outside the presence of the jury that the time, content and circumstances of the statement provide sufficient indicia of reliability; and *176 (2) The child either: (a) Testifies at the proceedings; or (b) Is unavailable as a witness. .... 3. A statement may not be admitted under this section unless the prosecuting attorney makes known to the accused or his counsel his intention to offer the statement and the particulars of the statement sufficiently in advance of the proceedings to provide the accused or his counsel with a fair opportunity to prepare to meet the statement. (Emphasis added.) When subsection 3 is read in context with the entire statute, it is obvious that Defendant incorrectly views the purpose of the statute. Section 491.075 only involves admissibility of a child victim's statement to another person which would ordinarily be inadmissible as hearsay except for the statute. See, e.g., State v. Blue, 811 S.W.2d 405, 407-08 (Mo.App. 1991); State v. Zamora, 809 S.W.2d 83, 86 (Mo.App.1991). The statute has no application to the child's own testimony at trial. C.H.'s testimony as to the date of the offense was admissible without regard to any assistance from § 491.075. Therefore, the prosecutor had no obligation to comply with subsection 3 to render C.H.'s testimony admissible. Furthermore, Defendant was not hindered in presenting his alibi defense. Both he and his wife testified that preparations for a fish fry to occur on August 18, 1990, made it necessary to return the children to their home on the 17th about 1:00 p.m. The information charged the crime occurred on August 17, 1990, and the State's evidence revealed it occurred that evening. Defendant's alibi defense squarely met the State's evidence. We find no plain error resulting in manifest injustice or a miscarriage of justice regarding Point I and it is denied. In Point II, Defendant asserts the "trial court erred by allowing into evidence out of court statements by the alleged victim that did not qualify as admissible non-hearsay statements as defined in § 801(d)(C) of the Missouri Rules of Evidence." Like Point I, this point is penned in complete disregard of Rule 30.06(d) and, for the reasons stated in Point I, preserves nothing for appellate review. As written, the point fails to state wherein and why the unspecified out-of-court statements by the victim do not qualify as admissible non-hearsay statements. Our review is further thwarted by our inability to locate any treatise or publication entitled Missouri Rules of Evidence. Believing Defendant would enlighten us with the contents of § 801(d)(C), we turned to the argument section of his brief and learned nothing. No further reference to this publication is found there. The State's brief surmises that "no such provisions exist." Reluctantly, we review for plain error. Defendant argues his hearsay objection to the testimony of Corporal Shirley Alexander should have been sustained. She testified of her interview with C.H. in October 1990 in which C.H. related her grandfather had touched her in a private area. From Defendant's discussion of State v. Wright, 751 S.W.2d 48 (Mo. banc 1988), we assume the error addressed is the failure of the trial court to hold a hearing as required by § 491.075.1(1). In State v. Langlois, 785 S.W.2d 679 (Mo.App.1990), the Court reviewed a point for plain error which alleged the trial court failed to conduct a hearing under § 491.075 in order to determine if a child victim's statements were reliable. Relying on State v. Fogle, 743 S.W.2d 468, 470 (Mo. App.1987), Defendant's point was denied, regardless of the lack of a hearing, because the challenged testimony was cumulative to the evidence elicited from the child victim who testified at trial and was competently cross-examined by defendant's counsel. Here, the challenged testimony of Corporal Alexander was cumulative to the trial testimony of C.H. who was fully cross-examined by Defendant's counsel. We find no manifest injustice or miscarriage of justice will result if plain error relief is not granted. Point II is without merit. Defendant's last point reads: *177 The trial court erred in finding the [Defendant] guilty beyond a reasonable doubt because insufficient evidence to support such a finding was presented by the State. The infirmities of this point and its violation of Rule 30.06(d) are readily apparent. The point does not state wherein and why the evidence was insufficient to support the trial court's finding of guilt. In State v. Keith, 811 S.W.2d 70 (Mo.App.1991), we ruled a similar point preserved nothing for our review and we so rule here. Nevertheless, we have carefully read the entire transcript of 197 pages to determine if plain error relief is warranted. Rule 30.20. Examination of Defendant's one-page argument leaves us convinced the matters complained of did not result in manifest injustice or miscarriage of justice. Defendant is not entitled to plain error relief on this point. Judgment affirmed. FLANIGAN and PREWITT, JJ., concur. NOTES [1] Statutory references are to RSMo 1986 unless otherwise indicated. [2] Rule references are to Missouri Rules of Court (1993). [3] Statutory references are to RSMo 1986.

2023-08-22 21:20:03.405605+00

Price

Dissenting Opinion by Price, J.: Without reaching the merits of the appeal, I would reverse the action of the lower court due to a procedural error. The docket entries most immediately relevant to the present case indicate that on July 26, 1974, appellants filed a petition in the lower court to replace the district attorney with a private prosecutor. This petition was denied by the trial court by order dated December 2, 1974. Appellants appealed this denial to the Pennsylvania Supreme Court and on December 20, 1974, certiorari was granted.1 This divested the lower court of *443jurisdiction over the case. Commonwealth v. Johnson, 431 Pa. 522, 246 A.2d 345 (1968); DeMatteo v. White, 233 Pa. Superior Ct. 339, 336 A.2d 355 (1975). However, on December 30, 1974, the lower court accepted a guilty plea and sentenced the defendant. Because jurisdiction rested with the supreme court at that time, the lower court had no power over the proceedings and could not dispose of the case. The proceedings in the lower court were a nullity during the pendency of that appeal. The guilty plea was improperly accepted and sentence could not have been imposed. I would remand the case for a proper determination of the defendant’s guilt and a proper sentence. Again, without reaching the merits, I must also note an inconsistency in the majority opinion. At the outset, the majority acknowledges that the facts of the case are “sketchy,” but later concludes that “the posture of this case compels the conclusion that the lower court acted properly in denying the petition.” (Majority opinion at page 439). When faced with evidence as “sketchy,” as well as conflicting, as that found here, the action of the lower court does not immediately appear to comply with the American Bar Association standards discussed by the majority. Under the circumstances of the instant case, we should not so readily affirm the actions of the lower court. Reversing and remanding would be neither senseless nor would it simply ensure jurisdictional adequacy, but is rather mandated in this situation. . That appeal, which was on March 5, 1975, transferred to this court, is the appeal at 419 April Term, 1975. Two subsequent appeals were taken to the supreme court and also transferred to this court, the *443appeal at 420 April Term, 1975 from an order of the lower court entered December 23, 1975, and the appeal at 421 April Term, 1975 from the proceedings in the lower court on December 30, 1975.

2013-10-30 06:32:38.742892+00

Dillin

615 F.Supp. 491 (1985) MILWAUKEE MUTUAL INSURANCE COMPANY, Plaintiff, v. Daniel R. BUTLER, Defendant. No. IP 82-926-C. United States District Court, S.D. Indiana, Indianapolis Division. August 15, 1985. *492 Frank I. Magers, Indianapolis, Ind., for plaintiff. William V. Barteau, Speedway, Ind., for defendant. MEMORANDUM OF DECISION DILLIN, District Judge. The Court, having heretofore heard the evidence in this cause, limited to the issue of liability, now makes its findings of fact and conclusions of law in the form of this memorandum. Rule 52(a), Federal Rules of Civil Procedure. Background On October 28, 1979, defendant, Daniel R. Butler, was struck by an automobile near the intersection of West 34th Street and High School Road in Indianapolis, Indiana. The striking followed an altercation between defendant and one of his friends with two unidentified young males, one of whom was the driver of the car which struck the defendant. The vehicle that struck defendant did not stop following the incident and thus was a "hit and run" automobile within the meaning of the term as defined in the insurance policies written by plaintiff, Milwaukee Mutual Insurance Company. Defendant received extensive injuries as a result of the striking, was hospitalized *493 for over three weeks and was confined to his bed at home for several months thereafter. The incident was reported to the Indianapolis Police Department and an investigation was undertaken by that department immediately following the striking. With the assistance of a Marion County Deputy Sheriff, a relative of defendant, a tentative identification of the driver and owner of the vehicle that struck defendant was made and charges were filed against the alleged driver, a juvenile, in the Juvenile Division of the Marion County Superior Court. A hearing was held in such juvenile case in May, 1980, at which time defendant was unable to identify the charged juvenile as the driver of the vehicle which had struck him, and he was unable to make positive identification of the juvenile's automobile as such vehicle. As a result, the charges against the juvenile were dismissed. Until the time of the hearing in Juvenile Court, defendant was operating under the belief that the driver and owner of the vehicle which had struck him were known, and he was unaware that he could have insurance coverage under insurance policies held by his relatives occupying the same household, if the identity of the owner and driver of the vehicle which struck him were unknown. Thereafter he hired counsel, who put plaintiff on notice by a letter dated June 24, 1980, following by a telephone call on July 1, 1980. At the time of his injuries, defendant was residing with his parents, Samuel P. and Barbara Butler, and his sister, Judith Butler, in his parents' residence. His father had an insurance policy in effect with Milwaukee Mutual which provided uninsured motorist coverage with $15,000/30,000 limits. This policy also provided for medical services coverage of $2,000. It was as to this policy which defendant originally claimed benefits. Defendant's sister, Judith Butler, also had had an insurance policy in effect with Milwaukee Mutual which provided for $15,000/30,000 uninsured motorist coverage and $1,000 medical services coverage. Under the terms of the policies, defendant was included within the definition of "insured" in that he was a resident of the same household with his father and his sister, and he was not otherwise excluded by the terms of the policy. Ms. Butler's original policy with the plaintiff covered the period from April 23, 1979, to October 23, 1979. Before the termination date of October 23, 1979, she received a "renewal certificate" from plaintiff which stated, in pertinent part, that: "In consideration of the payment of the premium shown below, this policy is hereby extended for the Policy Period designated." The policy period so designated was from October 23, 1979, to April 23, 1980, and the premium payment was $176.80. No such payment was ever made. After receiving a final notice that the renewal premium had not been received by plaintiff, Ms. Butler received a notice from plaintiff that her policy had lapsed. In January, 1980 she applied for and was issued a new policy from plaintiff covering her for the period of January 14, 1980, to July 14, 1980. Plaintiff's local representative, Jerry Jenkins, responded to defendant's notice on August 20, 1980 by letter. Mr. Jenkins testified in deposition that he opened a file on the case, but he took no further action on the claim until approximately a year later when he contracted with an independent adjusting company, Crawford and Company, to investigate and adjust the claim. Crawford and Company representatives met with defendant's attorney on several occasions, and said attorney supplied Crawford and Company with all available medical and other information available. Two appointments were made to obtain defendant's statement, as requested by Crawford and Company, but the Crawford and Company representative failed to appear. Defendant's attorney then contacted Mr. Jenkins by letter of October 19, 1981 and informed him of the status of the case and requested that immediate action be taken. Following this, the Crawford and Company representative appeared and took a written statement from defendant. *494 Defendant filed a John Doe complaint against the unknown defendants and plaintiff in the Marion County Superior Court on October 23, 1981. Plaintiff appeared in that case and filed various motions. Plaintiff then filed this action, seeking a declaratory judgment that it was not liable to defendant under the policies above mentioned. Defendant filed a counterclaim for relief under the policies. The Samuel P. Butler Policy I. Initially, the Court must determine whether the defendant gave sufficient notice to plaintiff of his claim under the insurance contract. Under Indiana law, the failure of the insured to give reasonable notice constitutes a material breach of the terms of the policy; however, if the insured can sustain his burden of proving that the insurer was not prejudiced by the late notice, then coverage may not be denied on that basis. Miller v. Dilts, 463 N.E.2d 257, 265-66 (Ind.1984). It is not completely clear under the instant contract as to when Mr. Butler was required to notify his insurer of his claim. On page three of the contract it is provided that if the identity of the driver or owner of a hit-and-run automobile cannot be ascertained, then the insured must report the accident within 24 hours to a police officer and must file with the company within thirty days thereafter a sworn statement that he has a cause of action arising out of the accident. Later, on page four of the policy, it states that written notice must be given within twenty days following the date of the accident, occurrence or loss, provided that the failure to give such notice within the time specified shall not invalidate any claim made by the insured if it shall be shown not to have been reasonably possible to give such notice within the prescribed time and that such notice was given as soon as reasonably possible. This Court need not decide whether or not the notice given by defendant was reasonable under the contract and facts of this case because it is clear that, even if the notice was late, the plaintiff, as insurer, was not prejudiced thereby. The incident at issue was promptly reported to the Indianapolis Police Department as well as the Marion County Sheriff's Department. A thorough investigation ensued which resulted in an arrest of a suspect who was subsequently released because of the inability of the witnesses to identify him. It is doubtful that the plaintiff, even had it been given more prompt notice, could have or would have conducted a more effective investigation. This is manifested by the actions which Milwaukee Mutual did take (or failed to take) once it was actually notified of defendant's claim. The plaintiff's claims manager opened a file on the matter after receiving notification of the claim but took no real action other than to request copies of defendant's medical bills and reports. Such reports, even if submitted much earlier, would not have aided the plaintiff in identifying the hit-and-run vehicle. Not until a year after being notified of the claim did Milwaukee Mutual assign the case to an independent adjusting company for investigation of the claim. Four months after this assignment, the independent adjuster finally took the insured's statement, but only after missing two previous appointments for that purpose. The insured has established that the insurer was not prejudiced, under the facts of this case, by the timing of the claim notification even assuming that it was late, because it is unlikely that Milwaukee Mutual could have identified the driver and/or owner of the offending vehicle even given an earlier opportunity to do so. Thus, defendant's claim cannot be denied on the basis of untimely notice. II. The second issue before the Court is whether a victim covered under an uninsured motorist provision of an automobile liability policy may recover from his own carrier for injuries resulting from the intentional wrong of an uninsured motorist when the policy protects the insured from damages "caused by accident." This appears *495 to be a case of first impression under Indiana law, which is the law to be applied in this action. Essentially, the determination of whether an intentional act constitutes an "accident" within the meaning of an uninsured motorist provision depends upon whether such an act is viewed from the standpoint of the victim or from the standpoint of the intentional wrongdoer. It seems clear to this Court that the proper standpoint from which to view such an occurrence is that of the victim. A victim's injuries are just as unexpected and unwelcome — accidental, if you will — to him whether they are intentionally, negligently, or otherwise delivered. This Court believes that, given the opportunity, the Indiana Supreme Court would take the "victim viewpoint" approach, thus aligning itself with the rule that injuries intentionally inflicted by an uninsured motorist fall within the meaning of damages "caused by accident" in the insured victim's uninsured motorist coverage. State Farm Fire & Casualty Company v. Tringali, 686 F.2d 821, 824 (9th Cir.1982) (construing Hawaii law); Sciascia v. American Insurance Company, 183 N.J.Super. 352, 443 A.2d 1118, 1120 (1982); Kish v. Central National Insurance Group of Omaha, 67 Ohio St.2d 41, 424 N.E.2d 288, 291 (1981); Tomlin v. State Farm Mutual Automobile Liability Insurance Company, 95 Wis.2d 215, 290 N.W.2d 285, 288 (1980) (construing automobile liability provision other than that for uninsured motorist); Leatherby Insurance Company v. Willoughby, 315 So.2d 553, 555 (Fla.Dist.Ct.App.1975); Davis v. State Farm Mutual Automobile Insurance Company, 264 Or. 547, 507 P.2d 9, 10 (1973) (construing Michigan law). The Indiana Court of Appeals, by focusing on the insured victim, has implicitly recognized the rationale behind this position by noting that "the duty of the insurer to pay damages arises solely out of its contract with its insured and not by reason of any special relationship between the insurer and the uninsured motorist." Bocek v. Inter-Insurance Exchange of Chicago Motor Club, 175 Ind.App. 69, 369 N.E.2d 1093, 1096 (1977). This interpretation of the language "caused by accident" is also supported by the declaration of the Indiana Supreme Court that "[i]t is the rule ... that an ambiguous term in an insurance policy will be resolved in favor of the insured." Freeman v. Commonwealth Life Insurance Company, 259 Ind. 237, 286 N.E.2d 396, 397 (1972). That the incident at bar was "caused by accident" within the meaning of the policy under Indiana law is further evidenced by the fact that Indiana is a compulsory automobile liability insurance state. Ind.Code § 9-1-4-3.5 (Supp.1984). Compulsory insurance statutes manifest a social policy to guarantee compensation for victims of traffic mishaps. Other jurisdictions which require such insurance, recognizing that its purpose is to provide broad protection, have held that injuries suffered as the result of an intentional act by the insured are caused "by accident" and thus are covered by policies utilizing such language. State Farm Fire and Casualty Company v. Tringali, supra; Sciascia v. American Insurance Company, supra; Hartford Accident and Indemnity Company v. Wolbarst, 95 N.H. 40, 57 A.2d 151, 153 (1948). The general rule of insurance law that voids a policy indemnifying an insured against liability for his willful wrong does not apply to compulsory automobile liability insurance because "[t]he statute itself is declaratory of public policy applicable to compulsory insurance and supersedes any rule of public policy which obtains in ordinary insurance law." Wheeler v. O'Connell, 297 Mass. 549, 9 N.E.2d 544, 547 (1937). This Court need not decide whether a victim of intentional harm may recover under the intentional wrongdoer's own insurance coverage because the case at bar concerns the distinct situation in which the victim and the insured are one and the same, by virtue of uninsured motorist coverage. However, given Indiana's compulsory insurance statute and the fact that intentional harm is just as "accidental" to the victim whether it is he or the tortfeasor who is insured, this distinction is not of critical importance and it would not change our conclusion on this issue. *496 Defendant's injuries in this case were "caused by accident" within the meaning of the instant uninsured motorist provision, thus causing plaintiff to be liable to defendant thereunder. The maximum amount of such insurance is in the amount of $15,000 for bodily injury and $2,000 for medical expenses. Although the issue of the amount of damages was reserved, it is obvious from material in the file that defendant's loss in each category is substantially more than the amount of insurance. The Judith Butler Policy The final issue which confronts the Court is whether the defendant's sister's policy with plaintiff, covering the defendant as an insured, was in effect at the time of the hit-and-run incident. We hold that it was not. The credible evidence shows that Ms. Butler did receive communications from plaintiff, prior to her brother's mishap, stating that her insurance protection was being terminated at the expiration of her policy period for nonpayment of premium. However, it is ultimately irrelevant whether or not she received such notice. Plaintiff is not required to give notice, since the policy was not "cancelled" within the meaning of Ind.Code § 27-7-6-1 et seq., but rather was "not renewed" due to Ms. Butler's failure to pay the renewal premium. American Family Mutual Insurance Company v. Ramsey, 425 N.E.2d 243, 244 (Ind.Ct.App.1981). Defendant argues that plaintiff renewed the policy by issuing a "renewal certificate" to Ms. Butler and therefore a notice of cancellation was subsequently required prior to the termination of the policy. However, this is not the case. The Indiana Court of Appeals has recognized the general rule that "the delivery of a policy by the insurer to the insured upon the expiration of a policy without request by the insured is an offer which must be accepted by the insured before a contract of insurance is effective." Cook v. Michigan Mutual Liability Company, 154 Ind.App. 346, 289 N.E.2d 754, 757 (1972). Applying this rule to the facts of the case, the court went on to hold that when a renewal policy recites the payment of a premium as consideration, and there is no intention to pay the required premium, there is no valid insurance policy. Id. Here, as in Cook, the "renewal policy" recites the payment of the premium as consideration for the extension of the policy. Ms. Butler did not pay, nor did she have any intention of paying the required premium. Therefore, no renewal took place and the policy lapsed as of October 23, 1979, five days before her brother's accident. Summary For all the foregoing reasons, the plaintiff is liable under the insurance policy purchased by Samuel P. Butler for the injuries suffered in the accident of October 28, 1979, by Daniel R. Butler in an amount not to exceed $15,000 for personal injuries and $2,000 for medical expenses. There is no such liability under the policy purchased by Judith Butler.

2013-10-30 06:32:38.78287+00

Melvin

34 Md. App. 357 (1977) 367 A.2d 548 RICKY LYNN TROVINGER, PATRICIA KAY LANE AND ALLAN TOMBAUGH HEALEY v. STATE OF MARYLAND. No. 62, September Term, 1976. Court of Special Appeals of Maryland. Decided January 3, 1977. *358 The cause was argued before THOMPSON, MENCHINE and MELVIN, JJ. Richard M. Karceski, with whom was Harold I. Glaser on the brief, for appellants. Gilbert H. Robinette, Assistant Attorney General, with whom were Francis B. Burch, Attorney General, and John S. Hollyday, State's Attorney for Washington County, on the brief, for appellee. MELVIN, J., delivered the opinion of the Court. Appellants were convicted of multiple violations of the Controlled Dangerous Substance Laws, Art. 27, Md. Code Ann. § 276 et seq. (1976), in a non-jury trial in the Circuit Court for Washington County (Rutledge, J.). Under separate indictments appellants Trovinger and Lane, and Trovinger and Healey, were convicted of conspiracy to distribute cocaine. Trovinger was also convicted of conspiracy to distribute marijuana. All three appellants were convicted of possession of cocaine with intent to distribute. An informant's tip, relayed by Pennsylvania State Police Officer Prough to the Maryland State Police, set the stage for the investigation which resulted in the appellants' arrests. This information was presented in an affidavit pursuant to 18 U.S.C., § 2518 (1970) in support of an Ex Parte wiretap order. The affidavit alleged that the informant was negotiating, via telephone, to purchase 500 pounds of marijuana from Trovinger, and that Trovinger was in telephone contact with his supplier in Wisconsin. The affidavit further averred that the informant had been supplying information to the Pennsylvania State Police since 1973, and that this information had led to fifteen separate arrests for narcotics violations. The application for an Ex Parte order was granted on 17 October 1974, allowing interception of Trovinger's telephone calls for a period of not more than thirty days. From this date until 10 November 1974, when appellants were arrested, twenty-eight *359 drug-related telephone calls were intercepted. Of these calls, twenty were admitted as evidence at trial over appellant's timely objections. The content of these conversations, coupled with testimony from the Maryland State Police, presented a scenario of ongoing drug traffic. Information gleaned from these phone calls disclosed that on 10 November 1974 the scenario would reach its climax when Trovinger would return to Washington's National Airport from a drug-buying trip, and would be met there by appellants Healey and Lane. On that date, after following their car from National Airport to the Hagerstown area, the Maryland State Police arrested the appellants. The curtain fell when a search of Trovinger revealed 177.008 grams of cocaine concealed on his person. Testimony established the resale value of this amount of cocaine to be in excess of $30,000. The instant indictments were issued on 26 November 1974. On 13 August 1975 and again on 21 August 1975 appellant Trovinger voluntarily appeared, without counsel, at the Baltimore office of the Federal Drug Enforcement Administration. On 21 August 1975 he wrote out a 26-page statement relating his drug enterprise experiences for a period of several years. This statement contained no information concerning the case at bar. The statement was admitted only against Trovinger at his trial. At trial, the appellants stipulated that the cocaine had been seized from Trovinger's person, that the car in which he was then a passenger was owned and operated by appellant Lane, and that appellant Healey was also present in the car at the time of the arrest. A motion to suppress the intercepted telephone conversations was denied. After a two-day trial, at which the three appellants were jointly represented by two attorneys, the appellants were convicted. This appeal followed. The questions presented for our consideration may be summarized as follows: (1) Was the Ex Parte order for the wiretap improperly granted? *360 (2) Was the statement of appellant Trovinger improperly admitted against him? (3) Was there a conflict of interest between counsel for the appellants? (4) Was the evidence insufficient to support the convictions? Because we answer each question in the negative we shall affirm the convictions. The Wiretap The privacy of telephone communication is guaranteed by the Fourth Amendment of the United States Constitution. Before this privacy may be invaded by the police, "probable cause for belief that an individual is committing, has committed, or is about to commit a particular offense ..." (including narcotic offenses) must be demonstrated. Other statutory requirements must also be met. See 18 U.S.C., § 2518 (1970). Appellant Trovinger claims that his motion to suppress the intercepted telephone conversations was improperly denied because the underlying Ex Parte Order does not meet statutory standards. He challenges the legal sufficiency of the required affidavit for failure to adequately demonstrate the informant's reliability as well as the necessity for a wiretap. After independently reviewing the record and the affidavit we find these contentions to be without merit. Appellant concedes the credibility of Cpl. Prough of the Pennsylvania State Police, but maintains that his informant's basis of knowledge was not proven. We disagree. The affidavit adequately demonstrates the basis for the informant's knowledge and amply supports his conclusions of the presence of criminal activity. It is evident within the four corners of the affidavit that the informant was dealing personally with Trovinger and was negotiating via telephone to purchase 500 lbs. of marijuana from him. The personal knowledge of the informant presented in the affidavit provides a sufficient basis for probable cause. See Spinelli v. U.S., 393 U.S. 410, 89 S.Ct. 584 (1969); Bolesta v. State, 9 *361 Md. App. 408, 264 A.2d 878 (1970). Compare, Collins v. State, 17 Md. App. 376, 302 A.2d 693 (1972). We hold further that the need for a wiretap was adequately demonstrated. The affidavit describes in detail the means of surveillance attempted to be used, and why these means had been, or would be, unsuccessful. The State need not exhaust all conceivable investigative possibilities before seeking a wiretap. In U.S. v. Lanza, 356 F. Supp. 27 (M.D. Fla. 1973), the granting of an Ex Parte order was challenged for failure to exhaust other investigative possibilities. In rejecting this argument, the court stated: "The purpose of the exhaustion requirements is not to foreclose the use of electronic surveillance until the State has exhausted every possible means of obtaining a viable case against the subjects, but merely to inform the authorizing magistrate or judge of the nature and progress of the investigation and the difficulties inherent in the use of normal techniques." 356 F. Supp. at 30. See also U.S. v. Leta, 332 F. Supp. 1357 (M.D.Pa. 1971). In all other respects the matter contained in the affidavit conforms to the standards set forth in Haina v. State, 30 Md. App. 295, 352 A.2d 874 (1976). Appellant Trovinger further contends that the affidavit was fatally defective for failure to aver that the communication would be of a continuing nature. Although this issue is not properly raised on appeal, Md. Rule 1085, after examination of the affidavit, we find the argument without merit. Trovinger's Statement On 13 and 21 August 1975 appellant Trovinger visited the Baltimore office of the Drug Enforcement Administration. At that time the appellant made a statement which detailed his traffic in narcotics, but omitted any reference to the activities for which he was then under indictment. His attorney was not present. This statement was admitted only *362 against appellant Trovinger at trial. He now attacks the admission of this statement on the sole ground that his Sixth Amendment right to counsel was violated. He does not question the relevancy or materiality of the statements. Appellant initially relies upon Blizzard v. State, 30 Md. App. 156, 351 A.2d 443 (1976) (Blizzard I.) Blizzard I adopted a liberal exclusionary rule for uncounseled, post-indictment statements. The thrust of this rule is that all uncounseled statements, elicited by the police after indictment, must be excluded from evidence. See, e.g., United States v. Thomas, 474 F.2d 110 (10th Cir.), cert. den. 412 U.S. 932 (1973). After the argument in the instant case, Blizzard was reversed by the Court of Appeals. State v. Blizzard, 278 Md. 556 (1976), (Blizzard II). In Blizzard II the Court, through Judge Smith, rejected the liberal exclusionary rule for uncounseled, post-indictment statements. The Court stated that, "... such a sweeping rule [requiring exclusion of all uncounseled, post-indictment statements] is hazardous in that it fails to take account of the special facts that arise in each new case". Blizzard II, at 22, citing Commonwealth v. Frongillo, 359 Mass. 132, 136, 268 N.E.2d 341 (1971). Thus it is clear that a challenged, uncounseled post-indictment statement is not automatically constitutionally vitiated, but rather must be evaluated in the light of its own peculiar facts. Based upon our independent analysis of the present case, we hold Trovinger's statement to be without constitutional taint. Preliminarily, we point out that insofar as the instant charges are concerned, the statement is not inculpatory. It contains a detailed description of his dealings in drugs for many years prior to his arrest, but omits any reference to the offense for which he was then under indictment. Second, it is patent that the statement was not induced, elicited, or solicited, by the prosecution. To the contrary, it appears that Trovinger himself sought out the federal authorities and that his statement was palpably voluntary. Trovinger first made contact with the Drug Enforcement Administration at their office in Philadelphia. He was there told to contact the Baltimore office. Trovinger visited the *363 Baltimore office on 13 August 1975. It was not until his second visit, one week later, on 21 August 1975, that Trovinger tendered his 26 page statement. There is some confusion on the point, but it appears that Trovinger was also advised of his right to counsel. Based upon these facts, we do not perceive that Trovinger's right to counsel has been violated. Not only was his statement not inculpatory for the charges for which he was tried, but it also appears that the statement was voluntarily made. See United States v. DeLoy, 421 F.2d 900 (5th Cir.1970), Blizzard II, supra. Appellants Healey and Lane also cite as error the admission of Trovinger's statement. It is their claim that the improper admission of the statement prejudiced their defense. Assuming arguendo that the statement was improperly admitted against Trovinger, the contentions of Healey and Lane must nevertheless fail. We have long followed the common law rule that in a non-jury trial the judge may both rule on the admissibility of evidence and act as trier of fact with no prejudice to the respective parties, State v. Hutchinson, 260 Md. 227, 271 A.2d 641 (1970); In Re Appeal No. 977, 22 Md. App. 511, 323 A.2d 663 (1974). Moreover, because the statement does not implicate appellants Lane and Healey, and the statement was offered only against appellant Trovinger, the exclusionary rule of Bruton v. United States, 391 U.S. 123, 85 S.Ct. 1620 (1968), is inapplicable. Conflict of Interest Our careful review of the record leads us to conclude that there was no fatally prejudicial conflict of interest present in this case. The State's evidence was subjected, as it was presented, to strict scrutiny by appellants' attorneys. The intercepted telephone calls, which comprised the State's case in chief, were all objected to and ultimately admitted only against respective parties identified in each phone call. None of the appellants presented a defense. There is no showing of a possible conflict among counsel and defendants as to theories or tactics of defense. We hold, therefore, that no conflict of interest resulted from the three appellants' representation by the same two attorneys. *364 Sufficiency of the Evidence Appellants claim that there was insufficient evidence to support their respective conspiracy convictions as well as Lane and Healey's convictions of possession of cocaine with intent to distribute. After carefully reviewing the record, we find that these contentions are without merit. It was proper for the court to infer from the uncontradicted evidence adduced at trial that the alleged conspiracies were formed and that Lane and Healey did have possession of cocaine. Seidman v. State, 230 Md. 305, 187 A.2d 109, cert. den. 374 U.S. 807 (1963); Greenwald v. State, 221 Md. 245, 157 A.2d 119, App. dismissed, 363 U.S. 721 (1960). Appellants Lane and Healey initially contend that their voices were not adequately identified from the intercepted telephone calls. Absent this identification, they argued, it could not be proven that they conspired together and therefore the conspiracy convictions must fail. Whether the voices of appellants Lane and Healey were properly identified was a question of fact for the court to determine. Judge Rutledge had the opportunity to listen to the taped conversations and to observe and judge the demeanor of the State's witnesses who identified the respective voices. The appellants neither testified nor presented any evidence in their behalf. This, of course, is their constitutional right, but the voice identifications are nonetheless uncontroverted. Upon our review of the record we find ample evidence from which the judge could find that the taped voices were those of the appellants. Appellants Lane and Healey further claim that their possession of the cocaine was not adequately proven.[1] We disagree. Our cases do not require actual possession of contraband; constructive possession will support a conviction. At the time of their arrest Lane and Healey were returning from the airport where they had traveled to meet Trovinger, knowing fully the illegal purpose of his travel. Based upon these facts, it was proper for the court to infer *365 Lane and Healey were participating in "the mutual use and enjoyment of the contraband". Folk v. State, 11 Md. App. 508, 518, 275 A.2d 184 (1971); Anderson v. State, 9 Md. App. 639, 267 A.2d 302 (1970). Because we are unable to find that the trial judge was clearly erroneous in his conclusions of fact, or that he erred in applying the law, we shall affirm the judgments. Williams v. State, 5 Md. App. 450, 247 A.2d 731 (1968); Maryland Rule 1086. Judgments affirmed. Costs to be paid by appellants. NOTES [1] It was stipulated at trial that Trovinger had possession of the contraband.

2013-10-30 06:32:38.819185+00

Breckenridge

852 S.W.2d 396 (1993) HAGGARD HAULING & RIGGING CO., INC., Appellant, v. STONEWALL INSURANCE COMPANY, Respondent. No. WD 45938. Missouri Court of Appeals, Western District. April 27, 1993. *397 Norman E. Beal, Kansas City, for appellant. Gary A. Schafersman, Niewald, Waldeck & Brown, Kansas City, for respondent. Before BRECKENRIDGE, P.J., and SHANGLER and KENNEDY, JJ. BRECKENRIDGE, Presiding Judge. Haggard Hauling & Rigging Co., Inc. appeals from the trial court's order granting Stonewall Insurance Company's motion for summary judgment. Haggard raises five points on appeal alleging that the trial court erred in granting Stonewall summary judgment because: (1) genuine issues of material fact existed; (2) the policy provided coverage for Haggard's defense of a lawsuit and the amount Haggard paid to settle the lawsuit; (3) Endorsement No. 3 (the Following Form Endorsement) did not preclude coverage by converting the policy to a pure excess policy; (4) the policy included coverage for loss of business revenues in its coverage for loss of use; and (5) the policy was ambiguous and should have been construed in the light most favorable to the insured. The judgment is affirmed. Haggard purchased an umbrella liability insurance policy from Stonewall which covered occurrences during the period of March 1, 1984 to March 1, 1985. Haggard was required to maintain certain underlying insurance in accordance with the Schedule of Underlying Insurance. Haggard maintained a cargo liability policy and a general liability policy during the term of the Stonewall policy. On or about August 14, 1984, Haggard was moving a five-color printing press owned by Harmony Printing Company and damaged it. Harmony demanded remuneration for damage to the printing press and for business Harmony lost due to its inability to use the damaged press. Haggard's cargo liability carrier provided coverage for the physical damage to the press and settled that portion of Harmony's claim. Although the cargo liability policy covered actual physical damage to the press, it did not cover loss of business revenues. Harmony filed suit against Haggard to recover for the loss of business revenues. Harmony sought to recover $93,081. Haggard's general liability insurance policy did not cover Harmony's loss of business revenues because such policy only covered property damage that occurred "on premises owned or rented" by Haggard. Haggard tendered the defense of the lawsuit to Stonewall and requested that Stonewall indemnify Haggard under the terms of the umbrella liability policy. In a letter dated September 3, 1987, Stonewall declined defense of the action. Pursuant to Stonewall's decision, Haggard retained defense counsel and a settlement was negotiated. Haggard filed this case to recover the amount it was forced to expend in the defense and settlement of the Harmony lawsuit. Stonewall filed its motion for summary judgment. Haggard did not file a cross-motion for summary judgment. The trial court granted Stonewall's motion for summary judgment and Haggard appeals from that order. When reviewing the trial court's ruling on a motion for summary judgment, an appellate court must examine the record in *398 the light most favorable to the non-moving party and grant that party all reasonable inferences which may be drawn from the evidence. Maryland Cas. Co. v. Martinez, 812 S.W.2d 876, 879 (Mo.App.1991). This court must affirm the trial court's judgment if it can be sustained under any theory. Ernst v. Ford Motor Co., 813 S.W.2d 910, 915 (Mo.App.1991). Summary judgment is appropriate when the prevailing party has shown that he or she is entitled to judgment as a matter of law and there is no genuine dispute of the material facts required to support that right to judgment. Martinez, 812 S.W.2d at 879. Summary judgment is appropriate when an insurance policy is clear and unambiguous. Id. at 880. The moving party bears the burden of proving a right to judgment as a matter of law and the absence of a genuine dispute about the material facts supporting such judgment. Rule 74.04(c). It is no longer necessary for the moving party to show entitlement to summary judgment by unassailable proof. Herron v. Whiteside, 782 S.W.2d 414, 415 (Mo.App.1989). Although Haggard sets forth five Points Relied On prior to the argument portion of its brief, Haggard does not organize its argument accordingly. In its argument, Haggard raises one Point Relied On and four subpoints identified with letters. In response to Haggard's arguments, Stonewall devised its own Points Relied On system. To avoid confusion, this court will address the arguments without identifying them according to Points Relied On. The trial court sustained Stonewall's motion for summary judgment, finding that Endorsement No. 3 of the umbrella insurance policy precluded coverage for Haggard's loss. Haggard argues that the court erred because the plain language of the policy provided coverage and a right to defense for Haggard and Endorsement No. 3 does not negate coverage. Endorsement No. 3 reads as follows: In consideration of the premium charged, it is agreed that unless coverage is provided by the underlying insurance at the full limits of liability as shown on the schedule of underlying insurance and not otherwise specifically excluded by endorsement hereon, this policy shall not apply to: 2. Property damage, as defined in insuring agreement II. C. 3. Liability assumed by the insured under any contract or agreement. The two provisions Haggard relies on as providing coverage for its loss are the "Conditions" section and the Defense Coverage Endorsement. The applicable portion of the "Conditions" section of the policy reads as follows: 5. Limits of Liability A. The company shall only be liable for ultimate net loss in excess of either: (i) the applicable limits of liability of the policies of underlying insurance set forth in the Schedule of Underlying Insurance; or (ii) as respects an occurrence not covered by such underlying insurance, but covered under this policy; or where an occurrence covered by such underlying insurance but in recoverable amounts less than the self insured retention set forth in Item 3(c) of the Declarations, the amount of ultimate net loss set forth in Item 3(c) of the Declarations as "Self Insured Retention." (emphasis added). The pertinent part of the Defense Coverage Endorsement reads as follows: It is agreed that the policy to which this endorsement is attached is amended to include the following additional insuring agreement: Defense, settlement, supplementary payments. As respects occurrences covered under this policy, but not covered under the underlying insurance or under any other collectible insurance, the company shall: (a) Defend in his name and behalf any suit against the insured alleging liability insured under the provisions of this policy and seeking damages on account thereof: Even if such suit is groundless, false or fraudulent; but the company shall have the right to make such *399 investigation and negotiation and settlement of any claim or suit as may be deemed expedient by the company.... (emphasis added). When construing an insurance policy, the court must apply general contract construction rules because insurance policies are contracts. Herpel v. Farmers Ins. Co., Inc., 795 S.W.2d 508, 510 (Mo. App.1990). A policy is only subject to being construed under contractual rules of construction if it is ambiguous. American Family Mut. Ins. Co. v. Ward, 789 S.W.2d 791, 795 (Mo. banc 1990). Whether or not the language of an insurance contract is ambiguous is a question of law. West v. Jacobs, 790 S.W.2d 475, 480 (Mo.App.1990). When a contract is unambiguous, it is the trial court's responsibility to state its meaning. Id. An insurance policy that is unambiguous will be enforced as written and does not require application of the rules of construction. Krombach v. Mayflower Ins. Co., Ltd., 827 S.W.2d 208, 210 (Mo. banc 1992). An ambiguity exists when there is duplicity, indistinctness or uncertainty in the meaning of the language used in the policy. Id. If the language of the policy is ambiguous and reasonably open to different constructions then the language will be interpreted in the manner that would ordinarily be understood by the lay person who bought and paid for the policy. Id. Ambiguous provisions of an insurance policy will be construed against the insurer. Id. Haggard first asserts that the policy is not ambiguous. It argues that the policy provides primary coverage for the loss claimed by Harmony and that Endorsement No. 3 does not convert the policy to an excess policy.[1] Haggard interprets the "Conditions" section of the policy and the Defense Coverage Endorsement as providing coverage for occurrences not covered by the underlying insurance. Haggard relies on the phrase "as respects occurrences covered under this policy, but not covered under the underlying insurance" as an expression of intent to provide coverage for occurrences not covered by the underlying insurance. Haggard claims that the plain meaning of this language is that the policy contemplates primary coverage for occurrences rather than only providing excess coverage. Words or phrases in an insurance contract must be interpreted by the court in the context of the policy as a whole and are not to be considered in isolation. First Nat. Bank v. Farmers New World Life Ins. Co., 455 S.W.2d 517, 523 (Mo.App. 1970). Although the language Haggard relies on supports its argument when viewed in isolation, if read in context, the meaning is otherwise. The "Conditions" section and the Defense Coverage Endorsement both include language stating that coverage is only afforded if it is provided under the Stonewall policy. Neither section is intended to bestow primary coverage not otherwise provided for in the policy. Haggard then argues that Endorsement No. 3 only requires it to maintain the underlying insurance coverage set forth in the Schedule of Underlying Insurance, without requiring that the coverage of those policies be exhausted in order to receive coverage for the property damage at issue in this case. Haggard contends that the terms of the Schedule of Underlying Insurance and Endorsement No. 3 when read together provide that any policy which covers property damage is sufficient to satisfy the underlying insurance requirement. Such an interpretation would create coverage that does not exist. The plain meaning of the two provisions requires that, before the umbrella policy provides coverage for property damage, underlying insurance must be available to pay the full limits of liability required by the Schedule for Underlying Insurance. Therefore, the trial court properly concluded, as a matter of *400 law, that the policy required that the underlying insurance be exhausted before Stonewall was liable. Haggard did maintain primary general liability coverage and cargo liability coverage which it claims met the requirements of the Schedule for Underlying Insurance. Both of the underlying policies, however, provided narrower coverage for property damage than the Stonewall policy, since not all occurrences involving property damage covered by the Stonewall policy were covered by Haggard's underlying insurance policies. Under Haggard's cargo liability policy, the definition of property damage did not include coverage for loss of use. Haggard's general liability insurance policy did not cover any property damage which occurred away from the premises owned or leased by Haggard. Haggard is not entitled to coverage under the Stonewall umbrella policy because the underlying insurance policies which it chose to maintain did not provide property damage coverage as required by the condition precedent under the Stonewall policy. Haggard next argues that if its maintenance of underlying insurance did not satisfy the condition of Endorsement No. 3, the trial court still erred in granting Stonewall's motion for summary judgment because there were genuine disputes as to material facts essential to a judgment in favor of Stonewall. Haggard asserts that summary judgment could not be granted to Stonewall as a matter of law because the following genuine issues of material fact existed: 1) the expectations and intent of the parties as to coverage were in dispute; 2) the possibility for two different interpretations of Endorsement No. 3 created an ambiguity; and 3) Stonewall's interpretation of Endorsement No. 3 created a conflict with the policy's "Conditions" section and the Defense Coverage Endorsement which rendered the policy ambiguous. Haggard first contends that the policy is ambiguous and should be construed in favor of the insured, because the expectations and intent of the parties as to coverage were in dispute. Extrinsic evidence of the expectations and intent of the parties as to coverage is only to be considered if the policy language is ambiguous. Peterson v. Continental Boiler Works, Inc., 783 S.W.2d 896, 901 (Mo. banc 1990). The Missouri Supreme Court in Peterson quoted, with approval, the following language from Kalen v. Steele, 341 S.W.2d 343, 346 (Mo. App.1960): "Where there is no ambiguity in the contract the intention of the parties is to be gathered from it and it alone, and it becomes the duty of the court and not the jury to state its clear meaning." Peterson, 783 S.W.2d at 901. Contrary to Haggard's argument, the parties' subjective intent cannot be used to create an ambiguity. Only if the policy is ambiguous, can a question of fact arise requiring extrinsic evidence of the parties' intentions when the policy was purchased. If the policy is not ambiguous, the intent of the parties must be ascertained by the court from the policy itself. Haggard's second contention of ambiguity is based upon the fact that Stonewall and Haggard interpret Endorsement No. 3 differently, which Haggard asserts proves that the endorsement is open to two different interpretations. Haggard's contention is without merit. An insurance policy will not be rendered ambiguous by a dispute between the parties regarding interpretation of a policy provision. Crim v. National Life and Acc. Ins. Co., 605 S.W.2d 73, 76 (Mo. banc 1980). Whether the policy is ambiguous is a question of law for the court, without regard to whether the parties disagree as to its meaning. Haggard further claims that an ambiguity is created because the phrase "as respects occurrences covered under this policy, but not covered under the underlying insurance," contained in the "Conditions" section and the Defense Coverage Endorsement, conflicts with the language of Endorsement No. 3. Its argument is that the umbrella policy provides coverage in one place, i.e., the property damage definition and the Defense Coverage Endorsement, and takes it away in another place, i.e., Endorsement No. 3. Haggard cites Maxon v. Farmers Insurance Co., 791 S.W.2d 437, 438 (Mo.App.1990), for the premise that if a *401 contract promises something in one place and takes it away in another then an ambiguity results. "[E]very clause in an insurance policy must be given some meaning if it is reasonably possible to do so, and ... conflicting provisions in insurance policies should be reconciled if it is possible to do so consistently with the intention of the parties as ascertained from the terms used." Brugioni v. Maryland Casualty Company, 382 S.W.2d 707, 712 (Mo.1964); Surface v. Ranger Insurance Company, 526 S.W.2d 44, 47 (Mo.App.1975). In the event of a possible ambiguity, seeming contradictions must be harmonized away if reasonably possible. Ward v. Gregory, 305 S.W.2d 499, 504 (Mo.App.1957). The rule requiring that an insurance policy be construed favorably to an insured in cases of ambiguity does not permit a strained interpretation of the language of the policy in order to create an ambiguity where none exists. Id. The seeming contradiction of Endorsement No. 3 with the "Conditions" section and the Defense Coverage Endorsement is easily harmonized. The Stonewall policy provides coverage for property damage and for liability assumed by the insured under any contract or agreement, to which Endorsement No. 3 is applicable. The policy also provides liability coverage for personal injury and advertising liability. The language of the "Conditions" section of the policy and the Defense Coverage Endorsement is meaningful and does not conflict with Endorsement No. 3, because it is applicable to the liability coverage excepted from the conditions of Endorsement No. 3. Haggard's argument to the contrary ignores the plain meaning of the policy and the endorsements. The court cannot distort the plain language of the policy to create an ambiguity in a policy that is unambiguous. Krombach, 827 S.W.2d at 210. Endorsement No. 3 is not ambiguous and does not conflict with the Defense Coverage Endorsement or with the "Conditions" section of the policy, because it is possible for all three provisions to have independent application. Haggard's brief also includes an argument that Harmony's claim for loss of business revenues is actually a claim for loss of use which the Stonewall policy definition of property damage includes. It is unnecessary for this court to decide whether loss of business revenues is included in the definition of property damage under loss of use. Regardless of the definition, the Stonewall policy does not cover loss-of-use damages because the underlying policies did not cover the property damage at issue. Haggard finally contends that the Defense Coverage Endorsement provides that Stonewall will defend Haggard in those instances where there is no underlying insurance coverage. Haggard's argument regarding Stonewall's responsibility to defend is without merit. In instances where there is no underlying insurance, the Defense Coverage Endorsement requires that the occurrence be otherwise covered under the policy in order to require Stonewall to defend the action. Haggard claims that under Missouri law, even if there is only the potential for coverage, Stonewall has a duty to defend the suit. Haggard bases its argument on Missouri Terrazzo Co. v. Iowa National Mutual Insurance Co., 740 F.2d 647, 652 (8th Cir.1984) which says that an insurer, under Missouri law, has a broader duty to defend than to indemnify. The court in Missouri Terrazzo Co. stated that an insurer must defend when a comparison of the policy language and the allegations of the complaint "state a claim which is potentially or arguably within the policy's coverage." Id. Harmony's loss-of-use damages are not "potentially or arguably" within the coverage of the policy because such damages are excluded by Endorsement No. 3. Endorsement No. 3 specifically excludes liability for property damage not covered by the underlying insurance. Harmony's claim for loss-of-use damages against Haggard is not covered by the policy and, therefore, Stonewall was not required to defend the suit. Stonewall met its burden of proving that it was entitled to judgment as a matter of law and that there are no genuine disputes *402 of material facts essential to support the right to judgment. The policy is not ambiguous and summary judgment in favor of Stonewall is appropriate because Haggard failed to comply with a condition of coverage as set forth in Endorsement No. 3. The judgment is affirmed. All concur. NOTES [1] Umbrella policies are utilized to provide excess coverage over and above any type of primary coverage. 8A Appleman, Insurance Law and Practice § 4909.85 (Rev. ed. 1981). Umbrella policies also often provide primary coverage for those areas not covered by any of the underlying policies. Id. The language of the policy is determinative of the coverage provided. Id. at § 7381.

2023-08-22 21:20:06.065458+00

Kern

KERN, Associate Judge: A dozen women during a period of some eight months in 1972 and 1973 were ab*1258ducted into a green Chevrolet Vega or similar car and subsequently raped by one or more men. These brutal crimes became known as the “Green Vega” rape cases and ultimately resulted in the late night arrest of appellant Davis. The arresting officers took such action upon (1) a composite drawing of one of the assailants prepared by a police artist from descriptions provided by the victims; and (2) a description of the similar modus operandi employed in all these crimes, detailed in a flyer issued to all police personnel throughout the city. Davis and appellant Warren, who was arrested subsequently, went to trial together on multiple counts of an indictment resting on seven separate incidents of rape and were convicted (except Davis on one such incident) by a jury and sentenced to substantial terms of imprisonment. Specifically, appellants were charged in a forty-four count indictment with kidnapping while armed,1 armed robbery,2 armed rape,3 sodomy,4 assault with a dangerous weapon,5 and various lesser included offenses arising out of eight incidents involving eight women in the District of Columbia.6 Appellant Warren was convicted of four counts of armed kidnapping, three counts of armed rape, two counts of armed robbery, and one count each of assault with a deadly weapon and armed assault with intent to commit sodomy. Appellant Davis was convicted of six counts of armed kidnapping, five counts of armed rape, two counts of armed robbery and one count each of assault with a deadly weapon and armed assault with intent to commit sodomy, and was acquitted on six counts. I. INTRODUCTION On this appeal, appellants raise several issues relating to joinder of defendants for trial, the reasonableness of the officers’ stopping appellant Davis, and other assertions of error before and during the trial. Before taking up the joinder issues, we describe briefly the form and content of the government proof at trial. In essence, each of the seven victims took the stand and described to the jury the circumstances of the crimes committed against her, including the date and the place and method of abduction, and the person or persons, if she knew, who had committed those crimes. Other witnesses testified for the government in corroboration of each of the victims’ testimony as to what she had done in each case immediately after the criminal attack. These non-victim witnesses were of course unable to make identification of any of the perpetrators. Thus each of the cases proved was in a sense a self-contained and separate account of a sordid event; there was virtual*1259ly no overlap of testimony from one incident to another by a government witness, The government proof at trial may be charted as follows: It may be seen that the government charged in the indictment and presented evidence to the jury that appellant Davis alone had been responsible for crimes against the person of one victim; that an unidentified man or men participated with *1260appellant Davis in crimes against two other women; and that appellant Warren had participated with appellant Davis in attacks on four victims. From the above chart summarizing the government evidence in the seven criminal assaults resulting in guilty verdicts, it is clear that the perpetrators of the offenses employed a remarkably similar modus op-erandi: Each incident commenced between 6:30 p. m. and 12:15 a. m.; the complainants were all offered rides to their destinations, and then either entered the car voluntarily or were forced to enter; and a knife or gun was used in every incident. We further note that five of the victims described the vehicle as a green Chevrolet Vega with black interior, while one described it as a small light green sports car with black interior and another described it as a two-door automobile with bucket seats and a dark interior. Finally, most of the complainants, according to the record testimony, were returned either to their homes or to the areas from which they had been abducted. II. JOINDER ISSUES Appellant Warren argues that the prosecution’s joinder of (1) the counts which charged appellant Davis, either by himself or with others never identified, for criminal assaults on three complainants in the same indictment with (2) all the counts charging Warren and Davis jointly with criminal assaults on four victims constitutes misjoinder under Super.Ct.Cr.R. 8(b), and accordingly requires reversal of his convictions. Assuming arguendo a proper joinder then appellant Warren contends that this joinder was prejudicial and the trial court committed reversible error in failing to grant his motion for relief from prejudicial joinder under Super.Ct.Cr.R. 14.7 Joinder of two or more defendants and multiple offenses in one indictment for trial is authorized by Rule 8(b)8 which provides: Two or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same, act or transaction or in the same series of acts or transactions constituting an offense or offenses. Such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count.9 [Emphasis added.] The issue we must decide is whether, within the meaning of Rule 8(b), Davis and Warren “are alleged to have participated in the same series of acts or transactions constituting an offense or offenses.” In its brief, the government now characterizes the Davis-only offenses as “integral elements in a seven-month campaign of kidnappings and rapes waged in concert by both appellants” (Brief at 37; emphasis added) and claims that “appellants [Davis and Warren] acted in concert in a continuing series of related sex offenses” (Brief at 39; emphasis added). These statements *1261on appeal in effect charge appellants with participating together in a conspiracy that was never alleged at trial and for which appellants were not indicted.10 Moreover, it is not correct to assert that the crimes charged were “in a seven-month campaign . . . waged in concert by both” since they were charged jointly only for crimes on four separate occasions in June, November and December, and Davis and others unidentified or Davis alone were charged with sex offenses on other occasions during this same period.11 Further, we must reject the government’s contention that the similarity of modus operandi in each of the crimes charged against the appellants jointly, as well as Davis and others and Davis alone, fulfills Rule 8(b)’s requirement that both defendants be charged with having participated in “a series of acts or transactions” within the meaning of the Rule. Rule 8(a) allows joinder of offenses “of the same or similar character,” but Rule 8(b) does not. See 8 J. Moore Federal Practice ¶8.06[1] (2d ed. 1975). The series of acts envisioned by the drafters of Rule 8(b) is one in which the individual offenses are connected or interrelated in such a manner that proof of charges against one defendant would necessarily have to be introduced in proving the jointly-charged offenses, or that the government otherwise will benefit without further prejudicing the defendant. See United States v. Roselli, 432 F.2d 879 (9th Cir. 1970), cert. denied, 401 U.S. 924, 91 S.Ct. 883, 27 L.Ed.2d 828 (1971); King v. United States, 355 F.2d 700 (1st Cir. 1966). Here, each offense charged occurred at a different time of day and at a different place, each complaining witness had her unique story to recount, and as a group, the seven offenses spanned a period from June to January.12 We are not persuaded that the situation in the instant case is analogous to and should be decided upon the basis of cases, including several cited by the government in its brief, where joinder of defendants *1262has been upheld even though a conspiracy is not alleged. Generally these cases fit into three categories: (1) where the offenses are committed as a means to a specific common end, or where they are directed toward some shared goal;13 (2) where one offense logically leads to another;14 and (3) where the offenses are part of a common scheme or plan, involving the same place, a short period of time, and a similar modus operandi, so that there is necessarily a substantial overlap in proof of the various crimes and “it would be difficult to separate proof of one from the other.”15 See ABA Standards Relating To *1263Joinder and Severance 15-17 (Approved Draft 1968). In the instant case, we can discern no specific or unitary goal toward which all the acts alleged in the indictment were directed, since each offense was committed independently on different dates commencing in June and ending in January and none depended for its furtherance or success on any of the others. Moreover, there is here no logical development of or relationship between the offenses because no crime necessarily led to or caused the subsequent offenses. And finally, in this case, there is no substantial overlap of proof of the various crimes; rather, each occurred and was proved at trial separate from the others. Accordingly, we believe that the counts charging Davis alone and with others unidentified were misjoined with the counts charging Davis and Warren jointly. Unlike the decisions by the Ninth Circuit in United States v. Friedman, 445 F.2d 1076 (9th Cir.) cert. denied, 404 U.S. 958, 92 S.Ct. 326, 30 L.Ed.2d 275 (1971), and United States v. Roselli, supra at 901, we cannot agree that the misjoinder was harmless under Super.Ct.Civ.R. 52(a). The court in those cases concluded that there was little or no possibility of prejudice, whereas here appellant was subjected to a likelihood of prejudice. First, joinder of defendants “involves a presumptive possibility of prejudice to the defendant.” King v. United States, supra at 703. Such joinder is allowed despite this possibility of prejudice due to the cu-mulation of evidence against defendants, because it will “promote economy and efficiency and . . . avoid a multiplicity of trials.” Daley v. United States, 231 F.2d 123, 125 (1st Cir.), cert. denied, 351 U.S. 964, 76 S.Ct. 1028, 100 L.Ed. 1484 (1956). Since the proof of each crime did not overlap, there was no such “economy and efficiericy” served in this case by the joinder of the various counts against Davis and Warren with the counts against Davis alone and with others. Second, we are constrained to note the prejudice to appellant Warren here was greatly increased since evidence of crimes neither charged against him nor related to him was introduced at his trial under circumstances that inevitably would lead the jury to consider him in fact a participant. Specifically, the jury heard, to Warren’s obvious prejudice, that Davis and one other male, never identified, abducted and raped the victim T.; and that Davis and two other males, never identified, abducted and raped the victim M. The court in King v. United States, supra at 705 n.6, pointed out the special prejudice inherent in a situation where one defendant is joined with another defendant, who is alleged to have committed certain offenses with unidentified third parties: The government agent was unsuccessful in learning who was [defendant] Mc-Kenney’s man on the other occasions. It seems to us that it might be natural for the jury to fill this void with King [a defendant]. If it did, the government was thereby showing other offenses by King not included in the indictment, the very thing it could not properly do. Macdonald v. United States, [264 F. 733 (1st Cir. 1920)] and of which in fact it had no evidence even warranting the inference. Given the testimony indicating that Davis and Warren acted together criminally in some instances and Davis and others unknown acted criminally in other instances, it is but a small step for the jury to infer that these unidentified attackers were in fact Warren. Such an inference contains *1264a real possibility of unwarranted and unfair prejudice to the defendant. The dissent (Op. at p. 1271, n. 3), citing Baker v. United States, 131 U.S.App.D.C. 7, 22-23, 401 F.2d 958, 973-74 (1968); United States v. Granello, 365 F.2d 990 (2d Cir.), cert. denied, 386 U.S. 1019, 87 S.Ct. 1367, 18 L.Ed.2d 458 (1967); and United States v. Roselli, supra, suggests that mis-joinder “can be harmless error.” While this may be true as a general proposition, those cases are inapposite to our situation here. In United States v. Baker, supra, 131 U.S.App.D.C., at 21, 401 F.2d at 972, the court specifically noted that evidence of larceny was “a necessary part of the proof. of the 1962 tax evasion charge.” (Emphasis added.) As described above, evidence of the Davis-alone and Davis- and-others’ crimes was not necessary to the proof of the Davis-Warren charges. In United States v. Granello, supra at 995, the court expressly concluded that had the defendants there received separate trials the government could still have offered “the same proof that it offered at the joint [trial].” Clearly, proof relating to the Davis-alone and Davis-and-others crimes could not have been introduced at the separate trial of the Davis-Warren charges. Finally, in United States v. Roselli, supra, the disparate crimes charged against the defendants were linked together by an allegation of conspiracy. We can only conclude that there was prejudice to Warren by joining the Davis-only and Davis-and-others counts with the Warren-Davis counts in the same indictment. Accordingly, appellant Warren’s convictions must be reversed for mis-joinder.16 Appellant Davis has raised an issue on appeal relating to severance which he did not raise at trial, viz., that the trial court erred in refusing to sever for trial the seven offenses and 39 counts contained in the indictment because the cumulative effect of the evidence introduced to prove all these counts made a fair trial impossible, and that the trial court’s failure to sever these counts deprived him of his right to a fair trial.17 But the trial court here did not have an opportunity to rule on appellant Davis’ request for severance since he made no motions either before or during trial, nor did he join in codefendant Warren’s motions. Even on appeal Davis has made no allegation of any prejudice that was not anticipated before trial but that developed or was increased during the trial to such an extent that the court sua sponte should have ordered a severance under Schaffer v. United States, 362 U.S. 511, 516, 80 S.Ct. 945, 4 L.Ed.2d 921 (1960). We believe that appellant Davis was aware of all the facts comprising his claim of prejudice before trial, and consequently the issue should have been raised at that time rather than on appeal. See 8 J. Moore Federal Practice ¶[ 14.02[2] (2d ed. 1975).18 *1265III. IDENTIFICATION OF APPELLANT WARREN Although our decision that the defendants were misjoined requires that appellant Warren’s case be remanded and disposes of his appeal, one issue raised in his brief is likely to recur if he is retried and consequently we will address it briefly. See Clemons v. United States, 133 U.S.App.D.C. 27, 35, 408 F.2d 1230, 1238 (1968) (en banc), cert. denied, 394 U.S. 964, 89 S.Ct. 1318, 22 L.Ed.2d 567 (1969). Warren argues that the trial court committed reversible error in refusing to suppress the photographic, lineup, and in-court identifications made by complainant R.19 R. identified Warren as the third of three men who assaulted her after looking at an array of nine black and white photographs. She had previously described this third man as a Negro, about 24 years old, five feet ten or eleven inches in height, medium build, dark complexion, clean-shaven with a short Afro haircut, and with pimples on his face; he also had a gap between his upper teeth and a chipped front tooth, and was wearing a maroon dashiki with gold and black markings at the time of the offense. The group of photographs shown to R. contained only one picture of a man wearing a dashiki, and complainant identified that individual, appellant Warren, as the third man who assaulted her. We do not agree that the photographic identification procedure in this case was “so impermissibly suggestive as to give rise to a very substantial likelihood of irreparable misidentification” and deny appellant Warren due process of law. Simmons v. United States, 390 U.S. 377, 384, 88 S.Ct. 967, 971, 19 L.Ed.2d 1247 (1968); see Conyers v. United States, D.C.App., 309 A.2d 309, 311 (1973). R. had ample opportunity to observe her attackers during the course of the abduction,20 and she described appellant Warren correctly and in detail. Her selection of his photograph was immediate and unequivocal; she wrote on the back that she was “positive” he was the third attacker. Furthermore, at trial R. was unable even to recall whether the man in the photograph was wearing a dashiki.21 IV. STOP AND ARREST OF APPELLANT DAVIS Appellant Davis argues that his stop by two police officers at 2:30 a. m. on February 11, 1973, was not based on probable cause to arrest or on articulable factors allowing a brief detention and investigation under Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). Ac*1266cordingly, he argues that the photograph taken of him that morning, as well as all other evidence obtained as a result of that photograph, must be suppressed as products of an illegal detention. See Davis v. Mississippi, 394 U.S. 721, 89 S.Ct. 1394, 22 L.Ed.2d 676 (1969); Gatlin v. United States, 117 U.S.App.D.C. 123, 326 F.2d 666 (1963); cf. Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963). Prior to the stop of Davis’ automobile in February 1973, the District of Columbia police possessed a quantity of evidence showing similarity of the modus operandi in some dozen rapes22 that had been committed during the preceding eight months. Around the end of January 1973, this evidence was compiled in a police flyer which described in some detail the time and place of each offense, the number and physical description of the assailants, and the description of the automobile used. Of the twelve incidents described, eight involved a Negro male driving a late model green Chevrolet Vega with a dark interior. Some of the more elaborate descriptions reported that the car also had bucket seats, two doors, a stick shift, clear plastic seat-covers, and blue and white license plates like Maryland plates, ending with the digits “91”. A similar modus operandi for the eight “green Vega” rapes was described. Attached to the police flyer were composite drawings of a driver and passenger involved in several of the rapes. These flyers and sketches were disseminated to Metropolitan Police officers early in February. In addition, on February 7, 1973, a teletype lookout was prepared, read at all police roll calls, and posted in all police stations alerting the officers to watch for a green Chevrolet Vega with blue and white license plates and a black interior. Officers Rich and Robinson, who arrested Davis on February 11, 1973, were in possession of all this information. According to their testimony at the suppression hearing23 in September 1973, they stopped Davis in his car “due to the fact that we were looking for a green Vega and we knew there were Negro males involved in these rapes.” Officer Robinson testified that he “observed a green Vega, two-door, with Maryland license plates, plastic seat covers.” His partner stated he was able to see the car itself, a late model green Chevrolet Vega with black interior, the blue and white license tags, and the Negro male who was operating it. Although the license plates did not contain the numbers “91”, neither officer professed familiarity with this alleged characteristic. While the Fourth Amendment clearly extends its protection to stops such as this, probable cause is not required. See Terry v. Ohio, supra; Wise v. Murphy, D.C.App., 275 A.2d 205, 212 (1971) (en banc). Instead the key is the reasonableness of the police activity, and the issue for determination is “whether the officer’s conduct under all the circumstances is reasonable, so as to comply with the fourth amendment requirement of reasonableness.” Stephenson v. United States, D.C.App., 296 A.2d 606, 608 (1972), cert. denied, 411 U.S. 907, 93 S.Ct. 1535, 36 L.Ed.2d 197 (1973) (emphasis in original); see Terry v. Ohio, supra, 392 U.S. at 21-22, 88 S.Ct. 1868. We are persuaded that the facts described above, which were known to the arresting officers at the time of Davis’ stop, were sufficient to justify the limited *1267police intrusion that occurred.24 It was late at night, and the color, make and model of the car matched exactly the description of a car used in several separate incidents to transport the victims of night-time kidnappings and rapes. In addition, the driver of the car was a Negro male, and a single Negro male had been involved in several of the incidents. In light of the clear governmental interest in “effective crime prevention and detection,” the initial stop in this case was reasonable.25 Terry v. Ohio, supra at 22, 88 S.Ct. 1868; see Adams v. Williams, 407 U.S. 143, 92 S.Ct. 1921, 32 L.Ed,2d 612 (1972); Stephenson v. United States, supra; United States v. Hines, 147 U.S.App.D.C. 249, 455 F.2d 1317, cert. denied, 406 U.S. 975, 92 S.Ct. 2427, 32 L.Ed.2d 675 (1972); cf. United States v. Poole, 161 U.S.App.D.C. 289, 495 F.2d 115 (1974), cert. denied, 422 U.S. 1048, 95 S.Ct. 2667, 45 L.Ed.2d 701 (1975). Moreover, the intrustion in this case was quite limited. See Terry v. Ohio, supra, 392 U.S. at 19-20, 88 S.Ct. 1868. The officers testified that they stopped Davis’ car in order to check its interior for additional characteristics matching the descriptions in the flyer. After approaching the car, Officer Robinson observed the black interior and the plastic covers on the seats and then asked Davis for some identification. The pictures on these pieces of identification he gave the officers were then compared to the composite sketches attached to the police flyer. Davis was not frisked or interrogated at this stage, nor was he even removed from his car. Cf. Palmore v. United States, D.C.App., 290 A.2d 573, 583 n.25 (1972), aff'd, 411 U.S. 389, 93 S.Ct. 1670, 36 L.Ed.2d 342 (1974); Davis v. Mississippi, supra, 394 U.S. at 727, 89 S.Ct. 1394. We conclude, therefore, that not only was the initial stop justified under the Terry doctrine of reasonableness, but the intrusion which resulted from stopping Davis’ car “was reasonably related in scope to the circumstances which justified the interference in the first place.” Terry v. Ohio, supra, 392 U.S. at 20, 88 S.Ct. at 1879; see Cupp v. Murphy, 412 U.S. 291, 294-96, 93 S.Ct. 2000, 36 L.Ed.2d 900 (1973). Assuming that the initial stop was lawful, then, we now must determine whether the subsequent arrest was based on probable cause. Judging from the totality of the circumstances, probable cause exists when an officer, “conditioned by his observations and information, and guided by the whole of his police experience, reasonably could have believed that a crime had been committed by the person to be arrested.” Jackson v. United States, 112 U.S.App.D.C. 260, 262, 302 F.2d 194, 196 (1962). In addition to the factors described above which justified the initial stop of Davis’ car, the officers also had an opportunity to observe close-up the interior features of Davis’ car, including the black *1268interior and plastic seat covers described by several victims. Further, they made a comparison between Davis’ identification pictures and actual face and the composite sketches of one of the alleged assailants. Similar features observed included Davis’ large eyes, facial hair, shape of chin, and full face. Both officers felt that the resemblance was “very strong” or “almost perfect.”26 At that point the two officers believed they had sufficient grounds to arrest Davis in connection with the string of rapes described in the flyer. Nevertheless they called in a superior officer who also compared Davis’ face to the composite sketches, agreed they were “very similar,” and instructed the officers to charge Davis in the case. We conclude that the close likeness of appellant to the composite sketches, combined with his presence in an automobile almost identical to that described by seven rape victims, provided the officers with sufficient information reasonably to believe that a crime or crimes had been committed by Davis. Jackson v. United States, supra; cf. United States v. Poole, supra. Accordingly, we hold that the detention and subsequent transportation and photographing of Davis was lawful.27 See Cupp v. Murphy, supra, 412 U.S. at 296, 93 S.Ct. 2000. V. MISCELLANEOUS ISSUES Finally, we take up and dispose of various errors asserted by appellant Davis. First, Davis alleges that there was no proof of where the rape offenses against complainants T. and H. occurred and therefore that his constitutional rights were violated. According to Professor Wright, “[although an allegation of venue is not essential to the validity of an indictment or information, venue is a fact that must be proved at trial, except where venue, or proof of venue, has been waived.” 1 C. WRIGHT, FEDERAL PRACTICE AND PROCEDURE: CRIMINAL § 307 at 601 (1969) (footnotes omitted). Professor Wright acknowledges that failure to prove venue may be raised by a defendant’s general motion for judgment of acquittal at the close of all the evidence, but adds that “if defendant specifies grounds in support of a motion for acquittal, and does not mention venue, he has not preserved his objection for appeal.” Id. § 306 at 601 (footnote omitted); see United States v. Haley, 500 F.2d 302, 305 (8th Cir.1974); United States v. Powell, 498 F.2d 890, 891 (9th Cir.), cert. denied, 419 U.S. 866, 95 *1269S.Ct. 121, 42 L.Ed.2d 103 (1974); United States v. Rivera, 388 F.2d 545, 547-48 (2d Cir.), cert. denied, 392 U.S. 937, 88 S.Ct. 2308, 20 L.Ed.2d 1396 (1968); Gilbert v. United States, 359 F.2d 285, 288 (9th Cir.), cert. denied, 385 U.S. 882, 87 S.Ct. 169, 17 L.Ed.2d 109 (1966). In the instant case, Davis’ attorney made a motion for judgment of acquittal at the close of the government’s case, and specified two grounds; the insufficient identifications of Davis by the complainants (and specifically the absence of any identification by the victim T.) and the absence of any scientific evidence such as hair or fiber analysis linking Davis to any of the crimes. As the Second Circuit ruled in United States v. Rivera, supra at 548, where the defendant “does specify grounds for the motion [for judgment of acquittal] and omits mention of venue we must conclude that he cannot be considered to have raised a question concerning the place of trial.” Thus we hold that appellant Davis has waived his right to object to the government’s alleged failure to prove venue of two rape charges.28 We also reject appellant Davis’ contention that he suffered prejudice requiring reversal when the trial court allowed the jury to hear evidence about complainant W.’s rape in Maryland with which Davis was not charged. We note that she described her sexual assault only briefly as part of the total incident she was recounting, and in order to explain the circumstance of the offense actually charged. See Wooten v. United States, D.C.App., 285 A.2d 308, 309-10 (1971). There were no questions that directly elicited this information, nor was the incident described in inflammatory terms or in any detail. Finally, there was substantial evidence of appellant’s guilt of the other offenses, and the challenged testimony was only a minor portion of the evidence adduced at trial. Under these circumstances, we are not persuaded that appellant Davis’ defense was prejudiced by these revelations to such an extent that he was denied due process or a fair trial. Davis also argues that the prosecutor’s closing argument improperly and prejudicially suggested that on the night of his arrest, when he was seen in his car talking to two women on the street,29 he was in reality looking for a new victim to rape, and that this was part of the same pattern. Although these statements may have been unnecessary and improper,30 in light of the overwhelming proof against *1270appellant Davis, the minimal reference to this occurrence at the end of all the evidence, and given the court’s instruction to the jury that statements and arguments made by counsel are not evidence, we cannot say that the comments were so prejudicial as to substantially sway the judgment of the jury and require reversal of Davis’ convictions. See Medina v. United States, D.C.App., 315 A.2d 169, 171 (1974). [20] Davis next argues that the trial court’s instruction on corroboration, which listed a variety of factors that might be deemed corroborative of the corpus delicti, unduly emphasized the prosecution’s theory of the case.31 Although the trial court responded to appellant’s objection by remarking that the instruction came out stronger than he had intended, nevertheless it was a proper recitation of various factors that a jury may consider to be corroboration. See, e. g., In re W.E.P., D.C.App., 318 A.2d 286, 288-89 (1974); Moore v. United States, D.C.App., 306 A.2d 278, 280-81 (1973); Evans v. United States, D.C.App., 299 A.2d 136, 139 (1973). Even if the corroboration instruction did over-emphasize the government’s evidence, having reviewed the instructions as a whole, we cannot say that appellant was prejudiced by this instruction. See United States v. Martin, 154 U.S.App.D.C. 359, 363, 475 F.2d 943, 947 (1973); United States v. Thurman, 135 U.S.App.D.C. 184, 185, 417 F.2d 752, 753 (1969), cert. denied, 397 U.S. 1026, 90 S.Ct. 1269, 25 L.Ed.2d 535 (1970). Appellant Davis also argues that a reasonable juror must necessarily have had a reasonable doubt about his guilt, and therefore his motion for judgment of acquittal should have been granted. Having reviewed the evidence adduced at trial with respect to each offense and each count in the indictment, we are unable to state that there was “no evidence upon which a reasonable mind might fairly conclude guilt beyond a reasonable doubt.” United States v. Lumpkin, 145 U.S.App.D.C. 162, 168, 448 F.2d 1085, 1091 (1971); see Crawford v. United States, 126 U.S.App.D.C. 156, 375 F.2d 332 (1967); Curley v. United States, 81 U.S.App.D.C. 389, 160 F.2d 229, cert. denied, 331 U.S. 837, 67 S.Ct. 1511, 91 L. Ed. 1850 (1947). Finally, appellant Davis argues that his conviction for assaulting Wi. with a deadly weapon, D.C.Code 1973, § 22-502, must be set aside since it is a lesser included offense of armed robbery, D.C.Code 1973, § 22-2901. See United States v. Johnson, 155 U.S.App.D.C. 28, 475 F.2d 1297 (1973). The offense of assault with a deadly weapon must be set aside as a lesser included offense of armed robbery only when the conviction for armed robbery arose out of the same act of the defendant. Here, the indictment charged the assault as a distinct offense that occurred after the completion of the kidnapping, rape, and robbery of the victim Wi. Moreover, the trial court carefully instructed the jury not to consider the assault count unless they found that it was an independent offense, distinct in time and circumstance from the earlier offenses. Finally, we note that the testimony of Wi. at trial was that the gun first used by her attackers to force her to submit was pointed at her later as the assailants prepared to leave when they instructed her not to leave the building until they were gone. The jury’s conviction of appellant for this offense of necessity includes a finding that *1271the assault occurred after the conclusion of all the earlier crimes, and consequently the conviction need not be set aside as a lesser included offense.32 VI. CONCLUSION The convictions of appellant Davis are upheld in all respects and the judgments against him are affirmed. The convictions of appellant Warren cannot stand because they occurred after a misjoinder under Rule 8(b); and we are unable to conclude under the particular circumstances here that such misjoinder was not prejudicial. Hence, the judgments against him are reversed and his case is remanded for a new trial. So ordered. . D.C.Code 1978, §§ 22-2101, -3202. . D.C.Code 1973, §§ 22-2901, -3202. . D.C.Code 1973, §§ 22-2801, -3202. . D.C.Code 1973, § 22-3502. . D.C.Code 1973, § 22-502. . The original indictment charged appellants with a total of 84 offenses involving 12 complainants. Forty counts against appellant Davis relating to four complainants were dismissed without prejudice before .trial, and the indictment was retyped and renumbered. Five more charges against appellant Davis relating to a fifth complainant were dismissed without prejudice on the eve of trial. Thus, ,the jury ultimately considered a total of 23 counts against appellants jointly and 16 counts against appellant Davis alone, with regard to seven separate incidents. The jury convicted appellant Warren on all counts and convicted appellant Davis on all counts except those concerning the complainant J. (See chart, p. 1259, infra.) . Appellant Davis also asserts in his brief that the joinder of offenses for trial was prejudicial and denied him a fair trial. We treat .this argument as one made under Rule 14 rather than Rule 8, and we address it infra. . This rule is identical to Fed.R.Crim.P. 8 (b), so we are guided in our decision by cases interpreting the federal rule. See D.C. Code 1973, § 23-311 (c) which codifies the Rule. . Rule 8(a) does allow joinder of offenses “of the same or similar character,” such as those in the instant case, but only when the offenses have been committed by a single defendant. See United States v. Roselli, 432 F.2d 879, 898 (9th Cir.1970), cert. denied, 401 U.S. 924, 91 S.Ct. 883, 27 L.Ed.2d 828 (1971) ; 8 J. Moore, Federal Practice ¶ 8.05-.06 (2d ed. 1975). . The Supreme Court in Schaffer v. United States, 362 U.S. 511, 80 S.Ct. 945, 4 L.Ed. 2d 921 (1960), has specifically approved joinder of defendants charged with conspiracy and otherwise unrelated transactions, since the conspiracy count serves as a link drawing together all the offenses and creating overlapping issues and proof. See United States v. Friedman, 445 F.2d 1076 (9,th Cir.), cert. denied, 404 U.S. 958, 92 S.Ct. 326, 30 D.Ed.2d 275 (1971) (conspiracy to obtain and disseminate secret grand jury testimony joined with counts charging possession and use of unreleased grand jury transcripts, perjury, and obstruction of justice); United States v. Roselli, 432 F.2d 879 (9th Cir. 1970), cert. denied, 401 U.S. 924, 91 S.Ct. 883, 27 L.Ed.2d 828 (1971) (conspiracy to violate and substantive violations of anti-racketeering statutes joined with counts charging false statements on tax returns); Haggard v. United States, 369 F.2d 968 (8th Cir. 1966), cert. denied, 386 U.S. 1023, 87 S.Ct. 1379, 18 L.Ed.2d 461 (1967) (conspiracy to defraud and substantive bank fraud counts joined); United States v. Granello, 365 F.2d 990 (2d Cir.1966), cert. denied, 386 U.S. 1019, 87 S.Ct. 1367, 18 L.Ed.2d 458 (1967) (conspiracy to evade taxes and counts charging wilfull failure to file tax returns joined). . At the hearing on Warren’s motion to sever, the government posited its opposition solely on the fact that the crimes charged involved the same modus operandi, vie., the same green Yega; and all occurred within a period of some seven months; and that appellants Warren and Davis knew each other and were both identified by some of ,the complaining victims as having been together in the green Yega. The government made no allegation in the indictment or assertion at trial that the particular offenses charged against Davis only were part of a conspiracy or were part of a connected or interrelated series of acts in which Warren and Davis jointly participated. . The ABA Standards Relating to Joinder and Severance (Approved Draft 1968) provide in Section 1.2(c)ii that two defendants may be joined “When, even if conspiracy is not charged and all of ,the defendants are not charged in each count, it is alleged that the several offenses charged . . . were so closely connected in respect to time, place and occasion that it would be difficult to separate proof of one from proof of others.” (Emphasis added.) . An example is Cataneo v. United States, 167 F.2d 820 (4th Cir. 1948), where two individuals, Magliano and Dreechio, were indicted in two counts for making false statements in affidavits attached to a Selective Service form, and Magliano and another individual, Cataneo, were indicted separately for making false statements in a letter to the local draft board. In affirming the joinder of these offenses for trial, the court emphasized ,the common concern of the three defendants — the draft deferment of Magliano— and concluded that “[a] 11 of the criminal activities alleged . . . relate to, and are logically and intimately connected together wi,th this transaction. . . . The deferment of Magliano is the goal of all the activities herein alleged. . . . ” Because of this joint goal, the offenses were deemed to be part of the “same series, of acts or transactions constituting an offense or offenses.” Id. at 823. . Two cases from this jurisdiction illustrate this second category. In United States v. Wilson, 140 U.S.App.D.C. 220, 434 F.2d 494 (1970), three men were indicted jointly for robbery, assault with a dangerous weapon, assault on a police officer, unauthorized use of a vehicle, and carrying a dangerous weapon, all arising out of ,the robbery of a drug store and subsequent flight in a stolen car. The court quickly disposed of any misjoinder issue since it found that “[,t]he offenses are based on two or more connected acts, constituting part of a common scheme and plan and the appellants are alleged to have participated in the same series of acts constituting the offenses.” Further, the court indicated that “[t]he joinder is also strengthened by the fact that each of the appellants aided and abetted those offenses charged against the other appellants.” Id. at 224, 434 F.2d at 498. Similarly, in Scheve v. United Slates, 87 U.S.App.D.C. 289, 184 F. 2d 695 (1950), the court upheld the joinder for .trial of four defendants, who were charged jointly with keeping a gaming table, with one of the four defendants, Joseph Scheve, who was charged with two counts of assault on Bicker, a customer of the gambling business. The court found that “there was an unbroken chain of causation between the defendants' gambling business, Kicker’s losses, his wife’s demand for return of some of them, Joseph Scheve’s assault on her, Bicker’s apparent attempt to intervene, and Scheve’s assault on Bicker.” Id. at 290, 184 F.2d at 696. . Cases upholding joinder of defendants in this category include United States v. Franks, 511 F.2d 25 (6th Cir.), cert. denied, 422 U.S. 1042, 1048, 95 S.Ct. 2656, 45 L.Ed.2d 693 (1975), and United States v. Scott, 413 F.2d 932 (7th Cir. 1969). In Franks, one indictment charged Franks and Britton with aiding and abetting the malicious damaging and attempt to destroy by explosives two Tennessee businesses on June 2, 1971, while a separate count charged Mitchell with knowingly transporting explosives across state lines without a license on June 1, 1971. This indictment was joined for trial with a second indictment charging Franks and Britton with causing others to commit physical violence to the same two Tennessee businesses on June 2, 1971, in furtherance of a plan or purpose to obstruct commerce. In upholding joinder of defendants for trial (Id. at 29), the court relied on language from Baker v. United States, 131 U.S.App.D.C. 7, 20, 401 F.2d 958, 971 (1968), a case involving joinder under Buie 8(a), which specified that “the predominant consideration is whether joinder would serve the goals of trial economy and convenience; the primary purpose of this kind of joinder is to insure that a given transaction need only be proved once.” (Footnote omitted.) Even without a specific allegation of a relationship between the offenses, the court found that a sufficient connection had been developed to permit joinder of defendants. Id. at 29, 401 F.2d at 980. Similarly, in United States v. Scott, supra, the indictment charged three defendants with secreting United States mail: count one charged Scott alone with an offense on October 27, 1965; count two charged Scott and Pearson with an offense on November 5, 1965; and count three charged Scott, Pearson, and Staples with an offense on November 8, 1965. The court indicated that “under Buie 8(b) a conclusion that acts were part of a common plan should be based on such factors as whether the transactions *1263have occurred in the same place, within a short period of time and using the same operandi.” (413 F.2d at 935.) Applying that test, the court decided there was a sufficient connection between the offenses to conclude they were part of a common plan so tha,t joinder of defendants was appropriate. Id. . Appellant Warren argued in the alternative that joinder of defendants in this case was prejudicial and that the trial court abused its discretion in failing to sever the defendants for trial. Because we have concluded that the defendants here were mis-joined under Buie 8(b), we need not determine whether severance was required under Bule 14. . Super.Ct.Cr.R. 14 provides : If it appears that a defendant or the government is prejudiced by a joinder of offenses or of defendants in an indictment or information or by such joinder for trial together the court may order an election or separate trials of counts, grant a severance of defendants or provide whatever relief justice requires. To the extent appellant relies on Buie 8(a) to assert that the offenses were misjoined; we must reject his argument. As we have described in detail above, the seven incidents for which appellant Davis was indicted were quite similar in several respects, most particularly in the almost identical modus op-erandi. Since they were “of the same or similar character,” we. conclude that the counts were properly joined against him under Buie 8(a). .Even had a motion been made by Davis at trial and denied by the court, we would *1265find it difficult to hold on the facts of this ease that the court abused its discretion in refusing to sever the counts. See Arnold v. United States, D.C.App., 358 A.2d 335 (1976) (en banc). . Complainant R. did not actually identify either appellant at the trial. Instead a stipulation was read to the jury stating that, if asked, she would identify appellant Warren as one of the three persons who assaulted her and one of the ,two passengers picked up by appellant Davis prior to that assault. . Although it is unclear how long R. was with her assailants, she testified that she first saw appellant Warren standing under a streetlight when Davis stopped to pick him up; that she talked with the two passengers (one of whom she identified as Warren) during a fifteen minute period when Davis had parked ,the car in a well-lighted alley and that she observed Warren during that time; that she accompanied all three assailants into the lighted laundry room before she was raped; that even when the light in .that room was turned off she could see the faces of her assailants by the light coming from an adjoining room; and that she rode back to her house with appellant Warren in the back seat and “probably” looked back at him. .Like the Supreme Court in Simmons, we acknowledge that the procedure used 'here was not the best in that the photograph of appellant was the only in the array of a man wearing a dashiki. Nevertheless we are not persuaded on the particular facts of .this case that the suggestive element gave rise to a “substantial likelihood of irreparable mis-identification.” Simmons v. United States, supra at 384, 88 S.Ct. 967; see Conyers v. United States, supra. . Not all these crimes were ultimately charged against one or both defendants. . It is important to distinguish between the pretrial testimony by government witnesses (mostly police officers) out of the presence of the jury and the testimony received at trial. The pre.trial testimony necessarily was overlapping since it dealt with police action in accumulating clues during the critical period of investigation prior to arrest; whereas, once the trial commenced the proof of each criminal incident did not overlap. See pp. 1258, 1261, supra. . It is clear from the officers’ testimony that this was not a spot check of an automobile such as that approved in Palmore v. United States, D.C.App., 290 A.2d 573, 582 (1972) aff’d, 411 U.S. 389, 93 S.Ct. 1670, 36 L.Ed.2d 342 (1974). The stop in the instant case was not random, but was done “to investigate some criminal behavior unrelated to the possession of a valid license and valid registration.” Id. at 583 n. 24. Accordingly, in order to detain appellant Davis the officers must have had some artic-ulable suspicion that Davis was involved in criminal activity. Id. . Although Davis himself was not acting suspiciously at the time of the stop, nonetheless we believe that facts known to the police officers were sufficient to create a reasonable, founded suspicion allowing the police to take the action they did. There were simply too many articulable similarities between Davis and his green Vega with blue and white tags and the information the officers possessed about actual offenses to categorize the police activity as an “inarticulate hunch” or an investigatory “dragnet.” See Terry v. Ohio, supra at 22, 88 S.Ct. 1868; Davis v. Mississippi, supra, 394 U.S. at 727-28, 89 S.Ct. 1394; Gatlin v. United States, supra. . We reject the argument made in appellant Davis’ reply brief that all police sketches are improperly suggestive and therefore should not be used to establish probable cause. Contrary to appellant’s assertions, we believe that such sketches are reliable and useful tools which provide a more accurate model for police officers than does a verbal or written description. The sketches are based on information communicated directly to the artist by the victims, and the likenesses are criticized and approved by the victims before use. This method of identifying suspects is apparently well accepted in this jurisdiction. See Adams v. United States, D.C.App., 302 A.2d 232 (1973); United States v. Poole, supra. . The trial court found as a fact that probable cause existed and Davis was under arrest after the officers observed his car and his close resemblance to the composite pictures. After Davis was taken to the police station and photographed, however, he was released, evidently without having been formally charged. Appellant Davis now argues that his subsequent arrest on February 13, 1973, based on a warrant signed and issued by a Superior Court judge at his home in Maryland, is a nullity because the court acted outside its territorial jurisdiction. An objection such as this based on “defects in the institution of the [prosecution] may be raised only by motion before [trial].” Super.Ct.Cr.R. 12(b). Since appellant Davis did not raise this objection at trial, his attempt to raise it on appeal is untimely, and is waived absent any showing of prejudice. See Nichols v. United States, D.C.App., 343 A.2d 336, 341 (1975). And, in any event, so long as the police have probable cause, an arres.t without a warrant is lawful. See United States v. Watson, 423 U.S. 411, 96 S.Ct. 820, 46 L.Ed.2d 598 (1976). . The Ninth Circuit in Gilbert v. United States, supra, acting “[o]ut of an abundance of solicitude for the rights of appellant,” reviewed appellant’s claim, of lack of proof of venue despite its prior finding that the issue had been waived. Id. at 288. Following this approach, we conclude that there was at least some proof which could lead :to a reasonable inference that the offenses occurred in the District of Columbia. See United States v. Haley, supra at 305. Complainant T. was abducted from the vicinity of Howard University in Washington, D. C., driven around for 30 minutes, taken into a housing project and raped, and then returned to her dormitory at the University. Complainant H. was abducted near Bast Capitol Street and 56th Streets, N. E., in Washington, D. C. She was driven west past a Shrimp Boat restaurant on East Capitol Street which the trial judge judicially noted was located in the District of Columbia. She was then taken behind an apartment building and raped and was subsequently driven to Maryland and released near her home. Although this evidence may not constitute overwhelming proof of venue, proof beyond a reasonable doubt is not necessary, nor is direct proof required. See C. Wright, Federal Practice and Procedure: Criminal § 307 at 601 (1969); cf. Best v. United States, D.C. App., 237 A.2d 825, 826 (1968). . Evidence of this exchange was admitted at trial to impeach Davis, who earlier had denied talking to any women at the time and place. The evidence was introduced in the testimony of a U. S. Park Police officer who gave Davis a traffic ticket after the women departed and Davis made an illegal turn. . But see Wesley v. United States, D.C. App., 233 A.2d 514 (1967); United States v. Bench, 152 U.S.App.D.C., 325, 470 F.2d 1234 (1972), cert. denied, 410 U.S. 909, 93 S.Ct. 964, 35 L.Ed.2d 271 (1973). . The factors listed by the trial court included : (1) a prompt report of the offense, (2) medical evidence, (3) the condition of a complainant’s clothing, (4) bruises or scratches on the complainant, (5) .the emotional condition of a complainant, (6) the opportunity of the defendant to commit the offense, (7) the circumstances surrounding the crime, including the mode of .transportation, (8) the presence of sperm or blood on the clothes or body of a complainant, (9) the conduct of the accused at the time of his arrest, (10) demonstrative or testimonial evidence substantiating or refuting a complainant’s testimony and prior statements, and (11) the complainant’s maturity or apparent motive to falsify or exaggerate. . We decline to adopt the government’s concession that the assault conviction was a lesser included offense of armed robbery and therefore should be set aside.

2023-08-22 21:20:06.075075+00

Gallagher

GALLAGHER, Associate Judge, concurring and dissenting: I concur in the result reached in the af-firmance of the convictions of appellant Davis. I do not agree that there was a misjoin-der under Rule 8(b) as to appellant Warren and dissent from the reversal of his convictions. I believe the initial joinder was proper and therefore the denial of the motion to sever may be overturned by this court only if there has been an abuse of discretion. United States v. Wilson, 140 U.S.App.D.C. 220, 226, 434 F.2d 494, 500 (1970); United States v. Franks, 511 F.2d 25, 30 (6th Cir.), cert. denied, 422 U.S. 1042, 95 S.Ct. 2656, 45 L.Ed.2d 693 (1975). Rule 8(b) provides that joinder is proper when the defendants have participated in the same “series of acts or transactions.” I conclude that they were conducted in such a similar manner as to form a modus operandi and that although conspiracy was not alleged there was a continuing “common plan” in this series of rapes. See United States v. Scott, 413 F.2d 932 (7th Cir.1969), cert. denied, 396 U.S. 1006, 90 S.Ct. 560, 24 L.Ed.2d 498 (1970). It is well-settled that joinder is improper when the crimes alleged are merely similar in character, see, e. g., United States v. Roselli, 432 F.2d 879, 898 (9th Cir.1970), cert. denied, 401 U.S. 924, 91 S.Ct. 883, 27 L.Ed.2d 828 (1971); C. Wright, Federal Practice and Procedure: Criminal § 144 (Supp.1975), but this case presents a series of rapes so similar in method that it cannot reasonably be said that they were simply separate criminal acts.1 Appellants were on a continuing predatory search for victims; rather than being seven separate acts, their rampage, conducted in the time span of slightly more than seven months with four of the rapes occurring in a two-week period, was a “series of acts” within the contemplation of Rule 8(b). Conspiracy need not be alleged for Rule 8(b) to apply. C. WRIGHT, supra at § 144. Appellant alleges that he was prejudiced by being tried with a person who was indicted on seven counts of rape when appellant was only indicted on counts involving four women. The rule specifically provides, however, that “such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count.” (Emphasis added.) Although there is always a certain amount of prejudice inherent in the joining of defendants,2 I do not find that there was substantial prejudice.3 Additionally, the trial judge informed the jury, *1272both at the beginning' of the trial and during the instructions, that they must consider the guilt or innocence of each defendant separately and that if they found one defendant guilty it should have no bearing upon the other defendant. I must assume that the jury heeded the instructions. Finally, the evidence against appellant Warren was extremely strong. There was considerable independent evidence of his guilt. Furthermore, I believe there was no substantial prejudice on this record and, consequently, I see no reversible error. D.C. Code 1973, § 11-721 (e). I dissent from the reversal on appellant Warren. . In addition to the similarities mentioned in the majority opinion there were other similarities in many of the rapes. Two of the victims were offered a ride by Davis and after accepting the ride Davis drove only a couple of blocks before picking up Warren, once indicating he was a hitchhiker and once indicating he was a friend. In the ease of another victim, Davis drove up and asked both Warren and the victim at the same time if they would like a ride. Also several of the victims were taken to either an abandoned building or construction site to be raped. . King v. United, States, 355 F.2d 700, 704 (1st Cir. 1966). . When no undue prejudice to the defendant is present and the original joinder was proper, *1272appellate courts are slow to overturn a trial court’s refusal to sever. E. g., United States v. Robinson, 139 U.S.App.D.C. 286, 432 F.2d 1348 (1970); Wiley v. United States, 277 F.2d 820 (4th Cir.), cert. denied, 364 U.S. 817, 81 S.Ct. 47, 5 L.Ed.2d 47 (1960). Even if the original joinder were incorrect as the majority asserts, .this circuit and others have held .that such misjoinder can be harmless error. Baker v. United States, 131 U.S.App.D.C. 7, 22-23, 401 F.2d 958, 973-74 (1968); United States v. Roselli, 432 F.2d 879, 901 (9th Cir.1970), cert. denied, 401 U.S. 924, 91 S.Ct. 883, 27 L.Ed.2d 828 (1971); United States v. Granello, 365 F.2d 990 (2d Cir. 1966), cert. denied, 386 U.S. 1019, 87 S.Ct. 1367, 18 L.Ed.2d 458 (1967). This is especially true when, as here, the government’s proof was very strong.

2013-10-30 06:32:38.852491+00

Rosenberg

615 F.Supp. 1163 (1985) UNITED STATES of America, Petitioner, v. WESTINGHOUSE ELECTRIC CORPORATION, Respondent. Misc. No. 11710. United States District Court, W.D. Pennsylvania. August 15, 1985. *1164 Craig R. McKay, Asst. U.S. Atty., Civil Div., Pittsburgh, Pa., Robert L. Ashbaugh, Dept. of Justice, Civil Div., Washington, D.C., for petitioner. Herbert L. Fenster, Washington, D.C., Philip Baskin, Pittsburgh, Pa., for respondent. Joseph A. Katarincic, Pittsburgh, Pa., for amicus curiae Chamber of Commerce of U.S. Stephen A. Bokat, Washington, D.C., for amicus curiae Institute of Internal Auditors. OPINION ROSENBERG, District Judge. This matter is before me after the filing by the Inspector General (IG) of the Department of Defense (DOD) for the United States of America on December 27, 1984, of a Petition For Enforcement of Administrative Subpoena by the Government, pursuant to the Inspector General Act of 1978, as amended 5 U.S.C. Appendix § 6(a)(4) and 28 U.S.C. § 1345, against Westinghouse Electric Corporation (Westinghouse) (respondent). The subpoena was served upon the respondent Westinghouse on September 28, 1984, and after Westinghouse refused compliance, this action followed. Joseph H. Sherick, the Inspector General, on September 27, 1984 issued the subpoena duces tecum to an official of the respondent, commanding his appearance before Mr. Newton H. Davis, Branch Manager, Defense Contract Audit Agency (DCAA), Pittsburgh, Pennsylvania, or his designees, at 1000 Liberty Avenue, Room 2112, on October 11, 1984, at 9:00 o'clock a.m., and to bring "the following information, documents, reports, answers, records, accounts, papers, and other data and documentary evidence pertaining to internal audits for the period January 1, 1982 through October 1, 1984, for which costs have been incurred by Westinghouse Electric Corporation and any of its segments and allocated to contracts awarded by the Department of Defense or to any subcontractors under the Department of Defense prime contracts to include the items listed in Appendix A which are necessary in the performance of the responsibility of the Inspector General under the Inspector General Act to produce and supervise audits and investigations relating to, and to promote economy, efficiency, and effectiveness in the administration of, and to prevent and detect fraud and abuse in, the programs and operations of the Department of Defense". The respondent in its answer contended that the administrative subpoena issued by the IG should not be enforced because (1) the subpoena fails to identify the investigation or inquiry to which it relates; (2) the subpoena was issued for the unlawful and improper purpose of obtaining information for another agency, the DCAA, which does not have subpoena power[1] to coerce a settlement of a collateral contract dispute (as to whether the DCAA has a right to examine the respondent's internal audit reports, an issue which is presently before the Armed *1165 Services Board of Contract Appeals for decision); (3) the documents sought are not related to DOD programs nor necessary to the performance of the IG's statutory functions; and (4) the production would be unduly burdensome. AMICUS CURIAE After the respondent filed an answer, the Chamber of Commerce of the United States (Amicus) averring it was the largest federation of business and professional organizations in the United States and that it represented the interests of its members in matters before the court, filed a motion for leave to present a brief amicus curiae on March 4, 1985. In its brief it attempted to support the position of the respondent by arguing that internal audit departments of corporations must be independent and confidential in order to be effective. On May 10, 1985, the Institute of Internal Auditors (Amicus) averred it is an international organization comprised of internal auditors in both government and private sectors, and filed a Motion to Submit Brief Amicus Curiae. It also practically reiterated the position of the Chamber of Commerce, adding that allowing the government "unrestricted access" to internal audit reports would ultimately discourage detection of fraud, waste and abuse by the internal auditors. These motions were granted. DISCOVERY Initially, the respondent requested discovery in the proceeding of the depositions of Joseph H. Sherick, the Inspector General of the Department of Defense, James H. Curry, Assistant Inspector General for Audit Policy and Oversight of the Department of Defense, Derrick Vander Schaaf, Deputy Inspector General of the DOD; Charles O. Starrett, Director, Defense Contract Audit Agency, and Newton H. Davis, Pittsburgh Branch Manager of the DCAA. After conferences among counsel, the documents sought by the respondent were: a DCAA memorandum request for a subpoena directed to the IG, dated August 14, 1984; a DCAA memorandum request for a subpoena directed to the IG, dated August 16, 1984; guidelines for the issuance of IG subpoenas dated October 7, 1983; Working Draft, Report on Oversight Review of DCAA Access to Contractor Records, dated January 11, 1983; and the Access to Records Summary of Twenty-three Field Offices with a handwritten tabulation of this summary, all of which were submitted to me for in camera examination. Pursuant to agreement of counsel, a court-supervised deposition of Sherick and Curry was conducted on February 26, 1985. Subsequently, after frequent consultations and after judicial concilliation between counsel, both parties agreed that the government's production of all the previously listed documents requested by Westinghouse, except for the field office summary, along with the additional court-supervised depositions of Starrett and Davis, would satisfy the respondent's Motion For Leave to Take Discovery. After a date was scheduled for those two depositions, both parties filed a stipulation on May 2, 1985, which obviated the need for an in-court examination. Thereafter discovery was closed. A final argument was had on May 15th, at which time the stipulation and exhibits were admitted into evidence. THE CASE Joseph H. Sherick, the incumbent Inspector General for the Department of Defense had been in government service for over 40 years. He was previously selected and appointed by the Secretary of Defense to be the Assistant to the Secretary for Review and Oversight. After the enactment of the 1982 Amendment to the Inspector General Act of 1978, President Reagan, obviously impressed with his career and service as anticipated, appointed him as the Inspector General for the DOD by authority of the 1982 Amendment. He was accepted by the Senate with approval and took office in April, 1983. When Sherick first came into office he assumed total control and attempted eventually to perform in accordance with the *1166 promises made to the Committee in the Part 2 Hearing, infra. The IG stated that he has oversight responsibility for all Department of Defense programs and activities, and to carry out this vast responsibility he is authorized to utilize and coordinate all of the audit, investigative and inspection organizations and resources of the DOD. Although he has an organization of approximately 1,000 people "to promote economy and efficiency as well as to prevent and detect fraud and abuse in a Department of 3 million", the IG must rely upon the resources of the 15,000 auditors and investigators of various accounting agencies in the DOD. It is the interrelation between these agencies which has become the focal point for the refusal by Westinghouse to comply with the subpoena. The IG has all encompassing oversight responsibility for DOD programs and activities. To carry out this assignment, part of his duties include an evaluation of the "quality and breadth" of each organization that is guided and supervised by the IG. Pursuant to these oversight activities, when the IG uncovers "weaknesses and vulnerabilities" in the practices of the office of the IG or any other DOD auditing agency, the IG is then required to take measures to "reduce these vulnerabilities". (Sherick Affidavit, Document 1, page 1). In June and July, 1983, the IG initiated a review of certain activities of the DCAA, the largest auditing agency in the DOD. He was thereafter periodically advised as to its progress by review of James H. Curry, the Assistant Inspector General for Audit Policy and Oversight. One area which was covered was the question of the availability to DCAA of certain records by DOD contractors. The records under question included: Board of Director meeting minutes; certain communications between a company and its outside public accounting firm; certain "audit trail" documents, and the reports of the internal audit staff of the contractors. In each year between at least 1976 and 1983, Westinghouse presented information to the DCAA relating to the costs incurred by its internal audit activity involving defense contracts. A certain proportion of these costs were charged to the government and it approved the payment of these costs. For example, in 1983 the government was billed for and paid the sum of $554,000 as its allocated portion of internal audit costs. Following review and discussion of the allowability and allocability of such costs, the DCAA, each year, recommended approval of those costs for payment by the government until August, 1984. Prior to August, 1984 the audit costs of the respondent were approved on the basis of records other than internal audit reports and without DCAA's access to those reports (Stipulation, Document 31 and the Muhlberg Affidavit). The evidence in the instant case, consisting of affidavits, exhibits and testimony is primarily concerned with: the IG's review and recommendations of June and July, 1983 regarding DOD auditors' access to contractor records; the request by DCAA through two August 1984 memoranda for the issuance of a subpoena; and the motivation for the issuance by the IG of the September, 1984 subpoena directed to the respondent for the production of internal audit report documents from January 1, 1982 through October 1, 1984 of DOD contracts of the corporation. Curry testified that the purpose of the IG's July, 1983 review of DCAA audit procedures was in response to allegations about certain areas of weakness therein, such as the access by DCAA to records, the handling of suspected fraud, the reporting procedures on savings and the relationship between the investigators and auditors. The final report concerning this review was issued on March 4, 1984 (Exhibit C-1, admitted February 26, 1985). Curry stated that the primary function of any audit is to determine "the adequacy of the internal controls of the activity that's being subject to audit". (Document 18, page 26). The purpose for the request of the internal audit reports of a contractor would be to evaluate the efficiency of their *1167 internal systems and controls. Therefore, as a preliminary consideration prior to a DCAA audit "the first thing they have to know is the adequacy of the internal controls" (Document 18,[2] page 20). In connection with the preparation of the DCAA report concerning their access to contractors' records, the DCAA personnel visited 28 field offices and determined to what types of documents the government auditors had access. Of 23 major defense contractor locations, where there was internal audit department functions, 6 of the contractors' locations were not providing DCAA with "complete access", which included the reports from their internal audit departments (Document 18, pages 23 and 29). Subsequent to the compilation of this report, 4 of the contractors agreed to provide access to their internal audit reports, so as of the time of his deposition Curry stated that 21 out of 23 of the defense contractor locations investigated were providing DCAA with access to their internal audit reports. Of the corporations providing DCAA access to internal audit reports, some of them may not have provided all of their internal audit reports to the DCAA. However, Curry testified that he knew of no instance where an internal audit report requested by the DCAA was denied by any of the 21 contractor locations providing access. In addition, a survey on July 20, 1984 of over 200 contractor locations indicated that the DCAA was obtaining access to internal audit reports at all except 16 of them (Document 18, page 44). The IG issued a Memorandum on September 19, 1983 providing that the DOD audit and investigative agencies which are under his control may request the issuance of an IG subpoena in support of audits and investigations conducted by them, where that audit or investigation is in furtherance of a statutory function of the IG and within the scope of the IG's statutory power. This memorandum was issued by the IG to all relevant auditing segments of the DOD, the "effective organization" of the IG, including the Army Auditing Agency, Navy Audit Agency, Air Force Audit Agency, DCAA, and the Criminal Investigative Divisions of the Army, Navy and Air Force. The memorandum was admitted as respondent's Exhibit S-2 and it outlined the policy of the office of the IG with regard to audits, investigations and the issuance of subpoenae. In explaining the policy the IG testified: "I'm not in the business of issuing subpoenas. What I am in the business is of investigating and auditing and inspecting. And if I feel that an inspection that they have under way is of vital interest to the Department of Defense, and comes within my function, and is one in which I should give it priority, I will pick up that investigation and incorporate it as part of my function and responsibility. I will designate it as such and carry it out, using one of those service organizations, if they're already involved in that subject ..." (Sherick testimony, Tr. page 131) In February, 1984, DCAA advised Westinghouse that it wished to conduct what it called an "inter-operational audit" of the Westinghouse internal audit functions. On June 11, the branch manager of DCAA, Pittsburgh office, set forth the DCAA rationale for requesting both the operational audit and the internal audit reports. DCAA indicated that its purpose was to obtain support for its contract auditing function. Westinghouse declined to comply with the DCAA request because these it said were internal audit reports or management documents which do not reflect incurrence and allocation costs. On August 14, DCAA requested the IG to issue a subpoena to respondent for immediate access to all internal audit reports relating to any of their organizational elements which allocate costs to DOD contracts. On August 16, DCAA sent a second detailed letter to the IG requesting the issuance of a subpoena, for all documents *1168 generated by the Westinghouse international audit department and stated that the internal audit reports were needed "in order to reach an internal opinion on the reasonableness and allocability of internal audit costs incurred and allocated to government contracts by WEC". The two August memoranda of DCAA (Stipulation Exhibits 1 and 2) stated that the internal audit reports "are needed for audit reviews which include in their objectives and the promotion of economy and efficiency and the prevention of fraud and abuse ..." In addition, both memoranda set forth the background of the Westinghouse audit, and the circumstances surrounding the refusal by Westinghouse to produce the documents. After receiving the DCAA memoranda and their request for the issuance of a subpoena, the IG and his staff carefully examined this situation because, as the IG said, "I was really concerned, very much concerned, because the first thing I had to do was determine that if — if this was an indication to me that there was a potential for fraud, waste or mismanagement of Government resources and Government assets at the Westinghouse Plant" (Document 18, page 124). After the IG received the first memorandum from the DCAA which indicated that there was a problem with access to certain records of the respondent, the IG stated that he was "concerned about that". He further asserted that this memorandum (of August 14, 1984) provoked him to ask "... why one of our major contractors would be uncooperative ... what the background of the whole problem was ... and how long this situation had gone on ..." (Document 18, pages 118 to 114). After receiving the second memorandum from the DCAA, the IG testified that "... I was appalled that one of our major contractors would fail to cooperate with us. My sentiment was how could this contractor be so insensitive? Here, we are in the Department of Justice being criticized up and down, day and night, for not being concerned about utilization of taxpayers' resources and he's a part of the defense industry. And yet, when we ask him for reports that are routine parts of his internal control system, he refused to cooperate with us, denies us these reports. And then when I looked at the history, it showed that he had been denying them for a long time" (Document 18, page 115). The two August memoranda contained the first request for a subpoena that the IG had ever received. The IG stated that the subpoena was not "automatically" issued, but instead the request for these documents was taken over by the IG and became his own audit (Document 18, pages 149-153). After receiving the two memoranda from DCAA in August, 1984, the oversight responsibility for the case of respondent's refusal to produce the internal audits became that of the IG. Sherick testified that at that point "... I made it my responsibility ..." and that "... It was mine and no one else's ..." even though he used the auditors and staff of the DCAA who were then acting under his direction (Document 18, page 142). The IG emphatically stated "I did not ever think that my subpoena was a tool of DCAA. It is not a tool of anybody's but me". (Document 18, page 137). Westinghouse is the thirteenth largest contractor with whom the DOD deals. Each year it has approximately nine billion dollars of open contracts with the DOD and two million dollars of direct contracts. At any one time, the respondent has approximately two hundred million dollars of government-owned material and property in its plants and facilities. Therefore, according to the IG, it is important for the government to know about any embezzlement[3] or fraud since it can be assumed *1169 there would be some "impact" on the government from any of these activities (Document 18, pages 97-98). Sherick testified that he believed it was necessary to examine the internal audit reports of contractors in order to evaluate the control systems of a company which would insure that costs were being properly allocated to government contracts. Sherick agreed with Curry that a sampling procedure involved in internal audits could be duplicated by the government, but that it was more cost effective to have the actual reports of the contractor, and that such reports would be useful in evaluating the actions taken by a contractor after uncovering fraud or embezzlement (Document 18, pages 96 and 98). The IG stated that there were a number of considerations and questions he had when he evaluated the August requests of the DCAA. The IG wanted to know: whether the accounting records and data systems of the respondent were inaccurate or unreliable; whether the work of the internal audit staff was "effective in policing itself against possible fraud, waste and mismanagement"; whether the respondent was equally diligent in searching for waste or abuse in government contracts as compared to commercial contracts; whether the act of refusal of respondent in producing the documents was itself an indication of possible frustration by Westinghouse of the efforts of its own internal audit staff with regard to possible unremedied practices of the corporation, possible nonadjustment of identified accounting errors, or perhaps failure to investigate suspicions of misconduct (Sherick Affidavit, pages 4, 5). Finally, Sherick stated that he wanted to see the actual internal audit reports which were being paid for by the government, and "to see if the government could save money by reducing its audit efforts by relying on the work already performed by the internal auditors" (Sherick Affidavit, page 5). The IG testified that the DCAA independently continued to administratively process the demand for the internal audit reports of the respondent by withholding payments to Westinghouse and by filing certain forms. However, the IG did not "adopt" or attempt to enforce the demand of the DCAA but instead the IG made his "own demand", motivated in part by Sherick's desire to learn what was behind the respondent's refusal, and because he "... had a suspicion that there's something there that they don't want us to have". (Document 18, pages 144, 145). The IG had no intention to "sublet" any of his powers to the DCAA, but he chose DCAA to initially receive the information requested by the subpoena because they were familiar with the situation; they had their auditors already at the location of the respondent's headquarters in Pittsburgh; they knew what records were involved and they had long experience in reporting back to the IG for direction. The IG considered using some of the limited number of auditors in his own staff; but at that time his auditors were "tied up in my spare parts reviews". In addition, using the DCAA auditors would save the government travel expenses and the expenses involved in new auditors learning the contractor's system. (Document 18, page 198). The IG stated that his office "will actively involve ourself in the analysis of the material ..." produced by the subpoena (Document 17, page 208). As the audit of the subpoenaed documents proceeds, the IG will personally be informed of the findings through Mr. Eberhardt, of the IG's office. The IG assured the court that his office routinely handles the most secret and sensitive matters, and that he considers protecting the confidentiality of the Westinghouse records to be a "solemn trust" (Document 18, page 177, 210). *1170 The IG repeatedly demonstrated his belief and practice that all of the various audit and investigatory divisions within the DOD were under his immediate control. For example, the IG used the DCAA in his massive spare parts investigation which uncovered lavishly expensive Allen wrenches and hammers (Document 18, page 172). Furthermore, it was not unusual for the IG to not only employ the DCAA in his investigations, but to receive information from the DCAA that would lead to an investigation or other action by the IG (Document 18, page 184). Therefore, it is apparent that the audit and investigatory functions within the DOD are not regimented in a static order, but that all these resources are in a state of flux and can be assembled and reassembled according to the will of the IG. The DOD contract business with the respondent is in the billions of dollars each year for all kinds of contracts. Some are cost reimbursement type, incentive, time and materials, labor hour, price redeterminable, or any combination thereof. There is no indication upon what basis the more than two billion dollars of work in progress and facilities and material in their plant is being used for defense contracts. It would be a matter of logic to ascertain how the government funds have been accounted for by the respondent as to contract prices, repairs, losses or guarantees. MENS LEGISLATORIS Although the respondent has raised no constitutional questions here, and since it does question the legal and functional capacity and power of the IG to issue this specific subpoena duces tecum for the particular documents which he requested, and has also asserted a lack of intention on the part of Congress to grant power to the IG to subpoena the particular internal audit documents of the respondent, it becomes necessary that we examine both the original Inspector General Act of 1978, 5 U.S.C. Appendix 3, and the Amendment of 1982, 5 U.S.C. Appendix 3, § 8, as well as the Congressional Report of 1978 and the history and hearings in the Senate in connection with the amending Act of 1982, before the Committee on Governmental Affairs, United States Senate, Ninety-seventh Congress, First Session, Part 1, June 18, 1981 and Part 2, March 25, 1982. These include Senatorial hearings conducted by the Senate as they relate to the contemplated Act of 1982. The Inspector General Act of 1978 (1978 Act) established the office of Inspector General in seven executive departments and six executive agencies and consolidated existing auditing and investigative resources to more effectively combat fraud, waste and mismanagement in the programs and operations of those departments, and agencies (1978 U.S.Code, Cong. & Ad. News, page 2676). Congress provided in the 1978 Act that each IG would be an independent official and appointed by the President of the United States and confirmed by the Senate. It provided for their purposes and duties and gave each the mandate "to consolidate existing auditing and investigative resources to more effectively combat fraud, abuse, waste and mismanagement in the programs and operations of those departments and agencies". It stated rules and regulations by which he was to be governed and by which he would be accountable, particularly, to the Congress. We must remember here that the Inspector General Act of 1978 did not create an IG for the DOD, as we shall presently see and understand; however the 1978 Act became the foundation for the changed enactment of 1982 which did create the IG of the DOD. The 1978 Act stated: "It shall be the duty and responsibility of each Inspector General ... To recommend policies for, and to conduct, supervise, or coordinate relationships between such establishment and other Federal agencies; State and local governmental agencies, and nongovernmental entities with respect to (A) all matters relating to the promotion of economy and efficiency in the administration *1171 of, or, the prevention and detection of fraud and abuse in, programs and operations administered or financed by such establishment, or (B) the identification and prosecution of participants in such fraud or abuse." 5 U.S.C.Appe. § 4(a)(4). To effectuate this broad mandate over "all matters" relating to economy and efficiency of an agency, Congress empowered each IG: "... (4) to require by subpena (sic) the production of all information, documents, reports, answers, records, accounts, papers, and other data and documentary evidence necessary in the performance of the functions assigned by this Act ..." Therefore, in examining only the language of the 1978 Act (which was later made applicable to the IG of the DOD), for the subpoena in the instant case to be enforceable, the internal audit reports sought must be "necessary" for the IG's oversight responsibilities with regard to "all matters" relating to economy and efficiency of the DOD. Both the 1978 Inspector General Act and the Amendment of 1982 are not only unambiguous, but they speak clearly and distinctly for the purpose of preventing and detecting "... fraud and abuse in, programs and operations administered or financed by ..." the specific departments. However, because the respondent in raising the contentions as it does seems to have confused a comment in the Congressional Report for the 1978 Act and has disregarded the specifics in both Acts, but particularly in the Amendment of 1982, and when Congress has spoken as vehemently as it did here, it is appropriate, while not necessary, that these be pointed out to add further forcefulness to the statutory text. In analyzing an issue of statutory construction we "`must begin with the language of the statute itself'". Bowsher v. Merck, 460 U.S. 824, 830, 103 S.Ct. 1587, 1591, 75 L.Ed.2d 580 (1983) (quoting cases). The case of Train v. Colorado Pub. Int. Research Group, 426 U.S. 1, 96 S.Ct. 1938, 48 L.Ed.2d 434 (1976) re-enforced what was stated in United States v. American Trucking Assns., 310 U.S. 534, 543-44, 60 S.Ct. 1059, 1063-64, 84 L.Ed. 1345 (1940) "To the extent that the Court of Appeals excluded reference to FWPCA's legislative history in discerning the meaning of the statute, the court was in error, for `[w]hen aid to construction of the meaning of words, as used in the statute, is available, there certainly can be no `rule of law' which forbids its use, however clear the words may appear on `superficial examination.'" It was stated in Stafford v. Briggs, 444 U.S. 527, 100 S.Ct. 774, 63 L.Ed.2d 1 (1980), at page 536, 100 S.Ct. at page 780, "Our analysis does not stop with the language of the statute; we must look to `the objects and policy of the law.' Brown v. Duchesne, 19 How. [183] at 194 [15 L.Ed. 595]. In order to `give [the Act] such a construction as will carry into execution the will of the Legislature ... according to its true intent and meaning,' ibid, we turn to the legislative history. Schlanger v. Seamans, 401 U.S. 487, 490, n. 4 [91 S.Ct. 995, 997, n. 4, 28 L.Ed.2d 251] (1971). See also United States v. Culbert, 435 U.S. 371, 374, n. 4 [98 S.Ct. 1112, 1114, n. 4, 55 L.Ed.2d 349] (1978); Train v. Colorado Public Interest Research Group, 426 U.S. 1, 9-10 [96 S.Ct. 1938, 1942-43, 48 L.Ed.2d 434] (1976). The respondent insists that the clause in the Congressional Report of the Inspector General Act of 1978, at page 2709, that "The use of the subpoena power to obtain information for another agency component which does not have such power would clearly be improper", be translated in its strict literal sense. This would be unreasonable, particularly in light of what remedies Congress was attempting to effect by means of the creation of IGs in all departments, except in the DOD, and in light of the fact that it took another amending statute, after three years of concerned study, to create the IG for the DOD with special, additional statutory provisions. *1172 Mr. Chief Justice Burger cited Brown v. Duchesne, 19 How. 194, at 197: "`We think these laws ought to be construed in the spirit in which they were made — that is, as founded in justice — and should not be strained by technical constructions to reach cases which Congress evidently could not have contemplated, without departing from the principle upon which they were legislating, and going far beyond the object they intended to accomplish. Stafford v. Briggs, supra [444 U.S. 527], at page 545 [100 S.Ct. 774 at page 785, 63 L.Ed.2d 1 (1980)]'." In order to determine if Congress intended to limit this expansive language, I have thoroughly examined the legislative history and surrounding statutory circumstances of both the 1978 Inspector General Act and the 1982 Amendment. See North Haven Board of Education v. Bell, 456 U.S. 512, 522, 102 S.Ct. 1912, 1918, 72 L.Ed.2d 299 (1982). Congress outlined the tremendous scope of the problem indicating that fraud, abuse and waste in the operations of Federal departments and agencies and in federally funded programs were reaching "epidemic proportions". The problem was not new, but the evidence indicated that waste and mismanagement was now of an "extraordinary magnitude". The "cardinal principle" that had been violated in the previous auditing structure was that the auditors and investigators were under the supervision of the officials of the programs which they were attempting to audit and investigate. (1978 U.S.Code, Cong. & Ad.News, 2679-2681), Congressional Report). Congress finally made a big step forward. It enacted the Inspector General Act of 1978. By this statute it created numerous inspector generals, one for each department or agency.[4] They had the power of subpoena to inspect all documents necessary for the ascertainment of fraud, abuse, waste and mismanagement in government contracts. While the 1978 Act did not give the IG powers to administer or to prosecute where the facts of the case might be such as would require these matters to be done, it did give him the power to report to the proper department and agency for such action and in order to permit the IG to investigate and ascertain the factual matters required for his duties, it gave him the power "to subpena (sic) such materials as he deems necessary to carry out his duties and responsibilities ..." (§ 6(a)(4), page 2708). Oddly enough, while the legislators were considering the adoption of this statute and its particular wording, it spoke very insistently of the need of the IG of the DOD, but in the adoption of the Statute, the DOD was disregarded. At its inception, the Congressional Report[5] at page 2676 states: "The purpose of this legislation is to create Offices of Inspector Auditor[6] General in seven executive departments and six executive agencies to consolidate existing auditing and investigative resources to more effectively combat fraud, abuse, waste and mismanagement in the programs and operations of those departments and agencies." (footnote added) At page 2677, the Report summarizes the legislation and indicates that H.R. 8588, as amended by the Committee, requires the appointment of an Inspector General in each of the 13 affected executive departments and agencies; that each requires appointment by the President with the advice and consent of Congress without regard to political affiliation, solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, *1173 law, managements analysis, public administration or investigation. It also details the duties and responsibilities of the Inspector General. Congress stated at page 2682, "... it is a fact of life that agency managers and supervisors in the executive branch do not always identify or come forward with evidence of failings in the programs they administer." And it follows through at page 2682, with the Inspector, the head of the agency or department, would not be under the supervision of any other official in the agency, and even the agency head would have no authority to "prevent the Inspector ... from initiating the completing audits and investigations he believes necessary". On page 2702, under Section 4. "Duties and Responsibilities", the Report specifies the functions of the Inspector General, Subsection (a)(1), to provide supervision and coordinate policy direction and conduct, supervise audits and investigations relating to programs and operations of his establishment; under Subsection (a)(2) to make recommendations to his agency head and the Congress; Subsection (2)(3) to recommend policies for and to supervise or coordinate activities carried out by such agency or financed by such agency for the purpose of promoting economy and efficiency and detecting fraud and abuse in its programs and operations. The Congressional Report, however, bespoke itself when it stated at page 2678: "The committee has decided that the legislation should also cover the Department of Defense. The legislation contains several provisions necessary to meet the unique needs of the Defense Department". (Emphasis added). And yet, when Congress enacted the final version, the IG for the DOD was omitted. The explanation is eventually supplied by the Senators at the two hearings held on June 18, 1981 and March 25, 1982. In the meantime, the Secretary of Defense supplied his own employees as various inspector generals in the defense agencies. But the Secretary also appointed one whom he titled the Assistant to the Secretary of Defense for Review and Oversight (Tr. page 86), and whom he used as were the other statutorily appointed inspector generals in accordance with the provisions of the Inspector General Act of 1978. This did not meet with the approval of the Senators and they expressed themselves openly in the hearings held for the purpose of providing an Inspector General for the Department of Defense and two other departments, the Department of Justice and the Department of Treasury. At the hearing before the Committee on Governmental Affairs in the United States Senate, Part 2, on March 25, 1982[7] for Inspector General Legislation, Chairman Senator William V. Roth, Jr., amongst others made clarifying remarks regarding the purpose and intention of the legislation which was to be considered by the Congress. Excerpts follow: Page 3: "I am particularly concerned about the lack of centralized audit and investigative responsibilities in the Defense Department. Audit resources are so dispersed in D.O.D. that it is almost like straining tea through an ocean fishing net: too many pieces of tea leaf are getting through. Just to use one example, there are over 18,000 employees in D.O.D. performing audit and investigative functions and some $500 million is spent annually to support their activities. Yet these personnel are spread over at least 18 different agencies with D.O.D. and until recently there were some eleven coordinating committees to ensure cooperation among the various audit organizations in D.O.D. Clearly, there is no `rapid deployment force' when it comes to controlling waste and fraud in D.O.D. but rather a mixed jumble of, in many *1174 cases, uncoordinated agencies and programs. . . . . . We must have a strong, statutory Inspector General in place in D.O.D. as soon as possible. . . . . . We can't accept fraud in D.O.D. programs, like that which may have resulted in over 80 percent cost overruns for the overhaul of Navy ships, recently, without establishing better mechanisms for controlling fraud. We cannot tolerate bad management practices and effective service coordination without creating an inspector general to systematically review inter-service management and push for improvements". And Senator Bentsen said at page 8: "Everyone, in other words, knew that there was waste in that huge appropriation, but we didn't know where to find it. With an independent inspector general at DOD, we'll all be in a better position to monitor how the hundreds of billions of dollars we appropriate every year for defense are being spent." (Emphasis supplied). When the dissatisfaction of certain Senators became more manifest and a new amending bill to create an IG for the DOD became more realistic, it appears that the Secretary of Defense also presented a bill which, according to the Senators, would merely have continued on an IG as an employee of the Secretary of Defense. This the Senators did not accept. At the second hearing the Senators practically accused the Defense Secretary of being antagnostic to the bill which would have created an independent IG, primarily because the Secretary wanted to have control over the IG. The Senators on the Committee argued that if the Secretary had control over the IG and could tell him what to do or what he should not do, then he would not be independent. They stated that they would not stand for that. They wanted an independent IG. Deputy Secretary of Defense, Frank Carlucci, argued that the Secretary of Defense should have the power of veto over any matter which the IG would want to process, because of certain problems which would affect the welfare and security of the United States. Senator Prior voiced his fear and stated that he didn't think that speaks of independence. Senator Eagleton and others voiced their apprehensions to Mr. Carlucci's testimony, and that if the amendment as requested was approved, it would be merely a "cosmetic" approach. When the amending statute of 1982 was finally enacted, Congress yielded in part to the Secretary of Defense by permitting him a veto power only of such matters as dealt with security in defense but not otherwise. But even in the veto power the Secretary was required to report the facts of the case to Congress within thirty days. THE DEFENSE CONTRACT AUDIT AGENCY (DCAA) RULE Did the Senators in the hearing before the Committee on Governmental Affairs in the United States Senate Second Session, Part 2, on March 25, 1982, contemplate that the DCAA would under the new IG Amendment be an unrelated agency in the Defense Department family of agencies without any obligations to the IG to be? Did the Senators of the Committee at the Part 2 hearing intend that the IG should have no relationship with, or use of the facilities and resources and personnel of the DCAA as with all other component agency parts of the DOD? Inasmuch as the respondent imputes a lack of cohesiveness of the DCAA within the entire family of defense agencies, it is noteworthy that the Senators discussed DCAA's significance in the 1978 Report. On page 2694, it is stated: "... DCAA does have significant auditing responsibilities, and in the past there has been no systematic cooperation between DCAA and DAS. For example, if DCAA discovers that a contractor is pursuing *1175 a course of action which amounts to fraud against DOD, DCAA will share that information with the contracting officer but ordinarily no contact is made with DAS which has the primary responsibility for internal audit of the Department of Defense." Thereafter the report discusses internal strife and a lack of communication. The Committee said (at page 2696): "But the deficiencies which exist intensify the committee's belief that the Secretary of Defense, and Congress, need a strong and independent auditing and investigative capability at the OSD level". Since the GAO[8] reported important improvements by the service itself "to upgrade the placement of auditing in the service and to remove all restrictions on the functioning of the service audit agencies", the Committee recommended that no "organizational changes be made in the service audit and inspection functions". Then, at the 1982 Act Amendment hearings, this problem was blared out loud. The respondent objects to the action of the IG's subpoena of the respondent's internal audit reports on the theory that it is a device which furthers the ulterior purpose of the DCAA. Accordingly, we should better understand the complex parts of the DOD, and particularly the DCAA. In a conversation between Sherick and Senator Eagleton, the Senator said (Report, page 27): "... there are some 18,000 individuals in the Department of Defense that in one form or another have something to do with auditing, investigating, accounting and the like"; that "there are about 4,000 support people"; that this "included the Defense Contract Audit Agency"; that "[t]here is an inspector general for each of the services"; and that each of the following have inspector generals: the Army, Navy, Air Force, Marine Corps, Defense Communications Agency, Defense Intelligence Agency, Defense Logistics Agency, Defense Mapping Agency and Defense Nuclear Agency. A summary sheet was prepared for the Committee which is reflected in the Report, page 29. In total the figure for auditors was 13,389 professionals; 4,426 support people; and 2078 augmentees. All were under the command and control of the Secretary. The Senators discussed the DCAA thoroughly at the hearings as is reflected from pages 30 through 39. The Committee was told by Sherick who was then the Assistant to the Secretary of Defense for Review and Oversight that these were experienced auditors and "[t]heir expertise is generally across the board in the evaluation of proposals and the post-award audit of the contract that eventually comes out of that proposal". (Report, page 32). Senator Eagleton asked Sherick whether his statement would be a fair conclusion and he was told that it would. The statement reads as follows: "... In short, the large part of DCAA's responsibility is pre-award work. They are not necessarily looking at whether fraud or waste has been committed after a contract has been entered into. They are advisers and not necessarily skeptical critics of the contracting officers, and the contracting processes". (Report, page 32). Sherick supplemented this with "they are critics in the sense that they disallow and question costs on contracts. That is their job. They do not review the contracting process; that is the function of the internal audit agencies". As relates to privileged communications, the matter was discussed before the Committee (Report, page 35), and the answer to Senator Eagleton by Sherick was "I think there may be privileged contractor data. DCAA is looking at the contractor's proposal, and looking at important information that is competitive in nature and shouldn't be revealed. Beyond that I think all the proposals are open to audit". Senator Eagleton said he understood and summarized his concerns as follows (Hearing, Part 1, page 38): *1176 First, that an office which performs in certain ways "is destined to be a weak office without adequate resources and without a substantial mandate in the very important area of defense contract and procurement ..."; Second, that the DCAA should not be regarded as sacrosanct; Third, that the DCAA lends a very valuable service in the advisory role to negotiating contract officers who need such auditors at their sides with "a tough auditing capacity"; and Fourth, that "... We still need, once you get beyond the advisory role, a tough auditing capacity ..." and that most auditing "is not auditing at all; it is financial negotiating advice that is given to the negotiating team". Sherick then made the comment (Hearing, Part 1, page 38), that "They (DCAA) have a reputation for being very professional people". In the Hearing, Part 1, page 40, in one of the written questions of Senator Roth to Deputy Secretary Carlucci, part of the question asked was "... what is being planned to make the DCAA more effective and what role could the proposed Inspector General plan in making this office more effective?" A part of the answer was "... The proposed Inspector General is charged with evaluating and monitoring contract audits and should thereby be able to assist in improving DCAA's effectiveness". In a written question by Senator Roth to Deputy Secretary Carlucci, who was insisting that the DCAA belonged with the advisory staff of negotiators for the DOD, even he agreed that if the DCAA was not included in the transfer of offices, the Senate could not be assured that the contract audit principles would be effectively managed and reviewed by the IG. At page 34 of the Hearing, Part 1, it was stated that DCAA audit reports were not always acted upon. And when Senator Eagleton, talking about the performance of DCAA with regard to the report of the GAO, asked in effect of Sherick, the contemplated IG, what would you do to eliminate the problem of the DCAA auditors having too close a relationship with the contractors and not being as vigilant as it should be in its auditing and examining of the records, Sherick said, "I have oversight and evaluation over DCAA and I will look into that matter". (Hearing, Part 1, page 35). Sherick further answered (Hearing, Part 1, page 34), "That is one of the things I will look into to find out why price negotiating memoranda are not being written and why are they not addressing the auditors' problems and recommendations. He owes it to the auditor to say why he did not take that advice". Senator Eagleton then responded, "I hope you will use your influence, Mr. Sherick, to see that it is rectified. It has been a continuing problem ...". At the Hearing, Part 1, page 37, Senator Eagleton pointed out that the DCAA and also the negotiating contractors and the government contract auditors had limited their own access to some important information, and that "Contrary to both DOD policy and regulations and public law, contract auditors are not always provided with the information necessary to review contractor pricing proposal or contractor cost. Contractor auditors may have compounded the problem by entering into agreements which have limited their own access to contractor data". All the other Senators echoed this concern that DCAA was not getting all the information to execute its proper functions. The IG Amendment of 1982 did not come by quickly or by unanimous thinking. Various versions in both the Senate and House were argued, mulled over and amended. But the Senate also had some versions backed by the DOD which resisted an independent IG. At the bottom of these versions the main concern was whether the IG was to remain as a DOD employee under the control of the Secretary, or whether a presidentially appointed IG was to be created as an independent official working in that Department with the Secretary. *1177 The second and lesser amount of argument related to the DCAA. There were those who argued that DCAA should continue as in the past and those, who eventually prevailed and who backed the idea that the DCAA should be as it is, an agency in the DOD belonging with the other agencies in the Department and under the guidance and direction of an independent IG. THE INSPECTOR GENERAL AMENDMENT OF 1982 The mood and thinking of the Senators who favored a powerful and independent IG for the DOD during the Part 2 Hearing especially and eventually permeated Congress and it enacted the Amendment of 1982 as it presently exists. It is significant that while the 1982 Amendment creates inspector generals for the Department of Justice, Treasury and Defense, it provided that the first two remain exactly in the same category as all other inspector generals created by the Act of 1978. But it is noteworthy that it made significant changes found in § 8 for the DOD. That reads as follows: "4. ... (c) In Addition to the other duties and responsibilities specified in this Act, the Inspector General of the Department of Defense shall — (1) be the principal adviser to the Secretary of Defense for matters relating to the prevention and detection of fraud, waste and abuse in the programs and operations of the Department; (2) initiate, conduct and supervise such audits and investigations in the Department of Defense (including the military departments) as the Inspector General considers appropriate; (3) provide policy direction for audits and investigations relating to fraud, waste, and abuse and program effectiveness; (4) investigate fraud, waste, and abuse uncovered as a result of other contract and internal audits, as the Inspector General considers appropriate; (5) develop policy, monitor and evaluate program performance, and provide guidance with respect to all Department activities relating to criminal investigation programs; (6) monitor and evaluate the adherence of Department auditors to internal audit, contract audit and internal review principles, policies and procedures; (7) develop policy, evaluate program performance, and monitor actions taken by all components of the Department in response to contract audits, internal audits, internal review reports and audits conducted by the Comptroller General of the United States; (8) request assistance as needed from other audit, inspection and investigative units of the Department of Defense (including military departments); ..." (Emphasis supplied). A proper understanding must be had of the difference between § 8 of the Inspector General Act of 1978 and that in the Amendment of 1982. The Act of 1978 did not create an inspector general for the DOD. All it did was to authorize the Secretary of Defense to provide his own inspector general. This had come about because of the opposition of the Defense Department to the creation of an IG equal to those of other departments. In order to take care of the situation Congress in the 1978 Act then gave special instructions to the Secretary of Defense. Primarily, it required the Secretary to submit to Congress semi-annual reports summarizing the activities of the auditing and investigative units of the department, which Congress, numerically and alphabetically detailed, and § 8(5)(c)(1) authorized the establishment of a task force "to study the operation of the audit, investigative, and inspection components in the Department of Defense which engage in the prevention and detection of fraud, waste, and abuse ..." It provided further of the rights and powers of the task force and regulated its functioning. *1178 It provided also that the task force submit a final report to the Secretary of Defense and the Director of the Office of Management and Budget, who may in the form of addenda, provide additional information, which the Secretary shall submit to Congress. Section 8 of the Amending Act of 1982 deals exclusively with IG of the DOD, and while it turned over to the new IG the functions of task force, it prescribed detailedly what the powers were that had been granted to the IG. It is noticeable that the IG of the DOD was given, when requested as needed, assistance "from other audit inspection and investigative units of the Department (including the military departments)". The DCAA not being excluded was thus included within the whole family of agencies in the DOD. By including the DCAA we see the working of Congress to enable the IG to do that which he was intended to do. Sherick promised Senator Eagleton that "I have oversight and evaluation over DCAA ...", (Hearing Part 1, page 35), and as the IG of the DOD he has proceeded to effectuate full control and guidance over the DCAA. RESPONDENT'S CONTENTIONS The many contentions of the respondent in its defense resisting the issuance of the IG's subpoena revolve in the main about two objections. First, that the pronouncement of the Supreme Court in the Merck case, infra, is the law of this case; and second, that Congress pronounced such action as being practiced by the IG now for the benefit of the DCAA to be improper. Several other contentions are also argued. The Merck Case. The respondent and Amici rely heavily on Bowsher v. Merck & Co., Inc., 460 U.S. 824, 103 S.Ct. 1587, 75 L.Ed.2d 580 (1983), to the effect that the Supreme Court said that the Comptroller General could not have access to indirect costs of a contract. The Merck case had three fixed-price negotiated contracts with the Defense Supply Agency and the Veterans Administration for the sale of pharmaceutical products. The prices were based on those in Merck's catalog. The contracts were negotiated rather than awarded after formal advertising. A negotiated contract is the method authorized by the statute for use in situations in which formal advertising and bidding is deemed impractical or unnecessary (See footnote, page 827, 103 S.Ct. page 1590). Each contract contained a standard access-to-records clause granting the Comptroller General the right to examine directly pertinent records involving transactions relating to the contract. In reliance upon these, the Comptroller General issued a formal demand to Merck for access to a series of documents and records directly pertinent to the contracts. The district court, after the Comptroller General sought enforcement, rejected Merck's argument that the costs records were not directly pertinent to the fixed-price contracts. Merck also expressed concern in participating with the Comptroller General's demand without adequate assurance of the confidentiality of the cost data which it was requested to supply. The Supreme Court held that the statutory language "directly pertinent"[9] as authority to the Comptroller General had a restrictive meaning in which Congress intended to prevent "snooping" of private businesses, as was reflected in the Congressional Report. So far as the instant case is concerned, it is to be noted that the Supreme Court was not unmindful that Congress sought in granting the GAO access authority to equip that agency with a tool to detect fraud, waste, inefficiency and extravagance *1179 in Government contracting generally. Justice O'Connor handed down the opinion and said (at page 834, 103 S.Ct. at page 1593). "Obviously, broad access to cost records would enhance the GAO's ability to evaluate the reasonableness of the price charged the Government and to identify areas of waste and inefficiency in procurement". But because the congressional intent was to protect the privacy of contractor's records involving non-governmental transactions, the government was precluded from inspecting records of indirect costs. Indirect costs were said to be costs incurred in the area of research and development, marketing and promotion, distribution, and administration, which are not directly attributable to a particular product (at page 826, 103 S.Ct. at page 1590). The court determined finally that (at pages 844-45, 103 S.Ct. at pages 1599-1600): "Because of the GAO's mandate to detect fraud, waste, inefficiency and extravagance through full audits of Government contracts, we cannot accept Merck's view that the only records directly pertinent to the four fixed-price contracts at issue are those necessary to verify that Merck actually had an established catalog price for the item procured, that it sold the items in substantial quantities to the general public at the catalog price, that it delivered the product specified, and that it received from the Government no more than the amount due under the contract. On the other hand, given the policy of protecting the privacy of the contractors' business records also expressed in the statutory language and legislative history, neither can we accept the Government's contention that it must be permitted access to all of Merck's cost records". (Emphasis supplied). The present situation is different. The statutes creating the Inspector Generals and their specific powers, especially that of Inspector General of the Department of Defense, contain no limited or restrictive power such as was imposed upon the Comptroller General. There is only a specific veto power imposed on the Inspector General for Defense as it relates to matters of national security when the Secretary may veto the action of the Inspector General and report fully to Congress within 30 days of the circumstances involved and his reasons for the veto. Otherwise, the statute creating the Inspector General of Defense is lavishly concerned with the extraordinary independent, capability and potency of the Inspector General. The Secretary did not veto the instant action of the IG. The Subpoena is Improper. The respondent maintains that the IG may not use the subpoena power in behalf of any other component of the DOD agencies and that includes the DCAA. On this basis it cites the Congressional Senate Report 95-1071, at pages 2676, 2709 of the enactment of the 1978 Inspector General Act. That reads as follows: "The Committee intends, of course, that the Inspector and Auditor General will use this subpoena power in the performance of his statutory functions. The use of subpoena power to obtain information for another agency component which does not have such power would clearly be improper". Congress had its reasons for omitting the power of inspector generals of the various agencies created under the Act of 1978, in an effort to control, limit and restrict each inspector general within that particular department to not interfere with any other department through any of its agencies. Under the Act of 1982, the IG was given overall power within the DOD of all agencies which composed it. It would seem that the respondent would put the DCAA in the category of an independent functionary over which the IG could have no authority. In the wording of the Defense IG's authority in § 8 we see that the IG is given power to "initiate, conduct and supervise such audits and investigations ..."; and to "monitor actions taken by all components of the Department in response to contract *1180 audits, internal audits, internal review reports"; to "request assistance as needed from other audits, inspection and investigative units of the Department of Defense (including the military departments)", (Emphasis supplied), as he considers "appropriate". And thus while the respondent argues that the DCAA is an independent component of the DOD, it is completely available for use when called upon by the IG both as a source of information and to carry our investigative delegations and assignments. Additional provisions in the 1982 Amendment give the IG powers in all agencies of the DOD, including the "military". While Congress did not intend that any IG created by the 1978 Act would act as a rubber stamp, automatically approving and issuing subpoenas for the use of other departments, it also did not intend to restrict the IG's own investigations, intra-departmentally no matter how they were commenced but the DOD had no IG as of that time. There is no similar Congressional expression for this intra-agency prohibition of lending subpoena power in the 1982 Amendment which created the IG for the DOD. However, from the numerous and forceful statements of the legislators, as well as from the text of the 1982 Amendment, it is clear that the various auditing or watchdog agencies within the DOD were not intended to operate in a vacuum. Congress indicated that if an investigation by one agency should kindle the interest, duty or even curiosity of the IG, himself, to investigate a contractor, he should not be prevented or discouraged. Collateral Processing. The respondent contends that because it appealed a decision of the DCAA regarding its demands for documents as to the Armed Service Board of Contract Appeals, ASBCA No. 30593, as of January 9, 1985, the IG of the DOD could not interfere with that process. The 1982 Inspector General Amendment states nothing at all about proceedings which would terminate or otherwise interfere with the IG's independent powers to proceed to initiate, conduct and supervise such audits and investigations as he considers appropriate. Whether or not the DCAA, itself, has any rights to access of such records as demanded, which the respondent refused, is of no concern to this enforcement proceeding. While the Armed Services Board of Contract Appeals may have the right and may eventually make a determination that the DCAA as an agency must pay for audits after requesting certain documents from the respondent based upon clauses in the contracts and by regulations, and may therefore grant or deny the respondent's appeal, that would not affect the IG's right to investigate and of the right of the IG even to use the DCAA as his own personnel in initiating, conducting and supervising such audits and investigations, as he considers appropriate. There is no substantial connective basis by which the respondent may indicate that its preliminary appeal to the Armed Services Board prevents and estops the statutory right of the IG to proceed in this case, since that appeal does not affect the power, authority, or purpose underlying the issuance of the IG subpoena. Therefore, the fact that the respondent has taken an appeal is not an issue here and does not deprive the IG of the right to look at the respondent's internal audit reports, as part of his own investigation. The IG was given independent authority to act in the manner in which he considered appropriate, even if such matters were collateral to any other proceeding, say for instance, the IRS. The provisions and regulations governing appeals to the Armed Service Board of Contract Appeals constituted an independent process which permits the adjudication of contract disputes under certain circumstances. The 1982 Amendment leaves no doubt that the intention of Congress in authorizing investigations supported by subpoenas and enforcement of subpoenas was intended to enable the IG to discover and procure evidence and not to prove pending charges or complaints. Similarly, the administrative *1181 apparatus established by Congress for other agencies was intended to delegate effective power to investigate certain matters within the scope of their authority. Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494, 90 L.Ed. 614 (1946). Scope and Subject of Subpoena. The respondent contends that the scope of the subpoena is too broad. Because of the manner in which audits are conducted by the respondent's internal audit department, where the audits encompassing defense contracts are not segregated from the other internal audit reports, the respondent would be required to produce 920 audit reports out of a total of 1,171 audits performed during the period between January 1, 1982 through October 1, 1984. The government seeks only internal audit work involving costs charged to the DOD. However, because of the intermingling of information pertaining to defense contracts, the respondent alleges that disclosure would compromise confidential matters not related to defense. The Supreme Court has consistantly held in summons enforcement proceedings, particularly involving the IRS, that "absent unambiguous directions from Congress" restrictions upon summons power should be avoided. I find that in the instant case, based upon the language of the statute as well as the legislative history previously quoted, Congress has similarly made a policy choice in favor of disclosure of all relevant information, and for the IG to have a "broad latitude" in deciding what materials are necessary. United States v. Arthur Young & Co., 465 U.S. 805, 104 S.Ct. 1495, 1502, 79 L.Ed.2d 826 (1984). The respondent argues that their internal audit reports have confidential and candid information relating to their non-defense contracts intermingled with DOD related data and evaluations, and that it would be detrimental to their interests to disclose any of these reports to government auditors. However, the corporation does provide these internal audit reports to their independent certified public accountants, who perform a "public responsibility" which transcends their employment relationship with the client. United States v. Arthur Young & Co., supra, at 1503. Similarly, the IG must perform his public responsibility in examining the internal audit reports and has assured the court that it will do so with due consideration with the concerns of the respondent, and with personnel that have been cleared for highly sensitive matters. In United States v. Noall, 587 F.2d 123, 126, C.A.2, 1978, the government on behalf of the IRS sought to examine all of the internal audit reports and related work papers of a corporation for certain periods. Although the corporation objected that the materials sought were confidential and reflected their operational plans and procedures, and that the reports might contain "hearsay rumors, [and] opinions", the Court of Appeals for the Second Circuit ordered their production. The court stated that what the internal auditors reported "might throw light" on the correctness of the corporate tax returns, and that since Congress has decided the policy issue it is not for the courts to challenge that determination. The court rejected as unpersuasive the argument that requiring production of internal audit reports runs counter to public policy because of the possible inhibition on full and frank disclosure by the internal auditors. In the instant case, I find that the public policy of preventing fraud, waste, abuse and mismanagement of public funds, so forcefully articulated by Congress, outweighs any possible "chilling effect" on the internal auditors with regard to their duties. The IG is seeking: "Any and all documents generated by the Westinghouse Electric Corporation internal audit department including those related to its budgeting and planning, as well as operations and allocations of its costs to segments having Government contracts. The documents should include, but not be limited to schedules of audits, working papers generated during the audit, written reports summarizing *1182 the results of audit, followup action taken to implement the recommendations, and personnel records documenting the time spent by the employees assigned to the internal audit department." (Document No. 1, Appendix A). The scope of his investigation is limited to "Government Contracts" and such a request is sufficiently specific for the respondent to be fully aware of what is required to be in compliance with the subpoena. These documents will enable the IG to discover whether there have been instances of mischarging, and whether the respondent has diligently searched for and remedied any incidents of misconduct or wasteful practices found. It was the choice of the respondent to intermingle the operational funds of the government contracts with those of its private sector contracts. It is the government's own funds which it has never been able to audit. If the respondent had kept separate its own corporate business from the government contract business in its internal audit operations, it might have presented the argument here that the IG could not intrude upon its corporate reports. But the respondent was the one who chose to intermingle the government's operational auditing with its own. That in effect made the total reports matters of interest and concern to the government because its funds were involved to whatever degree in those reports. It voluntarily took $554,000 in 1982 and what may have been similar amounts in the other required years for auditing, and by this means it sold its right to secrecy and opened the door to the government and its right to inspect the internal audit operational reports. What the DOD bought and paid for is of concern to the IG and to the public at large; and even though the IG speaks of it only passingly, it becomes a fundamental part of the IG's functions as Congress declared it to be in the IG statutes. The IG must perform his public responsibility in examining the internal audit reports and has assured the court that he will do so with due consideration of the concerns of the respondent, and with personnel that have been cleared for highly sensitive matters. Enforceability of Subpoena. The respondent contends that the legal requirements to establish the enforceability of an administrative subpoena have not been met. The Supreme Court has required that the investigation and subpoena by the administrative agency be for a legitimate purpose, that the inquiry be reasonably relevant to the purpose, and that the demand should not be too indefinite, too broad, or unreasonable. United States v. Powell, 379 U.S. 48, 57-58, 85 S.Ct. 248, 254-55, 13 L.Ed.2d 112 (1964); United States v. Morton Salt Co., 338 U.S. 632, 652, 70 S.Ct. 357, 368, 94 L.Ed. 401 (1950); Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 208-09, 66 S.Ct. 494, 505-06, 90 L.Ed. 614 (1946); Endicott Johnson v. Perkins, 317 U.S. 501, 509, 63 S.Ct. 339, 343, 87 L.Ed. 424 (1943). The cases have carefully distinguished between the limitations on a judicial subpoena and the broad latitude that must be given to an administrative subpoena. An administrative agency "... has a power of inquisition, if one chooses to call it that, which is not derived from the judicial function. It is more analogous to the Grand Jury, which does not depend on a case or controversy for power to get evidence but can investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not". United States v. Morton Salt Co., supra, 338 U.S., at 642-43, 70 S.Ct. at 363-64. It is not necessary for the agency issuing the subpoena to have "probable cause" to believe that a violation has occurred. "... Even if one were to regard the request for information in this case as caused by nothing more than official curiosity, nevertheless law-enforcing agencies have a legitimate right to satisfy themselves that corporate behavior is consistent with the law and the public interest". United States v. Morton Salt Co., supra, at 652, 70 S.Ct. at 368. *1183 I find that the subpoena was issued for a legitimate purpose within the permissible area of the IG's authority. At the time of the issuance of the subpoena the weight of the evidence abundantly demonstrates that the IG had: personal interest, "official curiosity", and "suspicion", that the lack of production of respondent's internal audits, and the other surrounding circumstances involving this contractor, required an investigation to discharge his responsibilities to the DOD and the public. The documents sought from the respondent, as outlined in Appendix A of the IG subpoena, supra, have been detailedly set forth. The arguments that the subpoena is not reasonably relevant to the IG's statutory purpose, is not specific enough, or is unduly burdensome, are all without merit. Both the IG and his deputy testified that it was of paramount importance to examine "the effectiveness of the internal controls". (Document 18, page 73). The better those internal controls are, the less audit work is required, and the less risk there is to the government and the public. (Document 18, at pages 74-75). It has been repeatedly established that having these documents will save the DOD the cost of duplicating these efforts, and more importantly they will demonstrate how effective the respondent has been in discovering instances of fraud, waste or mismanagement, and how effective the remedies undertaken by the respondent have been. It would be difficult to imagine any inquiry more relevant to the IG's statutory purpose. As to whether the subpoena is too broad, too indefinite, too burdensome, or unreasonable, I have previously found that the documents sought in Appendix A of the IG subpoena were described in sufficient detail and reasonably related to the IG's investigation. It would be needless to put additional matters into the subpoena to lengthen it more than it is. As for its breadth, it is no different from what a civil complaint filed in court may have. It is inclusive, but not overly broad. Additionally, the indication of the IG's purpose contained in the subpoena is sufficient for me to evaluate the reasonableness of the documents sought in light of the IG's administrative duty. The respondent attacks the subpoena as lacking in specificity, and also that it is too broad. I shall no further comment. The Subpoena is Sidetracked by the Respondent's Appeal. The respondent contends that because it appealed a decision of the DCAA regarding its demands for documents to the Armed Service Board of Contract Appeals, ASBCA No. 30593, as of January 9, 1985, the IG of the DOD could not sidetrack that process by his subpoena. The 1982 Inspector General Amendment says nothing at all about proceedings which would terminate or interfere with the IG's independent powers to proceed to initiate, conduct and supervise such audits and investigations as he considers appropriate. Whether or not the DCAA, itself, has any rights to access of such records as demanded, which the respondent refused, is of no concern to this enforcement proceeding. While the Armed Services Board may have the right and may eventually make a determination that the DCAA as an agency must pay for audits after requesting certain documents from the respondent based upon the clauses in the contracts and by regulations, and may thereafter grant or deny the respondent's appeal, that would not affect the IG's right to investigate and use the DCAA as his own personnel in initiating, conducting and supervising such audits and investigations, as he considers appropriate. There is no substantial connective basis by which the respondent may indicate that its preliminary appeal to the Armed Services Board prevents or estops the statutory right of the IG to proceed in this case, since that appeal does not affect the power, authority, or purpose underlying the issuance of the IG subpoena. Therefore, the fact that the respondent has taken an appeal is not an issue here and does not deprive the IG of the right to look at the respondent's internal audit reports, as part of his own investigation. *1184 The IG was given independent authority to act in the manner in which he considered appropriate, even if such matters were collateral to any other proceeding, say for instance, the IRS. The provisions and regulations governing appeals to the Armed Service Board of Contract Appeals constituted an independent process which permits the adjudication of contract disputes under certain circumstances. The 1982 Amendment leaves no doubt that the intention of Congress in authorizing investigations supported by subpoenas and enforcement of subpoenas was intended to enable the IG to discover and procure evidence and not to prove pending charges or complaints. Similarly, the administrative apparatus established by Congress for use of other agencies by the IG was intended to delegate effective power to investigate certain matters within the scope of his authority. Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494, 90 L.Ed. 614 (1946). The Subpoena is Too Burdensome. The respondent states that compliance with the subpoena would require approximately 3700 hours of effort and $55,000 in direct reproduction costs (although the government has not required that the documents be copied, only made available for inspection), in order to produce the 920 internal audit reports that relate to DOD contracts. This process, according to the respondent, would be extremely disruptive of their internal audit process in terms of diversion of personnel, and the temporary loss of access to records. In United States v. Firestone Tire & Rubber Co., 455 F.Supp. 1072 (D.C.D.C., 1978), the National Highway Traffic Safety Administration sought different types of records over a four-year period. Firestone complained that compliance would entail 100,000 hours of work and $2,000,000, which would be unduly burdensome and unreasonable. The court, nevertheless, upheld the subpoena. Quoting F.T.C. v. Texaco, Inc., 555 F.2d 862, 882, C.A.D.C., 1977, cert. den. 431 U.S. 974, 97 S.Ct. 2939, 53 L.Ed.2d 1072 (1977), the court summarized the relevant considerations: "We emphasize the question is whether the demand is unduly broad. Some burden on subpoenaed parties is to be expected and is necessary in furtherance of the agency's legitimate inquiry and the public interest. The burden of showing that the request is unreasonable is on the subpoenaed party. Further, that burden is not easily met where, as here, the agency inquiry is pursuant to a lawful purpose and the requested documents are relevant to that purpose. Broadness alone is not sufficient justification to refuse enforcement of a subpoena. Thus courts have refused to modify investigative subpoenas unless compliance threatens to unduly disrupt or seriously hinder normal operations of a business." 455 F.Supp. at 1083-84. I find that the subpoena in the instant case has not been shown to be unreasonable or unduly burdensome. If there were reasons for modifying the subpoena to avoid an unjust burden on the part of the respondent, it would have been in order for the respondent to come for a protective order from the court. But it would be difficult to see how any protective order could be had segregating only government related matters when the respondent chose to combine and intermingle them with its own audit operations. The IG has been available and continues to remain available to discuss and implement methods to reduce the inconvenience of the respondent in compliance. As the respondent has pointed out the government has auditors already on site at many locations and could work with the respondent to facilitate the review and production of the relevant internal audit reports. Credibility of Inspector General. Counsel presented by means of a lighted shadow box, three documents separately. The first was Stipulation Exhibit 1, which was the August 14, 1984 request by the DCAA to the IG for the issuance of a subpoena duces tecum; the second, Stipulation Exhibit 2, was the more detailed August *1185 16, 1984 request by the DCAA for the issuance of a subpoena; the third, Respondent's Exhibit S-3, the letter dated September 27, 1984, which the IG sent to the DCAA stating that he would issue the subpoena to the respondent. Counsel's argument was to the effect that the IG has the power for issuance of a subpoena for only his "own" investigation, but that he did not have any power whatsoever to issue a subpoena for any agency within the DOD, and especially for the DCAA, because the DCAA, he contended, was independent and in effect a neutral agency for the purpose of obtaining and giving information to the contract audit processings. Much has been quoted here from the hearings of the Committee on Governmental Affairs, Part 2, supra, indicating that the DCAA was an agency of the DOD, was not sacrosanct, had been ineffective in its performance, and after much debate, the intent of Congress was expressed to place the DCAA under the guidance and direction of the IG. I find that in the course of exercising his oversight powers he invited the submission of particular problems or inquiries after which he would determine whether or not to launch his own investigation. Therefore, it is critically important in any review of this process to analyze the credibility of the IG and discuss his motivation for issuing the subpoena. As for counsel's argument that the IG did not issue the subpoena for "his own purpose", but only for that of the DCAA, it is difficult to understand what counsel could possibly mean by the IG's "own" purpose, since Congress had given him the overall departmental jurisdiction and mandate to ferret out fraud, waste and mismanagement. The evidence demonstrates that the IG's purposes were just that, and within the discretion which the IG considers "appropriate". The IG has only a small department of his own but was given the right to use the resources, equipment and personnel of every agency, including the DCAA, all of which Congress constituted as his servants, when the IG considers it appropriate to use them. And thereafter, lacking uncommitted personnel of his own, using the DCAA personnel in this case was in accordance with the power and discretion which Congress bestowed upon him. The respondent contends that the IG invited all of the DOD investigative divisions under his control to use his subpoena power as a "tool" for their access to records, that the DCAA did indeed request the issuance of a subpoena in an investigation of the respondent, and that the IG did automatically issue the subpoena not for his own investigation, but for the DCAA. Counsel for the respondent urges the court to look only at the contemporaneous but terse memoranda between the IG and the DCAA. The respondent charges that the memoranda in question do not state their true purpose but merely recite general statements as to their statutory purpose. The critical phase for the respondent is in the September 27, 1984 memorandum from the IG, in which he requests the assistance of the DCAA in executing the subpoena and further requests that the DCAA continue its audit into these matters indicating, according to the respondent, that the IG was merely handing over an illegal subpoena to the DCAA (Document 34, pages 296-297). I must look to all of the evidence, however, and particularly to evidence characterizing the motivation of the IG. I found the IG to be a highly credible witness. I believe the IG's statements: that he was "appalled" by the lack of cooperation by the respondent; that the DCAA audit was taken over by himself; that "I did not ever think that my subpoena was a tool of DCAA. It is not a tool of anybody's but me".; that he provided for Michael Eberhardt, Assistant Inspector General, to report directly to him as to the progress of the audit; and that he would do all in his power to protect the confidentiality of the documents disclosed. After counsel for the respondent accused the IG of using his subpoena power for the coersive use of the DCAA, as it maintained, the August 14, 1984 Memorandum, Exhibit *1186 1; the August 16, 1984 Memorandum, Exhibit 2; and the IG's letter dated September 27, 1984, Exhibit S-3, proved the IG had to come to an understanding with the DCAA to help it coerce the respondent into producing the internal audit reports. Counsel for the respondent asserted that these were proof of a combination for an understanding between the two parties for an "ulterior" purpose. I then put the question to counsel for the respondent of whether the IG was "worthy of credibility". He honorably responded that "I, like Your Honor would have difficulty in finding that an officer of the executive branch is lacking in credibility". If the contention of counsel that there had been a collusion between the IG and the DCAA are true, then the IG's testimony before me at the deposition would have to be false. As the judge of credibility, I did not have any difficulty, as counsel for the respondent hesitated to state, in finding that the IG's vociferous description of his purpose in issuing the subpoena was true. Burden of Proof. The Supreme Court has held that in challenging an administrative subpoena on appropriate grounds, the burden of showing an abuse of process is on the respondent. In the case of an IRS summons, where motivation of the "good faith" of an agency becomes an issue, the burden of disproving a valid purpose on the part of the issuer is a "heavy one". United States v. LaSalle National Bank, 437 U.S. 298, 316, 98 S.Ct. 2357, 2367, 57 L.Ed.2d 221 (1978). The Court of Appeals for this Circuit in N.L.R.B. v. Interstate Dress Carriers, Inc., 610 F.2d 99, 112, C.A. 3, 1979, stated that in opposing an enforcement proceeding involving an N.L.R.B.'s subpoena: "Of course, the burden on the party to whom the subpoena is addressed is not a meager one. [Citing LaSalle National Bank, supra]. It must come forward with facts suggesting that the subpoena is intended solely to serve purposes outside the purview of the jurisdiction of the issuing agency". (citations omitted). While the respondent presented its evidence mainly by the affidavits and documents procured in discovery, it relied heavily for its defense that the IG and DCAA arrived at the expedient of forcing the respondent to reveal its internal audit reports to the DCAA by means of the IG's subpoena power. In deposing before the court the Deputy Inspector General Curry almost the entire substance dealt with the fact that the DCAA had made a study of 28 company locations to show that it was not entirely a popular request to companies for the compliance of divulging the internal audit reports. While it may not have been totally acceptable to the 28 company locations studied, we must remember that the DOD dealt with 200 companies and with their subcontractors. And so the study is not a fair evaluation of popularity; but popularity has nothing to do with this matter before me now. What the DCAA did in previous years and how it related to various contractors was before the 1982 Amendment. What the IG has done with the subpoena power in this instance relates to the authority and the fairly mandated directions of Congress in the 1982 Amendment. So it is in the same way that the respondent argues that the DCAA had never received any of these reports for twenty years, or made complaints that the respondent had not given the reports, nor chose previously that the DCAA was entitled to its internal audit reports. This, of course, is no excuse for the respondent who no longer deals with the DCAA but with the IG. This is a new ball game in which the star player and the rules are altogether different from what they were before the 1982 authorized the IG to act. Therefore, this evidence has no persuasive value in furthering the belief that there was any stratagem used by the IG agreeably with the DCAA. The second deposition was that of the IG and I need not repeat here the many statements which he made throughout his testimony (as he was being cross-examined by *1187 counsel for the respondent). Yet a few references are in order. At page 206 of the transcript: "The Court: Did anyone at any time intercede in such a way as to pressure you into issuing this subpoena? The Witness: No, sir. No, Your Honor." "The Court: Did you, of your own free will and good conscience, examine the matters, the facts, the circumstances in such a way as they related to law and your functional duty before you issued the subpoena? The Witness: Yes, Your Honor. The Court: If the subpoena honored or enforced, is it your intention to sublet any of your powers, and I will use the word `sublet' intentionally. Not delegate, but sublet your rights and authority and constitutional obligations to anyone else? The Witness: No, sir." When asked by the court who would assist him, the answer was "I have 570 auditors that work for me and I have a contract audit group ... I would ask them to work with the DCAA to protect the record from that kind of violation." (Tr. page 209). At page 210: "The Court: In response to certain of its documents. Would you have the ability to respect, you through your agencies, and representatives, and your staff, would you have the capability of seeing that that was done in accordance with your oath of office and the duties and functions which Congress has imposed upon you? The Witness: Yes, sir. I think that I have that capability. I deal with the most sensitive military programs in the Department of Defense and am cleared ___ I have the same clearances as the Secretary of Defense. My people are all cleared for top secret". At page 211, when asked whether he would be concerned in good conscience to see to it that none of the rights of Westinghouse would be violated, his answer was: "Let me assure you, Your Honor, that I consider that a solemn trust and I would take the actions that are necessary to protect those records." The court then asked: "And again, you say, that the action that has occurred right now, in regards to the issuance of this subpoena, was solely that of your own determination? And the witness answered: "That's right." "The Court: Based upon what information you had and not to serve or subserve any other purposes? "The Witness: "No." "The Court: How about rights not to disclose certain information to DCAA? The Witness: There are, if there are rights not to disclose involved with any paper, I would expect that Westinghouse would tell me that and I would certainly live up to that kind of a limitation". Towards the end of his testimony, the witness volunteered this statement: (Tr. page 214) "Your Honor, I would like to comment on one thing. There was no inference here that as a result of Congressional hearing that there would be pressure put on me. I want that — I would like to have it in the record that, you know, I'm independent of the Congress and the Department of Defense in carrying out my responsibilities. I have served the Government for over 40 years and I am more than eligible for retirement. That kind of inference bothers me because that's the last thing in the world that I would let affect my decision. And if it came to that kind of an issue, I would resign and I will not take that kind of ___". Since the burden is upon the respondent to prove, by at least a preponderance of the evidence in its case, particularly in its attack of impropriety of the issuance of the subpoena and its ulterior motivation in doing so, and because all of the credible evidence, even though produced for the most part by the respondent, is on the side of the petitioner with very little weight on the side of the respondent, the respondent has *1188 failed to convince the court that the petition for the enforcement of the subpoena should not be granted. SUMMARY With expressed antagonism against the overwhelming number of money grabbers, mismanagers and those who acquired public funds, through federal channels in the name of costs, expenses and profits, Congress finally broke out with exasperation to enact the IG statutes. Because the DOD was unique in its national security function, with so much of it integrated in confidentiality, and being the most costly part of the government wrapped up in fabulous hundreds of billions of dollars, Congress spent in excess of three years in finally arriving at a particularly devised medium to combat fraud, abuse, waste and mismanagement. And so it constituted an all powerful IG of the DOD (with additional powers compared to the other IGs) who would be virtually devoid of resources, facilities, equipment and personnel, and practically speaking, a pauper on budget allowances with only a nucleus of personnel. And, through the megical dexterity of Congress, all the resources, facilities, equipment and the nineteen thousand auditors and investigators in the scattered, disjointed DOD agencies were brought under the independent and discretionary authority of the IG who could more effectively combat fraud, waste, abuse and mismanagement. After the enactment of the Inspector General Amendment, the President appointed Joseph H. Sherick, a dedicated and experienced public servant with a legal foundation, and more than 40 years of government service in the related fields; and the Senate confirmed him. He already had much knowledge of the perplexed state of affairs in the DOD because of the lack of integration among the many unsupervised department agencies. In addressing the Senate Committee on Governmental Affairs Sherick said in a prepared statement that if he became the primary monitor of the DOD, he would be: (Hearing, Part 1, pages 44-45) "(1) Working closely with the President's Council on Integrity and Efficiency to achieve coordinated, government-wide attacks on fraud and abuse involving more than one federal agency. (2) Cooperating closely with Inspectors General in other civil federal agencies to insure that there is both an exchange of ideas on methods and techniques, as well as a careful coordination of any investigation or audit which involves DOD and these other agencies. (3) Coordinating efforts of the Departments' auditors, Inspectors General and Criminal Investigative agencies, to achieve a uniform and balanced approach to rooting out or preventing fraud, waste and abuse. (4) Developing new ideas and approaches in improving DOD operations and reducing fraud, waste or mismanagement. (5) Placing emphasis on use of Hotlines and mail drops to report and expose instances of fraud or abuse." He was, in effect, even then inviting the submission to his office of matters which might require his attention. Subsequently, he also invited any member of the public to inform him of potential DOD complaints by means of a "hotline" about which he testified. The IG knew what valuable services the DCAA provided to the contract officers within the Department. He also knew that there had been lacking a follow-up on many matters, often of moment, when the DCAA presented information to the appropriate agencies. Prior to the 1982 Amendment, the DCAA was a practically isolated and independent agency in the employment of the DOD under the supervision of the Secretary. The new IG required the DCAA to be more responsible. Because of the minimal number of his attached auditing personnel, the IG was required to perform his duties using the personnel of those agencies best and most conveniently suited for the task of effectuating the IG's inquiry within the sphere or limitation of his purpose. When the DCAA made its requests for a subpoena to compel the respondent to open *1189 up its records for review by the DCAA, the IG gave the matter much study, communicated a possible compromise unsuccessfully with the respondent, and then after obtaining the necessary information for an appropriate discretionary determination, he issued a subpoena duces tecum to the respondent based upon his own investigation. After a final hearing was had on May 15, 1985, in addition to the previous evidence of the depositions of the IG and the Deputy IG, the exhibits, affidavits, and finally the stipulation of the parties, the issue was clarified. In order to invalidate the IG's subpoena, the highly competent and skilled counsel for the respondent (and the Amici in their briefs) eloquently proferred the story that the DCAA had conspired with or used a willing IG to accommodate it in doing that which it, itself, was powerless to do — to issue a subpoena duces tecum to the respondent — because the DCAA had wanted to coerce the respondent into revealing its internal audit reports; and so the IG issued the subpoena for the DCAA and not for the IG's "own" purpose. The respondent and the petitioner admittedly agree that the request by the DCAA for the IG to issue a subpoena was in violation of nothing in either the 1978 or 1982 statutes, but seemingly of a Committee comment from the 1978 Congressional Report that "The use of the subpoena power to obtain information for another agency component which does not have such power would clearly be improper". 1978 U.S. Code Cong. & Ad.Report No. 1071, at page 2709. In so arguing, counsel was intermixing dissimilar motivations for the 1978 Act and the 1982 Amendment. Was not the Committee referring to Department agencies other than that for which each IG served? The aim evidently of Congress was to circumscribe and confine each IG within his own department and to not intermeddle with the affairs of any other department through their personnel or agencies. Thus it was expected that the 15 IGs appointed under the 1978 Act would not cross departmental lines into other departments and so they would avoid conflicts and confusion. The purpose of the 1978 Act was to consolidate audit and investigative functions within each department under a single, responsible official. There was no IG of the DOD created under this Act, to which the Committee comment could refer. Under the 1982 Amendment, instead of consolidating each DOD auditing agency, Congress allowed each to nominally remain, but placed them under the umbrella of a powerful and independent IG. The new Congressional scheme provided for the independent integration of all DOD auditing and investigative units within the descretion of the IG. The previous Committee comment does not apply to this situation. The DCAA is not only a DOD agency, but the Act of 1982 placed it under the supervision and control of the IG for the DOD, and so no matter how imaginative one may be to infuse a plot between the IG of the DOD and the DCAA of the DOD as separate elements, it plainly lacks fundamental logic. In order to give the respondent's postulate any plausability, there must have been some worthy evidence of a prearrangement between the IG and some one or more responsible members of the DCAA. What the DCAA did and what the IG did shows no evidence of any improper, even fragmentary, collusion. The respondent presented no preponderance of evidentiary credibility that the "two" had entered into a scheme for compelling compliance by the respondent to produce documents for the exclusive purposes of the DCAA. The respondent called the IG for his deposition; and he appeared before me as an honorable and reliable witness. I find his unimpeached and uncontradicted testimony to be totally credible. In addition to the primary contention by the respondent that the subpoena was issued for an improper purpose by the IG (on behalf of the DCAA and to coerce settlement of a related administrative dispute), the respondent relied on the Merck case, supra, allegations that the scope and subject of the subpoena were too broad, and *1190 the argument that compliance would be unduly burdensome. As previously stated, the authority of the Comptroller General to examine directly pertinent contract records in the Merck case, supra, was far more limited than the authority of the IG of the DOD: allowing him to subpoena any records necessary for his oversight responsibilities with regard to "all matter" relating to economy and efficiency in the DOD. In the instant case, the IG is well within his broad statutory discretionary rights. The IG assured the court that he would personally monitor any possible problems with confidentiality. In addition, the reproduction costs (not required by the subpoena) of the 920 audit reports in question will be approximately $55,000, not an unreasonable amount of money (to be paid by the government), which will ultimately save the government the much greater expense of duplicating the actual audits themselves. Inspection of the internal audit reports will not be unduly burdensome, and the IG will expectantly accommodate any logistical problems involved in the production of these records. The government paid the respondent $554,000 in 1983 for its share of respondent's internal audit activities, as a proportion of the total auditing cost. This cost was paid by the government, although the DOD has not examined the actual reports and does not know what they actually purchased by that money — a quid pro nihil. Thus, as the IG stated, "... I had suspicion that there's something there that they don't want us to have." and "I want to see what the Government is getting for its money". (Document 18, page 144 and Sherick Affidavit, page 5). While it may be that the IG should not have used the DCAA because the DCAA had reasons of its own for getting information about the internal audit reports, it was nevertheless a discretionary right which Congress had given him, lacking his own personnel with which to act. He acted, he said, with the DCAA auditors because they were familiar with the subject matter, they were close to the source of the records, and they had long experience in reporting back to him on problems that they have found. Under such circumstances, it is not for this court to forbid the IG from using DCAA employees and to direct him to use some other agency employees or hire special employees for that purpose. Because the respondent has been brought into this action for enforcement of a civil writ, it must be understood that that does not presume any culpability on the part of the respondent. The respondent properly resorts to due process in this judicial proceeding to test its theories as to the correctness or the incorrectness of the IG's authority to issue the subpoena. Neither do I infer, in any way, any wrongdoing on the part of the respondent because it is presently before me or the public officials who are before me, when I state that the public has a irrefutable and absolute right to demand: that its money payments be returned to it in full money value of whatever kind for which it bargains; that its own officials and employees and those with whom it deals be honest and honorable; and, that its legislators provide determined and independent processes and functionaries to eliminate or at least to substantially lessen the infiltration of fraud and waste in its publicly budgeted spending. Thus, when the Congress endows administrative agents and agencies with means and methods for improving the public welfare and provides resort for enforcement by court procedure, it becomes incumbent upon the judiciary to enforce the specific process in aid of the public's right to a remedy in accordance with law as it pertains to the facts. To do otherwise, would reinstate the public dilemna as it was as of the time when the Senators, concerned as they were, complained at the Hearing, Part 2, before the Committee on Governmental Affairs, on March 25, 1982, that if an IG for the DOD were created without strength and independence, *1191 it would be only for a "cosmetic" purpose. The Senators made it perfectly plain at the hearing and in the amending Act of 1982 that they intended and wanted an independent IG who would have power and purpose to prevent and detect fraud, abuse and waste in the government programs. In view of the attitude of the Senators as translated into clear, determined words by Congress in the 1982 Amendment, and lacking any illegality or impropriety on the part of the IG in issuing the subpoena, and being abundantly obvious from the evidence as a whole of the circumstances which required the issuance of a subpoena within the discretion of the IG, it is not for this court to substitute its judgment for that of the IG. The IG might have delegated personnel other than those of the DCAA, but as the evidence indicates because of his lack of personnel and because the auditors of the DCAA are highly expert in their field and have special knowledge which no other personnel in any of the other agencies in the DOD possess, and with the assurance of the IG that the matter will be treated with professional confidence, and that only such matters will be reported as the law requires, I find that it is as much as the respondent may hope for. We must remember that it is the auditing of the internal operations for which government money was spent and with which government resources, equipment and personnel have and are likely being used. Accordingly, the objections of the respondent will be denied, and the Petition for Enforcement of Administrative Subpoena by the Government will be enforced. The Findings of Fact and Conclusions of Law are incorporated in this opinion in accordance with Federal Rule of Civil Procedure 52.[10] NOTES [1] This outgrowth springs from the root of the Congressional Report that it would be improper for the IG to serve another agency. [2] In-court depositions of Sherick and Curry. [3] The IG has repeatedly stated that one reason for examining the respondent's internal audit reports would be to discover what, if any, action is taken by respondent upon the discovery of fraud, waste, or abuse involving DOD conracts. In a matter first raised by counsel for the respondent, Sherick testified as to his knowledge (derived solely from newspaper accounts) of an incident of alleged embezzlement and fraudulent invoicing which included a Westinghouse employee at its Baltimore facility, which principally performs defense contract work. An affidavit submitted by the government indicated that approximately $65,000 may have been misdirected to the possible detriment of the DOD. (See Document 18, pages 98-103 and Document 15). [4] Departments of Agriculture, Commerce, Education, HUD, Interior, Labor, Transportation; Agencies of Community Services, Environmental Protection, General Services, National Aeronautics and Space, Small Business Administration and Veterans' Administration. [5] 1978 U.S.Code, Cong. & Ad.News. [6] Auditor while originally contained was but an additional title for the IG. [7] Hereafter referred to as the Part 2 Hearing. [8] General Accounting Office [9] The language which the Supreme Court interpreted is from the statute in these words: "(b) except as provided in subsection (c), each contract negotiated under this chapter shall provide that the Comptroller General and his representatives are entitled, until the expiration of three years after final payment, to examine any books, documents, papers, or records of the contractor, or any of his subcontractors, that directly pertain to, and involved transactions relating to, the contract or subcontract". 10 U.S.C. § 2313(b). (Emphasis added). [10] Rule 52. Findings by the Court. "(a) Effect. In all actions tried upon the facts without a jury or with an advisory jury, the court shall find the facts specially and state separately its conclusions of law thereon ... If an opinion or memorandum of decision is filed it will be sufficient if the findings of fact and conclusions of law appear therein.

2013-10-30 06:32:38.85352+00

Garrison

852 S.W.2d 198 (1993) Regina Katherine (Gilliam) BELL, Petitioner-Appellant, v. Clarence GILLIAM, Respondent-Respondent. No. 18131. Missouri Court of Appeals, Southern District, Division Two. May 6, 1993. *199 W.H. Winchester, III, Stephanie M. Gleason, Drumm, Winchester & Gleason, Sikeston, for petitioner-appellant. James M. McClellan, Dempster, Barkett, McClellan & Edwards, Sikeston, for respondent-respondent. GARRISON, Judge. Appellant (Wife) appeals from the trial court's modification of a child support award. The original decree dissolving the marriage was entered on February 24, 1987 and included an order that respondent (Husband) pay child support of $150 per week for the one minor child born of the marriage. Husband filed an earlier motion to modify which was denied by the trial court in December 1990. The legal file furnished with this appeal does not include a copy of the order or indicate any findings made by the court in denying that request for modification. On July 31, 1991, Husband filed another motion to modify directed to the child support award. The matter was heard by the trial court on October 16, 1991. On March 26, 1992, the trial court entered a decree by which it reduced the child support award from $150 per week to $120 per week. The decree was later amended in ways which are not pertinent to this opinion. Wife alleges the trial court erred in entering the modification. The standard for review of this matter is consistent with other court-tried cases. Therefore, the decision of the trial court is to be affirmed unless it is not supported by substantial evidence, is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976); Laws v. Laws, 796 S.W.2d 439, 440 (Mo.App.1990); Wiebusch v. Deke, 762 S.W.2d 521, 524 (Mo.App. 1988). The party who is challenging *200 the decree bears the burden of demonstrating error. Ibrahim v. Ibrahim, 825 S.W.2d 391, 393 (Mo.App.1992). Wife's sole point on this appeal is, for purposes of clarity, set out verbatim: The trial court erred in granting respondent's motion to modify as to child support reducing the child support obligation because the burden is upon the movant to show a change in circumstances that have occured [sic] since the decree of dissolution so substantial and continuing in nature as to render the terms of the original decree unreasonable which the respondent failed to do: (A) Respondent's injury at work and resulting approximately three months off from work did not establish a substantial and continuing change in circumstances when respondent returned to work earning as much, if not more, gross income; (B) Respondent's remarriage and voluntary assumption of support of three stepchildren are irrelevant when examining child support; (C) The enabling statute establishing child support guidelines empowers the trial court with wide discretion in the utilization and application of said guidelines; (D) Respondent's burden is even greater when there is a short period of time since the last order on support requiring a showing of extraordinary change in circumstances so substantial and continuing in nature. Our discussion of paragraphs (C) and (D) of the point is determinative of this appeal. Husband responds with the argument that the child support award complied with the guidelines of Supreme Court Rule 88.01[1] and that the issue of child support was not preserved for appellate review because Wife did not include a Form 14 in the legal file which was filed with this court. This refers to Civil Procedure Form No. 14 which is required and which provides a method of calculating the amount of child support presumed by Rule 88.01 to be correct. In support, Husband cites the case of Ibrahim v. Ibrahim, supra. In that case the court found that a party who wishes to challenge a child support award on the basis that it does not conform to the requirements of Rule 88.01 must show that Civil Procedure Form No. 14 was filed in the trial court and it should be included in the legal file on appeal. We do not agree that, under the circumstances of the instant case, this failure is determinative of this appeal. Here, Wife's challenge to the child support award is not on the basis that it fails to, but should, conform to the child support guidelines calculated pursuant to Civil Procedure Form No. 14 and presumed correct by Rule 88.01. Rather, her complaint is that Husband failed to satisfy his burden to show a substantial and continuing change of circumstances so as to authorize the modification. Therefore, the instant case is distinguishable from Ibrahim, and the issue here is not controlled by it. Wife's argument is that Husband, who had the burden of proof, failed to show a change of circumstances so substantial and continuing as to justify modification. Section 452.370[2] governs modification of child support awards. It provides, in part: 1. ... [T]he provisions of any decree respecting maintenance or support may be modified only upon a showing of changed circumstances so substantial and continuing as to make the terms unreasonable. In a proceeding for modification of any child support award, the court, in determining whether or not a substantial change in circumstances has occurred, shall consider all financial resources of both parties, including the extent to which the reasonable expenses of either party are, or should be, shared by a spouse or other person with whom he or she cohabits, and the earning capacity of a party who is not employed. Wife's argument, however, ignores other provisions of § 452.370 which immediately follow that quoted above. Those additional provisions are: *201 If the application of the guidelines and criteria set forth in supreme court rule 88.01 to the financial circumstances of the parties would result in a change of child support from the existing amount by twenty percent or more, then a prima facie showing has been made of a change of circumstances so substantial and continuing as to make the present terms unreasonable. 2. When the party seeking modification has met the burden of proof set forth in subsection 1 of this section, then the child support shall be determined in conformity with criteria set forth in supreme court rule 88.01. In the instant case, Husband's evidence of income, which he contends should be attributable to each of the parties in calculating the child support under the Rule 88.01 guidelines, would have resulted in a reduction of the amount to be paid by Husband of more than twenty percent.[3] Therefore, under § 452.370, Husband met his burden to make a prima facie showing of a change of circumstances so substantial and continuing as to make the existing child support order unreasonable. Kieninger v. Kieninger, 836 S.W.2d 515, 518 (Mo.App.1992). Once Husband made this prima facie showing of change of circumstances, he was entitled to a new award calculated according to Rule 88.01 and Form No. 14 unless the court determined, after considering relevant factors, that the amount was unjust or inappropriate. Campbell v. Campbell, 811 S.W.2d 504, 506 (Mo.App.1991). The evidence was, therefore, sufficient in the instant case to have permitted the trial court to find a change of circumstances which would authorize it to modify the child support award. The question becomes, however, whether the trial court made adequate findings to support the modified award which it entered. Rule 88.01 provides, in pertinent part: ... There is a rebuttable presumption that the amount of child support calculated pursuant to Civil Procedure Form No. 14 is the amount of child support to be awarded in any judicial or administrative proceeding for dissolution of marriage, legal separation, or child support. It is sufficient in a particular case to rebut the presumption that the amount of child support calculated pursuant to Civil Procedure Form No. 14 is correct if the court or administrative agency enters in the case a written finding or a specific finding on the record that the amount so calculated, after consideration of all relevant factors, is unjust or inappropriate. Wife acknowledges that the child support guidelines under Rule 88.01 are mandatory but argues that the trial court has wide discretion in applying them. She cites Rothfuss v. Whalen, 812 S.W.2d 232 (Mo.App.1991), and In re Marriage of Zavadil, 806 S.W.2d 506 (Mo.App.1991), for the proposition that the child support guidelines should not be automatically or rigidly applied, but rather the trial court still retains discretion in setting the amount of child support. We do not disagree with that principle. Its application in the instant case by Wife, however, ignores the fact that Rule 88.01 itself permits the exercise of discretion in setting the amount of child support but mandates the procedure for doing so. The trial court is permitted by the rule to depart from application of the child support guidelines and exercise its discretion if it also makes "a written finding or a specific finding on the record that the amount so calculated, after consideration of all relevant factors, is unjust or inappropriate." See Campbell v. Campbell, 811 S.W.2d at 506; and Beeman v. Beeman, 816 S.W.2d 15, 17 (Mo.App.1991). It has been held that this requirement applies to cases involving modification of decrees. Once a substantial and continuing change of circumstances is shown under § 452.370, the provisions of Rule 88.01 become mandatory. The court is then required to either order the payment of child support calculated pursuant *202 to Form No. 14, or it must make a finding that the amount so calculated would be unjust or inappropriate after considering all relevant factors. Kieninger v. Kieninger, 836 S.W.2d at 518; Campbell v. Campbell, 811 S.W.2d at 506. A child support award is ineffective if it constitutes a departure from the amount calculated by the procedures found in Form No. 14 without there also being a specific finding, after consideration of all relevant factors, that the amount so calculated would be unjust or inappropriate. Beeman v. Beeman, 816 S.W.2d at 17. The modification decree from which Wife appeals in the instant case does not set forth the factual findings upon which the award is based. Likewise, it does not make a finding that, after consideration of all relevant factors, application of the Rule 88.01 guidelines would be unjust or inappropriate. Its findings are, in pertinent part: 4. That since the rendition of the decree in this cause, there has been a change in the circumstances of the parties considering the respective incomes of both parties as set forth in the Presumed Child Support Guidelines under Supreme Court Rule 88.01 and said change in circumstances is so substantial and continuing as to make the terms of the original Decree with respect to child support unreasonable. IT IS ORDERED, ADJUDGED AND DECREED by the Court that Respondent shall pay to the Petitioner in accordance with Supreme Court Rule 88.01, as support for the minor child ... the sum of $120.00 per week.... It is necessary that the record on appeal permit a determination of the decisions made by the trial court regarding the calculations required under Form No. 14. Umphenour v. Umphenour, 831 S.W.2d 764, 767 (Mo.App.1992). Neither this decree nor the record discloses whether the child support of $120 per week complies with the child support guidelines calculated pursuant to Rule 88.01 and Form No. 14 or whether it is some other figure arrived at by application of the trial court's discretion. If it is the former, the record does not disclose the trial court's findings of the amounts of income attributable to the parties which were used to calculate the applicable child support under the guidelines. If it is the latter, the record does not contain a finding that, after consideration of all relevant factors, the amount calculated under Rule 88.01 was "unjust or inappropriate." In short, we are unable to determine how the trial court arrived at the amount of child support ordered and whether the guidelines were followed and applied. It is true that generally in court-tried cases when no findings of fact are made and the record supports the ruling, the appellate court considers the facts to have been found in accordance with the result reached. Rule 73.01(a)(2). This rule has not always been applied, however, in modification actions because of the requirements of Rule 88.01 that either the child support be ordered in the amount calculated by the procedures found in Form No. 14 or the trial court find that amount is unjust or inappropriate. Kieninger v. Kieninger, 836 S.W.2d at 518; Campbell v. Campbell, 811 S.W.2d at 506. In Tuning v. Tuning, 841 S.W.2d 264 (Mo.App.1992), this court determined it was necessary to reverse and remand a modification action where the trial court made no determination of the proper amounts to be used in making the Form No. 14 calculations and also made no finding that application of the guidelines would be unjust or inappropriate. The same result should apply here. We find that the trial court erred in not making findings from which we can determine whether the modified child support award was arrived at by applying the child support guidelines under Rule 88.01, together with its findings concerning the amounts which should be used to make the Form No. 14 calculations. If the child support guidelines under Rule 88.01 were not applied, the trial court erred in failing to make a specific finding that the guidelines, after consideration of all relevant factors, *203 would be unjust or inappropriate. Accordingly, we reverse and remand this cause to the trial court to make such findings consistent with this opinion. In doing so, the trial court may take such additional evidence on the issues as it deems necessary. MONTGOMERY, P.J., and PREWITT, J., concur. NOTES [1] All references to rules are to Missouri Rules of Court, V.A.M.R. [2] All references to statutes are to RSMo 1986, V.A.M.S. [3] Wife raises no issue that the legal file contains no indication that Husband filed a Form No. 14 with the trial court. We, likewise, do not address that issue.

2013-10-30 06:32:38.888535+00

Per Curiam

116 N.H. 660 (1976) TOBER'S INCORPORATED v. PORTSMOUTH HOUSING AUTHORITY No. 7274. Supreme Court of New Hampshire. November 30, 1976. Wadleigh, Starr, Peters, Dunn & Kohls and James S. Yakovakis (Mr. Yakovakis orally) for the plaintiff. Gerald F. Giles and Francis J. Riordan (Mr. Giles orally) for the defendant. PER CURIAM. The plaintiff seeks to recover for alleged loss of business profits for the period August 1970 to August 1972, allegedly caused by negligent misrepresentations of the Portsmouth Housing Authority. Trial by jury resulted in a verdict for the plaintiff in the sum of $71,000. The defendant excepted to denial of its motions for nonsuit, directed verdict, and to set aside the verdict and to certain instructions to the jury and the denial of certain requests for instructions. The questions of law presented by defendant's exceptions were transferred by Cann, J. The defendant questions the sufficiency of the complaint to state a cause of action, and the sufficiency of the evidence to support the verdict. From the evidence it appears that in 1963 the *661 defendant authority, a public corporation organized under the provisions of RSA ch. 203, applied to the Department of Housing and Urban Development for funds to be used in the planning and preparation of the so-called Vaughn Street urban renewal project. See 42 U.S.C. §§ 1453, 3532. The project called for extensive redevelopment of approximately thirty acres in and adjacent to the Portsmouth business district. The plaintiff corporation occupied a building situated on Congress Street on one of the parcels scheduled for redevelopment. At all pertinent times the stock of Tober's, Inc., was held by Irving Tober, David Tober, Edward Tober, and Lee Tober Furman as guardian for Robert and Stephen Tober, minor children. Although in slightly different proportions, the same four individuals also owned the land and building in which the business of Tober's, Inc., was housed. On December 1, 1969, the authority entered into a site preparation contract with the Seaward Construction Company which called for the installation of streets, sidewalks, and utilities including a street which would intersect Congress Street at a point adjoining the Tober building. It was then fully anticipated that site preparation would require demolition of various structures, including the building owned by the Tobers and occupied by Tober's, Inc. From the outset, representatives of the authority met with the Tobers to discuss relocation, both temporary and permanent. The evidence on this point is conflicting, and inconclusive, but it is apparent that the parties were never able to reach an agreement satisfactory to the Tobers for relocation within the redevelopment project. On February 5, 1970, the authority brought a petition against Irving Tober, David Tober, Edward Tober and Lee Tober Furman to condemn the fee. The Tobers have not disputed the necessity or desirability of the urban renewal project, nor do they contest the right of the authority to proceed with condemnation. See Velishka v. Nashua, 99 N.H. 161, 106 A.2d 571, 44 A.L.R.2d 1406 (1954); Club Joilet, Inc. v. Manchester, 110 N.H. 172, 262 A.2d 844 (1970). Through counsel, they waived hearing on the condemnation petition and agreed to a decree vesting title in the authority with right of immediate entry and possession. On May 20, 1970, pursuant to this agreement, the authority deposited $70,000 in court and was granted the right to enter upon the property and to demolish the building. Thereupon Tober's, Inc., became a tenant at will of the authority. *662 On May 21, 1970, the authority issued the standard 90-day notice to vacate required by federal law specifying that the property was "scheduled for demolition." At the same time, the authority advised the Tobers of its policy to grant liberal extensions, from month to month in 30-day increments, until such time as demolition should be imminent, but that it could not guarantee more than one 30-day extension at any one time. Having just previously placed orders for future delivery of merchandise, the plaintiff decided to cancel its orders and to liquidate its business. On July 14, 1970, it notified the authority of its intention to quit the premises on or before July 31, 1970. It ceased business during the latter part of July 1970; and finally vacated the premises on August 31, 1970. The plaintiff did not reestablish its business until August 1972 when it did so at a point some five miles from its original location. The case was tried upon a declaration alleging that "the defendant had an obligation and duty to allow the plaintiff to continue to use said premises ... until such time as it was necessary for the defendant to put said property to a use other than as a retail store," and that the defendant "did negligently misrepresent to the plaintiff that said premises were to be demolished ...." and that "the plaintiff relying upon the statements of the defendant did sell all its merchandise and fixtures ...." and "through the defendant's negligent misrepresentation as aforesaid ... did suffer" damages. The record contains no evidence that the defendant was under an obligation or duty to allow the plaintiff to remain on the premises until it became necessary to put the building to a different use. The representations of an August 1966 letter from the assistant director of the authority, addressed to "all occupants", and stating that "occupants will not be required to move until a suitable place is available" and that "property owners may remain as tenants even after their property is acquired" must be construed in light of intervening circumstances by the time the notice to vacate was given to the plaintiff on May 21, 1970. In December 1969 demolition of the Tober building was contemplated by the project site preparation contract. Admittedly no guarantee was given in May 1970 that the plaintiff would not be required to vacate after 120 days from the date of notice. It was later determined that the building could be permitted to stand, but it was eventually demolished. *663 The trial proceeded, not on the theory of a duty to permit the plaintiff to remain in possession until the last possible moment, but on the basis of reliance upon alleged misrepresentations by the authority. This required evidence of the defendant's negligent failure to exercise care or competence in communicating information, and of the plaintiff's justifiable reliance upon such information to its damage. Restatement (Second) of Torts § 552 (Tent. Draft No. 12, 1966); Restatement of Torts § 552 (1938); Garapedian, Inc. v. Anderson, 92 N.H. 390, 31 A.2d 371 (1943). See also Eno Brick Co. v. Barber-Greene Co., 109 N.H. 156, 245 A.2d 545 (1968); W. Prosser, Law of Torts § 107, at 704-07, § 108 (4th ed., 1971). The record is replete with evidence that the authority undertook to find other suitable locations for the plaintiff, both temporary and permanent, but that none were satisfactory to the plaintiff. The plaintiff's application in March 1970 to redevelop a single small parcel (C 9-7) while it was unwilling to develop an adjoining parcel (C 9-6) at the same time, was not accepted for reasons dictated by the overall purposes of the project. However, following a meeting of the authority in May 1970, the plaintiff was offered an opportunity to acquire and preserve the building where its business was located (parcel C 9-5), provided it would refurbish and alter it to the extent necessary to provide clearance for the new street and its utilities and to bring the building into architectural harmony with the surrounding development. This was a proposal requiring modification of the project plan, which would have conferred a special privilege upon the plaintiff. The plaintiff however took no action to avail itself of the offer. As a whole the record tends to show that the plaintiff was accorded more than routine consideration by the authority. An essential element of the cause of action asserted by the plaintiff was justifiable reliance upon representations negligently made by the defendant. Restatement (Second) of Torts § 552 supra. The record contains no evidence of reliance upon the defendant's representations that extensions of time could later be granted after the expiration of the first 120 days. On the contrary the record establishes that the plaintiff decided not to rely upon prospective extensions of time but rather cancelled orders for merchandise which had been given shortly before May 21, 1970, advertised on July 13, 1970, a going-out-of-business sale, and on July 14, 1970, notified the authority of its purpose to vacate the *664 premises by July 30, 1970. Any reliance upon the long-standing representation that the building was to be demolished was belied by the evidence of the proposal that the plaintiff retain and refurbish it. Much of the trial was devoted to examination of the relative efforts made by all parties to relocate the plaintiff in a suitable location. No reason appears to question the good faith of either party in this regard. As to redevelopment by the plaintiff, on the one hand the Tobers were unwilling to invest personal funds in refurbishing their building in order to integrate it with the redevelopment plan. On the other hand, the authority was unwilling to permit the Tobers to redevelop a neighboring parcel of land, unless as a unit with contiguous land. This the Tobers were either unable or unwilling to do. While the authority had a duty to assist in relocating the plaintiff, 815 Mission Corp. v. Superior Court, 22 Cal. App. 3d 604, 99 Cal. Rptr. 538 (1971), this duty cannot justify the recovery which the plaintiff seeks. Although the authority had a general duty arising out of the relationship of the parties to deal in good faith, this did not translate into a duty to allow the plaintiff to remain in possession until demolition became imminent. The record indicates that the plaintiff could in fact have remained in possession on a month-to-month basis. The authority was under no greater obligation to it. 815 Mission Corp. v. Superior Court supra; see Muse v. Merrimack Valley Nat'l Bank, 114 N.H. 700, 327 A.2d 719 (1974). The order to vacate, which prompted the Tobers to leave, was reasonable in all respects since no duty to allow Tober's, Inc., to remain in possession until eviction can be inferred from either the statutory mandates of the housing authority, or the particular relationship of the parties. Nor was there any nexus between any loss the plaintiff may have suffered as a result of its decision to vacate, and any conduct of the authority which can be fairly termed "negligent," or a misrepresentation. All that was required was that the redevelopment plan be reasonably certain, and that the authority act in good faith in issuing the notice to quit. See Wilson v. United States, 350 F.2d 901 (10th Cir. 1965); Beistline v. San Diego, 256 F.2d 421 (9th Cir., cert. denied, 358 U.S. 865 (1958)). The plaintiff was not entitled to compensation in tort for the interruption of its business incident to a valid condemnation. See Amoskeag-Lawrence Mills v. State, 101 N.H. 392, 399, 144 A.2d 221, 226 (1958). *665 We are of the opinion that the trial court erred in failing to direct a verdict for the defendant for lack of evidence of a valid cause of action. The order is Judgment for the defendant. BOIS, J., did not sit.

2013-10-30 06:32:38.89056+00

Corbin

852 S.W.2d 110 (1993) 313 Ark. 87 McKinley Charles GREEN, Appellant, v. STATE of Arkansas, Appellee. No. CR 92-1171. Supreme Court of Arkansas. May 3, 1993. *111 Jan Thornton, El Dorado, for appellant. Teena L. White, Asst. Att'y. Gen., Little Rock, for appellee. CORBIN, Justice. Appellant, McKinley Charles Green, appeals a judgment of the Union Circuit Court convicting him of attempted kidnapping and sentencing him as an habitual offender to forty years in the Arkansas Department of Correction. Our jurisdiction is pursuant to Ark.Sup.Ct.R. 1-2(a)(2), In re: In the Matter of Rules of the Arkansas Supreme Court and the Arkansas Court of Appeals, 311 Ark.App. (Feb. 1, 1993). Appellant asserts three points for reversal of the judgment entered in accordance with the jury's verdict. We find no merit to the arguments and affirm. Appellant's first argument for reversal is that the trial court erred in denying his motion for directed verdict. Appellant claims the state failed to prove he intended to commit the offense of attempted kidnapping. He argues that the evidence the state presented of his intent is circumstantial evidence, and that this circumstantial evidence is not substantial because it does not exclude all reasonable hypotheses inconsistent with appellant's guilt. We treat the challenge of a denial of a motion for directed verdict as a challenge to the sufficiency of the evidence. Chism v. State, 312 Ark. 559, 853 S.W.2d 255 (1993). The test for determining the sufficiency of the evidence is whether there is substantial evidence to support the verdict. Id. On appeal, we review the evidence in the light most favorable to appellee and affirm if there is any substantial evidence to support the jury's verdict. Id. Evidence is substantial if it is of sufficient force and character to compel reasonable minds to reach a conclusion and pass beyond suspicion and conjecture. Id. Circumstantial evidence may constitute substantial evidence; however, in order for circumstantial evidence to constitute substantial evidence, it must exclude every other reasonable hypothesis inconsistent with an accused's guilt. Id. Whether the circumstantial evidence excludes all other reasonable hypotheses inconsistent with an *112 accused's guilt is a question to be determined by the finder of fact. Id. The crime of attempted kidnapping is encompassed in Ark.Code Ann. §§ 5-3-201 and 5-11-102 (1987). As applied to this case, these sections provide that a person commits attempted kidnapping if he intends to commit kidnapping and purposely engages in conduct that constitutes a substantial step toward the commission of the kidnapping. A person commits kidnapping if, without consent, he restrains another person so as to substantially interfere with that person's liberty, with the purpose of inflicting physical injury upon that person, or engaging in sexual intercourse, deviate sexual activity, or sexual contact with that person. Ark.Code Ann. § 5-11-102(a)(4). We recite the evidence as viewed most favorably to appellee. Appellant entered a convenience store and purchased a cigar. He loitered in the store for a while and asked to use the telephone. The store clerk denied his request pursuant to store policy. While loitering in the store, appellant stared at the store clerk's breasts and buttocks, and inquired of her marital status and whether she was lonely. After the denial of his subsequent request to use the telephone, appellant jumped over the counter and grabbed the clerk. She struggled with appellant for some time, but to no avail. He pinned her arms to her sides and forced her to walk outside the store. Appellant, still pinning the victim's arms to her sides, stopped at his car and opened the passenger door. The victim was able to slam the car door on appellant's hand causing him to lose his grip on her. The victim escaped and flagged down a car that was passing by. Appellant then drove away from the convenience store. The victim and the driver of the car who stopped to help her returned to the store where the victim called the El Dorado police. Soon thereafter, the police apprehended appellant while driving his car. The victim later identified appellant as her attacker. A search of appellant's vehicle produced an unsmoked cigar. Kidnapping, or in this case, attempted kidnapping, requires that the victim's liberty be restrained without consent. Ark.Code Ann. § 5-11-102. "Restraint without consent" is defined as including restraint by physical force. Ark.Code Ann. § 5-11-101(2) (1987); Fairchild v. State, 305 Ark. 406, 808 S.W.2d 743 (1991). Substantial interference with another person's liberty does not require that the interference be for a substantial period of time. Jackson v. State, 290 Ark. 160, 717 S.W.2d 801 (1986). The purpose of the restraint may be inferred from circumstantial evidence. Id.; Fairchild, 305 Ark. 406, 808 S.W.2d 743. Intent to commit a crime may also be inferred from the circumstances. Jackson, 290 Ark. 160, 717 S.W.2d 801. The foregoing evidence is substantial evidence and supports the jury's verdict of guilt. The victim's testimony that she struggled with appellant and that he had her arms pinned to her sides while pushing her through the store and outside clearly indicates he restrained her without her consent and that he interfered substantially with her liberty. Appellant's use of physical force against the victim leads to an inference that he intended to cause her physical harm. The questions appellant asked the victim regarding her marital status and her state of loneliness lead to the inference that he was considering sexual contact with the victim. See Fairchild, 305 Ark. 406, 808 S.W.2d 743; Jackson, 290 Ark. 160, 717 S.W.2d 801; and Ark.Code Ann. §§ 5-11-101, -102. Thus, the jury could have reasonably concluded that appellant intended to commit kidnapping and that no other reasonable conclusion consistent with appellant's innocence could be drawn from this evidence. The evidence is substantial and supports the jury's verdict of guilt. The trial court did not err in denying appellant's motion for directed verdict on the charge of attempted kidnapping. As his second point for reversal, appellant argues that his Sixth Amendment rights were violated because he was incarcerated longer than nine months while awaiting trial. He recognizes this court has held that release on one's own recognizance, rather than a dismissal or discharge, *113 is the remedy for an accused who has been incarcerated continuously since his arrest and not brought to trial within nine months. A.R.Cr.P. Rules 28.1(a), 30.1(b); Jackson v. State, 290 Ark. 375, 720 S.W.2d 282 (1986). However, appellant urges this court to reverse its ruling in Jackson and adopt the rule that one who, while awaiting trial, is incarcerated for a period in excess of that provided for in A.R.Cr.P. Rule 28.2 should be released and discharged pursuant to the Speedy Trial Clause of the Sixth Amendment and Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972). As part of this argument, appellant claims he was prejudiced by the trial court's order granting the state's motion to exclude the period of time from when the original scheduled trial date until the actual trial date. The state moved for the period to be excluded because of the trial court's crowded docket. We do not reach the merits of appellant's speedy trial argument because he never raised this argument to the trial court. We have stated time and time again that we do not consider arguments raised for the first time on appeal, and even speedy trial arguments must be so raised. Gooden v. State, 295 Ark. 385, 390, 749 S.W.2d 657, 660 (1988). Moreover, even constitutional arguments are waived when not raised below. Kittler v. State, 304 Ark. 344, 802 S.W.2d 925 (1991). As his third point for reversal, appellant argues that his prior conviction for second degree sexual assault in Wisconsin should not have been used to sentence him as an habitual offender because his sentence for that conviction was probation for four years. Appellant claims that our habitual offender statutes allow a conviction from another state to be used only when the defendant actually serves a sentence of imprisonment for more than one year. Appellant acknowledges the rule announced in Rolark v. State, 299 Ark. 299, 772 S.W.2d 588 (1989), that, for purposes of our habitual offender statutes, previous convictions resulting in probation are nonetheless previous convictions and may be considered for enhanced sentencing purposes. However, appellant urges this court to overrule Rolark, arguing it is inconsistent with legislative intent. The state argues that Rolark is good law and should be followed here. We agree with the state. This court has held that a prior conviction in another state resulting in a sentence of probation may be used for enhanced sentencing purposes, provided the law in the other state authorizes a sentence of imprisonment for more than one year. See e.g., Cherry v. State, 302 Ark. 462, 791 S.W.2d 354 (1990); Campbell v. State, 264 Ark. 575, 572 S.W.2d 845 (1978). See also Ark.Code Ann. § 5-4-503 (1987). Our habitual offender statutes focus on prior convictions, not on prior sentences as appellant contends. That the legislature intended the focus of the act to be on prior convictions is evident in the official commentary to section 5-4-503, which states as follows: If a sentence in excess of one year in prison was authorized upon conviction in the other jurisdiction, then regardless of the sentence actually received, the defendant has a previous felony conviction or finding of guilt for purposes of § 5-4-501 [emphasis added]. As our prior holdings on this issue are consistent with section 5-4-503 and its supporting legislative intent, we decline to overrule Rolark. The trial court's order denying appellant's motion to dismiss habitual offender status states that as appellant was sentenced to four years probation, it is clear that Wisconsin law authorized a sentence of imprisonment in excess of one year. We agree and find no error in the trial court's imposition of an enhanced sentence. The judgment of conviction is affirmed.

2013-10-30 06:32:38.973351+00

Taylor

367 A.2d 1338 (1976) In the Matter of the Consolidated Application of WILMINGTON SUBURBAN WATER CORPORATION for a General Increase in Rates throughout its Service Territory and Automatic Adjustment in Rates. Superior Court of Delaware, New Castle. Submitted October 15, 1976. Decided December 22, 1976. H. James Conaway, Jr., and Sydney R. Chirlin, of Young, Conaway, Stargatt & Taylor, Wilmington; and William J. LeBuhn, Philadelphia, Pa., of counsel, for Wilmington Suburban Water Corp. William D. Bailey, Jr., and David C. McBride, of Bayard, Brill & Handelman, Wilmington, for the Public Service Commission of the State of Delaware. Joseph C. Kelly, of ICI United States, Inc., Wilmington, and David P. Bruton, of Drinker, Biddle & Reath, Philadelphia, Pa., of counsel, for intervenors. *1340 TAYLOR, Judge. I — REFUND The Commission's order of December 17, 1975 directed the Water Company to refund to its customers the difference between the rate fixed by the Commission and the amount which the Water Company had charged since April 15, 1974. The Water Company contends that in view of the lapse of time between the application for rate increase which was filed on March 15, 1974 and the Commission's order of December 17, 1975, the Commission lacked jurisdiction to make its rate determination retroactive, and hence to order a refund. The Water Company does not dispute the power of the Commission to require that its rate determination be applied prospectively from the date of the order. The basic policy applicable to public utility rates is found in 26 Del.C. § 161 which provides: "No public utility shall make, impose or exact any unjust or unreasonable or unduly preferential or unjustly discriminatory individual or joint rate for any *1341 product or service supplied or rendered by it within the State ..."[1] Section 151 requires a public utility to file notice of the proposed rate changes with the Commission at least thirty days before the changes will go into effect, "unless the Commission otherwise orders". Section 152 permits the Commission "either upon complaint or upon its own initiative" to hold a hearing "concerning the lawfulness of such rate." Section 155 authorizes the Commission after the hearing to determine the just and reasonable rate to be charged. Section 153 contains a procedure for preventing the proposed rate change from going into effect as scheduled by the public utility. Subsection (a) permits the Commission at any time before the rate becomes effective, pending the hearing and decision on the proposed rate change, to suspend the effectiveness of the change "but not for a longer period than 90 days beyond the time when such rate would otherwise go into effect unless the Commission finds that a longer time will be required for a proper determination of the lawfulness of such rate, in which case the Commission may extend the period for not to exceed 6 months." Subsection (b) permits the public utility to avoid the effect of the suspension "by filing with the Commission a bond in a reasonable amount approved by the Commission with sureties approved by the Commission, conditioned upon the refund, in a manner to be prescribed by order of the Commission, to the persons entitled thereto of the amount of the excess, if the rate so put into effect is finally determined to be excessive." Water Company contends that the time limitation upon the Commission's power to stay the rate increase has the effect of limiting the time within which the Commission can make a rate determination which can have a retroactive effect. In order to resolve this issue, it is necessary to consider the power of the public utility to make a rate change, the duty of the public utility to charge just and reasonable rates, and the power of the Commission to determine just and reasonable rates. It is clear that under § 151 the public utility, unless the Commission takes countervaling action, may put into effect a rate change on 30 days notice to the Commission. This means that unless the Commission takes such action, the public may be charged those rates while the Commission proceeds to hold hearings on the reasonableness of the rate change. § 152. The Commission may prevent the proposed rate change from going into effect by suspension orders for 90 days and 6 months. § 153. The public utility may prevent the suspension from going into effect by providing financial protection to assure any refund to customers by filing a bond with surety with the Commission. While this may seem of little or no consequence to customers of public utilities whose liquidity is beyond question, apparently the legislative draftsman considered this to be of significance, and the importance of this in the case of public utilities whose financial structure is less sound is readily apparent. Obviously, the protection lies in the requirement that the bond be supported by a surety. In practice, this requirement is not adhered to in the case of utilities of sound financial position such as Water Company. I do not find that the provisions of § 153 limit the jurisdiction of the Commission to declare reasonable rates for any period of time. Rather, they limit the duration of interference with the public utility's power to begin to collect this proposed new rate. However, they do not validate the rate under the requirement that a public utility's rates must always be reasonable. *1342 § 155 which specifically refers to the action of the Commission with respect to a proposed rate change contains no time limitation and makes no reference to the limitations contained in § 153. It merely provides that the Commission "shall determine the just and reasonable rate to be charged or applied by the utility for the service in question and shall fix the same by order to be served upon the utility." It does provide that "such rate shall thereafter be observed until changed, as provided in this chapter." While this provision assures prospective application of the new rate, the absence of any reference to retroactive application gives rise to a possible inference that retroactive application was not contemplated and requires a testing of that proposition against other provisions of the chapter. § 154 contains an interesting provision that "if the public utility fails to make refund within 90 days after final determination by the Commission that the rate is excessive, any person entitled to such refund may sue therefor in any court of this State of competent jurisdiction ...". Although it might be contended that this reference to refund was intended to coincide with the refund requirements of the bond filed under § 153, it should be noted that the action referred to in § 154 is not a suit upon the bond but simply a suit for the excess paid by the consumer over a reasonable rate fixed by the Commission. Because of the historic significance of a suit on a bond, it must be concluded that the reference to suit for the excess payment under § 154 was not intended merely to refer to suit on a bond filed under § 153. This analysis must also consider the fundamental restraint upon public utilities forbidding a public utility to charge an unjust or unreasonable rate. 26 Del.C. § 161. Any departure from a rate previously found by the Commission to be just and reasonable is subject to hearing and determination of the Commission under § 152 and § 155. It is my conclusion that the statute contemplates that for no period of time is a public utility entitled to be free from the restriction that its rate be fair and reasonable. In recognition of the financial burden that a public utility may suffer from a delay in collecting a rate change, both from the financial drain and also from the impracticality of collecting retroactively for meritorious rate increases, a public utility may increase its charge to its customers pending Commission hearing and final determination of the fair and reasonable rate. When the fair and reasonable rate for the period involved has been established by the Commission, the public utility no longer is entitled under the law to retain the excess of the rate charged over the fair and reasonable rate. Accordingly, a customer who has paid the excessive rate is entitled to resort to the judicial remedies contemplated by § 154. It should be noted that § 154 contemplates joinder of customers' claims. Water Company has cited various cases in support of the proposition that rates go into effect automatically at the expiration of the suspension period.[2] The statutes involved in these cases provided for an initial delay or suspension after filing for rate increases during which no increase would be in effect. After expiration of that period the public utility could automatically put the proposed rate into effect upon filing of an appropriate bond to cover refund. The rate increase under bond could then remain in effect until the decision of the Commission. No authority has been cited holding that in the face of a provision such as 26 Del.C. § 161 proceeds of a rate increase put into effect by a public utility pending a Commission *1343 hearing and decision may be retained without refund after the Commission determines that the rate is not just and reasonable. In the light of the conclusion just reached, the remaining issue is whether the Commission acted unreasonably in directing that the refund be made. Pursuant to the bond filed by the Water Company under § 153, the Commission was entitled to direct a refund of the excess charge for the period which the Commission could lawfully suspend the rate increase. I find no merit in Water Company's contention that the Commission's power to order a refund ceased to exist upon the expiration of the lawful suspension period under § 153. Under § 153 the Commission had the power to order a refund for the period of lawful suspension and the statute does not require that the refund power be exercised before the expiration of the lawful suspension period. Since the refund under § 153 would undoubtedly go to most of the same customers who would be entitled to bring legal action for refund for the period after the legal suspension of the rate increase, and since additional expense would undoubtedly be incurred in a bifurcated refund procedure, I conclude that the Commission reasonably exercised its broad powers in directing that refund of the excess rate for the entire period from the time the Water Company placed the rate increase in effect until the Commission's decision should be made by a direct refund by the Water Company. In view of the conclusion reached above, it is not necessary to discuss the contention of the Commission and Intervenors that Water Company is estopped from opposing the refund order. II — APPLICABLE PRINCIPLES At the outset of the discussion of the propriety of the specific considerations which entered into the Commission's rate decision, it is appropriate to mention the standards which govern judicial review of a decision of the Commission. The ultimate object of a rate decision is to establish a result which will permit a utility "to earn enough to operate in a manner fair to it and to the consuming public." Application of Wilmington Suburban Water Corporation, Del.Supr., 211 A.2d 602, 605 (1964). Various elements must be considered in arriving at the fair rate. It is the function of the Court on appeal to determine whether the commission has reached a result which complies with the law and is reasonable, based upon the Commission's findings, and whether those findings are reasonable and are supported by the evidence before the Commission. Application of Diamond State Telephone Company, Del.Supr., 9 Terry 497, 48 Del. 497, 107 A. 2d 786 (1954). To enable this review, the statute charges that the Commission shall make findings in sufficient detail to enable the Court to make a proper review. 26 Del.C. § 183. When supplied with the proper findings by the Commission, this Court must determine whether sufficient substantial evidence supports those findings. City of Milford v. Delaware Electric Cooperative, Inc., Del.Supr., 344 A.2d 384 (1974). With respect to elements which the Commission has discussed in its decision, insofar as they are raised on appeal, the Court must determine whether Commission's action is reasonable when considered in the light of the evidence before the Commission. III — FAIR VALUE Water Company contends that the Commission used an improper "present fair value" in determining the just and reasonable rate. Water Company's evidence showed a trended original cost of $22,722,576. Absent contrary evidence, Water Company contends that this figure should have been accepted by the Commission as representing the present fair value. Instead, the Commission found the present fair value to be $17,800,000. *1344 Water Company challenges the Commission's finding that the fair value of Water Company for purposes of rate fixing is $17,800,000, the contention being that the only evidence of value before the Commission was that based upon the Water Company's evidence of trended original cost, the assets were valued at $22,722,576. It criticizes the Commission's figure of $17,800,000 as being arbitrarily "pulled out of the hat." Actually, in its decision the Commission states that it has taken the $16,000,000 figure which was determined to be the fair value in the decision in the prior proceeding of Water Company before the Commission, and has added the cost of additional assets acquired since that proceeding. A prior decision by the Commission, made after full hearing, and not having been appealed, involving the same utility may be given consideration and weight by the Commission in a subsequent proceeding to the extent that it may be applicable to the factual situation existing at the time of the subsequent proceeding. It appears that the Commission's reference to the "last case" was directed to its decisions dated April 25, 1973 and August 15, 1973 in docket No. 660. The test year which served as the standard in fixing reasonable rates in those decisions ended June 30, 1971. In the present case the test year ended December 31, 1973, 2½ years later than the earlier test year. Where the Commission has made a prior finding of fair value with respect to the same public utility it may be given substantial weight in a subsequent rate proceeding but the Commission must consider any factors which require adjustment of the prior fair value, and must make such adjustment as those factors may reasonably justify, considering the elements referred to in 26 Del.C. § 126.[3]Clark's Ferry Bridge Co. v. Public Service Commission, 291 U.S. 227, 54 S.Ct. 427, 78 L.Ed. 767 (1934), affirming, 108 Pa.Super. 49, 165 A. 261 (1933); Beaver Valley Water Co. v. Pennsylvania Public Utility Commission, 140 Pa.Super. 297, 14 A.2d 205 (1940); Mayor and City of Baltimore v. Consolidated Gas Electric Light & Power Co. of Baltimore, Md.Pub. Serv.Comm., 61 PUR(NS) 94 (1945); Memphis v. Southern Bell Telephone & Telegraph, Tenn. RR and Pub. Utility Comm., 6 PUR(NS) 464. This is of particular significance in a period of substantial inflation, such as is involved here. The decision is lacking in this respect. The Commission must address itself to this subject and must make appropriate findings based upon the evidence. Application of Delmarva Power & Light Co., Del. Super., 337 A.2d 517 (1975). This issue is remanded to the Commission for appropriate findings and for any further hearing appropriate for this purpose. IV — A. WORKING CAPITAL Water Company contends that it was entitled to an allowance of $247,107 for cash working capital. There is no doubt that under Delaware law a public utility is entitled to recognition and allowance for such cash working capital as is required to offset the time lag between the time when a utility must pay its expenses and the time it receives payment for its utility services. Application of Wilmington Suburban Water Corporation, Del. Supr., 203 A.2d 817 (1964). In recognition of this principle, the Commission allowed $140,000 for cash working capital. Water Company supports its contentions by the testimony of a witness who presented evidence concerning the cash working capital needs in the water service industry generally. Water Company's evidence did not address itself to the needs and requirements of this company. The *1345 needs of a company necessarily depend on the cash flow experience of a particular company, and its practices with respect to promptness or delay in payment of bills as well as its experience with respect to the promptness of collection of customers' billls are of significance. A witness for intervenors testified to tax overpayments and interest prepayments under the relationship existing between Water Company and its parent corporation indicating excess cash. The Commission arrived at the figure which it allowed by averaging the cash on hand at the end of 1972 and that at the end of 1973. While this is an imprecise method of arriving at cash working capital needs, faced with the alternative of a formula which did not reflect the experience of Water Company at all, it cannot be said the Commission failed to satisfy the requirements of the law in dealing with this matter. Nor was the Commission bound to accept the general statistical data presented by the Commission. In this respect the action of the Commission is affirmed. IV — B. INVENTORY In arriving at the allowable working capital, the Commission disallowed three categories totalling $66,631. The major item ($56,196) is a category called "exempt," by which it is meant that these are items of small unit value for which an annual inventory is not made. The last inventory of items of this category was made several years ago and the total then was $56,196. The item has been carried on the books at this figure on the basis that the volume and value of these items remain relatively constant. Inventory is dispensed with because of the cost of making an inventory of the items. The figure has been accepted for Internal Revenue Service purposes and it had not been questioned or excluded by the Commission in Water Company's previous rate cases. Recognizing that it was impossible in hearings in 1974 to establish an inventory of items as they existed during the 1973 test year, Water Company undertook to have a current inventory made in February, 1975. This was stricken as an item of evidentiary proof by the Commission. While it may not have been entitled to weight as independent proof of the value of this item, it clearly had evidentiary value if it tended to corroborate the testimony offered by Water Company that this item had remained relatively constant over a period of years. I conclude that the Commission's action in rejecting any allowance for the so-called "exempt" items must be reversed on the ground that its action does not meet the statutory test. This matter is remanded to the Commission for further action consistent herewith. V — ACQUISITION ADJUSTMENT Water Company claimed an acquisition adjustment of $98,148. This relates to Water Company's acquisition of Delaware Water Company in 1948. Until the 1973 application of Water Company before this Commission, Water Company had carried the Delaware Water Company on its books at the price originally paid when Water Company acquired that company. In the 1973 proceeding and in this proceeding Water Company sought to adjust that price upward to the depreciated original cost to Delaware Water Company which was $98,148 higher than the price paid by Water Company. The Commission concluded that this was an item which should have been amortized within a relatively short period after the 1948 acquisition, and in its 1973 decision it disallowed this adjustment entirely. In its present decision it concluded that this adjustment was entitled to treatment on the books of the company and that it should be amortized over a three-year period. Accordingly, it included one-third ($32,716) of the adjustment in the rate base for the test year and deducted the same amount from allowable expense for the base year. *1346 It appears to be without dispute that under proper accounting practices this is an item which ought to be amortized. The point of difference is that Water Company contends that the amortization ought to be over a long period of time and that since it failed to make such amortization beginning in 1949, the long-term amortization should commence now. Intervenors contend that since Water Company has not provided for the amortization of this figure during the proper time and since it has never prior to 1973 contended that the adjustment should be made a part of the rate base, there should be no adjustment or amortization allowance. Under the circumstances here, the Commission's action in permitting an amortization over a short period of time commencing at this late date was a reasonable solution to Water Company's dilemma and the Commission's determination in this respect is warranted under the law. The Commission's action in this respect is affirmed. VI — A. POST TEST YEAR ADJUSTMENT Having arrived at the revenue and expenses of Water Company for the test year (1973), the Commission made an upward adjustment of revenues to reflect the increase in the number of customers to September 30, 1974. The only adjustment which it made to expenses was an allowance of $2,076 as an allowance for increased cost of billing the new customers. Its conclusion that no other additional expenses would be incurred was based on an assertion by applicant that its consumption of electricity and chemicals had been reduced in 1974 as had been the total number of employees and the labor cost per gallon. It appears that the Commission was giving a significance to certain statements of Water Company which was not intended and was not supported by the figures. Findings of the Commission must be based on evidence which generally is found in the books and records and financial statements of the utility. It appears that the record contained insufficient financial data to permit a finding to be made as to the expense picture attributable to the revenue received from the new customers. The test year which is set in the discretion of the Commission is of primary significance in rate fixing. However, when complete and accurate information becomes available with respect to a later period of time, it is appropriate to consider that information "as a check on the continuing validity of the test year experience in a period of rapid change like the present." Application of Delmarva Power and Light Company, supra. In the last cited case, utility's figures for the subsequent year became available and were introduced in evidence prior to the Commission's decision. Under that state of facts, this Court held that the Commission should have considered the figures for the subsequent year, at least for the purpose quoted above. Here, it appears that the Commission did not use the 1974 nine month figures to test the validity of the 1973 test year figures. Rather, it modified the test year figures to create a hybrid figure. Moreover, it has been discussed above that the 1974 nine month figure did not reflect any evidentiary finding based on evidence in the case concerning the added expenses. Accordingly, this matter is remanded to the Commission for appropriate action consistent herewith. VI — B. 1. PARENT COMPANY MANAGEMENT AND SERVICE CHARGES Water Company sought an allowance for $178,265 which it paid to a subsidiary of Water Company's parent company for various services. This payment was based upon a formula which, according to Water Company, has acceptance in the industry. In its decision of August 15, 1973 in a prior proceeding involving Water Company, the Commission put Water Company on notice that it would not allow *1347 management fee thereafter unless the records were produced showing that the fee reflected time actually spent on behalf of Water Company. Since the prior decision of the Commission was rendered after the major part of the 1973 test year had passed, Water Company is not in a position in this proceeding to provide the actual time records. In the 1973 decision (involving a test year ending June 30, 1971) the Commission allowed a management fee of $3.50 per customer. Here, the fee sought by Water Company amounted to $8.73 per customer. The Commission, considering the effect of inflation, increased the allowance from $3.50 per customer to $5.00 per customer and applied that to the customers as of September 30, 1974 — a total allowance of $103,710. To require the Commission to accept Water Company's formula figures or the formula figure of a Commission's staff would violate the Commission's discretionary finding that a formula is not the proper method of determining the reasonableness of charges made by the parent company or another of its subsidiaries. The allowance by the Commission in its decision of August 15, 1973 stands unchallenged. The inflationary adjustment made by the Commission is reasonable and proper under the evidence before the Commission. I conclude the Commission's allowance is reasonable and is affirmed. VI — B. 2. RATE HEARING EXPENSES Water Company objects to the disallowance of a portion of its expenditures in connection with this rate proceeding before the Commission. Water Company showed expenditure of $192,802. The Commission disallowed a total of $35,000, comprising legal expenses of $15,000, other expenses of $15,000 and expenses in the amount of $5,000 related to an employee of General Water Works who had left its employment and was not available to present evidence at the hearing. The question is whether the expenses in connection with the rate proceeding were reasonable and proper. With the exception of the $5,000 disallowance for services of the former employee of General Water Works, the Commission's decision gives no finding or explanation for the disallowance. With respect to that employee, the Commission's explanation that it disallowed $5,000 of the claimed $8,206 on the ground that he was not available to testify and that his work papers could not be located by Water Company reasonably supports the action of the Commission in that respect. The contention made in the Commission's brief in this Court that the disallowance may have related to the companion claim of Water Company for an automatic rate adjustment is not supported by any language in the Commission's decision. The Commission's disallowance of the remaining $30,000 claim must be reversed and the matter is remanded to the Commission to include that amount in its allowance. VI — B. 3. REFUND EXPENSES The Commission disallowed Water Company's claim of $27,505 as expense incurred in making the refund required under the 1973 rate decision of the Commission. In that proceeding, as in this, Water Company had sought a larger rate increase than it received. However, the Commission did allow a rate increase to Water Company. The statute does contemplate that there will from time to time be proceedings to change the public utility rates and it does permit the public utility to put into effect increased rates pending the hearings before the Commission and that there would be a refund of any excess charges over the rate ultimately set by the Commission. Clearly, this procedure contemplates expenses. This is a price for the opportunity for a full hearing and due deliberation by the Commission. Where it is ultimately determined that a public utility was entitled to an increase as of the time the tentative rates were put into effect by the public utility, it should not be required *1348 at its peril to guess the exact amount of increase which the Commission may ultimately allow. This proceeding indicates the complexity of the rate making process and the many factors which enter into it. I conclude that the Water Company is entitled to its reasonable expense in making the refund. The Commission has not addressed itself to the issue of reasonableness nor has it given consideration to the fact that this item of expense, like the item of expense discussed in the previous section of this Opinion, is a non-recurrent expense and that it may not be proper for the entire expense to be charged against a single income year. This matter is remanded to the Commission for action consistent herewith. VII — AUTOMATIC RATE ADJUSTMENT Finally, the Water Company sought and the Commission refused a modification of Water Company's rate schedule which would have permitted Water Company to put into effect without further action of the Commission rate adjustments reflecting fluctuations in various operating expenses. The basic concept of Commission authorization for automatic rate adjustments based on a particular factor of expense of the public utility appears to have been accepted for many years as a valid application of the Delaware Public Utility Law. The most notable application of this concept has been in the case of Delmarva Power and Light Company where a formula has been approved based upon fuel cost. In approaching this question, it must be borne in mind that automatic rate adjustments constitute an exception to the traditional rate making function of public utility commissions. The question therefore is whether Water Company has made out a valid basis for such an exception and whether the Commission having granted such an exception in certain instances acted reasonably in refusing the exception in the case of Water Company. In the case of Delmarva Power and Light Company's gas rate, cost of gas represented 61% of the operating expense of that operation and in the case of electric power, fuel cost represented 50% of the expense of that operation. In each instance it represented a single item which was purchased by the utility and did not carry the potential of economy through efficient management. In the case of Water Company, six items were included as the determinants for rate adjustment and the largest single item was "payroll expense." This item clearly is an item of management control and is a proper subject for Commission surveillance. While the total of the items included in Water Company's proposal represents 51% of Water Company expenses, no single item represents more than 18% of the expenses and that is payroll expense, which may be influenced substantially by management controls. The Commission was persuaded from the evidence which it had heard in the electric and gas rate cases that the automatic rate adjustment involved there would maintain that public utility in a proper competitive position for new capital and that this would result in lower capital costs which could benefit the public. It found that in general, public utilities of that type had been authorized to have an automatic rate adjustment. Therefore, it found, allowing such adjustment in this State would maintain that public utility in the proper relationship to similar public utilities in other states over the country. In contrast, the Commission found here that there was insufficient evidence to show that in the case of water companies any measurable reduction in capital costs resulted from an automatic rate adjustment authorization. I conclude that the Commission's decision and findings with respect to the proposed rate adjustment clause are supported *1349 by the record and that valid distinctions have been shown between the treatment of gas and fuel costs related to gas and electric utilities and the proposed rate adjustment clause which was rejected by the Commission in this case. Clearly, an automatic rate adjustment may result in successive Commission hearings and costs increase. However, considerations of the protection of the public and the providing of utility services at fair prices must govern the decisions of the Commission. Periodic scrutiny by the Commission is consistent with such protection. Finally, with respect to the immediacy of a need for a rate change, it cannot be overlooked that the public utility may put into effect its proposed rate increase after minimal notification and after compliance with the statutory provision and may retain that rate increase to the extent that the increase is determined to have been reasonable. The Commission's disallowance of the Water Company's requested automatic rate adjustment provision in its rate schedule is a reasonable application of the law and is supported by substantial evidence and is affirmed. VIII — SUMMARY In summary, this case is remanded to the Commission for action consistent herewith, namely, to make appropriate findings relating to the issues discussed in Sections III, IVB, VIA, VIB2, and VIB3, and to hold further hearings thereon if it determines such hearings to be appropriate, and in the light of the findings contemplated herein together with the findings heretofore made which are affirmed herein or which have not been challenged on appeal, the Commission shall determine the just and reasonable rate. In all other respects, the decision of the Commission is affirmed. IT IS SO ORDERED. NOTES [1] The parties agree that this case is governed by the Chapter 1 of Title 26, Delaware Code, as it existed on the filing of this petition (March 15, 1974), and that the revised Chapter 1 which was adopted by 59 Del. Laws, Ch. 397, effective June 28, 1974, is inapplicable. [2] Arrow Transportation Co. v. Southern Railway Co., 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed. 2d 52 (1963); Associated Press v. F.C.C., 145 U.S.App.D.C. 172, 448 F.2d 1095 (1971); Associated Oil and Gas Co. v. F.P.C., 5 Cir., 280 F.2d 31 (1960); Logan Gas Co. v. Public Utilities Commission of Ohio, 115 Ohio St. 107, 152 N.E. 648 (1926). [3] Upon remand of the rate issues in Application of the Diamond State Telephone Co., Del. Supr., 10 Terry 203, 49 Del. 203, 113 A.2d 437 (1955), Commission applied this principle. Application of the Diamond State Telephone Co., 10 PUR 3d 350.

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Burnett

852 S.W.2d 570 (1993) Walford D. MARRS, Individually and as Executor of the Estate of Virginia Marrs, Deceased, et al., Appellants, v. FORD MOTOR COMPANY, Appellee. No. 05-92-00189-CV. Court of Appeals of Texas, Dallas. January 27, 1993. *572 Stephen F. Malouf, Dallas, for appellants. Eugene W. Bees, II, Austin, Malcolm E. Wheeler, Denver, CO, for appellee. Before Justices KINKEADE, BURNETT and BARBER, JJ. OPINION BURNETT, Justice. Walford D. Marrs, et al. ("Marrs") brought a common law products liability action against Ford Motor Company ("Ford"). Marrs alleged that the defective design of a 1986 Ford Taurus caused the death of Virginia Marrs. The Taurus did not have a passive-restraint system such as an airbag. Marrs appeals the summary judgment granted Ford. I. THE BACKGROUND A. Factual and Procedural History Virginia Marrs, a front seat passenger of a 1986 Ford Taurus, died in a head-on collision. The Taurus had safety belts and complied with all applicable federal safety standards. Mrs. Marrs was wearing a properly functioning seat belt when the accident occurred. Marrs brought suit against Ford. Marrs alleged that the Taurus was unreasonably dangerous because it did not include a passenger-side airbag. Ford moved for partial summary judgment on the ground that the National Traffic and Motor Vehicle Safety Act, 15 U.S.C.A. §§ 1381-1431 (West 1982 & Supp.1992) ("Safety Act" or "Act") and the federal motor vehicle safety standards ("FMVSS") promulgated under the Act pre-empt the no-airbag claim. The trial court's partial summary judgment became final when Marrs nonsuited the remaining cause. Marrs now appeals the summary judgment the trial court granted Ford. The question before us is whether federal safety regulations pre-empt a state tort law claim that an automobile was defective because it lacked airbags. Although the subject of a number of federal and state court decisions, the issue of federal pre-emption of common law passive-restraint claims has not until now come before a Texas appellate court. Courts that have analyzed the Safety Act and its standards have come to different conclusions. The vast majority of courts have found federal pre-emption of common *573 law passive-restraint claims.[1] We conclude that an actual conflict exists between a state common law no-airbag claim and federal law. We affirm the trial court's judgment. B. The Safety Act Congress enacted the Safety Act of 1966 in response to the "soaring rate of death and debilitation on the Nation's highways." S.Rep. No. 1301, 89th Cong., 2d Sess. 1 (1966), reprinted in 1966 U.S.C.C.A.N. 2709. The Safety Act sought to increase automotive safety in three principal ways. First, the Act provides for research, testing, and training in traffic safety. See 15 U.S.C.A. § 1395 (West 1982). Second, the Act requires manufacturers to notify the public of automotive defects relating to safety and to repair of the defects. See 15 U.S.C.A. §§ 1411-1419 (West 1982). Third, the Act permits the Department of Transportation to promulgate federal motor vehicle safety standards. See 15 U.S.C.A. §§ 1391(2), 1392(a), 1396, 1397 (West 1982). C. FMVSS 208 In 1967, the Department of Transportation ("DOT") first adopted FMVSS 208, entitled "Occupant Crash Protection." See 32 Fed.Reg. 2415 (1967). DOT defined its scope: "This standard specifies performance requirements for the protection of vehicle occupants in crashes." 49 C.F.R. § 571.208 (1987). DOT defined its purpose: [T]o reduce the number of deaths of vehicle occupants, and the severity of injuries, by specifying vehicle crashworthiness requirements in terms of forces and accelerations measured on anthropomorphic dummies in test crashes, and by specifying equipment requirements for active and passive-restraint systems. 49 C.F.R. § 571.208 (1987) (emphasis added). FMVSS 208 initially required the installation of manual lap belts in all new automobiles. See 32 Fed.Reg. 2415 (1967). In 1972, DOT amended FMVSS 208 to require a gradual phase-in of passive restraints in all cars. For models made before August 1975, the regulations required manufacturers, using manual belts, to use an ignition interlock system which prevented a car from starting until the seat belts were fastened. See 37 Fed.Reg. 3911-12 (1972). Public outcry against this ignition interlock system prompted Congress to amend the Act in 1974. The amendment required DOT to rescind the ignition interlock requirement. See 39 Fed.Reg. 38,380 (1974). DOT adopted a standard that permitted manufacturers to install either passive-restraint systems or manual belt. See id. Further, the 1974 amendment prohibited DOT from issuing any standard that required manufacturers to install passive restraints, unless DOT first submitted the standard to both houses of Congress, and Congress approved. See 15 U.S.C.A. § 1410b(b), (c) (West 1982). In 1984, DOT promulgated the version of FMVSS 208 in effect when Ford designed and manufactured the Taurus. As amended, FMVSS 208 granted manufacturers the option to install one of three restraint systems: passive-restraints for front and lateral crashes, passive-restraints for front crashes plus lap belts for side crashes and rollovers, or manual seat belts alone.[2]See *574 49 Fed.Reg. 28,962, 29,009-10 (1984). FMVSS 208 explicitly authorizes manufacturers to use manual belts, such as those installed in the Ford Taurus, in all vehicles made in the 1986 model year. Id. Ford's compliance with FMVSS 208 is the basis of its argument that federal law pre-empts Marrs's no-airbag claim. Ford argues that FMVSS 208, with its three basic options, defines the federal safety standard for occupant crash protection. Ford asserts that section 1392(d) of the Safety Act expressly pre-empts common law standards if those standards are not the same as the requirements of FMVSS 208. However, the Act has a savings clause: Compliance with any Federal motor vehicle safety standard issued under this subchapter does not exempt any person from any liability under the common law. 15 U.S.C.A. § 1397(k) (West Supp.1992). This section is the basis of Marrs's argument that the Act does not pre-empt the no-airbag claim. II. FEDERAL PRE-EMPTION DOCTRINE Article VI of the Constitution provides that the laws of the United States "shall be the supreme Law of the Land;... any Thing in the Constitution or Laws of any state to the Contrary notwithstanding." U.S. Const. art. VI, cl. 2. The Supremacy Clause empowers Congress to pre-empt state law. Louisiana Pub. Serv. Comm'n v. FCC, 476 U.S. 355, 368, 106 S.Ct. 1890, 1898, 90 L.Ed.2d 369 (1986). Federal pre-emption of state law can occur in three situations: (1) where Congress explicitly pre-empts state law; (2) where pre-emption is implied because Congress has occupied the entire field; and (3) where pre-emption is implied because there is an actual conflict between federal and state law. Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 300, 108 S.Ct. 1145, 1150, 99 L.Ed.2d 316 (1988). Where pre-emption is claimed because a state law conflicts with congressional action, federal law pre-empts the conflicting state law where compliance with both the federal and the state regulations is a physical impossibility, Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 83 S.Ct. 1210, 1217, 10 L.Ed.2d 248 (1963), or where the state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941). Pre-emption is a matter of congressional intent. In determining whether federal law pre-empts a state cause of action, our "sole task is to ascertain the intent of Congress." California Fed. Sav. & Loan Ass'n v. Guerra, 479 U.S. 272, 280, 107 S.Ct. 683, 689, 93 L.Ed.2d 613 (1987). However, we do not lightly presume pre-emption. Id. at 281, 107 S.Ct. at 689. We presume that the federal law does not displace existing state law. Maryland v. Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 2128, 68 L.Ed.2d 576 (1981). We insure neither Congress unintentionally nor the courts unnecessarily disturb the federal-state balance. Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977). The critical question in any pre-emption analysis remains whether Congress intended federal regulation to supersede state law. Louisiana Pub. Serv. Comm'n, 476 U.S. at 369, 106 S.Ct. at 1898. III. CONGRESSIONAL INTENT A. Express Pre-emption Initially, Ford contends that section 1392(d) of the Safety Act[3] expressly pre-empts Marrs's common law action. Ford *575 argues that FMVSS 208 defines the federal safety standard for passive-restraint systems. Section 1392(d) mandates that state law may not set up a safety standard on this aspect of performance that differs from the requirements of FMVSS 208. According to Ford, exposure to possible liability under state common law because of the absence of airbags has the effect of setting up a state standard within the meaning of section 1392(d). If not identical to FMVSS 208, federal law expressly pre-empts the common law standard. Ford argues that the recent Supreme Court ruling in Cipollone v. Liggett Group, Inc., ___ U.S. ___, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992), supports its express pre-emption position. In Cipollone, the Supreme Court held: [w]hen Congress has considered the issue of pre-emption and has included in the enacted legislation a provision explicitly addressing that issue, and when that provision provides a "reliable indicium of congressional intent with respect to state authority, there is no need to infer congressional intent to pre-empt state laws from the substantive provisions" of the legislation. ___ U.S. at ___, 112 S.Ct. at 2618 (citations omitted). The Court explained: "[s]uch reasoning is a variant of the familiar principle of expressio unius est exclusio alterius: Congress' enactment of a provision defining the pre-emptive reach of a statute implies that matters beyond that reach are not pre-empted." Id. Ford contends that Cipollone and its principles support express pre-emption of the present no-airbag claim. Ford urges this Court to look only to section 1392(d) in discerning congressional intent about federal pre-emption of state law. Ford asserts that section 1392(d) explicitly addresses the issue of pre-emption and provides a reliable indicium of congressional intent with respect to state authority. Section 1392(d) provides two exceptions to federal pre-emption of state law.[4] Ford argues that section 1392(d)'s two exceptions show that Congress knew how to carve out exceptions in that provision. Ford asserts that because no other exception appears within the pre-emption clause, the doctrine of expressio unius est exclusio alterius establishes that there can be no other exceptions. Ford concludes that because Marrs's no-airbag claim does not fall into either of the exceptions allowed in section 1392(d), the section expressly pre-empts the products liability claim. On the other hand, Marrs asserts that the common law savings clause, section 1397(k), authorizes the prosecution of any common law claim, including those that might establish a rule not identical to the federal safety standards. Applying Cipollone, we must read sections 1392(d) and 1397(k) together. This Court cannot look only to section 1392(d) in discerning congressional intent about federal pre-emption of state law. First, section 1392(d) does not "provide a reliable indicium of congressional intent with respect to state authority." When Congress specifically included a clause preserving state common law claims, the pre-emption provision cannot stand as the sole beacon of congressional intent regarding state authority. In Cipollone, the statutes in question did not contain savings clauses.[5] ___ U.S. at ___, 112 S.Ct. at 2621. Here the *576 Safety Act contains both a savings clause which would preserve the claim and a pre-emption provision that would preclude the claim. We cannot read either provision in isolation. We have a duty to give effect, if possible, to every clause of a statute. See United States v. Menasche, 348 U.S. 528, 538-39, 75 S.Ct. 513, 520, 99 L.Ed. 615 (1955). We may not disregard section 1397(k) in determining congressional intent concerning state authority. When Congress specifically included a savings clause, arguably excepting all common law claims from federal pre-emption, we cannot interpret the pre-emption provision to mean that Congress intended no other exception to federal pre-emption than the two specified within section 1392(d). Cipollone encourages courts not to look at substantive provisions of the statute when Congress has specifically considered the pre-emption issue and included a pre-emption provision. ___ U.S. at ___, 112 S.Ct. at 2618. However, the savings clause is not a substantive provision but a provision dealing with the very issue of state authority. Cipollone encourages this Court to consider both the pre-emption provision, section 1392(d), and the savings clause, section 1397(k), together to determine congressional intent about state authority. Next, Ford argues that we should narrowly construe section 1397(k) because its limited purpose is to express Congress' intent not to pre-empt the entire field of automobile safety. See Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 328, 101 S.Ct. 1124, 1135, 67 L.Ed.2d 258 (1981). According to Ford, Congress enacted section 1397(k) to insure only that state common law continues to exist where DOT has not promulgated a federal safety standard. However, such a construction would render the savings clause a mere redundancy. This is so because the pre-emption provision itself provides that where a federal standard does not govern the same aspect of performance as the state standard, the federal standard does not pre-empt the state standard. See 15 U.S.C.A. § 1392(d) (West 1982); Taylor v. General Motors Corp., 875 F.2d 816, 824 (11th Cir.1989), cert. denied, 494 U.S. 1065, 110 S.Ct. 1781, 108 L.Ed.2d 783 (1990). Ford's construction undermines the express language of section 1397(k). Section 1397(k) recognizes that compliance with a particular federal safety standard, like FMVSS 208, does not exempt Ford from common law liability. See 15 U.S.C.A. § 1397(k) (West Supp.1992); Pokorny v. Ford Motor Co., 902 F.2d 1116, 1121 (3d Cir.), cert. denied, 498 U.S. 853, 111 S.Ct. 147, 112 L.Ed.2d 113 (1990). Considering section 1392(d) together with section 1397(k), we conclude that common law liability survives federal regulation, even in those areas where federal safety standards have actually been established. Section 1392(d) does not expressly pre-empt Marrs's common law action. B. Implied Pre-emption Finding that section 1392(d) does not expressly pre-empt Marrs's no-airbag claim does not end the inquiry. We must determine whether we may infer congressional intent to pre-empt common law passive-restraint claims under the principles of implied pre-emption. Ford contends that the Safety Act and FMVSS 208 impliedly pre-empt Marrs's action because the possibility of common law liability "would substantially frustrate all of the purposes of the Safety Act and FMVSS 208." Ford argues that a state law airbag standard would interfere with federal efforts to reduce highway deaths and injuries, deprive manufacturers of the flexibility incorporated in federal safety standards, and conflict with the federal goal of uniformity of automobile safety standards. Marrs asserts that a common law products liability claim does not prevent Ford from complying with FMVSS 208, nor does it preclude Ford from exercising any of its options under the standard. Marrs argues that because FMVSS 208 provides alternatives, it does not exculpate the manufacturer from liability for failing to select one of the other, possibly better options. *577 The Supreme Court has recognized the regulatory effect of damages awards: [R]egulation can be as effectively exerted through an award of damages as through some form of preventive relief. The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy. San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 247, 79 S.Ct. 773, 780, 3 L.Ed.2d 775 (1959). With respect to a claim that a vehicle is defective because it lacks a passenger-side airbag, it is obvious that an award of damages will have a pronounced effect on the manufacturer's future conduct. See Wood v. General Motors Corp., 865 F.2d 395, 410 (1st Cir.1988), cert. denied, 494 U.S. 1065, 110 S.Ct. 1781, 108 L.Ed.2d 782 (1990). We conclude that Congress' purposes, as revealed in the Safety Act and its legislative history, plainly imply a preemptive intent. The language in the savings clause refuses to exempt persons from liability under common law because of compliance with a safety standard. However, this language does not reflect Congress' intent to avoid pre-emption of those defective design actions that would have the effect of creating a state safety standard in direct conflict with an existing FMVSS. Id. at 413. The Marrs's claim alleging that the absence of a passenger-side airbag rendered the vehicle unreasonably dangerous would, if upheld, clearly "stand as an obstacle" to the regulatory scheme of the Act. See Kitts v. General Motors Corp., 875 F.2d 787, 789 (10th Cir.1989), cert. denied, 494 U.S. 1065, 110 S.Ct. 1781, 108 L.Ed.2d 783 (1990). A state common law action sustaining the theory that a vehicle was defective because it lacked a passenger-side airbag would create a state safety standard related to the same aspect of performance of FMVSS 208. See Cipollone, ___ U.S. at ___, 112 S.Ct. at 2620-21. Such an action is impliedly pre-empted because it would effectively circumvent section 1392(d)'s prohibition of nonidentical state standards covering the same aspect of performance as a federal safety standard. See Taylor, 875 F.2d at 827; Wood, 865 F.2d at 412. Marrs's products liability action, if successful, would stand as an obstacle to Congress' chosen method of increasing motor vehicle safety. See International Paper Co. v. Ouellette, 479 U.S. 481, 493, 107 S.Ct. 805, 812, 93 L.Ed.2d 883 (1987). Although the Safety Act does not expressly pre-empt Marrs's no-airbag claim, the Act impliedly pre-empts it. A no-airbag action presents an "actual conflict" with the Act, specifically because it "stands as an obstacle" to Congress' determination that safety is best served by having uniform national standards, flexible options for manufacturers, and gradual change for the consumer. See 49 Fed.Reg. 29,000, 29,001, 28,997 (1984); see also Taylor, 875 F.2d at 826-27; Wood, 865 F.2d at 412-13. C. The Effective Date of FMVSS 208 In response, Marrs contends that if the Safety Act and FMVSS 208 impliedly pre-empt state tort law no-airbag claims, the pre-emption applies only to 1987 and later model year vehicles. Marrs argues that Ford manufactured and sold the Taurus before the 1984 version of FMVSS 208's airbag requirement took effect. According to Marrs, the 1984 version of FMVSS 208 requires manufacturers to install passive restraints in their automobiles, phased in over model years 1987-1990. Marrs asserts that the policies and purposes underlying the promulgation of the 1984 version of FMVSS 208 about airbags, which is applicable to 1987 and later models, are not frustrated by a tort claim involving a 1986 automobile. We disagree. The current version of FMVSS 208 expressly states that it became effective on August 16, 1984. See 49 Fed.Reg. 28,962 (1984). FMVSS 208 was in effect when Ford manufactured and sold the 1986 Taurus. Further, FMVSS 208 explicitly deals with automobiles manufactured during the 1986 model year. The 1984 version of FMVSS 208 expressly authorizes vehicles made in 1986 to use either manual safety belts or passive restraints. Marrs's no-airbag claim would effectively eliminate this option and impose on Ford a state tort law duty to install airbags in cars made in *578 the 1986 model year. Marrs's products liability action creates an "actual conflict" with the Safety Act. See Taylor, 875 F.2d at 827; Wood, 865 F.2d at 412. Federal law impliedly pre-empts Marrs's no-airbag claim. We affirm the trial court's judgment. NOTES [1] The majority of courts have found "implied" pre-emption of passive-restraint claims, while not finding express pre-emption. See, e.g., Kitts v. General Motors Corp., 875 F.2d 787 (10th Cir.1989), cert. denied, 494 U.S. 1065, 110 S.Ct. 1781, 108 L.Ed.2d 783 (1990); Wood v. General Motors Corp., 865 F.2d 395 (1st Cir.1988), cert. denied, 494 U.S. 1065, 110 S.Ct. 1781, 108 L.Ed.2d 782 (1990). Other courts have found that such claims are expressly pre-empted by federal law. See, e.g., Cox v. Baltimore County, 646 F.Supp. 761 (D.Md.1986); Vanover v. Ford Motor Co., 632 F.Supp. 1095 (E.D.Mo.1986). A minority of courts have found that the Safety Act and its standards do not preclude state common law actions based on a failure to install passive-restraint systems in automobiles. See, e.g., Gingold v. Audi-NSU-Auto Union, A.G., 389 Pa.Super. 328, 567 A.2d 312 (1989); Garrett v. Ford Motor Co., 684 F.Supp. 407 (D.Md.1987); Murphy v. Nissan Motor Corp. in U.S.A., 650 F.Supp. 922 (E.D.N.Y.1987). [2] This version presently in effect requires manufacturers to equip all automobiles manufactured after September 1989 with passive restraints. See 49 Fed.Reg. 28,962-63, 28,991, 28,996 (1984) (codified at 49 C.F.R. § 571.208 (1987)). [3] Section 1392(d), entitled "Supremacy of Federal standards; allowable higher standards for vehicles used by federal or state governments," provides in part: "Whenever a Federal motor vehicle safety standard established under this subchapter is in effect, no State or political subdivision of a state shall have any authority either to establish, or to continue in effect, with respect to any motor vehicle or item of motor vehicle equipment any safety standard applicable to the same aspect of performance of such vehicle or item of equipment which is not identical to the Federal standard." 15 U.S.C.A. § 1392(d) (West 1982). [4] These exceptions are: (1) Nothing in this section shall be construed as preventing any State from enforcing any safety standard which is identical to a Federal standard; (2) Nothing in this section shall be construed to prevent the Federal Government or the government of any State or political subdivision thereof from establishing a safety requirement applicable to motor vehicles or motor vehicle equipment procured for its own use if such requirement imposes a higher standard of performance than that required to comply with the otherwise applicable Federal standard. 15 U.S.C.A. § 1392(d) (West 1982). [5] The Supreme Court, in a footnote, discusses that both sides make much of the fact that Congress did not include a savings clause preserving common law claims. ___ U.S. at ___, n. 22, 112 S.Ct. at 2621 n. 22. The Court found the lack of a savings clause to make perfect sense: "Congress was neither pre-empting nor saving common law as a whole—it was simply pre-empting particular common law claims, while saving others." Id.

2013-10-30 06:32:39.016687+00

Kenison

116 N.H. 814 (1976) CARL V. JOSLIN & a. v. PINE RIVER DEVELOPMENT CORPORATION AND PINE RIVER ASSOCIATION, INCORPORATED No. 7462. Supreme Court of New Hampshire December 30, 1976. Cooper, Hall & Walker and Donald F. Whittum (Mr. Whittum orally) for the plaintiffs. Lecomte, Shea & Dangora (of Massachusetts) (Mr. Philip R. Shea orally) for the defendant Pine River Development Corporation. Timothy J. Sullivan, by brief and orally, for the defendant Pine River Association, Incorporated. *815 KENISON, C.J. This is an appeal from an order of the Superior Court (King, J.) granting a permanent injunction enjoining the defendants, their successors and all persons acting under their authority from using Lot #26 in the Scribner Park Subdivision at Pine River Pond in Wakefield, New Hampshire, as a common boating or beach area, or a common ingress or egress to and from the beach. The defendants were also enjoined from using Lot #26 in any manner inconsistent with or in contravention of the restrictions in the deed conveying the lots on Pine River Pond. All exceptions were reserved and transferred. The original developers, the Scribners, laid out forty-eight shore lots including Lot #26 and many more back lots which together constitute the Scribner Park Subdivision. They conveyed some of the shore parcels to the plaintiffs or their predecessors in title. The defendant corporation purchased Lot #26 and a large tract with no frontage. The corporation subdivided the large tract into 161 lots and sold 147 of them to various buyers, some of whom formed the defendant Pine River Association, Inc. The corporation conveyed Lot #26 to the association so that association members would have access to the water and could use the area for swimming, docking their boats, and for other recreational purposes. The land was conveyed because the owners of back lots "ran into trouble" attempting to use other routes to the water. The defendants entered upon Lot #26 and cleared the land for the admitted purpose of making it a docking, beach and recreational area. All of the deeds to the frontage lots including Lot #26 contain four restrictions limiting the number of cottages to be built on the lots, prohibiting mobile homes, requiring permanent buildings, finished exteriors, modern plumbing facilities and imposing set back requirements. Two other restrictions concern utility easements and drainage rights. The defendants do not dispute that Lot #26 is subject to the six restrictions imposed upon the rest of the parcels of land in the subdivision. The parties disagree only upon the meaning or effect of those covenants. In determining whether the restrictions concerning the construction of a cottage on Lot #26 prevent the defendants from using the lot for common beach and boating purposes, we confront the general issue of whether restrictions on dwellings or residences limit the use of the land itself apart from any building. 5 R. Powell, Real Property § 673, at 158-62 (1968). *816 The conclusions reached in cases posing this issue are so dependent upon the particular phraseology of the covenants involved that no sufficient general rules can be stated. Annot., Restrictive Covenants as Applicable to Land Itself Apart from Buildings, 155 A.L.R. 528 (1945). The leading New Hampshire cases are Fournier v. Kattar, 108 N.H. 424, 238 A.2d 12 (1968), and Carroll v. Schechter, 112 N.H. 216, 293 A.2d 324 (1972). The defendants rely upon Carroll in which the land in question was part of a residential subdivision and was subject to protective covenants that regulated the type, height and location of structures and reserved certain rights of way. Not more than one single family residence could be placed on each lot. Neither the deed nor the plan, which was incorporated into the deed, explicitly stated that the land had to be used for residential purposes only. The defendant used part of one lot for a parking area. The master held that this use did not violate the restrictive covenants so long as no parking structures were built. After noting that similar cases reached opposite results under varying circumstances, see Annot., 80 A.L.R.2d 1258 (1961), we held that under the particular circumstances, the master's ruling was not erroneous as a matter of law. According to the defendants, the proper rule of law to be applied in this case is that restrictive covenants are strictly construed to permit the free use of land, that all doubts must be resolved in favor of free use, and that no restrictions may be implied from those expressly stated. The defendants read Carroll v. Schechter supra as adopting this rule of law and take the position that, if we affirm the trial court's injunction against using Lot #26 as a common beach and boating area, we will in effect overrule Carroll. Carroll did not, as the defendants suggest, articulate any single narrow rule of law regarding the extent to which building restrictions limit the use of the land itself. We simply sustained the trial judge's interpretation and application of the covenants. See Fournier v. Kattar, 108 N.H. 424, 238 A.2d 12 (1968). This approach is consistent with the prevailing view that cases involving restrictive covenants present such a wide spectrum of differing circumstances that each case must be decided on its own facts. Edgewood Park Ass'n. v. Pernar, 350 Mich. 204, 86 N.W.2d 269 (1957); Hanley v. Misischi, 111 R.I. 233, 302 A.2d 79 (1973). The former prejudice against restrictive covenants which led courts to strictly construe them is yielding to a gradual recognition that they are valuable land use planning devices. 7 G. Thompson, *817 Real Property § 3158 (J. Grimes ed. Supp. 1976). In Traficante v. Pope, 115 N.H. 356, 358, 341 A.2d 782, 784 (1975), we noted that private land use restrictions "have been particularly important in the twentieth century when the value of property often depends in large measure upon maintaining the character of the neighborhood in which it is situated." They are particularly useful in the development of lake communities. Vogel, Lake Community Developments with Property Owners Associations: Selected Problems for Lot Owners, 8 Urb. L. Ann. 169, 172 (1974). The modern viewpoint is that the former policy of strictly construing restrictive covenants is no longer operative. 7 G. Thompson, supra at § 3166 (J. Grimes ed. Supp. 1976). Even some of those courts that speak in terms of strict construction have mitigated the harshness of the rule. They give great weight to the intent of the parties and will not defeat the purpose for which the covenant was established. Stockdale v. Lester, 158 N.W.2d 20 (Iowa 1968); Hanley v. Misischi, 111 R.I. 233, 302 A.2d 79 (1973). All the surrounding circumstances existing at the time of the creation of the covenants are taken into account in determining the intent of the parties. 5 R. Powell, supra at § 673; 7 G. Thompson, supra at § 3160, at 108-10 (J. Grimes ed. 1962). In determining whether building restrictions constitute use restrictions on the land itself, courts often consider the location and character of the entire tract of land, the purpose of the limitation, whether it was imposed for the sole benefit of the grantor or for the grantee and subsequent purchasers as well and whether the restriction is pursuant to a general building plan for the development of the property. Annot., 155 A.L.R. 528, 529 (1945); see Annot., Construction and Application of Covenant Restricting Use of Property to "Residence" or "Residential Purposes," 175 A.L.R. 1191, 1193 (1948). The rule of law proposed by the defendant is too mechanical and rigid and is not the law in this State. The facts and circumstances of this case are very similar to those in Edgewood Park Ass'n v. Pernar, 350 Mich. 204, 86 N.W.2d 269 (1957). In that case all of the shore lots in the subdivision were subject to single family residential building restrictions. The defendants, owners of back lots, wanted to use a frontage lot as a means of access to the lake for swimming and boating. The plaintiffs, who owned shore lots, sought an injunction against the defendants' proposed uses of the land in question. The trial court granted the injunction and the Supreme Court of Michigan affirmed. We cannot say as a matter of law that in the instant case *818 the trial judge, who heard all the testimony, reviewed all the evidence and made findings of fact, erred in granting the injunction. The restrictive covenants imposed upon Lot #26, although explicitly referring only to buildings are obviously part of a general plan to prevent the use of property in the Scribner Park Subdivision for any purpose other than residential. See Wilber v. Wisper & Wetsman Theatres, 301 Mich. 117, 3 N.W.2d 33 (1942); Bohm v. Rogoff, 256 Mich 199, 239 N.W. 320 (1931). Given the surrounding circumstances and the conduct and intent of the parties, the court was not required to find that the use of Lot #26 by potentially hundreds of people at all hours of the day and night for docking their boats, sunbathing, swimming and other recreational activities was within the scheme of residential development of the Pine River Pond area. See Bouley v. Nashua, 106 N.H. 74, 205 A.2d 34 (1964). Our conclusion is not inconsistent with Fournier v. Kattar, 108 N.H. 424, 238 A.2d 12 (1968). In that case the court allowed the defendant developer to turn some of the lots retained by him into common beach and boating areas because "[t]he evidence did not require a finding that the property retained by the developer and not subsequently sold for house lots would be restricted to residential use." Id. at 428, 238 A.2d at 15. Implicit in the Fournier holding is the assumption that, if the developer were bound to use his property for residential purposes only, he could not have built the recreational areas. We find no error in the trial court's admission of the plaintiffs' opinions as to the value of their property. Roy v. State, 104 N.H. 513, 191 A.2d 522 (1963); see 7 J. Wigmore, Evidence § 1943, at 53 (3d ed. 1940) and § 1943 (Supp. 1975). The trial court has wide discretion with respect to the admission of opinion evidence. Brown v. Montgomery Ward & Co., 109 N.H. 377, 254 A.2d 840 (1969). The court may have regarded the value of the property as one of the circumstances surrounding the development of Pine River Pond, and the admission of evidence of value was not an abuse of discretion. Finally, the denial of a continuance was not an abuse of discretion. See LePage v. Theberge, 97 N.H. 375, 89 A.2d 534 (1952). Defendants' exceptions overruled. GRIMES and BOIS, JJ., did not sit; the others concurred.

2013-10-30 06:32:39.037435+00

Sear

615 F.Supp. 1444 (1985) MORGAN GUARANTY TRUST COMPANY OF NEW YORK, et al., Plaintiffs, v. The M/V GRIGORIOS C. IV, et al., Defendants. No. 83-6268. United States District Court, E.D. Louisiana. August 20, 1985. *1445 Henry Read, Daniel Lund and Stanley McDermott, III, Montgomery, Barnett, Brown & Read, New Orleans, La., J. Bond Smith and John Loflin, Lord, Day & Lord, New York City, for plaintiffs. Walter Carroll, Jr., Terriberry, Carroll & Yancey, New Orleans, La., Alfred E. Yudes, Jr., Burlingham, Underwood & Lord, New York City, for defendants. MEMORANDUM AND ORDER SEAR, District Judge. Plaintiffs, Morgan Guaranty Trust Company ("Morgan"), Continental Illinois National Bank and Trust Company of Chicago ("Continental"), National Westminister Bank USA, Inc. ("Nat West"), and Banque De La Societe Financiere Europeenne ("BSFE") (collectively, "the Plaintiffs') brought this action in rem on December 30, 1983 to foreclose on a First Preferred Greek Ship Mortgage which they held on the M/V Grigorios. The Grigorios is of Greek registry and the mortgage was given as partial security for an $80 million revolving credit and term loan facility ("the Loan Agreement") funded by the Plaintiffs in favor of the ship's owner, Hellenic Lines, Ltd. ("Hellenic"), a Greek stock corporation. The vessel was arrested in the Port of New Orleans on January 4, 1984 and, on unopposed motion of the Plaintiffs, was sold on February 29, 1984 for $1,270,000 pursuant to Supplemental Admiralty Rule *1446 E(9)(b). Under the terms of the order for the sale of the vessel, the time for filing liens ran until 30 days after the sale, or through March 30, 1984. Accordingly, on April 5, 1984, the Plaintiffs' motion to default all lienholders who had not timely intervened was granted. Numerous parties intervened before and after the sale to recover monies allegedly owed them for supplies or services rendered to the vessel.[1] One of the intervenors, Mobil Sales and Supply Corporation ("Mobil"), contends that the mortgage which the Plaintiffs claim on the Grigorios is not a valid preferred ship mortgage under the Ship Mortgage Act, 46 U.S.C. § 911 et seq., and that even if it is, its lien for supplies provided to the vessel is superior to the Plaintiffs' mortgage lien under 46 U.S.C. § 951. Trial was conducted on these issues and after consideration of the evidence, the arguments of counsel, the pre- and post-trial memoranda of the parties, and the law applicable to the case, I now make the following findings of fact and conclusions of law. I. Background Hellenic was founded by Pericles Callimanopoulos. When he died on September 20, 1979, he left the bulk of his shares in the corporation to his son, Grigorios (59.375%), and the remainder to his wife and daughters. The wife and daughters thereafter brought an action in the Court of First Instance of Pireaus, Greece contesting the validity of his will. Although the validity of the will was initially upheld,[2] the Greek court later ruled that the wife and daughters may be entitled to a larger share of Callimanopoulos' estate. As a "conservatory measure" pending an accounting of the succession, the court appointed an administrator to control the shares of Hellenic which formed part of the succession.[3] On April 7, 1982, an Extraordinary General Meeting of Hellenic's shareholders was convened in accordance with the instructions of the court for the purpose of electing a new Board of Directors. At that meeting, the court-appointed administrator voted the shares of the succession. The new Board of Directors then scheduled another Extraordinary General Meeting of Hellenic's shareholders for June 1, 1982. When dissident shareholders sought to prevent that meeting on the ground that it would jeopardize their interests, the court reaffirmed the authority of its administrator and refused to enjoin the June 1, 1982 meeting. Prior to the meeting, however, on May 31, 1982, Callimanopoulas' heirs entered into an agreement providing for the distribution of voting rights to the shares of the succession. At the meeting of June 1, 1982, a new Board of Directors was elected in accordance with the May 31, 1982 shareholders agreement. At the end of 1982, Hellenic had several loans outstanding with Continental and Morgan totalling approximately $69.9 million. These loans were secured in part by mortgages on seven ships owned by Hellenic and in part by a pledge of marketable securities. At that time, there was a worldwide recession which severely depressed the shipping market and made it difficult for Hellenic to fulfill its obligation to repay these loans. Hellenic therefore sought to refinance its debt in a manner that would permit it to defer temporarily payments on the principal of the loans and to increase its liquidity. Morgan and Continental both declined to refinance the debt until Hellenic obtained additional working capital. *1447 Hellenic obtained the additional capital by arranging for two other banks, BFSE and Nat West, to participate in refinancing its debt. Management and documentation of the refinancing were initially handled by Continental, but were later overseen by Morgan after it became apparent that Morgan would fund the majority of the refinancing. On April 28, 1983, Hellenic and the Plaintiffs executed the Loan Agreement[4] which provided that Hellenic would receive $80 million of revolving credit that would convert to a six year term loan after December 31, 1984.[5] The Loan Agreement also provided that Continental and Morgan would release the securities pledged to them by Hellenic. Thus, under the Loan Agreement, Hellenic obtained about $10.1 million of new credit, deferral of the roughly $32 million in principal payments that would have been due during 1983 and 1984 under the earlier loans by Continental and Morgan to Hellenic, and the release of approximately $7 million of securities pledged by Hellenic to Continental and Morgan. In exchange, the Plaintiffs were given mortgages on the seven Hellenic vessels that were previously mortgaged to Continental and Morgan, as well as mortgages on four additional ships, including the Grigorios.[6] The ship mortgages, however, were not fully executed at the time that the Loan Agreement was signed. Initially, the parties contemplated execution of the ship mortgages in Greece and execution of the Loan Agreement and other documents in New York. Two or three days prior to closing, Morgan notified the Plaintiffs' New York counsel, R. Theodore Ammon, that it would not execute a power of attorney to permit the Plaintiffs' Greek counsel, Theo V. Sioufas, to execute the mortgages in Greece. Consequently, the signing of the mortgages was rescheduled to New York. Although Hellenic's Board of Directors had authorized on April 19, 1983 its New York representatives to execute all documents relevant to the Loan Agreement, when Sioufas was informed that the mortgages would be signed in New York rather than Greece, he recommended that Hellenic's Board of Directors execute a notarial power of attorney in favor of Anatasios Pitenis, Hellenic's representative who would sign the mortgages in New York. Sioufas believed at that time that under New York law, the mortgages would be executed in notarial form and that a notarial power of attorney was necessary to enable Pitenis, a non-director of Hellenic, to execute the mortgages. A meeting of Hellenic's Board of Directors could not be scheduled until after April 28, 1983, when the documents were to be signed in New York. Consequently, at the closing on April 28, 1983, two copies of each of the ship mortgages were reserved for signing by Pitenis after the power of attorney had been executed by Hellenic's Board. Therefore, at the April 28, 1983 closing, he executed only eight copies of each of the ship mortgages; he executed all ten copies of all of the other documents. The Plaintiffs, however, executed all copies of each of the documents, including the two reserved copies of the ship mortgages.[7] *1448 Hellenic's Board of Directors met on May 2, 1983 and issued a resolution authorizing two members of the Board to execute a notarial power of attorney in favor of Pitenis. Immediately after the power of attorney was executed, Pitenis executed in New York the two reserved copies of each of the mortgages. The mortgages were subsequently taken to the county clerk's office for certification of the notaries' signatures, and then to the Greek consulate for certification of the county clerk's signature. Thereafter, the mortgages were taken to Greece by Pitenis and delivered to Sioufas who registered them on May 3, 1983 in Piraeus, Greece, the port in which the Grigorios and the other vessels were registered. Simultaneously with the recordation of the ship mortgages in Greece, the Plaintiffs released the $80 million of credit to Hellenic. That day, Hellenic drew $73 million against its credit and repaid its prior obligations of about $69.9 million to Continental and Morgan. Hellenic paid on August 3, 1983 the first installment of interest that it owed under the Loan Agreement, but failed to pay the second installment which was due on November 3, 1983. The Plaintiffs formally declared Hellenic to be in default on November 23, 1983 and notified Hellenic that they were exercising their right under the Loan Agreement to accelerate repayment of the entire outstanding amount of credit extended to Hellenic. They began filing foreclosure actions in rem and arresting Hellenic's vessels on November 25, 1983. Hellenic filed for reorganization under Chapter 11 of the Bankruptcy Code, 11 U.S.C. § 101 et seq. on December 12, 1983 in the Southern District of New York. On January 20, 1984, Bankruptcy Judge Burton R. Lifland ordered that the automatic stay provided by § 362 of the Bankruptcy Code be lifted so that any party could proceed with actions in rem against the mortgaged vessels. II. Validity of the Mortgage Although Mobil initially advanced several arguments as to why the mortgage claimed by the Plaintiffs is not a valid preferred ship mortgage under the Ship Mortgage Act, the pre- and post-trial briefs, as well as the proposed findings of fact and conclusions of law which it submitted, indicate that Mobil abandoned all but three challenges to the preferred status of the mortgage. First, Mobil claims that the mortgage fails to meet the prerequisites for creation of a preferred ship mortgage under the Ship Mortgage Act. Second, Mobil contends that Hellenic's board of directors lacked authority to mortgage the vessel. Third, Mobil asserts that Hellenic was insolvent at the time the mortgage document was executed and therefore the mortgage was a nullity. *1449 The Ship Mortgage Act provides that a preferred mortgage constitutes "a lien upon the mortgaged vessel in the amount of the outstanding mortgage indebtedness secured by such vessel." 46 U.S.C. § 951. Both domestic and foreign ship mortgages can qualify as preferred mortgages under the Ship Mortgage Act. Section 951 of Title 46 provides that: the term `preferred mortgage' shall include, in addition to a preferred mortgage made pursuant to the provisions of this chapter [i.e., a domestic preferred mortgage created under 46 U.S.C. § 922], any mortgage, hypothecation or similar charge created as security upon any documented foreign vessel ... if such mortgage, hypothecation, or similar charge had been duly and validly executed in accordance with the laws of the foreign nation under the laws which the vessel is documented and has been duly registered in accordance with such laws in a public register ...; and the term `preferred mortgage lien' shall also include the lien of such mortgage, hypothecation, or similar charge.... Mobil does not dispute that the mortgage creates a security interest in the vessel in favor of the Plaintiffs.[8] Thus, because the Grigorios is a vessel documented under the laws of Greece, the mortgage constitutes a preferred ship mortgage under § 951 if it was executed in accordance with Greek law and recorded in the proper Greek public register. At trial, four experts in Greek law, Sioufas, Paul C. Aurameas, Professor A.N. Yiannopoulas, and Aristides P. Kalamiotis, testified regarding the Greek law governing ship mortgages. The first three testified for the Plaintiffs, and the fourth for Mobil. Much of the testimony of the witnesses was substantially similar. That testimony indicated that there are two requirements to establish any mortgage in Greece. There must be a title of mortgage, and that title must be registered in the appropriate public records. With respect to ships, a title of mortgage may be created only by the will of the parties expressed in a formal or informal instrument. Greek law provides for two types of ship mortgages, simple and preferred. Both convey to the creditor the right to proceed in rem against the ship to satisfy the debt after default by the debtor. A Greek simple ship mortgage is like a preferred ship mortgage in the United States created under 46 U.S.C. § 922 in that it provides for foreclosure and judicial sale of the vessel upon default on the debt. In addition, a Greek preferred ship mortgage allows the creditor another means to satisfy the debt after default of the debtor. The creditor holding a Greek preferred ship mortgage may take over the proceeds from the vessel's operation. The mortgagor in a preferred ship mortgage may also give the creditor the right to sell the ship in a private sale and apply the proceeds to the debt. Under the Greek Code of Private Maritime Law, a simple ship mortgage may be created either by an informal instrument (i.e., an unilateral declaration of the debtor executed before a notary), or by a formal instrument (i.e., a contract executed by both parties before a notary). Legislative Decree No. 3899 of 1958, which governs preferred ship mortgages, provides in Article 2 that a preferred ship mortgage can be created within Greece only through a formal instrument. Where a preferred ship mortgage is executed outside of Greece, however, Article 2 permits the instrument to be in the "form required by the law of the country in which the agreement is executed." Legislative Decree No. 2687 of 1953,[9] permits the instrument to be a unilateral declaration of the debtor executed under private signature. There is also Greek law specifically applicable to the mortgage at issue in this case. Ministerial Decision and Approval No. *1450 F53521 of 1969 was issued pursuant to the authority of Legislative Decree No. 2867 of 1953[10] and constitutes irrevocable law specifically applicable to the Grigorios.[11] Article 19 of the Ministerial Decision authorizes the vessel owner, in this case, Hellenic, to encumber the Grigorios by preferred mortgages: either by contract or by any other act signed before Greek notary public in accordance with the form provided for by Greek law in case the signing takes place in Greece, or, if the signing takes place abroad, in accordance with the form required or permitted by the law of the place of signing. Thus, under Article 2 of Legislative Decree No. 3899 of 1958 and the Ministerial Decision, the experts agree that the law of the place of the signing — in this case, New York — governs the form of any instrument purporting to create a mortgage upon the Grigorios.[12] The experts disagree, however, about what form under New York law the mortgage must take. The Plaintiffs' experts uniformly testified that for an instrument to be a valid preferred Greek ship mortgage, it need only be in a form sufficient to create a security interest under New York law. Mobil's expert, Kalamiotis, stood alone in testifying that Greek law looks only to the form of instruments which create the same rights under New York law as would be created under Greek law. I find the testimony of the Plaintiff's experts more persuasive than Kalamiotis' testimony for several reasons. First, and most important, Kalamiotis' opinion is not supported by any of the Greek authorities he cited. Second, the Plaintiff's experts' interpretation of Greek law is consistent with the operation of its counterpart in the law of the United States, 46 U.S.C. § 951. That statute considers only whether a security interest has been established in the foreign vessel, and not whether the security interest constitutes a maritime lien. See State of Israel v. M/V Nili, 435 F.2d 242, 252 (5th Cir.1970), cert. denied, 401 U.S. 994, 91 S.Ct. 1232, 28 L.Ed.2d 532 (1971). Third, the testimony of the Plaintiff's experts provided a clearer explanation of Greek law. For example, Kalamiotis' testimony was ambiguous as to the precise form the instrument must take under New York law to create a valid preferred mortgage under Greek law. Furthermore, Kalamiotis did not include this point in his expert report. Indeed, he expressed it for the first time at trial. If Greek law were as he testified, one would have expected him to have included it in his report. I therefore credit the testimony of the Plaintiff's experts and find that a mortgage of any form sufficient to create, as between the parties, a security interest under New York is a proper form of title under Greek law. New York law specifically provides for the enforcement of a security interest as between the parties where: (1) the debtor has signed a security agreement which contains a description of the collateral; (2) value has been given; and (3) the debtor has rights in the collateral. N.Y.U.C.C. § 9-203. The mortgage in this case meets these requirements and is therefore in proper form under Greek law. *1451 Although Mobil conceded at trial that the mortgage created a security interest in the vessel in favor of the Plaintiffs, Mobil nevertheless argues that New York law is inapplicable. Mobil claims that Article 9 of the N.Y.U.C.C. does not apply: to a security interest subject to any statute of the United States, to the extent that such statute governs the rights of parties to and third parties affected by transactions in particular types of properties. N.Y.U.C.C. § 9-104(a). That argument, however, is incorrect. The plain language of § 9-104 suggests that Article 9 is inapplicable only to the extent that the federal statute applies. The commentary to § 9-104 confirms this interpretation: [w]here a federal statute regulates the incidents of security interests in particular types of property, those security interests are of course governed by the federal statute and excluded from this Article. The Ship Mortgage Act, 1920, is an example of such a federal act.... Even such a statute as the Ship Mortgage Act is far from a comprehensive regulation of all aspects of ship mortgage financing. That Act contains provisions on formal requisites, on recordation and on foreclosure but not much more. If problems arise under a ship mortgage which are not covered by the Act, the federal admiralty court must decide whether to improvise an answer under `federal law' or to follow the law of some state with which the mortgage transaction has appropriate contacts. The exclusionary language in paragraph (a) is that this Article does not apply to such security interest `to the extent' that the federal statute governs the rights of the parties. Thus if the federal statute contained no relevant provision, this Article could be looked to for an answer. (Emphasis added). In this case, the provisions of the Ship Mortgage Act governing foreign ship mortgages do not specify the formal requisites of a foreign ship mortgage. Hence, under Greek law, Article 9 of the N.Y.U.C.C. controls the form of the mortgage and the mortgage is of proper form. Mobil also argues vigorously that the mortgage is invalid under Greek law because of alleged informalities in the dating of the notarial jurats on the acknowledgments and on Hellenic's affidavit of good faith. Neither acknowledgments nor an affidavit of good faith, however, are required under New York law to establish a security interest in property. Thus, any informality in the dating of the notarial jurats is irrelevant under Greek law. In addition to meeting the requirements of New York law as to form, a valid title of a Greek preferred ship mortgage must meet the requirements of Greek law regarding substance. Article 3(a) of Legislative Decree No. 3899 of 1958 provides that the mortgage must identify the creditor, the debtor, the debt which the mortgage secures, the maturity date, and the ship. The Plaintiffs' experts all testified the mortgage contains all of the information necessary under Greek law to be a valid title of preferred ship mortgage. Notwithstanding the opinion of Kalamiotis to the contrary, I agree. Greek law also requires that the grantor of the mortgage be the owner of the vessel or a person acting under authority of the owner. See Code of Private Maritime Law, Art. 204; Greek Civil Code Art. 1265(2); Legislative Decree No. 3899 of 1958, Art. 22. Thus, this provision of Greek law was satisfied if Pitenis was properly authorized to act on behalf of Hellenic. Whether Pitenis was properly authorized turns on whether Hellenic's Board of Directors had the authority to appoint Pitenis, and on whether the appointment was in the form required by Greek law. Article 217 of the Greek Civil Code provides that a power of attorney "in the absence of other indication, is subject to the same form that is required for the execution of the juridical act for which the power of attorney is given." In this case, New York law did not require that the mortgage be executed in notarial form; therefore, the power of attorney in favor of Pitenis granted by the April 19, 1983 resolution of Hellenic's Board of Directors was *1452 in a form acceptable under Greek law. Nevertheless, by resolution on May 2, 1983 before Pitenis execute the two copies of the mortgage which were registered in Greece, Hellenic's Board also granted Pitenis a power of attorney in notarial form. Consequently, the form of Pitenis' appointment would have been appropriate under Greek law even if New York law had required that the mortgages be executed in notarial form. Although Mobil does not challenge the form of Pitenis' appointment, it vigorously contends that Hellenic's Board of Directors lacked authority to appoint him. Mobil first asserts that the Board lacked authority because Hellenic ceased to exist in March, 1955. Hellenic was formally constituted on March 19, 1935 through the publication of its Articles of Association in the Bulletin of Joint Stock and Limited Liability Companies of the Government Gazette, an official publication of the government of Greece. Article 4 of those Articles of Association established the term of the company at twenty years, or until March 18, 1955. However, included with the exhibits admitted into evidence, though not otherwise identified as an exhibit, is a certified and consularized copy of the Government Gazette of February 26, 1955 in which an amendment to Article 4 is published. That amendment fixes the duration of the Hellenic company at 40 years from the date of incorporation in 1935, or until March 18, 1975.[13] Article 4 was once again amended in 1970 to extend the duration of Hellenic until March 18, 1995. Accordingly, I find that Hellenic was continually in existence under Articles of Association from the time they were first promulgated in 1935 through the time that this action was brought. Mobil next claims that Hellenic's Articles of Association require that any documents be signed by Hellenic's managing director or by two members of the Board of Directors, and that the Articles provide no authority for the appointment of a nondirector to execute a mortgage on behalf of the Board. Mobil, however, cites no provision of Hellenic's Articles of Association in support of the first proposition and I have found none. With respect to the second, Article 21 provides, in addition to an extensive list of the duties of the Board, that: "[i]n other words, the Board of Directors decides on all matters requiring attention for the execution of the aims of the Company and all matters in the Company's administration and protection of its interests." This language is certainly broad enough to permit the Board to authorize a non-director to execute a mortgage. Mobil's final contention regarding the lack of authority of Hellenic's Board of Directors to appoint Pitenis is that certain decisions of the Greek courts have deprived the Board of authority to bind the corporation. Specifically, Mobil points to several actions brought by the wife and daughters of Pericles Callimanopoulas in which they have sought to have various meetings of Hellenic's shareholders declared invalid. None of the actions cited by Mobil, however, challenge the meeting of Hellenic's shareholders on June 1, 1982 at which the Board of Directors that authorized Pitenis to execute the mortgage was elected. Moreover, the June 1, 1982 shareholders' meeting was convened by the Board of Directors elected at the April 7, 1982 meeting of Hellenic's shareholders which in turn was held in accordance with judgments of the Court of First Instance of Piraeus. Although those judgments were interlocutory, they were issued as conservatory measures in the succession proceedings. Under Greek law, decisions of a Board of Directors elected in compliance with conservatory measures stand despite subsequent modification of the interlocutory judgment. Thus, even if Callimanopoulos' dissatisfied heirs prevail in their challenge to the succession, decisions of the Board which was elected June 1, 1982 will not be affected. I therefore find that Pitenis was *1453 properly authorized to execute the mortgage on behalf of Hellenic. Mobil's final challenge to the validity of the title of mortgage is its claim that Hellenic was insolvent at the time the mortgage was created and that the mortgage therefore constitutes a voidable preference under Greek bankruptcy law. Mobil, however, adduced no evidence that Hellenic was insolvent at the time the mortgage was created. Indeed, the testimony of Judith J. Plows, who is employed by Morgan as a Vice President in its shipping department and was responsible for Hellenic's business with Morgan, suggests the contrary. Moreover, when the Court of First Instance of Piraeus, Greece found Hellenic to be insolvent, it established March 31, 1984 as the date of insolvency. Relying on Kalamiotis' report, Mobil nevertheless contends that the Greek court may later redetermine the date of Hellenic's insolvency. Even if Kalamiotis' analysis of Greek law were credible, whether the Greek court will at some time in the future redetermine the date of Hellenic's insolvency is purely speculative. Consequently, I find that Hellenic was not insolvent when the mortgage was created and that the title of mortgage is valid. The final requirement for establishing a valid Greek preferred ship mortgage is that the title of mortgage be registered. Until this is accomplished, the mortgage establishes no rights under Greek law, whether as between the parties, or as to third parties. In this case, the mortgage was registered by Sioufas in Piraeus, the port in which the ship was registered. Under Articles 1271 and 1329 of the Greek Civil Code, the registration of a mortgage in Greece is presumed valid unless: (1) the mortgagor is not the owner of the mortgaged property on the date of registration of the mortgage; (2) the mortgage fails to identify the mortgagor, the mortgagee, the mortgaged property or the amount the indebtedness secured; (3) the registration is not dated; or (4) the title of mortgage is void. Although all of the Plaintiffs' experts testified that the mortgage was properly registered, Kalamiotis alone testified that the registration was defective and therefore invalid. The defect described by Kalamiotis was that the discrepancy between the date of registration and the date stated on the mortgage, and the changed dates on the notarial jurats on the acknowledgments and on Hellenic's affidavit of good faith rendered the date of registration uncertain. The date stated on the face of the mortgage, however, is identical to the date declared on the certificate of registration, May 3, 1983. Moreover, Article 197 of the Greek Code of Private Maritime Law provides that "[t]he mortgage begins to exist from the time of the appropriate registration in the records of the place in which the vessel is registered.[14] Consequently, under Greek law, a mortgage does not exist until it is registered and the date on which it is executed or which is stated on its face is therefore irrelevant to the determination of the date of registration. Similarly, even if the acknowledgments and Hellenic's affidavit of good faith were not surplusage under New York and therefore Greek law, the date stated in the notarial jurats is irrelevant to the date of registration. I therefore find no defect in the registration of the mortgage and that the registration is valid. Accordingly, I conclude that the mortgage is a Greek preferred ship mortgage which was duly and validly executed and recorded in a public register in accordance with the laws of Greece. Thus, the mortgage is a preferred mortgage within the meaning of 46 U.S.C. § 951 and is therefore entitled to treatment as a preferred mortgage lien. III. The Priority of Mobil's Lien Mobil argues that even if the Plaintiffs hold a valid preferred ship mortgage under the Ship Mortgage Act, it is subordinate to *1454 Mobil's lien for supplies provided to the Grigorios. The lien asserted by Mobil is in the amount of $177,735.20 for marine fuel oil and marine gas oil supplied to the Grigorios in Durban, South Africa on November 18, 1983. The evidence presented at trial reflects that: In early November, 1983, a representative of Hellenic called one of Mobil's sales managers in New York inquiring as to Mobil's price for fuel oil in South Africa. Mobil, however, declined to accept Hellenic's order. Thereafter, Pitenis of Hellenic called Curt Townsend, a Vice President of Mobil with responsibility for overseeing certain sales of marine bunkers. Townsend agreed to accept Hellenic's order. Because Mobil had no fuel depot in South Africa, Mobil arranged for Mobil Oil Southern Africa (PTY), Ltd. ("Mobil South Africa"), to supply the Grigorios. Mobil South Africa "assigned and transferred" its claim against the Grigorios to Mobil. Hellenic was then billed by Mobil for the value of the oil, but never paid. The provision of the Ship Mortgage Act upon which Mobil relies in asserting that its lien is entitled to priority is the last clause of 46 U.S.C. § 951, which provides: Provided, however, That such `preferred mortgage lien' in the case of a foreign vessel shall also be subordinate to maritime liens for repairs, supplies, towage, use of drydock or marine railway, or other necessaries, performed or supplied in the United States. Even assuming that Mobil is entitled to a maritime lien for the oil supplied to the Grigorios by Mobil South Africa, that oil was clearly not supplied in the United States. Mobil nevertheless contends that the Plaintiffs' mortgage lien should be subordinated under § 951 because Hellenic arranged to purchase the oil in the United States. In making this argument, Mobil ingeniously characterizes its claim as one arising under a contract that was "performed" in the United States. Section 951, however, makes no reference to contracts. Its plain language is concerned exclusively with the location at which the repairs were performed, or the supplies supplied. Although the brief legislative history of this provision indicates that it was intended to protect American suppliers of goods and services to foreign vessels, there is no clear expression of congressional intent to protect American suppliers supplying vessels outside of the United States. See, H.R.Rep. No. 1662, 83d Cong., 2d Sess., 1954 Code Cong. & Ad. News 2451-53. Mobil's interpretation of § 951 would unduly extend the reach of the law of the United States. Cf. Gulf Trading and Transportation Co. v. M/V Hoegh Shield, 658 F.2d 363, 366-368 (5th Cir.1981) cert. denied, 475 U.S. 1119, 102 S.Ct. 2932, 73 L.Ed.2d 1332 (1982) (holding that U.S. law governed creation vol non of maritime lien for fuel supplied in Canal Zone even though fuel was ordered in London and delivered under contract negotiated there); Brandon v. S.S. Denton, 302 F.2d 404, 411 (5th Cir.1962); ("`[t]he law of the place where the contract is made is, generally speaking, the law of the contract; i.e., it is the law by which the contract is expounded. But the right of priority forms no part of the contract itself'"). Moreover, under the Federal Maritime Lien Act, 46 U.S.C. § 971 et seq., it must be presumed that those who furnish repairs, supplies and other necessaries look to the credit of the vessel and not that of the owner. Sasportes v. M/V Sol De Copacabana, 581 F.2d 1204, 1209 (5th Cir.1978). Where a supplier looks to the credit of the vessel to secure his lien, it would be anomalous to consider that the lien attaches in a place other than where the supplies were provided to the vessel. Consequently, because Mobil's claim is not for supplies furnished to the Grigorios in the United States within the meaning of § 951, its claim is not superior to the Plaintiffs' mortgage lien. See Sasportes v. M/V Sol De Copacabana, supra, 581 F.2d at 1211 (holding that of those monies advanced to vessel for necessaries, only those advances made in the United States entitled to priority). NOTES [1] Several of the intervenors later voluntarily dismissed their interventions. The Plaintiffs have stipulated to the validity and priority of the liens asserted by four of the intervenors which total $79,572.77. One party, Jerome Brown, failed to intervene before the deadline established by the order for sale. Because Brown's claim did not arise until after the deadline and because the claims of the other intervenors had not yet been adjudicated, he was nevertheless permitted to intervene on January 2, 1985. Brown's claim arises from personal injuries he allegedly sustained while working aboard the vessel in 1979. That claim is presently set for trial on December 16, 1985. [2] Judgment No. 2285 of 1981, Court of First Instance of Piraeus, Greece. [3] Judgment No. 352 of 1982, clarified by Judgment No. 871 of 1982, Court of First Instance of Piraeus, Greece. [4] Although the Loan Agreement was executed on April 28, 1983, it was "dated as of March 31, 1983." [5] The amounts funded by each of the Plaintiffs were: Morgan, $40 million; Continental, $30 million; BSFE, $1 million; and Nat West, $5 million. [6] The other vessels mortgaged were: Hellenic Valor, Hellenic Innovator, Hellenic Explorer, Hellenic Sun, Hellenic Wave, Hellenic Pride, Hellenic Star, Hellenic Champion, Hellenic Ideal, and Hellenic Friendship. The Hellenic Friendship, however, was not owned by Hellenic, but by Universal Cargo Carriers, Inc., a related corporation. This vessel was mortgaged under the Loan Agreement pursuant to Universal's guarantee of Hellenic's debt. [7] The closing of the Loan Agreement and execution of the documents took place in the New York offices of the Plaintiffs' counsel. Because all of the documents had been prepared in anticipation of execution on April 28, 1983, the date line of the notarial jurat on the acknowledgments and the affidavits of good faith that were attached to the mortgages had been typed as "April __, 1983." Pitenis was not to execute the two reserved copies of the ship mortgages until after Hellenic's Board met on May 2, 1983; therefore, Ammon instructed an associate of his law firm to change the date line of the notarial jurats on the acknowledgments and affidavits of good faith of Hellenic which were attached to the two reserved copies to "May __, 1983." The associate, however, failed to follow Ammon's instructions and changed the date line of the jurats on the acknowledgments of the Plaintiffs as well. Two notaries were present at the signing of the documents on April 28, 1983. They were introduced to the persons who would be signing the documents on behalf of Hellenic and the Plaintiffs. Those persons were told that the notaries would sign the acknowledgments and, with respect to Hellenic, the affidavits of good faith. After the documents had been executed by the parties, the notaries signed and sealed the acknowledgments and the affidavits of good faith on all of the mortgages except for the two reserved copies. On those copies, the notaries signed and sealed only the acknowledgments with respect to the Plaintiffs. The date lines of the notarial jurats were incorrectly completed by Ammon's associate with the date of closing, May 3, 1983, rather than with the date on which the notaries had in fact signed the jurats. The same notaries were also present at the signing of the two reserved copies of the ship mortgages by Pitenis on May 2, 1983. After signing of the mortgages by Pitenis, the notaries signed and sealed the jurats on the acknowledgments and affidavits of good faith. Ammon's associate also incorrectly dated the notarial jurats on these documents as of May 3, 1983. In preparing the documents for shipment to Greece, Ammon noticed that his associate had incorrectly dated the jurats on the acknowledgments by Hellenic, and instructed his associate to change the date to May 2, 1983 to reflect the date on which the jurat had actually been signed. Aamon did not notice that the jurat on the acknowledgment by the Plaintiffs were also incorrectly dated May 3, 1983. [8] Indeed, Mobil's counsel expressly conceded this point at trial. [9] Legislative Decree No. 2687 was authentically interpreted by legislative Decree No. 2928 of 1954. In accordance with the practice of Greek lawyers, reference to Legislative Decree No. 2687 herein shall also indicate reference to Legislative Decree No. 2928 of 1954. [10] The Ministerial Decision, dated January 8, 1970, was issued jointly by the Greek Ministers of Coordination, Mercantile Marine and Finance, and published in the January 23, 1970 edition of the official Government Gazette. [11] Before the Grigorios was completed, it was registered as Hull No. 1076 in accordance with Article 4 of the Greek Code of Private Maritime Law which permits registration of a vessel at any time after construction has begun. [12] At trial, however, Kalamiotis offered this as only one possible interpretation. He also suggested that the laws of Greece may govern the form of the instrument. He theorized that because New York law provides that a mortgage on a ship of a foreign flag is governed by the laws of the flag state, Greek law governed the mortgage in this case in all respects. Although he claimed to have authority for this opinion, his testimony revealed none. Moreover, his opinion is directly contradicted by Article 32 of the Greek Civil Code which expressly declares: When foreign law is to be applied, the rules of conflict of law of the foreign state are not part of the applicable law. Furthermore, counsel for Mobil conceded at trial that New York law governed the form of the mortgage. [13] The language of Article 4 subsequent to the 1955 amendment is identical to the text of Article 4 contained in the 1960 recodification of the Articles of Association which was admitted into evidence. [14] The language of Article 1268 of the Greek Civil Code, which governs mortgages generally, is substantially similar.

2013-10-30 06:32:39.059418+00

McNEILLY

367 A.2d 632 (1976) Josephine R. TILDEN, guardian of Lydia Tilden, Plaintiff below, Appellants, v. Kurt ANSTREICHER, M.D., Individually and as Director of the Division of Mental Health and Retardation, et al., Defendants below, Appellees. Supreme Court of Delaware. Submitted September 17, 1976. Decided December 7, 1976. C. Waggaman Berl, Jr., Wilmington, for plaintiff below, appellant. Raymond L. Becker, of Becker & Ferri, Wilmington, for Kurt Anstreicher, M.D., Individually and as Director of the Division of Mental Health and Retardation. Rodney M. Layton and Jane R. Roth, of Richards, Layton & Finger, Wilmington, for Karnik Gurdikian, M.D., Individually and as Clinical Director and Chief of Service of the Delaware State Hospital. Robert B. Walls, Jr., Wilmington, for Helena Bauchwitz, M.D., and George L. Curry. William D. Bailey, Jr., of Bayard, Brill & Handelman, Wilmington, for Pierre L. Leroy, M.D. Wheeler K. Neff, Deputy Atty. Gen., Wilmington, for the State. Before DUFFY, Justice, McNEILLY, Justice, and MARVEL, Chancellor. *633 McNEILLY, Justice: In this medical malpractice action, plaintiff appeals from the granting of all defendants' motions for summary judgment by the Superior Court on the ground that plaintiff's suit was not timely filed. The plaintiff contends that the cause of action is not barred by the Statute of Limitations because: (1) the defendants are estopped to assert the defense of the Statute of Limitations; (2) the Statute of Limitations is tolled because the cause of action was fraudulently concealed; (3) the applicable Statute of Limitations is that for trespass (10 Del.C. § 8106),[1] with its appendant tolling provision for infants and incompetents (10 Del.C. § 8116),[2] rather than that for *634 personal injuries (10 Del.C. § 8119.)[3] We disagree. I This action to recover damages for semiparesis suffered as a result of a May 11, 1970, operation known as a prefrontal lobotomy was filed November 5, 1973, on behalf of Lydia Tilden, a mentally retarded minor patient at Delaware State Hospital (Hospital), by Mrs. Josephine Tilden, her mother and court appointed guardian ad litem. In 1968 Lydia was committed to the Hospital because of her unmanageable and disruptive behavior in another State institution. Various therapies and treatments, including heavy medication, behavior therapy, occupational therapy and electroshock therapy were attempted without success. Lydia continuously fought attendants and other patients, put her fists through windows, cut herself and others, and frequently had to be placed in restraint and seclusion. Numerous employees of the Hospital, including psychiatrists, social workers and nurses, were involved in Lydia's case and discussions of how to handle her. Finally, after much interchange, a prefrontal lobotomy was recommended, explained to Mrs. Tilden, and performed after Mrs. Tilden's written consent to the operation was obtained. An improvement in Lydia's mental condition and behavior resulted from the operation, but this was accompanied by semiparesis of her left side (limited use of the left arm and dragging of the left foot). II The plaintiff first contends that the defendants are estopped to plead the defense of the Statute of Limitations, because of the physician-patient, guardianward, fiduciary relationship between the defendants and Lydia, as a mentally retarded minor patient at the Delaware State Hospital. We have examined the authorities cited by plaintiff: Roy v. Hartogs, Civ.Ct., 81 Misc.2d 350, 366 N.Y.S.2d 297 (1975); 61 Am.Jur.2d Physicians and Surgeons § 100; 39 Am.Jur.2d, Guardian and Ward § 208; 51 Am.Jur.2d, Limitation of Actions § 452, finding them to be inapposite. The Roy decision concerned whether the New York Heart Balm act barred a suit by a patient against her psychiatrist for damages resulting from sexual intercourse induced by the psychiatrist as part of her therapy; in no respect did the case touch on the Statute of Limitations question presented here. Similarly, the encyclopedia articles do not support the proposition that a physician may not assert the Statute of Limitations defense against a patient in a malpractice action. To accept the plaintiff's argument would render the Statute of Limitations in medical malpractice actions a virtual nullity, a result we find untenable. III The plaintiff next contends that the Statute of Limitations is tolled because the cause of action was fraudulently concealed. By its nature a prefrontal lobotomy often renders a patient unable to comprehend his or her true physical and mental state, and it is argued that since Lydia's mother was not interested enough in her, or competent enough to be responsible for her legal rights, Lydia's doctors concealed the cause of action by taking no action with regard to her rights. The doctrine of fraudulent concealment requires both knowledge and affirmative action on the part of the physician. *635 In Layton v. Allen, Del.Supr., 246 A.2d 794 (1968), this Court stated: "We are unable thus to adapt the doctrine of fraudulent concealment to a situation where, as here, there is no allegation that the practitioner either had actual knowledge of the wrong done or acted affirmatively in concealing the facts from the patient. Such scienter and affirmative action are generally deemed to be esssential elements for the application of the doctrine of fraudulent concealment in a malpractice case." 246 A.2d at 798 (emphasis added) We reaffirm the rule of Layton v. Allen, supra, and conclude that since the record shows that Lydia's semiparesis was apparent to Mrs. Tilden, the named plaintiff, and that she was informed during the summer of 1970, by a Hospital nurse the operation could have caused it, there was no concealment of the subject matter of the cause of action.[4] IV Finally, plaintiff contends that the Statute of Limitations set forth in 10 Del.C. § 8106, with its appendant tolling provisions (10 Del.C. § 8116), controls the resolution of this appeal, because the consent given to the operation by Lydia's mother was not informed. Plaintiff argues that the lack of informed consent renders the operation an assault and battery, which should be considered a trespass under Section 8106. The three year Statute of Limitations (10 Del.C. § 8106), which plaintiff argues applies here is made expressly subject to the savings provisions for infants and incompetents of Section 8116, and Section 8119, the personal injury Statute of Limitations, which is not subject to any savings provisions. As was stated in Lewis v. Pawnee Bill's Wild West Co., Del. Supr., 6 Pennewill 316, 66 A. 471 (1907): "It is clearly within the power of the Legislature to fix the period within which actions shall be brought, without any exceptions whatever. Whether there are exceptions in favor of certain classes of persons, or against certain other classes, depends wholly on the will of the Legislature as expressed in the statute itself, or in some other statute of which it is a part." 66 A. at 473. Since there is no savings provision appendant to Section 8119, the controlling Statute of Limitations, and since more than two years elapsed between the accrual of the cause of action and the filing of the suit, we find it unnecessary to reach the informed consent issue. Affirmed. NOTES [1] 10 Del.C. § 8106 provides in pertinent part: "No action to recover damages for trespass * * * shall be brought after the expiration of 3 years from the accruing of the cause of such action; subject, however, to the provisions of §§ 8108-8110, 8119 and 8127 of this title." (emphasis added) [2] 10 Del.C. § 8116 provides: "If a person entitled to any action comprehended within §§ 8101-8115 of this title, shall have been, at the time of the accruing of the cause of action, under disability of infancy or incompetency of mind, this chapter shall not be a bar to such action during the continuance of such disability, nor until the expiration of 3 years from the removal thereof." [3] 10 Del.C. § 8119 provides: "No action for the recovery of damages upon a claim for alleged personal injuries shall be brought after the expiration of 2 years from the date upon which it is claimed that such alleged injuries were sustained * * *" [4] An exerpt from a deposition of Mrs. Tilden, taken on January 15, 1974, appears below: Question: (by Mrs. Roth, attorney for defendant Gurdikian): "And did Lydia know you when you came to see her?" Answer: (Mrs. Tilden): "Yes." Question: "Whereabouts was she?" Answer: "She was in Springer." Question: "Whereabouts in Springer?" Answer: "In the ward." Question: "And what was she doing when you came to visit her?" Answer: "She was walking around, but she couldn't walk too good. Something was wrong with her leg and, you know, hand." Question: "And did you ask her what the matter was?" Answer: "No, I didn't ask her. I asked one of the nurses what's the matter with her, and one of the nurses say they think it might come from that operation. She would hold her hand up, and she was sometimes walking, you know, dragging her leg."

2013-10-30 06:32:39.060068+00

Lagarde

852 S.W.2d 643 (1993) Edward James BREWER, Appellant, v. The STATE of Texas, Appellee. No. 05-91-02125-CR. Court of Appeals of Texas, Dallas. March 25, 1993. Discretionary Review Refused June 9, 1993. *644 Anne Adair Dunlap, Dallas, for appellant. Lori L. Ordiway, Dallas, for appellee. Before LAGARDE, BURNETT and WHITTINGTON, JJ. OPINION LAGARDE, Justice. The sole issue before us in this appeal is whether the evidence is sufficient to support a rational jury finding that Edward James Brewer was guilty as a party to an aggravated robbery committed by another. Because we conclude that the evidence is sufficient, we affirm. When analyzing the sufficiency of the evidence, an appellate court must first determine the legal theory of criminal responsibility under which the application paragraph of the charge properly authorizes the jury to convict. See Chatman v. State, 846 S.W.2d 329, 331 n. 1 (Tex.Crim. App.1993). Only then may an appellate court rule upon the sufficiency of the evidence as measured by the charge. See Chatman, 846 S.W.2d at 331 n. 1. Legal Theory of Criminal Responsibility Brewer argues that the evidence is insufficient to support his conviction because the application paragraph of the charge did not properly apply the law of parties to the facts of the case; thus, the jury was not authorized to convict him as a party to aggravated robbery. We disagree. We first note the following significant facts: (1) there was no objection to the court's charge; (2) there was no specially requested charge; and (3) a proper abstract instruction on the law of parties was given. With those facts in mind, we must determine whether the words "acting with another as a party to the offense, as that term is herein defined" contained within the application paragraph of the charge authorized the jury to find Brewer guilty as a party based on the conduct of another. Brewer relies on Johnson v. State, 739 S.W.2d 299, 305 (Tex.Crim.App.1987), Apodaca v. State, 589 S.W.2d 696, 699 (Tex. Crim.App. [Panel Op.] 1979), and Chatman v. State, 830 S.W.2d 637, 641 (Tex.App.— Beaumont 1992), rev'd, 846 S.W.2d 329 (Tex.Crim.App.1993). Johnson is distinguishable. There the appellant specifically requested that the charge more explicitly apply the law of parties to the facts of the case. Johnson, 739 S.W.2d at 305 n. 4. Here there was no objection or specially requested charge. Since the time of submission, the court of criminal appeals has reversed Chatman v. State, the opinion upon which Brewer primarily relies. See Chatman v. State, 846 S.W.2d 329, 332 (Tex.Crim.App.1993). Chatman involved a murder trial in which *645 the judge gave an abstract instruction on the law of parties essentially the same as the one given at Brewer's trial. See id. at 330. The application paragraph authorized the jury to find Chatman guilty of murder if it believed beyond a reasonable doubt that Chatman, "either acting alone or as a party, as that term has been defined," intentionally or knowingly caused the death of an individual. See id. at 330-31. The jury found Chatman guilty of murder. See id. at 330. Relying on Apodaca v. State, 589 S.W.2d 696 (Tex.Crim.App.1979), the Beaumont Court of Appeals held that the application paragraph was inadequate as an application of the law of parties and, therefore, only authorized the jury to convict Chatman as a principal. See Chatman, 846 S.W.2d at 331. Because the court found no evidence that Chatman was guilty of murder by his conduct alone, it reversed Chatman's conviction and remanded for entry of an acquittal order. See id. at 331. In reversing the Beaumont court's decision, the court of criminal appeals held that the language "acting alone or as a party, as that term has been defined," in the application paragraph, "generally applied" the law of parties to the facts. See id. at 332. It concluded that this general application was sufficient to refer the jury to the abstract instruction on the law of parties so that the jury could properly apply the law to the facts. See id. at 332. The court also distinguished Apodaca, pointing out that, in effect, there was no application of the law of parties to the facts in the application paragraph because it asked the jury to find Apodaca guilty if he acted as a principal. See id. at 332. The court further noted that if a defendant desires a more explicit application of a particular method of acting as a party, it is his burden to object to the charge or request a more detailed charge. See id. at 332 (citing Johnson v. State, 739 S.W.2d 299, 307 (Tex. Crim.App.1987)). The charge given here contained an abstract instruction on the law of parties and an application paragraph that incorporated by reference that abstract instruction. Furthermore, Brewer was not entitled to a more specific application of the law of parties because he failed to object to the jury charge or file a specially requested charge, even though the judge specifically asked Brewer's defense counsel if he wished to do so. See id. at 332. Therefore, this charge is sufficient under Chatman to authorize Brewer's conviction as a party. See id. SUFFICIENCY OF THE EVIDENCE Having determined that the charge authorized the jury to convict Brewer as a party to aggravated robbery, we must decide whether the evidence presented at trial is sufficient to prove the allegations in the indictment, as measured by the charge, based on the State's legal theory of culpability, i.e. that Brewer was guilty based on the conduct of another. See Boozer v. State, 717 S.W.2d 608, 610 (Tex.Crim.App. 1984). Evidence is sufficient to support a conviction if this court determines, after evaluating the evidence in the light most favorable to the verdict, that a rational trier of fact could have found the elements of the offense beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 318-19, 99 S.Ct. 2781, 2788-89, 61 L.Ed.2d 560 (1979); Turner v. State, 805 S.W.2d 423, 427 (Tex.Crim.App.), cert. denied, ___ U.S. ___, 112 S.Ct. 202, 116 L.Ed.2d 162 (1991). The essential elements of the offense of aggravated robbery as charged in this case and incorporated into the application paragraph of the charge are that: (1) Brewer (2) while in the course of committing theft, (3) and with intent to obtain or maintain control of property, to-wit: money, (4) intentionally or knowingly threatened or placed Robert Hall in fear of imminent bodily injury or death, and (5) used or exhibited a firearm. See TEX.PENAL CODE ANN. § 29.02(a)(2) & § 29.03(a) (Vernon 1989 and Vernon Supp.1993). Lela Mae Davis testified that at about 5:30 a.m. on May 28, 1991, she parked her car in a parking lot across the street from the federal building where she works in the coffee shop. She saw a young man walk across the parking lot toward her and get *646 into a burgundy car. Before she entered the federal building, the burgundy car pulled up in front of a van parked by a paper rack on Young Street. The man she had earlier seen get in the burgundy car got out and shot a man standing by the van. Davis identified Brewer as the driver of the car. Robert Hall, the complainant, testified that he delivers papers in downtown Dallas for the Dallas Morning News. On the morning of May 28, 1991, he was unloading newspapers at the intersection of Young and Lamar Streets when a brown or maroon car pulled up in front of his van at an angle so that he could not have driven his van forward without hitting the car. A man carrying a gun in his hand got out of the car and said, "Give me your money." When Hall replied that he didn't have any money, the man shot him in the chest from a distance of five feet. Hall returned fire. The man ran across the street and through a park. Despite his wound, Hall climbed into his van and chased the gunman. Hall saw the gunman get back into the same car that had dropped him off before the shooting; the car backed up for a short distance and ran into a pole or a curb; two men jumped out of the car and ran. After the police began to chase the two men, an ambulance arrived to treat Hall's wounds. Phillip Washington, a Dallas County deputy constable, testified that he was driving to work at about 6 a.m. on May 28, 1991 when he heard gunfire at the intersection of Griffin and Young Streets in downtown Dallas. Hall pulled up in a van next to Washington's car and asked Washington to follow him. Washington complied and was led to a maroon car left parked in the street. After Hall told Washington that he had been shot, Washington saw a man running; he chased him. After the runner was apprehended, Washington saw Brewer seated on a curb across the street from the federal building. Brewer told Washington that he was the driver of the maroon car. Brewer took the stand and testified that Willie Dell Robinson, a friend of his daughter, knocked on his door at some time prior to 5:30 a.m. on May 28, 1991 and asked Brewer to drive him to his girlfriend's house on Gaston Avenue. Brewer's fiancee let him borrow her car. Once they were in the car, Robinson persuaded Brewer to take him downtown to meet a friend on Griffin Street. Brewer let Robinson out of the car on Lamar Street near the federal building, told him to hurry, and then drove around for a few minutes. Brewer next saw Robinson at the intersection of Lamar and Young streets, running toward him. When Robinson got into the car, a man in a van began shooting at them. Brewer saw Robinson pull a gun from his pocket. Brewer put the car in reverse and accelerated in an attempt to escape the shots from the van. After the car collided with a telephone pole and a curb, Brewer got out of the car and ran. He saw a police officer and told him that there had been a shooting. The police officer drove away and Brewer wandered back to where he had abandoned his fiancee's car. He was later arrested at that location. Brewer denied that he participated in or had knowledge of the robbery and shooting. Irma Wesley, Brewer's girlfriend, testified that she was in bed with Brewer at the Red Roof Inn on the morning of May 28, 1991. Sometime before 6 a.m., Robinson knocked on the door and asked Brewer to give him a ride to his girlfriend's house. Brewer asked her if he could borrow her car. She said he could if he would be back by 7 a.m. so that she could drive to work. Wesley stated that she owned a maroon 1984 Caprice Classic. As their final witness, the defense called Gregory Lee Johnson, a Dallas County deputy constable. He testified that he was driving to work at about 6 a.m. on May 28, 1991 when Brewer approached him at the intersection of Young and Griffin streets and told him that there had been a shooting near the federal building. Johnson notified his dispatcher and drove in the direction that Brewer had pointed him. At some point he saw Washington chasing Robinson and joined in the pursuit. After they apprehended Robinson, Johnson saw Brewer sitting on a curb next to a van. *647 The State called two witnesses on rebuttal: Thomas Arnold and K.C. Edmonds. Arnold, a Dallas police officer, testified that he was on patrol the morning of May 28, 1991. In response to a dispatcher alert about a shooting, he drove to Lamar Street. Upon arriving there, he saw Washington and Hall leaning up against the side of a van. Washington gave him a description of the gunmen. Arnold searched the area and eventually spotted Brewer and Robinson running. He apprehended Robinson and placed him under arrest. At some point after the arrest, Brewer approached Arnold and claimed ownership of the burgundy car. Brewer also told him that Robinson had entered his car from the passenger side, pointed a gun at him, and told him to drive away. K.C. Edmonds, also a Dallas police officer, testified that when he interviewed Brewer after his arrest, Brewer initially told him that an unknown, armed man opened his car door and got in. After contacting and talking to the owner of the car, Irma Wesley, Edmonds told Brewer that he did not believe him. Brewer then made a written statement about the events of May 28, 1991 which essentially mirrored his testimony at trial. Brewer does not dispute that Willie Dell Robinson committed aggravated robbery. Instead, he argues that the evidence is insufficient to show that he acted as a party to that aggravated robbery. Although he acknowledges that he drove the car that dropped off Robinson before the shooting and picked him up afterward, Brewer points out that (1) he was not armed, (2) he was not present during the aggravated robbery, and (3) there is no evidence suggesting that he knew about Robinson's intent to rob Hall. A person is criminally responsible for an offense committed by the conduct of another if, "acting with intent to promote or assist the commission of the offense, he solicits, encourages, directs, aids, or attempts to aid the other person to commit the offense." TEX.PENAL CODE ANN. § 7.02(a)(2) (Vernon 1974). Mere presence at the scene of a crime is not sufficient to establish guilt as a party, but presence is a circumstance tending to prove guilt which, combined with other facts, may suffice to show that the accused was a party to the crime. Beardsley v. State, 738 S.W.2d 681, 685 (Tex.Crim.App.1987). Furthermore, evidence that a defendant drove the getaway car after a robbery has been held sufficient to convict the driver as a party to the offense. See Thompson v. State, 697 S.W.2d 413, 417 (Tex.Crim.App.1985); Webber v. State, 757 S.W.2d 51, 56 (Tex.App.— Houston [14th Dist.] 1988, pet. ref'd). The evidence presented at trial established that Brewer drove the car which dropped off Robinson immediately prior to the time that Robinson shot Hall. Brewer stopped his car in front of Hall's van at an angle, thereby preventing Hall from driving his van forward without hitting the car. Brewer also picked up Robinson shortly after the shooting. After his arrest, Brewer initially told Officers Arnold and Edmonds that an unknown gunman had jumped into his car. When Edmonds spoke with Brewer's fiancee and then told Brewer that he did not believe his story, Brewer admitted that he knew Robinson but still claimed ignorance of his intent to rob Hall. Although Brewer testified at trial that he was unaware of Robinson's intent to rob Hall, the jury as trier of fact was the sole judge of the witnesses' credibility. Sharp v. State, 707 S.W.2d 611, 614 (Tex.Crim. App.1986), cert. denied, 488 U.S. 872, 109 S.Ct. 190, 102 L.Ed.2d 159 (1988); Dumas v. State, 812 S.W.2d 611, 615 (Tex.App.— Dallas 1991, pet. ref'd). Accordingly, the jury was free to accept or reject the testimony of any witness. Sharp, 707 S.W.2d at 614; Dumas, 812 S.W.2d at 615. Furthermore, the jury had good reason to discredit Brewer's trial testimony in light of his initial statements that an unknown gunman had jumped into his car and forced him to drive at gunpoint. In light of Brewer's inconsistent statements, the angle at which Brewer pulled his car in front of Hall's van, and Brewer's presence as Robinson's driver immediately before and after the robbery, we conclude that the evidence is sufficient to support a rational jury finding *648 that Brewer was guilty of aggravated robbery. We overrule Brewer's sole point of error. We affirm the trial court's judgment.

2013-10-30 06:32:39.068369+00

Shadur

615 F.Supp. 836 (1985) Burton MORGAN and Margaret Morgan, Plaintiffs, v. BANK OF WAUKEGAN, et al., Defendants. No. 84 C 6251. United States District Court, N.D. Illinois, E.D. August 28, 1985. Ditkowsky & Contorer, Chicago, Ill., for plaintiffs. Michael L. Sherman, Chicago, Ill., for defendants. MEMORANDUM OPINION AND ORDER SHADUR, District Judge. Margaret and Burton Morgan ("Morgans") have sued a diverse group of defendants, seeking to ground federal jurisdiction in the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968,[1] and adding several pendent state claims. Various of the defendants have moved to dismiss the Third Amended Complaint (the "Complaint") under Fed.R.Civ.P. ("Rule") 12(b)(6). Because the fourth time has not proved the charm, the motion is granted. This Court's opinions normally begin with a statement of the facts. On Rule 12(b)(6) motions, the "Facts" section is invariably footnoted with the following statement or one much like it: As always with respect to a motion to dismiss, the well-pleaded factual allegations of the Complaint are taken as true, with all reasonable factual inferences drawn in plaintiff's favor. Wolfolk v. Rivera, 729 F.2d 1114, 1116 (7th Cir. 1984). That approach of course involves no actual findings of fact. That task is really impossible here, for whatever else may be said of the Complaint, it is not "well-pleaded." Morgans' counsel has followed three earlier sprawling and unintelligible efforts at pleading a civil RICO cause of action with a current version that is little improved and does not permit of ready analysis. This Court is of course fully aware of its responsibilities in reading a complaint under Hishon v. King & Spalding, 467 U.S. 69, ___, 104 S.Ct. 2229, 2233, 81 L.Ed.2d *837 59 (1984) (reconfirming the principles of Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957)). But Rule 8(a) still requires of a complaint "a short and plain statement of the claim showing that the pleader is entitled to relief," modified only (where as here the heart of the Complaint lies in fraud charges) that "the circumstances constituting fraud ... shall be stated with particularity" (Rule 8(b)). See, e.g., Tomera v. Galt, 511 F.2d 504, 508 (7th Cir.1975). And lawyering is after all the job of the lawyer, not the Court, in the first instance. If a lawyer seeking to invoke civil RICO has difficulties with its statutory roadmap (referred to by Judge Posner in Sutliff, Inc. v. Donovan Cos., 727 F.2d 648, 652 (7th Cir.1984) as "constructed on the model of a treasure hunt"), he or she need only refer to a solid law review treatment that provides a checklist as to what must be alleged.[2] In this case this Court issued a short August 6, 1984 memorandum opinion and order dismissing the initial complaint and attempting to steer counsel in the right direction. Thereafter, loath to expend further effort in writing unless and until counsel restructured the complaint in manageable form, it has ruled orally — most recently dismissing the Second Amended Complaint and referring counsel to the then-brandnew law review article cited in n. 2 of this opinion. Yet counsel has still not provided any meaningful designation of the "enterprise" involved, and hence just how the charged "persons" are connected to that enterprise, in the manner required to state a Section 1964(c) cause of action based on a violation of Section 1962(a) or 1962(c). That failure, plus a recognition of the proper division of labors between counsel and court, would be enough to send Morgans back to the drawing board. But a critical intervening event, the definitive ruling on other aspects of civil RICO by the Supreme Court in Sedima, S.P.R.L. v. Imrex Co., ___ U.S. ___, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985), occasions this expansion on what has already been said to Morgans' counsel more than once. There is no gainsaying much of the federal judiciary has had a feeling of unease about the broad sweep of civil RICO.[3] No other explanation suggests itself, for example, for the extraordinary tour de force in which the Court of Appeals for the Second Circuit (albeit in a group of sharply-split decisions) constructed such imaginary requirements as the one demanding a defendant to have been criminally convicted of a RICO violation as a prerequisite to liability under civil RICO — an aberration it took the Supreme Court to correct in Sedima. And that was only one of the manifestations of discomfort of federal judges at the notion Congress had, somehow unwittingly, created federal question jurisdiction over what had traditionally been state court preserves — "garden-variety fraud" implemented (as it would almost invariably be) by mailings or by interstate-commerce-connected telephone usage. As often happens, the sense of disquietude—the nagging sense that something is wrong, though it is difficult to put a finger on just what — was sound, even though the perceived ailment was mistaken. Sedima, 105 S.Ct. at 3285 n. 14 and 3287 (though in dictum) supplied the clue that the courts had been mistaken in viewing two mailings — a necessary ingredient under Section 1961(5) of a "pattern of racketeering activity" violating Section 1962 — as a sufficient condition to establish such a "pattern." *838 This Court has recently responded to the Supreme Court's invitation for "the courts to develop a meaningful concept of `pattern'" (Sedima, 105 S.Ct. at 3287) in Northern Trust Bank/O'Hare, N.A. v. Inryco, Inc., 615 F.Supp. 828 (N.D.Ill. 1985), and it will continue to do so here. As already stated, it is hard to decipher precisely what Morgans' cause of action is when sought to be placed in the RICO matrix. But as best this Court can determine, Morgans' claim is that somehow the 1978 sale to them of a 20% interest in what they call the "venture" — certain drug stores — was part of a plot to divest Morgans of both their initial cash investment and their home (put up as security for the loans obtained to provide further capital for the "venture"). If this Court assumes (as it must in its efforts to read the Complaint) all the alleged conspirators engaged in a single plot, though spread over several years from its hatching in 1978 to its coming to fruition in 1982, Morgans have not satisfied the "pattern of racketeering activity" requirement as articulated in Inryco, 615 F.Supp. at 831-33. There may be one other possibility that has occurred to this Court, though it is not even hinted at in Morgans' four efforts to state their claim. If the complained-of acts were somehow said to represent "repeated criminal activity, not merely repeated acts to carry out the same criminal activity" (id. at 831), thus perhaps meeting the "pattern" requirement,[4] it would appear highly likely much if not most of the earlier activity would be outlawed by limitations.[5] In any event Morgans cannot really have it both ways, and there is at least a substantial likelihood — judging by their performance to date — they may not have it either way, at least in federal jurisdictional terms. Morgans' RICO claim as asserted in the Complaint is accordingly dismissed. Because they have shown no ability to state such a claim despite repeated efforts, and because their other claims are wholly pendent, lacking an independent basis for federal jurisdiction, the entire Complaint and this action are accordingly dismissed. By definition such dismissal is without prejudice to Morgans' right to pursue their claims in a court of competent jurisdiction. NOTES [1] All further references to RICO provisions will simply take the form "Section ___." [2] One good source (though antedating the Supreme Court's Sedima decision referred to later in this opinion) is Miller and Olson, Recent Developments in Civil RICO, 8 Corp.L.Rev. 35 (1985). [3] This Court should hasten to add it does not number itself as part of that body of judges. Both in its large number of opinions in the field and in its lecturing and panel participation at civil RICO seminars and workshops, it has consistently expressed the view it is for Congress — not for courts via judicial legislation — to curtail the application of RICO if it were found too broad. Unless and until Congress acts, a literal application of the statute — neither niggardly nor overexpansive — has been and continues to be the proper judicial response. [4] This hypothetical assumption should not be mistaken for a holding to that effect. First, it is difficult (and really inappropriate) for this Court to essay such radical surgery, reconstructing what Morgans appear to have claimed from the outset of this litigation. Second, without knowing just what form that reconstruction might take, it is certainly not for this Court to render an advisory opinion on the "pattern" issue. [5] Though this Court has not yet spoken to the civil RICO limitations question (and this footnote is not intended to do so), counsel's attention is called to Judge Hart's decision in Electronic Relays (India) Pvt. Ltd. v. Pascente, 610 F.Supp. 648 (N.D.Ill.1985).

2013-10-30 06:32:39.094334+00

Aboussie

852 S.W.2d 97 (1993) Lawrence E. WENZEL and Myrtice Wenzel, v. CITY OF NEW BRAUNFELS. No. 3-92-020-CV. Court of Appeals of Texas, Austin. April 21, 1993. *98 Catherine M. Stone, San Antonio, for appellants. Wren Gray Foster, Law Office of Tony Korioth, P.C., Austin, for appellee. Before POWERS, ABOUSSIE and B.A. SMITH, JJ. ABOUSSIE, Justice. In a single point of error, Lawrence and Myrtice Wenzel ("the Wenzels") appeal the summary judgment that the trial court rendered in favor of the City of New Braunfels ("the City"). Mr. Wenzel was severely injured when struck by a motor vehicle as he was leaving the Comal County Fair. Mrs. Wenzel claims that she suffered severe emotional distress when she witnessed the aftermath of the accident. The Wenzels sued the City, alleging that it was negligent in failing to provide pedestrian cross-walks; in failing to erect a barricade, warning sign, stop light, or other similar warning device; in failing to provide a guard, policeman, or other person to regulate the flow of traffic and pedestrians; in failing to place a flare or flares to alert motorists and pedestrians of the dangers of the roadway; in failing to provide adequate lighting; and in failing to limit parking in the area adjacent to the crossing. The Wenzels also pleaded that the City had actual or constructive notice of a special defect which it failed either to warn about or to correct. They claimed that insufficient lighting, uncontrolled parking, and uncontrolled pedestrian activity each constituted a special defect. The standards for reviewing a summary judgment are well established: (1) as the movant for summary judgment, the City has the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact precluding summary judgment, evidence favorable to the Wenzels will be taken as true; and (3) every reasonable inference must be indulged in favor of the Wenzels and any doubts resolved in their favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). When the City moves for summary judgment on the basis of an affirmative defense, it must conclusively prove all essential elements of that defense. Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972); Dillard v. Austin Indep. Sch. Dist., 806 S.W.2d 589, 592 (Tex.App.— Austin 1991, writ denied). The City moved for summary judgment on four grounds. We will affirm the district court's judgment based upon two grounds which assert that the City had governmental immunity for its failure to perform discretionary acts and that no special defect existed as an exception to this immunity.[1] GOVERNMENTAL IMMUNITY Governmental immunity consists of two basic principles of law. First, the state as sovereign is immune from suit without consent. Second, the state has immunity from liability even though the state has consented to be sued. Missouri Pac. R.R. v. Brownsville Navigation Dist., 453 *99 S.W.2d 812, 813 (Tex.1970); Dillard, 806 S.W.2d at 592. One exception to the general rule of governmental immunity is that a municipality is not immune when exercising its proprietary functions. Dillard, 806 S.W.2d at 593-94. Street construction and design, the presence of warning signals, traffic regulation, and maintenance of traffic signals, signs, and hazards are all governmental functions as defined by the Legislature. Texas Tort Claims Act ("the Act") § 101.0215(a)(3), (20), (21), (31).[2] These governmental functions are not proprietary functions of a municipality. Act § 101.0215(c). As a general rule, therefore, the City is immune from suits based on the exercise of its governmental functions. City of Galveston v. Posnainsky, 62 Tex. 118, 125-127 (1884); Dillard, 806 S.W.2d at 593-94. However, this rule is not without a broad exception. Section 101.025 of the Act permits actions against the state and other governmental entities; the section also waives the state's immunity from liability. Both provisions limit these waivers to the terms expressly set forth in the Act. Id.; see also McKinney v. City of Gainesville, 814 S.W.2d 862, 865 (Tex.App.—Fort Worth 1991, no writ). Therefore, we must examine the Act's provisions before determining if the Wenzels may sue the City for damages. DISCRETIONARY ACTS The waivers of immunity from suit and liability in the Act do not apply to a governmental entity's failure to perform a discretionary act. Act § 101.056(2). The City contends that its decision whether to place a traffic control device or take other precautionary measures is a discretionary act for which it is immune. The reason for immunizing discretionary actions of governmental entities is "to avoid judicial review that would question the wisdom of a government's exercise of its discretion in making policy decisions." McKinney, 814 S.W.2d at 866 (quoting State v. Terrell, 588 S.W.2d 784, 787 (Tex. 1979)). Courts distinguish the formation of policy from its implementation by according immunity to the former but not the latter. See University of Tex. at Arlington v. Akers, 607 S.W.2d 283, 286 (Tex.Civ. App.—Fort Worth 1980, writ ref'd n.r.e.) (university had discretion for policy decision whether to cancel classes due to bad weather); cf., Tarrant County Water Control & Improvement Dist. No. 1 v. Crossland, 781 S.W.2d 427, 433 (Tex.App.—Fort Worth 1989, writ denied) (decision to post warning signs did not make inclusion of lights in bridge design implementation of policy decision). The distinction also has been phrased in terms of policy formation and decisions incidental to the formation of that policy. See Norton v. Brazos County, 640 S.W.2d 690, 692-93 (Tex. App.—Houston [14th Dist.] 1982, no writ) (decision of jail to operate kitchen discretionary, but county not immune with respect to daily operation incidental to this policy). The Wenzels and the City initially dispute whether determining the discretionary nature of a governmental entity's actions is a legal or a factual question. If we accept the latter proposition, the trial court improperly granted summary judgment, as the question would be one for the trier of fact. Recognizing a split in authority among Texas courts of appeals on this issue, we hold that it is a question of law. Compare McKinney, 814 S.W.2d at 867 (question of law) with Villarreal v. City of San Antonio, 657 S.W.2d 175 (Tex.App.— San Antonio 1983, no writ) (question of fact). The supreme court has indicated that a governmental entity's initial decision to place traffic control devices is discretionary. See State Dep't of Highways & Pub. Transp. v. King, 808 S.W.2d 465, 466 (Tex. 1991). Other courts of appeals have held that the decision to regulate traffic by signs, barricades, or other means is discretionary. See McKinney, 814 S.W.2d at 866-67 (barricades along parade route); *100 Villarreal v. State, 810 S.W.2d 419, 420-21 (Tex.App.—Dallas 1991, writ denied) (exit ramp sign); City of El Paso v. Ayoub, 787 S.W.2d 553, 554 (Tex.App.—El Paso 1990, writ denied) (guardrail); Shives v. State, 743 S.W.2d 714, 717 (Tex.App.—El Paso 1987, writ denied) (stop sign). We hold that the City's decision whether to regulate traffic near the County Fair by the means suggested in the Wenzels' petition was discretionary. Accordingly, section 101.056(2) of the Act bars the Wenzels from suing the City for the failure to perform such acts.[3] SPECIAL DEFECTS The Wenzels assert that even if the City would ordinarily be immune from its failure to perform discretionary acts, it is still liable for failure to warn of special defects existing at the time of the accident.[4] Section 101.060(a)(1) provides that the Act's waiver of immunity does not apply to a claim arising from the failure of a governmental unit initially to place a traffic or road sign, signal, or warning device if the failure is a result of discretionary action of the governmental unit. This section provides further support for the trial court's order of summary judgment based upon governmental immunity. Immunity is not waived, however, for "the duty to warn of special defects such as excavations or roadway obstructions." Act § 101.060(c). The Act thus makes the City's duty to warn the public of special defects mandatory, not discretionary. See Villarreal, 810 S.W.2d at 421. The Wenzels pleaded that special defects existed in the form of insufficient lighting, uncontrolled parking, and uncontrolled street crossing by pedestrians. The City's motion for summary judgment asserted that no special defect existed; instead, it contends, its failure to provide lighting, to regulate parking, or to direct pedestrian activity constitute discretionary decisions for which it is immune. The existence of a special defect is a question of law. State Dep't of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 238 (Tex.1992). The Act mentions "special defects such as excavations or roadway obstructions." Act § 101.060(c). Applying the rule of ejusdem generis, we construe "special defects" to include those defects of the same kind or class as the examples mentioned in the statute. See Harris County v. Eaton, 573 S.W.2d 177, 179 (Tex.1978); Crossland, 781 S.W.2d at 434. Inadequate lighting is not an excavation or roadway obstruction. Cases holding an obstruction to be a special defect involve obstructions of a different nature than vehicles or pedestrians. See Eaton, 573 S.W.2d at 179 (abnormally large hole in pavement); State v. McBride, 601 S.W.2d 552, 558 (Tex.Civ.App.—Waco 1980, writ ref'd n.r.e.) (slick mud on roadway as result of construction); Miranda v. State, 591 S.W.2d 568, 570 (Tex.Civ.App.—El Paso 1979, no writ) (flood waters on road in low water crossing). One court of appeals has held that a legally parked car is not a special defect. Palmer v. City of Benbrook, 607 S.W.2d 295, 300 (Tex.Civ.App.— Fort Worth 1980, writ ref'd n.r.e.). We hold that none of the circumstances alleged in the Wenzels' petition constitutes a special defect. Because the City has established its immunity from all of the Wenzels' claims, we overrule their point of error. The judgment of the trial court is affirmed. NOTES [1] The City's other two grounds asserted that (1) the street where Mr. Wenzel was injured was constructed before the enactment of the Texas Tort Claims Act and (2) Mr. Wenzel's knowledge of the condition of the street where he was injured barred his recovery. [2] All references to the Act are to Tex.Civ.Prac. & Rem.Code Ann. §§ 101.001—.109 (West 1986 & Supp.1993). [3] Section 101.056(2) of the Act only applies to a governmental entity's failure to perform a discretionary act. If the City had decided to regulate the street in question, it might be liable for acts furthering this policy decision. See McKinney, 814 S.W.2d at 866. The Wenzels allege the City made this decision but cite no evidence in the record to support this allegation. [4] The Wenzels argue that their claims of "premise defects" also fall within an exception to the rule that the City is immune for failure to perform discretionary acts. Unlike special defects, however, no express exception is contained in the Act for premise defects. The only mention of premise defects is in section 101.022, where the normal duty of care the governmental entity owes in regard to special defects is contrasted to the "licensee duty of care" owed for premise defects. The "premise defects" the Wenzels allege are the conditions resulting from the City's failure to perform the acts we have found discretionary.

2013-10-30 06:32:39.123223+00

Dudley

852 S.W.2d 135 (1993) 313 Ark. 53 Garland F. MORRIS, Jr., Appellant, v. B. Reagan McLEMORE, Appellee. No. 92-1179. Supreme Court of Arkansas. May 3, 1993. *136 David J. Potter, Texarkana, for appellant. John R. Mercy, Helmut F. Talton & Jeffery C. Lewis, Texarkana, for appellee. DUDLEY, Justice. This case involves construction of the statute of limitations provision for legal malpractice. Garland Morris, Jr., appellant, contends that his father, Garland Morris, Sr. and his father's wife, Sophia, entered into a contract to make irrevocable wills, and that they employed appellee Reagan McLemore, an attorney licensed in Texas, to prepare the wills for them on August 8, 1969, more than twenty-three years ago. According to appellant, Garland Morris, Jr., Sophia's will was to provide that her entire estate would go to Garland Morris, Sr., but if he predeceased her, it would go to appellant, and Garland Morris, Sr.'s will provided that half of his estate would go to his wife, and the other half in trust for Garland Morris, Jr., with Sophia as trustee. In short, after the death of both Morris, Sr. and Sophia, appellant would receive all of the property. However, Sophia destroyed her will soon after making it. Garland Morris, Sr. died in January 1985, and his will was admitted to probate on April 5, 1985. He was survived by Sophia. Appellant, Garland Morris, Jr., filed suit alleging the wills were reciprocal and could not be revoked. The chancellor held there was no agreement for reciprocal wills and dismissed the suit. We affirmed. Morris v. Cullipher, 299 Ark. 204, 772 S.W.2d 313 (1989). In 1987, appellant Garland Morris, Jr. again sued Sophia, but this time alleged breach of fiduciary duty in her performance as executrix of the estate of Morris, Sr. The probate court denied relief, and we affirmed. Morris v. Cullipher, 306 Ark. 646, 816 S.W.2d 878 (1991). In this suit, appellant Morris, Jr. alleges that the attorney who prepared the wills, appellee Reagan McLemore, committed malpractice when he prepared the wills more than twenty-three years ago. The trial court dismissed the case because the three-year limitation on malpractice had run, and because there was no privity which would allow appellant Morris, Jr. to sue the attorney. Garland Morris, Jr. appeals and argues that the trial court erred in both rulings. We affirm the ruling dismissing the case on the basis of the statute of limitations. As a result, it is not necessary for us to reach the privity issue. The statute of limitations in legal malpractice cases begins to run, in the absence of concealment of the wrong, when the act of negligence occurs, not when it is discovered. Goldsby v. Fairley, 309 Ark. 380, 831 S.W.2d 142 (1992); Chapman v. Alexander, 307 Ark. 87, 817 S.W.2d 425 (1991). This has been our interpretation of the applicable statute for over 100 years. See White v. Reagan, 32 Ark. 281 (1877). Even so, appellant asks us to apply the "time of injury" rule in this case. We decline to do so. A cardinal rule in dealing with a statutory provision is to give it a consistent and uniform interpretation so that it is not taken to mean one thing at one time and something else at another time. When a statute has been construed, and that construction has been consistently followed for many years, such construction ought not be changed. Southwest Ark. Communications, Inc. v. Arrington, 296 Ark. 141, 753 S.W.2d 267 (1988). As time passes, the interpretation given a statute becomes a part of the statute itself. Gibson v. Gibson, 264 Ark. 418, 572 S.W.2d 146 (1978). Accordingly, we will not change our interpretation of the statute that provides the limitation for legal malpractice actions. Affirmed.

2013-10-30 06:32:39.129806+00

Luongo

615 F.Supp. 1002 (1985) Evelyn BLOOM, et al., v. WASTE MANAGEMENT, INC., et al., v. UNITED STATES of America and United States Army Corps of Engineers, v. WASTE MANAGEMENT, INC., et al. Evelyn BLOOM, et al., v. UNITED STATES of America and United States Department of the Army, Corps of Engineers. Civ. A. Nos. 83-4706, 84-3406. United States District Court, E.D. Pennsylvania. August 9, 1985. *1003 *1004 *1005 Paul J. Senesky, Richard K. Hohn, Galfand, Berger, Senesky, Lurie & March, Philadelphia, Pa., for plaintiffs. John J. Tinaglia, Wendy R. Fleishman, Ballard, Spahr, Andrews, & Ingersoll, Philadelphia, Pa., for Philadelphia Elec. Co. Joseph P. Green, Krusen, Evans & Byrne, Philadelphia, Pa., for American Dredging Co. James J. Donohue, Christopher P. Leise, White & Williams, Philadelphia, Pa., for Warner Co. Rachel Shao, Asst. U.S. Atty., Philadelphia, Pa., for U.S. and U.S. Dept. of the Army, Corps of Engineers. OPINION LUONGO, Chief Judge. This wrongful death and survival action[1] arises from the death of Lonnie Bloom (Bloom) during the course of his employment with the American Dredging Company (American Dredging or American). Named as defendants are The United States, United States Department of the Army, Corps of Engineers (collectively as the Government or Corps of Engineers), Warner Company (Warner), several companies apparently related in some fashion to Warner, Philadelphia Electric Company (PECO), and American Dredging. Now before me are motions for summary judgment on behalf of PECO, American Dredging, the Government and Warner. For the reasons that follow, I will grant the motions. I. On September 29, 1981, Lonnie Bloom was electrocuted when he attempted to tie a ground wire to an overhanging electric power line, apparently in an effort to obtain greater clearance for his bulldozer. At the time of his death, Bloom was performing his duties as an assistant foreman for American Dredging Company. American had been engaged as a contractor by the Corps of Engineers to complete certain dredging between Philadelphia, Pennsylvania and Trenton, New Jersey on the Delaware River. The property on which the accident took place is located in Falls Township in Bucks County, Pennsylvania. The land, owned by Warner Company, was the subject of an easement under which the Government or its contractor was entitled to use the property as a disposal site for soil and sludge removed from the river base. II. Philadelphia Electric Company has filed a motion for summary judgment which no party has opposed. PECO's amply supported motion demonstrates that the electrical lines, poles, and related equipment used to convey electricity across the Falls Township tract were sold to Warner Company in 1942 and 1943. Since that time PECO has continued to supply power to Warner, but has performed no maintenance and has exercised no control over the poles and lines located on Warner's land. From this factual record, PECO argues that, as a matter of law, it cannot be held liable for Bloom's death. I agree. Plaintiffs have failed to articulate or support any basis for holding PECO liable. PECO is not responsible for the placement of Warner's electrical lines and poles, and there is no suggestion that PECO had notice of the ongoing dredging operations in a manner that should have caused it to cease supplying power. See Dunnaway v. Duquesne Light Co., 423 F.2d 66 (3d Cir.1970) (supplier of electricity not liable where it was not on notice of crane operating in proximity to lines which it owned). PECO's motion for summary judgment will therefore be granted. III. American Dredging Company has filed a motion for summary judgment against all parties except the United *1006 States.[2] Like PECO's motion, American's motion has drawn no opposition. It is undisputed that American was the decedent's employer, and that Bloom was performing work-related tasks when his accident occurred. American thus argues, and I conclude, that Pennsylvania's Workmen's Compensation Statute bars suit both on behalf of the decedent/employee and by any other defendant seeking non-contractual contribution or indemnity. 77 P.S. § 481(a), (b); Weldon v. The Celotex Corporation, 695 F.2d 67 (3d Cir.1982). I will therefore grant American Dredging Company's motion as to all parties except the United States. IV. A. The Contentions The Government's motion for summary judgment presents a more substantial question. Pointing to the Army Corps of Engineers' limited involvement in the actual dredging operation, the Government argues that Pennsylvania law would not impose liability for Bloom's death against a private party in the Government's position. But assuming that Pennsylvania law is to the contrary, the Government further contends that it cannot be held liable because of limitations of the United States' waiver of sovereign immunity in the Federal Tort Claims Act. The factual predicate for the Government's motion is supplied by the contract between the Government and American Dredging Company, an outline of American Dredging's worker safety program, and various affidavits and depositions submitted by the parties. The Government relies primarily on the affidavit of Stephen J. Lalli, a construction inspector assigned by the Army Corps of Engineers to monitor the performance of American Dredging. Taken together, the Government contends the documents supporting its motion demonstrate that the Army Corps' inspection program was designed, and was in fact exercised, for the limited purpose of assuring that American Dredging was fulfilling its contractual obligations. The legal basis for the Government's motion under Pennsylvania law is, essentially, the general rule that one who entrusts work to an independent contractor is not liable for the negligent acts or omissions of the contractor. See Restatement (Second) Torts § 409. The Government denies that any of the relevant exceptions to the rule apply because: (1) the Government did not have superior knowledge of an ultrahazardous condition, (2) the Government did not retain control over the work of the independent contractor, and (3) the source of the danger was an open and obvious condition. Finally, the Government contests plaintiffs' effort to characterize the Army Corps as possessor of the disposal site. Pennsylvania law notwithstanding, the Government argues that the Federal Tort Claims Act does not permit imposition of liability against the United States on the facts of this case. The Government points out that its liability must be predicated on a finding of negligence by Government employees, and not on theories of strict liability or vicarious liability for the torts of its independent contractor. Addressing plaintiffs' allegation of negligence on the Army Corps' behalf, the Government argues that the claim is nonetheless barred by the discretionary function exception. The Government's discretionary function argument rests on the premise that the Secretary of the Army's patent discretion to contract out dredging work encompasses also his judgment as to the degree to which the Corps of Engineers would enforce safety regulations for the protection of a contractor's employees. Plaintiffs and the Warner Company have opposed the Government's motion for summary judgment. Plaintiffs assert three theories of liability against the Government. Joined by Warner Company, plaintiffs *1007 first contend that the Government was in possession of the disposal site, but failed to use reasonable care to protect Bloom, a business invitee, from an unreasonable risk of harm about which the Government knew or should have known. Giannone v. United States Steel Corp., 238 F.2d 544 (3d Cir.1956); Restatement (Second) Torts § 343. Second, plaintiffs contend that the Government is liable because the Army Corps should have recognized that the overhanging electric wires presented, in the absence of "special precautions," a "peculiar unreasonable risk of physical harm" to workers at the disposal site, but failed either to require by contract that American Dredging safeguard the worksite or to take such precautions on its own. Restatement (Second) Torts § 413; Toole v. United States, 588 F.2d 403 (3d Cir.1978) (duty to warn contractor or its employee arose where Government had superior knowledge of special danger); Gonzalez v. United States Steel Corp., 484 Pa. 277, 398 A.2d 1378 (1979). Third, plaintiffs assert that the Government retained control over the dredging operation and the energized wire at issue in this case. Restatement (Second) Torts § 414; Byrd v. Merwin, 456 Pa. 516, 317 A.2d 280 (1974); DiSalvatore v. United States, 456 F.Supp. 1079 (E.D.Pa.1978). In response to the Government's discretionary function argument, plaintiffs and the Warner Company deny that their theories of liability effectively seek review of policy-laden governmental decisions. In their view, the Government's liability for Bloom's death arises from its breach of rather mundane duties of care shared by all possessors of land and employers of independent contractors. B. Discussion The Federal Tort Claims Act, 28 U.S.C. § 1346(b), vests jurisdiction in the district courts over suits against the United States for damages for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred. Under the Act, the Government is liable with respect to tort claims "in the same manner and to the same extent as a private individual under like circumstances...." 28 U.S.C. § 2674. The waiver of sovereign immunity embodied in the Tort Claims Act, however, is subject to several important limitations and exceptions. As a threshold matter, the Act authorizes suit against the United States only on account of the negligent or otherwise wrongful conduct of a Government employee. Thus excluded from the Act's coverage are theories of strict liability and vicarious liability for the torts of independent contractors. Laird v. Nelms, 406 U.S. 797, 92 S.Ct. 1899, 32 L.Ed.2d 499 (1972); United States v. Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976). The jurisdiction conferred by the Tort Claims Act is also subject to several exceptions the effect of which is to preclude liability notwithstanding that state law would impose liability on a similarly situated private party. The most prominent of these exceptions is the discretionary function exception, 28 U.S.C. § 2680(a). As recently interpreted by the Supreme Court in United States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), ___ U.S. ___, 104 S.Ct. 2755, 81 L.Ed.2d 660 (1984), the discretionary function exception bars any lawsuit in which the gravamen of the plaintiff's complaint directly or indirectly challenges a decision which Congress intended to insulate from judicial review through the medium of a common law tort suit. The starting point for any case under the Federal Tort Claims Act, however, is the plaintiff's case against the Government under principles of otherwise applicable law, here the law of Pennsylvania. In the case at bar, therefore, I will first determine whether there exists a genuine issue of *1008 material fact with respect to a theory of liability involving the negligence or wrongful conduct of Government employees. For the reasons that follow, I conclude that the Government is entitled to summary judgment on the basis of principles of state tort law. For the most part, therefore, I need not decide whether the suit is barred by the discretionary function exception. At the outset, it should be made clear that the record abundantly supports the Government's contention that its supervision of the dredging operation was exercised simply to assure the Government that it was receiving the benefit of its bargain. Both the Government's contract with American Dredging Company and the affidavit of Stephen Lalli demonstrate that American Dredging, an independent contractor, retained and exercised responsibility for the daily operation of the landfill as well as the safety of American Dredging's employees. Although Lalli reported minor safety violations to American Dredging supervisors and felt he had the authority to stop work if he perceived a life-threatening hazard, his routine duties were to monitor the level of water in the dikes and to measure "spillway density" to assure that dredged material was not being returned to the river. The Army Corps' limited involvement in the actual dredging operation is confirmed by the Corps' minimal presence on the Falls Township tract. Whereas American Dredging employed approximately fifty employees and various subcontractors to operate the disposal site twenty-four hours a day, seven days a week, the Corps assigned only Lalli to inspect the site on a forty hour per week basis. Consistent with this limited supervisory role, the Corps did not assign inspectors to the site on weekends. On the basis of this record, I conclude that the Government cannot be held liable as possessor of the land on which Bloom's death occurred. Confronted with far greater evidence of the Government's supervision of a contractor, our court of appeals has reversed as clearly erroneous a district court finding that the Government was in possession of a construction site. Fisher v. United States, 441 F.2d 1288 (3d Cir.1971). In Fisher, the district court concluded that the Government had possession of a construction site on the basis of evidence that the Government assigned to the project a "resident engineer" who had "general charge of the construction" and the "authority to require the contractor's compliance with a safety plan." Id. at 1290. The record also contained evidence that the Government assigned two or more "inspectors whose duties included seeing that the work was done in accordance with specifications, enforcing safety regulations, and issuing safety directions." Id. at 1290-1291 (footnotes omitted). Despite this evidence, the court of appeals overturned the district court's finding that the Government had possession of the site. The appellate court's rationale requires rejection of the present effort to characterize the Government as possessor of the Falls Township tract: The law of Pennsylvania makes it clear that one who employs an independent contractor may also employ a person to ascertain that the work is done according to plans and specifications and that the employment of such a person in no way indicates that the independent contractor is being subjected to control.... This is a corollary to the long recognized general right of inspection and supervision that an owner normally enjoys and exercises to insure his receiving from the contractor the benefit or total performance bargained for. In employing those men, the United States was only seeking to protect itself and to insure that the contractors were performing in the manner required of them under the contract.... We conclude that the district court's finding that the United States was in possession of the site based on the presence of the Government's engineer and inspectors was clearly erroneous. Id. at 1291 (citations and footnote omitted). See also Brletich v. United States Steel Corp., 445 Pa. 525, 285 A.2d 133 (1971). *1009 Plaintiffs make much of an isolated statement by Francis Branagan, an employee of the Warner Company, reporting a conversation he had with unspecified representatives apparently of the Army Corps of Engineers. When deposed on the issue of Warner's involvement at the location of the accident, Branagan responded that he made occasional visits but no inspections, and that his request to have certain dredged materials relocated was rebuffed by someone who added that the Army Corps "runs it." Taking this remark out of context, plaintiffs claim that the record shows the Army Corps' pervasive control over the operation. I cannot agree. The record is otherwise barren of evidence that the Government troubled itself with the details of operating this project. Standing against the Government's unequivocal affidavit demonstrating the Army Corps' limited role, Branagan's statement is insufficient to create a genuine issue of material fact. Under a similar analysis, plaintiff's third theory of liability, premised on Restatement (Second) Torts § 414, must be rejected. In this regard plaintiffs contend that the Government is liable for Bloom's death because it controlled the dredging operation and the energized wires at issue in this case. Section 414 permits imposition of liability against an employer of an independent contractor who "retains the control of any part of the work ... for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care." See Byrd v. Merwin, 456 Pa. 516, 317 A.2d 280 (1974). Although there has been some uncertainty as to the level of control over a contractor that is required to subject an employer to liability under section 414, there has emerged a consensus that liability may not be imposed simply because the employer retained either the general power to stop work or the right to inspect and supervise the results of the contractor's operation. Retention of such powers is consistent with the employer's legitimate interest in assuring itself that the contractor is properly fulfilling its obligations. Rather, to establish liability under section 414, it is necessary to show that the employer retained control over the manner of the contractor's work or the operational detail of the construction project, and that the employer's negligent control of the work caused physical harm. See generally, Byrd v. Merwin, supra; Hurst v. Triad Shipping Co., 554 F.2d 1237 (3d Cir.), cert. denied, 434 U.S. 861, 98 S.Ct. 188, 54 L.Ed.2d 134 (1977); Fisher v. United States, supra; Marshall v. Southeastern Pennsylvania Transportation Authority, 587 F.Supp. 258, 264-266 (E.D.Pa.1984); Sharkey v. Airco, Inc., 522 F.Supp. 646, 650-652 (E.D.Pa.1981) (section 414 properly invoked where "retained control is tantamount to reservation of the power to direct the manner in which the contractors produce the result...."), aff'd mem., 688 F.2d 824 (3d Cir.1982); Toole v. United States, 443 F.Supp. 1204, 1223-24 (E.D.Pa.1977), rev'd on other grounds, 588 F.2d 403 (3d Cir.1978). Liability under section 414 is therefore based directly on the negligence of the employer; it is not a theory of vicarious liability for the contractor's misdeeds. Hurst v. Triad Shipping Co., supra; Sharkey v. Airco, Inc., supra; Moss v. Swann Oil, Inc., 423 F.Supp. 1280, 1282 (E.D.Pa.1976), aff'd mem., 566 F.2d 1168 (3d Cir.1977). Application of section 414 to the Government as an employer of an independent contractor requires particular attention to the Tort Claims Act's limitation of liability to that caused by the negligence or other malfeasance of Government employees. Our court of appeals and other appellate courts have "consistently held that the United States cannot be vicariously liable for injuries to workmen on Government construction sites, solely because the Government has retained control over the work and safety practices of the independent contractor whose negligence caused the injury." Gibson v. United States, 567 F.2d 1237, 1243 (3d Cir.1977), cert. denied, 436 U.S. 925, 98 S.Ct. 2819, 56 L.Ed.2d 768 *1010 (1978). In short, to impose liability against the Government under Restatement (Second) Torts § 414, it is necessary for the plaintiff to show: (1) that the Government retained control over the manner of contractor's work or the operational detail of the project, (2) that the manner in which the Government or its employees controlled the contractor constituted negligence or an otherwise wrongful act, independent of fault attributable to the contractor, and (3) that the Government's negligence or wrongful act caused physical harm. Applying this standard to the facts of this case, plaintiffs' claim under section 414 cannot survive the Government's motion for summary judgment. As discussed above, our court of appeals specifically rejected the contention, and a district court's finding, that the Government exercised control over a contractor by inspection and supervision of the results of the contractor's work. Fisher v. United States, supra. The evidence of Government involvement was far greater in Fisher than plaintiffs have been able to muster in the case at bar. The record in this case is devoid of any suggestion that the Government controlled either the manner in which American Dredging conducted its operation or the operative detail of the dredging project. I must therefore grant the Government's motion for summary judgment as to plaintiffs' section 414 claim. Plaintiffs' lone remaining theory of liability against the Government is premised on Restatement (Second) Torts § 413 and the variation of § 416 or § 427 liability enunciated by our court of appeals in Toole v. United States, 588 F.2d 403 (3d Cir.1978). Under section 413 plaintiffs contend that the Government is liable because the energized wires in the vicinity of dredging operations presented, in the absence of "special precautions" an "unreasonable risk of physical harm," and that the Government failed either to require American Dredging to take special precautions or to take such precautions itself. Under Toole v. United States, plaintiffs claim that the Government had superior knowledge of the special danger presented by energized wires, but failed to warn either American Dredging or Bloom of the danger.[3] Section 413 of the Restatement imposes liability against [o]ne who employs an independent contractor to do work which the employer should recognize as likely to create, during its progress, a peculiar unreasonable risk of physical harm to others unless special precautions are taken ... for physical harm caused to them by the absence of such precautions if the employer (a) fails to provide in the contract that the contractor shall take such precautions, or (b) fails to exercise reasonable care to provide in some other manner for the taking of such precautions. Interpreting analogous language in sections 416 and 427 of the Restatement, the courts have held that the presence of uninsulated energized electric wires in close proximity to a construction zone is a condition that an employer should recognize as likely to create an unreasonable risk of harm in the absence of special precautions. Nationwide Mutual Insurance Co. v. Philadelphia Electric Co., 443 F.Supp. 1140, 1144-45 (E.D.Pa.1977); Colloi v. Philadelphia Electric Co., 332 Pa.Super.Ct. 284, 297, 481 A.2d 616, 622-23 (1984) (underground power line). See also Philadelphia Electric Co. v. James Julian, Inc., 425 Pa. 217, 228 A.2d 669 (1967) (underground gas main). As a theory of direct negligence on the part of an employer, however, section 413 *1011 limits the duty imposed by that section in accord with the attenuated relationship between an employer and the employees of his independent contractor. In particular, both the Restatement and Pennsylvania caselaw enable the employer to satisfy his duty by providing in the contract that the contractor must take the special precautions necessitated by the peculiar hazards attendant to the work. Restatement (Second) Torts § 413(a); Gonzalez v. United States Steel Corp., 484 Pa. 277, 398 A.2d 1378 (1979). This is in contrast to rules of vicarious liability contained in sections 416 and 427 of the Restatement which do not permit an employer to avoid by contract its responsibility for a contractor's negligence. See Restatement (Second) Torts § 416, comment c. In the case at bar, the record demonstrates that the Government satisfied its duty under section 413 by requiring American Dredging to abide by safety regulations which, if followed, would have prevented Bloom's death. In relevant portion, the contract between the Government and American Dredging Company required American Dredging to comply with Army Corps of Engineers Manual EM 385-1-1 (June 1, 1977), which was entitled "General Safety Requirements." Contract No. DACW 61-81-C-0166, ¶ 52(a). Although the Army Corps' safety manual has not been made part of the record in its entirety, the record makes clear that the manual included several provisions compliance with which by the contractor would have prevented Bloom's accident. For example, as recited in the Army Corps' internal report on the accident, paragraph 11a17 provided "When moving equipment under or near energized lines, a designated employee shall be utilized to determine that required clearance is maintained." United States Army Corps of Engineers, Board of Investigation Report at 5. More importantly, also as related by the report, paragraph 15e08 provided in part: Operations adjacent to overhead lines are prohibited unless one of the following conditions is satisfied: (a) Power has been shut off and positive means taken to prevent the lines from being energized. (b) Equipment or any part thereof does not have the capability of coming within the following minimum clearance from energized overhead lines, and equipment has been positioned and blocked to assure no part thereof including cables can come within the following minimum clearances. POWER LINES MINIMUM NOMINAL SYSTEM KV REQUIRED CLEARANCE 50 or under ...........10 feet (3.05m) . . . . . A notice of the minimum required clearance shall be posted at the Operator's position. Electric line derrick trucks and aerial lifts shall not be required to comply with this requirement. Id. at 5-6. Plaintiffs do not dispute that provisions of the safety manual addressed operation of equipment in the vicinity of overhead electric lines, or that compliance with the regulations would have prevented Bloom's death. Indeed, it is plaintiffs' contention that the Government's liability (as the alleged possessor of the disposal site) arises from the lack of compliance with the same safety regulations which were included in the 1981 edition of the safety manual. Plaintiffs' contention misses the mark. A contractor's failure to comply with the safety manual does not give rise to liability against the Government under the Federal Tort Claims Act. LeSuer v. United States, 617 F.2d 1197, 1198-99 (5th Cir.1980). To the contrary, inclusion of adequate safety regulations in the manual, made binding on the contractor by the contract, discharges the Government's duty as an employer under section 413. Closely related to plaintiffs' cause of action under section 413 is plaintiffs' claim under Toole v. United States, supra. In Toole, our court of appeals predicted that Pennsylvania law would recognize a cause of action against an employer of an independent contractor for harm to the contractor's employees which was caused by *1012 the employer's failure to give warning of a special danger about which the employer had superior knowledge. Relying on Pennsylvania's adoption of sections 416 and 427 of the Restatement, the court reasoned that Pennsylvania's courts would, if the question were presented, impose a duty on an employer to prevent accidents avoidable through communication of the employer's particular expertise. The court determined in that case that the Government was negligent for failing to warn a contractor engaged in manufacturing anti-tank explosives about the inadequacy of tests of a safety shield. The Government had superior knowledge of the danger because Government employees recognized, but failed to call to the contractor's attention, that the Government's safety manual required far more severe testing than the contractor had conducted. In the instant case, however, the "superior knowledge" theory of negligence is of no assistance to the plaintiffs. As an initial matter, I have some doubt whether the presence of overhead power lines on a construction site could be deemed a "special danger" within the intent of Toole v. United States. Although an employer of an independent contractor may well have a duty to disclose the presence of concealed hazards or dangers that an independent contractor should not be expected to comprehend, the peril associated with overhead wires near mobile equipment has so long been recognized by contractors engaged in such activity that imposition of liability against the employer would make little sense under a theory of the employer's negligence. More importantly, the record in this case simply does not permit a reasonable inference that the Government had "superior knowledge" of the danger. If nothing else, the record demonstrates that American Dredging Company was acutely aware of the hazard presented by overhead wires. Robert L. Berg, a general superintendent and vice president of American Dredging at the time of the accident, testified at deposition that he was aware of the lines before the accident and that he instructed his subordinate, Richard M. Mascio, to treat the lines as energized, and to instruct personnel to treat them likewise and to stay away from them. Stanley Forrest, Bloom's immediate supervisor, confirmed in his deposition that he received instructions from Berg and Mascio. His orders were to consider the lines "hot." He was further directed to instruct his employees to treat them as "hot," to stay at least thirty feet from the wires, and not to work underneath them. Forrest stated that he relayed those instructions to Bloom, and that he warned his employees about the wires at safety meetings conducted every other Monday during the project. In response to this evidence, plaintiffs respond that a genuine issue of fact exists as to whether Bloom was personally informed of the danger of overhead wires. Plaintiffs also argue that liability may be imposed because the Army Corps did not warn American Dredging or Bloom that the wires were in fact energized. Neither contention has merit. Assuming arguendo that Bloom did not receive a personal warning, liability on the part of the Government is foreclosed by the fact that Bloom's employer had notice of the danger and recognized its obligation to caution its employees. To rule otherwise would require the Government and other employers of independent contractors to provide individual notice to all members of the often fluid workforces of their contractors. Plaintiffs have identified no precedent imposing such a duty, and I decline to so extend the obligations already imposed by Pennsylvania law.[4] Equally unavailing is plaintiff's attempt to impose liability because American *1013 Dredging had not been informed of the actual use of the electric wires. This is indeed a tenuous distinction when it is apparent that the contractor recognized the risk that the lines were energized. In any event, uncontested testimony establishes that not all wires traversing the Falls Township Tract on the same poles were energized. Under these circumstances, the only prudent warning would have required that all lines be treated as "hot." This, of course, was precisely American Dredging's policy. In short, on the record of this case I conclude that none of the theories of liability articulated by plaintiffs can form the basis for liability against the United States. I must therefore grant the Government's motion. V. A. The Contentions Warner Company's motion for summary judgment also requires extended analysis. Plaintiffs' claim against Warner rests on Warner's ownership and alleged control of both the land and the energized wires on which Bloom's accident occurred. In response, Warner's motion for summary judgment attacks virtually every necessary element of plaintiffs' cause of action in tort. Warner resists plaintiffs' effort to characterize it as possessor of the Falls Township tract, contending that it transferred possession of the site to the Army Corps of Engineers well before the date of the accident. With respect to its conceded ownership of the power lines, Warner argues: (1) that it discharged its duty by warning the Army Corps and American Dredging of the danger, (2) that any breach of duty on the part of Warner cannot be the legal cause of Bloom's death because both the Army Corps and American Dredging had actual knowledge of the hazard, (3) that Bloom's supervisors at American Dredging warned him of the danger, (4) that the danger was open and obvious, and (5) that it was not reasonably foreseeable that workers on the disposal site would take the extraordinary steps taken by Bloom to come in contact with the power lines. Plaintiffs and the Government have opposed Warner's motion. Plaintiffs assert two theories of liability against Warner. First, contending that Warner had far greater involvement with dredging operations than its motion suggests, plaintiffs claim that Warner remained bound to observe the duty of care owed by possessors of land to their business invitees. Giannone v. United States Steel Corp., 238 F.2d 544 (3d Cir.1956); Restatement (Second) Torts § 343. Plaintiffs dispute Warner's assertion that it conveyed the disposal site to the Army Corps. Together with at least some of the Government's memoranda of law, plaintiffs note that the conveyance executed by Warner in favor of the Government was termed an "easement." Plaintiffs' second theory of liability centers on Warner's ownership and control of the energized power lines. Plaintiffs point out that Pennsylvania law has long required suppliers of electricity and those in possession of energized wires to exercise the highest standards of care for the safety of persons foreseeably in the proximity of their wires. See Colloi v. Philadelphia Electric Co., 332 Pa.Super. 284, 292-94, 481 A.2d 616, 620-21 (1984), and cases cited therein. From that premise plaintiffs contend that Warner breached its duty to Bloom by failing to provide an adequate warning of the danger and in failing to take other steps such as elevation or relocation of the lines. Plaintiffs contend that a genuine issue of fact exists as to whether Bloom was warned of the danger in view of his intentional contact with the line and his contemporaneous statement that the lines were not energized. Plaintiffs further argue that even an actual warning would not have discharged Warner's duty under the Pennsylvania Supreme Court's decision in Stimmel v. Kerr, 394 Pa. 609, 148 A.2d 232 (1959). Also relying on Stimmel v. Kerr, plaintiffs deny that the danger presented by the wires was open and obvious, and *1014 they invoke the presumption that the decedent exercised due care for his own safety. With respect to the warnings given to the Army Corps and American Dredging, plaintiffs dispute whether any Warner representative notified American Dredging of the existence of the lines, and they contest the adequacy of any warnings so given. Finally, plaintiffs claim that the circumstances of this accident were reasonably foreseeable because Warner Company or its contractor built the dikes as part of Warner's agreement with the Government, and used heavy equipment on top of the dikes when doing so. Plaintiffs argue that it was therefore foreseeable that the dikes would need repair or fortification and that a contractor would use heavy equipment on top of the dikes to complete that operation. B. Background Resolution of Warner Company's motion for summary judgment requires, in the first instance, a careful review of Warner's involvement at the Falls Township tract and the circumstances of Bloom's accident. The record makes clear that Bloom's accident took place at a Falls Township, Pennsylvania disposal site known as area 24D/25. The land, owned by Warner Company, was the subject of a conveyance through the Temporary Delaware River Spoil Disposal Easement Agreement, dated August 15, 1980. The agreement enabled the Army Corps to deposit dredged materials from the Delaware River onto the disposal site, and to excavate drainage ditches and build retaining walls in furtherance of that project. The agreement was originally negotiated as a one year agreement, and was extended to two years on May 8, 1981. Warner concedes that its contract with the Army Corps required Warner, through its subcontractor, to construct a dike to specifications supplied by the Army Corps. It is also apparent that Warner built the dike at issue in this case, that there was an opening in the dike in the area of poles which carried the power lines, and that Warner eventually finished the dike. Although based on hearsay and not directly relevant, there is some suggestion that Warner required American to leave the opening in the dike to permit Warner to remove sand and gravel until American was about to take over. When finished, the apex of the dike was approximately seventeen or eighteen feet beneath the electric wires which crossed the dike in the northeast section where the accident occurred, and again in the southern portion. Also crossing the dike at the site of the accident, however, were two other lines, a neutral electrical wire and a telephone wire. Although the precise distance between the top of the dike and the telephone wire is not clear, it is apparent that it was low enough to prevent passage of Bloom's Komatsu front end loader, a bulldozer ten feet in height. Warner continued to work in the vicinity of the dikes from the time American Dredging first assigned employees to the project in June, 1981 until approximately July, 1981 at which time Warner turned over the dike to the Army Corps. Thereafter, Warner assigned no employees to the Falls Township tract, and had no authority to direct disposal operations. The record also establishes that Warner had no contractual relationship with American Dredging, and no authority to alter the Government's specifications for the disposal site. On the date of the accident, Bloom was operating his front end loader together with his subordinate, George Roane. At some point the Army Corps' inspector, Stephen Lalli, determined that water in the dike was too close to the apex of the dike, and that dredged materials were being returned to the river in an excessive amount. In response to Lalli's direction that corrective action be taken, Richard Mascio and Stanley Forrest ordered Bloom to reinforce portions of the southern end of the dike, but not to disturb the northern wall. Bloom and Roane completed their assignment, but then began to drive the front end loader along the top of the wall of the dike toward the northern side. With Bloom preceding the front end loader on foot, the front end loader traveled north until the point at which the lines crossed the dike. *1015 Recognizing that the bulldozer would not pass beneath a low-hanging telephone line, Bloom climbed onto the hood of the front end loader, seized the telephone line and fastened it to the neutral electrical wire. Although the clearance thus provided measured approximately eleven feet, Bloom then ascended to the roof of the cab of the front end loader, apparently seeking to obtain greater clearance by affixing the lower wires to an overhanging, energized line. Despite Roane's caution that he would not touch the wires, Bloom grasped one of the wires with both hands and was electrocuted. C. Discussion Pennsylvania law imposes liability against a possessor of land for physical harm to invitees caused by the possessor's failure to exercise reasonable care. Giannone v. United States Steel Corp., 238 F.2d 544 (3d Cir.1956); Mathis v. Lukens Steel Co., 415 Pa. 262, 203 A.2d 482 (1964); Beary v. Pennsylvania Electric Co., 322 Pa.Super. 52, 469 A.2d 176 (1983). See also Restatement (Second) Torts § 343. Pennsylvania law makes clear, however, that title ownership is not a sufficient basis for liability; it is the possessor of land that bears responsibility for dangerous conditions that arise on the premises. Bagley v. Philadelphia, 148 Pa.Super.Ct. 318, 326, 25 A.2d 579, 582 (1942); Whitaker v. Hills, 430 F.Supp. 1389, 1390-91 (E.D.Pa.1977). Under Restatement (Second) Torts § 328E(a), a possessor of land is one "who is in occupation of the land with intent to control it...." Plaintiffs' effort to characterize Warner as the possessor of the disposal site is plainly inadequate in view of the evidence demonstrating Warner's lack of control over the land subsequent to July, 1981. The record establishes that Warner assigned no employees to the Falls Township tract, had no authority to direct disposal operations, and had no involvement with either the Government's specifications for the disposal site or the contractor chosen to fulfill them. In short, control over the operation of the disposal site was the province of the Government and/or its contractor, not of the Warner Company. Plaintiffs' (and the Government's) argument that Warner conveyed only "limited rights" through the "easement" transferred to the Government is an attempt to elevate form over substance. From the record before me, it is clear that Warner authorized the Government to conduct a major landfill operation on Warner's land and to exercise exclusive control over it. Designation of the conveyance as an "easement" did not render Warner responsible for premises over which it had ceded control. Likewise unpersuasive is plaintiffs' contention that Warner Company was significantly involved in the actual dredging operation. Although Warner did, on its own or through a subcontractor, prepare the site for the Army Corps' arrival, Warner's activity at the disposal site ceased well before Bloom's accident.[5] Plaintiffs' claim against Warner as possessor of the energized power lines presents a more substantial question. As was established by the documents supporting PECO's motion for summary judgment, Warner Company owned the lines and poles used to conduct electricity through the Falls Township tract. Plaintiffs have also identified some evidence that Warner refused to permit relocation of the lines when asked to do so by the Army Corps before dredging began. Pennsylvania law has long recognized a duty upon those in control of energized power lines to observe a standard of care commensurate with the degree of danger *1016 imposed by electrical lines. Fitzgerald v. Edison Electric Illuminating Co., 200 Pa. 540, 50 A. 161 (1901). As owner of the wires at issue in this case, therefore, Warner was bound to exercise the highest standard of care practicable to protect those foreseeably in the proximity of its wires. Warner first contends that it discharged its duty to Bloom by warning the Army Corps and American Dredging of the energized lines. Plaintiffs contest the adequacy of the warnings, and dispute that a warning allegedly given to American Dredging by George Widman, an employee of G.R.O.W.S., Inc., discharged the duty of Warner, apparently a distinct entity. Warner rejoins that the source and adequacy of the warnings are unimportant because the record demonstrates that both the Army Corps and American Dredging had actual notice of the danger and adopted a policy of treating all lines as energized. Thus, Warner concludes, any failure to warn on its part cannot be the legal cause of Bloom's death. I need not resolve the parties' dispute as to the source and adequacy of the warnings, for I conclude that Pennsylvania law does not permit a possessor of electric lines to discharge its duty by warning a contractor such as American Dredging or an employer such as the Government. This result is compelled by our court of appeals' decision in Dunnaway v. Duquesne Light Co., 423 F.2d 66 (3d Cir.1970). In Dunnaway, suit was brought against a power company on behalf of an employee of a contractor killed when a crane made contact with the power company's wires. On appeal after a jury verdict for the plaintiff, the court of appeals reversed, but concluded in relevant part that the power company did not conclusively discharge its duty to the decedent by warning the contractor that employed him. A warning does not automatically discharge an electric company of its duty to those in proximity to its wire. Rather, a warning is only one element to be considered by the jury in determining whether the electric company has exercised reasonable care to protect against the danger. 423 F.2d at 68-69 (footnote and citations omitted). The court of appeals reasoned that a simple warning may not discharge the power company's high standard of care to workers whose attention might be directed to their work and not to the dangers around them. The adequacy of a warning in relieving an electric company from liability must depend on both the expected efficacy of the warning and the availability of more effective alternate precautions. Experience has taught that from time to time a crane operator with full knowledge of the danger will bring the boom in contact with overhead wires. Id. at 69 (footnote omitted). Warner next contends that it cannot be held liable because Bloom himself was warned of the danger. Relying on Dunnaway, plaintiffs argue that proof of a warning would not entitle Warner to summary judgment. Moreover, plaintiffs dispute that Bloom received such a warning in view of Bloom's conduct and evidence that Bloom stated that the wires were "dead" as he was about to grasp them. Addressing first the question whether Warner fulfilled its duty by warning Bloom of the danger, I conclude that both the Dunnaway decision and the facts of this case preclude my acceptance of Warner's position. Initially, there is no evidence that representatives of Warner Company advised Bloom of the danger, either orally or by posted signs. Warner Company's claim that it observed its duty thus hinges on the adequacy of its warning to Bloom's employer or the Army Corps. For the reasons stated above, such a warning is not dispositive under Pennsylvania law. More importantly, the court of appeals ruled in Dunnaway that warnings issued by a possessor of energized wires are not *1017 conclusive with respect to the question whether the possessor observed its duty of care. Careful review of the court of appeals' opinion demonstrates that this is true even if the possessor gives notice of the danger to the worker subsequently injured. 423 F.2d at 68 & n. 1. The rationale for this rule is that a busy worker's momentary inadvertence is a common risk against which a possessor of electric wires might be expected to take precautions. Id. at 69. It is an entirely different question, however, whether the failure of a possessor of power lines to take precautions other than warning can be deemed the legal cause of harm resulting from the intentional grasp of a wire by a person advised of the danger. It would be an extraordinary principle of law that would impose liability against the possessor for such harm, and were I confronted with that question I would likely conclude either that Bloom's death was not proximately caused by Warner's negligence or that Bloom was an "unforeseeable plaintiff" with respect to Warner's conduct. I conclude, however, that the record now before me does not establish that Bloom actually received warning that the lines were energized. Some suggestion that Bloom was not warned is furnished by his conduct, which can only be characterized as a determined effort to reach Warner's electrified wire. Of far greater significance is Bloom's statement to his subordinate, George Roane, that the lines were "dead." Bloom's statement is reported in deposition testimony given by Roane and in a certified copy of a report of the accident given by Roane on the day after the accident. Although Roane's deposition does not pinpoint when Bloom made such statements, the testimony suggests that Bloom so advised Roane on more than one occasion. Roane's certified statement reports that the statements were made in response to Roane's attempt to caution Bloom immediately before the accident. Warner challenges the admissibility of Roane's deposition and certified statement on the ground that these out-of-court statements constitute inadmissible hearsay under Fed.R.Evid. 802 or, at best, limited evidence of Bloom's state of mind under Fed.R.Evid. 803(3). I disagree. Rule 801 defines hearsay as "a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." Specifically excluded from the Rule are statements offered for a purpose other than to prove the truth of what the declarant said. Plaintiffs clearly have not offered Bloom's statements as reported by Roane to prove the truth of what Bloom asserted, namely, that the lines were not energized. Relying exclusively on Roane's deposition testimony, I conclude that a genuine issue of material fact exists as to whether Bloom was informed of the energized wires. The record contains sufficient evidence for a jury to conclude that Bloom was unaware of the danger at or near the time of his accident. A reasonable jury could infer from that finding that Bloom was not informed of the hazard. Warner's reference to unequivocal testimony to the contrary from Stanley Forrest, Bloom's immediate supervisor, does not change this conclusion; resolution of conflicting evidence is the province of a jury. Similar reasons compel rejection of Warner's argument that the danger was open and obvious. It should be noted initially that the "open and obvious" rule, derived from Restatement (Second) Torts § 343, is essentially a limitation of the duty of possessors of land to use reasonable care to protect invitees from defective conditions on the premises. In view of the more exacting standard of care imposed on possessors of energized power lines, it might not be appropriate to apply a similar limitation to the duty of a defendant sought to be held liable as a possessor of such lines. In any event, I cannot say as a matter of law that Warner Company's power lines *1018 presented an open and obvious danger to Bloom. I have previously held that a reasonable jury could find that Bloom was not warned of the electrified wires. In the absence of a warning, Pennsylvania courts have consistently refused to equate the mere presence of overhead wires with the existence of an open and obvious hazard. Stimmel v. Kerr, 394 Pa. 609, 148 A.2d 232 (1959); Stark v. Lehigh Foundries, Inc., 388 Pa. 1, 130 A.2d 123 (1957); Brillhart v. Edison Light & Power Co., 368 Pa. 307, 82 A.2d 44 (1951); Fitzgerald v. Edison Electric Illuminating Co., supra. Cf. Repyneck v. Tarantino, 415 Pa. 92, 202 A.2d 105 (1964) (contributory negligence established where plaintiffs were aware of danger, but allowed crane to touch wires). Warner's attempt to distinguish this line of precedent on the ground that Bloom acted intentionally is not persuasive. That Bloom made a determined effort to reach the energized wire is relevant to the question whether his accident was foreseeable and to the issue of contributory negligence (which has not been argued). Bloom's intent, however, did not convert the danger presented by the wire into an open and obvious condition.[6] Having disposed of Warner's arguments concerning discharge of its duty and Bloom's awareness of the danger, there remains for my consideration Warner's most potent argument, advanced primarily in its first reply memorandum, that the circumstances of Bloom's death were so unforeseeable that it was not under a duty to prevent such an occurrence. In advancing this argument, Warner relies on the court of appeals' decision in Dunnaway v. Duquesne Light Co., 423 F.2d 66 (3d Cir. 1970). Recognizing that Bloom's death would not have occurred in the absence of what must be regarded as extraordinary conduct on the part of the decedent, plaintiffs nevertheless contend that Warner's involvement with the disposal site put it on notice of the risk of an accident of this sort. Plaintiffs point out that Warner, the owner of the Falls Township tract, built the dike on which Bloom was killed, and that it operated heavy machinery on top of the dike when doing so. Plaintiffs contend that Warner also was on notice that American Dredging employees operated heavy equipment on the dike. From these facts, plaintiffs argue that Warner should have foreseen that the dike might need repair or fortification, that American Dredging employees might drive machinery such as a front end loader on top of the dike, and that an employee of American Dredging might attempt to gain clearance for such a vehicle by manually raising low-hanging wires. In Dunnaway v. Duquesne Light Co., our court of appeals made clear that a possessor of electrical lines has a duty to take preventative action only as to those dangers reasonably foreseeable to the possessor. The court noted that the possessor is required "to anticipate the customary uses of the land beneath its wires." 423 F.2d at 69. But to hold a possessor responsible for harms resulting from unusual occurrences, the court ruled that the possessor must have notice of the special activity in the vicinity of its lines. Id. Particularly instructive is the Dunnaway court's application of that standard to the case before it. As noted above, Dunnaway was a case brought against a power company by an employee of a contractor killed when a crane made contact with an energized wire. At the point of impact, the wire was 39.4 feet from the ground. The crane, which had a 100 foot boom,[7] was used to transfer concrete from trucks to an *1019 area at the floor of a bridge then under construction. Although the power company had no "actual knowledge of the crane's actual or prospective use immediately beneath its wires," and did not have enough time to discover the crane beneath its wires in the ordinary course of inspection, the company had notice of the general use of cranes and other equipment in the construction area near its lines. Id. The court of appeals held that knowledge of the use of such equipment was not sufficient to charge the power company with "notice that a crane would be used under its wires." Id. Relying on Stark v. Lehigh Foundries, Inc., 388 Pa. 1, 130 A.2d 123 (1957), the court reasoned that to impute notice of use of a mobile crane beneath the wires would effectively require that the power company maintain constant surveillance over the construction site. Following the Pennsylvania Supreme Court's decision in Stark, the court of appeals declined to impose such a duty. Numerous cases decided in accord with the rationale of Dunnaway and Stark confirm that mere notice of mobile equipment in the vicinity of power lines is not sufficient to apprise the possessor of the danger; where the lines are sufficiently elevated to preclude contact through ordinary activity, liability can be imposed only if the possessor has notice of the actual use of such equipment in close proximity to its wires. Kronk v. West Penn Power Co., 422 Pa. 458, 222 A.2d 720 (1966); Luketich v. Duquesne Light Co., 389 Pa. 87, 132 A.2d 268 (1957); Reed v. Duquesne Light Co., 354 Pa. 325, 47 A.2d 136 (1946); Nationwide Mutual Insurance Co. v. Philadelphia Electric Co., 443 F.Supp. 1140, 1151 (E.D.Pa.1977); Guglielmo v. Scotti & Sons, Inc., 58 F.R.D. 413, 422-23 (W.D.Pa. 1973). After careful consideration of the standard set forth in Dunnaway in relation to the record in this case, I conclude that no reasonable jury could find that Bloom's accident was foreseeable by Warner. I must therefore grant Warner's motion for summary judgment. It is clear, primarily, that Bloom's accident did not result from customary activity in the vicinity of Warner's power lines. Contrary to plaintiff's contention, the record is devoid of evidence that either Warner or American Dredging had reason to expect that an employee of American Dredging would attempt to scale with heavy machinery the top of a wall of a filled dike. Uncontroverted testimony from Richard Mascio and Stanley Forrest establishes not only that they, as supervisors directly involved with the dredging operation, had no knowledge of any prior incidents involving machinery such as a front end loader on top of the dike, but also that American Dredging strictly forbade any such activity. Likewise uncontroverted is testimony from Mascio and Forrest that both supervisors directly communicated that rule to Bloom. The rather intuitive rationale for prohibiting machinery on top of the dikes is twofold: Heavy machinery on top of a soaked wall of a dike tends to crush the wall, and the steep slopes of the dike make operation of wide equipment at the narrow apex of the wall dangerous to employees. Plaintiffs' contention that Warner had notice of American Dredging's employees on top of the dike is based on the testimony of Francis Branagan, an employee of Warner, who admitted seeing some equipment on top of unspecified dikes. Branagan's statements, however, provide little suggestion that Warner should have foreseen the use of equipment on top of the dike and near its power lines. Careful review of Branagan's testimony reveals that his knowledge of equipment on top of the dikes was limited, with one possible exception, to the time of construction of the dikes. Branagan's testimony provides no evidence that he was aware of any use of machinery in dangerous proximity to the power lines in conjunction with the dredging operations. *1020 Quite apart from the lack of notice of equipment on top of the dike, Warner cannot fairly be charged with notice that Bloom, having put himself in that position, would come in contact with the energized wires. Even after completion of the dike, the clearance between the surface of the dike and energized wires remained approximately seventeen feet, clearly preventing Bloom's bulldozer, a vehicle ten feet in height, from touching the lines. Undaunted, plaintiffs argue that Warner should have foreseen that an American Dredging employee would attempt to drive heavy machinery along the wall of the dike, that lower-hanging neutral wires would impede passage of the vehicle, and that such an employee would manually raise the wires in an effort to obtain clearance. But as Warner points out, not even prediction of that scenario would have enabled Warner to foresee Bloom's accident. The record in this case is abundantly clear that, having gained clearance for his vehicle, Bloom then climbed onto the top of the cab of his bulldozer, and purposefully reached or jumped to grasp wires above his head. Plaintiffs do not specifically contend that Bloom's effort to reach the overhead wire was foreseeable, and I could not permit a jury to find that such extraordinary behavior should have been anticipated.[8] Plaintiffs' final argument, perhaps resting on the notion that the exceptional character of Bloom's series of acts is relevant only to the issue of contributory negligence, is that Pennsylvania law affords the decedent a presumption that he exercised due care for his own safety. This argument is unavailing. The presumption, of course, gives way upon the introduction of evidence to the contrary. More importantly, although relevant to contributory negligence and the question whether any negligence of Warner could be held the proximate cause of Bloom's death, the foreseeability of the decedent's conduct is also relevant to the question whether Warner owed a duty to prevent this accident. The risks against which a possessor of energized wires has a duty to take precaution are limited to those arising from customary activity in the vicinity of its lines and special activity of which the possessor has notice. Dunnaway v. Duquesne Light Co. The record in this case establishes that Bloom's operation of the bulldozer at the apex of a filled dike and his purposeful contact with wires from atop the cab of his vehicle were no more customary than operation of a tall crane underneath energized wires. The record fails to establish a basis for a finding that Warner had reason to expect that Bloom would do so. For these reasons, I conclude that, under the principles set forth in Dunnaway v. Duquesne Light Co., Warner could not have foreseen the circumstances of Bloom's accident, and thus was not obligated to guard against it. I must therefore grant Warner's motion for summary judgment. NOTES [1] Plaintiffs' action against the United States was filed separately after exhaustion of administrative remedies. By Order dated October 2, 1984, I consolidated the cases for all purposes. [2] Because of the contractual relationship between American Dredging and the United States, those parties, with my approval, agreed to postpone the Government's response to American's motion until after I disposed of the Government's motion for summary judgment. [3] Plaintiffs also ascribe to the Army Corps a "non-delegable duty" to prevent "peculiar unreasonable risks" to the employees of independent contractors. To the extent this theory imputes liability without fault of Government employees it is not available under the Federal Tort Claims Act. Gibson v. United States, 567 F.2d 1237, 1242-44 (3d Cir.1977), cert. denied, 436 U.S. 925, 98 S.Ct. 2819, 56 L.Ed.2d 768 (1978). To the extent liability is predicated upon the Government's own negligence with respect to the special danger, this contention adds nothing to plaintiffs' claims under section 413 and Toole v. United States. [4] To hold otherwise would raise serious questions under the discretionary function exception. It is conceded by all parties that the Army Corps has the discretion to complete dredging projects through independent contractors. A significant portion of that discretion would effectively be eviscerated by imposition of a duty to ensure that each employee of an independent contractor received proper warnings. [5] Assuming arguendo that Warner was under an obligation as transferor of the land to warn the transferee of the wires, it is clear that Warner observed that duty. Uncontradicted testimony from Francis Branagan establishes that the Army Corps was warned of the danger. Assuming further that Warner was bound to caution American Dredging, the record demonstrates that any breach of that duty was not the cause of the accident because American Dredging in fact had notice of the danger. [6] Warner's contention that the danger was open and obvious because the wires visibly ran to a nearby energy-consuming plant is not convincing, and the factual basis for that argument is not clearly established by the record. [7] The boom was doubled in size from 50 feet approximately a week to ten days before the accident. [8] Despite plaintiffs' statement to the contrary at oral argument, there is no basis in the record for a jury to conclude that Bloom was told that the lines were not energized.

2023-08-22 21:20:16.395502+00

Peeples

OPINION PEEPLES, Justice. Plaintiff San Antonio Press, Inc. appeals a take-nothing judgment in favor of the three defendants it sued for damages resulting from a fire on its premises. It complains of the trial court’s failure to sanction one defendant, American Fan Company, for altering the condition of a fan that allegedly caused the fire, and the court’s failure to exclude the testimony of three expert witnesses. We affirm because plaintiff has left unchallenged the jury’s no-damage finding, which supports the judgment regardless of the correctness of the liability findings. The jury found the liability issues against plaintiff; plaintiff’s points of error, if sustained, would undermine those findings. But the jury also found that plaintiff had not proved damages, a finding that independently supports the take-nothing judgment. That finding is not challenged. When a separate and independent ground that supports a judgment is not challenged on appeal, the appellate court must affirm. See Nobility Homes, Inc. v. Shivers, 557 S.W.2d 77, 83 (Tex.1977); First Bankers Ins. Co. v. Newell, 471 S.W.2d 795, 796 (Tex.1971); Midway Nat’l Bank v. West Texas Wholesale Supply Co., 453 S.W.2d 460, 461 (Tex.1970); Texas Dep’t of Human Resources v. Orr, 730 S.W.2d 435, 436 (Tex.App.—Austin 1987, no writ); see also Boatland of Houston, Inc. v. Bailey, 609 S.W.2d 743, 750 (Tex.1980) (“Generally, error in the submission of an issue is harmless when the findings of the jury in answer to other issues are sufficient to support the judgment.”). If the rule were otherwise, an appellant could avoid the adverse effect of a separate and independent basis for the judgment by ignoring it and leaving it unchallenged. This rule has been consistently applied to jury findings that a plaintiff did not establish damages. When an unchallenged no-damages finding supports a take-nothing judgment, any error in the liability findings is harmless. See, e.g., Hancock v. City of San Antonio, 800 S.W.2d 881, 885 (Tex.App.—San Antonio 1990, writ denied); Canales v. National Union Fire Ins. Co., 763 S.W.2d 20, 23 (Tex.App.—Corpus Christi 1988, writ denied); Easley v. Castle Manor Nursing Home, 731 S.W.2d 743, 744 (Tex.App.—Dallas 1987, no writ); Roe-*66ver v. Delaney, 589 S.W.2d 180, 182 (Tex.Civ.App.—Fort Worth 1979, no writ); Lewis v. Isthmian Lines, Inc., 425 S.W.2d 893, 894-95 (Tex.Civ.App.—Houston [14th Dist.] 1968, no writ). The no-damage finding fully supports the court's take-nothing judgment. Even if the jury had found liability, the no-damages finding would have compelled a take-nothing judgment unless it was successfully challenged (for example, as being against the weight of the evidence). Plaintiff has not attacked the no-damage finding in any way. Indeed, it did not complain of the answer in its motion for new trial, as rule 324(b) requires. See TEX.R.CIV.P. 324(b). Even if error were preserved, because of the deference given to jury findings we could not set aside the no-damage finding for factual insufficiency without detailing the evidence and saying why it is against the weight of the evidence. See Cropper v. Caterpillar Tractor Co., 754 S.W.2d 646, 652 (Tex.1988); Lofton v. Texas Brine Corp., 720 S.W.2d 804, 805 (Tex.1986); Alm v. Aluminum Co. of America, 717 S.W.2d 588, 594-95 (Tex.1986); Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986); Raul A. Gonzalez & Rob Gilbreath, Appellate Review of a Jury’s Finding of “Zero Damages”, 54 Tex.B.J. 418 (1991). This we cannot do, because unless fundamental error is presented, we may not sustain an argument that was not preserved in the trial court or in this court. Vawter v. Garvey, 786 S.W.2d 263, 264 (Tex.1990); Tex.R.App.P. 52(a). Plaintiff suggested at oral argument that the damage issue was irreparably tainted by American Fan’s spoliation of evidence. We are not told how the evidence of what may or may not have caused a fire affects whether damages proximately resulting from the fire were proved. But even if spoliation tainted the damages aspect of the case, the rules require an appellant at least to assign the no-damage finding as error and present argument to this court why it is tainted and cannot stand. Plaintiffs brief does not attack the damage answer in any way; indeed the brief does not even mention it. Even if we were to sustain plaintiffs liability points of error, the unchallenged no-damages finding requires us to affirm. We nevertheless address the allegation of evidence spoliation because we think that such a serious charge should be addressed even though we must affirm the judgment for procedural reasons. In addressing this issue, we note that plaintiff does not suggest that the defense attorneys played a part in the spoliation or condoned it in any way. The record shows that plaintiffs premises suffered a fire in November 1986. Evidence suggested a blower motor made by American Fan Company was the cause. Plaintiffs expert Rodney Fuchs promptly investigated the fire and in December disassembled the motor in his laboratory and took several photographs of it. Plaintiffs experts again took the motor apart and photographed it in September and October 1987. In March 1990 defendants obtained the motor for examination and testing, but it was agreed there would be no “destructive” testing. American Fan sought permission in June 1990 to operate the motor under stress, which would alter its condition; a court denied this request in August 1990, but by that time American Fan’s expert Robert Scott had already done the test. During a deposition of a defense expert in February 1991, it became known that Scott had operated the motor and tested it. Plaintiff sought sanctions before trial, but before a pre-trial judge had heard from all parties he expressed doubt about his authority to sanction because no judge had ever signed the agreed order prohibiting destructive testing. At that point plaintiff’s attorney withdrew his motion for sanctions in open court, without prejudice to reurge it later. Because the motion was withdrawn and also because the court did not hear from the defendants at the sanctions hearing, we reject plaintiff’s argument that the events at this pretrial hearing somehow bear upon the spoliation issue on this appeal. The case was called for trial before a different judge, who took under advise*67ment the issue of spoliation of evidence and sanctions, saving the matter for decision later during the trial. Ultimately the trial court ruled that American Fan could not present the expert’s deposition testimony about his testing; the court ruled that plaintiff could present the deposition if it desired, or American Fan could bring the witness live so that he would face fresh cross-examination. American Fan chose not to offer the expert’s testimony live, and plaintiff did not offer his deposition. Plaintiff had asked the court to strike American Fan’s pleadings, to instruct the jury that the bearing caused the fire, or to instruct the jury that it could presume the pre-test condition of the motor would have been unfavorable to American Fan. We hold that the court did not abuse its discretion by granting less severe sanctions than plaintiff requested. The choice of sanctions is largely a matter for the trial court’s discretion. Willful violations may justify severe sanctions. See Plorin v. Bedrock Found. & House Leveling Co., 755 S.W.2d 490, 490-92 (Tex.App.—Dallas 1988, writ denied); Southern Pac. Transp. Co. v. Evans, 590 S.W.2d 515, 518-19 (Tex.Civ.App.—Houston [1st Dist.] 1979, writ ref’d n.r.e.), cert. denied, 449 U.S. 994, 101 S.Ct. 531, 66 L.Ed.2d 291 (1980). The intentional, deliberate destruction of evidence raises a presumption that the evidence would have been unfavorable to the destroying party. Newton v. General Manager of Scurlock’s Supermarket, 546 S.W.2d 76, 78-79 (Tex.Civ.App.—Corpus Christi 1976, no writ); H.E. Butt Grocery Co. v. Bruner, 530 S.W.2d 340, 344 (Tex.Civ.App.—Waco 1975, writ dism’d); 1 Roy R. Ray, Texas Law of Evidence § 103 (Texas Practice 1980). But here there was, at most, a fact issue whether American Fan’s expert intentionally violated the agreed order or intentionally altered or destroyed evidence; the court could well have concluded that any alteration of the motor by testing was done through mistake and misunderstanding and not with the intent to hide or destroy evidence. We cannot disturb the trial court’s resolution of conflicting testimony in a sanctions dispute unless the court abused its discretion; nor will we substitute our judgment for the trial court’s decision to impose a lesser sanction than plaintiff requested. See Chrysler Corp. v. Blackmon, 841 S.W.2d 844, 852-53 (Tex.1992); United States Fidelity & Guar. Co. v. Rossa, 830 S.W.2d 668, 672 (Tex.App.—Waco 1992, writ denied). The spoliation cases cited above focused on whether the spoliation of evidence was intentional and deliberate. Thus this case is unlike Bruner, in which an employee of the slip-and-fall defendant told another employee to “get rid of” the onion that plaintiff slipped on. And it is unlike Plorin, a construction defect case in which plaintiffs hired a firm to repair the defects in their house before they gave the defendant a chance to inspect it. Here the experts simply energized and ran the motor, which altered its condition but did not destroy it. And here the trial court was aware that the jury was able to consider photographs of the motor in its original condition and testimony about the motor’s condition before and after testing. We hold that the trial court did not abuse its discretion by granting a sanction less severe than requested. The judgment is affirmed.

2023-08-22 21:20:16.399468+00

Chapa

CHAPA, Justice, concurring. In concur in the results, but only because an unchallenged no-damage finding supports a take-nothing judgment, and renders harmless any error in the liability instructions of findings. See e.g., Hancock v. City of San Antonio, 800 S.W.2d 881, 885 (Tex.App.—San Antonio 1990, writ denied); Canales v. Nat’l Union Fire Ins. Co., 763 S.W.2d 20, 23 (Tex.App.—Corpus Christi 1988, writ denied); Howard v. Faberge, Inc., 679 S.W.2d 644, 650 (Tex.App.—Houston [1st Dist.] 1994, writ ref’d n.r.e.); Szmalec v. Madro, 650 S.W.2d 514, 517 (Tex.App.—Houston [14th Dist.] 1983, writ ref’d n.r.e.); Mitchell v. Chaparral Chrysler-Plymouth Sales, Inc., 572 S.W.2d 359, 361 (Tex.Civ.App.—Fort Worth 1978, writ ref’d n.r.e.).

2013-10-30 06:32:39.178849+00

Duffy

367 A.2d 178 (1976) DELAWARE OLDS, INC., a corporation of the State of Delaware, and William Luke, Jr., Defendants below, Appellants and Cross-Appellees, v. Michael DIXON, Plaintiff below, Appellee and Cross-Appellant. No. 193. Supreme Court of Delaware. Submitted September 22, 1976. Decided October 21, 1976. Richard W. Pell, of Tybout & Redfearn, Wilmington, for defendants below, appellants and cross-appellees. Wilfred J. Smith, Jr., Wilmington, and James C. Eberly, Sr., Georgetown, for plaintiff below, appellee and cross-appellant. Before HERRMANN, C. J., and DUFFY and McNEILLY, JJ. DUFFY, Justice: In this civil action for assault and battery, a Superior Court jury returned a verdict for plaintiff. On defendants' motion, the Court ordered a new trial on the issue of damages, holding that it was error for plaintiff's counsel in his summation to ask the jurors to place themselves in plaintiff's position.[1] We conclude that a new *179 trial should be ordered as to liability as well as to damages. The form of appeal made to the jury in this case is commonly known as the "golden rule argument." Briefly, a "`[g]olden rule argument' is where counsel asks the jury to place themselves in the shoes of a party to the suit in arriving at a verdict, and to render such verdict as they would want rendered in case they were similarly situated." 18 Words and Phrases, Golden Rule Argument, p. 716 (1956), citing Ravel v. Couravallos, Tex.Civ.App., 245 S.W.2d 731, 734 (1952) Apparently, there is not a reported Delaware decision discussing the rule, but it is universally held that such argument is improper[2] and will constitute reversible error when the Trial Court fails to give a specific cautionary instruction to the jury to disregard the statement of counsel. Millen v. Miller, 224 Pa.Super. 569, 308 A. 2d 115, 118 (1973). Here, defendants' objection and request for a curative instruction were timely raised. But the Trial Court did not admonish the jury to disregard the statements made by plaintiff's counsel. Traditionally, Courts had carefully tried to eliminate appeals for sympathy in jury trials. Thus, in F. W. Woolworth Co. v. Wilson, 5 Cir., 74 F.2d 439 (1934), the Court said: "Sympathy for suffering and indignation at wrong are worthy sentiments, but they are not safe visitors in the courtroom, for they may blind the eyes of Justice. They may not enter the jury box, nor be heard on the witness stand, nor speak too loudly through the voice of counsel." See 75 Am.Jur.2d, Trial § 781. Jurors are expected to apply common sense and experience in making the findings essential to justice, but justice is not done if a juror simply places himself in the position of an injured party. Our system demands of jurors a prudent, disinterested evaluation of the evidence, not an emotional identification with a party. Indeed, neither the rules of evidence nor other legal guidelines would have much meaning if subjective judgments were the tests for persuasion. Fairness to all parties is the duty of jurors, as well as judges, and that is difficult to achieve under the best of circumstances. And our best chance of realizing that high hope is through the application of uniform standards governing the admission of evidence and the rules which the jury must follow in considering it. A plea for sympathy is, in essence, an appeal to abandon such standards and, necessarily, it must be rejected. We approve for Delaware the general rule stated in 53 Am.Jur., Trial § 496: "It is, ..., improper for counsel to appeal to the sympathy of the jury, either directly or indirectly, as, for example, by asking the jury, in a personal injury action, to put themselves in the plaintiff's place, if they would go through life in the condition of the injured plaintiff ...." *180 See Annot., Argument-Taking Position of Litigant, 70 A.L.R.2d 935. We agree with the Superior Court that this rule was violated and it follows that a new trial must be had. But, in our judgment, the comments were so inextricably intertwined with the evidence on the issue of liability that fairness requires that the trial cover that issue as well. As this Court observed in Chrysler Corporation v. Quimby, Del.Supr., 1 Storey 264, 144 A.2d 123, 139 (1958), "[T]he guiding principle in reaching a decision [on whether to limit a new trial to damages only] is the determination of whether the jury, in awarding damages, has been or may be influenced by the circumstances giving rise to the liability." The facts here fall within the "may have been" aspect of the rule and, hence, a fragmented trial would not serve the interests of justice. * * * Reversed and remanded for proceedings consistent herewith. NOTES [1] The pertinent argument made by counsel to the jury was as follows: "Looking at the aftermath of this thing — I don't know what to call it — look at the extent of the injuries sustained. Try to imagine, if you can, what it will be like to have only one eye for the rest of your life. It is difficult for you to do. Try to imagine, if you can, from the condition of Mr. Dixon, as shown by these photographs, the amount of pain that this man had to suffer while he went through this experience. Try to imagine the fright, and the anxiety, and fear, that he would have had during that experience, and also subsequent to that when it was learned that he was totally blind in his right eye, and when he further learned that there was no hope of the sight ever being restored in that eye, that he would have to live out the rest of his life with one eye. Mr. Dixon has told you some of the activities he can no longer engage in. Mr. Dixon's wife has told you other activities which they used to enjoy and no longer enjoy as a result of his not being able to see out of his right eye. [2] Bullock v. Branch, Fla.App., 130 So.2d 74 (1961); Colgan v. Raymond, 275 Minn. 219, 146 N.W.2d 530 (1966); Copiah Dairies Inc. v. Addkison, 247 Miss. 327, 153 So.2d 689, 694 (1963); Faught v. Washam, Mo., 329 S.W.2d 588, 602 (1959); Boyd v. Pernicano, 79 Nev. 356, 385 P.2d 342, 343 (1963); Jackson v. Southwestern Public Service Co., 66 N.M. 458, 349 P.2d 1029, 1040 (1960); Roth v. Jelden, 80 S.D. 40, 118 N.W.2d 20 (1962); Phillips v. Fulghum, 203 Va. 543, 125 S.E.2d 835 (1962).

2013-10-30 06:32:39.184533+00

West

615 F.Supp. 465 (1985) FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver of Penn Square Bank, N.A., Plaintiff, v. Bill P. JENNINGS; Eldon L. Beller; William G. Patterson; John R. Preston; Carl W. Swan; and C.F. Kimberling, Sr., Defendants, and Peat Marwick Mitchell & Co., a partnership, Additional Party-Defendant. No. CIV-84-1612-W. United States District Court, W.D. Oklahoma. August 15, 1985. *466 Richard B. Noulles, Charles C. Baker, David L. Bryant, Gable & Gotwals, Tulsa, Okl., Ted N. Pool, Sherman, Pool, Thompson & Coldiron, Del City, Okl., for plaintiff. Charles C. Green and Robert Turner, Turner, Turner, Green & Braun, Oklahoma City, Okl., for Jennings. Richard Talley and L. Keye Farrar, Norman, Okl., for Beller. Burck Bailey, Warren F. Bickford, IV, Fellers, Snider, Blankenship, Bailey & Tippens, Oklahoma City, Okl., for Patterson. John Goodman, Oklahoma City, Okl., for Preston. John W. Vardaman, Jr., Washington, D.C., Peter B. Bradford, Bradford, Haswell & Jones, Oklahoma City, Okl., for Swan. John E. Green, Asst. U.S. Atty., Oklahoma City, Okl., for the U.S. Ross Arbiter, Stanley W. Levy, Weinberg, Zipser, Arbiter & Heller, Los Angeles, Cal., Erwin E. Adler, Carol Lynch, Richards, Watson, Dreyfuss & Gershon, Los Angeles, Cal., Gene A. Castleberry, Robert A. Wiener, Oklahoma City, Okl., for Professional Asset Management, Inc. Gary A. Bryant, G. Blaine Schwabe, III, Mock, Schwabe, Waldo, Elder, Reeves & Bryant, Oklahoma City, Okl., Larry K. Griffis, Butzell, Keidan, Simon, Myers & Graham, Detroit, Mich., for Michigan Nat. Bank, N.A. J. William Conger, James C. Prince, Hartzog, Conger & Cason, Earl D. Mills, Mills, Whitten, Mills & Mills, Oklahoma City, Okl., Edwin D. Scott, Peat, Marwick, Mitchell & Co., New York City, William E. Hegarty, Mathias E. Mone, Dean Ringer, Cahill, Gordon & Reindel, New York City, for Peat, Marwick, Mitchell & Co. David T. Hedges, Jr., Vinson & Elkins, Houston, Tex., James E. Work, Shirk, Work, Robinson & Williams, Oklahoma City, Okl., for Coe, Cook, Haugland, Richardson, Smelser, Kenworthy, Randolph and Ross. James A. Kirk, Kirk & Chaney, Oklahoma City, Okl., for Stubbs. Robert C. Margo, Oklahoma City, Okl., for Marvin K. Margo, M.D. Harold M. Durall, Oklahoma City, Okl., for Murphy. K. Phillip Knierim, Mark S. Simonian, Wood, Lucksinger & Epstein, Los Angeles, Cal., Joan M. Bernott, Special Litigation Counsel, Torts Branch, Civ. Div., U.S. Dept. of Justice, Washington, D.C., for James and Roe. James W. Bill Berry, Oklahoma City, Okl., Wilmer Cutler Pickering, Washington, D.C., for Burks. Phillip F. Horning, Horning, Johnson & Grove, Judson M. Fink, Oklahoma City, Okl., for Dunn. ORDER LEE R. WEST, District Judge. Background The Federal Deposit Insurance Corporation, as Receiver for Penn Square Bank, on behalf of the Bank's depositors and shareholders, has filed suit against the Bank's officers, directors and independent auditors. As to the auditors, Peat, Marwick, Mitchell & Co. ("Peat"), the Receiver alleged negligence, malpractice, and breach of common law duties and professional standards. Peat responded by filing a third-party action against the FDIC, in its corporate capacity, and the Office of the Comptroller of Currency ("OCC"), alleging that the Comptroller's examination and declaration of the Bank's insolvency, and the FDIC's determination to liquidate the Bank, constituted common law negligence, breach of statutory duties to depositors and creditors, and concurrent liability for *467 any damages recovered from Peat. Presently before the Court is the motion of the United States, on behalf of OCC and FDIC as third party defendants, to dismiss Peat's counterclaim and third party action. DISCUSSION The Federal Tort Claims Act is a limited waiver of sovereign immunity allowing certain enumerated kinds of lawsuits to proceed against the government. 28 U.S.C. § 1346(b). The Act contains express exceptions for suits which remain barred by sovereign immunity. The exceptions include: "(a) Any claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation, whether or not such statute or regulation be valid, or based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused;" and "(h) Any claim arising out of misrepresentation ..." 28 U.S.C. § 2680(a), (h). The Act's legislative history indicates that Congress did not intend to create liability for errors by government agencies or officials in administration, policy judgments or exercise of "discretionary functions". Dalehite v. United States, 346 U.S. 15, 33-37, 73 S.Ct. 956, 966-69, 97 L.Ed. 1427 (1953); Emch v. United States, 630 F.2d 523 (7th Cir.1980). The Court finds that Peat's third-party claims fall within the "discretionary function" exceptions to the Tort Claims Act. The Court also finds that Peat's claims in Counts I and II of its third-party complaint are premised on concepts of governmental duty that case law does not recognize. Accordingly, for the reasons explained below, Peat's third party complaint is dismissed. Liquidation and Receivership Counts III and IV Peat critizes the FDIC for "refusing" to arrange a purchase and assumption of Penn Square and for failing to devise other means of financially assisting the Bank and protecting its depositors. Peat alleges that the FDIC's decision to liquidate the Bank, rather than attempt to "revive" it, was a concurrent cause of the Bank's losses for which Peat is being sued. (Although Peat has targeted the FDIC as the defendant on these counts, presumably because of the Corporation's authority to arrange emergency loans and "purchase and assumption" transactions (12 U.S.C. § 1823(c), (e), the Comptroller of the Currency, who is empowered to declare a national bank insolvent and appoint a receiver (12 U.S.C. § 192, 1821(c)) seemingly would also be involved.) It is evident that the decisions of whether and how to intervene in failing banks is discretionary with the FDIC. 12 U.S.C. § 1823 provides that: "(c) The Corporation is authorized, in its sole discretion and upon such terms and conditions as the Board of Directors may prescribe, to make loans to, to make deposits in, to purchase the assets or securities of, to assume the liabilities of, or to make contributions to, any insured bank — (A) if such action is taken to prevent the closing of such insured bank; (B) if, with respect to a closed insured bank, such action is taken to restore such closed insured bank to normal operation; or (C) if, when severe financial conditions exist which threaten the stability of a significant number of insured banks or of insured banks possessing significant financial resources, such action is taken in order to lessen the risk to the Corporation posed by such insured bank under such threat of instability. (2)(A) In order to facilitate a merger or consolidation of an insured bank described in subparagraph (B) with an insured institution or the sale of assets of such insured bank and the assumption of such insured bank's liabilities by an insured institution, or the acquisition of the *468 stock of such insured bank, the Corporation is authorized, in its sole discretion and upon such terms and conditions as the Board of Directors may prescribe— (i) to purchase any such assets or assume any such liabilities; (ii) to make loans or contributions to, or deposits in, or purchase the securities of, such insured institution or the company which controls or will acquire control of such insured institution; (iii) to guarantee such insured institution or the company which controls or will acquire control of such insured institution against the loss by reason of such insured instution's merging or consolidating with or assuming the liabilities and purchasing the assets of such insured bank or by reason of such company acquiring control of such insured bank; or (iv) to take any combination of the actions referred to in subparagraphs (i) through (iii)." Similarly, the FDIC can issue cease and desist orders if, in its "opinion", the Bank is engaging in unsafe and unsound practices. 12 U.S.C. § 1818(b)(1). This determination is also a matter of agency discretion. Davis v. Federal Deposit Insurance Corporation, 369 F.Supp. 277 (D.Colo.1974). Just as the Comptroller and FDIC have been attacked for not giving adequate assistance to some banks, they have been critized for giving too much to others. In the Franklin National Bank situation, "rescue attempts" through emergency reserve infusions and merger efforts were unsuccessful. Appellants in Huntington Towers Ltd. v. Franklin National Bank, 559 F.2d 863 (2d Cir.1977), argued that the Comptroller's rescue attempts were "in effect throwing good money after bad (and) should not have been made," but the Second Circuit held that such claims based on the Comptroller's decision and manner of intervention were barred. Observing that under the Federal Reserve Act the Comptroller "may" appoint a Receiver "whenever ... he shall become satisfied of the insolvency of a national banking association," the Court noted that "needless to say, the powers of determining the point at which a bank is no longer able to meet its obligations as they fall due involves a substantial amount of discretion", 559 F.2d at 870. Accord, Matter of American City Bank & Trust Co., 402 F.Supp. 1229, 1231 (D.Wis.1975) (Comptroller's discretion in insolvency determinations). As explained by the Second Circuit: "Both the fixing of the date of declaration of insolvency by the Comptroller and the granting of rescue funds to FNB (Franklin) by the Federal Reserve Board were exercises of judgment by the public officials concerned and were well within their competence and authority. Absent clear evidence of grossly arbitrary or capricious action on the part of either or both of them ... it is not for the courts to say whether or not the actions taken were justified in the public interest, particularly where it vitally concerned the operation and stability of the nation's banking system." Huntington Towers, 559 F.2d at 868. The FDIC's discretion in electing between liquidation of an insolvent bank and executing a purchase and assumption agreement is manifest in the Federal Reserve Act, 12 U.S.C. § 1823(c). While some courts have identified policy advantages from purchase and assumption transactions rather than liquidations (Gunter v. Hutcheson, 492 F.Supp. 546 (N.D.Ga.1980) aff'd 674 F.2d 862, 865-66 (11th Cir.1982)), none have declared the FDIC liable for choosing one course of action over another. Washington Federal Savings & Loan Asso. v. Federal Home Loan Bank Bd., 526 F.Supp. 343, 401-02 (N.D.Ohio 1981). In fact, analogous claims of wrongful liquidations and receiverships of savings and loan associations have been rejected, based on the discretionary function exception. First Federal Savings and Loan Assn., 531 F.Supp. 251, 254-55 (D.Hawaii 1981), Newberg v. Federal Savings and Loan Insurance Corp., 317 F.Supp. 1104 (N.D. Ill.1970). As the Supreme Court explained in Dalehite v. United States: *469 "the `discretion' protected by (the Tort Claims exception) ... is the discretion of the executive or administrator to act according to one's judgment of the best course ... It also includes determinations made by executives or administrators in establishing plans, specifications or schedules of operations. Where there is room for policy judgment and decision, there is room for discretion." 346 U.S. at 34-36, 73 S.Ct. at 967-968. The decision to liquidate Penn Square may have been unpopular; but in any event it was a discretionary governmental function within the meaning of § 2680(a). Accordingly, the government's liability is barred by the Act as to Counts III and IV and they are dismissed. Bank Examination Counts I and II Peat complains that the Comptroller's examinations and reports of the Bank's financial situation were negligent and misleading; that Peat based its audit on the Comptroller's misinformation; and therefore that the Comptroller is liable to Peat, either for the damages which Peat may be found owing to the Bank's shareholders or for Peat's costs of defense (if the Receiver's suit is unsuccessful). Without regard to Peat's rather tenuous theory of causation, we find that these counts do not state a claim for relief. The FDIC, in exercising it's statutory mission to administer the federal deposit insurance fund, is authorized to appoint and assign bank examiners who "shall have (the) power to make a special examination of any ... national bank ... whenever in the judgment of the (FDIC's) Board of Directors such special examination is necessary to determine the condition of any such bank for insurance purposes." 12 U.S.C. § 1820(b). The Comptroller reports the examiners' findings to the examined bank. Peat claims that the Comptroller expected Penn Square's directors to publicize the reports to Peat and knew, or should have known, that Peat would rely upon them. Federal regulations concerning the Comptroller's reports state that: "The Comptroller of the Currency makes available to each national bank and, in some cases to holding companies thereof, a copy of the report of examination of such bank or company. The report of examination is the property of the Comptroller and is loaned to the bank or holding company for its confidential use only. Under no circumstances shall the bank or holding company or any director, officer or employee thereof make public or disclose in any manner the report of examination or any portion of the contents thereof to any person or organization not officially connected with the bank as officer, director, employee, attorney, auditor or independent auditor. Any other disclosure or use of this report except as expressly permitted by the Comptroller of the Currency may be subject to the penalties provided in 18 U.S.C. § 641." 12 CFR § 4.19(c). Presumably, Peat is claiming "independent auditor" status entitling it to receive the Comptroller's reports on Penn Square. It is one thing to receive reports, however, and quite another to rely on them. In essence, Peat is claiming that its license for receipt was an excuse for reliance. FDIC counters that Peat had a professional duty to conduct its audit without relying on the Comptroller's findings. Regardless of the arguable aspect of causation and reliance, Peat's theory of liability vis-a-vis the government is defective because it is premised on a non-existent duty. The FDIC and the Comptroller, in their governmental functions, had no obligation to Peat, the Bank's privately retained auditors. Indeed, some courts have found that the FDIC, in examining a bank, has no duty to the Bank's directors or holding company (In re Southern Industrial Banking Corp. v. Tennessee, 49 B.R. 811 (Bkry.E.D.Tenn.1985); Emch v. U.S., supra), and some courts have held that the agency's allegiance is owed solely to maintaining the fiscal integrity of its deposit insurance fund. In re: Franklin National *470 Bank Securities Litigation, 445 F.Supp. 723, 730-31 (E.D.N.Y.1978); supp. op. 449 F.Supp. 574 (E.D.N.Y.1978); First State Bank of Hudson Co. v. U.S., 599 F.2d 558 (3d Cir.1979). As articulated by the Third Circuit, "The purpose of the bank examinations by the FDIC under 12 U.S.C. § 1820(b) is to prevent losses that would result in claims against the insurance fund. Nothing in the Act purports to establish any duty requiring that the FDIC warn banks of irregularities perpetrated by their officials. When the FDIC carried out its responsibilities under the Act by examining the Bank, its purpose was to safeguard this system of insurance ... The FDIC was not acting for the benefit of the Bank or even of the Bank's depositors and other creditors. If bank examinations by the FDIC reveal any irregularities or fraud, such examinations, though they may inure incidentally to the benefit of a bank, are intended primarily for the protection of the insurance fund." First State Bank of Hudson Co., 599 F.2d at 563, see also 565. In Emch v. United States, the plaintiff was a stockowner in the holding company of an insolvent national bank. He sued the Comptroller and the FDIC, claiming that bank examinations had been performed negligently and that as a result of the examiners' failure to take proper and adequate measures to correct the bank's deficiencies, the value of holding company's stock became worthless. Finding that "the essence of the claims is the allegation of negligent performance of regulatory and statutory supervision or monitoring of the bank entities," the Seventh Circuit held that such claims "cannot be sustained in light of the provisions of section 2680(a)." 630 F.2d at 528. The Circuit also held that: "Attempt(s) to saddle the government with liability on the basis of its failure, in the course of statutory regulatory activities, to anticipate the financial difficulties of (the) Bank, to insure the honesty and competency of its officers, and to successfully prevent the losses to (the Bank's) shareholders" were "claims of the type which sec. 2680(a) was designed to preclude." 630 F.2d at 528-29. Peat's case against the government falters on its threshold assumption that the Comptroller's and FDIC's statutory duties embrace common law tort concepts of foreseeable reliance by third parties, i.e. bank auditors. This theory is defective for two reasons: first, as discussed above, 28 U.S.C. § 2680(a) and (h) supplant common law tort theories by expressly negating the government's liability for discretionary functions or misrepresentations. Second, the statutory scheme for deposit insurance and bank examinations does not create a governmental duty to a national bank's independent auditors. Conceptually, these two reasons are different: one goes to the absence of duty while the other goes to a bar against recovery. In this case, however, their impact is the same: assuming, arguendo, that Peat in fact relied on the Comptroller's reports and examinations, this reliance was misplaced and did not give rise to compensable injuries. Peat stands in the same shoes as the rest of the general public, which has no basis in law to recover against the FDIC or Comptroller for failing to publicly disclose a bank's deteriorating financial condition. Davis v. Federal Deposit Insurance Corp., 369 F.Supp. 277, 280 (D.Colo.1974). Since there was no duty of disclosure to Peat or to the public and since recovery against the government is barred in any event, supra, the third party claims in Counts I and II are not actionable. Davis v. Federal Deposit Insurance Corp. CONCLUSION The government's motion is granted and the third party action by Peat, Marwick, Mitchell & Co. against the United States is dismissed. The United States' motion for a protective order is hereby rendered MOOT. If Peat, Marwick, Mitchell & Co. intend to pursue the documents previously requested from the United States, they must do so by *471 subpoena prior to the discovery cut-off date of September 1, 1985.

2013-10-30 06:32:39.237517+00

Anderson

852 S.W.2d 226 (1993) Roger KEE, Plaintiff-Appellant, v. SHELTER INSURANCE d/b/a Shelter Insurance Mutual Insurance Company, Defendant-Appellee. Supreme Court of Tennessee, at Jackson. April 5, 1993. J.T. Harris, Memphis, TN for plaintiff-appellant. Michael L. Robb, Elizabeth T. Collins, Thomason, Hendrix, Harvey, Johnson, Mitchell, Blanchard & Adams, Memphis, for defendant-appellee. OPINION ANDERSON, Justice. This appeal raises the issue of whether applying the recently amended Savings Statute, Tenn. Code Ann. § 28-1-105(b) (Supp. 1992),[1] to an insurance contract existing before the statute's amendment violates the prohibition in Article I, Section 20 of the Tennessee Constitution against passing "retrospective law, or law impairing the obligation of contracts." Prior to the amendment, Tennessee courts had interpreted the Savings Statute as not extending the contractual time limitation within which to bring suit for a loss. The policyholder argues on appeal that since the Savings *227 Statute affects only the remedy and not the right, it may be retroactively applied without violating the Tennessee Constitution. We conclude the retroactive application of the Savings Statute affects a contract right and, therefore, unconstitutionally impairs the obligation of the existing contract of insurance. Accordingly, we affirm the Court of Appeals. FACTUAL BACKGROUND In 1986, the plaintiff, Roger Kee ("Kee"), purchased a homeowner's insurance policy from the defendant, Shelter Mutual Insurance Company ("Shelter"). The policy contained a provision requiring that suits by the policyholder against the company be brought within "one year after the loss or damage occurs after any claim is denied." The insurance contract was renewed every six months until it was last renewed in June 1988. On July 26, 1988, Kee's home was destroyed by fire. He submitted a timely claim for loss, but it was denied on September 9, 1988, because of alleged fraudulent misrepresentations and nondisclosure on the policy application. Kee brought suit within the one-year contractual limitation period, on July 12, 1989, claiming that Shelter's denial of his claim breached the insurance contract. Later, on September 22, 1989, he voluntarily dismissed that action. The present suit was filed on April 18, 1990, again alleging that the denial of Kee's claim breached the insurance contract. Shelter moved to dismiss on the grounds that Kee had not complied with the contract's limitation-of-action provision requiring actions to be brought within one year after denial of a claim. Kee relied upon an amendment to the Savings Statute that became effective May 2, 1989 (after the contract was written and the fire loss occurred, but before the filing of the original action and voluntary dismissal), which provides: In the case of a contract which limits the time within which an action arising out of such contract must be brought, if such action is commenced within the time as limited by the contract but the judgment or decree is rendered against the plaintiff upon any ground not concluding his right of action, or where the judgment or decree is rendered in favor of the plaintiff, and is arrested, or reversed on appeal, the plaintiff, or his representatives or successors, as the case may be, may, from time to time, commence a new action within one (1) year after the nonsuit, dismissal without prejudice, reversal or arrest. Tenn. Code Ann. § 28-1-105(b) (Supp. 1992). The trial court agreed with Kee that the amendment saved the action, and denied Shelter's motion. Shelter was granted an interlocutory appeal, however, and the Court of Appeals reversed the trial court, concluding that applying the amendment retroactively to contracts executed before its effective date would violate Article I, Section 20 of the Tennessee Constitution, which provides "that no retrospective law, or law impairing the obligation of contracts, shall be made." We then granted Kee's application for permission to appeal. RETROSPECTIVE APPLICATION The original Savings Statute that was in effect when the homeowner's insurance contract was executed, and when the fire loss occurred, provided: If the action is commenced within the time limited by a rule or statute of limitation, but the judgment or decree is rendered against the plaintiff upon any ground not concluding his right of action, or where the judgment or decree is rendered in favor of the plaintiff, and is arrested, or reversed on appeal, the plaintiff, or his representatives and privies, as the case may be, may, from time to time, commence a new action within one (1) year after the reversal or arrest. Tenn. Code Ann. § 28-1-105(a) (1980). Prior decisions of the courts of this state had specifically held that a contractual provision limiting the time in which a suit could be brought was not extended by this statutory language. Guthrie v. Connecticut Indemnity Ass'n, 101 Tenn. 643, 49 S.W. 829 (1899); Schultz v. Hartford Mut. Ins. Co., 776 S.W.2d 76 (Tenn. App. 1987). *228 In Guthrie, the life insurance contract required suit to be filed within one year of the loss. The plaintiff filed suit within the year, but it was dismissed for insufficient service of process. A second suit was instituted within one year of the first suit, but more than one year after the loss. This Court found the Savings Statute to be inapplicable to the contractual limitation provision and affirmed the trial court's dismissal, stating: [W]e are of the opinion that the statute is wholly inapplicable in the present instance. It clearly refers to statutory, and not to contractual, limitations. Guthrie, 101 Tenn. at 648-49, 49 S.W. at 830. More recently, the Court of Appeals, in Schultz v. Harford Mut. Ins. Co., 776 S.W.2d 76 (Tenn. App. 1987), relied on Guthrie when it held that a fire insurance contract limitation provision is only satisfied if the action for the loss, which is commenced within the twelve months, is the action subsequently prosecuted to judgment. Schultz, 776 S.W.2d at 78. Despite the state of the law both at the time the parties executed this contract and at the time the loss occurred, Kee argues that the 1989 amendment to the Savings Statute applies because it is remedial and procedural, and as such, may be retrospectively applied to causes of action arising before its passage and to suits pending when the legislation takes effect. Shelter contends, however, that the legislature did not intend for the amendment to apply to contractual relationships already in existence at the time the amendment was adopted, nor does the Tennessee Constitution allow such application. Generally statutes are presumed to operate prospectively and not retroactively. Woods v. TRW, Inc., 557 S.W.2d 274, 275 (Tenn. 1977); Cates v. T.I.M.E., DC, Inc., 513 S.W.2d 508, 510 (Tenn. 1974). An exception exists, however, for statutes which are remedial or procedural in nature. Such statutes apply retrospectively, not only to causes of action arising before such acts become law, but also to all suits pending when the legislation takes effect, unless the legislature indicates a contrary intention or immediate application would produce an unjust result. Saylors v. Riggsbee, 544 S.W.2d 609, 610 (Tenn. 1976). The exception is also limited by the principle that retrospective application of a remedial or procedural statute is constitutionally forbidden if it takes away a vested right or impairs contractual obligations. Id.; see also Mid-South Milling Co., Inc. v. Loret Farms, Inc., 521 S.W.2d 586 (Tenn. 1975). Since we have stated that the Savings Statute is remedial and is to be liberally construed, Woods v. Palmer, 496 S.W.2d 474, 475 (Tenn. 1973); Morford v. Yong Kyun Cho, 732 S.W.2d 617, 619 (Tenn. App. 1987), we must now determine whether retrospectively applying the 1989 amendment takes away a vested right or impairs the obligation of contract. At the time that the contract at issue here was executed, Kee was contractually required to bring suit within one year after denial of the claim. Under the existing Tennessee court decisions, the Savings Statute did not apply to such a contractual limitation provision. It is well established that the laws affecting enforcement of a contract, and existing at the time and place of its execution, enter into and form a part of the contract. Robbins v. Life Ins. Co. of Virginia, 169 Tenn. 507, 89 S.W.2d 340 (1936); Lunati v. Progressive Bldg. & Loan Ass'n, 167 Tenn. 161, 67 S.W.2d 148 (1934); Webster v. Rose, 53 Tenn. 93 (1871); Cary v. Cary, 675 S.W.2d 491 (Tenn. App. 1984). In Webster, for example, we observed: Those laws which in any manner affect the contract, whether its construction, the mode of discharging it, or which control the obligation which the contract imposes, are essentially incorporated with the contract itself... . Webster, 53 Tenn at 100. Consequently, when we defined the phrase "obligation of contract," we said: [T]he legal obligation of contracts — that is, the legal means of enforcing them, which constituted their legal obligation, or the legal obligement by which they were enforced — should not be impaired or weakened, or rendered less effective, *229 than when the contract was entered into and the obligation imposed or taken upon the party... . Webster, 53 Tenn. at 98. In Hermitage Loan Co. v. Daykin, 165 Tenn. 503, 56 S.W.2d 164 (1933), this Court, applying the rule that remedies "must not be rendered less efficacious or more dilatory than those ordained by the law in being when the contract was made," refused to apply a statute declaring confession-of-judgment provisions void to notes executed prior to the statute's enactment. In a more recent case, this Court considered the question of whether a statutory amendment limiting coverage of uninsured motorist policies to compensatory damages only, applied in a case where the accident occurred more than a year before the amendment was passed, but the verdict awarding punitive damages was rendered nearly a year thereafter. Crimson v. Curtiss, 785 S.W.2d 353 (Tenn. 1990). There, we held that retrospective application of the amendment would "impair the accrued contractual rights of the insured" under the policy, id. at 354, because the claims of the insured against both the uninsured tort-feasor and the uninsured motorist carrier accrued on the date of the accident, and at that time, under a prior holding of this Court,[2] the terms of the policy covered punitive as well as compensatory damages. In the present case, the loss occurred, and therefore the contractual right accrued, nearly one year before the statutory amendment was adopted. At the time the insurance contract was executed and at the time of loss, the law of this state, as incorporated into the contract, required that the suit commenced within the contractually limited time be the suit prosecuted to judgment. The amendment, if applied retrospectively, negates that requirement and allows the policyholder to extend his cause of action, despite the fact that he failed to comply with the contractual obligation. Clearly, retrospective application of the amendment would impair the accrued contractual rights of the insuror. Accordingly, we conclude that where the contract was already executed and the contractual right accrued before the amendment's effective date, retrospectively applying the 1989 amendment impairs the obligation of contract and violates Article I, Section 20 of the Tennessee Constitution. As we stated in Webster v. Rose, supra: If the Legislature can enlarge the time one day in which the party is to perform what the legal obligation of his contract requires at the time it is entered into, it may do it for a hundred days; and if for this period, then it may equally well do it for a hundred years. There can be no difference in principle in the one case from that of the other; and thus the legal obligation is not only impaired, but practically destroyed. Can this tremendous power be fairly held to lurk within the principle of legislative power over the remedy for enforcement of a contract? We think not. 53 Tenn. at 102-03. Our conclusion comports with authority from other states. In Farmers Co-operative Creamery Co. v. Iowa State Ins. Co., 84 N.W. 904 (Iowa 1900), the fire insurance policy contained a six-month contractual limitation period. A fire loss occurred, and suit was filed after the six-months period. After the date of the fire loss, an Iowa statute was enacted prohibiting contractual limitation provisions of less than one year. The Iowa Supreme Court recognized that statutes of limitations are remedial, but held that contractual limitation provisions that affect the right cannot be changed by the legislature if the contract was executed and the right vested, by reason of the destruction of the property, before the statute took effect. Id. at 904-05; see also Smith & Marsh v. Northern Neck Mut. Fire Ass'n of Virginia, 112 Va. 192, 70 S.E. 482 (1911) (a statute voiding contractual time limitations of less than one year was applied to an existing contract where the loss did not occur, and therefore the contractual right did not accrue, until more than one year after the passage of the Act); see also Annotation, Application to *230 Period of Limitations Fixed by Contract, of Statute Permitting New Action to be Brought Within Specified Time After Failure of Prior Action for Cause Other Than on the Merits, 16 A.L.R.3d 452, 455 (1967). Accordingly, we conclude that the 1989 amendment to the Savings Statute may not be applied here, because the contract was executed and the contractual right accrued before the effective date of the statutory amendment. The decision of the Court of Appeals granting Shelter's motion to dismiss is affirmed. The costs of this appeal are taxed to the plaintiff-appellant, Roger Kee. REID, C.J., and DROWOTA, O'BRIEN and DAUGHTREY, JJ. NOTES [1] The amendment, adopted May 2, 1989, specifically applies the Savings Statute to contracts which limit the time within which an action may be brought. [2] Mullins v. Miller, 683 S.W.2d 669 (Tenn. 1984).

2013-10-30 06:32:39.247035+00

Levet

152 F.Supp. 637 (1957) Oscar WAGMAN and N. Wagman & Company, Incorporated, Petitioners, v. Elting ARNOLD, Acting Director, and Walter C. Gorsuch, Supervising Agent, Foreign Assets Control, Treasury Department. United States District Court S. D. New York. May 23, 1957. *638 Fulton, Walter & Halley, New York City, for petitioners. Joseph W. Burns, New York City, of counsel. Paul W. Williams, U. S. Atty., for the Southern Dist. of New York, for United States of America, Robert W. Bjork, Asst. U. S. Atty., New York City, of counsel. LEVET, District Judge. Oscar Wagman and N. Wagman & Company, Incorporated, have petitioned this court for an order quashing or modifying an administrative "subpoena" entitled "Order to Make Records Available for Examination" issued by the Foreign Assets Control Division of the Treasury Department, and directing that certain property be returned which allegedly had been unlawfully seized by agents of the Foreign Assets Control without a warrant. The Foreign Assets Control is a division of the Treasury Department and is authorized to enforce Section 5(b) of the Trading With the Enemy Act, 50 U.S. C.A.Appendix, § 5(b), which gives the President or his appointee the power during any period of national emergency to regulate or prohibit transactions with any foreign country or nationals thereof, and to require full records, reports and information concerning such transactions. The President delegated his power under this statute to the Secretary of the Treasury, Executive Order No. 9193, 50 U.S.C.A.Appendix, § 6 note. On December 17, 1950, in accordance with this authority and under the proclamation of a national emergency because of the Korean conflict, the Secretary of the Treasury promulgated the current Foreign Assets Control Regulations, 31 C.F. R. §§ 500.101 et seq. Section 500.204 of *639 these regulations prohibits individuals and corporations subject to the jurisdiction of the United States from engaging in any transaction concerning merchandise originating from Communist China or North Korea, unless specifically authorized by the Secretary of the Treasury or his designee. Hog bristles are expressly included in the category of merchandise within the meaning of this regulation. The Secretary of the Treasury's power to enact these regulations was upheld in United States v. China Daily News, Inc., 2 Cir., 1955, 224 F.2d 670, certiorari denied 350 U.S. 885, 76 S.Ct. 138, 100 L.Ed. 780. The petitioner, Oscar Wagman, is vicepresident and a director of the corporate petitioner, N. Wagman & Company, Incorporated. The corporation is engaged in the business of importing and exporting bristles, animal hair and wool. It maintains offices in Philadelphia, Pennsylvania, and New York City, New York. Prior to 1953, the bulk of the corporation's business was in China hog bristles. The corporation was licensed to import China hog bristles until sometime in 1952. Thereafter it could no longer lawfully import this commodity. In May, 1954, the New York Office of the Foreign Assets Control Division commenced an investigation of the Wagman corporation in order to ascertain whether or not in 1953 and 1954 the firm had engaged in transactions involving Chinese bristles in contravention of the Foreign Assets Control Regulations. The Foreign Assets Control Division was particularly interested in the Wagman corporation's connection with certain transactions involving the sale of China hog bristles by de Muinck & Company of Amsterdam, Holland to a Canadian brush manufacturing firm named T. S. Simms and Company, Ltd. Mr. Oscar Wagman appeared at the New York office of the Foreign Assets Control Division and permitted the agents to inspect certain of his files. He also furnished the agents with a detailed affidavit of his dealings with de Muinck and Simms in which he stated that he made a personal loan to Simms totaling $300,000 to enable Simms to purchase China hog bristles from de Muinck. The loan was without interest and allegedly made for the purpose of retaining Simms' good will. Further investigations of the Wagman corporation were made in August, 1956, when agents of the Foreign Assets Control Division simultaneously visited its Philadelphia and New York offices. At both offices the agents were informed that Oscar Wagman was in Europe. In addition, the agents visiting the New York office were advised by the secretary in charge that she had been in the corporation's employ only a short time and was not familiar with the files. The agents told her that they were Treasury agents, displayed their badges and asked to see the correspondence and records relating to the purchase and sale of hog bristles. There is some dispute as to whether the agents took several folders of documents from the file cabinets or whether the secretary handed the folders to the agents and told them that they might look through the file cabinet themselves. In any event, pursuant to a telephone conversation with the agents who were then in the corporation's Philadelphia office, the agents in the New York office discontinued their examination of the records and wrapped the documents, which they had removed from the files, in a shopping bag and then sealed the bag with a piece of paper on which they signed their names. They informed the secretary that they were going to leave the package in Oscar Wagman's office until they returned to continue the examination and that it would be unlawful to break the seal. No representative of the Treasury Department has had any access to these documents since that time. The package remained in the custody of the petitioners and their counsel until the hearing on this motion. Petitioners object to the "Order to Make Records Available for Examination," dated February 11, 1957, on the following grounds: *640 "1. The said Order is not authorized by law, as required by Section 6(b) of the Administrative Procedure Act, 5 U.S.C.A. Section 1005 (b). "2. The said Order unlawfully requires the production of documents and records made more than two years before February 11, 1957, and is unauthorized under Section 500.602 of Chapter V of Title 31 of the Code of Federal Regulations, 31 C. F.R. 500.602. "3. The said Order requires the production of records selected from petitioners' files in their office at 80 Wall Street, New York, N. Y. by Treasury Representatives, pursuant to unlawful search and seizure, in violation of the 4th Amendment to the Constitution of the United States. "4. The purpose of said Order is to procure evidence to compel petitioner Oscar Wagman to incriminate himself, in violation of the 5th Amendment to the Constitution of the United States." The parties to this motion have stipulated that the court might inspect the contents of the sealed package in order to determine whether the documents in the folders relate to corporate affairs or to private matters of Oscar Wagman. The stipulation was entered into without prejudice to petitioners' position that the distinction between corporate or private matters is immaterial, since it is claimed that the documents were obtained as a result of an unreasonable search and seizure within the meaning of the Fourth Amendment. The "Order to Make Records Available for Examination" which was issued to Mr. Oscar Wagman, individually and as vice-president of N. Wagman & Company, Incorporated, reads in part as follows: "Pursuant to Section 5(b) of the Trading with the Enemy Act, as amended, and Sections 500.601 and 500.602 of Chapter V of Title 31 of the Code of Federal Regulations, 31 CFR 500.601, 500.602, You and Each of You Are Hereby Required to Produce and Make Available: "The record within your custody or control, including all books of account, contracts, letters, memoranda or other papers relative to all transactions subject to the provisions of this Chapter engaged in by you and each of you on or since December 17, 1950 and relative to any property in which any foreign country or any national thereof has or has had any interest of any nature whatsoever, direct or indirect, on or since said date; "Including particularly those records which were selected from your files on August 3, 1956 by Treasury representatives and set aside by mutual consent; "And with specific reference to all dealings in Chinese hog bristles which you and each of you had with de Muinck & Co., Handelmatschappij N. V., Amsterdam, The Netherlands and with T. S. Simms & Co., Limited, Saint John, New Brunswick, Canada on and after January 1, 1953. "All of the foregoing documents and papers are required to be produced at Room 6, United States Court House, Foley Square, New York, N. Y., on the 27th day of February, 1957, at 10 o'clock A.M." Petitioners' contention that said Order is not authorized by law is predicated upon Section 6(b) of the Administrative Procedure Act, 5 U.S.C.A. § 1005(b), which provides in part as follows: "(b) No process, requirement of a report, inspection, or other investigative act or demand shall be issued, made, or enforced in any manner or for any purpose except as authorized by law." The Foreign Assets Control Division asserts that it is authorized to compel production of the letters and documents contained in the seized folders pursuant to Section 500.602 of the Foreign Assets *641 Control Regulations in 31 C.F.R., which provides as follows: "§ 500.602 Reports to be furnished on demand. Every person is required to furnish under oath, in the form of reports or otherwise, from time to time and at any time as may be required by the Secretary of the Treasury or any person acting under his direction or authorization complete information relative to any transaction subject to the provisions of this chapter or relative to any property in which any foreign country or any national thereof has any interest of any nature whatsoever, direct or indirect. The Secretary of the Treasury or any person acting under his direction may require that such reports include the production of any books of account, contracts, letters or other papers, connected with any such transaction or property, in the custody or control of the persons required to make such reports. Reports with respect to transactions may be required either before or after such transactions are completed. The Secretary of the Treasury may, through any person or agency, investigate any such transaction or property or any violation of the provisions of this chapter regardless of whether any report has been required or filed in connection therewith." The aforementioned regulation derives its authority from Section 5(b) of the Trading With the Enemy Act, which provides for "the production, or if necessary to the national security or defense, the seizure, of any books of account, records, contracts, letters, memoranda, or other papers in the custody or control of * * * [a person or corporation subject to the Act.]" Manifestly, the issuance of the "Order to Make Records Available for Examination" was "authorized by law" within the meaning of Section 6(b) of the Administrative Procedure Act, 5 U.S. C.A. § 1005(b). The report or affidavit (which is under oath and, hence, within the requirement of the first sentence of Section 500.602) which Mr. Oscar Wagman submitted to the Foreign Assets Control Division concerning his dealings with de Muinck and Simms contained information which necessitated further investigation. The records and documents on this subject are sought by the Foreign Assets Control Division as part of such investigation and relate to matters referred by Mr. Wagman in his affidavit. Consequently, the Foreign Assets Control Division is entitled to the production of these records and documents pursuant to the second sentence of Section 500.602 of the Foreign Assets Control Regulations. Petitioners' objection based upon this point must be overruled. With respect to the claim of privilege against self-incrimination, it is abundantly clear that a corporation is not entitled to the benefit of this protection under the Fifth Amendment. Hale v. Henkel, 201 U.S. 43, 26 S.Ct. 370, 50 L.Ed. 652; Wilson v. United States, 221 U.S. 361, 31 S.Ct. 538, 55 L.Ed. 771; Baltimore & Ohio Railroad Co. v. Interstate Commerce Commission, 221 U.S. 612, 31 S.Ct. 621, 55 L.Ed. 878; Oklahoma Press Pub. Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494, 90 L.Ed. 614; Fleming v. Montgomery Ward & Co., 7 Cir., 1940, 114 F.2d 384, certiorari denied 311 U.S. 690, 61 S.Ct. 71, 85 L.Ed. 446. Moreover, the privilege has been held to be a personal one which cannot be asserted by a corporation on behalf of its officers. Wilson v. United States, supra; Baltimore & Ohio Railroad Co. v. Interstate Commerce Commission, supra; Oklahoma Press Pub. Co. v. Walling, supra. The privilege against self-incrimination which is claimed by petitioner Oscar Wagman in his personal capacity protects only those papers which are his private property and not the property of the corporation. United States v. Wernes, 7 Cir., 1946, 157 F.2d 797, 800; In re Indusco, Inc., D.C.S.D. N.Y. 15 F.R.D. 7, 11. With the consent of all parties to this motion, I have examined the contents of the seized *642 documents which were submitted by the petitioners. The papers relate to corporate affairs and cannot be considered Oscar Wagman's private property. Hence, his claim of privilege is inapplicable to these documents. The next point emphasized by the petitioners is that the Treasury agents' examination and sealing of the folders taken from the files in the corporation's New York Office constituted an unreasonable search and seizure in violation of the Fourth Amendment. A consideration of this issue requires an examination of Section 500.601 of the Foreign Assets Control Regulations, 31 C.F.R., which reads: "Records. Every person engaging in any transaction subject to the provisions of this chapter shall keep a full record of each such transaction engaged in by him, regardless of whether such transaction is effected pursuant to license or otherwise, and such record shall be available for examination for at least two years after the date of such transaction." The rule is well settled that books, papers, and records which are required by law to be kept in order to provide information concerning transactions covered by governmental regulations are public or quasi-public records and an examination of such records by the appropriate governmental authorities does not violate the provisions of the Fourth Amendment prohibiting unreasonable searches and seizures. Bowles v. Glick Bros. Lumber Co., 9 Cir., 1945, 146 F.2d 566, certiorari denied 325 U.S. 877, 65 S. Ct. 1554, 89 L.Ed. 1994; Rodgers v. United States, 6 Cir., 1943, 138 F.2d 992; Fleming v. Montgomery Ward & Co., Inc., 7 Cir., 1940, 114 F.2d 384, certiorari denied 311 U.S. 690, 61 S.Ct. 71, 85 L.Ed. 446; Bartlett Frazier Co. v. Hyde, 7 Cir., 1933, 65 F.2d 350, certiorari denied Bartlett Frazier Co. v. Wallace, 290 U.S. 654, 54 S.Ct. 70, 78 L.Ed. 567; A. Guckenheimer & Bros. Co. v. United States, 3 Cir., 1925, 3 F.2d 786, certiorari denied 268 U.S. 688, 45 S.Ct. 509, 69 L.Ed. 1157; In re Bleichfeld Bag & Burlap Co., Inc., D.C.W.D.N.Y., 1952, 105 F.Supp. 162; Bowles v. Stitzinger, D.C.W.D.Penn., 1945, 59 F.Supp. 94; United States v. Mulligan, D.C.N.D.N.Y., 1920, 268 F. 893. See also Wilson v. United States, 221 U.S. 361, 380, 31 S.Ct. 538, 55 L.Ed. 878. In Fleming v. Montgomery Ward & Co., Inc., supra, involving the production of records concerning wages and hours under the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., the following language is pertinent: "We conclude that when Congress, in the exercise of its plenary power of regulation under the commerce clause, creates an administrative agency with power to regulate and supervise the acts and practices of an industry in order to safeguard commerce, and requires records to be kept to have available to the agency information respecting specified subjects, and requires the agency to enforce the requirement to keep such records, such administrative agency is entitled to inspect the records at any time to obtain the information and for the further purpose of determining whether or not such records are being kept, and whether or not they are being kept in such a way as to make available the specified information." 114 F.2d at page 391. In Bowles v. Stitzinger, supra, the following facts and conclusion appear: "On July 22, 1943, Reid and Rosen, duly accredited agents for the Office of Price Administration, went to the office of Stitzinger Brothers Lumber Company at New Castle, Pennsylvania, presented their credentials to defendants E. L. Stitzinger and Mary Kuttesch, two members of the defendant firm, and asked to see all the lumber records of that firm for the years 1942 and 1943. Defendant E. L. Stitzinger replied that the 1943 records were immediately available, but that the records for 1942 were stored in another *643 room in the building, but that he could get them if the agents wanted them. Thereupon, the agents went into the private office of E. L. Stitzinger and were there furnished the records which they examined between July 22 and July 28, 1943. At the time the agents went to the office of defendant firm, they had no subpoena for the production of documents. It might be held under the evidence that the defendants consented to the examination of their records by the OPA agents. But it is not necessary to pass on that question, because, as we view the law, the records of this firm were kept under the requirements of the Emergency Price Control Act of 1942, Section 202(b), 50 U.S.C.A.Appendix, § 922(b) * * *. "We are therefore of the opinion that no constitutional rights of the defendants have been violated. We are dealing here with the war powers of the Government, which may not be circumscribed if National security demands this exercise * *." 59 F.Supp. at page 95. The petitioners cannot complain that the agents unreasonably searched folders which contained documents unrelated to China hog bristle transactions since the folders in question do contain some papers pertaining to such transactions. However, these papers were not kept separately, but were intermingled with documents pertaining to other bristle and hair matters and, therefore, under these circumstances, the Treasury agents' examination of the folders was not unreasonable. The petitioners argue that since Section 500.601 of the regulations provides that the prescribed record must "be available for examination for at least two years after the date of" each transaction covered by said regulations, it follows that records relating to transactions beyond the two year period need not be made available. It is significant that Section 500.601 specifically qualifies the two year limitation by the words "at least." Thus, a wilful failure to maintain records for at least two years after a transaction subject to the regulations is punishable under Section 5(b) of the Trading With the Enemy Act, whereas criminal liability does not attach to a failure to maintain records for more than the prescribed two years. Section 500.601 does not alter the status of records which are maintained for a longer period than required. Said records are public or quasi-public in character and remain as such. Accordingly, petitioners' motion for an order quashing the "Order to Make Records Available for Examination" must be denied. However, I believe that the demand for the production of certain records and documents is too broad and should be modified so as to include only the records, books of account, contracts, letters, memoranda or other papers relative to dealings in China hog bristles which petitioners had with de Muinck & Co., Handelmatschappij N. V., Amsterdam, The Netherlands, and with T. S. Simms & Co., Limited, Saint John, New Brunswick, Canada, on and after January 1, 1953. Said records, books and documents are to be produced in Room 6, United States Court House, Foley Square, New York, N. Y., as required by the original Order, within five days after the service upon petitioners of the Order herein. The remaining records which do not relate to dealings with de Muinck and Simms and which were selected from petitioners' files on August 3, 1956 and set aside by mutual consent need not be produced, although they are to be returned to petitioners with the direction that they shall be made available for examination by the agents of the Foreign Assets Control. The second part of petitioners' motion, relating to the request for an order directing the return of the records and the suppression of evidence, is denied. Settle order on notice.

2023-08-22 21:20:18.382424+00

Jones

JONES, Chief Judge. This suit is based upon a contract between the plaintiff and the Veterans Administration. The plaintiff, doing business as the Southern School of Insurance in Jackson, Tennessee, engaged in the education and training of veterans under Public Law 346, 78th Congress, 58 Stat. 287, § 400, 38 U.S.C.A. § 701(f); Veterans’ Regulation No. 1(A), pt. 8, 38 U.S.C.A. following section 745, from October 15, 1947, to August 4, 1949. Plaintiff received authority to train Public Law 346 veterans in a course entitled “Insurance Training” from the Department of Education of the State of Tennessee and began the training and education on October 15, 1947. From that date through June 30, 1948, plaintiff’s school furnished training and education without a formal contract with the defendant. From July 1, 1948, through December 31, 1948, the school operated under Contract V3020V-43 which plaintiff had entered into with the Veterans Administration. On or about January 1, 1949, the school commenced operating under Contract V3020V-241 which was to cover the period from January 1, 1949, through December 31, 1949. Contract V3020V-241 provided, inter alia, that the Southern School of Insurance would provide certain courses of instruction to qualified veterans at specified prices, and that the school would furnish to the veterans the books, supplies, and equipment necessary to complete the courses. It further provided that the Veterans Administration would pay the school for tuition fees and other services and would compensate the school for books, supplies, and equipment furnished the veterans at cost to the school. The contract also provided that the school would maintain records of attendance, deportment, and progress of veterans in training under the contract. Under Public Law 346 and regulations promulgated pursuant thereto the approval or disapproval of institutions for the education and training of eligible *86veterans was the responsibility of the state in which the particular school operated. The Veterans Administration under its regulations was required to present any information it possessed with respect to inadequacies of any school approved for the training of veterans pursuant to Public Law 346, to the appropriate state approving agency. After an investigation, the Department of Education of the State of Tennessee, by letter dated April 14, 1949, notified plaintiff that the school’s approval for veteran training was to be withdrawn effective as of the close of business on April 30, 1949, because the school did not meet the State’s minimum requirements for the training of veterans under Public Law 346. Upon receiving this letter the plaintiff personally called on the Commissioner of Education to discuss the reasons for the withdrawal of approval and for the purpose of obtaining a revocation of the withdrawal order. As a result of this conference, the Commissioner of Education agreed to postpone the effective date of the withdrawal order 'and plaintiff was advised that authorization for continued operation of his school for the training of veterans would depend upon the results of another Veterans Administration inspection of the school, which plaintiff had requested. The Veterans Administration was notified of this decision by letter dated April 19, 1949, and plaintiff was sent a copy of the letter. After learning that continued approval of the school would depend upon the outcome of a further inspection of the school, plaintiff destroyed the school’s attendance records relating to veterans who were in training prior to January 3, 1949. Pursuant to its regulations, the Veterans Administration made a spot check of the school’s available records on May 6 and 9,1949, to determine whether there had been compliance with the requirements of the state agency and with the terms of the contract. The spot check, confined to records beginning January 3, 1949, because the prior records had been destroyed, revealed irregularities on the part of the plaintiff’s school with respect to records and billings for books and supplies. As a result, further payments were suspended by the Veterans Administration, effective April 30, 1949, pending a more complete audit. On July 20, 1949, an audit team from the Veterans Administration conducted an audit and subsequently prepared an audit report on the available attendance records and other records pertaining to 52 veterans. According to the audit report the attendance records showed almost perfect attendance by all students, but contained many erasures and alterations, and students were marked present on days when they had been originally marked A, S, or L, which, according to the symbols used by the instructors, stood for absent, sick, or late. The report further indicted that the practice of alteration was widespread and that in the case of one student, there were nineteen days on which erasures and alterations were made showing that the student was present on those days when previously he had been marked absent. The audit report also revealed the existence of the following types of irregularities: (1) entries had been made on school records to show that students commenced training at a date earlier than the actual date of training; (2) some students were granted leave from classes and marked P for present; (3) students were marked present on the attendance records when their files contained a doctor’s certificate stating that they were ill and unable to attend classes; (4) instructors marked students present on days when such students were actually absent; (5) certain students were reported as having made up classes on Saturdays when in fact such students never attended Saturday make-up classes, and (6) students signed receipts for books and supplies before receiving them and the Veterans Administration was billed for them before they were issued and, in some instances, for items never issued to students. The evidence submitted in this case substantiates most of the findings in the audit re*87port and reveals other irregularities not specifically noted in the audit report. The audit report was sent to the Department of Education of the State of Tennessee for its information in accordance with Veterans Administration regulations. After the receipt of the report the Tennessee Department of Education made an investigation of conditions existing at plaintiff’s school. Subsequent to its investigation, the Tennessee Department of Education issued an order removing the plaintiff’s school from the State’s list of schools approved for the training of veterans under Public Law 346, effective August 3, 1949. Upon being notified that approval of his school had been withdrawn, plaintiff, on August 4, 1949, closed the school and discontinued the training of veterans. Upon learning that plaintiff had closed his school, the Veterans Administration cancelled Contract V3020V-241 effective August 5, 1949, by registered letter dated August 9, 1949. Count One of plaintiff’s petition is a claim for tuition, books, and supplies for the period from May 1 to August 4, 1949. The school was in operation during that period and plaintiff has not been paid for the services rendered. Count Two of the petition is a claim for damages allegedly resulting from the failure of the defendant to give the plaintiff 60-day notice of termination of Contract V3020V-241 in accordance with the provisions of the contract. Count Three is a claim for damages allegedly resulting from defendant’s revocation of the contract.1 Defendant has filed counterclaims in which it seeks to recover overpayments allegedly made to plaintiff prior to May 1, 1949, because of false and fraudulent vouchers submitted by the plaintiff. It also seeks to recover damages from the plaintiff under section 231 of the False Claims Act, 31 U.S.C.A. § 231, for false claims which it alleges were submitted by the plaintiff. It is also the defendant’s position that the court should forfeit plaintiff’s claim under 28 U.S.C. § 2514, which reads as follows: “A claim against the United States shall be forfeited to the United States by any person who corruptly practices or attempts to practice any fraud against the United States in the proof, statement, establishment, or allowance thereof. “In such cases the Court of Claims shall specifically find such fraud or attempt and render judgment of forfeiture.” The evidence in this case is extremely confusing and contains many conflicting statements. Plaintiff’s alterations of certain records and destruction of others make it difficult for the court to draw definite conclusions. However, from a reading of the entire record it becomes manifest that the plaintiff knowingly submitted fraudulent claims against the United States for services rendered during the period from January 1 to April 30, 1949, under contract V3020V-241, as well as for services rendered in 1948 under the previous contract. Plaintiff’s present suit is for services rendered after April 30, 1949, under contract V3020V-241, and for breach of that contract. The defendant does not allege that plaintiff practiced fraud after April 30, 1949, and the record does not establish fraud after that date. It is true that the forfeiture statute quoted above was not intended to forfeit an otherwise valid claim of a claimant merely because, in some other unrelated transaction, he had defrauded the Government. But where, as in the present case, fraud was committed in regard to the very contract upon which the suit is brought, this court does not have the *88right to divide the contract and allow recovery on part of it. Since plaintiff’s claims are based entirely upon contract V3020V-241, a contract under which he practiced fraud against the Government, all of his claims under that contract will be forfeited pursuant to 28 U.S.C. § 2514. We are aware that our decision in this case conflicts, in certain respects, with this court’s decision in Branch Banking & Trust Co. v. United States, 87 F.Supp. 777, 115 Ct.Cl. 341. We think it can be distinguished on the facts. However, insofar as that case may be in conflict with the opinion in the present case it is overruled. While it is clear from the entire record that plaintiff practiced fraud under contract V3020V-241 and under his previous contract, the condition of plaintiff’s records and the conflicting testimony make it impossible to determine with any degree of accuracy the specific instances of fraud or the amount overpaid the plaintiff. In view of the confused state of the record in this case we will dismiss the defendant’s counterclaims. Furthermore, we will decline t<f-apply the provisions of the False Claims Act since the facts are not sufficiently established to justify the application off the drastic penalty called for in that, act. We feel that the ends of justice will be fully served by the forfeiture of plaintiff’s claims pursuant to 28 U.S.C. § 2514. Plaintiff’s claims in the present case-will be forfeited and defendant’s counterclaims will be dismissed. It is so ordered. MADDEN and LITTLETON, Judges, concur. . When evidence was being taken in this case, counsel for the defendant moved for dismissal of Counts Two and Three of the petition under Rule 49(c) of this court, 28 U.S.C. The commissioner who took the testimony allowed the motion as to Count Three only. Action by the court in respect to this motion is unnecessary in view of our disposition of tha case.

2013-10-30 06:32:40.448+00

Bissett

535 S.W.2d 745 (1976) Margaret TINDOL et al., Appellants, v. Ethel Lee Ellis McCOY et al., Appellees. No. 1020. Court of Civil Appeals of Texas, Corpus Christi. March 25, 1976. Rehearing Denied April 15, 1976. *746 Hillord H. Hinson, Houston, S. Eldon Dyer, Dyer, Redford, Burnett, Wray & Woolsey, Corpus Christi, for appellants. Allen Wood, Wood, Burney, Nesbitt & Ryan, Corpus Christi, Robert D. Nogueira, Beeville, for appellees. OPINION BISSETT, Justice. This is a will construction case. The appeal is from a judgment which denied Margaret Tindol's motion for summary judgment and granted the motion for summary judgment that was filed by Ethel Lee Ellis McCoy and Ethel Lee Ellis Parrish. Margaret Tindol, the appellant, was plaintiff in the trial court and Ethel Lee Ellis McCoy and Ethel Lee Ellis Parrish, the appellees, were defendants therein. The take nothing judgment of the trial court, in addition to finding that there "are no disputed issues of material fact", also found: "2. The will of John V. Ellis is unambiguous, his intentions are clear, that Ralph V. Ellis, Jr., received a life estate only, that only a natural and legitimate child or children of Ralph V. Ellis, Jr., could have taken the succeeding estate as `a child or children of the body,' that Plaintiff herein does not fall in the class of persons to take the succeeding estate under this provision of the will." Plaintiff has perfected an appeal from that judgment. John V. Ellis, the testator of the will in question, executed the will in 1914 and amended it by a codicil which was executed in 1917. He died in 1917. He had three children, viz.: Wayman D. Ellis, Cyrus C. Ellis and Ralph V. Ellis. Wayman D. Ellis and Cyrus C. Ellis survived the testator; Ralph V. Ellis died in 1906 and was survived by three children, viz.: Ralph V. Ellis, Jr., Wilbur M. Ellis and Ethel Lee Ellis, all of whom survived John V. Ellis. Wayman D. Ellis and Cyrus C. Ellis were each bequeathed one-third of the testator's personalty and were each devised certain real property in fee. The properties left to them by John V. Ellis are not involved in this suit. Ralph V. Ellis, Jr. died in 1969. He was married but one time and no children were born to that marriage. He was survived by Doris Ellis, his wife, and by Margaret Tindol, plaintiff, who was adopted by him in 1951. Wilbur M. Ellis died in 1946. He was survived by Ethel Lee Ellis Parrish, his only child, who was legitimate and a child of his body. She is one of the defendants in the case. Ethel Lee Ellis (McCoy) was living at the time judgment was rendered. She is also a defendant in the case. Plaintiff claims that she owns the fee title to certain lands devised by the testator, particularly to all of the real property devised under a section of the will, denominated "Item Seven". She contends that she is entitled to the land in question under the *747 will of John V. Ellis directly, under the Rule in Shelley's case, and because: 1) she was not precluded by the will from taking by being an adopted child of Ralph V. Ellis, Jr.; 2) by operation of the doctrine of definite failure of issue; 3) by operation of the doctrine of indefinite failure of issue (points 1, 2, 3 and 4). The very first part of "Item Seven" devised certain real property to Ralph V. Ellis, Jr. "for the full term of his natural life", and specifically stated that "the said Ralph V. Ellis, Jr. shall never take any fee-simple title to any part of said land". Provisions were made in case Ralph V. Ellis, Jr. did not survive the testator.[1] Since he was alive at the time the testator died, those provisions have no bearing on this appeal, the pertinent parts of which are quoted in the footnote, except insofar as they may affect the question of whether Ralph V. Ellis, Jr. took a fee under "Item Seven" by operation of the doctrines of definite failure of issue or indefinite failure of issue, as urged by plaintiff in points 1 and 2. "Item Seven" of the will further provided: "If Ralph V. Ellis Jr. should outlive me, thereby really and actually becomming entitled in his own proper person to possession and enjoyment of the life estate herein created for his use and benefit, then upon the ending and termination of his said life estate ... and in such event, the life estate in the real estate so affected by the ending and termination of the life estate of Ralph V. Ellis Jr., but not the immediate fee-simple legal title to the corpus, or body, of such real estate so affected, shall pass immediately, but only for the specifically limited time of twenty (20) years, in the same succession, to the same persons, and in the same portions, named or designated in this Item (7) to have taken a life interest in said real estate direct from me, had I outlived my grand-son Ralph V. Ellis Jr." Identical devises were made to the testator's grandson Wilbur M. Ellis in "Item Six" of the will, and to the testator's granddaughter Ethel Lee Ellis in "Item Five" of the will. The only difference in the language used was the name of the respective devisee and the description of the property therein contained. It was stated in "Item Fifteen" of the will that "the life estate anywhere in this will ... shall become effective and *748 operative immediately upon my death", that the "twenty year-term estate" shall "begin to run" upon the death of the life tenant, and that: "... immediately upon the ending and termination of such twenty year term—estate, the fee-simple, legal title shall vest ... absolutely in the persons then living who are using and enjoying, or who are entitled to use and enjoy said twenty years term-estate at the time of its termination . . .." Ralph V. Ellis, Jr., under "Item Twenty" of the will, was devised in fee one-ninth (1/9) of all the rest and residue of the testator's estate, and "in the event of the prior death" of Ralph V. Ellis, Jr., then "the children born to the body (of Ralph V. Ellis, Jr.)" shall take what he would have taken. The same devise and bequest was made to Wilbur M. Ellis and Ethel Lee Ellis. It is well settled in this State that the primary consideration to be given the construction of a will is the intent of the testator. Sellers v. Powers, 426 S.W.2d 533 (Tex.Sup.1968); Federal Land Bank of Houston v. Little, 130 Tex. 173, 107 S.W.2d 374 (Tex.Com.App.1937, opinion adopted). The intentions of the testator are clear. He had, first, a plan for disposing of the lands which he gave to his grandchildren, Ralph V. Ellis, Jr., Wilbur M. Ellis and Ethel Lee Ellis, for life, in the event any of them predeceased him, with or without leaving surviving children of their body or children (and a wife) of such a deceased child. He had a second plan for disposing of the lands in the event the grandchildren survived him. However, the estate in remainder, under each plan, became vested within the time provided by the rule against perpetuities. Since Ralph V. Ellis, Jr. outlived John V. Ellis, the testator, we are not here concerned with the first plan provided in the will. Under the second plan, with which we are concerned, in the event Ralph V. Ellis, Jr. survived the testator, which he did, but had no children born to his body, which was the case, then the life estate which was given to Ralph V. Ellis, Jr. passed at his death to his brother and sister for 20 years and vested in them at the end of the 20-year period. The possibility that the estate for years may have merged into the vested remainder is not involved in this appeal and we express no opinion thereon or with respect thereto. The issue to be decided is whether or not Margaret Tindol, the plaintiff, inherited directly from the testator an interest in any of the lands described in Items Five, Six and Seven of the will. The rule in Shelley's case is defined in Hancock v. Butler, 21 Tex. 804 (1858): "`... when a person takes an estate of freehold, legally, or equitably, under a deed, will, or other writing, and in the same instrument, there is a limitation, by way of remainder, either with or without the interposition of another estate, of an interest of the same legal or equitable quality, to his heirs, or heirs of his body, as a class of persons, to take in succession, from generation to generation, the limitation to the heirs entitles the ancestor to the whole estate'." The rule in Shelley's case was abolished by Acts of the 58th Legislature, Ch. 199, § 1, effective January 1, 1964. Tex.Rev. Civ.Stat.Ann. Art. 1291a (1964). However, it was therein provided that the Act (abolishing the Rule) does not apply to conveyances or wills which took effect prior to January 1, 1964. The will in this case became effective before that date. The question for decision is whether the words "children born to his body", as used by the testator, are words of purchase or of limitation. For the rule in Shelley's case to have application in this case, the words "children born to his body" must be construed as words of limitation. "In a will, words of limitation are those which do not give the estate imported by them originally to the person described, but only extend the ancestor's estate to an estate of inheritance descendible to such persons . . . [W]ords of purchase are words designating a particular class, who are to take, not through or from an ancestor, but from the devisor." 96 C.J.S. Wills § 804. *749 In order to sustain plaintiff's contentions that Ralph V. Ellis, Jr. took a fee under the will, we would be required to convert the words "children of his body" into "heirs generally". To do that, it would be necessary to find that the testator intended to use such words in the technical sense of "heirs" so as to pass the estate devised in "Item Seven" from person to person through successive generations in regular succession. Hancock v. Butler, supra; Robinson v. Glenn, 150 Tex. 169, 238 S.W.2d 169 (1951); Crist v. Morgan, 245 S.W. 659 (Tex. Com.App.1922, jdgmt. adopted). In Daugherty v. Manning, 221 S.W. 983 (Tex.Civ.App.—San Antonio 1920, writ dism'd), the deed in question conveyed a life estate in the land to Martha Ann Riggle, and at her death the remainder of the land was conveyed to her children "or their descendants in the same proportion as is prescribed by the laws of descent and distribution". The Court, at page 988 of the published opinion, said: ". . . The use of the word `children' describing remaindermen, shows the intention of grantor to use words of purchase and not of limitation, and to create a life estate with a remainder. . . ." In Watterson v. Thompson, 404 Ill. 515, 89 N.E.2d 381 (1949), the subject of an annotation in 14 A.L.R. 2d 1234, the Supreme Court of Illinois reached the conclusion that the words "children of her body" are words of purchase and not of limitation, mean immediate offspring only, and cannot be interpreted as meaning "heirs". A similar construction has been given to the word "children" by the courts of this State. Briggs v. Peebles, 144 Tex. 47, 188 S.W.2d 147 (1945); Bartlett v. Terrell, 292 S.W. 273 (Tex.Civ.App.—San Antonio 1927, writ ref'd); Dallmeyer v. Hermann, 437 S.W.2d 367 (Tex.Civ.App.—Houston [14th Dist.] 1969, no writ); Bass v. Surls, 153 S.W. 914 (Tex.Civ.App.—Dallas 1913, no writ); 61 Tex.Jur.2d, Wills § 189. The remainder, after the termination of any and all life estates and following the end of estates for years (the 20-year term), was vested by "Item Fifteen" of the will. Under the pleadings and summary judgment evidence here presented, since Ralph V. Ellis, Jr. survived the testator and as there were no children born to his body, the remainder became vested in the defendant Ethel Lee Ellis McCoy (the sister of Ralph V. Ellis, Jr.), and in the defendant Ethel Lee Ellis Parrish, the sole child of the body of Wilbur M. Ellis (the brother of Ralph V. Ellis, Jr.), who died in 1946, subject, possibly, to the enjoyment of the estate in remainder being postponed until the termination of a 20-year term that began on the date of death of Ralph V. Ellis, Jr. It is manifest that the testator intended to designate only that group of persons who would take initially after the death of Ralph V. Ellis, Jr., the first taker. The words "children born to his body" were intended by the testator to be words of purchase, not of limitation. We so hold. See Hopkins v. Hopkins, 103 Tex. 15, 122 S.W. 15 (1909). Ralph V. Ellis, Jr. took a life estate only, and did not take a fee simple estate. Plaintiff was adopted by Ralph V. Ellis, Jr. in 1951. She contends that the testator, by his use of the phrase "children born to his body" did not mean to exclude adopted children from taking under his will. She argues that the word "children", when used in a will, includes adopted children, absent any language to the contrary. She petitions this Court to construe the will in question in the light of contemporary laws and modern concepts of social morality because the views of the present-day generation are much more humane and compassionate and in tune with civilized society. She states that a family of today is made up of emotional and spiritual experiences demonstrated by love and understanding, rather than by mere biological identity. That may be correct; however, that is not the issue before this Court. The question here presented is whether or not such asserted modern concepts and laws are applicable to a will which was made in 1914, and probated in 1917. It has long been settled that the words "child" or "children of the deceased or their *750 descendants" does not include an adopted child. Murphy v. Slaton, 154 Tex. 35, 273 S.W.2d 588 (1954); Harle v. Harle, 109 Tex. 214, 204 S.W. 317 (1918). Cutrer v. Cutrer, 162 Tex. 166, 345 S.W.2d 513 (1961), is almost directly in point. There, trusts for life were established for each of the children of the settlor, and the remainder was vested in the beneficiary's child or children. One of the beneficiaries of a particular trust had an adopted child who sought a portion of the trust after the death of his adoptive father. The Supreme Court denied a recovery, and stated: ". . . it is generally held that an adopted child is not entitled to property conveyed or devised to the `children' of the adoptive parent unless a contrary intent is disclosed by additional language or circumstances. . . ." In Decker v. Elliott, 425 S.W.2d 880 (Tex. Civ.App.—Fort Worth 1968, writ ref'd n. r. e.), the testatrix died in 1934 and left a will that devised a life estate to her daughter, with remainder to her daughter's child or children. The adopted child of the daughter attempted to take the remainder. The court cited Cutrer as authority for the rule that an adopted child cannot take a remainder designated to go to a child or children of the holder of the life estate unless the will shows such an intent by the testator. The court also held that the testatrix's failure to consider the possibility of adoption did not imply that she intended to include adopted children as persons who could take the remainder. A will is to be construed by the law as it exists at the date of death of the testator. The arguments advanced by plaintiff concerning her right to take as an adopted child of Ralph V. Ellis, Jr. cannot be sustained by the law as it existed in 1917, when the testator died. There is no language in the will of John V. Ellis which either states or reasonably supports an inference that he intended for an adopted child to take under his will. Plaintiff is not included within the class identified as "children born to his body". She is not entitled to take under the will as an adopted child of Ralph V. Ellis, Jr. Plaintiff further contends that the remainder to the blood brothers and sisters of Ralph V. Ellis, Jr. was contingent upon his death occurring before the death of the testator, and that since he outlived the testator he took a fee simple estate because of the operation of either the doctrine of definite failure of issue or that of indefinite failure of issue. A "definite failure of issue" means a failure of issue at some specified time. An "indefinite failure of issue" means a failure of issue at any time. In the instant case, there is no language in the will, in "Item Seven" or elsewhere, that purports to give to Ralph V. Ellis, Jr. anything more than a life estate in any real property. There are no words used by the testator in the will which indicate that he intended to create an estate of inheritance and to exclude collateral heirs. There is nothing in the will which suggests an intent by the testator to restrict the estate to the lineal descendants of Ralph V. Ellis, Jr. beyond either the children of his body or the children of such a deceased child. Nowhere in the will does the testator use the words "to the heirs of his body", or "to his heirs", or "to his issue". A fair construction of the will will not support a finding that the words "children born to his body" were intended as words of limitation. There is no basis for a holding that the language used in "Item Seven" created a fee tail in Ralph V. Ellis, Jr. There was no limitation to Ralph V. Ellis, Jr. for life, remainder to the heirs (or issue) of his body, with a gift over to his brother and sister if he died without leaving heirs or issue of his body. The testator did not create "an alternative contingent remainder over in Ralph V. Ellis, Jr.'s brother and sister, contingent upon Ralph's death without issue", as argued by plaintiff in her brief. There is nothing in the will which shows that the testator "intended that Ralph V. Ellis, Jr. must die without surviving children prior to testator's death for the alternative contingent remainder over to become a present interest", as contended by plaintiff. *751 The rule in Shelley's case has no application to the case at bar. The clear and unmistakable intent of the testator to give only a life estate to Ralph V. Ellis, Jr. in the subject property, the fact that there is no language in the will which will support a finding that the testator intended to create an estate of inheritance and to exclude collateral heirs, plus the fact that the testator intended to vest the remainder in the brother and sister of Ralph V. Ellis, Jr. in the event there were no children born to his body, prevents any holding that Ralph V. Ellis, Jr. took a fee simple estate by operation of either the doctrine of indefinite failure of issue or the doctrine of definite failure of issue. Since Ralph V. Ellis, Jr. took only a life estate in the land described in "Item Seven", plaintiff, either as an adopted daughter or as an heir at law of Ralph V. Ellis, Jr., has no interest in any of the properties devised by John V. Ellis by his will. Plaintiff's points 1, 2, 3 and 4 are overruled. Plaintiff further asserts that the "trial court erred in ruling that there were no material facts to be determined by the jury" (point 8). In support of that assertion, she argues that her pleadings allege that she, though illegitimate at birth and later adopted by Ralph V. Ellis, Jr., her biological father, is a child of the body of Ralph V. Ellis, Jr., and is, therefore, entitled to take under the will of John V. Ellis. She contends that she has, by her pleadings, raised a material fact issue, which, accords her, at the very least, the right to a trial on that issue if there is the slightest doubt as to the existence of that fact. The question really becomes whether or not an illegitimate child is included within the definition of "children born to his body". It has been held by the Supreme Court of Texas that the term "child", or "issue", or "children", without more, does not include illegitimate children. Hayworth v. Williams, 102 Tex. 308, 116 S.W. 43 (1909); Harle v. Harle, supra. See also 34 A.L.R. 2d 4. The words "children born to his body" in a will that was made in 1914, and probated in 1917, means prima facie legitimate children, and they cannot include illegitimate children unless a plain intention to so include them can be found on the face of the will itself. There is no such indication here. Plaintiff would not be entitled to take under the will of the testator even if she proved that she was the illegitimate child of Ralph V. Ellis, Jr. There are no material facts in dispute. Plaintiff's point 8 is overruled. We have carefully considered all of plaintiff's remaining points of error. They have no merit. All such points are overruled. A correct judgment was rendered. The judgment of the trial court is AFFIRMED. NOTES [1] "Item Seven. I will, give, devise, and bequeath to my grand-son Ralph V. Ellis, Jr. (a minor) the son of my deceased son, Ralph V. Ellis, for the full term of his natural life, the use, occupancy, and enjoyment, including all the usufruct, rents, revenues, profits and earnings therefrom, to belong to him, from the following described property, pieces, and parcels of land, to wit ... But the said Ralph V. Ellis, Jr. shall never take any fee-simple title to any part of said land; ... If Ralph V. Ellis should die before I do, then all that he would have taken as a life estate had he survived my death, shall pass ... in equal shares to such children born to his body as shall be living at the time of my death, for the terms of their natural lives; provided, that if at the time of the death of Ralph V. Ellis, Jr., any child born to his body, shall also be dead leaving it surviving a wife, child or children, then such surviving wife, child or children of such deceased child of Ralph V. Ellis, Jr., as shall survive my death, shall take, per stirpes, during the remainder of the life of that child of Ralph V. Ellis, Jr., living the longest, such portion as its deceased parent (the deceased child of Ralph V. Ellis Jr.) would have taken, thus and thereby making the last life estate created by this Item (7) to cease and end with the death of that child, born to the body of Ralph V. Ellis, Jr., that lives the longest; but if any child born to the body of Ralph V. Ellis Jr. should die before the death of Ralph V. Ellis Jr. without leaving it surviving a wife, child or children, then the portion which it would have taken hereunder shall pass in equal shares to those of its brothers and sisters who shall survive my death, during the term of their natural lives. But if Ralph V. Ellis Jr., should die before I do, without leaving surviving him, a child or children born to his body, and without leaving surviving him any other person designated in this Item (7) to take after him, then and in those events the life estate which Ralph V. Ellis Jr. would have taken under this Item (7) had he outlived me, shall be divided equally among his brothers and sisters of the whole blood (meaning those brothers and sisters born to the body of Ralph V. Ellis Sr.) who shall be living at the time of my death, and to such of their heirs at law (of the whole blood of Ralph V. Ellis Sr.) as would take personal property at the date of this will according to the Texas laws of descent and distribution."

2013-10-30 06:32:39.917595+00

Per Curiam

367 A.2d 612 (1977) STATE of Maine v. Willie CRAFT. Supreme Judicial Court of Maine. January 7, 1977. Henry N. Berry, III, Dist Atty., Thomas Goodwin, Asst. Dist. Atty., Peter G. Ballou, Deputy Dist. Atty., Portland, for plaintiff. Dwight A. Fifield, Portland, for defendant. Before DUFRESNE, C. J., and POMEROY, WERNICK, ARCHIBALD, DELAHANTY and GODFREY, JJ. PER CURIAM. Willie Craft was indicted for a violation of 17 M.R.S.A. § 3401 (robbery), waived trial by jury, but was convicted of larceny from the person (17 M.R.S.A. § 2102) after trial before a single Justice of the Superior Court. By making appropriate motions for judgment of acquittal the appellant has preserved for appellate review the issues argued on appeal, namely: "1. The Court below erred in denying Defendant's motion for acquittal made at the conclusion of the evidence. 2. The verdict is not supported by substantial evidence." We deny the appeal. It is not disputed that the victim's billfold containing over $500.00 was taken from his pocket. The fact finder could have believed that a young woman surreptitiously removed this wallet, tossed it to the defendant who immediately secreted it and, on being arrested shortly thereafter, was found to have "in the vicinity of $507" on his person. Additionally, both persons involved in this activity were positively identified by the victim. The defendant has argued that, since there were at least two discrepancies between the trial testimony of the victim, a Norwegian merchant seaman, and that given when his deposition was taken, it was error to accept the former as true. We have read both the trial transcript and the deposition. We find the discrepancies *613 to be minor and not of that character and significance which would destroy the believability of the testimony heard by the single Justice. In any event, the weight and credibility of the victim's testimony is for the fact finder, not the appellate court. State v. McDonough, 350 A.2d 556, 561-62 (Me.1976); State v. Donovan, 344 A.2d 401, 405 (Me.1975). Our duty is to determine from the entirety of the record if the verdict is adequately supported by believable facts. It is. State v. Burnham, 350 A.2d 577, 582 (Me.1976). The entry is: Appeal denied. All Justices concurring.

2013-10-30 06:32:39.962781+00

Russell

535 S.W.2d 166 (1976) Alexander FORREST, Appellant, v. STATE of Tennessee, Appellee. Court of Criminal Appeals of Tennessee. February 10, 1976. Certiorari Denied March 22, 1976. *167 Hughie Ragan, Jackson, for appellant. R.A. Ashley, Jr., Atty. Gen., William J. Haynes, Jr., Asst. Atty. Gen., Nashville, George W. Hymers, Jr., Dist. Atty. Gen., James G. Woodall, Asst. Dist. Atty. Gen., Jackson, for appellee. Certiorari Denied by Supreme Court March 22, 1976. OPINION RUSSELL, Judge. This is an appeal by Alexander Forrest from the dismissal without an evidentiary hearing of his petition for post-conviction relief from an armed robbery conviction and ninety-nine year penitentiary sentence. Forrest alleged (1) that evidence obtained in an illegal search and seizure was introduced against him, (2) that he was illegally arrested, (3) that he was subjected to an illegal identification procedure by use of a single photograph, and (4) that proof of unrelated crimes was introduced against him over objection. It is sufficient answer to these allegations to say that the latter two were explicitly dealt with upon the direct appeal to this court; and the first two were proper subjects for direct appeal. A matter previously determined is not a proper subject for post-conviction relief. Pruett v. State, Tenn., 501 S.W.2d 807 (1973). A rebuttable presumption that a ground for post-conviction relief not raised in prior proceedings wherein it could have been raised is waived is grounded upon both statute and case law. T.C.A. § 40-3812; Arthur v. State, Tenn., 483 S.W.2d 95 (1972). T.C.A. § 40-3804(10) explicitly requires a petition for post-conviction relief to explain why a ground asserted therein has not been previously presented, where procedurally it obviously could have been. The final ground for relief asserted by Forrest is that his appointed counsel was incompetent because they failed and refused to object to "the legality of the arrest warrant". By way of pro se argument Forrest also claims that his attorneys refused to object to an illegal search and seizure, apparently in connection with the arrest. He also claims that they would not object to the evidence of unrelated facts, a contention rebutted by the record on direct appeal. The learned trial judge who summarily dismissed this petition presided over the trial and explicitly reports in a memorandum of record that defense counsel did in fact make the objections that they are accused of not making. In that context, it was unnecessary to hold an evidentiary hearing. The dismissal of this petition for post-conviction relief is affirmed. WALKER, P.J., and DUNCAN, J., concur.

2013-10-30 06:32:40.03867+00

O'Hara

367 A.2d 653 (1976) Marlene B. PEARSON and William J. Pearson, her husband, Plaintiffs, v. George J. BOINES, M.D. and George P. Liarakos, M.D., Defendants. Superior Court of Delaware, New Castle County. Submitted October 8, 1976. Decided December 17, 1976. Arthur J. Sullivan, Wilmington, for plaintiffs. *654 Stuart B. Young, of Young, Conaway, Stargatt & Taylor, Wilmington, for defendant Boines. Jane R. Roth, of Richards, Layton & Finger, Wilmington, for defendant Liarakos. O'HARA, Judge. This is a medical malpractice case. Defendants have moved for dismissal on the grounds that plaintiffs' claim is barred by the statute of limitations. In early 1972, Dr. Boines, a specialist in multiple sclerosis, examined Mrs. Pearson and concluded that she was suffering from the disease. He advised her that she should have no more children and went on to recommend that she have something done so she could not. On March 27, 1972, Mrs. Pearson signed a consent to have a sterilization operation performed by Dr. Liarakos, a specialist in obstetrics and gynecology. Two days later, Dr. Boines wrote Dr. Liarakos confirming a diagnosis of multiple sclerosis and suggested a tubal ligation as an "absolute medical necessity." Plaintiffs allege also that Mrs. Pearson was led to believe the operation was of this extreme importance. On May 23, 1972, the operation was successfully performed. However, two years later, in mid-1974, Mrs. Pearson's treating physician, Italo V. Monteleone, M.D., allegedly told her she did not have multiple sclerosis and never did. Plaintiffs argue it was at this point that the Pearsons learned the sterilization had not been necessary. Plaintiffs have also filed an affidavit of another doctor saying sterilization is not required even with multiple sclerosis. In addition, they have cited writings by experts whose opinions amount to much the same conclusion. Judge Joseph T. Walsh of this Court, in Pearson v. Boines, unreported opinion, C. A. 1097 (1976), denied defendants summary judgment motion based on the grounds that no issue of material fact existed. The motion now before the Court raises the two year statute of limitations as a bar to the suit since the operation occurred in May, 1972 and the complaint was filed November 21, 1974. Obviously, defendants will prevail in this argument unless some theory is found which has operated to toll the statute and permit the suit. Plaintiffs argue that the "inherently unknowable injury" theory, the only such theory specifically adopted in Delaware for this purpose, applies. They cite Layton v. Allen, Del.Supr., 246 A.2d 794 (1968). That case stood for the proposition that an injury is sustained when the harmful effect first manifests itself and becomes physically ascertainable. Plaintiffs argue that this occurred when Dr. Monteleone informed Mrs. Pearson that she did not have multiple sclerosis. Defendants counter by saying that the injury was Mrs. Pearson's inability to have children, a fact perceptible to her from the time of the operation. Only in a case where the plaintiff is blamelessly ignorant of the injury and the wrongful act, they argue, will the statute of limitations not run. Layton v. Allen, supra. The Court must conclude that plaintiffs' reliance on Layton v. Allen, supra, is misplaced. The holding of the case, having dealt with unknowable conditions in a physical sense, is far too narrow to embrace the situation here, where the physical state of Mrs. Pearson was immediately manifest. See also, Lembert v. Gilmore, Del.Super., 312 A.2d 335 (1973); Bradford, Inc. v. Travelers Indemnity Company, Del.Super., 301 A.2d 519 (1972). Although it certainly appears that the lay person should be protected in his natural and necessary reliance on the medical doctor, defendants seem well supported by Delaware case law in their argument that it is the sterilization itself which constitutes the injury. A different set of rules may one day be formulated for the situation where an operation is successful and *655 its effects clearly known, but the wisdom of such operation is called into question later. However, when and if such a rule is formulated it will have to be cloaked with proper safeguards to prevent a plaintiff from bringing a suit on the basis of one isolated doctor's opinion many years after the operation or treatment. Presumptions as to lack of due diligence could also be incorporated. In any event, it is not for this Court to set up a special rule for the type of case presented here, but rather for the legislature. It should be noted that there has been some uncertainty as to which statute of limitations was applicable: 10 Del.C. § 8119; or 18 Del.C. § 6856, signed April 26, 1976, and having subsequent immediate effect on "pending" malpractice cases unless it "would work injustice." 18 Del.C. § 6856. The new law applies generally a two year statute of limitations except "in the event of personal injury the occurrence of which, during such period of two years, was unknown to and could not in the exercise of reasonable diligence have been discovered by the injured person." In such cases, the action may be brought within three years of the occurrence. Defendants' position is that the same reasoning applies even under the new statute; that is, the injury (sterilization) was immediately discernible at the time of the operation. Plaintiffs' position is that application of the new statute has no effect on the case. The Court is willing, for purposes of this motion, to accept both positions and will view 18 Del.C. § 6856 as codifying the Layton v. Allen, supra, rule to allow plaintiffs one extra year over the usual two in which to bring suit in cases of inherently unknowable injury, which, we have already decided, is not present here. Since the complaint here was filed less than three years after the sterilization operation, it becomes irrelevant for the purposes of this motion to determine which statute of limitations applies. The factual situation not fitting within the "inherently unknowable injury" mold, and no other theory being advanced upon which the statute can be tolled, the Court must conclude that the statute of limitations has run. The motion to dismiss is, therefore, granted. IT IS SO ORDERED.

2013-10-30 06:32:40.072901+00

Bevilacqua

367 A.2d 714 (1977) Paul A. RUSSO et al. v. STEARNS FARMS REALTY, INC., et al. No. 75-321-Appeal. Supreme Court of Rhode Island. January 7, 1977. *715 Corcoran, Peckham & Hayes, Kathleen Managhan, Joseph T. Houlihan, Newport, for plaintiffs. Swan, Keeney, Jenckes & Asquith, Conrad M. Cutcliffe, Providence, for defendants. OPINION BEVILACQUA, Chief Justice. This is a civil action which seeks to quiet title to certain real property located in the town of Jamestown by virtue of the adverse possession by the plaintiffs and their predecessors in title for the statutory period in accordance with G.L.1956 (1969 Reenactment) § 34-7-1. Trial was held before a justice of the Superior Court sitting without a jury. The trial justice awarded title to the plaintiffs and the defendants initiated this appeal from that judgment. We affirm. The plaintiffs and their predecessors in title were under the impression that they owned certain land contiguous to the south and west of the land to which they hold record title and upon which their house is located.[1] According to the recorded title, plaintiffs' southern boundary lies 3 inches from their house. The defendants hold record title to the disputed land both to the south and to the west. The plaintiffs and their predecessors in title used the land immediately to the south of the house as a driveway, regularly parking their vehicles in this area. The remainder of the southern portion of the disputed property is cleared land surrounded by woods. This area has been cleared and used for recreation by plaintiffs and their predecessors in title for more than 10 years. When the Martins, plaintiffs' immediate predecessors in title, lived in the *716 house, this southern portion was used by them as a play area for their grandchildren. In the southeast corner of the cleared land, the Martins had a swing set and a brick barbecue. In addition, there was a sandbox and picnic table on this portion of the disputed land. There was testimony by Mrs. Martin that they used this property to the south of the house frequently for cookouts and family outings. They also performed general maintenance work, cutting grass, raking acorns, and cleaning up branches. The plaintiffs, like the Martins, used this area for recreation. They replaced the swing set left by the Martins with their own which they placed in the southwest corner of the property. In this corner, they also had a dog house. They installed two horseshoe pits near the southern edge of the clearing; they repaired the brick barbecue and set up a new picnic table. In addition, plaintiffs put up a split rail fence along East Shore Road on the southeastern side of this portion of the disputed land. They improved the driveway, putting in gravel; they cut down a birch tree, and planted ten to twelve evergreen trees to the south of the driveway in the cleared area. In addition to improving the area, plaintiffs performed normal maintenance, cutting the grass, raking acorns and clearing the driveway. On the western portion of the disputed land was a garage with an attached shed. These buildings were in existence at the time the Martins purchased their house. The Martins used the shed for storage of garden tools and children's playthings. Behind these buildings and further to the west was an outhouse which was used by the occupants of the house from the late 1920's until sometime in 1963 or 1964 when the Martins installed indoor plumbing and tore the outhouse down. They filled in the remaining hole so that, according to testimony, their grandchildren could safely play in this area of the yard. Soon after plaintiffs purchased the house, they tore down the garage, leaving the shed. The plaintiffs remodeled the shed and used it as a stall for their children's pony. The plaintiffs cleared some of the brush and built a corral fence around this portion of land to the west of the house. In addition, they planted grass to the west of the driveway. The defendants contend that the trial justice erred in finding that plaintiffs had acquired title to the land by adverse possession thereof for several reasons: first, that plaintiffs failed to sustain the burden of establishing such adverse possession by strict proof; second, that plaintiffs failed to establish that the use of the western portion was continuous; third, that plaintiffs failed to establish that their use of the southern portion was exclusive and uninterrupted; and fourth, that there was insufficient evidence to support the finding that plaintiffs' adverse possession extended 70 feet south from their house. In addition, defendants argue that the trial justice assumed facts not in evidence in evaluating the testimony of Terrance F. McGaughan, one of the defendants, and that he improperly used the view he took of the property as evidence. We find none of these arguments sufficient to mandate reversal of the trial court decision. I To acquire title to land by adverse possession, a claimant must prove actual possession of the property claimed and acts of dominion over that property as required by law. Dodge v. Lavin, 34 R.I. 514, 84 A. 857 (1912). The generally accepted rule is that the possession required to acquire title pursuant to this statute must be actual, open, notorious, hostile, under claim of right, continuous and exclusive. Sherman v. Goloskie, 95 R.I. 457, 188 A.2d 79 (1963). As this court has frequently stated, claimants must establish each of these elements of possession by *717 strict proof; that is, proof by a proponderance of the clear and positive evidence. Finocchiaro v. Francescone, 97 R.I. 371, 198 A.2d 37 (1964); Sherman v. Goloskie, supra; Day. v. Proprietors of Swan Point Cemetery, 51 R.I. 213, 153 A. 312 (1931). The determination of whether claimants sustained their burden of proof involves an exercise by the trial justice of his factfinding power. It is well-settled that the trial justice's findings of fact will be upheld unless they are clearly wrong or unless he has misconceived or overlooked material evidence. 1 Kent, R.I.Civ.Prac. § 52.5 at 384 (1969). Here the trial justice found that the acts of dominion upon which plaintiffs relied to establish adverse possession were sufficient to manifest an intent to oust the true owner thereof and to put the true owner on notice of the claim of ownership. From a close examination of the record, we are unable to perceive that the trial justice either overlooked or misconceived any material evidence bearing on the issues or that the evidence adduced to support the claim of adverse possession is not clear and positive. The defendants argue that because there was a gap in the use of the western portion of the disputed land, plaintiffs failed to establish the requisite continuity of possession. They claim that the use of the area ceased in 1963 or 1964 when the outhouse was removed, and did not resume until 1967 when plaintiffs built a corral. However, evidence was adduced at trial that the Martins and their predecessors used the outhouse for more than 10 years prior to its removal. This `continuous use for the statutory period was sufficient to establish adverse possession to this portion of land. In addition, the apparent gap in use did not break the continuity of possession. Since the land in dispute was relatively unimproved rural land, continual use was not necessary. As we stated in La-Freniere v. Sprague, 108 R.I. 43, 52-53, 271 A.2d 819, 824 (1970): "It is true that the continuous and uninterrupted possession required to constitute adverse possession by the statute does not require a constant use of the occupied area. It is necessary that it be continuous only in the sense that the claimant exercised a claim of right without interference at such times as it was reasonable to make a proper use of the land. [citation omitted]. * * * [T]emporary breaks in the use to which the occupier was putting the disputed area do not necessarily destroy the requisite continuity." Essentially, the test is whether the use to which the land has been put is similar to that which would ordinarily be made of like land by the owners thereof. Sherman v. Goloskie, supra 95 R.I. at 466, 188 A.2d at 84. An examination of the record reveals acts of possession that took place during this period of time. The Martins removed the outhouse; they filled in the hole that remained so that their grandchildren could safely play in this area. Furthermore, the shed which stood on this land was used by the Martins throughout this period of time. These acts of dominion were sufficient to provide notice to the world that the Martins claimed title to this land. Therefore, we conclude that the trial justice did not err in finding that plaintiffs acquired title to the western portion of land by adverse possession. With regard to the southern portion of the disputed land, defendants argue: (1) that there was insufficient evidence to justify the trial justice's finding that plaintiffs' possession extended 70 feet south from their house, and (2) that defendants' posting of "No Hunting" signs on this property established that plaintiffs' possession was not exclusive and uninterrupted. The defendants' first argument is based on the fact that the largest estimate of the size of the grassy area was 40-50 feet. *718 The defendants thus argue that there is no evidence to support the trial justice's award of an area 70 feet south of the house. The defendants' argument, however, overlooks other testimony. While the estimates of the extent of the grassy area given by the witnesses varied from 20-30 feet to 40-50 feet, most of the witnesses agreed that the present extent of this cleared area was the same as it had been throughout the statutory period. Thus, the trial justice could properly have decided to disregard the witnesses' estimates as unreliable; there was sufficient evidence that the present extent of the clearing was the area actually possessed by plaintiffs and their predecessors. The defendants' posting of "No Hunting" signs did not establish as a matter of law that plaintiffs' possession was nonexclusive or interrupted. Mrs. McGaughan, one of the defendants, testified that she posted "No Hunting" signs within 40 to 50 feet of the house. John J. Martin, plaintiffs' predecessor in title, corroborated her testimony; however, he also testified that he saw her posting signs on the border of his property which he believed to be where the clearing met the wooded area. As a result, the trial justice could have concluded that Mrs. McGaughan was not posting signs in the cleared area claimed by plaintiffs, but rather in the wooded area to the south. Her testimony during cross-examination further supports this conclusion. She testified that she did not notice any of the easily identifiable features of the yard, i. e., the fireplace, shed, picnic table, or swing set. Based on this testimony, the trial justice could reasonably have concluded she was not posting signs within the cleared area claimed by plaintiffs. II The defendants contend that the trial justice used as evidence his view of the property. The taking of a view is not per se error, but a view is not evidence; it is intended as a device to enable the judge or jury to better comprehend and apply the evidence adduced at trial. Corrado v. Providence Redevelopment Agency, 110 Rawle I. 549, 294 A.2d 387 (1972). The trial justice was aware that the view was not evidence and so stated in deciding to take the view. The defendants argue that the trial justice's mention of the view in his decision establishes that he used it as evidence. They further argue that his alteration of the surveyor's boundaries in the final decision was based only on his view of the property. After a careful examination of the record, we conclude that there was sufficient evidence apart from the view to support the lower court's modification of the survey. As discussed above, there was ample testimony that the extent of the clearing remained unaltered throughout the period of adverse possession. The view could properly be used to interpret and understand the testimony relating to the extent of possession. The trial court's statement, "[t]he photographs in evidence and the view I took of the premises in conjunction with the testimony in this case, leads me to believe that Mr. O'Loughlin missed, in a few instances, the actual lines of occupation which I presume he was trying to reflect," does not establish that he used the view as evidence. We have examined the defendants' other contentions and find them to be without merit. The defendants' appeal is denied and dismissed, and the judgment appealed from is of firmed. PAOLINO, J., did not participate. NOTES [1] Since the plaintiffs' possession commenced in 1967, and this suit was initiated in 1974, in order to prove that the disputed land was adversely possessed for the 10 years required by G.L.1956 (1969 Reenactment) § 34-7-1, it was necessary to tack the adverse possession of their predecessors in title, the Martins.

2013-10-30 06:32:40.120422+00

Dimock

152 F. Supp. 838 (1957) Don C. OVERSTREET, Plaintiff, v. CANADIAN PACIFIC AIRLINES, Defendant. United States District Court S. D. New York. May 21, 1957. Harry H. Lipsig, New York City, for plaintiff. Shearman & Sterling & Wright, New York City, for defendant. Thomas F. Fennell, II, M. Van Voorhies, New York City, of counsel. *839 DIMOCK, District Judge. This is a motion to dismiss the complaint upon the following grounds: (1) that the law of New York would not countenance the maintenance of this suit in the New York courts and that the Federal Court should follow this doctrine under Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188, (2) that the maintenance of this suit would place an unreasonable burden upon commerce with foreign nations in violation of Article I, Section 8, Clause 3 of the Constitution, (3) forum non conveniens, (4) that the service of the summons should be set aside on the ground that it does not comply with the requirements of Section 229 of the New York Civil Practice Act. As I am clear that the maintenance of this action would place an unreasonable burden upon commerce with foreign nations in violation of Article I, Section 8, Clause 3 of the Constitution it is unnecessary to consider any of the other points. The action is one to recover damages for personal injuries alleged to have been sustained on one of defendant's airplanes in Yukon Territory, Canada. Plaintiff is a non-resident and defendant is a Canadian corporation not authorized to do business within the State of New York. Defendant operates no flights to or from points in the continental United States but does operate flights from Canada to Alaska and to Hawaii. Defendant maintains an office in New York for the purpose of soliciting freight and passenger business and sells passenger tickets over its lines in combination with air carriers operating to and from points in the United States. The money for these tickets is collected within the State of New York. While there is authority for the proposition that an action brought in the federal courts under the diversity jurisdiction cannot under any circumstances be dismissed as an unreasonable burden on commerce, Wadell v. Green Textile Associates, D.C.D.Mass., 92 F. Supp. 738, Judge Medina in Jablonski v. Southern Pac. Co., D.C.S.D.N.Y., 76 F. Supp. 1022, dismissed, upon that ground, an action in the District Court brought by a non-resident upon a foreign tort against a foreign corporation engaged in interstate commerce and I see no reason for departing from his decision. The question remains whether in order to apply the analogy of the Jablonski case it can be said that defendant is engaged in commerce with foreign nations within the meaning of the Constitution. As above stated, it operates no flights to or from points in the continental United States but it does operate flights between Canadian points on the one hand and Alaskan and Hawaiian points on the other. Is commerce between a territory and foreign nations protected as would be commerce between a state and foreign nations? The answer is supplied by the case of Inter-Island Steam Nav. Co. v. Territory of Hawaii, 9 Cir., 96 F.2d 412, affirmed 305 U.S. 306, 59 S. Ct. 202, 83 L. Ed. 189 and the answer is in the affirmative. On the authority of that case and the Jablonski case I hold that this action must be dismissed as an unreasonable burden on commerce with foreign nations. The case is to be distinguished from Shulman v. Compagnie Generale Transatlantique, D.C., 152 F. Supp. 833. In that case, the defendant French Railways was not engaged in any commerce between the United States and foreign nations by means of its railroad lines. Hence I held that its railroad commerce was not protected from burdens by the commerce clause. Here defendant is engaged in commerce with foreign nations and that commerce is entitled to protection from burdens under the commerce clause. It may be said that the burden is here insubstantial since the effect of bringing witnesses away from their work in the Yukon territory to New York would not interfere with service between Canada and Alaska or Hawaii. I think, however, *840 that defendant's operations must be regarded as integrated and that I should not speculate upon the ability of defendant to replace its employees at the scene of the accident without drawing upon employees from its neighboring Alaska run or even from its Hawaiian run. The motion to dismiss is therefore granted on the ground that maintenance of the action would constitute an unreasonable burden upon commerce with foreign nations.

2013-10-30 06:32:40.134467+00

Larrow

367 A.2d 677 (1976) Herman C. KINNEY v. GOODYEAR TIRE & RUBBER CO. et al. No. 281-75. Supreme Court of Vermont. December 7, 1976. *678 Natt L. Divoll, Jr., Bellows Falls, for plaintiff. Robinson E. Keyes of Ryan, Smith & Carbine, Ltd., Rutland, for Goodyear. James H. Wick of Dinse, Allen & Erdmann, Burlington, for Gans. Sylvester & Maley, Burlington, for Canney. Before BARNEY, C. J., and DALEY, LARROW and BILLINGS, JJ., and SHANGRAW (C. J. Ret.), Special Justice. LARROW, Justice. Plaintiff claims personal injuries caused by the bursting of a new tire while he was mounting it on August 7, 1968. By complaint filed August 5, 1974, he sought recovery from (a) Goodyear Tire & Rubber Co., alleging breach of express and implied warranty of merchantability and fitness for use, in manufacturing the tire, (b) Gans Surplus Tire Co., who sold the tire to Canney and Boyd, alleging breach of implied warranty of merchantability and fitness for use, and (c) Canney and Boyd, individual purchasers of the tire, for breach of duty in having the plaintiff mount their defective tire. Defendant Boyd never appeared or answered, but no judgment was taken as to him, and the action against him was eventually dismissed with prejudice in this court, by agreement of the parties, so that the summary judgment below, disposing of the matter by judgment in favor of the other defendants, is a final and appealable judgment under V.R.C.P. 54(b) and V.R. A.P. 4. The other defendants moved for summary judgment below on the general ground that the asserted claim was barred by the applicable statute of limitations, but they inadvertently cited 12 V.S.A. § 511, the general six year statute applicable to civil actions. Subsequently the court and the plaintiff were advised of this error and of the parties' intent to cite 12 V.S.A. § 512(4). Although no formal amendment of the pleadings was made, the issue was *679 treated by all parties below, and by the court, as being the applicability of § 512(4). The motions were clearly granted on that basis, and plaintiff has admitted in this court that the issue was squarely raised below, without prejudice to him. V.R.C.P. 15(b). 12 V.S.A. § 512(4), in its relevant portion, reads as follows: Actions for the following causes shall be commenced within three years after the cause of action accrues, and not after: . . . . . . (4) Injury to the person suffered by the act or default of another, except as otherwise provided in this chapter; It is uncontroverted that the chapter in question does not otherwise provide, and that either this section or 12 V.S.A. § 511, setting up a six year statute for civil actions "except as otherwise provided", is the governing law. Plaintiff contends that the six year statute governs because his action sounds in contract. The defendants contend that the action sounds in tort, but that, even if it does not, the nature of the injury sustained, rather than the legal theory underlying the claim for relief, determines which statute is applicable. We agree with the defendants, and for the reasons set out seriatim, affirm. The judgment as to the defendant Canney requires little examination. Although plaintiff's brief speaks of the defendants collectively, he does not argue seriously that there was error below in granting judgment for this defendant. Whatever the merits of his argument with respect to a claim based upon strict products liability, assuming without deciding that the complaint below adequately sets forth such a claim, it does not apply to the claimed liability of Canney. The only claim against Canney is that he was negligent in having the plaintiff work on the defective tire that Canney had purchased. This is not a claim based on product liability, but one sounding simply in negligence, resulting in bodily injury. There is, and can be, no serious claim that the three year statute does not apply to this individual defendant. The history of the doctrine of strict product liability in this jurisdiction is reviewed at length in Zaleski v. Joyce, 133 Vt. 150, 333 A.2d 110 (1975). It is not necessary to repeat it here. Set forth in Restatement (Second) of Torts § 402A (1965), it imposes upon the seller engaged in the business of selling a product which reaches a user without undergoing substantial change liability for physical harm or property damage to a user or consumer resulting from a defective condition, unreasonably dangerous, in the product sold. Lack of negligence or contractual relationship does not bar the liability. The short answer to plaintiff's first contention, that the liability is contractual in nature, is found in the very language of § 402A. If the absence of any contractual relationship between the parties does not bar liability, it is difficult indeed to perceive how the liability can be said to "sound" in contract. Cf. Comment m, § 402A, Restatement (Second) of Torts. With all prior forms of action abolished, and only one "civil action" in this jurisdiction (V.R.C.P. 2), we do not feel it necessary to categorize actions based on strict product liability as either tort or contract. The terminology of the applicable statute does not require it. But were we required to do so, we would incline to view the type of action here brought, by a person other than the one to whom the product was sold, as tortious in nature. Whatever may have been earlier doubt and confusion, the authorities are now in general agreement that strict liability sounds in tort rather than in contract. Victorson v. Bock Laundry Machine Co., 37 N.Y.2d 395, 373 N.Y.S.2d 39, 43, 335 N.E.2d 275, 278 (1975); accord, Beasley v. Fairchild Hiller Corp., 401 F.2d 593, 596 *680 (5th Cir. 1968); cf. also 2 L. Frumer & M. Friedman, Products Liability § 16A [5][g], at 3-368.1 (1976). The distinction, however, is more important in some jurisdictions than in others, depending upon the wording of the statute of limitations involved. If, as was often the case with early statutes, the distinction is made between actions ex delicto and ex contractu, then of course the analysis must be made, and the intrinsic nature of the action under these outmoded concepts must be determined. Such, however, is not the case in this jurisdiction. The statutory history of what is now 12 V.S.A. § 512 convinces us that, since at least 1915, the applicability of that section has been predicated upon the nature of the harm for which recovery is sought and not upon the nature of the action brought. By its terms, it applies to actions for assault and battery, false imprisonment, slander and libel, injury to the person suffered by the act or default of another, and damage to personal property similarly suffered. P.S. § 1558, its predecessor, was amended by Public Act No. 88, § 2, 1915, to refer to "actions for slanderous words and for libels and for the recovery of damages for bodily hurt or injury to personal property." Since that time, it has consistently referred to actions by enumerating the harm allegedly suffered. This has been the criterion governing the applicability of the statute. Thus, in Murray v. Allen, 103 Vt. 373, 375, 154 A. 678 (1931), this Court was required to compare G.L. 1849 (the predecessor of 12 V.S.A. § 511), which then gave a six year statute for "actions of tort, except as otherwise provided," with G.L.1850 (predecessor of § 512), giving a three year statute for actions "for the recovery of damages for bodily hurt." That action was for malpractice, concededly a tort, but the special statute, referring to "bodily hurt" and containing a three year limitation, was held to control the general statute. Similar reasoning compels the result here contended for by the defendants. The recovery sought is for injury to the person, allegedly sustained through the acts or defaults of the defendants Goodyear and Gans in selling a product in a defective condition unreasonably dangerous to the user or consumer. The underlying theory of the doctrine is that the public generally has a right to protection against the business sale of such a product. Where the injury is personal, the statute relating to personal injury actions applies. Maynard v. General Electric Co., 486 F.2d 538, 540-41 (4th Cir. 1973). We will look to the substance of the complaint rather than its precise terminology. The law has outgrown its primitive stage of formalism, when the precise word was the sovereign talisman, and every slip was fatal. Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 91, 118 N.E. 214 (1917) (Cardozo, J.). So viewed, the allegation of express warranty is not controlling, because the facts set forth show no contractual relationship whatever between plaintiff and defendants. Judgment affirmed.

2013-10-30 06:32:40.138737+00

Klingeman

535 S.W.2d 938 (1976) George L. SHELDON and Angilee G. Sheldon, Appellants, v. Eva E. FARINACCI, Appellee. No. 15529. Court of Civil Appeals of Texas, San Antonio. April 14, 1976. *939 Biery, Biery, Davis & Myers, Fred Biery, San Antonio, for appellants. Casseb, Leon, Rodgers, Strong & Pearl, Alvin Huth, Bennett & Leger, San Antonio, for appellee. KLINGEMAN, Justice. This is a suit by appellants, George L. Sheldon and Angilee G. Sheldon, the holders of a judgment against Suniland Corporation, against appellee, Eva E. Farinacci, to satisfy such judgment by foreclosure of a judgment lien against certain real property in Bexar County, Texas. Both appellants and appellee filed motions for summary judgment. The trial court granted appellee's motion for summary judgment that appellants take nothing, and denied appellants' motion for summary judgment. The summary judgment evidence, which sets forth the sequence of events upon which this suit is predicated, may be summarized as follows: 1. July 11, 1973—Recording of deed of subject property from Suniland Corporation to Empress Construction Company. 2. January 29, 1974—Appellants recover judgment against Suniland Corporation in the amount of $33,446.00. 3. April 29, 1974—Recording of abstract of appellants' judgment against Suniland Corporation. 4. November 27, 1974—Recording of "Correction Deed" from Suniland Corporation to Empress Construction Company. 5. November 27, 1974—Recording of deed from Empress Construction Company to Eva E. Farinacci. Appellants assert that their judgment lien had attached to the real property involved prior to the purchase by appellee. Appellants' entire case is predicated upon their contention that the acknowledgment to the deed recorded July 11, 1973 was fatally defective and that consequently the deed (a) was ineffective to divest Suniland Corporation of any title to the subject property; (b) should not have been recorded; (c) was ineffective to impart constructive notice to a creditor; (d) was improperly admitted as a part of appellee's summary judgment proof. If such acknowledgment was not fatally defective, but a valid acknowledgment, all of appellants' contentions must fail. Appellants assert four points of error: (1) the trial court erred in denying appellants' motion for summary judgment; (2) the trial court erred in granting appellee's motion for summary judgment; (3) the trial court erred in finding that the deed from Suniland Corporation to Empress Construction Company recorded July 11, 1973, imparted constructive notice to creditors and divested Suniland Corporation of title to the subject property; (4) the trial court erred in allowing appellee to use such deed as a part of her summary judgment proof. Although not assigned as a point of error, appellants make some contention in their brief that the property description in the July 11, 1973 deed was also defective and was inadequate to divest Suniland Corporation of its interest in the property. However, on oral argument, appellant stated that he now believes such description to be *940 adequate, and that he has abandoned any such contention. We will not consider it. We first consider appellants' point of error that the court erred in denying their motion for summary judgment. We have heretofore set forth the applicable summary judgment evidence. It is to be noted that nowhere therein is any proof that Suniland Corporation, appellants' judgment creditor, owned the subject property on the effective date of appellants' judgment lien, and in fact, nowhere in the record is there any proof that Suniland Corporation ever owned the property. Appellants apparently rely on the deed from Suniland Corporation to Empress Construction Company recorded July 11, 1973, and the "Correction Deed" from Suniland Corporation to Empress Construction Company recorded November 27, 1974, as proof that Suniland Corporation owned such property. The fact that A gives a deed of conveyance to B of Blackacre, may be effective to divest A of any title that it has in Blackacre, but such a deed of conveyance, in itself, does not prove that A owned Blackacre or any part thereof. In order to show that appellants' judgment lien attached to the subject property, it was incumbent upon appellants to show that Suniland Corporation owned the property or some interest therein. There is no such proof. Under the record, the trial court did not err in refusing to grant appellants' motion for summary judgment. Appellants' other three points of error are based on their contention that the acknowledgment on the deed of July 11, 1973 was fatally defective, and that consequently their judgment lien had attached to the real property involved prior to the purchase by appellee. The acknowledgment here involved reads as follows: The State of Texas County of Bexar Before me, the undersigned authority, on this day personally appeared of SUNILAND CORPORATION, a corporation, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said corporation. Given under my hand and seal of office on this the 1st day of June, A.D., 1973. (Seal) /s/ Santa Kime Notary Public in and for Bexar County, Texas (TR 32) Appellee asserts that it is the law of this State that in construing an acknowledgment, the instrument to which it is attached may also be considered; that the acknowledgment here involved when considered with the deed to which it was attached is not defective; that the deed was effective to divest Suniland Corporation of whatever interest it had in the subject property; was properly recorded; was effective to give notice to creditors; and was properly admitted into evidence as a part of appellee's summary judgment proof. It is obvious from the above set forth acknowledgment that it is not possible to tell who appeared before the notary public without reference to the deed. But by looking at the deed and the acknowledgment together it can be readily ascertained that Adolph Alvarez, the person who signed the deed, is the person who appeared before the notary public, the person who acknowledged that he executed the same for the purposes and considerations therein stated, as the act and deed of said corporation. The grantor shown in the deed is Suniland Corporation, and the only signature on the deed is that of Adolph Alvarez. Article 6603, Tex.Rev.Civ.Stat.Ann., requires that the acknowledgment of an instrument for the purpose of being recorded shall be by the person who executed the same, appearing before some officer authorized to take acknowledgments and stating that he executed the same for the purpose and consideration therein stated. Article 6626, Tex.Rev.Civ.Stat.Ann., requires that all deeds, in order to be recorded, shall have been acknowledged according to law. *941 Appellants rely heavily on Sweeney v. Vasquez, 229 S.W.2d 96 (Tex.Civ.App.—San Antonio 1950, writ ref'd), in which it was held that a contract of sale and purchase which is not acknowledged by the vendor is not notice to subsequent purchasers even though it was acknowledged by the purchaser and recorded. The court pointed out that Article 1294, Tex.Rev.Civ.Stat.Ann., requires that "[e]very deed or conveyance of real estate must be signed and acknowledged by the grantor in the presence of at least two credible subscribing witnesses thereto; or must be duly acknowledged before some officer authorized to take acknowledgments, and properly certified to by him for registration;" and that since a contract of sale and purchase executed by the seller and purchaser passes an equitable title to the land, it should have been acknowledged by the vendor and not by the vendee. The contract of sale therein involved contained no acknowledgment whatsoever of the vendor, in contravention of Article 1294, and we do not regard such case as determinative of what constitutes a defective acknowledgment. Appellants and appellee both cite Smith v. Victory, 69 S.W.2d 433 (Tex.Civ.App.— Texarkana 1934, writ ref'd), which involved a certificate of acknowledgment of a married woman under the old privy acknowledgment statute. Appellee cites the case as authority for the proposition that an attached deed can be looked at in construing the validity of the acknowledgment. The name of the wife was left blank in one place in the acknowledgment, but appears in another place in the certificate; there was also a variance between the spelling of the name in the acknowledgment and in the deed. The court held such acknowledgment sufficient stating that when considered with the remaining terms of the certificate, the omission of the name in the blank indicated did not render the certificate void. The court also found the difference in the spelling of the name in the deed and in the acknowledgment was not sufficient to invalidate the certificate of acknowledgment in that the doctrine of idem sonans was applicable. Appellants also rely on Huff v. Webb, 64 Tex. 284 (1885), in which the court held that a certificate of acknowledgment, that did not affirmatively show that the person whose name is shown in the acknowledgment executed the deed, was not sufficient and the deed could not be admitted in evidence. The court stated that under the then Articles 4305 and 4312, Tex.Rev.Civ. Stat.Ann., a proper certificate of acknowledgment of a deed or other instrument must show that the maker appeared before the officer "and stated that he executed the same," and that the acknowledgment there involved did not show that the maker acknowledged before the officer that he had executed the deed. Appellee relies chiefly on Hill v. Foster, 143 Tex. 482, 186 S.W.2d 343 (1945), and Williams v. Cruse, 130 S.W.2d 908 (Tex.Civ. App.—Beaumont 1939, writ ref'd). Hill involved a certificate of acknowledgment of a married woman which was defective in that it failed to show that the officer taking the acknowledgment fully explained the contents of the deed to the married woman and therefore did not meet the requirements of Article 6608, Tex.Rev.Civ.Stat.Ann., which prescribed the form of a certificate of acknowledgment of a married woman. The court held that in order for the notary's certificate to a married woman's acknowledgment to a deed to be valid, it is not necessary to use the exact language of the statute, but that a substantial compliance with the statute will be sufficient if it contains language which possesses the same meaning or represents the same facts. In view of other facts involved in this case, we do not regard it as exactly in point or controlling on the matter here before us. We regard Williams v. Cruse, supra, a writ refused case, as most directly in point of any of the cases we have examined. In this case, it was contended that two acknowledgments were fatally defective. One acknowledgment was that of Anna Swearingen, a married woman, which failed to state that she willingly signed the deed. The court held that no exact form or words *942 were required, and that a certificate of acknowledgment was valid so long as it shows that all essential prerequisites were in fact complied with. The other acknowledgment under attack, which we regard as directly in point, was that of a grantor whose name was shown in the body of the deed as "Nancy A. E. Risinger." The deed was signed "Nancy A. E. Risinger `her mark'." However, the acknowledgment was that of "Nancy A. E. Swearingen," and nowhere in the acknowledgment did the name "Nancy A. E. Risinger," appear. The court held that an acknowledgment may be considered in connection with the instrument to which it is attached in determining its sufficiency. The court stated that from the "instrument," it would appear that the officer who made the acknowledgment simply made an error in making out the certificate, and that the acknowledgment and the record sufficiently established that Nancy A. E. Risinger, grantor in the deed, and Nancy A. E. Swearingen, who acknowledged it, were one and the same person. In Williams we have an error of commission; in the case before us, an error of omission; that is, the name of the person who signed the instrument is omitted from the acknowledgment. However, it clearly appears from looking at the deed and the acknowledgment, that the person who signed the deed and the person acknowledging the deed were one and the same person. The acknowledgment contains all the other necessary prerequisites of an acknowledgment; that is, that the signer personally appeared before the notary; that he was known to the notary to be the person whose name is subscribed to the deed; that he acknowledged to him that he executed the same for the purposes and considerations therein stated, in the capacity therein stated, and as the act and deed of the corporation.[1] Appellant also contends that the deed involved did not impart constructive notice because of the provisions of Article 5.08 of the Texas Business Corporation Act which provides that a corporate conveyance shall be acknowledged in the manner prescribed for other conveyances of land, and that any such deed when recorded, if signed by the president or any vice-president of the company, shall constitute prima facie evidence that a resolution of the board of directors or stockholders was duly adopted. We have concluded that by looking at both the deed and the acknowledgment thereto it is clearly apparent that Adolph Alvarez signed the deed as President of Suniland Corporation and we do not regard appellants' contentions with regard to Article 5.08 as having merit. We have concluded that under the summary judgment evidence and the applicable authorities the certificate of acknowledgment is not fatally defective, and that the acknowledgment shows that all essential prerequisites to a valid acknowledgment were in fact complied with. All of appellants' points of error are overruled. The trial court did not err in granting appellee's motion for summary judgment and in refusing to grant appellants' motion for summary judgment. The judgment is affirmed. NOTES [1] Smith v. Burgher, 136 S.W. 75 (Tex.Civ.App. 1911, no writ), is another case in which the court looked to the deed in passing on the sufficiency of an acknowledgment. The acknowledgment was that of a married woman, and an objection was made to the deed on the ground that it appeared from the acknowledgment that it was doubtful that the married woman ever acknowledged it at all, as the acknowledgment did not show her to be the wife of D. M. Mason, but the wife of ___. The appellate court held that the objection was not tenable in that the deed stated that she was the wife of D. M. Mason. The court stated that the acknowledgment substantially complied with the statute, and that there was no error in admitting the deed.

2023-08-22 21:20:42.075204+00

Whitaker

WHITAKER, Judge. This case is now before the court on plaintiff’s and defendant’s motions for reconsideration of our decision of December 5, 1956. Plaintiff, a former Army reserve officer, brought this suit to recover disability retirement pay from July 18, 1946 to date, less disability compensation received from the Veterans Administration. The petition was filed August 5,1954, and came before the court on defendant’s motion to dismiss plaintiff’s petition, as amended, on the ground that the plaintiff’s claim, if any, is barred by the statute of limitations. On September 12, 1945, plaintiff, while serving on active duty with the United States Army in the Philippines, was injured when struck in the abdomen by a bullet which came through the canvas of his tent quarters. Attempts made by the Army doctors to remove the bullet were unsuccessful and the bullet has remained in plaintiff’s hip to this day. On July 18, 1946, the plaintiff was separated from the service not by reason of physical disability. Immediately prior to this separation plaintiff was examined at Lovell General Hospital, Camp Devens, Massachusetts, for the purpose of determining whether an operation should be performed to remove the bullet from his body. The medical officers at the hospital decided not to perform the operation and plaintiff sought their advice as to whether he should appear before a Medical Disposition Board and an Army Retiring Board. He was informed by the doctors that his disabilities were not sufficient to make him eligible for re*240tirement benefits. Shortly thereafter on July 18, 1946, plaintiff was separated from military service not by reason of physical disability, with the rank of major. Following his separation, plaintiff’s physical condition grew worse and on January 3, 1947, he sought the advice of the Reserve Officer’s Association as to whether, in the opinion of the association, it would be possible for him to appear before an Army Retiring Board. Plaintiff’s request for permission to appear before the Board was forwarded by the association to the Adjutant General of the Army. On February 5, 1947, plaintiff was informed that his request would be given consideration if he submitted evidence which would justify his appearance before the Board. Plaintiff submitted evidence along this line and on March 22, 1948, he was directed to enter Murphy General Hospital, Waltham, Massachusetts, for physical evaluation preliminary to an appearance before an Army Retiring Board. Plaintiff entered the hospital on August 3, 1948, which was two years after his release from active duty. On August 6, 1948, the Retiring Board found that plaintiff was not at that time permanently incapacitated for active duty. This decision was approved by the Secretary of War on Setember 2, 1948. It is plaintiff’s position that an honest evaluation of his case by Army authorities would have resulted in his having been declared eligible for the retired benefits provided for by statute, but that he was deprived of such statutory benefits by the arbitrary, capricious and unsupported findings and decision of the Army. Defendant moved to dismiss the petition on the ground that plaintiff’s claim, on which he bases his suit, accrued upon his separation from the service on July 18,1946, without retirement benefits, and is therefore beyond the six-year statute of limitations applying to claims filed in this court. On the same day our former opinion in this case was handed down, December 5, 1956, we also decided the cases of Levadi v. United States, 146 F.Supp. 455, and Conlin v. United States, 146 F.Supp. 833, in which the same question was presented, and in which the facts were quite similar. Since then the Supreme Court has denied certiorari in both cases (353 U.S. 917, 77 S.Ct. 665, 1 L.Ed.2d 664, and 353 U.S. 916, 77 S.Ct. 663, 1 L.Ed.2d 663 respectively). In addition, we have since decided the cases of Price v. United States, 149 F.Supp. 181, and Hutchinson v. United States, 149 F.Supp. 156, in which we applied the principle of the Levadi and Conlin cases. All of these cases followed our previous decisions in Rosnick v. United States, 129 F.Supp. 958, 132 Ct.Cl. 1; Girault v. United States, 135 F.Supp. 521, 133 Ct.Cl. 135; Duff v. United States, 135 F.Supp. 527, 133 Ct.CI. 161; Odell v. United States, 139 F.Supp. 747, 134 Ct. Cl. 634; Levine v. United States, 137 F.Supp. 955, 133 Ct.Cl. 774; McFarlane v. United States, 140 F.Supp. 420, 134 Ct.Cl. 755; and Barker v. United States, 140 F.Supp. 415, 135 Ct.Cl. 42, certiorari denied 352 U.S. 935, 77 S.Ct. 224, 1 L.Ed. 2d 161. The principle of these cases is: first, jurisdiction is conferred by Congress, not on this court, but on retiring boards and the Secretaries of the three armed services, to decide an officer’s right to retirement for physical disability, and his consequent right to retired pay; second, it follows therefrom that we cannot acquire jurisdiction of such a claim until after the board and the Secretary have acted, or failed or refused to act, and not then unless the board and the Secretary acted arbitrarily or capriciously or contrary to law; third, since our jurisdiction could not be invoked until after the retiring board and the Secretary had acted, the statute of limitations on a suit in this court did not begin to run until they had acted; fourth, on a finding of arbitrary or otherwise unlawful action by *241the retiring board and Secretary, it is our duty to act in the place of the retiring board and, on a finding of disability at the time of discharge, to hold an officer is entitled to retired pay from the date of his discharge. Now the material facts in this ease differ from the facts in those cases only in this: plaintiff claims he did not make application to go before a retiring board at the time he was released to inactive duty because the medical officers at the hospital, where he was examined prior to separation, advised him that he was not sufficiently incapacitated to warrant sending him before a retiring board; that he relied on such advice, was misled thereby, and that in the circumstances he was justified in relying on such expert advice. At any rate, plaintiff did not then make application to go before such board. However, when his condition got progressively worse, he did make such an application about five months later and about eighteen months later a hearing before a retiring board was granted him. Under ordinary circumstances an officer should make application to appear before a retiring board prior to his discharge, but in view of plaintiff’s allegation that he was misled by the advice of the medical officers, we think he was excused for waiting until his worsened condition made it obvious to him that their advice was erroneous, and then making his application. This justified the retiring board and the Secretary in entertaining his application made five months after his discharge. Cf. Updike v. United States, 132 F.Supp. 957, 132 Ct.Cl. 627; Vaughn v. United States, Ct.Cl. 147 F.Supp. 280. But plaintiff alleges the board arbitrarily, capriciously, and without foundation in fact or law, found that he was not incapacitated for military service at the time of his discharge. If this allegation turns out to be true, then it would be our duty to render that decision which the board and the Secretary should have rendered. It is our duty, therefore, to inquire, 'first, whether the board did act arbitrarily, capriciously, or without foundation in fact, and if we find that it did so act, then we must inquire whether plaintiff, at the time of his discharge, was physically disabled to perform the duties of his office. If we find that he was, and that his disability was an incident of his service, then we must render that judgment to which such findings by the retiring board would have entitled him, to wit, retired pay from the date of discharge to the date of judgment. We have jurisdiction to do this-in this case because the Secretary acted on his application for retirement on September 2, 1948, and plaintiff filed his petition on August 5,1954, which was within six years of the time plaintiff’s right to sue in this court accrued. The motions for reconsideration are allowed. The opinions of December 5,1956 are vacated and withdrawn. Defendant’s motion to dismiss plaintiff’s amended petition is overruled in its entirety, and the case is remanded to a trial commissioner to take testimony on the issues stated. It is so ordered. MADDEN and LITTLETON, Judges, concur.

2023-08-22 21:20:42.079951+00

Jones

JONES, Chief Judge (concurring in part). I concur, but am inclined to the opinion that any recovery in this court should be limited to six years previous to filing of the suit.

2023-08-22 21:20:42.084143+00

Laramore

LARAMORE, Judge (dissenting). I respectfully dissent for the following reasons: Regardless of whether this court has jurisdiction, upon an allegation and proof of arbitrary action on the part of the Secretary of the Army, to review and substitute for the decision of the Secretary, I would dismiss this case on the limitations. *242Aside from the correction of records board, there is no specific authority given the Secretary to review the case of any one released from service, not for physical disability, except section 301 of the Act of June 22, 1944, 58 Stat. 284, 286, 38 U.S.C.A. § 693h. Section 302 of the above act, 38 U.S. C.A. § 693i, provides for the review by the board in cases of officers who were retired or released for disability, but without pay, and with power equal to that of the board created under section 301. This, it seems to me, was the power to review the extent and incident of the disability for which the officer was released. It would be an inadmissible premise to assume that under this section there was granted authority to determine existence of disability. If section 301 granted this authority, there would seem to have been no reason for section 302. If, therefore, the Secretary should review the case of an officer who has not been released for disability, he would be doing so under the broad authority conferred upon him under the basic retirement Act of April 3, 1939, 53 Stat. 555. The right which the Secretary refused to grant was the same right that existed under the Act of April 3, 1939. Assuming that this court has a right to review the grant under the Act of April 3,1939, any cause of action accrued when the plaintiff was released from duty and the 6-year statute of limitations ran from that date. Any subsequent act of the Secretary would not be a required administrative act which would toll the running of the statute of limitations. Therefore, whether the case comes into this court based on the denial of retirement when released or whether it came into court based on alleged arbitrary action, the statute of limitations would commence to run at the same time. The petition, having been filed more than six years from plaintiff’s release from duty, is in my opinion barred by the 6-year limitations statute.

2013-10-30 06:32:40.179319+00

Van Dusen

152 F. Supp. 583 (1957) UNITED STATES of America v. Harold EPSTEIN. Cr. No. 19035. United States District Court E. D. Pennsylvania. June 13, 1957. *584 G. Clinton Fogwell, Jr., U. S. Atty., Henry J. Morgan, Asst. U. S. Atty., Philadelphia, Pa., for plaintiff. Jacob Kossman, Philadelphia, Pa., for defendant. VAN DUSEN, District Judge. This case comes before the court on post-trial motions filed by defendant after the jury found him guilty of devising a scheme to defraud and carrying it out, through the use of the mails to send false financial statements to persons from or through whom he wished to secure credit, in violation of 18 U.S.C.A. § 1341.[1] I. Motion For Judgment of Acquittal The uncontradicted evidence showed that defendant asked an accountant (Mr. Segal) to prepare financial statements of the condition of his retail clothing store business as of 12/31/53 and 3/31/54 "for the purpose of procuring credit" (N.T. 75). The defendant told the accountant that these statements were to be sent to the "usual credit agencies in the trade" (N.T. 76). In preparing the statement, the accountant asked the defendant "how much stock do you have that is your own" (N.T. 84, 86) and told him that consignment merchandise should not be included in this inventory figure.[2] The defendant told the accountant to include $10,804 in inventory as of 12/31/53 and $12,500 as of 3/31/54 (N.T. 74-5). The defendant admitted on at least one occasion in February of 1954, incident to investigation of a burglary loss in his store, that 95% of the stock in defendant's store was on consignment (N.T. 90 and 38, 54). Counts of the merchandise in the store made on February 19 and April 1, 1954, indicated that the greater portion of such stock was on consignment (N.T. 70-72). The value of the defendant's own stock or inventory on March 31, 1954, did not exceed $2,000. The $12,500 inventory figure was the largest item on the March 31, 1954, statement and, with this item, the *585 statement showed capital of $22,585.41 (see Exhibit G-2). Copies of these statements were given by defendant to the accountant (N.T. 76). Also, at defendant's "direction" on April 27, 1954, the accountant typed and signed a covering letter of transmittal of the March 31, 1954, statement addressed to Credit Exchange, Inc., New York City, and delivered this letter, with a copy of the statement, to defendant so he could mail it in Credit Exchange's envelope to New York City (N.T. 77-9; see G-2 and N.T. 19). The Credit Exchange[3] received a financial statement of Harold Epstein, dated March 31, 1954, through the mail in an envelope postmarked Philadelphia, Pa., April 27, 1954. The statement was accompanied by a letter of transmittal on the stationery of Benjamin M. Segal, Public Accountant and Auditor, the letter being dated April 27, 1954, and signed by Benjamin M. Segal.[4] It has been repeatedly held that sending of false financial statements through the mail in order to secure credit, knowing that such statements are false, is a violation of this provision of the Federal Criminal Statutes. Slakoff v. United States, 3 Cir., 1925, 8 F.2d 9; Scheinberg v. United States, 2 Cir., 1914, 213 F. 757; Bettman v. United States, 6 Cir., 1915, 224 F. 819; United States v. Yorsaner, D.C.,E.D.N.Y.1937, 20 F. Supp. 902. Under these circumstances, the motion for judgment of acquittal must be denied. II. Motion For New Trial Since the foregoing section of this opinion makes clear that the guilty verdict was not against the weight of the evidence, only the following three alleged grounds for new trial need be commented on in this opinion: A. Admission of testimony given voluntarily by defendant in involuntary proceeding under Section 21, sub. a of the Bankruptcy Act before the adjudication that he was a bankrupt. Defendant alleges that Section 7, sub. a (10) of the Bankruptcy Act, 11 U.S. C.A. § 25, sub. a (10),[5] made it error *586 for the trial judge to have admitted into evidence in this criminal proceeding (N. T. 165-8), over the objection of counsel for the defendant, portions of testimony of the defendant, taken January 3, 1955, and January 10, 1955, after the filing of an involuntary petition in bankruptcy by his creditors, before a Referee in Bankruptcy at special meetings under Section 21, sub. a of the Bankruptcy Act, 11 U.S.C.A. § 44.[6] Although defendant was directed by the court to appear at the examination before a Referee under § 21, sub. a[7] of the Bankruptcy Act, he was under no duty to testify. He could not have been compelled to testify unless the Act makes it his duty to do so, and it is only in such instances that his testimony may be privileged.[8] Arndstein v. McCarthy, 1920, 254 U.S. 71, 41 S. Ct. 26, 65 L. Ed. 138, affirmed 1923, 262 U.S. 355, 43 S. Ct. 562, 67 L. Ed. 1023, reaffirmed, 1924, 266 U.S. 34, 45 S. Ct. 16, 69 L. Ed. 158; Goldstein v. United States, 5 Cir., 1926, 11 F.2d 593, certiorari denied, 1926, 271 U.S. 667, 46 S. Ct. 483, 70 L. Ed. 1141. See, also, Cajiafas v. United States, 6 Cir., 1930, 38 F.2d 3; White v. United States, 1 Cir., 1929, 30 F.2d 590; Optner v. United States, 6 Cir., 1926, 13 F.2d 11, 13.[9] *587 Section 7 of the Bankruptcy Act[10] details the duties of the bankrupt,[11] and any testimony of the bankrupt given at an examination under this Section, being compulsory, may be privileged.[12] But testimony under § 21 is given by the *588 bankrupt as it would be by any other witness in a proceeding in which it is not made his duty to testify, and, therefore, it is not privileged.[13] Thus, if the defendant was in fear of furnishing incriminating information against himself at the examination under § 21, sub. a, he could have then asserted his constitutional privilege and refused to answer the questions asked of him. McCarthy v. Arndstein,[14] supra. If the Referee had certified the matter for contempt proceedings to the court as the result of his refusal to answer, he could then have claimed the protection of the Fifth Amendment. Goldstein v. United States, supra. B. Portion of the charge concerning the requisite intent for guilt under 18 U.S.C.A. § 1341 The trial judge charged the jury that if the inaccurate representation in the financial statement as to the inventory was made by defendant with reckless indifference as to whether it was true or false, this was sufficient intent to make the defendant guilty,[15] provided that the *589 other elements of the crime (mailing or knowingly causing it to be mailed, etc.) were present. The federal courts have repeatedly held that 18 U.S.C.A. § 1341 is violated if the defendant either knows the representation is false or makes it with reckless indifference as to whether it is true or false. West v. United States, 10 Cir., 1933, 68 F.2d 96, 98; Slakoff v. United States, 3 Cir., 1925, 8 F.2d 9, 10;[16] cf. United States v. Murdock, 1933, 290 U.S. 389, 394-395, 54 S. Ct. 223, 78 L. Ed. 381;[17] Kercheval v. United States, 8 Cir., 1926, 12 F.2d 904, 908; Kaplan v. United States, 2 Cir., 1916, 229 F. 389, 390.[18] C. Statement that consideration of whether defendant should be prosecuted in state or federal courts "is a red herring." Counsel for defendant used the following language in his opening statement to the jury (N.T. 10): "There wouldn't be any case here if he had brought it over to Dun & Bradstreet and handed it to them. Then the creditors would have to pursue their remedy in the state court. But technically, because they say he mailed it, that case has to wind up and take up our time." The trial judge made no mention of the possibility of the defendant's prosecution in the state court at any time during the trial or in his charge. However, after the jury had been deliberating for about two hours,[19] several questions, *590 including the following, were sent to the trial judge (N.T. 206): "`In your charge, we were told that the only reason this case has come to Federal Court is because he used the mails to send this statement. If a man uses the mails for such a statement must the Government prove that the defendant had knowledge of the law governing such mailing.'" In answering this question, the trial judge said (N.T. 207-8): "Now, I think maybe you have got confused by some argument that counsel made to you with what I said. You should not consider whether counsel may think this prosecution should be in the State Court or in the Federal Court. That is none of your and my concern. Congress has made this a crime. Whether it may be a crime under state law, too, or under any other law, has nothing to do with your decision here. * * * "Now, do not go off on whether or not it should be in the Federal Court or somewhere else, as counsel for the defendant indicated to you at one point in the trial. That is a red herring. This is a situation where you are to decide on whether or not what was done by this defendant fell within a statute of the United States Congress. It is not for you or me to say whether we think this should be a crime. Congress says that, and we are sworn to follow the laws of Congress." Near the end of the supplemental instructions to the jury, after objection by counsel for defendant to the use of the term "red herring," the trial judge said (N.T. 214): "I want to emphasize that when I use the term `red herring,' I am not trying to characterize the arguments of the defense counsel as foolish, because they are very good. He is an extremely able lawyer. He has presented a very good argument to you. You remember it all, and you should remember the United States Attorney's argument. All I am saying is that I do not want you to decide the thing on the fact that this might have been brought before a court somewhere else. You have got an Act of Congress that you as a jury in this court must decide on. You must decide whether it has been violated or not. That is your job." After a careful review of the entire record, the trial judge does not believe that it is "in the interest of justice"[20] to grant a new trial because of use of the term "red herring" under these circumstances. Order And now, June 13, 1957, it is ordered that (1) defendant's motion for judgment of acquittal, made April 5, 1957, is denied,[21] and (2) defendant's motion for judgment of acquittal and, in the alternative, for a new trial, filed April 8, 1957, is denied. NOTES [1] The pertinent provisions of the statute are: "Whoever, having devised * * * any scheme * * * to defraud, or for obtaining money or property by means of false * * * representations * * * for the purpose of executing such scheme * * * or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Post Office Department * * * or knowingly causes to be delivered by mail according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined not more than $1,000 or imprisoned not more than five years, or both." 18 U.S.C.A. § 1341. The second count of the indictment was dismissed during the trial due to improper venue (N.T. 176). [2] At N.T. 84, the accountant testified as follows on cross-examination: "Q. Did you ask him? Did you know whether he had merchandise on consignment? A. He told me he kept consigned merchandise. "Q. You knew. Well, did you ask him and tell him what the inventory was for his statement to eliminate not what he had? A. Yes, I did. I said, `How much stock do you have that is your own?'" [3] Paragraph 2 of the written stipulation provides: "2. Credit Exchange is a credit checking and reporting agency. It compiles financial data and gives credit reports and recommendations with respect to the financial status of prospective purchasers to its subscribers who are manufacturers and suppliers of merchandise." [4] There was also evidence that a supplier of defendant always considered the inventory figure on a customer's statement before extending him credit and that this supplier actually did extend credit to the defendant in the summer of 1954 on the basis of figures contained in his March 31, 1954, statement which were secured from Credit Exchange, Inc. (N. T. 125-152). In view of the well-recognized principle that no proof that anyone has been deceived is necessary for commission of this crime (see Henderson v. United States, 6 Cir., 1953, 202 F.2d 400, rehearing denied, 6 Cir., 204 F.2d 126; Kreuter v. United States, 5 Cir., 1955, 218 F.2d 532, certiorari denied 349 U.S. 932, 75 S. Ct. 777, 99 L. Ed. 1262), this testimony seems irrelevant, but it does show that inflation of inventory in the statement was a scheme likely to secure credit which would not otherwise be granted. Cf., also, Durland v. United States, 1896, 161 U.S. 306, 315, 16 S. Ct. 508, 40 L. Ed. 709. [5] Section 7 of the Bankruptcy Act, 11 U.S. C.A. § 25, provides, in part, the following: "Duties of bankrupts "(a) The bankrupt shall (1) attend at the first meeting of his creditors, at the hearing upon objections, if any, to his application for a discharge and at such other times as the court shall order; * * * (10) at the first meeting of his creditors, at the hearing upon objections, if any, to his discharge and at such other times as the court shall order, submit to an examination concerning the conducting of his business, the cause of his bankruptcy, his dealings with his creditors and other persons, the amount, kind, and whereabouts of his property, and, in addition, all matters which may affect the administration and settlement of his estate or the granting of his discharge; but no testimony given by him shall be offered in evidence against him in any criminal proceeding, except such testimony as may be given by him in the hearing upon objections to his discharge: * * *." (Emphasis supplied.) [6] An involuntary petition in bankruptcy was filed against the defendant on December 29, 1954 (Bankruptcy No. 24272 in E.D.Pa.), and on that same day, a Receiver of the assets and property of the alleged bankrupt (defendant here) was appointed. On December 31, 1954, the Receiver petitioned the court for an order directing the alleged bankrupt to appear for examination pursuant to § 21, sub. a of the Bankruptcy Act. Such petition alleged, in part: "4. That it is desirable and necessary to conduct an immediate examination of the alleged bankrupt under Section 21-A of the Bankruptcy Act for the following reasons: "(a) The alleged bankrupt has failed and refused to turn over all of his books and records to the Receiver for examination. "(b) The only assets that have been discovered thus far consist of a small stock of ladies' dresses of the approximate value of $1,000. "(c) No additional assets have been discovered and it is necessary to examine the alleged bankrupt to discover the location and whereabouts of same." An order of the court was entered that same day, directing the alleged bankrupt and his father, L. Epstein, to appear before a Referee in Bankruptcy "for examination under Section 21-A of the Bankruptcy Act, there to be examined concerning their acts, conduct and property relative to these proceedings." Such special meeting was held on January 3, 1955, adjourned, and then completed on January 10, 1955. On January 3 the meeting was prefaced by the Referee's opening remark that: "This is a special meeting under Section 21(a) for the examination of the alleged bankrupt and such other witnesses as may be called by counsel for the petitioning creditors." Defendant was adjudicated a bankrupt on January 17, 1955. Thereafter, on March 7, 1955, schedules signed by defendant on March 4, 1955, were filed; on April 5, 1955, the first meeting of creditors was held; on June 10, 1955, the defendant waived his right to receive a discharge in bankruptcy; on June 28, 1956, a final meeting of creditors on notice was held; and on August 10, 1956, an order of final distribution was entered. [7] Section 21, sub. a of the Bankruptcy Act, 11 U.S.C.A. § 44, sub. a, provides as follows: "(a) The court may, upon application of any officer, bankrupt, or creditor, by order require any designated persons, including the bankrupt * * *, to appear before the court or before the judge of any State court, to be examined concerning the acts, conduct, or property of a bankrupt: * * *." [8] Cases such as Adams v. Maryland, 1954, 347 U.S. 179, 74 S. Ct. 442, 98 L. Ed. 608, where testimony given in response to a summons before a United States Senate Committee investigating crime was held not admissible in a subsequent criminal proceeding because of the express prohibition by statute, 18 U.S.C.A. § 3486, of such use of the testimony, are inapplicable since there was no requirement that plaintiff give the testimony which was offered in evidence in this case. [9] Jacobs v. United States, 1 Cir., 1908, 161 F. 694, 698-700, cited by defendant at the oral argument on this motion, does no more than state that under § 7 of the Bankruptcy Act testimony taken before the Referee when defendant had his examination as a bankrupt is not admissible in a subsequent criminal prosecution; but nowhere does it state that such examination of the bankrupt was made pursuant to § 21 nor does it consider whether, under § 21, it would be the bankrupt's duty, as under § 7, to give testimony at the examination. [10] See footnote 5 above. [11] It is recognized that § 7, sub. a (10) refers only to oral testimony and does not render the bankrupt's schedules inadmissible against him in a subsequent criminal prosecution. Ensign v. Pennsylvania, 1913, 227 U.S. 592, 33 S. Ct. 321, 57 L. Ed. 658; Slakoff v. United States, 3 Cir., 1925, 8 F.2d 9; Czarlinsky v. United States, 10 Cir., 1931, 54 F.2d 889. See Krotkiewicz v. United States, 6 Cir., 1927, 19 F.2d 421, 424, where the court, citing Optner v. United States, 6 Cir., 1926, 13 F.2d 11, admitted bankruptcy schedules in evidence in a later criminal proceeding, since they were signed by the defendant and had become admissions by him. See also, Podolin v. Lesher Warner Dry Goods Co., 3 Cir., 1914, 210 F. 97, 103. The dictum in United States v. Weissman, 2 Cir., 1955, 219 F.2d 837, 841, relied on by defendant for the principle that testimony of the defendant taken under § 21, sub. a was within the immunity granted by § 7, appears to be based on the fact that the defendant had been directed by the Referee to sign the schedules in bankruptcy (and apparently had done so). The cases above in this footnote appear to view the signing of schedules as not of such dimensions as to entitle the bankrupt to the protection of § 7, sub. a (10), but this question need not be decided since the state of the record as of the time of the examination of the defendant under § 21, sub. a, as shown in footnote 6, clearly distinguishes the Weissman case on its facts. Here the schedules were not signed by the defendant until after his adjudication as a bankrupt, both of which were subsequent to the examination under § 21, sub. a, here under consideration. See, also, In re Kaplan Bros., 3 Cir., 1914, 213 F. 753, 755, where the court found that testimony taken at the first meeting of creditors, a meeting which § 7 of the Bankruptcy Act makes it a duty for the bankrupt to attend, could be received in evidence at a later criminal prosecution if such prosecution was for perjury at the examination or punishable contempt for refusing to submit to the examination required by the Act. [12] In McCarthy v. Arndstein, 1924, 266 U.S. 34, at pages 39-40, 45 S.Ct. at page 17, the court said: The rules by which an examination of a bankrupt under § 21, sub. a, are to be governed "are, impliedly, the general rules governing the admissibility of evidence and the competency and compellability of witnesses. The section contains no indication of an intention, on the part of Congress, to take from any witness the privilege against self-incrimination. Moreover, the section makes clear the purpose not to differentiate between the bankrupt and other witnesses * * *." The court continued to say, 266 U.S. at page 42, 45 S.Ct. at page 17: "When the bankrupt appears before a commissioner under this section [21a], he comes, like any other person, merely to testify. In that connection he may, like any other witness, assert the constitutional privilege; because the present statute fails to afford complete immunity from prosecution. If Congress should hereafter conclude that a full disclosure of the bankrupt estate by the witnesses is of greater importance than the possibility of punishing them for some crime in the past, it can, as in other cases, confer the power of unrestricted examination by providing complete immunity. Compare Brown v. Walker, 161 U.S. 591, 16 S. Ct. 644, 40 L. Ed. 819; Glickstein v. United States, 222 U.S. 139, 142, 32 S. Ct. 71, 56 L. Ed. 128; Ensign v. Pennsylvania, 227 U.S. 592, 33 S. Ct. 321, 57 L. Ed. 658." The court, in the McCarthy case, further determined that the privilege was not waived either by the bankrupt's filing sworn schedules of his assets and liabilities or by his answering orally certain questions; and it is noted that the McCarthy case has been interpreted so that under Section 7 "a bankrupt could not be compelled to give incriminating testimony against himself, since the statute fails to afford complete immunity from prosecution." See editorial comment in 100 L. Ed. 537 and, also, Goldstein v. United States, supra, 11 F.2d at page 594; In re Naletsky, D.C.Conn.1921, 280 F. 437, 440-441, and cases there cited; In re Bogen, D.C.E.D.S.C.1927, 19 F.2d 935; 118 A.L.R. 608-610. Section 7, as now worded, was amended by the Chandler Act of 1938, 52 Stat. 847, which made an exception of "such testimony as may be given by him [the bankrupt] in the hearing upon objections to his discharge" to the general exemption in § 7, sub. a (10) that "no testimony given by him shall be offered in evidence against him in any criminal proceeding." The House Report commented that: "It has been considered wise to exclude from the immunity of the testimony of the bankrupt that testimony which he gives upon his discharge proceeding. If he refuses to answer at the discharge hearing a material question upon the ground that it might tend to incriminate him, then he should be denied the privilege of a discharge." See House Report No. 1409, on H.R. 8046, 75th Cong., 1st Sess. (1937), 25. See, also, 1 Collier on Bankruptcy, 14th Ed., p. 1008. This language, though, is not decisive as to the question of what testimony given by a bankrupt is to be considered included within the general exemption in § 7, sub. a (10). The interpretation placed on the language of § 7, quoted in footnote 5 above, in 1920 by the Supreme Court in McCarthy v. Arndstein, supra, and the other federal courts referred to above would seem controlling since, when the Act was amended in 1926 and 1938, no attempt was made to render the bankrupt's immunity any more extensive than it had been construed by the courts in the years following 1898, when this language was inserted in the Act. See Bruce v. Tobin, 1917, 245 U.S. 18, 38 S. Ct. 7, 62 L. Ed. 123; Hecht v. Malley, 1924, 265 U.S. 144, 153, 44 S. Ct. 462, 68 L. Ed. 949; and United States v. Ryan, 1931, 284 U.S. 167, 174-175, 52 S. Ct. 65, 76 L. Ed. 224, holding that failure of Congress to change statutory language after it has been construed by the Supreme Court and other federal courts is an adoption of such construction. Cf. Zapalac v. White, D.C.S.D.Tex.1934, 9 F. Supp. 419. [13] See footnote 12 above. [14] It is clear that it is not essential to the admissibility of the prior testimony that defendant should first have been warned that what he said might be used against him, providing that such testimony was voluntarily, freely and understandingly given. See Powers v. United States, 1912, 223 U.S. 303, 313, 32 S. Ct. 281, 56 L. Ed. 448; United States v. Burdick, 3 Cir., 1954, 214 F.2d 768, 773; Turner v. United States, 4 Cir., 1955, 222 F.2d 926, 931; Scanlon v. United States, 1 Cir., 1955, 223 F.2d 382; United States v. Block, 2 Cir., 1937, 88 F.2d 618, 620-621; Wood v. United States, 1942, 75 U.S.App.D.C. 274, 128 F.2d 265, 268-269, 141 A.L.R. 1318. [15] Defendant complains of this language (N.T. 195-6): "It is not necessary for the Government to persuade you beyond a reasonable doubt that the defendant knew this representation was false. It is sufficient if it persuades you beyond a reasonable doubt that this representation was made with reckless indifference as to whether it was true or false. In other words, that is enough. If a representation is made by a man with reckless indifference as to whether it is true or not, that is the equivalent of making a false statement; if he does not check up on it, just tells his accountant to put a figure out of the air in there." Immediately following this language, the charge continued as follows: "In that connection, I am going to read you two points that the defendant has asked me to read, which are correct statements of the law, but they must be considered in connection with this principle, that a person has no right to go out and make representations with reckless indifference as to whether or not they are true or false. "`Even if the financial statement was incorrect but was made by the defendant or his accountant in good faith, the verdict must be not guilty.' "That is right, as long as it was not made with reckless indifference as to whether it was true. "This also is true: "`If, at the time the financial statement was made, the defendant believed that inventory need not be specifically stated on the statement as being on consignment, the verdict must be not guilty.' "That is true, but again, if he was recklessly indifferent in coming to the conclusion that he did not have to show that it was on consignment, that would be the equivalent of making a false representation." See, also, last paragraph at N.T. 213. [16] In the West case, supra, the court said in 68 F.2d at page 98: "* * * the jury could not find appellant guilty unless he knew they were false at the time they were made, or acted with reckless indifference as to whether they were true or false." In the Slakoff case, supra, the court said in 8 F.2d at page 10: "That the defendant did the acts charged is not, and cannot be, denied, but he may not be convicted and punished unless he knowingly and willfully did them with the intent to defraud and obtain credit and property. An incorrect statement, grossly misrepresenting facts, does not amount to fraud in law, unless the false representation was knowingly and willfully made with fraudulent intent [citing cases]. It was the defendant's duty, however, to make such investigation as was necessary to enable him honestly to sign and send out the statements. If he did not do this, but acted with such gross carelessness and indifference to the truth of the representations contained in the statements as to warrant the conclusion that he acted fraudulently, then his conviction may stand." (Emphasis supplied.) [17] In discussing "wilfulness," Mr. Justice Roberts said, in the Murdock case, supra, 290 U.S. at pages 394-395, 54 S.Ct. at page 225: "The word often denotes an act which is intentional, or knowing, or voluntary, as distinguished from accidental. But, when used in a criminal statute, it generally means an act done with a bad purpose [citing cases]; without justifiable excuse [citing cases]; stubbornly, obstinately, perversely [citing cases]. The word is also employed to characterize a thing done without ground for believing it is lawful [citing cases], or conduct marked by careless disregard whether or not one has the right so to act [citing cases]." (Emphasis supplied.) [18] In this case, the court said, 229 F.2d at page 390: "It was defendant's duty when he certified to the truth of these statements to make the necessary investigation to enable him to do so honestly." [19] The jury was sent to lunch with the Marshal at 12:30 (having retired at 12:- 21) and returned from lunch to resume deliberations shortly after 2 P.M. (N.T. 203). [20] See F.R.Crim.P. 33, 18 U.S.C.A. (first sentence). [21] The court's ruling on this motion was reserved during the trial (N.T. 176).

2013-10-30 06:32:40.241174+00

Picard

152 F. Supp. 722 (1957) K. SHAPIRO, Inc., a Michigan Corporation, Plaintiff, v. NEW YORK CENTRAL RAILROAD COMPANY, a Michigan Corporation, and New York, New Haven & Hartford Railroad Company, a Foreign Corporation, Defendants. No. 16119. United States District Court E. D. Michigan, S. D. July 10, 1957. *723 Friedman, Meyers & Keys, Detroit, Mich., for plaintiff. George H. Wyatt, Jack I. Alspector, Detroit, Mich., for New York Cent. R. Co. William A. Alfs, Detroit, Mich., for New Haven & H. R. Co. PICARD, District Judge. Motion by New York, New Haven & Hartford Railroad Company hereinafter referred to as "New Haven" to quash service and dismiss. Findings of Fact Plaintiff originally commenced action against the New York Central Railroad Company, a Michigan corporation, pursuant to Section 20, Paragraph (11) Title 49 U.S.C.A. The complaint alleged that on September 10, 1954, plaintiff delivered to said defendant a shipment of fresh veal destined for Harlem River, New York, routed over the lines of New York Central and New Haven Railroad Companies. The complaint further alleged that due to negligence of either or both railroads the veal spoiled enroute and was rejected by the consignee. After the New York Central answered and after a pretrial, plaintiff's motion to add New Haven as a party defendant was granted. Thereupon plaintiff filed an amended complaint, paragraphs 1, 2, and 3 of which read as follows: "1. As to Defendant, New York Central Railroad Company, a Michigan Corporation, this action arises under United States Code Title 49, Section 20, Paragraph 11, as hereinafter more fully appears. "2. Plaintiff is a Michigan corporation doing business in the City of Detroit, Michigan. Defendant, New York, New Haven and Hartford Railroad Co., is a foreign corporation doing business in the City of Detroit, Michigan. "3. The matter in controversy exceeds, exclusive of interest and Court costs, the sum of Three Thousand ($3,000.00) Dollars." Subsequently a summons and copy of the amended complaint were served on Thomas Joseph Gilhooly, General Traffic Agent for New Haven in Detroit. The latter is not incorporated in this state, has not been admitted to business, *724 nor does it operate any lines within Michigan but maintains a small two room office in the General Motors Building in Detroit staffed with two employees, Mr. Gilhooly and a stenographer. These two employees serve as agents for New Haven. However, while New Haven's representatives do not make contracts, sell tickets or handle funds, they do make or help customers make arrangements for the same. They do solicit, and have in the past, secured a considerable amount of freight and passenger business for the railroad so that their activity in the latter's behalf may be characterized as continuous and concerted; they do trace lost shipments and give advice on freight and passenger routings; they do keep close observation of business trends and conditions, such as loss of business and forecasts of future conditions and report to their supervisors; they do attend educational tours in order to keep well informed on the facilities of New Haven available to customers so they can advise the latter accordingly; and the New Haven does have some equipment such as box cars and gondolas available in Michigan. But New Haven has no tracks in Michigan. Each side filed two briefs and plaintiff's first brief stated that: "N.Y. N.H. & H.'s brief quite properly proceeds on the theory that the issue presented by its motion must be decided under the controlling Federal authorities. This is true, not only because (as Defendant points out) this suit arises under the Carmack Amendment (49 U.S.C.A. Sec. 20 (11) * * *." It appears, therefore, that plaintiff, although paragraphs 2 and 3 of its amended complaint alleged diversity and jurisdictional amount in its action against New Haven, nevertheless first intended its action to be based exclusively on Section 20 (11) of the Carmack Amendment —Section 20 (11) of which is as follows: "* * * all actions brought under and by virtue of this paragraph against the delivering carrier shall be brought, and may be maintained, if in a district court of the United States, only in a district, * * * through or into which the defendant carrier operates a line of railroad." Noting that plaintiff in paragraph 8 of its amended complaint had alleged that New Haven was only the "connecting or delivering carrier", and it being agreed that the New Haven does not operate a line of railroad in this state, gave us pause and an examination of the briefs revealed that both plaintiff and defendant had neglected to discuss this point or to mention the above quoted provision. Believing this might have been an oversight, the court, through its clerk, directed this matter to counsels' attention, whereupon each filed a supplemental brief, but again ignored the above cited section, while each seemingly reversed its position assumed in their respective first briefs. Conclusions of Law In view of paragraphs 1, 2, and 3 of plaintiff's amended complaint, we believe its action against New Haven is now based upon diversity of citizenship. Paragraph 1 specifically states that as to defendant New York Central the action arises under Title 49 U.S.C.A., but when setting forth the necessary jurisdictional allegations as to New Haven, the amended complaint alleges diversity and the jurisdictional amount, without mentioning Title 49 U.S.C.A. Although plaintiff might have brought its action pursuant to the above Act, subject, of course, to the requirement that a "delivering carrier" have a line of railroad in this jurisdiction, it is not required to do so. This is true because Section 20 (11) provides that "* * * nothing in this section shall deprive any holder of such receipt or bill of lading of any remedy or right of action which he has under the existing law." Nor is the right to maintain the action affected because joined with another which arises under the laws of the United States. We interpret Hurn v. *725 Oursler, 289 U.S. 238, 53 S. Ct. 586, 77 L. Ed. 1148, to permit the joinder of federal and non-federal causes of action in the same complaint where proper jurisdictional grounds exist. Having decided that the claim against New Haven is a diversity action, the question then arises, Are state or federal decisions determinative of whether or not defendant is doing business in Michigan for purposes of service of process out of this court? This question has been before the lower federal courts many times and the decisions are not uniform. See Kenny v. Alaska Airlines, D.C., 132 F. Supp. 838, for citation discussion and classification of those cases. The lower federal courts being in disagreement, we examined the decisions of the Supreme Court of the United States which, also, unfortunately, has not expressly and directly ruled on this precise issue since its decision in Erie Railroad Co. v. Tompkins, 1938, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188. However, in Angel v. Bullington, 1946, 330 U.S. 183, 67 S. Ct. 657, 91 L. Ed. 832, a case decided subsequent to Erie Railroad Co. v. Tompkins, supra, where a citizen of Virginia brought suit in the federal court of North Carolina, against a citizen of that state, the district court held that since the state courts would not entertain the action, a federal tribunal sitting in that state was likewise prevented from so doing. The Supreme Court said, 330 U.S. at page 192, 67 S. Ct. at page 662— "What is more important, diversity jurisdiction must follow State law and policy. A federal court in North Carolina, when invoked on grounds of diversity of citizenship, cannot give that which North Carolina has withheld." Then again in Woods v. Interstate Realty Co., 1949, 337 U.S. 535, 69 S. Ct. 1235, 93 L. Ed. 1524, the Supreme Court held that where the courts of a state in which a federal tribunal is sitting have declared a contract unenforceable but not void, the latter could not be enforced in the Federal Court, citing Erie Railroad Co. v. Tompkins and Angel v. Bullington, both supra. Under these decisions we believe that in determining whether or not a foreign corporation was "doing business" in a particular state for purpose of securing jurisdiction, a Federal Court would be obliged to resort to the decisions of the highest court of the state in which it was sitting. But in Riverbank Laboratories v. Hardwood Products Corp., 220 F.2d 465, the Court of Appeals, Seventh Circuit, reversed a District Court, holding that a Wisconsin corporation having sales agents in Illinois who solicited orders, investigated complaints and consulted with third parties in relation to its product, was "doing business" in that state. The Seventh Circuit Court of Appeals reversed on the grounds that the decisions of the state court were determinative and that under those decisions the corporation was not "doing business". But this court was in turn reversed by the Supreme Court — 350 U.S. 1003, 76 S. Ct. 648, 100 L. Ed. 866 — saying — "The Court is of the opinion that the District Court correctly found there was proper service upon the defendant in this case." While the Supreme Court did not expressly overrule Angel v. Bullington and Woods v. Interstate Realty Co., both supra, nor distinguish these cases, we hold that the ruling per se stands for the proposition that in cases like the one before us, the federal courts should be guided by the principles enunciated in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95, instead of blindly following pronouncements of state courts. In the case at bar, however, it is immaterial as both courts hold the same. Hellman v. Ladd, 315 Mich. 150, 23 N.W.2d 244. Thus in deciding whether New Haven was doing business so that service of process out of this court was proper, we do not rely alone on the state court decisions but do rely upon cases decided by the federal courts. And when the business activity carried on in this state *726 on behalf of New Haven is considered in the light of the standards established by the Supreme Court in International Shoe Co. v. State of Washington, supra, and by our Court of Appeals in Scholnik v. National Airlines, 6 Cir., 219 F.2d 115, there can be no doubt that defendant New Haven is amenable to process out of this court. Motion is denied.

2013-10-30 06:32:40.241382+00

Levine

279 Md. 189 (1977) 367 A.2d 1223 STATE OF MARYLAND v. RAYFIELD ZEKE WILSON [No. 26, September Term, 1976.] Court of Appeals of Maryland. Decided January 24, 1977. The cause was argued before MURPHY, C.J., and SINGLEY, SMITH, DIGGES, LEVINE and ELDRIDGE, JJ. Bernard A. Raum, Assistant Attorney General, with whom were Francis B. Burch, Attorney General, and Clarence W. Sharp, Assistant Attorney General, on the brief, for appellant. George E. Burns, Jr., Assistant Public Defender, with whom was Alan H. Murrell, Public Defender, on the brief, for appellee. LEVINE, J., delivered the opinion of the Court. We granted certiorari in this case to consider whether the finding and taking of serial numbers from certain equipment during a search for narcotics, conducted pursuant to a valid warrant, was an unconstitutional search and seizure. On appeal from appellee's conviction for receiving *192 stolen goods in the Circuit Court for Prince George's County, the Court of Special Appeals, in Wilson v. State, 30 Md. App. 242, 252, 351 A.2d 437 (1976), held that a police officer violated appellee's rights under the Fourth Amendment by engaging in an illegal search and in unlawfully seizing the serial numbers, and that the State had failed to meet its burden of showing that consent to the subsequent seizure of the equipment was freely and voluntarily given. Since we agree with the Court of Special Appeals, we shall affirm. The events leading to the arrest and prosecution of appellee began on the evening of June 18, 1974, at the residence in Carmody Hills which he shared with several people. A Prince George's County police officer, acting as a "back-up," accompanied federal agents to this residence, where the agents were to execute a valid search warrant for narcotics and narcotics paraphernalia. While the agents searched downstairs, the county officer searched appellee's upstairs bedroom. He observed that "sitting on top of the drawer, the dressers, on the floors" were "[s]omewhere around twenty, twenty-five" items, consisting of "various t.v. sets, stereo equipment, speakers, one or two clock radios, camera and various items in the house." The officer "looked over" these items and "jotted down the serial numbers of all of them." Then, during "the last ten minutes [the officer] was in the bedroom," the federal agents also searched the room. To conduct their narcotics search, the agents "would ... have moved some of these items anyway." After a thorough search, the federal agents departed empty-handed, finding neither narcotics nor narcotics paraphernalia, while the police officer left with his list of serial numbers. Later that night, the officer checked the serial numbers against those stored in a national computer system which lists serial numbers of stolen equipment. One number matched, indicating that appellee possessed a Sony cassette tape recorder which had been stolen some 4 1/2 months earlier from an apartment in nearby Lanham. The officer then referred the matter to another division. On the following day, one Prince George's County police *193 sergeant and two detectives, although lacking a search warrant, proceeded to appellee's residence. One of appellee's housemates answered the door and invited the policemen inside. On seeing appellee, one detective "approached the Defendant, advised him of his [Miranda] rights and explained that the stolen property was observed and verified in his home the night before by the uniformed officer." Asked, then, whether he understood these rights, appellee "acknowledged that he did." Specifying the serial number of the cassette recorder, the police then requested that appellee "relinquish the property." Appellee replied that "[i]t was in his room and he led [the officer] up there." On reaching appellee's room, the detective located the cassette recorder, verified that its serial number matched the one revealed by the computer, seized it, and arrested appellee. The detective observed, in addition to the recorder, "[s]everal stereo items [and] many, many shoes." He further specified two television sets and "at least four stereo units," which "could be receivers, amplifiers, cassettes, tape players or a combination, but there were four separate pieces which could have been off any of the described items." Their assignment completed, the police transported appellee and the recorder to the police station. Appellee was charged with burglary, housebreaking, grand larceny, and receiving stolen goods. Confronted during the trial by appellee's objection to the introduction of the recorder into evidence, the court (Meloy, J.) ruled that appellee had consented to the seizure of the cassette recorder, and thus found it unnecessary to rule on the legality of the police conduct in copying the serial numbers. After the State abandoned the burglary and one of the receiving stolen goods counts, the jury convicted appellee of receiving stolen goods of the value of $100 or more, and the court sentenced him to a term of six years. I We begin by observing that both the State and appellee, correctly in our view, treat the taking of the serial numbers as a seizure within the meaning of the Fourth Amendment. *194 See United States v. Clark, 531 F.2d 928, 931-32 (8th Cir.1976); United States v. Gray, 484 F.2d 352, 356 (6th Cir.1973), cert. denied, 414 U.S. 1158 (1974); United States v. Sokolow, 450 F.2d 324 (5th Cir.1971) (per curiam); State v. Murray, 84 Wash.2d 527, 527 P.2d 1303, 1308 (1974), cert. denied, 421 U.S. 1004 (1975). Appellee is entitled to Fourth Amendment protection because he did not "knowingly [expose] to the public" either the numbers or the equipment they identified. Katz v. United States, 389 U.S. 347, 351, 88 S. Ct. 507, 19 L. Ed. 2d 576 (1967). Appellee's expectation of privacy, moreover, was reasonable. Id. at 361 (Harlan, J., concurring). The issue in controversy here is whether the search for the serial numbers and their seizure were lawful. To prevent the issuance of general warrants, the Fourth Amendment requires that a warrant "particularly [describe] the place to be searched, and the persons or things to be seized." The warrant which was issued here mentioned only narcotics and narcotics paraphernalia. Manifestly, then, the seizure of the serial numbers cannot be justified under the terms of the warrant. Moreover, "searches conducted outside the judicial process, without prior approval by judge or magistrate, are per se unreasonable under the Fourth Amendment — subject only to a few specifically established and well-delineated exceptions." Katz v. United States, supra, 389 U.S. at 357 (footnotes omitted). To sustain the seizure here, therefore, the State must shoulder the heavy burden of showing that one of the exceptions applies. Coolidge v. New Hampshire, 403 U.S. 443, 455, 91 S. Ct. 2022, 29 L. Ed. 2d 564 (1971); Vale v. Louisiana, 399 U.S. 30, 34, 90 S. Ct. 1969, 26 L. Ed. 2d 409 (1970). II The State contends, first, that the seizure was valid under the "plain view" exception enunciated in the plurality opinion in Coolidge v. New Hampshire, supra, 403 U.S. at 464-73. This doctrine serves to supplement a previously justified intrusion, such as a search warrant for other *195 property, and permits a warrantless seizure. Id. at 466. The exception, on the other hand, may not be used to expand a justified, but limited, intrusion into a general exploratory search of a person's belongings until something incriminating at last emerges. Id. at 466-67. To confine the exception within these boundaries, the Court prohibited the use of any evidence seized outside the warrant unless (1) the police have a prior justification for the intrusion; (2) they find the evidence in plain view; (3) they find it inadvertently; and (4) it is "immediately apparent to the police that they have evidence before them," id. at 466-71. Accord, United States v. Johnson, 541 F.2d 1311, 1316 (8th Cir.1976); United States v. Clark, supra, 531 F.2d at 932; United States v. Wilson, 524 F.2d 595, 598 (8th Cir.1975), cert. denied, 424 U.S. 945 (1976); State v. Keefe, 13 Wash. App. 829, 537 P.2d 795, 797 (1975). Appellee contends that neither the third nor fourth requirement imposed by Coolidge for application of the "plain view" exception has been met here. In our view, it is unnecessary to consider the "inadvertence" requirement, since, in any event, it was not "immediately apparent to the police that they [had] evidence before them." This element, in essence, amounts to a requirement that police have probable cause to believe the evidence is incriminating before they seize it. As the court said in United States v. Gray, supra, 484 F.2d at 356, "[I]t must be `immediately apparent' to the police that the object is in fact incriminating or the seizure of the object would be without probable cause and would turn the search into a general or exploratory one." Accord, United States v. Clark, supra, 531 F.2d at 932; United States v. Wilson, supra, 524 F.2d at 598-99; United States v. Truitt, 521 F.2d 1174, 1176 (6th Cir.1975); see United States v. Golay, 502 F.2d 182, 184-86 (8th Cir.1974). Stated another way, to be subject to seizure, the object must be one for which the police could have obtained a warrant because they had probable cause. Coolidge v. New Hampshire, supra, 403 U.S. at 467-68. In the context of another exception to the warrant requirement, the "hot pursuit" doctrine, the Supreme Court *196 has indicated what information a police officer must possess before he can be said to have probable cause to seize evidence: "... There must, of course, be a nexus — automatically provided in the case of fruits, instrumentalities or contraband — between the item to be seized and criminal behavior. Thus in the case of `mere evidence,' probable cause must be examined in terms of cause to believe that the evidence sought will aid in a particular apprehension or conviction." Warden v. Hayden, 387 U.S. 294, 307, 87 S. Ct. 1642, 18 L. Ed. 2d 782 (1967) (emphasis added). This standard has also been used to determine whether probable cause existed to seize articles in plain view. See, e.g., United States v. Golay, supra, 502 F.2d at 185; United States v. Maude, 481 F.2d 1062, 1071-72, n. 73 (D.C. Cir.1973). See also United States v. Sedillo, 496 F.2d 151, 152-53 (9th Cir.) (Hufstedler, J., dissenting), cert. denied, 419 U.S. 947 (1974). In Hayden, of course, the Court held that mere evidence, as well as fruits, instrumentalities, and contraband, may be seized under certain circumstances. Under the Hayden formulation, so long as police have probable cause to believe that what they see is contraband, or the fruit or instrumentality of some unspecified criminal activity, they may seize the object. See, e.g., United States v. Golay, supra, 502 F.2d at 184-86 (fruits and instrumentalities); United States v. Canestri, 518 F.2d 269, 274-75 (2d Cir.1975) (contraband); United States v. Lopez-Ortiz, 492 F.2d 109, 111 (5th Cir.1974) (contraband). Where, however, they possess probable cause to believe that the object is mere evidence, officers may seize it as an aid in a particular apprehension or conviction. See, e.g., Mapp v. Warden, N.Y. State Corr. Inst., Etc., 531 F.2d 1167, 1172 (2d Cir.1976); United States v. Jones, 518 F.2d 384, 390-92 (7th Cir.) (Swygert, J., dissenting), cert. denied, 423 U.S. 997 (1975); United States v. Damitz, 495 F.2d 50, 56 (9th Cir.1974). *197 These standards furnish guidelines to determine the ultimate issue, whether an officer of reasonable caution would be warranted in believing that an offense is being or has been committed and that the object is evidence incriminating the accused. United States v. Truitt, supra, 521 F.2d at 1177. Whether we regard the cassette recorder as the "fruit of crime" or "mere evidence," the record fails to support the State's contention that the officer possessed probable cause to seize the serial numbers. In support of its claim, the State first urges that since drug users frequently deal in stolen goods to support their habit, the officer possessed probable cause to believe the equipment was stolen. This "nexus," standing alone, is too remote in this case to establish probable cause. The cases upon which the State relies are all distinguishable.[1] In each instance, either the same or a similar kind of criminal conduct was involved. Although finding the articles named in the search warrant is not an essential element of the nexus argument, see, e.g., United States v. Golay, supra, we observe that here the agents and officer found neither the narcotics nor the paraphernalia named in the warrant. The State also argues that the large quantity of equipment observed in appellee's bedroom created probable cause. In our view, however, the record justifies no more than a mere suspicion that any of the goods were stolen. It is important to recognize that although the officer observed a total of 20 to 25 items, they were of many varieties: "various t.v. sets, stereo equipment, speakers, one or two clock radios, camera and various items in the house." Cf. Comi v. State, 26 Md. App. 511, 519, 338 A.2d 918, cert. denied, 276 Md. 740 (1975). *198 Relying heavily on Crawford v. State, 9 Md. App. 624, 626, 267 A.2d 317 (1970), the State argues, finally, that these two factors — the quantity of items and the nexus to the narcotics search — taken together, created probable cause. Because we regard Crawford as distinguishable, however, we disagree. There, in addition to finding the narcotics paraphernalia for which the warrant had been issued, the police found approximately 30 pawn tickets. These tickets immediately suggested a repeated course of conduct to obtain cash necessary to purchase narcotics. In contrast, the State has failed to show any connection here between possession of the items and receipt of cash; indeed, since no narcotics were discovered, the State has also failed to link the supposed need for cash to possession of narcotics. Other courts, on facts which parallel those found here, have held the seizure of serial numbers to be invalid. United States v. Clark, supra, 531 F.2d at 931-33 (serial numbers of firearms seized during search for narcotics); United States v. Gray, supra, 484 F.2d at 355-56 (serial numbers of firearms seized during search for unlicensed liquor); United States v. Sokolow, supra, 450 F.2d at 326 (seizure of serial numbers of air conditioning units during arrest for stolen cigarettes); State v. Murray, supra, 527 P.2d at 1306-08 (serial number of television seized during consent search for stolen items other than televisions). In each of those cases, as in this case, the incriminating nature of the evidence became apparent only after seizure of the serial number. We hold that seizure of the serial number was not justified under the plain view doctrine. III The State argues that even if the officer lacked probable cause to believe the equipment was stolen, the seizure of the serial number was justified under another exception to the general rule proscribing warrantless searches. The State premises this contention on the ground that the Fourth Amendment prohibits "unreasonable" searches and seizures. Stressing that the officer's action neither deprived appellee of possession of the equipment nor required that it be moved *199 any more than was necessary to conduct the valid search for narcotics, the State maintains that the search and seizure here meets the standard of reasonableness established in Terry v. Ohio, 392 U.S. 1, 88 S. Ct. 1868, 20 L. Ed. 2d 889 (1968). That standard is met, the State suggests, when the specific and articulable facts available to the officer at the moment of the search and seizure would warrant a man of reasonable caution to believe that the action taken was appropriate. Id. at 21-22. The State's argument, however, misconceives Terry's narrow scope. In Terry, and in its companion case, Sibron v. New York, 392 U.S. 40, 88 S. Ct. 1889, 20 L. Ed. 2d 917 (1968), the Supreme Court addressed the constitutionality of "stop and frisk." To determine the validity of this form of police conduct, the Court balanced the need to search and seize against the invasion which the stop and frisk entails. On one hand lies the interest in effective crime prevention and detection. For the Court, however, the "crux" of the case was the "more immediate interest of the police officer in taking steps to assure himself that the person with whom he is dealing is not armed with a weapon that could unexpectedly and fatally be used against him." Terry v. Ohio, supra, 392 U.S. at 23. The Court recognized, on the other hand, that even a limited search of the outer clothing for weapons "constitutes a severe, though brief, intrusion upon cherished personal security, and it must surely be an annoying, frightening, and perhaps humilitating experience." Id. at 24-25. Balancing these competing interests, the Court held that even absent probable cause to arrest, a police officer's stop and frisk is reasonable where he reasonably concludes that "criminal activity may be afoot." Id. at 30. His conclusion must be founded on "specific and articulable facts" and "rational inferences," and be measured by an objective standard. Id. at 21. The officer must also have reason to believe that he is dealing with an armed and dangerous individual. Id. at 27. And finally, the search must be a "carefully limited search of the outer clothing ... to discover weapons which might be used to assault" the officer. Id. at 30. *200 In Sibron the Court indicated how narrowly Terry was to be read. There, the Court struck down a conviction based on narcotics which had been found in Sibron's pocket when he was "frisked" outside a restaurant late one night. The only basis for stopping him was the officer's observation over an eight hour period of Sibron's conversations with several persons whom the officer knew to be addicts. The Court found that if the patrolman lacked probable cause for an arrest, "his seizure and search of Sibron might still have been justified at the outset if he had reasonable grounds to believe that Sibron was armed and dangerous." Sibron v. New York, supra, 392 U.S. at 63. On the facts, however, the officer apparently was never in fear of bodily harm during the encounter. The Court believed, moreover, that even if there were adequate grounds to search Sibron for weapons, "... [t]he search was not reasonably limited in scope to the accomplishment of the only goal which might conceivably have justified its inception — the protection of the officer by disarming a potentially dangerous man." Id. at 65 (emphasis added). The narrow exception established in Terry and Sibron may have been expanded somewhat by Adams v. Williams, 407 U.S. 143, 92 S. Ct. 1921, 32 L. Ed. 2d 612 (1972). There, although appearing to apply the Terry standards, the Court may have applied less stringent requirements to justify the initial forcible stop. Nevertheless, the teaching of Adams that is important here is that "[t]he purpose of this limited search is not to discover evidence of crime, but to allow the officer to pursue his investigation without fear of violence. ..." 407 U.S. at 146 (emphasis added). These cases, of course, involved searches on the street rather than in the home, but even when the Terry exception has been applied to warrantless searches in the home, the purpose and scope of the search have been similarly limited to ensuring the officer's safety. Compare, e.g., United States v. Clark, supra, 531 F.2d at 931, 933, and United States v. Boswell, 347 A.2d 270, 275-76 (D.C. 1975), with McGeehan v. Wainwright, 526 *201 F.2d 397, 399-400 (5th Cir.) (per curiam), cert. denied, 425 U.S. 997 (1976), and United States v. Briddle, 436 F.2d 4, 7 (8th Cir.1970), cert. denied, 401 U.S. 921 (1971). Each case must be decided on its own facts, Terry v. Ohio, supra, 392 U.S. at 30, and on the record here the State's reliance on the Terry exception is inapposite. Not only was the officer searching for evidence of crime without probable cause, but also there is not the slightest suggestion in the record that either he or any of the agents whom he accompanied were concerned about their physical safety.[2] IV The State contends that yet a third exception to the general rule prohibiting warrantless searches is applicable here. It posits that even if seizure of the serial numbers was unlawful, appellee consented to the seizure of the recorder itself on the second day. Initially, we observe that the State bears the burden of proving that: "... consent was in fact voluntarily given, and not the result of duress or coercion, express or implied. Voluntariness is a question of fact to be determined from all the circumstances...." Schneckloth v. Bustamonte, 412 U.S. 218, 248-49, 93 S. Ct. 2041, 36 L. Ed. 2d 854 (1973). Bumper v. North Carolina, 391 U.S. 543, 548, 88 S. Ct. 1788, 20 L. Ed. 2d 797 (1968); Whitman v. State, 25 Md. App. 428, 437, 336 A.2d 515 (1975). Moreover, the State must prove voluntariness by a preponderance of the evidence. See Lego v. Twomey, 404 U.S. 477, 488-89, 92 S. Ct. 619, 30 L.Ed.2d *202 618 (1972). But see, e.g., United States v. Jones, 475 F.2d 723, 728 (5th Cir.), cert. denied, 414 U.S. 841 (1973) (clear and convincing evidence required). On appeal, we examine the entire record and make an independent determination of the ultimate issue of voluntariness. Davis v. North Carolina, 384 U.S. 737, 741-42, 86 S. Ct. 1761, 16 L. Ed. 2d 895 (1966) (confessions); Gardner v. State, 32 Md. App. 629, 630, 363 A.2d 616 (1976); Whitman v. State, supra, 25 Md. App. at 435. We think the State has failed to prove that appellee voluntarily consented to the second search. We are mindful, in this regard, of the Supreme Court's admonition: "... In examining all the surrounding circumstances to determine if in fact the consent to search was coerced, account must be taken of subtly coercive police questions, as well as the possibly vulnerable subjective state of the person who consents." Schneckloth v. Bustamonte, supra, 412 U.S. at 229. The State has suggested several factors which, it argues, demonstrate that appellee voluntarily consented. At no time prior to seizure of the recorder itself was appellee in custody, although Miranda warnings had been issued. Moreover, appellee was in his own home and some of his housemates, including his landlord, were present. Appellee informed the officer that the recorder was in his bedroom and led him there. As we see it, however, the circumstances surrounding the seizure demonstrate that appellee's consent was obtained by coercion. Three officers — two detectives and their sergeant — arrived at his home. The housemates permitted the officers to walk upstairs, and since the others seemed already to have acquiesced to the officers' request to search the house, appellee apparently reasoned that he had no alternative but to consent. The detective then "advised [appellee] of his constitutional rights." Conspicuously absent from the warnings was any reference to defendant's right not to consent to the search. Concededly, Schneckloth does make it clear that although defendant's "knowledge of a *203 right to refuse is a factor to be taken into account, the prosecution is not required to demonstrate such knowledge as a prerequisite to establishing a voluntary consent." Schneckloth v. Bustamonte, supra, 412 U.S. at 249. Here, however, the absence of this advice, coupled with the presence of the Miranda warnings, may well have led appellee to believe that he had no right to refuse the officers' request. Next, the police explained their presence by referring to the search conducted by the uniformed officer on the prior evening. Nothing in the record indicates that appellee knew or assumed the search and seizure of the serial numbers to be unlawful. We can only conclude, therefore, that he premised his consent on the assumption that the officer had acted lawfully and within the scope of the warrant. From this premise, appellee could reasonably have understood that the police were continuing to act under the authority granted by the search warrant. The detective's polite but firm request that appellee "relinquish" the cassette recorder may well have buttressed the view in appellee's mind that his only alternatives were either to surrender the equipment cooperatively or to have it taken by force. Implicit, moreover, in the visit by the three officers was the indication that they intended to seize the recorder. Under the circumstances here, "such a police request could be construed as a demand." People v. Huffman, 541 P.2d 1250, 1252 (Colo. 1975). The situation here is analogous to that in which an officer claims to possess a warrant: "When a law enforcement officer claims authority to search a home under a warrant, he announces in effect that the occupant has no right to resist the search. The situation is instinct with coercion — albeit colorably lawful coercion. Where there is coercion there cannot be consent." Bumper v. North Carolina, supra, 391 U.S. at 550 (emphasis added). Accord, Whitman v. State, supra, 25 Md. App. at 437-38. The illegality of a prior seizure, of course, does not automatically render evidence obtained by a subsequent *204 consent search inadmissible, but it is a relevant factor to consider in determining the voluntary nature of the consent. United States v. Hearn, 496 F.2d 236, 242 (6th Cir.), cert. denied, 419 U.S. 1048 (1974); accord, Burrows v. Superior Court of San Bernadino County, 13 Cal. 3d 238, 529 P.2d 590, 598-99, 118 Cal. Rptr. 166, 174-75 (1974). Those cases in which consent has been held voluntary, however, are distinguishable because in each the prosecution presented strong evidence of consent. In all of them, the suspect consented in writing and, therefore, knew he need not consent. In addition, before consenting, the suspect had either volunteered information, discussed his rights with other persons, or denied knowing either that a crime had been committed or that the evidence sought by the police was in the dwelling. United States v. Mullens, 536 F.2d 997, 999 (2d Cir.1976); United States v. Tortorello, 533 F.2d 809, 814-15 (2d Cir.), cert. denied, 97 S. Ct. 254 (1976); United States v. Race, 529 F.2d 12, 14-15 (1st Cir.1976); State v. Niemszyk, 303 A.2d 105, 108-09 (Me.), cert. denied, 414 U.S. 1042 (1973); State v. Evans, 533 P.2d 1392, 1393-94 (Ore. App. 1975). None of those factors, manifestly, is present here. As we indicated earlier, account must be taken of subtle police conduct. Here, as in People v. Superior Court of Marin County, 13 Cal. 3d 406, 530 P.2d 585, 587, 118 Cal. Rptr. 617, 619 (1975), "[d]efendant's consent to the search may well have been influenced by knowledge he had already admitted involvement in the crime." He may have understood that possession on the prior day of the recorder, which the police had ascertained by unlawful means to be stolen property, amounted not simply to an admission of "involvement" in criminal conduct, but to overwhelming proof of his guilt. Since we have concluded that appellee's consent was involuntarily given, we need not reach his second argument that possession of the cassette recorder by the police was, in any event, tainted by the illegal seizure of its serial number. See generally Brown v. Illinois, 422 U.S. 590, 95 S. Ct. 2254, 45 L. Ed. 2d 416 (1975); Wong Sun v. United States, 317 U.S. 471, 83 S. Ct. 407, 9 L. Ed. 2d 441 (1963); United States v. *205 Tortorello, supra; United States v. Race, supra; State v. Evans, supra. V What we have already said disposes, in large part, of the State's final contention. In its brief, the State suggested that instead of merely reversing the conviction, the Court of Special Appeals should also have remanded the case for a new trial. The State premised its contention on the bald assertion that it could "quite possibl[y]" establish an independent source for the same information which we have here found to be inadmissible. So too, asserted the State, it is "possible" that the State "might be able" to adduce new evidence on the consent issue. At oral argument, however, the State conceded that it possessed neither an independent source nor additional evidence. Accordingly, we shall not remand for a new trial. Cf. Johnson v. State, 30 Md. App. 280, 294-95, 352 A.2d 349 (1976) (remanded). Judgment of the Court of Special Appeals affirmed; costs to be paid by Prince George's County. NOTES [1] Payne v. United States, 508 F.2d 1391, 1395 (5th Cir.), cert. denied, 423 U.S. 933 (1975) (dictum), United States v. Golay, 502 F.2d 182, 185 (8th Cir.1974), Aron v. United States, 382 F.2d 965, 973-74 (8th Cir.1967), Brooks v. State, 235 Md. 23, 28-30, 200 A.2d 177 (1964), Comi v. State, 26 Md. App. 511, 517, 519, 338 A.2d 918, cert. denied, 276 Md. 740 (1975), Gerstein v. State, 10 Md. App. 322, 332, 270 A.2d 331 (1970), cert. denied, 260 Md. 720, 402 U.S. 1009 (1971), and Anglin v. State, 1 Md. App. 85, 88, 227 A.2d 364, cert. denied, 246 Md. 757 (1967), on petition for writ of habeas corpus, 439 F.2d 1342 (4th Cir.), cert. denied, 404 U.S. 946 (1971). [2] The State's reliance on United States v. Powers, 439 F.2d 373 (4th Cir.) cert. denied, 402 U.S. 1011 (1971), for the proposition that seizure of a serial number is an appropriate response in the situation, is misplaced. Powers held that once police became aware that an automobile's vehicle identification number was missing from the doorpost, they could search barely accessible areas of the car to ascertain that number. Automobile identification numbers are in a class by themselves, since they are, as the court said, "at the least, quasi-public information." Id. at 375. Moreover, United States v. Golay, 502 F.2d 182 (8th Cir.1974) and State v. Proctor, 12 Wash. App. 274, 529 P.2d 472, 474 (1974), are inapposite because in those cases the police had probable cause to believe they were looking at fruits of criminal activity, and thus the items were immediately seizable. Cf. State v. Keefe, 13 Wash. App. 829, 537 P.2d 795, 798 (1975).

2013-10-30 06:32:40.291341+00

Herlands

152 F. Supp. 934 (1957) THE A/S GLITTRE, Plaintiff, v. Robert W. DILL, Collector of Customs, Port of New York, Defendant. United States District Court S. D. New York. April 12, 1957. *935 Haight, Gardner, Poor & Havens, New York City, Walter A. Darby, Jr., New York City, of counsel, for plaintiff. Paul W. Williams, U. S. Atty., for Southern District of New York, New York City, Burton S. Sherman, Asst. U. S. Atty., New York City, of counsel, for defendant. HERLANDS, District Judge. Whether the doctrine of economic duress applies to the facts of this case is the question presented by plaintiff's motion for summary judgment and defendant's cross-motion for summary judgment. In this action, commenced on December 21, 1955, plaintiff seeks to recover a $1,000 fine paid to defendant under the Immigration Act of 1924 (8 U.S.C.A. § 167 and 8 C.F.R. 160.14). Plaintiff, the owner of the motor-vessel Ferncape, is a Norwegian corporation. Defendant is the Collector of Customs for the Port of New York. On August 26, 1954, the District Director of Immigration and Naturalization Service served upon plaintiff's agent, Dichmann, Wright & Pugh, Inc., a Notice Of Intention To Fine Under Immigration And Nationality Act (Exhibit C attached to plaintiff's moving affidavit; Exhibit 6 attached to defendant's opposing affidavit). The violation for which the imposition of a $1,000 fine was indicated in 1954 had taken place in April or May, 1948. The violation consisted of plaintiff's "failure to detain on board vessel and deport" an alien seaman, Salvatore Alongi, who had arrived on the Ferncape at the port of Norfolk, Virginia. The Notice Of Intention To Fine contained, inter alia, the following provisions: (1) plaintiff's agent was granted thirty days to file a written defense "setting forth the reasons why a fine should not be imposed or if unpaid, why it should be mitigated or remitted"; (2) plaintiff's agent was given the opportunity for a "personal interview," the privilege of having counsel present, and of "presenting evidence" and submitting a brief in support of its contentions; and (3) "The vessel * * * on which the alien * * * arrived will be granted clearance papers when ready to depart and allowed to proceed upon the outward-bound voyage on condition that you deposit with the collector of customs at this port, prior thereto, the sum *936 of One Thousand dollars, or, where permitted by the Immigration and the Nationality Act, a bond with sufficient surety to secure the payment of the fine should it be imposed." The evidence establishes that the Immigration and Naturalization Service duly notified plaintiff in writing, on April 16, 1948, to detain on board the Ferncape at all United States ports, a certain alien seaman, one Salvatore Alongi (Exhibit 1 attached to opposing affidavit of Burton S. Sherman). Alongi had been deported from the United States on or about February 10, 1940, as a narcotics peddler, with a record of a number of convictions under the Federal narcotics laws. For the purpose of these motions, plaintiff admits "that the Collector of Customs was entitled to assess a fine" (moving affidavit of Walter A. Darby, Jr., p. 2); and "that had the United States proceeded in timely fashion, it would have been an offense for which the Ferncape, or its owners, would be subject to the possibility of paying a fine" (replying affidavit of Walter A. Darby, Jr., p. 1). On April 20, 1948, the Ferncape sailed from Newport News, Virginia, bound for New York. On April 21, 1948, the New York District Director of Immigration and Naturalization was officially notified to detain Alongi on board the Ferncape upon its arrival in New York. When that vessel arrived in New York, plaintiff was ordered to detain Alongi on board the vessel. While the Ferncape was in the Port of New York, Alongi jumped ship. On May 17, 1948, the Immigration and Naturalization Service was notified of that fact. It was not until March 12, 1954, that Alongi was located and arrested. When questioned, he admitted that he had jumped ship in 1948. At the time of Alongi's apprehension on March 12, 1954, administrative proceedings had not been instituted to fine plaintiff for its failure to detain Alongi on board the Ferncape. After receiving the Notice Of Intention To Fine, dated August 26, 1954, plaintiff's agent posted a $1,000 bond in favor of the United States of America, pursuant to 8 U.S.C.A. § 1284, and Immigration Regulations 8 C.F.R. 160.14. The bond was delivered to the Collector of Customs on September 24, 1954. This bond is entitled: "Bond For Payment Of Sums and Fines Imposed Under Immigration Act of May 26, 1924" (Exhibit 7 attached to defendant's opposing affidavit). Plaintiff's agent executed this bond as principal. The National Surety Corporation executed the bond as surety. On September 24, 1954, when the bond was delivered, the vessel was in the Port of New York. The bond contains, inter alia, the following recitals: "Whereas, the owner, master, agent * * * of the said vessel may incur liability for fines * * * imposed by the Attorney General pursuant to the provisions of sections 16, 20, and/or 26 of the Immigration Act of 1924 in connection with aliens brought to the United States on the said vessel; and "Whereas, under the said Immigration Act no vessel shall be granted clearance pending the determination by the Attorney General of the question of such liability or while such fines remain unpaid, provided that clearance may be granted prior to the determination of such question upon the deposit of an amount sufficient to cover such fines, or of a bond with sufficient surety to secure the payment thereof approved by the Collector of Customs; "Now, Therefore, the condition of this obligation is such, that if the above-bounden principal shall pay to the Collector of Customs of the said port any and all fines imposed by the Attorney General under the said sections of the said Act against the owner, master, agent * * * of the said vessel; then this obligation shall be void, otherwise it shall remain in full force and effect; the *937 said principal to have, however, the privilege of making such payments under protest, and without prejudice to any and all legal rights of recovering by appropriate action or proceedings any and all sums paid under this bond." On September 24, 1954 (when both plaintiff's agent and the National Surety Corporation assumed an obligation on the bond) they knew that the Notice Of Intention To Fine was based upon a violation of Section 20 of the Immigration Act of 1924, which had taken place in April or May 1948. On October 21, 1954 (pursuant to Immigration Regulations 8 C.F.R. 160.14 et seq.) plaintiff filed a protest to the imposition of the fine with the District Director on the ground that "the applicable statute of limitations had run" and that the fine should not be imposed (complaint, paragraph Fifth). On November 5, 1954, the District Director denied plaintiff's protest and ordered the imposition of the fine. On November 12, 1954, plaintiff appealed to the Board of Immigration Appeals. On April 15, 1955, the Board of Immigration Appeals dismissed plaintiff's administrative appeal from the District Director's decision and ordered imposition of the fine. In its decision (Exhibit 8 annexed to defendant's answering affidavit), the Board of Immigration Appeals rejected as "not valid" plaintiff's contention that 28 U.S.C.A. § 2462 completely bars any enforcement by the Government of the fine. The Board's opinion, distinguished between (1) an affirmative suit by the Government to collect the fine, as to which suit the statute of limitations "may have run against the Government"; and (2) a formal finding that the detention order had been violated and that the statutory fine should be imposed. As to the latter, the Board took the position that the statute of limitations did not preclude such findings and imposition; nor did it prevent the Government from resorting to means—other than an affirmative suit—to collect the fine, such as by way of an offset against funds which might be due from the Government to the claimant. On April 26, 1955, defendant notified plaintiff's agent that, on April 15, 1955, the Department of Justice had imposed a fine of $1,000. This notice stated: "Inasmuch as the law requires full payment of the imposed fine before clearance of the vessel * * * may be granted, prompt payment of this amount is requested" (Exhibit A attached to moving affidavit of Oakley Wood; Exhibit 9 attached to opposing affidavit of Burton S. Sherman). This was the first notice to collect the fine. On May 10, 1955, defendant notified plaintiff that if the fine "is not paid on or before May 20, 1955, the facts pertaining to the matter will be reported to the United States Attorney for appropriate action" (Exhibit 10 attached to the moving affidavit of Burton S. Sherman). This was the second notice to pay. On May 16, 1955, plaintiff forwarded to defendant its check in the amount of $1,000. Plaintiff's letter of transmittal stated that the check represented "payment of the Immigration fine" and that "the fine is being paid under protest, and without prejudice to the vessel's rights to institute court proceedings in order to test the legality of the United States Immigration Board of Appeals decision" (Exhibit 11 attached to the opposing affidavit of Burton S. Sherman; Exhibit B attached to the moving affidavit of Oakley Wood). The bond was cancelled and discharged by the Collector of the Port on June 6, 1955. According to the complaint (paragraph Ninth) the fine was paid "for the sole purpose of insuring said clearance papers when the MV/Ferncape next arrived in a United States Port and to avoid detention of the vessel and permit her departure thereby avoiding great *938 and irreparable damage." The gravamen of the complaint (paragraph Tenth) is that the fine was illegal because it "was outlawed by the applicable Statute of Limitations" at the time it was imposed. Plaintiff relies upon the five year statute of limitations contained in 28 U.S.C.A. § 2462: "Except as otherwise provided by Act of Congress, an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued if, within the same period, the offender or the property is found within the United States in order that proper service may be made thereon." On May 16, 1955, when the $1,000 was paid by plaintiff, the Ferncape "was en route from Barbados to Montreal" (plaintiff's answer No. 3 to defendant's interrogatories). The vessel had left Barbados on May 16th and arrived in Montreal on May 24, 1955. At the time the fine was paid, plaintiff's agent knew that the vessel was bound north along the Atlantic Coast. From May 16, 1955, to January 1, 1956, the Ferncape was not in the Port of New York. Since May 16, 1955, the Ferncape has been within the territorial waters of the United States on two occasions: in Mobile, Alabama on September 7, 1955, and in Tampa, Florida, on September 12, 1955. The vessel has been in San Juan, Puerto Rico on June 22, July 16, August 14, October 11 and December 7, 1955 (plaintiff's answer No. 5 to defendant's interrogatories). The term "United States," when used in the geographical sense, includes Puerto Rico (8 U.S.C.A. § 501); Immigration and Nationality Act, section 1101, paragraph (a) (38), 8 U.S.C.A. In point of fact, it thus appears: (1) The decision of the Board of Immigration Appeals on April 15, 1955, affirming the imposition of the fine, was rendered more than two months before the Ferncape docked in the "United States" at San Juan, Puerto Rico, on June 22, 1955. On April 15, 1955, the vessel was at Istanbul, Turkey. (2) At the time of the first collection notice of April 26, 1955, the vessel was en route from Palermo, Italy, to Demerara, British Guiana. This was fifty-seven days before the vessel docked at San Juan, Puerto Rico. (3) At the time of the second collection notice of May 10, 1955, the vessel was at Trinidad. This was forty-three days before the vessel docked at San Juan, Puerto Rico. (4) At the time when the fine was paid on May 16, 1955, the vessel was en route from Barbados to Montreal. This was thirty-seven days before the vessel docked at San Juan, Puerto Rico. (5) At the time when the $1,000 fine was paid on May 16, 1955, plaintiff knew that the very first time the vessel would thereafter dock at any "United States" port (San Juan, Puerto Rico) would be June 22, 1955, thirty-seven days later. I. The foregoing facts demonstrate not merely that the $1,000 payment by plaintiff was voluntary, considered in terms of the weight of the evidence, but more importantly that there was no duress or coercion as a matter of law. The $1,000 was paid on May 16, 1955, about five weeks before the vessel docked in San Juan. If, arguendo, it be assumed that plaintiff could justifiably act on the supposition that the Collector of the Port of San Juan would deny clearance at that port, that denial could not possibly occur, at the earliest, until June 22, 1955, the scheduled (and actual) date of arrival of the vessel at San Juan. Hence, plaintiff's payment was anticipatory. It was not induced by a present, immediate and urgent necessity, but by a desire to avert a prospective and contingent event which presumably might take place in five weeks. To constitute duress, the demand must, among other things, create "an immediate and urgent necessity" for the *939 payment. See Union Pacific Railroad Co. v. Board of County Commissioners, 1878, 98 U.S. 541, 543-544, 25 L. Ed. 196; Cunard S. S. Co. v. Elting, 2 Cir., 1938, 97 F.2d 373. In the Cunard case, supra, a stop order was issued against a vessel which was not in port at the time and was not expected in that port for six weeks. Payment was promptly made. In holding that the payment to obtain clearance for the vessel had been voluntary, the Court, per Judge Swan, said at page 378: "In our opinion the mere issuance of the stop order against clearance of a vessel which was expected to arrive in port six weeks later would not render the present payment one made under duress." (Emphasis supplied.) The law of voluntary payments was analyzed in Adrico Realty Corp. v. City of New York, 1928, 250 N.Y. 29, at pages 33-34, 164 N.E. 732, at page 733, 64 A.L.R. 1, where Judge Crane said that "the heart" of the rule is that, to make out duress or coercion, the payment must be made "through necessity and the urgency of the case," or "when the payment of money becomes necessary to obtain the immediate liberty of person or the possession of property," or "where present liberty of person or immediate possession of goods" cannot be deferred in favor of the alternative of effective legal proceedings. (Emphasis supplied.) In his dissenting opinion in Cahill v. New York, N. H. & H. R. Co., 1956, 351 U.S. 183 at page 190, note 6, 76 S. Ct. 758, 763, 100 L. Ed. 1075, Mr. Justice Black, discussing "payment under duress," wrote: "`Where a party pays an illegal demand with a full knowledge of all the facts which render such demand illegal, without an immediate and urgent necessity therefor, or unless to release his person or property from detention, or to prevent an immediate seizure of his person or property, such payment must be deemed voluntary and cannot be recovered back. And the fact that the party at the time of making the payment files a written protest does not make the payment involuntary.' Union Pacific Railroad Co. v. [Board of County] Commissioners, 98 U.S. 541, 543-544, 25 L. Ed. 196. See also Little v. Bowers, 134 U.S. 547, 554-558, 10 S. Ct. 620, 621-623, 33 L. Ed. 1016." This is not a case of "economic duress" instanced by Circuit Judge Frank in his dissent in United States v. Johnson, 2 Cir., 1956, 238 F.2d 565, 574, note 17. II. There are additional circumstances which leave no room for rational doubt that, in this case, there was no duress. One of the essential elements of duress—lacking in the present case— is that the demand be illegal. Union Pacific Railroad Co. v. Board of County Commissioners, supra; Cunard S. S. Co. v. Elting, supra. Williston on Contracts, Vol. V. (revised ed. 1937) section 1621, sums up the general rule as to duress with the question "whether the party induced to act was coerced by wrongful pressure * * *." (Emphasis supplied.) In In re Meyer, D.C.E. D.N.Y.1901, 106 F. 828, 831, the Court, in defining duress, said: "What is duress? `The duress for which a person may avoid any contract or conveyance made, or recover back any money paid under its influence, exists where one by the unlawful act of the beneficiary or his authorized agent, or by the act of some person with his knowledge, is constrained under circumstances which deprive him of the exercise of free will to agree or to perform the act sought to be avoided.' 10 Am. & Eng. Enc. Law, 321. This definition illustrates that the act which coerces the complaining person must have been an unlawful one, and so it should be. If one person exercises simply the right which the law gives him with reference to the person or property of another, it cannot be said that he unlawfully *940 coerces the other. Duress involves illegality." (Emphasis supplied.) The fine imposed on plaintiff by the Collector was lawful. 8 U.S.C.A. § 1284 (formerly 8 U.S.C.A. § 167) provides: "No such vessel or aircraft shall be granted clearance pending the determination of the liability to the payment of such fine, or while the fine remains unpaid * * *." The running of the statute of limitations did not render the imposition of the fine and the attempt to collect it illegal, although the collection of the fine by affirmative action might have been avoided by the plaintiff through the appropriate interposition of the time-bar. The material part of 8 U.S.C.A. § 167, Immigration Act of 1924 section 20 (as revised, now 8 U.S.C.A. § 1284, Immigration and Nationality Act of 1952) provides: "The owner, charterer, agent, consignee, or master of any vessel arriving in the United States from any place outside thereof * * * who fails to detain such seaman on board after such inspection or to deport such seaman if required by such immigration officer or the Attorney General to do so, shall pay to the collector of customs of the customs district in which the port of arrival is located the sum of $1,000 for each alien seaman in respect of whom such failure occurs * * *." The foregoing provision does not contain a statutory time condition as an essential ingredient of the cause of action for the $1,000 fine. A claim for the fine may, however, be barred by the running of the applicable statute of limitations contained in 28 U.S.C.A. § 2462. There is a vital and well-recognized distinction between a statutory time condition and a statute of limitations. A statutory time condition operates as a limitation of the liability itself as created, and not of the remedy alone. Bowles v. American Distilling Co., D.C.S.D.N.Y.1945, 62 F. Supp. 20, appeal dismissed Porter v. American Distilling Co., 2 Cir., 1946, 157 F.2d 1012. See 53 C.J.S. Limitations of Actions § 1, pp. 904-905. In the case at bar, the Collector acted pursuant to his statutory duty; his demand was not illegal. The plaintiff's obligation to pay the $1,000 was not "a nonexistent debt"; and there has been no "over-payment" to defendant. Cf. Dawson, Economic Duress—An Essay in Perspective (1947) 45 Mich.L.Rev. 253, 283; cf. Hardie and Lane v. Chilton (1928) 2 K.B. 306 (commented on in 42 Harv.L.Rev. 274 [1928]). III. The sequence of events also clearly demonstrates that plaintiff had adequate time and opportunity to pursue available legal remedies as the alternative to making the payments. (A) The plaintiff could have brought an action for declaratory judgment to determine the question of whether the fine had been legally imposed and whether the Collector of Customs could have denied clearance to the vessel. See 5 U.S.C.A. § 1009(a), (e), Administrative Procedure Act. An application for interim injunctive relief would have been in order. In American President Lines, Inc., v. MacKay, D.C.D.C.1953, 120 F. Supp. 897, pursuant to regulations, the Immigration Service required the plaintiff-shipping company to deposit money in advance for detention expenses of aliens. Plaintiff, after making the deposit, contested the legality of the regulations by seeking a declaratory judgment. The Court held that an action for a declaratory judgment was a proper remedy to determine the legality of payments made by plaintiff, notwithstanding the fact that plaintiff also could sue in the Court of Claims for a refund. It has been held that summary judgment may properly be granted when there is no genuine issue of fact or law raised by plaintiff's claim of economic duress, as where it has been demonstrated that plaintiff had an alternative, adequate and available legal remedy or that the loss of plaintiff's property was due to *941 plaintiff's own hasty or premature conduct. Christianson v. Gaines, 1949, 85 U.S.App.D.C. 15, 174 F.2d 534. Similarly, it has been held that the availability of the Federal Declaratory Judgment Act, 28 U.S.C.A. § 400,[*] as a means of securing an adjudication of the particular controversy, was significant in determining that a payment made under protest by a person to protect a valuable contract had not been induced by duress of the other party to the controversy. Pure Oil Co. v. Tucker, 8 Cir., 1947, 164 F.2d 945. On the other hand, where a person was required by an official agency to pay a fee for a certificate of authorization or else, as threatened by the agency, its mortgage bonds would be invalidated and it would be subjected to "grave penalties," the payment of the fee was deemed to have been "made under duress," in view of the fact that there was "no proceeding" available to the payor "by which it adequately could have avoided" the payment. Union Pacific Railroad Company v. Public Service Commission, 1918, 248 U.S. 67, 39 S. Ct. 24, 25, 63 L. Ed. 131, discussed in Thompson v. Deal, 1937, 67 App.D.C. 327, 92 F.2d 478, 485. In the Thompson case, plaintiffs' payment for certain exemption certificates required under an invalid law was held to have been "exacted by coercion" because the purchase of such certificates was "immediately necessary" to the plaintiffs' business and they had no adequate alternative course to follow (92 F.2d at pages 481, 486). (B) Another alternative open to plaintiff was to wait for the United States to bring an action on the bond and then for plaintiff to raise the parties' implied agreement as to the statute of limitations as an affirmative defense. United States v. Springer & Lotz, 2 Cir., 1934, 69 F.2d 819, 820. In the Springer & Lotz case, the Circuit Court of Appeals affirmed the District Court's dismissal of the Government's action upon a bond which had been posted by defendants, retail druggists, in connection with their application for a liquor permit while the Eighteenth Amendment was in force. The condition of the bond was that the defendants should pay all taxes and penalties "payable * * * under the National Prohibition Act * * * and other internal revenue laws." The bond was executed in July 1922. Shortly thereafter, defendants illicitly sold liquor. Ten years later, in 1932, the Government brought suit on the bond, seeking to recover the amounts of certain special taxes and penalties imposed under the National Prohibition Act and the Revenue Act. The District Court granted defendants' motion to dismiss the action on the ground that the statute of limitations applicable to penalties was a defense. Circuit Judge Learned Hand pointed out that, in affirming, the Circuit Court of Appeals did not agree with the District Judge's reasoning that the statute of limitations, as such, was a defense to the action on the bond. The affirmance was bottomed on the proposition that the penalties were no longer "payable" within the specific meaning and purpose of the particular bond's condition because the penalties could no longer be collected by virtue of the time-bar. In the present case, the purpose of the bond was merely ancillary to the imposed fine. Its promise is to be read, as the parties intended, as conditioned upon the resolution of the controversy between them concerning the effect of the statute of limitations on the imposition of the fine. The statute of limitations by its own force would not apply to an action upon the bond because that action, as such, is not covered by the language of title 28 U.S.C.A. § 2462. But the statute of limitations could be pleaded as a defense to the action upon this bond because that was the parties' intention "by convention." Cf. United States v. Springer & Lotz, supra, at page 820.[1] *942 The posting of the bond, in the present case, at a time when there was a bona fide controversy between the parties as to whether the statute of limitations had run, was specifically designed to preserve in status quo the mutual legal rights of the parties and, at the same time, to enable plaintiff to use its vessel while protecting the Government if it had a valid claim to the fine. Cf. United States v. Mack, 1935, 295, U.S. 480, 484, 55 S. Ct. 813. If, at the time the bond was posted, the Government's claim for the fine was outlawed by the statute of limitations, as it was, the posting of the bond for the purpose of preserving the rights of the parties did not constitute a waiver of the defense of the statute of limitations. IV. The uncontradicted evidence establishes that plaintiff's assumption—that a stop order had been sent to the Collector of Customs for the Port of San Juan —was factually erroneous. The first notice that the fine had been administratively imposed plainly stated that the notice was from the Collector of Customs of the Port of New York. The notice recited that, unless the fine were promptly *943 paid, the ship would be denied clearance. This meant clearance in the Port of New York. The Collector of Customs of New York has no authority to deny clearance in San Juan, Puerto Rico. The applicable Immigration Regulations (8 C.F.R. 280.11, 8 C.F.R. [1947 Supp.] 160.16. and 8 C.F.R. [Revised 1952] 280.15) provide that the Notice of the Imposition of the Fine (Defendant's Exhibit 9) is sent to the same Collector of Customs who was first notified (by the Immigration and Naturalization Service) of the Notice of Intention to Fine (Defendant's Exhibit 6). The Collector may then deny clearance to the vessel involved. If the vessel is located in a different customs district, there is a requisite procedure to notify the Immigration and Naturalization Service and Collector of Customs for that other district. But that procedure can be activated only when the Government knows where the vessel is located — a fact not appearing in this case. In the present case, the Collector of Customs was the Collector of Customs of the Port of New York. It must be presumed that the agent of the plaintiff, a well-known and large shipping company agency, had knowledge of this regulation. If not, a telephone call to the Collector of Customs of the Port of New York would have revealed that no stop order had been sent to the Collector of Customs of San Juan, Puerto Rico or to any port other than New York. Plaintiff acted upon the unverified and erroneous assumption that there was a stop-order awaiting the vessel in San Juan. The rule is that if by reasonable diligence one, under a legal duty to do so, can obtain knowledge of a fact and fails or neglects to do so, and thereafter pays money to discharge a legitimate debt, he cannot require its return as having been paid under a mistake of fact or under a misapprehension. The mere fact that a person is in fear of some impending peril or injury or in a state of mental perturbation at the time of doing any act, is not sufficient ground for holding that the act was done under duress. Plaintiff's motion is denied. Defendant's motion is granted. Settle order on notice. NOTES [*] Now 28 U.S.C.A. §§ 2201, 2202. [1] In Durning v. McDonnell, 2 Cir., 1936, 86 F.2d 91, 92, certiorari denied 1936, 300 U.S. 682, 57 S. Ct. 753, 81 L. Ed. 885, an action was brought by the Government upon a bond executed by the general agents of a steamship line, as principals. The bond had been executed in 1924. It was conditioned upon payment to the Collector of Customs of all fines imposed against any vessel by reason of the violation of any of certain provisions of the Immigration Act of 1924 (including 8 U.S.C.A. § 167) for the payment of which the said principals shall be "determined" to be liable. In 1928 — four years after the bond had been given—the Secretary of Labor imposed fines on the defendants with respect to the improper admission of three aliens transported on defendant's vessel. The action on the bond was commenced more than five years after the fines had been posed. Circuit Judge Swan held that the five-year statute of limitations (which barred an action to recover the fines themselves as a statutory liability) did not bar this action on the bond because (1) the condition of the bond was to pay fines for which the defendants "shall be determined to be liable"; (2) when the Secretary of Labor imposed the fine, he "determined" the defendants' liability within the meaning of the bond; and (3) the statute of limitations does not run against the promise contained in the bond. Judge Swan pointed out that the "correctness" of the Secretary of Labor's determination of the fine was subject to judicial review in the action on the bond because the bond secured "only valid fines" and if there were none, it was not forfeited. The Durning case indicates that each such case (of an action on the bond) is determined by the language and purpose of the bond and that the coverage of the bond is the decisive feature. The problem of the relationship between the obligation on the bond and the original obligation in connection with which the bond is given is illustrated in United States v. Mack, 1935, 295 U.S. 480, 55 S. Ct. 813, 79 L. Ed. 1559. In the Mack case, the Court upheld an action on a bond brought by the Government in view of the language of the condition contained in the bond (295 U.S. at page 482, note 1, 55 S. Ct. 813). In that case, a motor boat carrying a cargo of intoxicating liquors in violation of the National Prohibition Act was seized by the Collector of the Port of New York, and the crew were arrested. The alleged owner of the boat posted a bond conditioned "that the bond should be void if the vessel was returned to the custody of the collector on the day of the criminal trial to abide the judgment of the court." (295 U.S. at pages 481-482, 55 S.Ct. at page 814.) The crew pleaded guilty and were sentenced. But the vessel was not returned by the owner to the Collector. The Government brought an action on the bond. Defendants contended that, through the Twenty-first Amendment's repeal of the Eighteenth Amendment liability on the bond had ended. The Supreme Court held that the bond, being a contract, is to be enforced according to its terms; that defendants' liability became complete upon the breach of the express condition for the return of the vessel; and that the perfected liability on the bond was not extinguished by the fact that the Government could no longer proceed criminally against the vessel. Mr. Justice Cardozo analyzed the initial purpose of the bond (295 U.S. at page 484, 55 S.Ct. at page 815). It has been indicated that, in an action upon a bond such as the bond in the present case, "the obligor can raise the invalidity of the fine." Judge Learned Hand in Bank Line v. United States, 2 Cir., 1938, 96 F.2d 52, 54.

2013-10-30 06:32:40.29237+00

Houser

535 S.W.2d 499 (1976) In re the MARRIAGE OF Julia NEUBERN, Petitioner-Respondent, and Ralph Neubern, Respondent-Appellant. No. 36894. Missouri Court of Appeals, St. Louis District, Division Four. March 9, 1976. Motion for Rehearing or Transfer Denied April 13, 1976. Raymond A. Bruntrager, Sr., St. Louis, for appellant. *500 Julius H. Berg, St. Louis, for respondent. NORWIN D. HOUSER, Special Judge. Action by Julia Neubern for dissolution of her marriage to Ralph Neubern, contracted on September 12, 1963. The circuit court dissolved the marriage and found the parties possessed of the following marital property: a residence located at 5825 Lotus Avenue in the City of St. Louis, a package liquor business, a joint savings account and five rooms of household furniture. The court awarded Julia the residence; all furniture, except three items; the savings account, and $10,000 in cash payable by Ralph at the rate of $183 per month until fully paid. In addition Julia was awarded maintenance of $160 per month for 12 months. Ralph was awarded the liquor business. No order was made with respect to a 1973 Cadillac automobile titled in Ralph's name. Ralph was ordered to pay Julia's attorney a fee of $650. Costs were assessed against Ralph, who has appealed, claiming (1) error in awarding maintenance to Julia on the ground that she is healthy, capable of earning substantial wages and was working at time of decree; (2) abuse of discretion in the division of the marital property in a grossly unequal manner, and (3) error in awarding a grossly excessive attorney's fee and because Julia had sufficient property, including marital property awarded her, to pay her attorney. Under the provisions of § 452.330, RSMo 1969 the court on dissolution of a marriage is obligated to divide the marital property between the spouses in just proportions after considering all relevant factors, including each spouse's contribution to the acquisition of the marital property, including the contribution of a spouse as a homemaker; the value of the property set apart to each spouse; the economic circumstances of each spouse at time the property is divided, and the parties' conduct during the marriage. The parties lived together for ten years before separating. No children were born of the marriage. The family home was purchased in 1965 for $10,500. Julia provided the down payment of $400 from the proceeds of an insurance policy on which she paid the premium. The house, which has depreciated, has a present value of $10,000. There are three mortgages on the house totaling around $9,500. The first mortgage (balance due $5,748) requires monthly payments of $110. A second mortgage is being paid at the rate of $73.33 per month. A third mortgage is for $800. There was testimony that the parties' equity in the house is less than $2,000. From these facts the equity appears to be $500. The parties owe no debts other than the mortgages. The parties bought "quite a few" war bonds in their joint names, "twenty five or fifty" of them, but there was no evidence of the denominations or present value of bonds. The $4,000 savings account represents receipts from the pinball machine in the liquor store. For the first few years Julia worked there 7 days a week from 9:30 a. m. to 11 p. m. Monday through Friday, and from 9 a. m. to midnight on Friday and Saturday. During the last three years of the operation they closed on Sunday. Ralph is a butcher by trade. He works in Granite City, Illinois for the Army Aviation Systems Command. He makes $5.84 an hour wages, 40 hours a week, with 2 or 3 hours overtime about six days a month. The parties' joint 1973 federal income tax return shows that Ralph's gross wages that year were $14,309. His 1970 wages were $8,500, the same in 1971, and approximately $9,000 in 1972. His 1974 gross wages were "about" $9,000 or $10,000. Ralph customarily brought home $200 every two weeks. Julia would pay current bills with the $200, supplemented by money from the liquor store. All current bills for living expenses have been paid. On days when he worked at his butcher job Ralph would ordinarily spend 2 or 3 hours waiting on customers at the liquor store. On days off he would spend 4 or 5 hours at the store. Each night Julia took $3 and Ralph took $3 from the store receipts. On Saturdays each would take $5 as wages. Ralph customarily deposited the liquor store receipts in a checking account when any money was left over *501 after paying current household expenses. Store expenses were paid from the checking account, which was nil at time of trial. The tax return showed that net profits made at the store in 1973 were $680. The profit and loss statement attached to the return shows an inventory at the end of 1973 in the amount of $2,855. For telephone, utilities, food, clothing, transportation, dental and medical care, insurance, recreation and miscellaneous expenses Julia asked for maintenance in the sum of $400 per month. Prior to her marriage Julia, who had a 10th grade education, worked as a clerk in a drugstore, as a shoe cutter, pressboard operator and as a hospital technician. She testified that she was capable of working at time of trial; that she had no physical, mental or emotional disabilities. The record does not show her age. It was stated in oral argument and not denied that she is in her middle forties. The parties separated because of Ralph's physical abuse of Julia; his continual drinking; cursing her in public; unexplained absences on weekends. He would leave home after the liquor store closed on Saturday night and not return until the early hours of Sunday morning. There were frequent unexplained telephone calls on the parties' unlisted number made by females asking for Ralph. Ralph made constant threats against Julia. Ralph told Julia that if the divorce went through Julia would be walking down the street and her brains would be blown out; if she "got the store" he would blow up the store; if she "got the house" he would blow up the house. He fought with Julia continually. He kicked her. Once he bit her, as a result of which she sought medical attention. On one occasion Ralph choked Julia until she passed out. On numerous occasions he hit and struck her. One of her teeth was knocked loose. She bled as a result of one physical attack on Julia. Julia admitted that during family arguments she had called Ralph dirty names and that one time in self-defense she hit him with a telephone when he started to hit her. The record reveals nothing with respect to her contribution as a homemaker, except her testimony that she cooked on Sundays and Mondays, and that for evening meals at the liquor store she would warm up for Ralph and herself what was left over from Sunday. We find that the circuit court had before it the following marital property for just apportionment between the parties: (1) The package liquor business; (2) The residence property; (3) 5 rooms of furniture, value not assessed; (4) Joint savings account of $4,000; (5) 1973 Cadillac, value not assessed; (6) United States bonds. The circuit court awarded Julia (2), (3), and (4), plus $1,920 maintenance, payable in 12 monthly instalments of $160 each, plus $10,000 payable in monthly instalments of $183. The total value of the awards to Julia was upwards of $17,000, plus whatever the furniture is worth. For his part of the marital property Ralph was awarded (1), valued at $2,855, and three items of used household articles and appliances. Neither Cadillac nor war bonds was mentioned in the decree. The Cadillac is being purchased on time. The monthly payments are $153 and are Ralph's obligation. We are not informed of the value of Ralph's equity in the Cadillac. In sum, Ralph received a $2,855 liquor inventory, an equity of unknown value in a used Cadillac, a used air conditioner, television set and bedroom suite. Ralph estimated his monthly expenses for utilities, food, clothing, laundry, cleaning, transportation, gas and bridge toll, car payment, medical and dental and insurance at $740. The decree required him to pay Julia a total of $343 each month. On this basis Ralph's total monthly outlay would be $1,083, or about $13,000 a year. In addition, he was bound to pay $800 for a new canopy on the house and the $650 attorney's fee. His average yearly income 1970-1974 was approximately $10,000. Considering the four criteria named in § 452.330, RSMo 1969, we are of the opinion *502 that the circuit court abused its discretion in dividing the marital property; that the decree entered is clearly erroneous. It is heavily and unduly weighted in favor of Julia. The net score under this decree, as far as money and property is concerned, is approximately: Julia, plus $17,000; Ralph, minus $10,000 plus the equity in the Cadillac. This is not a just and equitable apportionment, and if Ralph's future income does not substantially exceed the average of his income for the 5-year period preceding trial (and there is no evidence of any such prospect) the circuit court will have decreed an impossibility. There is no question that each spouse contributed materially and substantially to the acquisition of the modest amount of marital property accumulated by these parties during the 10 years they lived together. There is no question that the conduct of Ralph during the marriage was disruptive of the marital relationship. While Julia's conduct on some occasions left something to be desired, the balance on the merits tipped considerably in favor of Julia. Ralph's conduct during the marriage is one important factor to be considered but it is not the overwhelmingly decisive factor. It is apparent that Julia's principal interest and preoccupation during the marriage was the operation of the package liquor business, in which she invested long hours of her time over a period of many years. It is likewise clear that without her, or someone else, Ralph could not have operated the liquor business, because he had a full-time job elsewhere as a butcher. There is little testimony on net business earnings but what evidence there is clearly demonstrates that it would be uneconomical for Ralph to pay the wages of a store manager to operate the business in his absence, while attending to his regular job. Ralph requested that the circuit court award the liquor business to Julia. Instead the court awarded it to Ralph, who obviously cannot handle it and keep his steady employment as a butcher. On appeal Ralph renews his request that Julia be awarded the liquor business, and we are persuaded that this is proper and it is so ordered. On remand Ralph will execute appropriate papers to transfer his interest in the package liquor store business to Julia. As to the residence: While it is likely both parties signed the notes and mortgages, there is no such evidence, so we are not advised whether one or both of the parties are legally obligated by contract to pay the $9,500 due on the residence property. Under the decree Julia retains the house and Ralph is obliged to give her a quitclaim deed and pay her $183 per month until $10,000 is paid (an amount considered sufficient to enable her to make the payments). Whether the $183 includes interest, insurance and taxes was not shown. The house is mortgaged to the hilt. There is only a small equity in the house, amounting to about $500. There is no real value there; Julia would profit little by selling the house at this time. The house does provide her shelter. We find no justification, however, in requiring Ralph, in effect, to purchase a house for Julia at the termination of this marriage. As framed the decree insures continuing friction between these parties. Ralph suggests the adverse psychological effect upon him of the house being occupied by his ex-wife and he being forced to make the mortgage payments for a long term of years "instead of correcting the problem between these two parties." Insofar as possible the decree should provide for a clean break without unnecessary entangling provisions. The provision of the decree ordering Ralph to pay Julia $10,000 is vacated and set aside. The house is set over to Ralph as his property with the obligation on him to meet the monthly payments on the house. The decree will require Ralph to hold Julia harmless on account of any contractual obligation she may have incurred on the notes and mortgages, and will require Julia to give Ralph a quitclaim deed. As to the furniture: An equitable division of the furniture between the parties should be made, after holding a hearing and taking evidence on what it consists of, its *503 value, and the relative needs of the parties after Julia moves from the residence. The $4,000 savings account was properly awarded to Julia. The Cadillac is specifically awarded to Ralph. The war bonds are divided equally between the parties. On the question of maintenance: As pointed out by appellant no longer is a wife entitled to alimony on the theory that it is a judgment for the damages sustained by her by reason of the loss of the right to her husband's support, Nelson v. Nelson, 282 Mo. 412, 221 S.W. 1066 (banc 1920), or as being in the nature of an award of damages because of her husband's breach of the marriage contract. Brinker v. Brinker, 360 Mo. 212, 227 S.W.2d 724 (1950). Marriage is now regarded as a partnership between equals. Either party upon dissolution of the marriage may be awarded maintenance, depending upon the circumstances, but a maintenance order in a proceeding for dissolution of marriage, where there are no children, is to be granted to an applying spouse ONLY upon a finding that the spouse seeking maintenance (1) lacks sufficient property, including the marital property apportioned to him, to provide for his reasonable needs, and (2) is unable to support himself through appropriate employment. § 452.335, par. 1(1), (2), RSMo 1969. Julia does not lack sufficient property to provide for her reasonable needs, in view of the award to her of the package liquor business in which she has had ten years' experience; the savings account of $4,000, and the order relieving her of the obligation to pay her attorney's fee. That she is able to support herself through other appropriate employment has been demonstrated by her record of working in various capacities prior to marriage, and by her own testimony that she is without physical, mental or emotional disabilities and is capable of working. By the terms of § 452.335 Julia is not entitled to an order of maintenance. On the attorney's fee: Julia's counsel has been paid either $450 or $500 out of liquor store receipts. We find the court's allowance of an additional $650 reasonable under the circumstances, and sustain the court's action in awarding counsel that sum, to be paid by Ralph. Wherefore, the judgment and decree is reversed and set aside, and the cause is remanded to the circuit court with directions to enter a new judgment and decree consistent with the views expressed in this opinion, directing the execution of all necessary documents and papers to effectuate these directions, after conducting the hearing referred to with respect to the furniture. SMITH, C.J., and ALDEN A. STOCKARD, Special Judge, concur.

2013-10-30 06:32:40.31173+00

Daley

367 A.2d 668 (1976) M. Jerome DIAMOND v. Carol VICKREY. No. 54-76. Supreme Court of Vermont. December 7, 1976. *669 John J. Easton, Jr., Asst. Atty. Gen., Burlington, for plaintiff. Richard C. Blum, Burlington, Natt L. Divoll, Jr., Bellows Falls, for defendant. Before BARNEY, C. J., DALEY, LARROW and BILLINGS, JJ., and SHANGRAW, C. J. (Retired), Specially Assigned. DALEY, Justice. By virtue of the Vermont Consumer Fraud Law contained in Chapter 63 of Title 9, Vermont Statutes Annotated, the Legislature has declared that unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are unlawful. 9 V.S.A. § 2453(a). Included within the statutory scheme governing consumer fraud are provisions authorizing the attorney general or a state's attorney to conduct a civil investigation whenever he has probable cause to believe that a person is or has been engaging in unfair methods of competition, or unfair or deceptive acts or practices in commerce. 9 V.S.A. § 2460. The civil investigation provisions of 9 V.S.A. § 2460(a), as amended, provide that: The attorney general or a state's attorney whenever he has probable cause to believe any person to be or to have been in violation of section 2453 of this title. . . may upon probable cause examine or cause to be examined . . . any books, records, papers, memoranda and physical objects of whatever nature bearing upon each alleged violation. The statute further provides that the attorney general or a state's attorney is authorized to require the attendance of certain persons and may take testimony of these persons. Subsection (c) of § 2460 confers jurisdiction upon the superior court for the enforcement of the section and states that such court is empowered to make orders as may be required to carry into effect the investigatory powers of the attorney general or a state's attorney. A person disobeying such an order is subject to punishment for contempt. 9 V.S.A. § 2460(c). In a proceeding brought under 9 V.S.A. § 2460(c), the Attorney General, M. Jerome Diamond, petitioned the Windsor Superior Court for an order compelling Carol Vickrey to comply with a subpoena issued by his office. This petition was met with a motion to quash the subpoena and to dismiss the show cause order issued upon the allegations in the petition. After a hearing at which the subpoena and a supporting affidavit were made part of the record, the superior court granted Vickrey's motions because of the lack of sufficient facts alleged in the subpoena and affidavit to establish probable cause. The attorney general appeals. The principal issue presented by this appeal relates to the construction of 9 V.S.A. § 2460(a), specifically the "probable cause" requirement of that statute. The attorney general, citing opinions of the United States Supreme Court, contends that this probable cause requirement is satisfied by the three-fold showing that: (1) the administrative investigation is authorized by the Legislature; (2) that the investigation is for a purpose that the Legislature can order; and (3) that the information sought is relevant to the administrative inquiry. Ms. Vickrey claims that the Legislature, by its express use of the term "probable cause to believe" in § 2460(a), intended to set a stricter standard upon the attorney general or a state's attorney which must be met prior to the utilization of the investigatory powers conferred by the statute. We agree with her construction of § 2460(a). *670 Our review of the cases dealing with the constitutional considerations limiting the enforcement of administrative subpoenas indicates a definite trend toward enlarging the investigatory powers of administrative agencies. Justice Holmes' concern, expressed in Federal Trade Commission v. American Tobacco Co., 264 U.S. 298, 306, 44 S. Ct. 336, 337, 68 L. Ed. 696 (1924), that these agencies would "direct fishing expeditions into private papers on the possibility that they may disclose evidence of crime", is no longer regarded as a constitutional impediment to the enforcement of administrative subpoenas. United States v. Morton Salt Co., 338 U.S. 632, 642, 70 S. Ct. 357, 94 L. Ed. 401 (1950); Equal Employment Opportunity Commission v. University of New Mexico, 504 F.2d 1296, 1303 (10th Cir. 1974). The opinions set forth in Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 66 S. Ct. 494, 90 L. Ed. 614 (1946) and United States v. Morton Salt Co., supra, relied upon by the attorney general to support his view of the construction of § 2460(a), delineate the Fourth Amendment restrictions upon the enforcement of administrative subpoenas. The United States Supreme Court has noted that an administrative investigation conducted by subpoena is constitutionally permissible even if the investigation is grounded upon the mere suspicion that the law has been violated or on the ground that the administrative body seeks assurances that the law has not been violated. United States v. Powell, 379 U.S. 48, 57, 85 S. Ct. 248, 13 L. Ed. 2d 112 (1964). This view of the constitutionally permissible scope of administrative subpoenas fully comports with the United States Supreme Court's opinion that the investigatory powers of an administrative agency are analogous to those of a grand jury. Oklahoma Press Publishing Co. v. Walling, supra, 327 U.S. at 216, 66 S. Ct. at 509. It has even been held that an administrative subpoena "need not be supported by an ad hoc showings of probable cause" in order to be enforced by the federal courts. United States v. DeGrosa, 405 F.2d 926, 928-29 (3rd Cir.), cert. denied, 394 U.S. 973, 89 S. Ct. 1465, 22 L. Ed. 2d 753 (1969). It must be stressed that the federal statutes which were reviewed in the above cases did not contain an express probable cause requirement. Inasmuch as the parties differ as to the meaning of the term "probable cause to believe", undefined in the statute, we are called upon to determine the intent of the legislative body through an inquiry to the legislative history of § 2460(a). See State v. Mahoney, 122 Vt. 456, 458, 176 A.2d 747 (1961). The material provisions of this statute as enacted by the Acts of 1967, No. 132, authorized the attorney general to institute a civil investigation "whenever he believes any person to be or have been in violation of" the consumer fraud law. At the 1973 Session of the General Assembly, House Bill No. 133 was introduced as an amendment to subsections (a) and (c) of 9 V.S. A. § 2460. This proposed amendment, along with extending the investigatory powers to state's attorneys, authorized the attorney general to conduct a civil investigation "whenever he desires to conduct an investigation with respect to a possible past, present, future or potential violation" of the consumer fraud law. After a stormy passage through the House of Representatives and the Senate, the words of the proposed bill were rejected and in lieu the General Assembly enacted No. 110, Acts of 1973, which amended § 2460(a) so as to restrict civil investigations to those instances where there is "probable cause to believe" that there has been a violation. The attorney general argues that the Legislature, in substituting the "probable cause" requirement for the prior requirement, did not intend to impose a greater restriction upon his investigatory powers. He argues that, under either standard, the only limits upon his investigatory powers are the constitutional requirements as *671 enunciated by the federal courts. We cannot agree. It is well settled that, in interpreting amendatory language in a statute, we are guided by the rule that the Legislature intended to change the law. In re Cartmell Estate, 120 Vt. 228, 232, 138 A.2d 588 (1958); City of Winooski v. Companion, 105 Vt. 1, 3, 162 A. 795 (1932); Essex Storage Electric Co. v. Victory Lumber Co., 95 Vt. 117, 120, 112 A. 832 (1921). If we were to adopt the attorney general's argument, we would have to accept the view that the Legislature did not intend to change the law by replacing the phrase "whenever he believes" with "whenever he has probable cause to believe". We feel that such an interpretation of the statutory amendment is untenable. The history of § 2460(a) compels us to believe that the Legislature, in granting civil investigatory powers to the attorney general and state's attorneys, intended to prevent those officers from conducting so-called "fishing expeditions" by restricting investigations to those instances where there is probable cause to believe there has been a violation, and provided a judicial forum for the testing of probable cause. 9 V.S.A. § 2460(c). The legislative body is free to impose greater restrictions upon the issuance and enforcement of administrative subpoenas than is constitutionally mandated. The probable cause requirement of § 2460(a) cannot be interpreted as allowing the designated officials to engage in investigations upon the mere suspicion of a violation. The authority granted the attorney general and the state's attorneys under the statute is not analogous to those of a grand jury. We cannot accept the proposition that § 2460(a), containing an explicit probable cause requirement, does not place greater restrictions upon investigations than the federal statute without such restriction. We hold that the Legislature, by its 1973 amendment to § 2460(a), intended to change the previous standard allowing an investigation upon the attorney general's personal belief that a violation had taken place in favor of an objective probable cause standard. The term "probable cause" has been stated by this Court to refer to "a state of facts and circumstances as would lead a careful and conscientious man to believe" that a violation had taken place. Barron v. Mason, 31 Vt. 189, 195 (1858); Driggs v. Burton, 44 Vt. 124, 135, 145 (1871). See also Gerstein v. Pugh, 420 U.S. 103, 111-12, 95 S. Ct. 854, 862, 43 L. Ed. 2d 54 (1975); Wong Sun v. United States, 371 U.S. 471, 479, 83 S. Ct. 407, 9 L. Ed. 2d 441 (1963). We hold that this is the standard which the Legislature intended to impose as a limitation upon the authority of the attorney general or a state's attorney in conducting civil investigations under § 2460(a). Having thus resolved the issue regarding the standard to be applied in determining probable cause, the question remains as to whether the lower court properly ruled that insufficient facts had been alleged by the attorney general to establish probable cause. A review of the information contained in the subpoena and its supporting affidavit discloses that an investigator with the office of the attorney general had spoken to a nurse formerly employed at a certain nursing home in this State. She informed the investigator that during the fall of 1974 Medicaid patients at the home were charged for pharmaceutical items previously covered by the nursing home. She advised the investigator to contact Carol Vickrey, a bookkeeper at the Center, for more exact information. The investigator did speak to Ms. Vickrey by telephone, at which time she stated to the investigator that, in her opinion, his office would be able to "bring legal action" against the home if she gave him certain *672 information. When she later refused to talk to the investigator, the subpoena was issued against her. The only information bearing upon probable cause to believe that a violation of the consumer fraud law had occurred is this information gathered by the investigator and set forth in the supporting affidavit. These allegations fail to demonstrate probable cause to believe that a violation of the consumer fraud law had occurred or was occurring. We therefore affirm the determination by the lower court. Because of our decision regarding the construction of the probable cause requirement of § 2460(a), we need not pass upon other issues raised. Judgment affirmed.

2013-10-30 06:32:40.409955+00

Duffy

367 A.2d 636 (1976) HUSBAND, de, Appellant, v. WIFE, de, Appellee. Supreme Court of Delaware. Submitted September 24, 1976. Decided October 21, 1976. David Roeberg, of Roeberg & Agostini, Wilmington, for appellant-husband. Ben T. Castle, of Young, Conaway, Stargatt & Taylor, Wilmington, and Lawrence B. Brody, of Coudert Brothers, London, England, of counsel, for appellee-wife. Before HERRMANN, Chief Justice, and DUFFY and McNEILLY, Justices. DUFFY, Justice: The threshold question in this case involves the appealability of an interlocutory order of the Family Court awarding temporary alimony, travel expenses and attorney fees. I This is a contested action for divorce brought by the Husband under 13 Del.C. § 1505. Apparently, he is a Delaware domiciliary; his wife lives in England. She applied under 13 Del.C. § 1509(a)(1) and (6)[1] for interim relief pending final hearing and, on a record made by affidavits, the Family Court awarded her temporary alimony, travel expenses and attorney fees *637 in the order on appeal here. 13 Del.C. § 1522. II The Husband argues that by virtue of the provisions of 13 Del.C. § 1522(a)(3) he has a right to an appeal of the interlocutory order. That statute reads as follows: "(a) All parties to any of the proceedings brought pursuant to this chapter shall possess all the procedural rights which those parties would have heretofore possessed in any of the proceedings brought pursuant to this chapter in the Superior Court of this State including but not limited to the following: . . . . . (3) Right to appeal to the Supreme Court of this State on the record from interlocutory or final orders for judgment; such appeal shall be in the form and manner provided by the rules of the Supreme Court." We have no doubt that under the statute certain interlocutory appeals may be taken to this Court, but we are not persuaded that every interlocutory order is appealable. And that is the logical consequence of the argument the Husband makes. That position is not sound for two reasons. First, § 1522(a)(3) clearly manifests a Legislative intent to subject appeals, interlocutory as well as final, to the procedural mandates of this Court by providing that they "shall be in the form and manner" provided by Supreme Court Rules. Second, the statute confers on Family Court parties the same "procedural rights" which they would have possessed in prior proceedings in the Superior Court (which had divorce jurisdiction prior to November 21, 1975, 60 Del.L. ch. 297); and, under established case law, an appeal from an interlocutory order may be taken from the Superior Court to this Court only if the order determines a substantial issue and establishes a legal right. See, for example, C. v. C., Del.Supr., 320 A.2d 717 (1974). The General Assembly is presumed to have been aware of that law when it enacted § 1522(a)(3). We conclude that to be appealable to this Court an interlocutory order of the Family Court must determine a substantial question and establish a legal right between the parties. III We turn now to the question of whether an award of temporary alimony, or travel expenses or attorney fees is appealable under the announced criteria.[2] There does not appear to be a reported Delaware decision as to any of such awards. In other jurisdictions there is a division of opinion as to whether or not such orders are appealable. 4 Am.Jur.2d Appeal and Error § 138, Annot. 167 A.L.R. 360. Statutory variations explain some of the differences but whatever the rationale, our view is that an order granting or refusing temporary alimony or suit expenses is not appealable under the Delaware statute. See 4 Am.Jur.2d supra. We say this for several reasons. First, temporary alimony is, by its nature and purpose, subject to modification as the circumstances of the parties change and each change would thus create a new right of appeal. And, second, in the disposition of marital property under 13 Del.C. § 1513 the Trial Court, at final hearing, can consider amounts awarded to a spouse on an interim basis.[3] Under these circumstances, *638 we decline to say that an order which merely directs the payment of moneys on an interim basis, and the consequences of which are subject to later consideration, determines a substantial question between the parties within the meaning of the law governing appealability. In addition, marital and domestic relations litigation should proceed to prompt disposition, and an interlocutory appeal would, in most cases, thwart that objective. We conclude that the interlocutory order made by the Family Court in this case is not appealable and, therefore, this Court is without jurisdiction to consider it.[4] It follows that the appeal must be dismissed. NOTES [1] 13 Del.C. § 1509(a)(1) and (6) provide: "(a) Petitioner in the petition for divorce or annulment, or by motion filed simultaneously with the petition, or either party by motion filed after the filing of the petition, may move for 1 or more of the following interim orders: (1) For temporary alimony for himself or herself; . . . . . (6) Requiring 1 party to pay such sum to the other party as deemed necessary to defray the other party's expenses in conducting the proceedings." [2] The order at issue is simply a direction to pay money. In this context we are not concerned with contempt or any other enforcement proceeding. [3] Section 1513(a)(3) directs that an equitable division of marital property be made by the Court after considering a number of relevant factors, including "(4) Whether the property award is in lieu of or in addition to alimony." [4] The interlocutory order is, of course, reviewable by this Court on appeal from a final order. 10 Del.C. § 144.

2023-08-22 21:20:49.703862+00

Henry

OPINION ON PETITION TO REHEAR HENRY, Justice. Counsel for respondents have filed a dignified, courteous, forceful and persuasive petition to rehear. It does not however raise any question that has not heretofore been fully considered by the Court. It is in the nature of the appellate judicial process that the issues are generally arguable from the vantage point of either side to any given case or controversy; that the facts are susceptible of differing interpretations; and that it is a rare case indeed wherein the Court can say to a mathematical certainty that either party is entirely correct. Under the rules governing appellate review, such certainty is not required. Indeed, an appeal where either the law or the facts are not susceptible of a bon a fide dispute tends to be frivolous in nature, and most assuredly this appeal presented a bona fide and justiciable controversy. This Court has reached a decision upon the matter after thorough and painstaking attention and consideration. It has reconsidered in the light of the petition to rehear, and upon that reconsideration, feels that it must adhere to the original opinion. The petition to rehear is respectfully overruled. All concur.

2013-10-30 06:32:40.578576+00

Shelbourne

152 F. Supp. 549 (1957) B. Allie HALL, Administrator of the Estate of John Michael Edwards, Deceased, Plaintiff, v. ILLINOIS CENTRAL RAILROAD COMPANY, Defendant. Civ. A. No. 938. United States District Court W. D. Kentucky, Paducah Division. June 20, 1957. *550 M. C. Anderson, Wickliffe, Ky., Waller, Threlkeld, Whitlow & Byrd, Paducah, Ky., Barnett, Jones & Montgomery, Jackson, Miss., for plaintiff. Wheeler & Marshall, Paducah, Ky., for defendant. SHELBOURNE, Chief Judge. This action is before the Court on the plaintiff's motion to remand, filed May 23, 1957. The complaint was filed in the Ballard Circuit Court on the 23rd day of February, 1957, against the Illinois Central Railroad Company. Paragraph 3 of the complaint alleges that the action is brought under the Employers' Liability Act of the State of Kentucky, KRS 342.001 et seq., to recover for the wrongful death of John Michael Edwards, an unmarried man, who died February 29, 1956, while he was employed by the Illinois Central Railroad in intrastate commerce. The complaint quotes Section 277.310 of the Kentucky Revised Statutes, Section 241 of the Kentucky Constitution, and, in part, Section 411.130 of the Kentucky Revised Statutes. It is alleged that the deceased was a lineman and, as a member of a crew, engaged in "clipping and removing unused telegraph wires mounted on crossarms attached to a line of poles near the Town of Wickliffe, Kentucky." It is alleged that the wires were not in use and had not been in use for a long time; that the line of poles near Wickliffe (on which the wires were strung) was partially submerged in the flood waters; that the crewmen were travelling by boat from pole to pole; that the boat furnished for the work was unsuited and overturned, causing the drowning of Edwards. The defects of the boat were described in detail, and knowledge of the defective boat is alleged to have been had by the defendant, together with knowledge that the boat as being used was heavily loaded by members of the crew with their equipment, and because of a powerful outboard motor, high winds, and choppy waters of the river the accident occurred and the deceased was drowned. Negligence is alleged on the part of the operator of the motor on the boat. Plaintiff alleges that the doctrine of res ipsa loquitur applies. It is alleged that the defendant failed to furnish deceased a reasonably safe place to work and reasonably safe appliances and boats in which to perform the work, and was otherwise negligent in causing its boats to be operated in an unsafe and imprudent manner while being overloaded. The plaintiff then avers in the alternative that, if the deceased was not engaged in intrastate commerce, he was engaged in interstate commerce, and plaintiff invokes the provisions of the Federal Employers' Liability Act, Title 45 U.S.C.A. § 51 et seq. Then plaintiff alleges that, if neither the Employers' Liability Act of Kentucky nor the Federal Employers' Liability Act have application, he invokes *551 remedies afforded him under the common law for negligence. It is claimed that the negligence of the defendant created liability under one or more of these alternatives. Recovery is sought for the love, affection and companionship which the beneficiaries of the deceased's estate have lost, the support and contributions that deceased made to them, and the gratuities they would have received from him. They seek to recover funeral and burial expenses in a sum not exceeding $1,000, for the physical pain and suffering and mental anguish the deceased endured prior to his death, and for the destruction of his power to earn money. The prayer of the petition is that plaintiff have and recover "actual and punitive damages from the defendant in the sum of One Hundred Thousand Dollars ($100,000.00)." March 14, 1957, defendant filed its petition and bond for removal of the action to this Court; removal is based on the diversity of citizenship. March 19, 1957, defendant filed a written motion. Paragraph I seeks dismissal because no claim is stated upon which relief can be granted; Paragraph II moves that Paragraphs 4, 5, and 6 of the complaint be stricken; Paragraph III moves that Paragraphs 14, 15, 17, 18, and 19 be stricken; Paragraph IV moves that all of Paragraph 20, except the allegation as to the age of the decedent, be stricken. In support of Paragraph I of the motion, defendant says that the allegations of negligence are specific and are inconsistent and insufficient. As to Paragraph II of the motion, counsel states that this Court takes judicial notice of the statutes of Kentucky, and Paragraphs 4, 5, and 6 are unnecessary and are violative of Rule 8, Fed.Rules Civ.Proc., 28 U.S.C. As to Paragraph 14 of the complaint asked to be stricken by Paragraph III of the motion; defendant says that the doctrine of res ipsa loquitur cannot be invoked when specific negligence is alleged; as to Paragraph 15, that the allegations as to the legal duties of the defendant are surplusage and violative of Rule 8; and, as to Paragraph 17, that no facts are alleged in support of the attempted invocation of the provisions of the Federal Employers' Liability Act, and that the paragraph should be stricken in the interest of clarity and in order to enable the defendant to plead. Defendant's counsel says that Paragraphs 18 and 19 are surplusage and violative of Rule 8, and, finally, that all of the allegations of Paragraph 20 are improper and irrelevant, except as to the age of plaintiff's decedent. March 29, the plaintiff filed his response to defendant's motion, also in paragraphs numbered I, II, III, and IV. Strangely enough, neither in the defendant's statement of grounds of his motion nor in plaintiff's response thereto is there a reference to any adjudicated case. Plaintiff, in Paragraph I of his response, says, "The complaint states a good cause of action," and then cites the provisions of the Kentucky Revised Statutes and the entire Federal Employers' Liability Act, Title 45 U.S.C.A. § 51 et seq., without further comment. Paragraphs II and III of the response submitted the paragraphs of the complaint referred to in Paragraphs II and III of defendant's motion without argument, and the concluding paragraph of his response is that "all facts alleged in the complaint have evidential value in support of plaintiff's allegations of negligence and violation of statutes which caused or contributed to the death of John Michael Edwards, * * *." When the defendant's petition for removal was presented to the Court, together with an order reciting the steps taken by defendant pursuant to Section 1446 of Title 28 U.S.C.A., the order was signed by the Court without a careful examination of the complaint filed in the State court, copy of which was attached to the petition for removal. In examining the complaint more carefully, the Court is of the opinion that a serious question of jurisdiction presents itself. The plaintiff has alleged a cause of action under common law or under the wrongful death statute of Kentucky on the one hand, and an action under the *552 Federal Employers' Liability Act on the other hand. It is provided by Section 1445(a) of Title 28 U.S.C.A. that "A civil action in any State court against a railroad * *, arising under sections 51-60 of Title 45, may not be removed to any district court of the United States." A similar provision was originally a part of the Federal Employers' Liability Act. Rule 18 of the Rules of Civil Procedure permitted a plaintiff in his complaint to join either as an independent claim or as alternative claims as many claims, either legal or equitable or both, as he may have against his adversary. Hence, it was permissible for plaintiff to sue in the alternative for damages for the destruction of decedent's earning power and funeral expenses under the State law, and for pecuniary loss suffered by the beneficiaries in the death of the decedent. Assuming that the plaintiff has done or attempted to do this, the jurisdictional question arises: Does this Court have jurisdiction of the action? It is provided by Section 1441(c) of Title 28 U.S.C.A., "Whenever a separate and independent claim or cause of action, which would be removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction." In the case of Patton v. Cincinnati, N. O. & T. P. Ry., D.C.Tenn., 208 F. 29, Judge Sanford, considering the effect of the prohibition against removal to a Federal District Court an action under the Federal Employers' Liability Act filed in a State court, said (at page 32): "And it is clear that while the plaintiff may, after removal of a cause, waive objection to the jurisdiction of the particular Federal court to which the case has been removed, he cannot waive an objection running to the jurisdiction of the Federal courts as a class, or confer jurisdiction, even by consent, in a cause not within the general jurisdiction of the Federal courts. * * "It results that as Congress has expressly withheld from the Federal courts, as a class, jurisdiction in cases arising under the Employers' Liability Act previously brought in a State court, the plaintiff could not, under the rule laid down in the cases above cited, waive his objection to the want of jurisdiction in this court by filing his declaration in this court, or otherwise, and could not, even by express consent, confer jurisdiction upon this court under the removal proceedings in this cause; and it appearing that jurisdiction in a case of this character has been expressly withheld from the Federal courts by the Acts of Congress, it would clearly be the duty of the court, even in the absence of a motion to remand, upon its own motion, when such want of jurisdiction is brought to its attention, to remand the case to the State court, under the provisions of section 37 of the Judicial Code." In the case of Mitchell v. Southern Ry. Co., D.C.Ga., 247 F. 819, the complaint contained four counts, two of which alleged liability under the Federal Act and two liability under the State law. The action was removed to the Federal court and the trial resulted in a mistrial, after which there was a motion made to remand the case on the ground that it was a non-removable case. In ordering the case remanded, and for the reason that two of the counts in the complaint sought recovery under the Federal Employers' Liability Act, the Court held that the question was one of jurisdiction and, notwithstanding plaintiff had engaged in a trial in the Federal court without objection, the action was remanded because the Court was of the opinion that the Federal court was without jurisdiction. In the case of Pate v. Standard Dredging Corp., 5 Cir., 193 F.2d 498, a claim under the Jones Act, 46 U.S.C.A. § 688, was involved. That suit was filed in the State court in Texas and removed by the defendant to the United States District *553 Court on the ground of diversity of citizenship. The requisite amount to confer jurisdiction on the Federal court being present, the case proceeded to trial to the Court without a jury and resulted in a judgment for the defendant, from which the plaintiff appealed. In the Court of Appeals, the plaintiff claimed error on the part of the Court in declining to remand the case to the State court. The defendant claimed that the plaintiff's complaint sought recovery for alleged unseaworthiness and that that constituted a separate and independent cause of action from that under the Jones Act and was removable; and, further, that the plaintiff's claim for maintenance and cure constituted a separate and distinct cause of action which would be removable if sued upon alone. The Court pointed out that actions under the Jones Act gave seamen suffering personal injury in the course of employment an action bottomed upon the statutes of the United States, modifying or extending the common law right or remedy in cases of personal injury to railway employees; that such actions thereby became limited by Section 56 of Title 45 U.S.C.A., prohibiting cases arising under the Act and brought in any State court of competent jurisdiction to be removed to a Federal court. The Court then proceeded to answer the contention of the defendant that the action should not have been remanded because of the presence in the complaint of a request for recovery on account of unseaworthiness of the vessel or on account of the allegations with respect to maintenance and cure. The Court there said that the case should have been remanded to the State court on the broad principle that a suit under the Jones Act for negligence and under the maritime law for unseaworthiness involved but a single wrongful invasion of a single primary right; the causes were not separate and independent causes of action, and ordered the case remanded to the State Court. The Supreme Court of the United States said, in Baltimore S. S. Co. v. Phillips, 274 U.S. 316, 47 S. Ct. 600, 602, 71 L. Ed. 1069, "[I]t is perfectly plain that the respondent suffered but one actionable wrong, and was entitled to but one recovery, whether his injury was due to one or the other of several distinct acts of alleged negligence, or to a combination of some or all of them. In either view, there would be but a single wrongful invasion of a single primary right of the plaintiff, namely, the right of bodily safety, whether the acts constituting such invasion were one or many, simple or complex." To the same effect are the cases of Jones v. Southern Ry. Co., D.C.Ga., 236 F. 584, and Boyle v. Chicago, R. I. & P. Ry. Co., 8 Cir., 42 F.2d 633. In opposition to plaintiff's motion to remand in the case at bar, defendant's counsel relies principally upon the cases of Bedell v. Baltimore & O. R. Co., D.C., 245 F. 788, Jacobson v. Chicago, M., St. P. & P. R. Co., 8 Cir., 66 F.2d 688, and Muller v. Lyke Coastwise Line, D.C., 144 F. Supp. 135. The case of Bedell v. Baltimore & O. R. Co., I think is distinguishable, as is the Jacobson case, because both were decided, the Bedell case in 1917 and the Jacobson case in 1933, prior to the enactment of Section 1441 of Title 28, United States Code. In the Bedell case the crux of the opinion is that when a separable controversy is stated, of which the Federal courts have jurisdiction, the right to remove exists, and the entire case is thereby transferred to the Federal courts. This holding was nullified by the enactment of Section 1441(c). American Fire & Casualty Co. v. Finn, 341 U.S. 6, 71 S. Ct. 534, 95 L. Ed. 702. The Jacobson and Muller cases more nearly support the contention of defendant's counsel, but this Court is of the belief that the case of Pate v. Standard Dredging Corp., supra, contains the logical rule: there being but one wrong to be redressed and suit under the Federal Employers' Liability statute being expressly made non-removable, this Court lacks jurisdiction in the case at bar. It is the opinion of the Court that the action in its entirety should be remanded *554 to the Ballard Circuit Court, which court had jurisdiction of both causes of action, to-wit: (1) the action to recover under the State law, and (2) the action to recover under the Federal Employers' Act. Both causes of action sought recovery for the alleged wrongful death of plaintiff's decedent; both sought recovery because of alleged failure of defendant to furnish to decedent a reasonably safe place to work and safe tools and appliances with which to work. While the measure of recovery is different, the recovery in each is conditioned upon proof of the negligence alleged in the complaint, which is the same in each cause of action. A Federal statute prohibits the removal of the cause of action bottomed upon the Federal Employers' Liability Act and thereby precludes removal because, as held by the Circuit Court of Appeals in the Pate case, there was but a single wrongful invasion of a single right of decedent. Plaintiff's motion to remand is sustained and an order is this day entered remanding this action to the Ballard Circuit Court.

2013-10-30 06:32:40.586446+00

Douglas

535 S.W.2d 176 (1976) Roger Clinton LIGHTNER, Appellant, v. The STATE of Texas, Appellee. No. 51184 Court of Criminal Appeals of Texas. March 31, 1976. Douglas H. Parks, Dallas, for appellant. Henry Wade, Dist. Atty., Donald H. Flanary, Jr., and Bill Booth, Asst. Dist. Attys., Dallas, Jim D. Vollers, State's Atty., David S. McAngus, Asst. State's Atty., Austin, for the State. OPINION DOUGLAS, Judge. This is an appeal from a conviction for the offense of aggravated robbery. Trial was before the court; punishment was assessed at five years. Appellant's sole contention is that the evidence is insufficient to sustain a conviction of robbery. The record reflects that on September 25, 1974, appellant parked in front and across the lines of a Mr. M. Store in Irving. As he approached the store the attendant yelled to her daughter who was in the rear of the store that they were about to be robbed. Appellant pushed on the door of the store as if to enter but walked around the corner of the shopping center and went into Triangle Cleaners. Ester Stevens, an employee, was in the rear of the store. She saw appellant in front of the store. She saw him put his hand in his pocket and heard the cash register slam shut. When she asked if she could help him, he answered that he was looking for his ticket. When she told him that they did not use tickets, he left. Miss Stevens then looked in the cash register and discovered that some money was missing. Miss Stevens then ran to the front door. Appellant *177 turned and ran towards his car and she yelled for the police. Appellant got in his car and made a "horseshoe" turn to get out of the parking lot. He turned out of the lot onto Darr Street and drove down the street for about a quarter of a block and turned back into the shopping center lot behind the buildings. The exit driveway was blocked by another vehicle and appellant stopped his car within twenty feet of the back of Triangle Cleaners. M. C. Collins, a policeman who was driving by, noticed some women waiving and shouting at him. The officer drove into the lot and one woman yelled that she had been robbed by "a colored man in a white Chevrolet." They told him that the man had just gone around the south corner of the shopping center. The officer drove the length of the shopping center, turned to the back of the shopping center and stopped at the white Chevrolet blocked at a north exit. Officer Collins told appellant to get out, put his hands on the car and spread his legs. During the pat down, appellant turned around and struck the officer in the chest with his elbow. Officer Collins tried to subdue him and they both fell against the car. Appellant got away from the officer and back into his car. The engine was still running. Appellant then drove it back towards the officer who was able to step out of the way. Appellant then ran into the police car. Officer Collins then pointed his gun at appellant and told him to get out of his car. Appellant did so, and the officer tried to search him again. Another struggle followed. Officer Collins was not able to control the appellant and had to ask another man for help. They were able to handcuff the appellant. Forty-four dollars was found between the driver's seat and the door jamb of appellant's car. The officer's chest was bruised by the blow from appellant's elbow. Appellant testified that he took the money from the cash register of Triangle Cleaners but contends that the struggle with the policeman had nothing to do with the theft of the money. V.T.C.A., Penal Code, Section 29.02, defines robbery as follows: "(a) A person commits an offense if in the course of committing theft as defined in Chapter 31 of this code and with intent to obtain or maintain control of the property, he: (1) intentionally, knowingly, or recklessly causes bodily injury to another; or . . .." V.T.C.A., Penal Code, Section 29.01, provides: "(1) `In the course of committing theft' means conduct that occurs in an attempt to commit, during the commission, or in immediate flight after the attempt or commission of theft. . ." Appellant contends that the cases interpreting the former statute should apply to the new statute. Article 1408, V.A.P.C. (1925), defined robbery as follows: "If any person by assault, or violence, or by putting in fear of life or bodily injury, shall fraudulently take from the person or possession of another any property with intent to appropriate the same to his own use, he shall be punished. . .." Generally under the former statute the threats or violence had to be antecedent to the taking of the property and had to put the person from whom the property was taken in fear so that he would more readily part with his property. Crawford v. State, 509 S.W.2d 582 (Tex.Cr.App.1974). The definition of robbery under the 1974 Penal Code is broader than the one contained in Article 1408, supra. The requirements set by cases such as Crawford, supra, do not apply to the new penal code. Under Sections 29.01 and 29.02, supra, the offense of robbery includes any violence in the course of effectuating the theft as well as any violence while in immediate flight from the scene of the theft. This new definition of robbery proscribes the use of violence not only in the taking of the property, *178 but also in the immediate efforts of the thief to keep the stolen property. Appellant contends that he was not in immediate flight when apprehended by Officer Collins. Officer Collins caught appellant about 100 yards from the scene of the theft. He started to follow appellant to the back of the shopping center shortly after appellant had entered the rear of the parking lot. Appellant was handcuffed and in custody within seven to nine minutes after the theft. We hold that there is sufficient evidence to show that appellant injured the police officer in an effort to maintain control of the stolen property while in immediate flight from the theft. This is sufficient under the 1974 Penal Code. The judgment is affirmed.

2016-07-06 07:27:43.058835+00

Per Curiam

This cause came on to be heard upon an appeal from the Hamilton County Court of Common Pleas. Plaintiffs-appellants, Christopher and Connie McGaw, have taken the instant appeal from the entry of summary judgment in favor of defendant-appellee, South Bend Lathe, Inc., on their products liability claims seeking recovery for injuries sustained by Christopher McGaw while operating an allegedly defective power press. The appellants advance on appeal two assignments of error. We address first the appellants' second assignment of error in which they contend that summary judgment was improvidently granted for South Bend Lathe, Inc., when issues of fact remained as to whether South Bend Lathe, Inc., as the "successor" to the manufacturer of the power press on which Christopher McGaw was injured, was liable for its negligent design or manufacture or for any breach of implied warranties in the sale of the press. We find no merit to this contention. The record before us discloses that power presses of the type upon which Christopher McGaw was injured were first manufactured and marketed by Johnson Machine Press Company ("Johnson Machine"), which manufactured mechanical presses under the brand name "Johnson." Bontrager Corporation ("Bontrager") subsequently acquired the assets and assumed the liabilities of Johnson Machine and continued to manufacture presses under the "Johnson" name. In 1959, American Steel Foundries ("ASF"), a New Jersey corporation, acquired the assets and assumed the liabilities of South Bend Lathe Works, an Indiana corporation. ASF subsequently transferred the assets and liabilities acquired from South Bend Lathe Works to its wholly owned subsidiary, South Bend Lathe, Inc., a Delaware corporation ("SBL-Delaware"). In 1962, Amsted Industries, Inc. ("Amsted"), a Delaware corporation and the successor to ASF, purchased the assets of Bontrager and transferred the Bontrager assets to SBL-Delaware. SBL-Delaware thereafter manufactured and sold presses under the "Johnson" trade name. In 1965, Amsted dissolved its wholly owned subsidiary SBL-Delaware, and the assets and liabilities of SBL-Delaware were transferred to Amsted. Amsted continued to manufacture and market power presses under the "Johnson" name through South Bend Lathe, an unincorporated division of Amsted ("SBL Division"). In April 1975, L.W.E., Inc. ("LWE"), was incorporated in Indiana. Effective June 30, 1975, Amsted sold certain assets of its SBL Division to LWE. On *Page 11 July 18, 1975, LWE changed its name to South Bend Lathe, Inc. ("SBL-Indiana"), and SBL-Indiana manufactured and marketed presses under the "Johnson" name. In February 1985, Christopher McGaw was injured while operating a "Johnson" power press in the course of his employment with Whiteway Manufacturing Company (now Spaulding Lighting, Inc.). In December 1985, the appellants instituted the action underlying the instant appeal against SBL-Indiana and Spaulding Lighting, Inc. The evidentiary material submitted on SBL-Indiana's motion for summary judgment discloses that the press on which Christopher McGaw was injured was manufactured in 1964 by Amsted's wholly owned subsidiary SBL-Delaware and was sold by Amsted to Christopher McGaw's employer, Whiteway Manufacturing Company. It is beyond cavil that Amsted assumed the liabilities of SBL-Delaware in 1965, when SBL was dissolved. The issue before us is whether SBL-Indiana, as the successor of LWE, succeeded to liability for defective products manufactured by SBL-Delaware when LWE purchased assets of Amsted's SBL Division. Under the traditional rule of successor liability, a corporation that purchases the assets of another corporation does not assume the liabilities of the selling corporation, unless: (1) the purchasing corporation expressly or implicitly agrees to assume the liabilities of the selling corporation; (2) the transaction amounts to a de facto consolidation or merger of the seller and the purchaser; (3) the purchaser is merely a continuation of the seller; or (4) the transaction was entered into fraudulently to escape liability. Flaugher v. ConeAutomatic Machine Co. (1987), 30 Ohio St. 3d 60, 30 OBR 165,507 N.E.2d 331; Seibel v. Crown Cork Seal Co., Inc. (June 18, 1986), Hamilton App. No. C-850758, unreported, 1986 WL 6817. The exceptions to the general rule that a purchaser of corporate assets does not assume the liabilities of the seller were developed to protect the rights of the seller's commercial creditors and to protect the voting and appraisal rights of dissenting shareholders. Some courts have found the theoretical underpinnings of the traditional rule, which was developed in the context of corporate law, to be irrelevant in the context of products liability law and thus have endeavored to fashion an approach more responsive to the public-policy considerations underlying products liability law. For example, in Cyr v. B.Offen Co. (C.A.1, 1974), 501 F.2d 1145, the focus of the "mere continuation" exception was shifted from internal continuity to external continuity, i.e., the appearance of the successor corporation to the public. In Turner v. Bituminous Cas. Co. (1976), 397 Mich. 406, 244 N.W.2d 873, the Michigan Supreme Court held with respect to the mere-continuation exception that the traditional *Page 12 requirement of continuity of shareholders was not crucial and that the relevant factors were (1) the basic continuity of the seller's enterprise, including the retention of key personnel, assets, physical location, general business operations, and name; (2) the seller's cessation of ordinary business operations, liquidation and dissolution soon after the sale; (3) the purchaser's assumption of the liabilities and obligations of the seller necessary for the uninterrupted continuation of the seller's normal business operations; and (4) the purchaser's representation of itself as the effective continuation of the seller. In Ray v. Alad Corp. (1977), 19 Cal. 3d 22,136 Cal. Rptr. 574, 560 P.2d 3, the California Supreme Court abandoned the traditional rule and established what has come to be known as the "product-line" approach, under which the purchaser of the assets of a business that continues to manufacture the same product line assumes liability for its predecessor's products. The Ohio Supreme Court in Flaugher v. Cone Automatic MachineCo., supra, declined to abandon the traditional rule for theRay product-line approach, but, by implication, adopted the "expanded view of continuity" that has emerged from the Cyr andTurner cases. Id., 30 Ohio St.3d at 64-65, 30 OBR at 170,507 N.E.2d at 336. Applying the traditional rule, with the "expanded view" of the continuity exception, we hold that, on the evidence before us, summary judgment was properly entered for SBL-Indiana. Factors relevant to the fraud exception to the general rule of nonliability include inadequate consideration or a lack of good faith. See Turner, supra (Coleman, J., dissenting). The appellants do not contend and there is no evidence to suggest that the consideration paid by LWE for the assets of Amsted was less than adequate or that the transaction was structured with an intent to defraud. Nor does the evidence disclose a basis for a finding that LWE expressly or implicitly assumed liability for injuries caused by defective products manufactured by Amsted or its predecessors. Under the June 30, 1975 agreement, pursuant to which LWE agreed to purchase and Amsted agreed to sell "the business and certain assets of [Amsted's] SBL Division," LWE assumed liability for losses, damages and expenses incurred as a result of products liability claims for products shipped after June 30, 1975, but expressly declined to "assume any other liability of Amsted arising out of defects or alleged defects in said products shipped by Amsted prior to July 1, 1975." Pursuant to R.C. 1701.82(A)(3) and (4), the merger of two or more corporations vests in the surviving corporation "all obligations belonging to * * * each of the constituent corporations * * * without further act or deed * * * [and] the surviving * * * corporation is liable for all the obligations of *Page 13 each constituent corporation * * *."1 An asset purchase is subject to the legal consequences of a merger under the de facto merger exception if: (1) there is a continuation of the enterprise of the seller in terms of continuity of management, personnel, physical location, assets, and operations; (2) there is a continuity of shareholders, accomplished by payment for the assets with shares of stock; (3) the seller ceases operations, liquidates, and dissolves as soon as legally and practically possible; and (4) the purchasing corporation assumes the obligations of the seller necessary for the uninterrupted continuation of business operations. Louisiana-Pacific Corp. v.ASARCO, Inc. (C.A.9, 1990), 909 F.2d 1260. The Amsted-LWE asset transaction involved neither a continuity of shareholders nor the prompt extinction of Amsted following the transfer. Therefore, the de facto merger exception will not operate to take the Amsted-LWE transaction out of the general rule of nonliability. Courts have not established a uniform set of factors for the mere-continuation exception as it has traditionally been applied. The "expanded view" of the continuity exception developed by the Michigan Supreme Court in Turner, supra, which is also known as the "continuing business enterprise exception," see Bonee v. L M Constr. Chemicals (M.D.Tenn. 1981), 518 F. Supp. 375, is, in essence, a recasting of the de facto merger exception, dispensing with the traditional requirement of shareholder continuity, while adding the Cyr factor of external continuity,i.e., the purchaser's representation of itself as the effective continuation of the seller. As with the de facto merger exception, the continuity exception will not operate to impose successor liability on SBL-Indiana in the absence of the seller's prompt extinction after the transfer. See Flaugher, supra,30 Ohio St. 3d at 65, 30 OBR at 170, 507 N.E.2d at 336. Civ.R. 56(E) provides that the party opposing a motion for summary judgment that is supported by evidentiary material may not rest upon the allegations of his pleading but must, by affidavit or otherwise, set forth specific facts to demonstrate the existence of a genuine issue of fact for trial. In the absence of some evidence that SBL-Indiana, by virtue of its predecessor's purchase of assets of Amsted, assumed the liability of Amsted for defective products manufactured by SBL-Delaware, we hold that no genuine issue of material fact remained for trial and that SBL-Indiana was entitled to judgment in its favor as a matter of law. We, therefore, overrule the second assignment of error. *Page 14 The appellants contend in their first assignment of error that the trial court erred in granting SBL-Indiana's motion for a protective order to prevent the appellants from deposing the person designated by SBL-Indiana as the custodian of records regarding the press on which Christopher McGaw was injured. This contention is untenable. Civ.R. 26(C) provides in relevant part: "Upon motion by any party or by the person from whom discovery is sought, and for good cause shown, the court in which the action is pending may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: (1) that the discovery not be had * * *." An appellate court will not reverse a protective order in the absence of some demonstration that the trial court abused its discretion. See Ruwe v. Bd. of Springfield Twp. Trustees (1987),29 Ohio St. 3d 59, 29 OBR 441, 505 N.E.2d 957. To be discoverable, the matter sought to be discovered must be "relevant to the subject matter involved in the pending action." Civ.R. 26(B)(1). The appellants in their notice to take deposition duces tecum sought discovery through deposition testimony and the production of documents by the records custodian of information regarding the design, manufacture, sale and maintenance of the press on which Christopher McGaw was injured. SBL-Indiana presented by way of answers to interrogatories uncontroverted proof that the press on which Christopher McGaw was injured was not manufactured or sold by SBL-Indiana, which did not begin to manufacture "Johnson" presses until 1975, but was manufactured and sold by Amsted's wholly owned subsidiary SBL-Delaware in 1964. The matters sought to be discovered were, therefore, relevant to the appellants' products liability claims only if SBL-Indiana assumed Amsted's liability for defective products manufactured by SBL-Delaware. As we determined supra, it did not. We, therefore, hold that the trial court did not abuse its discretion in granting SBL-Indiana's motion for a protective order when the matters sought to be discovered were rendered irrelevant by a failure of proof on the issue of successor liability. Accordingly, we overrule the first assignment of error. The judgment of the trial court is affirmed. Judgment affirmed. GORMAN, P.J., SHANNON and DOAN, JJ., concur. 1 R.C. 1701.01(V) defines a "constituent corporation" as "an existing corporation that is participating with one or more other corporations in a merger * * *." *Page 15

2013-10-30 06:32:40.729375+00

Moore

535 S.W.2d 374 (1976) Louita D. WILSON, Guardian, Appellant-Appellee, v. The GROOS NATIONAL BANK OF SAN ANTONIO, Texas, Appellee-Appellant. No. 906. Court of Civil Appeals of Texas, Tyler. March 11, 1976. *375 Joel H. Pullen, Tinsman & Houser, Inc., San Antonio, for appellant-appellee, Louita D. Wilson, guardian. William L. Morrow, Stiernberg, Skaggs & Koppel, Harlingen, Groce, Locke & Hebdon, San Antonio, for appellee-appellant, Groos Nat. Bank. MOORE, Justice. This is an appeal from an order of the trial court overruling in part and sustaining in part defendant's plea of privilege to be sued in Bexar County. On January 29, 1974, plaintiff, Louita D. Wilson, as Guardian of the Estate of Braddie G. Lowe, brought suit in the 63rd District Court, Val Verde County, Texas, against defendant, Groos National Bank, the former guardian of Braddie G. Lowe's estate. On February 27, 1974, defendant mailed its plea of privilege to plaintiff by registered mail, return receipt requested. The plea was not filed with the District Clerk until the following day, February 28, 1974. The bank alleged that no exception to the exclusive venue statute[1] existed and that it was entitled to be sued in Bexar County, the county of its residence. The attorney for plaintiff admits that he received a copy of defendant's plea of privilege in the mail on February 28, 1974. Plaintiff's controverting affidavit was not filed until March 13, 1974, some three days after the ten-day period allowed by Rule 86, Texas Rules of Civil Procedure. On May 15, 1975, the trial court, after a hearing before the court, without the aid of a jury, entered an order granting in part and overruling in part defendant's plea of privilege. The court ordered a portion of the cause against the bank to be transferred to Bexar County, and after a severance of that portion, overruled the bank's plea as to the remainder of plaintiff's suit holding that venue over that portion of the case was properly laid in Val Verde County. Both plaintiff and defendant perfected appeals to this court. Defendant, Groos National Bank, takes the position that it was entitled to have the entire cause transferred to Bexar County on the ground that plaintiff's controverting affidavit was not timely filed in accordance with Rule 86, supra. We agree with defendant's contention. *376 Rule 86, supra, provides that a party contesting a plea of privilege must file a controverting affidavit in response thereto "within ten days after he or his attorney of record received the copy of the plea of privilege." The record shows without dispute that plaintiff's attorney received the copy of defendant's plea of privilege on February 28, 1974, and that the controverting affidavit was not filed until March 13, 1974. Thus, the controverting affidavit was filed 13 days after plaintiff received a copy of the plea of privilege rather than within the ten-day period provided by Rule 86. Plaintiff seeks to sustain the judgment on the ground that she timely filed a sworn motion for extension of time in which to file her controverting affidavit. While plaintiff did file such a motion attempting to establish good cause for the late filing, the record is before us without a statement of facts or findings of fact and conclusions of law. In these circumstances we are not in a position to determine whether any proof of good cause was presented. The mere allegation in a verified motion alleging good cause for an extension of time to file the controverting affidavit is not sufficient; such facts must be established by extrinsic evidence. Poston Feed Mill Company v. Leyva, 438 S.W.2d 366, 369 (Tex.Civ.App.—Houston (14th Dist.) 1969, writ dism'd). Absent extrinsic proof of good cause excusing the late filing, the plea of privilege must be sustained and the entire cause transferred to Bexar County. LPG, Inc. v. Development Associates, Inc., 498 S.W.2d 736, 737 (Tex. Civ.App.—El Paso 1973, no writ); Bond v. Lewis, 496 S.W.2d 181, 184 (Tex.Civ.App.— Waco 1973, no writ); Poston Feed Mill Company v. Leyva, supra. Plaintiff further seeks to sustain the judgment on the ground that her attorney received the copy of the plea of privilege by mail rather than by actual delivery in person and therefore she is entitled to an additional three days, pursuant to Rule 21a, Texas Rules of Civil Procedure. Rule 21a provides, in part that "Whenever a party has the right or is required to do some act or take some proceedings within a prescribed period after the service of a notice or other paper upon him and the notice or paper is served upon him by mail, three days shall be added to the prescribed period." In view of the specific mandate of Rule 86 requiring the controverting plea to be filed within ten days after it has been "received," we do not believe Rule 21a applies. Rule 86 does not require a party desiring to contest a plea of privilege to take action within ten days of service of the plea of privilege. The rule requires no action at all until the plea of privilege is actually "received" by the adverse party. The rule clearly provides that the controverting plea must be filed within ten days after the plea of privilege is "received." Where the controverting plea is not timely filed, the trial judge has authority only to enter an order transferring the cause to the county of the residence of the defendant. Alley v. Ponca Wholesale Mercantile Co., 360 S.W.2d 870, 871 (Tex.Civ. App.—Amarillo 1962, no writ); Cowan v. State, 356 S.W.2d 170, 172 (Tex.Civ.App.— Austin 1962, writ dism'd); Terrell v. Vandergriff, 351 S.W.2d 910, 911 (Tex.Civ.App. —Amarillo 1961, no writ). In order to extend the trial court's jurisdiction beyond the ten-day period allowed by the rule, appellee had the burden of proving good cause existed. In the absence of a statement of facts the record fails to show good cause existed. Consequently, the trial court was without power to overrule the bank's plea of privilege after the expiration of the ten-day period and as a result the bank was entitled to have the entire cause transferred to Bexar County. Accordingly, the judgment of the trial court is reversed and judgment is hereby rendered transferring the entire cause to the District Court of Bexar County, Texas. NOTES [1] Article 1995, Vernon's Ann.Texas Statute.

2013-10-30 06:32:40.646047+00

Digges

279 Md. 185 (1977) 367 A.2d 1243 UNITED STATES COIN AND CURRENCY IN THE AMOUNT OF $21,162.00 ET AL. v. DIRECTOR OF FINANCE OF BALTIMORE CITY [No. 81, September Term, 1976.] Court of Appeals of Maryland. Decided January 13, 1977. The cause was argued before SINGLEY, SMITH, DIGGES, LEVINE, ELDRIDGE and ORTH, JJ. Robert V. Lazzaro for appellants. A. Gus Mastracci, Assistant City Solicitor, with whom were Benjamin L. Brown, City Solicitor, and Harry S. Swartzwelder, Jr., Associate Solicitor, on the brief, for appellee. DIGGES, J., delivered the opinion of the Court. We are here presented with a narrow question, and find that the answer becomes self-evident by simply reading a section of the Maryland Code. The question is whether *186 appellee Director of Finance of Baltimore City may obtain title to $21,162 seized by the city police in a gambling raid, even though he failed to file his forfeiture petition within the time frame set out in § 264 of Article 27. Md. Code (1957, 1976 Repl. Vol.). We determine that by inaction the director forfeited his rights with respect to this coin and currency; consequently, we will reverse the order of the Baltimore City Court vesting title to that money in the city. We relate the pertinent happenings which give rise to this dispute: Samuel and Annie Mae Wells, husband and wife, reside at 116 North Smallwood Street in Baltimore City. Together they operate a small store known as Annie's Grocery located at 2149 West Lexington Street, a couple of blocks from their home. On July 11, 1975, the Baltimore City Police conducted simultaneous searches of the store and home, finding lottery slips in the former and lottery pay-off records in a first floor closet of the latter. Additionally, in the course of searching the second floor of the residence, the police located, and seized as contraband, a shopping bag which contained $21, 162 in currency, food stamps having a value of $319, and personal checks totaling $490.49. The record discloses that on September 16, 1975, both Mr. and Mrs. Wells were found guilty of violating the lottery laws and on that day each was sentenced to pay a substantial fine. No appeal was noted by either defendant. The Director of Finance on January 13, 1976, some 119 days later, filed a petition in the Baltimore City Court for the forfeiture of the $21,162 seized by the police. Section 264 of Article 27, the statute governing the disposition of cash seized by police officers in connection with an arrest for a violation of the gambling or lottery laws, in pertinent part[1] provides: (c) Forfeiture upon conviction. — If the trial or other ultimate disposition of such charge or charges, indictment or indictments, results in a *187 record of conviction being entered against the person or persons so arrested, in connection with which the said money, currency, or cash may have been so seized or captured, the county treasurer of the county or director of finance in Baltimore City, shall within ninety days from the date of the record of the entry of such conviction, unless the case is appealed to an appellate court, make application to the circuit court of the county, for an order declaring and ordering that such money, currency or cash in the custody of the director of finance or county treasurer shall be forfeited to the sole use and gain of the county or city. The court to which any such application has been directed shall establish to its satisfaction that there is no pending and undetermined suit or proceeding which has been filed in any court of competent jurisdiction, against the director of finance or treasurer, seeking a return or recovery of the money, currency or cash so held in custody, before the court shall proceed so to order a forfeiture of such money, currency or cash to the county. (1) All applications for the forfeiture of contraband shall be by petition.... [(Emphasis supplied.)] We note that § 264 (c) was amended by Chapter 666 of the Laws of 1974, whereby the legislature substituted the present "shall within ninety days" language for what had previously been "may, after one month." This change, considered in light of the principle that the use of the word "shall" ordinarily is presumed mandatory (but may not be if the context indicates otherwise), see Maryland St. Bar Ass'n v. Frank, 272 Md. 528, 533, 325 A.2d 718, 721 (1974), together with the further principle that forfeitures "are considered harsh extractions, odious, and to be avoided where possible," Commercial Credit Corp. v. State, 258 Md. 192, 199, 265 A.2d 748, 752 (1970), leads us to the conclusion that the General Assembly has now mandated that the right to institute a proceeding for the forfeiture of seized contraband *188 has as a condition precedent that the petition be filed within the 90-day period set out in the statute. See Geppi v. State, 270 Md. 239, 245, 310 A.2d 768, 771 (1973). Given the factors present in this case, i.e., the establishment of guilt and the imposition of sentence both having been recorded more than 90 days prior to the filing of the petition by the Director of Finance, and no appeal having been noted by the convicted defendants, we have no choice but to conclude that the petition must be dismissed as untimely.[2] Accepting as true that the appellee indicated an intention within the 90-day period to claim a forfeiture, we hold that such an intention, no matter how manifested by the governmental agency, will not act as an effective substitute for the actual filing of a petition. Order reversed and case remanded to the Baltimore City Court with direction to dismiss the petition. Costs to be paid by the Director of Finance of Baltimore City. NOTES [1] The Director of Finance's apparent suggestion that subsection (d) in some way creates an estoppel here or tolls the 90-day limitation in subsection (c) is wholly without substance, since subsection (d) is applicable only to dispositions of seized property upon acquittal. [2] In so holding, we leave for another day our determination whether under other circumstances there exists an "ultimate disposition of the charge" resulting "in a record of conviction" so as to trigger the running of the 90-day period within which the appropriate governmental officer must file his forfeiture petition, as well as the effect on the computation of that time period when an appeal is noted.

2013-10-30 06:32:40.651837+00

Byers

152 F. Supp. 17 (1957) Edward Peter CALLAS, an infant under the age of fourteen years by Helen Callas, his Guardian ad litem and Edward George Callas, Plaintiffs, v. UNITED STATES of America, Defendant. Civ. A. No. 15979. United States District Court E. D. New York. June 18, 1957. *18 Herman E. Hoberman, Brooklyn, N. Y., for plaintiffs. Leonard P. Moore, U. S. Atty. for Eastern District of New York, Brooklyn, N. Y., by Myron Friedman, Asst. U. S. Atty., Long Beach, N. Y., for defendant. BYERS, District Judge. This defendant's motion for summary judgment presents but one question, that is, was the Island of Kwajalein, in the Marshall Islands in the Pacific, on February 20, 1955, a foreign country within the exclusion of the Federal Tort Claims Act, Title 28 U.S.C. § 2680(k)? The Section reads: "The provisions of this chapter and section 1346(b) of this title shall not apply to * * * "(k) Any claim arising in a foreign country." The infant plaintiff is the son of the plaintiff, Edward George Callas, who on that day was in the military service of the United States, and stationed on the said island. The boy, then nine years old, was playing on the beach and was seriously injured by the explosion of "a round of ordnance" thought to have been washed up on the beach as the result of its not having detonated in the course of military operations directed at the island during World War II. It will be seen that nearly ten years had elapsed between the date of the accident and the termination of hostilities. For reasons to be stated, it will appear that the negligence attributed to the defendant cannot present a triable issue for disposition on the merits, in view of the limitations imposed by Congress upon the submission of the Government to suit under the Federal Tort Claims Act. With reference to Okinawa, the subject has been adjudicated as to injuries sustained in October of 1954, in Burna v. U. S., 4 Cir., 240 F.2d 720, 721. Therein it is stated that as to the Ryukyu Archipelago, of which Okinawa is a part, by treaty between the United States and Japan, the latter agreed to "concur in any proposal of the United States to the United Nations to place the Ryukyu Islands under its trusteeship system." Seemingly that subject is still in the formative stage, but the opinion continues to point out (quoting a State Department memo): "As of September 1955, there is no arrangement between the United States and the United Nations regarding the trusteeship of the Ryukyu Islands. Okinawa, therefore, is under the provisional administration of the United States Government." The court decided that even so, "there is even less reason [than in Dorr v. U. S., 195 U.S. 138, 24 S. Ct. 808, 49 L. Ed. 128, re the Philippines] for thinking that Okinawa has been incorporated into the United States or that it has ceased to be foreign in the sense in which the word is used in the F.T.C.A." Cobb v. U. S., 9 Cir., 191 F.2d 604, dealt with a tort claim arising on Okinawa in October, 1948, and the decision was that Okinawa is a foreign country, even speaking as of 1948, within the language and intent of the applicable statute. Brunell v. U. S., D.C., 77 F. Supp. 68, 70, dealt with a tort claim arising on October 16, 1945, on the Island of Saipan, in the Marianas Group in the Pacific. Advice from the State Department of December 16, 1947, was quoted as follows: "It is the view of the Department of State that the Island of Saipan on October 16, 1945 was an area under military occupation by forces of the United States following conquest from Japan, the power to which a *19 mandate had been entrusted after World War I pursuant to Article 22 of the Covenant of the League of Nations." The court (Judge Ryan) concluded that even military occupation and control of Saipan on the date of the plaintiff's injury did not change the essential character of the Island from being a foreign country within the statutory purpose here involved. That case was decided in 1948 and there has been no change in the statute in the intervening years, in spite of the obvious hardship which may well be visited upon such a plaintiff as this boy. When one reflects upon the lengths to which some courts and juries have gone to award damages in so-called attractive nuisance stateside cases, he cannot but wish that Congress had seen fit to add appropriate words to the F.T.C.A. to include a country whose affairs are being administered by the United States, so far as concerns American citizens there stationed, so that an injured national could at least have his day in court. The task obviously is for Congress, and lies beyond the province of the judiciary. As to Kwajalein, the parties have stipulated that "sovereignty of the Island of Kwajalein in the Marshall Islands group, on February 20, 1955, was governed by a trusteeship agreement entered into on July 18, 1947, by the United States of America [61 Stat. 3301], which provides: "`The Territory of the Pacific Islands, consisting of the islands formerly held by Japan under mandate in accordance with Article 22 of the Covenant of the League of Nations, is hereby designated as a strategic area and placed under the trusteeship system established in the Charter of the United Nations. The Territory of the Pacific Islands is hereinafter referred to as the trust territory. * * * * * * "`The United States of America is designated as the administering authority of the trust territory.'" Reference to a commentary upon the Charter of the United Nations by Goodrich and Hambro (Revised Edition 1949) will tend to explain the language quoted from the stipulation touching the nature and incidents of the trustee relationship. See particularly pages 424, 429, 432, 434 and 451 et seq. where Article 82 of the Charter and the designation of strategic areas is discussed. This court has been unable to discover in the discussion of the provisions of the Charter contained in the work to which reference has been made, any indication that territory held under trusteeship loses its character as that of a foreign country, for the purposes of carrying into effect the intent of the statue in rendering the United States Government amenable to tort claims. For reasons which must be apparent, the court is reluctantly brought to the conclusion that the defendant's motion must be granted. Settle order.

2013-10-30 06:32:40.6524+00

Fogleman

535 S.W.2d 842 (1976) Robert Lewis WILLIAMS, Appellant, v. STATE of Arkansas, Appellee. No. CR76-7. Supreme Court of Arkansas. May 3, 1976. *844 Charles D. Barnette, Texarkana, for appellant. Jim Guy Tucker, Atty. Gen., by B. J. McCoy, Asst. Atty. Gen., Little Rock, for appellee. FOGLEMAN, Justice. Robert Lewis Williams filed a petition for post-conviction relief from his conviction of possession of heroin, a felony, after trial on June 4, 1973, resulting in a sentence to seventy years' imprisonment on three counts. He also filed a motion for disqualification in the post-conviction proceeding of Circuit Judge John W. Goodson, who had presided over his trial. In support of this motion, appellant Williams filed an affidavit in which he stated that immediately preceding the jury's being excused from the courtroom to begin its deliberations in his trial, Judge Goodson had stated to the jury that he saw no reason why the defendant Williams should not be found guilty as charged. Thereafter, Williams was charged with and convicted of perjury in violation of Ark.Stat.Ann. § 41-3001 (Repl.1964) in the making of this statement under oath. *845 For reversal, Williams first contends that the court erred in denying his motion for directed verdict. His argument on this point is not well taken. He contends that the matter pending before the court was his petition for post-conviction relief and that the alleged false statements were not material to the issues raised by it, since the affidavit was in support of his motion for disqualification of the presiding judge only. He relies on Lednum v. State, 169 Ark. 396, 275 S.W. 699. There are three factors that made the denial of the motion proper. In the first place, reliance on Lednum is inappropriate. The governing statute has been amended since that decision. We held that a perjury conviction cannot be based upon a false affidavit which does not show upon its face that its subject matter is material in a cause, matter or proceeding before a court, tribunal, body corporate or other officer having authority to administer oaths. The amendment has materially changed the definition of the crime of perjury upon which the holding in Lednum was based. This amendment was made by Initiated Act No. 3 of 1936. The statute, as amended, appears as Ark.Stat.Ann. § 41-3001 (Repl. 1964) which now reads as follows: Perjury in the first degree is the wilful and corrupt swearing, testifying or affirming falsely to any material matter in any cause, matter or proceeding before any court, tribunal, body corporate or other officer having by law authority to administer oaths, or to any affidavit, deposition or probate authorized by law to be taken before any court, tribunal, body politic or officer. (Italicized words were added by amendment.) Secondly, appellant's contention is unsound in that perjury in the second degree is a lesser included offense. People v. Samuels, 284 N.Y. 410, 31 N.E.2d 753 (1940). That crime is defined in Ark.Stat.Ann. § 41-3002 (Repl.1964) which, in pertinent part, reads as follows: A person who swears ... that any ... affidavit ... by him subscribed, is true, in any action of any kind, or in a special proceeding, or upon any hearing, or inquiry, or on any occasion in which an oath is required by law, or is necessary for the prosecution or defense of a private right, or for the ends of public justice, or may lawfully be administered, and who in such action or proceeding, or on such hearing, inquiry or other occasion, wilfully and knowingly testifies, declares, deposes or certifies falsely, in any matter, or states in his testimony, ... affidavit, or certificate, any matter to be true which he knows to be false, and who is not guilty of perjury in the first degree, is guilty of perjury in the second degree. ... The third factor is that the statements in the affidavit were certainly material, as a matter of law, to the proceeding before the court, which was the motion to disqualify, not the petition for post-conviction relief. Where there is no dispute about the facts sworn to, any question of materiality is one of law for the court. Bryant v. State, 208 Ark. 192, 185 S.W.2d 280; Carter v. State, 181 Ark. 665, 27 S.W.2d 781. Williams also asserts that there was error in the court's refusal to give his requested instruction that if the facts sworn to were not material to the proceedings before the court, the defendant should be found innocent. It seems to us that there was no question of fact for the jury as to materiality. Furthermore, the materiality of the statements in an affidavit is not an essential element of perjury in either degree under the statutes applicable to this prosecution. Ark.Stat.Ann. §§ 41-3001, 3002 (Repl.1964). In this respect our statutes make the crime with which appellant was charged that which was known to the common law and in many statutes as "false swearing." To constitute that offense, the false statement need not be material, even though it should be relevant. Beckley v. State, 443 P.2d 51 (Alaska, 1968); State v. Ellenstein, 121 N.J.L. 304, 2 A.2d 454 (1938); Barkley v. Commonwealth, 264 S.W.2d 297 (Ky., 1954); Partin v. Commonwealth, 154 Ky. 701, 159 S.W. 542 (1913); People v. Samuels, 284 N.Y. 410, 31 N.E.2d 753 (1940); State v. Byrd, 28 S.C. 18, 4 S.E. *846 793, 13 Am. St. Rep. 660 (1888); State v. Miller, 26 R.I. 282, 58 A. 882 (1904). The instruction offered was not a correct statement of the law, so its refusal was not error. Walker v. State, 241 Ark. 300, 408 S.W.2d 905, appeal dism. and cert. den. 386 U.S. 682, 87 S. Ct. 1325, 18 L. Ed. 2d 403, reh. den. 387 U.S. 926, 87 S. Ct. 2027, 18 L. Ed. 2d 987. The third point for reversal is well taken. Appellant elected not to testify and offered no evidence. He had entered a plea of not guilty. By so doing, he availed himself of any defense and all matters of justification and excuse available under the law, which are not required to be specifically pleaded. Baker v. State, 236 Ark. 91, 365 S.W.2d 119; Flake v. State, 156 Ark. 34, 245 S.W. 174. He put all material facts alleged in the information in issue. Ark.Stat.Ann. § 43-1223 (Repl.1964); Hill v. State, 253 Ark. 512, 487 S.W.2d 624. Even the most patent truths were in issue. Roe v. U.S., 287 F.2d 435 (5 Cir., 1961), cert. den. 368 U.S. 824, 82 S. Ct. 43, 7 L. Ed. 2d 29. This plea was a continuing denial of every bit of evidence and every statement of every witness who testified against him. State v. Whitney, 7 Or. 386 (1879); United States v. DeAngelo, 138 F.2d 466 (3 Cir., 1943); State v. Godwin, 227 N.C. 449, 42 S.E.2d 617 (1947). More importantly, he invoked his right to the presumption of his innocence and put the burden upon the state to prove his guilt beyond a reasonable doubt, as well as the right to remain silent in the hope that the jury would not be convinced of his guilt beyond a reasonable doubt. State v. Hardy, 189 N.C. 799, 128 S.E. 152 (1925); State v. Godwin, supra. The presumption of innocence is so strong that it serves an accused as evidence in his favor throughout the trial and entitles him to an acquittal unless the state adduces evidence which convinces the jury beyond a reasonable doubt that he is guilty of the crime charged. Cranford v. State, 156 Ark. 39, 245 S.W. 189. It is a fundamental right in the American system antedating any constitution and an essential of due process of law. Reynolds v. United States, 238 F.2d 460, 16 Alaska 502 (9 Cir., 1956); Shargaa v. State, 102 So. 2d 814 (Fla., 1958), cert. den. 358 U.S. 873, 79 S. Ct. 114, 3 L. Ed. 2d 104; State v. Cynkowski, 19 N.J. Super. 243, 88 A.2d 220 (1952), aff'd. 10 N.J. 571, 92 A.2d 782 (1952); People v. Morris, 260 Cal. App. 2d 848, 67 Cal. Rptr. 566 (1968); People v. Weinstein, 35 Ill. 2d 467, 220 N.E.2d 432 (1966); People v. Di Manno, 15 Misc. 644, 182 N.Y.S.2d 937 (1959). It alone puts in issue the truth and credibility of all the evidence offered against an accused. State v. Lackey, 251 N.C. 686, 111 S.W.2d 891 (1960); State v. Hardy, supra. In spite of this, the deputy prosecuting attorney in opening the arguments to the jury stated, "To me it is just a pure and simple matter of a man lying who has been convicted, is now in the penitentiary, and is coming up here and lying to the Court, and he is lying to the jury to get himself out of a pickle." Prompt and proper objection was made and overruled. The last clause certainly reminded the jury immediately that appellant had not testified. Even though this, in and of itself, may not have constituted reversible error, had it not, at the same time, carried the clear implication that, by remaining silent, as he had a constitutional right to do, and by not offering any evidence, his plea of not guilty, which he had a clear right to enter even if he had no doubt in his own mind about his guilt, constituted lying to the jury, rather than just relying on the presumption of his innocence and putting the burden on the state to prove his guilt beyond a reasonable doubt. This, of course, was a misstatement, even though we are confident that, instead of being intentional, it resulted from the prosecutor's zeal and the natural indignation that he would feel when convinced that wholly unwarranted and baseless charges had been made against the presiding judge of the court. The statement constituted error beyond doubt. Closing arguments must be confined to questions in issue, the evidence introduced and all reasonable inferences and deductions which can be drawn therefrom. *847 Simmons v. State, 233 Ark. 616, 346 S.W.2d 197. Whenever trial counsel argues matter that is beyond the record and states facts or makes assertions not supported by any evidence that are prejudicial to the opposite party, there is clearly error. Walker v. State, 138 Ark. 517, 212 S.W. 319; McElroy v. State, 106 Ark. 131, 152 S.W. 1019; Willyard v. State, 72 Ark. 138, 78 S.W. 765; Fakes v. State, 112 Ark. 589, 166 S.W. 963. When objection is made, the presiding judge should appropriately reprimand counsel and instruct the jury not to consider the statement, and in short, do everything possible to see that the verdict of the jury is neither produced nor influenced by such argument. Walker v. State, supra. The failure to sustain a proper objection to argument of matters not disclosed by the record is serious error, because it gives the appearance that the improper argument has not only the sanction but the endorsement of the court. Miller v. State, 120 Ark. 492, 179 S.W. 1001; Hays v. State, 169 Ark. 1173, 278 S.W. 15; Elder v. State, 69 Ark. 648, 65 S.W. 938. It has even been said that the overruling of a proper objection to a statement amounting to a declaration of law is tantamount to the giving of an instruction to that effect. Autrey v. State, 155 Ark. 546, 244 S.W. 711. It is true that the trial judge has a wide latitude of discretion in the control of arguments to the jury, but it is not unlimited. Holcomb v. State, 203 Ark. 640, 158 S.W.2d 471; Todd v. State, 202 Ark. 287, 150 S.W.2d 46. It has been said that this court will always reverse where counsel goes beyond the record to state facts that are prejudicial to the opposite party unless the trial court has by its ruling removed the prejudice. Adams v. State, 176 Ark. 916, 5 S.W.2d 946. We have also said that failure of the trial court to interfere calls for a reversal. Hays v. State, supra. We have carefully considered the record in an effort to determine whether this error could be said to be harmless, because the guilt of appellant seems rather clear. When we consider, however, that in this case, the jury, which could have meted out punishment ranging from a fine of $50 to 15 years' imprisonment, fixed the sentence at seven years, we cannot say that the prestige of the prosecuting attorney who made the statement enhanced by the prestige of the circuit judge, did not make the error prejudicial to appellant. For this reason, the judgment is reversed and the cause remanded for a new trial.

2013-10-30 06:32:40.683038+00

Van Dusen

152 F. Supp. 825 (1957) UNITED STATES of America v. Frank PALERMO, also known as Frank "Blinkey" Palermo. Crim. No. 19189. United States District Court E. D. Pennsylvania. May 31, 1957. *826 John A. Erickson, Asst. U. S. Atty., Philadelphia, Pa., for plaintiff. Jacob Kossman, Philadelphia, Pa., for defendant. VAN DUSEN, District Judge. This case comes before the court on defendant's motion to dismiss the information charging defendant with "wilfully and knowingly" failing to pay his 1953 federal income tax when due, in violation of 26 U.S.C.A. § 145(a)—1939 I.R.C.—and with "wilfully and knowingly" failing to pay his 1954 federal income tax when due, in violation of 26 U.S.C.A. § 7203—1954 I.R.C. The defendant alleges these reasons as grounds for his motion: I. "The Information Does Not State Facts Sufficient to Constitute an Offense against the United States." The defendant filed 1953 and 1954 federal income tax returns on time but failed to pay any tax at the time of filing, as required by law. Since the information against defendant, filed March 7, 1957, is for violation of misdemeanors in Section 145(a) of the 1939 Internal Revenue Code, 26 U.S.C.A. § 145(a), and in Section 7203 of the 1954 Internal Revenue Code, 26 U.S.C.A. § 7203, the alleged offense of "that well knowing all of the * * * facts he did wilfully and knowingly fail to pay said income tax or any part thereof * * * at the time required" sufficiently embodies the elements of the crime[1] and sufficiently informs the defendant of the charge so as to enable him to prepare his defenses.[2] *827 II. "The Information Is a Discriminatory Action against the Defendant in Violation of His Constitutional Rights." In his memorandum of law filed 5/9/57, defendant argues that information in the possession of the Government will show that "there has been no criminal prosecution * * * against taxpayers who have not paid the income taxes due at the time requires." Although neither the motion nor the brief allege any more than the foregoing, defendant apparently alleges that these taxpayers filed their returns but did not pay the tax, which is the course followed by defendant. In order to give the defendant an opportunity to amplify this point and to present evidence in support of it, the hearing judge held a hearing on May 28, 1957.[3] At this hearing, counsel stipulated to these facts:[4] A. In the First Pennsylvania District, there have been no other criminal prosecutions against taxpayers who have filed their federal income tax returns on time but have failed to pay the tax shown to be due on the return at the time the tax was due (N. T. 3-4). B. There are only two pending cases where informations[5] have been returned against taxpayers who have filed their federal income tax returns on time but have failed to pay the tax shown to be due on the return at the time the tax was due (N. T. 5-6, 11).[6] Defendant relies on cases holding that the due process clause of the Fifth Amendment prohibits unjustifiable discriminatory enforcement of the law, *828 even though this Amendment does not contain "equal protection" wording. See Bolling v. Sharpe, 1954, 347 U.S. 497, 499, 74 S. Ct. 693, 694, 98 L. Ed. 884,[7] where the court said "discrimination may be so unjustifiable as to be violative of due process"; Truax v. Corrigan, 1921, 257 U.S. 312, 332, 42 S. Ct. 124, 129, 66 L. Ed. 254, where the court indicated that "due process" covers "the general fundamental principle of equality of application of the law." However, the clearly recognized principle, that failure to prosecute all criminals is no defense to the one prosecuted,[8] makes the above cited cases, relied on by defendant, inapplicable in this situation, particularly in the absence of any showing in this record that defendant is similarly situated to any of those taxpayers described under A above who have not been criminally prosecuted. It seems too clear for argument that a taxpayer who wilfully fails to pay his tax when due, having ample assets to use for the purpose, may most properly be treated differently under these criminal provisions from the many taxpayers whose economic conditions make it far more difficult for them to pay their taxes when due.[9] This record even indicates that this taxpayer has assets which might have been used to pay this tax when due.[10] III. "The Information Is an Attempt to Imprison the Defendant for Taxes That Have Been Paid in Full, Including Interest and Penalties." Finally, it has been repeatedly held that neither the Thirteenth Amendment nor any other other Constitutional or statutory provision prevents imprisonment for non-payment of taxes.[11] *829 Order And now, May 31, 1957, defendant's motion to dismiss, filed March 7, 1957, is denied. NOTES [1] If this information charged a failure to pay a tax under § 145(b) of the 1939 Internal Revenue Code, the felony subsection, then an affirmative action implied from the term "attempt," as used in the above section, would have to be alleged in such information (cf. United States v. Bardin, 7 Cir., 1955, 224 F.2d 255, 260), but where the charge, as here, is a failure to pay a tax under § 145(a) of the 1939 Internal Revenue Code or under § 7203 of the 1954 Internal Revenue Code, the misdemeanor subsections, all that is required in the information is an allegation of wilful neglect (though passive) of the statutory duty. Spies v. United States, 1943, 317 U.S. 492, 499, 63 S. Ct. 364, 87 L. Ed. 418. The court, 317 U.S. at pages 497-498, 63 S.Ct. at page 367, found that "Mere voluntary and purposeful, as distinguished from accidental, omission to make a timely return might meet the test of willfulness. But * * [w]e would expect willfulness in such a case [default in payment of tax but not in filing the return] to include some element of evil motive and want of justification in view of all the financial circumstances of the taxpayer." Defendant contends that such language requires the information to allege an "evil motive," but it seems clear that by alleging "wilfulness" the information includes any necessary element of evil motive, as well as voluntary and purposeful omission to pay. See, also, the charge of the trial court, defining "wilful," which was approved by the Fourth Circuit Court of Appeals, in Yarborough v. United States, 4 Cir., 1956, 230 F.2d 56, 61. The matter of wilfulness is a question for the jury. United States v. Di Silvestro, D.C.E.D.Pa.1957, 147 F. Supp. 300, 304. Whether the elements of the crime, as stated in the information, are made out by the Government so that the jury may render a guilty verdict is a question to be considered by the trial judge and the appellate courts reviewing a conviction. [2] United States v. Debrow, 1953, 346 U.S. 374, 74 S. Ct. 113, 98 L. Ed. 92; Contreras v. United States, 5 Cir., 1954, 213 F.2d 96. It is noted that the defendant did not request a bill of particulars under the terms of F.R.Cr.P. 7(f), 18 U.S.C., indicating his present knowledge of facts which might be the basis of an inference of evil motive. Cf., for example, evidence at N. T. 30 that defendant had ample assets for payment of the taxes at the time they were due. [3] See F.R.Cr.P. 12(b) (4) and letter of May 20, 1957 (a copy of which is attached to this opinion), scheduling the hearing, which letter was delivered to both counsel on May 20. The motion to dismiss was listed on the argument list of May 13, 1957, and, by agreement of counsel, was submitted on briefs at that time. [4] The Government objected to the admission in evidence of the facts stated in A as irrelevant to this issue of discrimination on this record. The hearing judge agrees with this contention, particularly in view of the following language in the 1956 Presentment of the Grand Jury in this District (see In re Grand Jury Investigation (Matter of Income Taxes of Lemuel B. Schofield)—page 12 of Presentment of 1/6/56 of Grand Jury of October 11, 1955): "Finally, the Grand Jury recommends legislation imposing severe penalties for non-payment of income taxes. It was clear from the evidence that the practice of deliberately failing to pay taxes is wide-spread. * * * If returns are filed, the only penalty for non-payment of the taxes is the imposition of interest, which has proved an insufficient deterrent. Criminal penalties should be considered for the most flagrant cases. "The Grand Jury feels that no time should be lost in taking the corrective action recommended." (Emphasis supplied.) There were some additional stipulated facts, such as (A) the lack of any reported cases involving prosecutions of the type described in A (N. T. 4-5), but this fact is clearly irrelevant on this record, particularly because of the large number of unreported United States District Court memorandum opinions and orders; (B) the fact that defendant paid his 1953 and 1954 federal income taxes with interest and penalties in September 1956— N. T. 30-1, 34-5. (This late payment is irrelevant on this issue without more facts than are in this record—N. T. 36.) [5] One case is pending in the Eastern Division of the Northern District of Illinois and the other in the Eastern District of South Carolina (N. T. 7). [6] The defendant also contends the court should consider the following in considering this ground for his motion: A. Statistics on page 3372 of the Congressional Record of 3/18/57 (Vol. 103, No. 46), showing 1,144,876 delinquent income tax accounts in December 1956 and 1,139,658 such accounts in December 1955. (These facts are irrelevant on this issue on this record.) B. Page 3 of defendant's brief implies that the court should take judicial notice of tax returns in the Government's possession. United States v. Golden, 2 Cir., 1956, 239 F.2d 877, relied on by defendant, involved a single document, the exact location of which in the possession of the Government was described by the defendant in the record and does not justify such a contention. [7] See, particularly, cases cited in footnote 2 at page 499 of 347 U.S., at page 694 of 74 S.Ct., and Neild v. District of Columbia, 1940, 71 App.D.C. 306, 110 F.2d 246, 257, where the court said: "In a sense it may be said that every citizen is entitled to the equal protection of the laws as they may be adopted and administered by the federal government throughout the land." [8] Saunders v. Lowery, 5 Cir., 1932, 58 F.2d 158, 159; Grell v. United States, 8 Cir., 1940, 112 F.2d 861, 875; United States v. Manno, D.C.N.D.Ill.1954, 118 F. Supp. 511, 515; Barnes v. District of Columbia, 1906, 27 App.D.C. 101, 105. Cf. Goldberg v. Hoffman, 7 Cir., 1955, 225 F.2d 463. As pointed out in the Grell case, supra, 112 F.2d at pages 875-876, this type of evidence may be relevant at the time of imposing sentence. [9] The hearing judge ruled that the following items of evidence which defendant offered to prove were irrelevant without any showing by defendant that his failure to pay his tax when due was for lack of ability to pay or for any other reason (see Exhibit C-1, being subpoena calling for this information—N. T. 42-3): A. The number of taxpayers during 1953 and 1954 who filed their tax returns on time and did not pay their tax when it was due and yet were not prosecuted criminally (N. T. 29, 38-9). (It is noted that defendant made no offer to classify such taxpayers as to economic ability to pay or in any other way.) B. The properties of defendant against which tax liens were filed to cover the defendant's 1953 and 1954 income taxes and that such properties were ample to secure the payment of the taxes (N. T. 30, 36, 37, 55). The defendant mentioned in argument that there was a 1948 income tax claim pending in the Tax Court against defendant, presumably when his 1953 and 1954 federal income taxes became due. However, a pending proceeding does not involve an immediate duty to pay and the record of this proceeding in March 1954 and March 1955 could have easily been shown by defendant on May 28 (N. T. 48-9). [10] See last sentence of footnote 2 and references to notes of testimony in that footnote. [11] See Porth v. Brodrick, 10 Cir., 1954, 214 F.2d 925, and cases there cited. Carrollo v. United States, 8 Cir., 1944, 141 F.2d 997; Freeman v. United States, 1910, 217 U.S. 539, 30 S. Ct. 592, 54 L. Ed. 874; United States v. Smith, D.C.W.D. Mich.1945, 62 F. Supp. 594; Moore v. Mitchell, 2 Cir., 1929, 30 F.2d 600, 602, 65 A.L.R. 1354. 28 U.S.C.A. § 2007, cited by defendant, merely prevents imprisonment for debt "in any State wherein imprisonment for debt has been abolished." See Low v. Durfee, C.C.Mass.1880, 5 F. 256; Stuart v. Reynolds, 5 Cir., 1913, 204 F. 709, 717-719; Freed v. Central Trust Co., 7 Cir., 1914, 215 F. 873, 876-877. It is clear that imprisonment for failure to pay all elements of tax obligations has not been abolished in Pennsylvania, since 12 P.S. § 257 "except[s] from its operation arrest on civil process in * * * action for fines or penalties * * *." City of Philadelphia v. Cline, 1945, 158 Pa.Super. 179, 184, 44 A.2d 610, 613. See, also, Dole v. City of Philadelphia, 1940, 337 Pa. 375, 11 A.2d 163, 767. It is also noted that it would seem premature to raise this argument until conviction and sentence involving imprisonment is imposed.

2013-10-30 06:32:40.702133+00

Stephenson

535 S.W.2d 751 (1976) ALLAN CONSTRUCTION COMPANY, INC., Appellant, v. PARKER BROTHERS & CO., INC., Appellee. No. 7772. Court of Civil Appeals of Texas, Beaumont. March 25, 1976. Rehearing Denied April 15, 1976. *752 E. H. Thornton, Jr. and W. L. Burnett, Houston, for appellant. Robert L. Rouner, Houston, for appellee. STEPHENSON, Justice. This is an appeal from an order overruling defendant's plea of privilege. The parties will be referred to here as they were in the trial court. Parker Brothers & Company, Inc., filed this suit in Harris County for debt with the primary allegations that defendant, Allan Construction Company, Inc., and Francis L. Bertling (Bertling) were engaged in a joint venture in connection with the construction of the East Bank Brazos River Levee in Brazoria County. Plaintiff furnished materials *753 used in that construction, and this suit is to recover the amount not paid for. Defendant's plea of privilege alleges it is a corporation with its domicile in Bexar County. Plaintiff's controverting plea relies upon Tex.Rev.Civ.Stat.Ann. art. 1995 §§ 5 (Supp.1975-76) and 23 (1964), to retain venue in Harris County. There are no findings of fact or conclusions of law. June 30, 1970, defendant and Bertling entered into a written contract with the United States of America for this construction. A performance bond and a payment bond were required and were furnished. September 30, 1970, defendant and Bertling entered into a written agreement between themselves outlining their respective duties and responsibilities. In such agreement defendant was to receive 3 percent of the final gross contract amount as its fee for furnishing the required bonding capacity. Bertling was responsible for financing the project, with all bills to be rendered in its name. All monies for work performed were to be sent to defendant to deposit in the defendant-Bertling joint venture account at the Frost National Bank in San Antonio. Defendant was to then forward to Bertling a check in this amount of 97 percent of the net monthly estimate so that Bertling could make full and prompt payment of all job costs including material. In June of 1971 plaintiff began to furnish material for this job. Plaintiff would furnish Bertling with an invoice, who would prepare a voucher for payment, and then mail checks to plaintiff in Houston. However, when the invoices were received from plaintiff by Bertling for materials furnished July, August, and September, 1971, even though the money was sent by defendant to Bertling, Bertling could not make the payments, because the money was withheld by its Galveston bank. Then October 1, 1971, defendant and Bertling entered into a new written agreement whereby defendant took over the management and responsibility for completing this construction job. Such agreement contained this provision: "Allan will pay the back materials invoices, and any unpaid labor checks that may be unpaid at this time, but will not assume the obligation of paying any other bills." The record before us shows that defendant is a private corporation. In Stone Fort Nat. Bank of Nacogdoches v. Forbess, 126 Tex. 568, 91 S.W.2d 674, 676 (1936), we find this statement: "The provision of exception 23 of article 1995, supra, which permits `a private corporation, association or joint stock company' to be sued `in any county in which the cause of action, or a part thereof, arose,' means that either some part of the transaction creating the primary right, or some part of the transaction relating to the breach of that right, must have occurred in the county where the suit is brought." Then, in Employers Casualty Company v. Clark, 491 S.W.2d 661 (Tex.1973), it was made clear that under subdivision 23 a plaintiff must still prove a cause of action by at least proving a right and a breach by defendant. Plaintiff's evidence shows Bertling made a contract to purchase material from plaintiff that was used on the project in question. To maintain venue under Section 23, plaintiff had to prove either that the contract was made in Harris County or that the contract was breached in Harris County. Delhi Gas Pipeline Corporation v. Allgood, 492 S.W.2d 651 (Tex.Civ.App.— Tyler 1973, no writ). In addition, plaintiff had to prove defendant was bound by that contract because of defendant's relationship with Bertling. The evidence shows plaintiff furnished a quotation of prices of materials which was used by Bertling in preparing a bid on this project. As soon as Bertling and defendant were awarded a contract, Bertling went to Houston and informed plaintiff that plaintiff's quotation would be used. It was settled that plaintiff would sell the material on open account, and, as soon as the material was shipped, would bill Bertling at LaMarque. All invoices sent by plaintiff to Bertling showed them to be payable to Houston, Harris County. Until *754 defendant took over the job, Bertling paid the account by mailing checks to plaintiff in Houston. Bertling breached its contract by failing to make the payments as agreed. The evidence supports an implied finding by the trial court that an oral contract was made by plaintiff and Bertling in Harris County, which contract was breached when the payments were not made. The next question for this court to determine is whether or not defendant was bound by the actions of Bertling with plaintiff so that this action can be maintained in Harris County. The evidence shows the following: Defendant and Bertling made a joint bid for the contract in question and also jointly executed a bid bond. Defendant and Bertling entered into a written contract with the U.S.A. and jointly and severally were obligated to carry out such a contract. Defendant and Bertling executed a performance and payment bond as principals. All money paid by the U.S.A. was sent to defendant's office in San Antonio. The checks were deposited in a joint account of defendant and Bertling in the Frost National Bank in San Antonio. Estimates for labor and material were sent by Bertling to defendant. The plaintiff alleged that Bertling was acting as a joint venturer in this transaction. Defendant denied this under oath; so, joint venture became an issue of fact for the trial court to determine. By overruling defendant's plea of privilege, the trial court impliedly found that there was a joint venture. Even though the contractual relationship existing between defendant and Bertling has many of the characteristics of a joint venture, we have come to the conclusion that it is not one in fact. There are exceptions to the rule, however, generally the requisites of a joint venture are (a) the right to participate in the profits, (b) the obligation to share losses, and (c) joint control of the enterprise. Mann v. Risinger, 423 S.W.2d 626 (Tex.Civ.App.—Beaumont 1968, writ ref'd n. r. e.); Kaiser Gypsum Company v. Jordon, 399 S.W.2d 588 (Tex. Civ.App.—Waco 1966, writ ref'd n. r. e.); and Luling Oil & Gas Co. v. Humble Oil & Refining Co., 144 Tex. 475, 191 S.W.2d 716, 722 (1945). The agreement that defendant would receive 3 percent of the final gross contract amount for furnishing bond capacity was not an agreement to share in the profits. There was no agreement to share in the losses, if any. It is clear from the written agreement between defendant and Bertling that defendant would receive 3 percent without regard to whether there was a profit or a loss on this contract. The provision that defendant was to get 3 percent of the gross contract amount was merely the method used by those parties in determining how much defendant would receive for furnishing bonding capacity. Jenkins v. Brodnax White Truck Company, 437 S.W.2d 922 (Tex.Civ.App.—Tyler 1969, no writ), and Blair v. Rindy, 358 S.W.2d 685 (Tex.Civ.App.—Houston 1962, writ ref'd n. r. e.). However we find that defendant is a joint venturer with Bertling by estoppel. The Texas Uniform Partnership Act [Tex. Civ.Stat.Ann. art. 6132b § 16 (1970)] provides in part as follows: "Sec. 16. (1) When a person, by words spoken or written or by conduct, represents himself, or consents to another representing him to any one, as a partner in an existing partnership or with one or more persons not actual partners, he is liable to any such person to whom such representation has been made, who has, on the faith of such representation, given credit to the actual or apparent partnership, and if he has made such representation or consented to its being made in a public manner he is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by or with the knowledge of the apparent partner making the representation or consenting to its being made: (a) When a partnership liability results, he is liable as though he were an actual member of the partnership." We will not repeat all of the evidence set forth above supporting a finding of joint *755 venture by estoppel, but such evidence clearly brings this case under Section 16 as set forth above. Defendant is jointly and severally liable with Bertling for the materials furnished by plaintiff under this contract. We likewise find that defendant may be sued in Harris County under Section 5 of Tex.Rev.Civ.Stat.Ann. art. 1995 (Supp.1975-76) under the same rules of law set forth in our consideration of Section 23. See Foster v. Pace Packing Co., 269 S.W.2d 929 (Tex.Civ.App.—Eastland 1954, no writ); Gonzalez v. Burns, 397 S.W.2d 898 (Tex.Civ. App.—San Antonio 1965, writ dism'd); Romer v. Gruver State Bank of Gruver, 456 S.W.2d 788 (Tex.Civ.App.—Amarillo 1970, no writ); and Johnson v. Abco Industries, Inc., 460 S.W.2d 957 (Tex.Civ.App.—Eastland 1970, no writ). AFFIRMED.

2013-10-30 06:32:40.726618+00

Bruchhausen

152 F. Supp. 848 (1957) Raffaele MANGONE, Plaintiff, v. MOORE-McCORMACK LINES, Inc., Defendant and Third Party Plaintiff, AMERICAN STEVEDORES CO., Inc., and United States of America, Third Party Defendants. Civ. No. 15951. United States District Court E. D. New York. March 12, 1957. On Reargument April 18, 1957. *849 *850 Kirlin, Campbell & Keating, New York City, for defendant and third party plaintiff, Thomas F. Feeney, Joseph F. Hanley, Jr., New York City, of counsel. Leonard P. Moore, U. S. Atty., Brooklyn, N. Y., for third-party defendant The United States, Walter L. Hopkins, Dept. of Justice, New York City, of counsel. BRUCHHAUSEN, District Judge. The defendant, United States of America, moves for an order dismissing the third party complaint as to said defendant, pursuant to Rule 12(b) (1) and (2) of the Federal Rules of Civil Procedure, 28 U.S.C.A. The question involved is whether the said defendant is properly joined as a third party defendant in a cause of action in admiralty, alleged in the third party complaint where the original complaint pertains to a civil jury claim. The plaintiff, a longshoreman, in his original complaint against the shipowner, Moore-McCormack Lines, Inc., alleged causes of action for negligence and unseaworthiness, basing jurisdiction of this court upon diversity of citizenship, 28 U.S.C.A. § 1332. Subsequently, the shipowner obtained leave to serve a third party complaint against the third party defendants, The United States of America, as time charterer of the vessel, S. S. Mormacmoon, and American Stevedores Co., Inc., the plaintiff's employer. It is alleged in the third party complaint that the shipowner and the Government entered into a contract of time charter party for the transportation of military and government cargoes and that pursuant thereto the Government's agents installed a certain padeye for loading this cargo; that the Government engaged the stevedores to load the cargo; that the wrongful installation of the padeye by the Government, and the negligent use thereof by the Government and/or the stevedores were the primary cause of the injuries alleged in the complaint in that the vessel was in a seaworthy condition when delivered to the Government or the stevedores pursuant to the time charter, and that the said equipment was so used without the knowledge or consent of the shipowner. It is further alleged that by the terms of the time charter the Government was obligated to the shipowner to perform its work in a proper manner; that under the contract between the Government and the stevedore, the latter was obliged to perform its work thereunder in a proper manner, which obligation inured to the benefit of the shipowner; that the stevedore also undertook with the shipowner itself, while performing its stevedoring work, to do so in a proper manner. Finally, it is alleged that jurisdiction herein is based on either the Suits in Admiralty Act, 46 U.S.C.A. § 741 et seq., the Public Vessels Act, 46 U.S.C.A. § 781 et seq., or the Federal Tort Claims Act, 28 U.S.C.A. §§ 1346 (b), 2671 et seq. It is not alleged that any of the aforesaid agreements or contracts contain any express provisions for indemnity. If that were so, the third party action could be purely a contract action. See Chicago, R. I. & Pac. R. Co. v. Dobry Flour Mills, 10 Cir., 211 F.2d 785; Compare Chicago, R. I. & Pac. R. Co. v. United States, 7 Cir., 220 F.2d 939. The third party complaint, however, is based upon the aforesaid contracts, and thus the cause of action, in this respect, is for breach of contract, *851 although no specific provision of indemnification is included in the agreement. Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, at pages 133, 134, 76 S. Ct. 232, at page 237, 100 L. Ed. 133. Although in this latter respect the action is for tortious breach of contract, nevertheless the action is in contract. Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 59 S. Ct. 516, 83 L. Ed. 784; United States v. Huff, 5 Cir., 165 F.2d 720, 1 A.L.R. 2d 854. Thus, the District Court would have no jurisdiction under the Tucker Act for the said action, in contract, is in excess of $10,000. Hammond-Knowlton v. United States, 2 Cir., 121 F.2d 192, certiorari denied 314 U.S. 694, 62 S. Ct. 410, 86 L. Ed. 555. The third party complaint also contains allegations upon which a claim for common law indemnity is based. It is often stated that such a claim is based upon implied contract or quasi-contract. However, it has been held that the "implied contract" referred to in the Tucker Act is a contract "implied in fact" and not a contract "implied in law", or quasi-contract. C. F. Harms Co. v. Erie R. Co., 2 Cir., 167 F.2d 562, 564, Cf. Ryan Stevedoring Co. v. Pan-Atlantic S. S. Corp., supra. It is has been held that such actions for common law indemnity are tort claims under the Tucker Act. Chicago, Rock Island & Pac. R. Co. v. United States, supra, and cases cited. On the other hand, whether in contract or tort, this third party action is maintainable in admiralty. A stevedoring contract is maritime, American Stevedores v. Porello, 330 U.S. 446, 67 S. Ct. 847, 91 L. Ed. 1011; a charter agreement is maritime, Matson Navigation Co. v. United States, 284 U.S. 352, 52 S. Ct. 162, 76 L. Ed. 336; a common law claim for indemnity is likewise cognizable in admiralty. The No. 34, 2 Cir., 25 F.2d 602, reversing Petition of L. Boyer's Sons Co., D.C., 23 F.2d 201, certiorari denied T. Hogan & Sons, Inc., v. L. Boyers' Sons Co., 278 U.S. 606, 49 S. Ct. 11, 73 L. Ed. 533. Cf. Canale v. American Export Lines, D.C., 17 F.R.D. 269. Both the Suits in Admiralty Act and the Public Vessels Act are to be construed together. United States v. Caffey, 2 Cir., 141 F.2d 69. They are complementary jurisdictional statutes providing for admiralty suits against the United States. Aliotti v. United States, 9 Cir., 221 F.2d 598; Phalen v. United States, 2 Cir., 32 F.2d 687; 46 U.S.C.A. § 782. Since the remedy sought by the third party complaint is one that may be maintained under one of these acts, jurisdiction is given under them to the exclusion of the Federal Tort Claims Act. Prudential Steamship Corp. v. United States, 2 Cir., 220 F.2d 655; Isbrandtsen Company v. United States, 2 Cir., 233 F.2d 184; Johnson v. United States Shipping Board Emergency Fleet Corp., 280 U.S. 320, 50 S. Ct. 118, 74 L. Ed. 451; Simonowycz v. United States, D.C. Ohio, 125 F. Supp. 847. Since the admiralty court would have jurisdiction, and since jurisdiction would be excluded on the civil side, the question remains whether the Federal Court can try the civil and admiralty actions together, or more particularly, whether the Court can at the same time sit as a court of law and a court of admiralty. The decisions of Judge Dimock in Cornell Steamboat Company v. United States, D.C.S.D.N.Y., 138 F. Supp. 16, and Dell v. American Export Lines, D.C.S.D. N.Y., 142 F. Supp. 511, are followed rather than those of Judge Murphy in Skupski v. Western Navigation Corp., D.C. S.D.N.Y., 113 F. Supp. 726, and Judge Kaufman in Canale v. American Export Lines, supra. See also McKenna v. United States, D.C.S.D.N.Y., 91 F. Supp. 556. It has been held that a third party libel under the 56th rule must be maritime in nature. Soderberg v. Atlantic Lighterage Corp., 2 Cir., 19 F.2d 286, certiorari denied 275 U.S. 542, 48 S. Ct. 37, 72 L. Ed. 416; Benedict on Admiralty, *852 Vol. 2, 6th Ed., Sec. 350. It seems conversely that a third party complaint, under Rule 14 of the Federal Rules of Civil Procedure, should be civil in nature. In fact, Rule 81(a) (1) of the Federal Rules expressly provides that said rules do not apply in admiralty. While there are some decisions permitting a joinder of jury and non-jury causes, the difficulties encountered therein are minimal by comparison to those in the case at bar. To combine these two jurisdictions together in one litigation seems improper and not feasible. Under Civil Rule 14 a party may not be impleaded simply because it is or may be liable to the plaintiff, but only, since the 1946 amendment, upon the ground that it is liable to the impleading defendant; under Admiralty Rule 56, 28 U.S.C.A. a party may be impleaded upon either ground. Cf. Moore's Federal Practice, 2nd Ed., Vol. 3, Secs. 14.20, 14.15, 14.16. Under Civil Rule 14, the Government would not be liable unless the third party defendant satisfied the original judgment. Canale v. American Export Lines, S.D.N.Y., 1956 A.M.C. 1350 (not otherwise reported); Thomas v. Malco Refineries, 10 Cir., 214 F.2d 884; Clinton v. Boehm, 139 A.D. 73, 124 N.Y. S. 789. Under Admiralty Rule 56 libelant is entitled to recover directly against an impleaded respondent for damages caused by the latter's negligence. When a person or vessel is impleaded under this rule, the case is treated as if the libel had originally been filed against it, and the decree may so provide. The G.L. 40, 2 Cir., 66 F.2d 764; Staples v. Manhattan Lighterage Corp., D.C.E.D.N.Y., 68 F. Supp. 754, affirmed 2 Cir., 158 F.2d 284. The District Court must also consider whether the claim against the Government is maintained in rem or in personam, both of which are permitted by the Suits in Admiralty Act. Grillea v. United States, 2 Cir., 229 F.2d 687 and 232 F.2d 919. Variations in pre-trial procedure and evidence greatly augment the difficulties. A recent decision of the Court of Appeals of this Circuit in Paduano v. Yamashita Kisen Kabushiki Kaisha, 2 Cir., 221 F.2d 615, demonstrates, quite clearly, the basic and historical differences between the civil and admiralty jurisdictions. To allow the admiralty jurisdiction, which is constitutional, to be so adulterated by civil diversity jurisdiction, which has come under severe criticism, would impair the usefulness of that ancient and historic tribunal. Cf. Lumbermen's Mutual Casualty Co. v. Elbert, 348 U.S. 48, 75 S. Ct. 151, 99 L. Ed. 59. Finally, the Federal Tort Claims Act expressly provides that remedies provided for by the Suits in Admiralty Act and the Public Vessels Act shall be excluded thereunder. 28 U.S.C.A. § 2680 (d). Waiver of sovereign immunity should be strictly construed. United States v. Sherwood, 312 U.S. 584, 61 S. Ct. 767, 85 L. Ed. 1058. The motion is granted. On Reargument The defendant and third-party plaintiff herein, Moore-McCormack Lines, Inc., moves for an order granting reargument of the motion of the United States of America for dismissal of the third-party complaint. In its prior decision, dated March 12, 1957 this Court held that a suit commenced on the law side of the Federal Court could not find its way into the admiralty by way of an impleading petition in the same proceeding. The movant regards this as a hyper-technicality, maintaining that the decisions in the cases of Skupski v. Western Navigation Corp., D.C., 113 F. Supp. 726 and Canale v. American Export Lines, D.C., 17 F.R.D. 269 should be followed. The movant claims that the decisions of Judge Dimock in the cases of Cornell Steamboat Company v. United States, D.C., 138 F. Supp. 16 and Dell v. *853 American Export Lines, D.C., 142 F. Supp. 511 are not in conflict with its position. The movant contends that in the Cornell case, the judge presided in a court of law and a court of admiralty at the same time, but only withheld the results of his decision, and, that in the Dell case the determination was de minimis in that the original suit was transferred to the admiralty and the impleader was enabled to again commence the proceeding. The three learned jurists, who presided in all of the aforesaid cases have heretofore demonstrated their disapproval of technicalities with regard to admiralty litigation. Cf. Rinaldi v. The Elizabeth Bakke, D.C.Cal., 107 F. Supp. 975; Cf. also, Internatio-Rotterdam, Inc., v. Thomsen, 4 Cir., 218 F.2d 514. Those cases dealt with the change of venue of a libel in rem in accordance with the Judicial Code, 28 U.S.C.A. § 1404(a), referring to a "civil action." Libels had been filed upon allegations that the res was expected to be within the district shortly. When the res unexpectedly arrived in another district, an effort was made to transfer the proceeding thereto. Technicalities were ignored in those cases. The libels in rem were treated as civil actions for change of venue purposes. In the latter action the court differentiated between acquisition of juisdiction over proceedings before the court, permitting a change of venue, and acquisition over the person or property, which was not required for such purpose. The cases cited by movant herein, such as The Everett Fowler (Conners Marine Company v. Petterson Lighterage & Towing Corp.), 2 Cir., 151 F.2d 662, certiorari denied 327 U.S. 804, 66 S. Ct. 963, 90 L. Ed. 1029; Admiral Oriental Line v. United States, 2 Cir., 86 F.2d 201, evidence the avoidance of technicalities, for in each of them, the jurisdictional requirements were already satisfied. In The Everett Fowler, supra, all of the testimony had already been taken, and the Appellate Court reversed on the law. It is significant that in United States v. The John R. Williams, 2 Cir., 144 F.2d 451, a case wherein the complete trial had likewise been had, the Appellate Court transferred the in personam phase of the pending litigation and rendered judgment accordingly on the grounds that no right had been lost by respondent, but the said court was careful not to so transfer the in rem phase of the case, peculiar to admiralty. The language concerning transferral in Cory Bros. & Co. v. United States, 2 Cir., 51 F.2d 1010 was dicta, but even there the court used the expression "formal differences." At that, it is not suggested that the said libel, considered as a complaint under the Tucker Act could have been simultaneously maintained in the original admiralty proceeding. In Cornell Steamboat Company v. United States, supra, a decision followed in the opinion heretofore filed, Judge Dimock considered the evidence from an admiralty and a civil viewpoint simultaneously and granted judgment upon either theory, but made the judgment in admiralty conditional upon the failure of the civil judgment by vacatur or otherwise. Technicalities have been brushed aside in this Circuit and others in cases wherein a jury was permitted to consider a negligence issue under the Jones Act, 46 U.S.C.A. § 688 simultaneously with an unseaworthiness issue under the general maritime law. Balado v. Lykes Bros. S. S. Co., 2 Cir., 179 F.2d 943; McCarthy v. American Eastern Corp., 3 Cir., 175 F.2d 724, certiorari denied 338 U.S. 868, 70 S. Ct. 144, 94 L. Ed. 532; Doucette v. Vincent, 1 Cir., 194 F.2d 834. The theory is one of pendent jurisdiction wherein recovery on one theory bars recovery on the other; Cf. McCarthy v. American Eastern Corp., supra, or perhaps it may be stated that recovery is concurrent and not cumulative, for judgment on one bars recovery on the other. Baltimore S. S. Co. v. Phillips, 274 U.S. 316, 47 S. Ct. 600, 71 L. Ed. 1069. *854 The simultaneous jurisdiction held by the court in Cornell Steamboat Company v. United States, supra, is in this category, and the withholding of the operation of the admiralty judgment therein so demonstrates. The courts were more reluctant with regard to submitting to the jury the civil issue of negligence under the Jones Act with the maritime issue of maintenance and cure, for the theory was that one cause of action was in tort while the other was in quasi contract, and that damages for the latter were independent of and in addition to damages for the former. Jordine v. Walling, 3 Cir., 185 F.2d 662. The Jordine v. Walling case, supra, approved of the practice of the trial judge's rendering decision on the maintenance and cure claim, at the same time and upon the same evidence as the negligence claim, to avoid multiplicity of actions, but restricted submission of evidence pertaining to maintenance and cure to the judge, in the absence of the jury. More recent decisions in this Circuit have indicated encouragement of practice of separate submission to the judge and jury, Weiss v. Central Railroad Company of New Jersey, 2 Cir., 235 F.2d 309, and even approval of submission of the entire controversey to the jury. Gonzales v. United Fruit Company, 2 Cir., 193 F.2d 479. But this Circuit does not seem to have conclusively decided as yet that either unseaworthiness claims, or maintenance and cure claims, can be tried with negligence claims at law under the Jones Act at the same time to a jury. McAfoos v. Canadian Pacific Steamships, Ltd., 2 Cir., 243 F.2d 270; Troupe v. Chicago, Duluth & Georgian Bay Transit Co., 2 Cir., 234 F.2d 253. The two separate actions herein could not be placed in a similar category, and refusing to so place them is not a mere technicality. The stevedore's action is positive, the impleading action is conditional. The first action is original, the second derivative and bound only by what the first action discloses. Maritime jurisprudence is part of the law of nations. The China, 7 Wall. 53, 74 U.S. 53, 19 L. Ed. 67. The peculiar feature of Federal Admiralty jurisdiction which Congress, no doubt on this basis, has given to the Federal Courts, from which the State Courts are excluded, is in rem process. The Glide, 167 U.S. 606, 17 S. Ct. 930, 42 L. Ed. 296; McAfoos v. Canadian Pacific Steamships, Ltd., supra. Such process was intended to follow the vessel, and a libelled vessel could be forced to cease operations, at least until a bond was posted. As formerly promulgated the 56th Rule in Admiralty only applied to contribution in collision cases, more than likely because of the traditional maritime rule that "where two vessels collide due to the fault of both * * * the mutual wrongdoers shall share equally the damages sustained by each, as well as personal injury and property damage inflicted on innocent third parties." Halcyon Lines v. Haenn Ship Corp., 342 U.S. 282, 284, 72 S. Ct. 277, 279, 96 L. Ed. 318 and cases cited in footnote 4. The rule has been broadened to include "any suit", also indemnity and direct liability to the plaintiff as well as contribution. Movant herein would now broaden it to include claims that were never contemplated to be within admiralty jurisprudence. Thus foreign, as well as domestic vessels, plying our waters could find themselves removed from the world of commerce because of a civil claim that was unknown in admiralty. Under existing diversity jurisdiction, a vessel would be subject to seizure for almost every type of civil claim imaginable. There are many factors about jurisdiction that are inconvenient; there are also many factors about it that make for more comprehensive justice. Certain courts exercise special functions such as probate courts, and customs courts. Very often general matters come before *855 these courts, or even matters treated by these courts come before other courts, which could readily be adjudicated by the instant court because of familiarity with the subject matter. But duplication of litigation must yield to jurisdiction. No trial judge should be placed in the position of presiding in a combined civil and criminal income tax case, including waiver of jury trial, obliging him to differentiate between the varying rules applicable to those two matters. Then, too, if plaintiff had commenced this action in the State Court, and there were no grounds for removal, the moving party herein would have had to wait until an adjudication therein before commencing this proceeding against the United States, since the Federal forum is the only proper one, Matson Navigation Co. v. United States, 284 U.S. 352, 52 S. Ct. 162, 76 L. Ed. 336, or an in rem proceeding against anyone. The Glide, supra. The trial of the issues herein in the original action, though similar, will be separate and distinct from the trial of the third-party action. This is not a consolidation wherein common questions of law and fact are involved. The original action is for a breach of duty, whether by negligence or unseaworthiness; the indemnity action is for breach of contract or an implied breach of duty. There is no common plaintiff or common defendant. Defendant in one action is a plaintiff in the other against a third litigant. To render the issue even more confusing there is a fourth party who is apparently not being sued in admiralty. Where a court of law also sits as a court of admiralty with different litigants and different causes of action and different prayers for relief, someone is bound to sustain prejudice by the mixture. If the impleader were in rem, the liability of the vessel would differ from that of an owner impleaded in personam. The China, supra. If the original action were before a jury, the breach would become wider. Movant herein is not completely without recourse. It can apprise the party it seeks to implead of the pending litigation and afford it a reasonable opportunity to defend. This would bind the party served with such "vouching in notice" as to movant's liability in the original action, if such were found, and the conclusiveness of the facts determined therein which are material for recovery in the indemnity action, provided there be no fraud or collusion. Standard Oil Co. of New Jersey v. Robbins Dry Dock & Repair Co., D.C., 25 F.2d 339, affirmed 2 Cir., 32 F.2d 182; New York & Porto Rico S. S. Co. of New York v. Lee's Lighters, Inc., D.C.E.D.N.Y., 48 F.2d 372. The statute of limitations would not commence to run against the defendant on any indemnity claim until liability accrued against it by judgment or settlement agreement. Chicago, Rock Island & Pacific Railway Co. v. United States, 7 Cir., 220 F.2d 939; James McWilliams Blue Line v. Esso Standard Oil Co., D.C.S.D.N.Y., 123 F. Supp. 824, citing New York law; Hidalgo Steel Co. v. Moore & McCormack Co., Inc., D.C.S.D.N.Y., 298 F. 331. It should also be borne in mind that under the surrender of sovereign immunity doctrine, the last party upon whom this apparent innovation of impleader in admiralty (when the original action is at law) should be tried is the United States Government. While calendar congestion will unfortunately delay commencement of the indemnity action if one must ever be commenced, nevertheless this should be regarded as a temporary condition that the court is endeavoring to remedy. The roots of the admiralty law and those of the civil common law are different. The Constitution so regarded them. Congress has preserved this difference, except for the "saving to suitors" clause of the Judiciary Code, 28 U.S.C.A. § 1333. If any change should be made, or *856 any departure from the traditional concept of the admiralty jurisdiction, it would seem to be the function of the legislature and not of the courts. There are other differences between admiralty and civil jurisdiction, such as the nature of an appeal being a trial de novo, and the admissibility of further proof on appeal. These concepts may have lost some of their distinctiveness, Petterson Lighterage & Towing Corp. v. New York Central R. Co., 2 Cir., 126 F.2d 992; Cf. Admiralty Rule 45; Brooklyn Eastern District Terminal v. United States, 287 U.S. 170, 53 S. Ct. 103, 77 L. Ed. 240, but they serve to point up an essential difference between the two jurisdictions. The motion for reargument is granted and upon reargument, the motion of the defendant, United States, for dismissal of the complaint as to said defendant is granted, and the original decision on the motion is adhered to.

2013-10-30 06:32:40.752126+00

Davis

535 S.W.2d 188 (1976) Ex parte Allen Edward RUNO. No. 52028. Court of Criminal Appeals of Texas. April 7, 1976. *189 Jim D. Vollers, State's Atty., Austin, for the State. OPINION DAVIS, Commissioner. Appeal is taken from an order entered after a hearing in a habeas corpus proceeding seeking reduction of bail. Appellant's application for writ of habeas corpus alleged that appellant was held in confinement by reason of an indictment: Cause No. 11,793, exercise of control of property, other than real property of the value of more than $200.00 and less than $10,000 without the consent of the owner and with intent to deprive the owner of the property. See V.T.C.A. Penal Code, Sec. 31.03(a)(2). In addition said indictment contains additional paragraphs alleging that appellant has previously been convicted of two felony offenses. Bail $125,000.00. At the hearing, appellant was allowed to amend his application for writ of habeas corpus to allege that he was further confined and restrained by virtue of an order entered by the Justice of the Peace of Precinct No. 1 of Walker County following an examining trial on February 18, 1976 in Cause No. 133, such order binding appellant over to the grand jury on a charge of possession of a firearm by an ex-felon and setting bond at seventy-five thousand dollars. The amendment alleged that said bail is excessive in amount. The record reflects that a stipulation was offered in evidence reciting that appellant had been previously convicted in the 54th Judicial District Court of McLennan County, Texas in Cause No. 14,160 on March 11, 1958, for the offense of murder, and that prior to that offense appellant was convicted in Criminal District Court Number Three of Harris County, Texas in Cause No. 68,758, on April 16, 1953, under the name of Allen Edward Runo for the offense of robbery by assault. The record contains the further stipulation that appellant received a full and unconditional pardon in 1973 for all prior felony convictions. The record reflects the introduction of the indictment in Cause No. 11,793 and the transcription of the court reporter's notes at the examining trial hearing in Cause No. 133 in Justice Court, Precinct No. 1 of Walker County. After the hearing in the habeas corpus proceeding, the court denied the request to lower the bonds. Kathy Runo, wife of appellant, testified that bail could possibly be made in the amount of twenty thousand dollars. *190 The ability or inability of the accused to make bail does not, alone, control the amount. Ex parte Poindexter, 511 S.W.2d 529 (Tex.Cr.App.); Ex parte Von Bierberstein, 487 S.W.2d 345 (Tex.Cr.App.); Ex parte Roberts, 468 S.W.2d 410 (Tex.Cr. App.); Ex parte Nectoux, 455 S.W.2d 249 (Tex.Cr.App.). Ex parte Roberts, supra, cited Article 17.15, V.A.C.C.P. and quoted the applicable rules contained therein for fixing the amount of bail. Among those rules it is stated that "the bail shall be sufficiently high to give reasonable assurance that the undertaking will be complied with," and "the nature of the offense [as well as] the circumstances under which it was committed are to be considered." Taking into consideration the "nature of the offense" necessarily involves the punishment permitted under the law. Ex parte Taylor, 531 S.W.2d 335 (Tex.Cr.App.); Ex parte Cascio, 140 Tex. Crim. 288, 144 S.W.2d 886. Under V.T.C.A. Penal Code, Sec. 12.42, upon conviction in Cause No. 11,793 and a finding that appellant has been previously convicted of two felony offenses, the punishment is for life. V.T.C.A. Penal Code, Sec. 46.05, provides that, "A person who has been convicted of a felony involving an act of violence to a person or property commits an offense if he possesses a firearm away from the premises where he lives." This offense is classified as a felony of the third degree and upon conviction carries punishment of not more than ten nor less than two years. See V.T.C.A. Penal Code, Sec. 12.34. (Subdivision (b) of Section 12.34, supra, provides that in addition to imprisonment a fine not to exceed $5,000 may be assessed.) The testimony adduced at the examining trial, introduced into evidence at the habeas corpus hearing, reflects that when appellant was arrested pursuant to a capias issuing after return of indictment in Cause No. 11,793 appellant was alone in an automobile in which one Colt .38 super caliber automatic pistol, one "Colt 357 Python—357 Magnum caliber pistol," and one box of .357 Magnum shells were found. The court is authorized to consider the nature of the offense and fix bail sufficiently high to give reasonable assurance that the undertaking will be complied with. We find that bail of one hundred twenty-five thousand dollars in Cause No. 11,793 is not excessive. On the other hand, considering the nature and circumstances of the offense in Cause No. 133, we conclude that seventy-five thousand dollars is excessive bail, and order reduction of bail in that cause to five thousand dollars. No abuse of discretion is shown in denying reduction of amount of bail in Cause No. 11,793 and bail in Cause No. 133 is set at five thousand dollars. It is so ordered. Opinion approved by the Court.

2023-08-22 21:20:55.550101+00

Powers

Powers, J., delivered the opinion of the Court. Davidson, J. dissents and filed a dissenting opinion at page 239 infra. The parties in this appeal, Katie Sue Sard and her husband, David Penn Sard, Jr., appellants, and Erving D. Hardy, M.D., appellee, went to trial before a jury and Judge • Harry E. Clark, Jr. in the Circuit Court for Talbot County, on an amended declaration containing eight causes of action asserted by Mrs. and Mr. Sard against Dr. Hardy. Suit was filed on 29 August 1972. The amended declaration was filed on 1 February 1973. Trial was held on 26 and 27 March 1974. At the close of all of the evidence offered by the plaintiffs, the defendant filed a motion for a directed verdict. Maryland Rule 552. After hearing arguments, the court granted the motion. On 1 April 1974 the plaintiffs filed a motion for a new trial. That motion was heard by Judge Clark on 28 July 1975, and was overruled. Judgment absolute was entered. The plaintiffs appealed. We shall discuss briefly the significant allegations *219of the amended declaration, to aid in understanding the legal foundations upon which the several claims rest. The first three causes of action are asserted only by Mrs. Sard. In the first she said that Dr. Hardy was a licensed physician, a specialist in obstetrics and gynecology, and in the performance of bilateral tubal ligation to prevent pregnancy; that in March 1968 she employed Dr. Hardy to treat her for the purpose of accomplishing sterilization; that she had undergone several difficult prior pregnancies, terminating in Caesarean sections, and Dr. Hardy recommended that she be sterilized; that on 26 March 1968 Dr. Hardy delivered her child by Caesarean section and attempted to perform a bilateral tubal ligation upon her, and represented to her that it would accomplish sterilization. She alleged that Dr. Hardy did not use the usual, ordinary, or accepted method of performing that operation or, in the alternative, that he was so negligent in performing the operation as to fail totally in accompplishing its purpose; and that in April 1970 she again became pregnant. The other allegations related primarily to damages. In her second cause of action Mrs. Sard adopted the allegations of the first, except as to negligent performance of the operation, and alleged that Dr. Hardy negligently failed to inform her that the surgical procedure for sterilization was not absolute, and that the possibility did exist that she could thereafter become pregnant, so that she might declare her decision in accepting or rejecting the procedure. The third cause of action differed only in that the negligence alleged was that Dr. Hardy advised her after the delivery and operation that she could engage in sexual intercourse with safety and could not become pregnant, and that he gave this advice without having performed suitable postoperative tests to ascertain the success or failure of the operation. The fourth, fifth, and sixth causes of action, asserted by both plaintiffs, paralleled the first, second, and third, respectively, and differed only in that they claimed damages incurred jointly by both plaintiffs. *220The seventh cause of action, by Mrs. Sard alone, alleged that Dr. Hardy expressly warranted the success of the operation. The eighth, brought by both plaintiffs, was based upon the same allegation of express warranty, and claimed joint damages. Mrs. Sard’s relevant medical history as disclosed by the record was that in December 1965, when she was eight months pregnant, she developed eclampsia and severe convulsions. An emergency Caesarean section was performed. The baby did not survive. She first saw Dr. Hardy, the defendant in this case, in October 1966, after she had become pregnant a second time. He rendered routine prenatal care, and on 4 March 1967 delivered a normal baby girl by Caesarean section in the hospital at Easton. There were no complications. Dr. Hardy again saw Mrs. Sard when she came to him on 28 November 1967. She was five months pregnant. He rendered care through an uneventful prenatal course, culminating in the delivery of a normal baby girl on 26 March 1968 by Caesarean section, at The Memorial Hospital at Easton. At the same time Dr. Hardy performed upon Mrs. Sard an operative procedure described as a bilateral tubal ligation. In June 1970 Mrs. Sard, suspecting that she was pregnant, consulted a different physician, who confirmed that she was. The time of conception was estimated to have been the middle of April 1970, slightly more than two years after the tubal ligation was performed. The child was born at the hospital in Cambridge in January 1971. At the trial of the case Mr. and Mrs. Sard relied upon the testimony of four witnesses to support the issues of liability. The witnesses were Dr. Hardy, called by the plaintiffs as an adverse witness, Mr. Sard, Mrs. Sard, and Dr. Eldon L. Hawbaker, who had been in training as a resident in general surgery in the hospital in March 1968, and had assisted Dr. Hardy at the operation. Dr. Hawbaker was called by the defendant out of turn, by agreement, to testify that he had dictated the operative report, and that it was true, to the best of his knowledge. The record suggests that during cross *221examination, the plaintiffs made him their witness for a limited purpose. The issues, as they were pleaded and tried below, fell into four areas, which we summarize as follows: 1. That the doctor was negligent in the manner in which he performed the sterilization operation. (First and fourth causes of action.) 2. That the doctor was negligent in failing to inform his patient of facts material to her consent to the sterilization operation. (Second and fifth causes of action.) 3. That the doctor was negligent in failing to perform postoperative tests to ascertain the success or failure of the operation. (Third and sixth causes of action.) 4. That the doctor expressly warranted to his patient that the operation would accomplish sterilization. (Seventh and eighth causes of action.) In argument to Judge Clark on the motion for a directed verdict, plaintiffs’ counsel relied for evidence of negligent performance upon the eventual “failure” of the operation — recanalization of a fallopian tube. The trial judge rejected that argument, and granted the motion as to the first and fourth causes of action. The issue is not raised or argued in this appeal. As to the alleged failure to make postoperative tests for success or failure, plaintiffs’ counsel conceded below that there was no evidence to support that claim, and that the motion should be granted as to the third and sixth causes of action. It was. The issue is not raised or argued in this appeal. Two issues are raised in this appeal as to the correctness of the directed verdict, and an error in ruling on evidence is asserted. In their brief, appellants state the Questions Presented in this way: I. Was it error for the trial court to direct a *222verdict in favor of the Defendant, Dr. Ervin D. Hardy? A. Was the plaintiffs evidence legally sufficient to sustain a finding by the jury that Dr. Hardy had failed to obtain an informed consent from Mr. and Mrs. Sard prior to the sterilization of Mrs. Sard? II. Was it error for the trial court to refuse to allow Dr. Hawbaker, who had assisted Dr. Hardy in Mrs. Sard’s sterilization, to testify as to the standard of care required of physicians and surgeons who performed sterilizations in Easton, Maryland in 1968. III. Was it error for the trial court to hold that Dr. Hardy’s express warranty of sterilization was unenforceable for lack of consideration. Consent to Operate Generally, a physician has no right to operate upon the body of a patient without that patient’s consent.1 To do so has been treated historically by the courts as a battery, or assault and battery. As the Court of Appeals of New York, through Cardozo, J. said in Schloendorff v. Society of New York Hospital, 211 N. Y. 125, 105 N. E. 92 (1914): “Every human being of adult years and sound mind has a right' to determine what shall be done with his own body; and a surgeon who performs an operation without his patient’s consent commits an assault, for which he is liable in damages.” In that case the testimony of the patient was that she had consented to an abdominal operation for the purpose of examination, but had notified the doctor that there must be no operation. The surgeon who operated removed a tumor. The Court held that the hospital was not liable for the *223physician’s wrong, but said of it, “ * * * the wrong complained of is not merely negligence. It is trespass.” The assault and battery theory has been widely applied, with some of the cases holding that an apparent consent which is not “informed” is no consent at all. In A. Holder, Medical Malpractice Law, 228-29 (1975), the author explains: “There are two different legal theories to support actions by plaintiffs alleging lack of consent. The original theory on which this cause of action was predicated was that treatment to which the patient had not knowingly consented was a classic example of the tort of ‘assault and battery.’ This is still the case where the patient is in total ignorance of what is to be done.” “The other approach to this problem is to treat it as negligence and allege that a physician’s failure to explain the consequences of treatment to which the patient has consented without understanding is negligence per se and a violation of the requisite standards of due care. In most cases in which the doctrine of informed consent arises, the patient is aware of the nature of the procedure which he is to undergo and has in fact signed a consent for it. What he does not understand is that there are some risks of permanent damage inherent in the procedure. Failure to have told him this means that the action is one in negligence. “The practical difference between the two theories is that if assault and battery is alleged, no expert testimony is required to prove it. Lay witnesses are sufficient. On the other hand, in most, but not all, states, before a claim of medical negligence can go to the jury for determination, expert testimony to the fact that the reasonably careful physician would have explained the given risk is required.” *224An interesting observation of the change in the trend of judicial thinking is found in W. Prosser, The Law of Torts 165-66 (4th ed. 1971), which says: “A considerable number of late cases have involved the doctrine of ‘informed consent,’ which concerns the duty of the physician or surgeon to inform the patient of the risk which may be involved in treatment or surgery. The earliest cases treated this as a matter of vitiating the consent, so that there was liability for battery. Beginning with a decision in Kansas in 1960, it began to be recognized that this was really a matter of the standard of professional conduct, since there will be some patients to whom disclosure may be undesirable or even dangerous for success of the treatment or the patient’s own welfare; and that what should be done is a matter for professional judgment in the light of the applicable medical standards. Accordingly, the prevailing view now is that the action, regardless of its form, is in reality one for negligence in failing to conform to the proper standard, to be determined on the basis of expert testimony as to what disclosure should be made. The factors to be considered by the physician or surgeon include the likelihood and seriousness of the bad result, the feasibility of alternative methods, the interest of the patient, knowledge of his past history, his emotional stability, the necessity of treatment, and the existence of an emergency.” Perhaps the most articulate and exhaustive judicial discussion of the “informed consent” principle is found in the case of Cobbs v. Grant, 8 Cal. 3d 229, 104 Cal. Rptr. 505, 502 P. 2d 1 (1972), written by Justice Mosk for the Supreme Court of California. The case had been submitted to a jury on a claim that the physician was negligent in undertaking and in performing an operation for a duodenal ulcer, and on a claim that the physician’s failure to disclose the inherent *225risks of the initial surgery vitiated the patient’s consent to operate. The patient’s course following the surgery was complicated by three occurrences. He suffered internal bleeding which required an emergency operation for the removal of his spleen, because an artery at the hilum of the spleen had been severed during the operation. This was stated to be a risk inherent in the type of surgery performed. A month or two later the patient developed pains, which were caused by a developing gastric ulcer. The evolution of a new ulcer was stated to be another risk inherent in the surgery performed. A third operation, removal of one half of the patient’s stomach, was performed to relieve the gastric ulcer. Still another hospitalization was required because of internal bleeding due to the premature absorption of a suture, another inherent risk. This condition abated without further surgery. The California court held that there was not substantial evidence to support a jury verdict on the issue of liability for negligence in deciding to operate, or in performing the surgery, and reversed the judgment against the physician, for retrial. The court then discussed the question of informed consent. We shall quote portions of that discussion, generally omitting the numerous citations it contains. Justice Mosk wrote: “Where a doctor obtains consent of the patient to perform one type of treatment and subsequently performs a substantially different treatment for which consent was not obtained, there is a clear case of battery. “However, when an undisclosed potential complication results, the occurrence of which was not an integral part of the treatment procedure but merely a known risk, the courts are divided on the issue of whether this should be deemed to be a battery or negligence. *226“Although this is a close question, either prong of which is supportable by authority, the trend appears to be towards categorizing failure to obtain informed consent as negligence. That this result now appears with growing frequency is of more than academic interest; it reflects an appreciation of the several significant consequences of favoring negligence over a battery theory. As will be discussed infra, most jurisdictions have permitted a doctor in an informed consent action to interpose a defense that the disclosure he omitted to make was not required within his medical community. However, expert opinion as to community standard is not required in a battery count, in which the patient must merely prove failure to give informed consent and a mere touching absent consent. “We agree with the majority trend. The battery theory should be reserved for those circumstances when a doctor performs an operation to which the patient has not consented. When the patient gives permission to perform one type of treatment and the doctor performs another, the requisite element . of deliberate intent to deviate from the consent given is present. However, when the patient consents to certain treatment and the doctor performs that treatment but an undisclosed inherent complication with a low probability occurs, no intentional deviation from the consent given appears; rather, the doctor in obtaining consent may have failed to meet his due care duty to disclose pertinent information. In that situation the action should be pleaded in negligence. “The facts of this case constitute a classic illustration of an action that sounds in negligence. Defendant performed the identical operation to which plaintiff had consented. The spleen injury, development of the gastric ulcer, gastrectomy and internal bleeding as a result of the premature *227absorption of a suture, were all links in a chain of low probability events inherent in the initial operation. “Defendant * * * points out that the majority of the California cases have measured the duty to disclose not in terms of an absolute, but as a duty to reveal such information as would be disclosed by a doctor in good standing within the medical community. * * * Moreover, with one state and one federal exception every jurisdiction that has considered this question has adopted the community standard as the applicable test. Defendant’s second contention is that this near unanimity reflects strong policy reasons for vesting in the medical community the unquestioned discretion to determine if the withholding of information by a doctor from his patient is justified at the time the patient weighs the risks of the treatment against the risks of refusing treatment. “Despite what defendant characterizes as the prevailing rule, it has never been unequivocally adopted by an authoritative source. Therefore we probe anew into the rationale which purportedly justifies, in accordance with medical rather than legal standards, the withholding of information from a patient. / “Preliminarily we employ Several postulates. The first is that patients aril generally persons unlearned in the medical sciences and therefore, except in rare cases, courts may safely assume the knowledge of patient and physician are not in parity. The second is that a person of adult years and in sound mind has the right, in the exercise of control over his own body, to determine whether or not to submit to lawful medical treatment. The third is that the patient’s consent to treatment, to *228be effective, must be an informed consent. And the fourth is that the patient, being unlearned in medical sciences, has an abject dependence upon and trust in his physician for the information upon which he relies during the decisional process, thus raising an obligation in the physician that transcends arms-length transactions. “From the foregoing axiomatic ingredients emerges a necessity, and a resultant requirement, for divulgence by the physician to his patient of all information relevant to a meaningful decisional process. In many instances, to the physician, whose training and experience enable a self-satisfying evaluation, the particular treatment which should be undertaken may seem evident, but it is the prerogative of the patient, not the physician, to determine for himself the direction in which he believes his interests lie. To enable the patient to chart his course knowledgeably, reasonable familiarity with the therapeutic alternatives and their hazards becomes essential. “Therefore, we hold, as an integral part of the physician’s overall obligation to the patient there is a duty of reasonable disclosure of the available choices with respect to proposed therapy and of the dangers inherently and potentially involved in each. “A medical doctor, being the expert, appreciates the risks inherent in the procedure he is prescribing, the risks of a decision not to undergo the treatment, and the probability of a successful outcome of the treatment. But once this information has been disclosed, that aspect of the doctor’s expert function has been performed. The weighing of these risks against the individual subjective fears and hopes of the patient is not an expert skill. Such evaluation and decision is a nonmedical judgment reserved to the patient alone. *229“The scope of the disclosure required of physicians defies simple definition. Some courts have spoken of ‘full disclosure’ * * * and others refer to ‘full and complete’ disclosure, * * * but such facile expressions obscure common practicalities. Two qualifications to a requirement of ‘full disclosure’ need little explication. First, the patient’s interest in information does not extend to a lengthy polysyllabic discourse on all possible complications. A mini-course in medical science is not required; the patient is concerned with the risk of death or bodily harm, and problems of recuperation. Second, there is no physician’s duty to discuss the relatively minor risks inherent in common procedures, when it is common knowledge that such risks inherent in the procedure are of very low incidence. “In sum, the patient’s right of self-decision is the measure of the physician’s duty to reveal. That right can be effectively exercised only if the patient possesses adequate information to enable an intelligent choice. The scope of the physician’s communications to the patient, then, must be measured by the patient’s need, and that need is whatever information is material to the decision. Thus the test for determining whether a potential peril must be divulged is its materiality to the patient’s decision. “We point out, for guidance on retrial, an additional problem which suggests itself. There must be a causal relationship between the physician’s failure to inform and the injury to the plaintiff. Such causal connection arises only if it is established that had revelation been made consent to treatment would not have been given. Here the record discloses no testimony that had plaintiff *230been informed of the risks of surgery he would not have consented to the operation. “The patient-plaintiff may testify on this subject but the issue extends beyond his credibility. Since at the time of trial the uncommunicated hazard has materialized, it would be surprising if the patient-plaintiff did not claim that had he been informed of the dangers he would have declined treatment. Subjectively he may believe so, with the 20/20 vision of hindsight, but we doubt that justice will be served by placing the physician in jeopardy of the patient’s bitterness and disillusionment. Thus an objective test is preferable: i.e., what would a prudent person in the patient’s position have decided if adequately informed of all significant perils.” What the California court said in Cobbs v. Grant, supra, closely parallels much of what was said by Robinson, J. for the court in Canterbury v. Spence, 464 F. 2d 772 (D.C. Cir. 1972). In addition, however, it includes what we feel is a more illuminating discussion of whether the scope of the duty of disclosure is measured by lay standards or by medical standards. On this question there is a substantial division of authority.2 Although it seems to be the fact, as appellants stat¿ in their brief, that there is no Maryland authority ruling on *231informed consent, the principle was applied in Kruszewski v. Holz, 265 Md. 434, 290 A. 2d 534 (1972), apparently by common acquiescence of both parties, the trial court, and the Court of Appeals. One of the patient’s allegations was that the doctor was negligent in failing to inform her adequately of the possible risks of and alternatives to the operation. Expert opinion evidence was received on the question of whether the standard of care required of a physician was satisfied when he merely informed his patient that a hysterectomy was major surgery and complications could arise. Questions presented to and decided by the Court of Appeals involved the proper wording of hypothetical questions, and the adequacy of a special issue submitted to the jury to present the question of whether the doctor deviated from the standard of care by not sufficiently informing the patient of the alternatives and risks involved in obtaining her consent to operate. The very existence, in the law of Maryland, of a duty to disclose, and the extent of such a duty, were not before the Court. Upon our consideration of the leading recent cases and the texts, we embrace the principle of informed consent, and we hold that it should be applied by the courts of Maryland in appropriate cases where there is a claim of professional negligence in failing to meet a duty to disclose. The duty is to make an adequate disclosure of substantial facts which would be material to the patient’s decision. The trial court must decide as a matter of law, on the facts and circumstances of each case, whether the evidence is sufficient to support a finding by the jury that there has been a negligent failure to disclose such facts. A subsidiary question, which also must be decided by the trial court as a matter of law, on the facts of each case, is whether the duty to disclose is to be determined by standards of the profession, thus requiring expert opinion evidence,3 or may be determined by a jury without the aid of *232expert opinion. We do not agree that either rule could be applied in all cases. We now examine the evidence in the case before us, so that we may determine whether there was any evidence tending to show a negligent failure by Dr. Hardy to disclose to Mrs. Sard any substantial fact which would have been material to her decision. It is perfectly clear that Mrs. Sard consented to the performance upon her by Dr. Hardy of the surgical procedure medically described as bilateral tubal ligation — she so alleges in her declaration. She said that they discussed the fact that she did not want to have any more children, and he suggested birth control pills, an intrauterine device, or sterilization. She rejected the first two choices. He told her that he could sterilize her by tying her tubes, at the time of the Caesarean section delivery. As she put it, “I thought sterilize meant fix you so you can’t have no more kids, so I took it.” The doctor did not discuss with her the technique he was going to use to tie her tubes, or advise her that there were different methods of sterilization. It is equally clear that the tubal ligation was to be performed at the same time as the delivery. A month or a couple of weeks before delivery Dr. Hardy had told her to go home and think about it, and let him know. She did, and told him, “I would rather be sterilized.” It is also clear that Mr. Sard was in no way involved in any of the discussions between Mrs. Sard and Dr. Hardy. Mr. Sard testified that the first time he ever saw Dr. Hardy to speak to was in June 1970, when he told Dr. Hardy that Mrs. Sard was pregnant again. There was very little evidence concerning risks or hazards inherent in the sterilization operation recommended by Dr. Hardy. It seems logical that they would add little, if anything, to the risks and hazards inherent in the delivery of a child by Caesarean section. Whatever those added risks *233and hazards might have been, they were successfully avoided by Dr. Hardy, or by Providence, or both. None developed. To repeat what we quoted above from Cobbs v. Grant, supra: “Two qualifications to a requirement of ‘full disclosure’ need little explication. First, the patient’s interest in information does not extend to a lengthy polysyllabic discourse on all possible complications. A mini-course in medical science is not required; the patient is concerned with the risk of death or bodily harm, and problems of recuperation. Second, there is no physician’s duty to discuss the relatively minor risks inherent in common procedures, when it is common knowledge that such risks inherent in the procedure are of very low incidence.” There was no evidence that Mrs. Sard suffered any ill effects from the sterilization procedure, during her recuperation or at any later time. It would be safe to say that at no time did any physical manifestation make her aware that the tubal ligation had been performed. Appellants do not complain that the performance of the tubal ligation brought any harm upon Mrs. Sard. They do not complain that the operation should not have been performed. They do not contend on appeal that the ultimate failure resulted from negligence by Dr. Hardy. Their sole complaint, stated narrowly but accurately, is that the operation failed to provide,' permanently, the expected benefit. That any medical or surgical therapy or procedure may fail to accomplish the desired, or even the reliably expected result, seems to be universally recognized, both in medicine and in law. That recognition is inherent in the statement for the Court of Appeals by Chief Judge Brune in Lane v. Calvert, 215 Md. 457, 138 A. 2d 902 (1958), at 462-63: “It is well established by the case law in this State that the mere fact that an unsuccessful result *234follows medical treatment is not of itself evidence of negligence.” It is reflected also in that Court’s consistent rejection of the rationale of res ipsa loquitur in medical malpractice cases. Lane v. Calvert, supra; Johns Hopkins Hospital v. Genda, 255 Md. 616, 258 A. 2d 595 (1969), and cases cited therein. The absence of negligence in spite of an unfavorable result is not in all circumstances the equivalent to the absence of negligence in failure to disclose risks and hazards to the patient. In an excellent discussion of informed consent the Supreme Court of Rhode Island said in Wilkinson v. Vesey, 295 A. 2d 676 (R.I. 1972): “Having established defendants’ duty to disclose, we will now delineate the extent of the disclosure which should be made. Obviously there is no need to disclose risks that are likely to be known by the average patient or that are in fact known to the patient usually because of a past experience with the procedure in question. * * * It is not necessary that a physician tell the patient any and all of the possible risks and dangers of a proposed procedure. * * * As we noted earlier, materiality is to be the guide. It is our belief that, in due deference to the patient’s right to self determination, a physician is bound to disclose all the known material risks peculiar to the proposed procedure. Materiality may be said to be the significance a reasonable person, in what the physician knows or should know is his patient’s position, would attach to the disclosed risk or risks in deciding whether to submit or not to submit to surgery or treatment.” 295 A. 2d 689. The evidence in this case shows that the physical harm to the patient was zero; that there was one chance in fifty 4 *235that the benefit would be zero, and forty-nine chances in fifty that the benefit would be all that the patient desired. On that evidence we hold that a reasonable person, in Mrs. Sard’s position, would attach no material significance to the risk of one chance in fifty that she would derive no benefit from the operation. It is significant, and by itself perhaps fatal to her claim, that she produced no evidence to show that she would have refused the operation if she had known 5 that there was a chance of failure. Although the trial judge did not arrive at his ruling by *236quite the same route that we have followed, he reached the correct result when he granted a directed verdict on the second and fifth causes of action, based upon the allegation that Dr. Hardy was negligent in failing to inform Mrs. Sard adequately before obtaining her consent. Ruling on Evidence We have set out the questions presented in appellants’ brief. One of them asks if the court erred in refusing to allow Dr. Hawbaker to testify as to a standard of care. The short answer is that the witness simply was not asked to give such an opinion. The court had asked the witness if he felt qualified to give an expert opinion, and the witness had said, “No, sir. Absolutely not.” True, the question was couched in terms of “this hospital community”, but the witness was not asked a question which might have been proper under Shilkret v. Annapolis Emergency Hosp., supra. We see no erroneous ruling. Express Warranty Allegations contained in the seventh and eighth causes of action asserted by Mrs. and Mr. Sard leave some doubt as to the warranty claimed. One allegation states that Dr. Hardy “expressly warranted” that the tubal ligation “would accomplish sterilization”, while a later allegation refers to his “warranty” that the “the operation was a complete success”. The first suggests an expected future result. The other suggests a result already accomplished. Although it is possible to make either or both of such warranties, there is a significant difference between them. The principal difference is that an alleged warranty of a past fact has no legal validity unless it is supported by an independent consideration. In the record in this case there is no evidence of a pre-operative warranty. Dr. Hardy’s suggestion to Mrs. Sard that she be sterilized by tying her tubes cannot be construed as an express warranty of result. *237Appellants rely for support of the alleged warranty upon statements which they say Dr. Hardy made to them after the operation had been performed. We quote from Mrs. Sard’s direct examination: “Q. When the Doctor said that he would sterilize you, what, in fact, what was his conversation to you about? A. All he said was sterilize me so I thought sterilize meant fix you so you can’t have no more kids, so I took it. Q. Did the Doctor ever tell you you couldn’t have any more kids after he sterilized you? A. Yes, he did. Q. What did he tell you? A. On the day he let me go home from the hospital he told me before I walked out the door, ‘Go home. Have all the fun you want. You don’t have to worry about getting pregnant’. Q. Before you went to the hospital did the Doctor inform you you would not have to worry about getting pregnant if you were sterilized? A. After I was sterilized he did.” “Q. Now after you had the sterilization did you again, after a period of time, resume some type of sexual activity with your husband? A. Yes. Q. Did you take any precautions to prevent child birth? A. No. Q. Why not? A. Because Dr. Hardy told me I was sterile and would not have to worry about getting pregnant, a guaranteed operation.” *238Mr. Sard was asked about his contact with Dr. Hardy in June, 1970. The transcript shows: “A. I went to Dr. Hardy’s office. Q. Why did you go to Dr. Hardy’s office then? A. I figured he was the one that fixed her. I wanted to know whether she could get pregnant or not. Q. Had you been to his office before that? A. No, sir. Q. What was your temperament, how did you feel? A. I don’t know, I just wanted to find out if she could get pregnant or not. Q. What did the doctor say to you when you went to his office? A. I went down there and Dr. Hardy and his nurse, and we went in the back room and I asked Dr. Hardy about it and he said, ‘It ain’t no way she can be pregnant. It’s a guaranteed operation. Don’t worry about it. Go ahead on home’.” Dr. Hardy’s version of what he told Mrs. Sard when she left the hospital was, “I told her that I had tied her tubes and she should be sterile. She didn’t have to worry * * * about becoming pregnant.” If these statements, viewed most favorably to the appellants, could be considered as more than ordinary medical reassurance, and could be construed as an express warranty, the warranty lacked consideration, and was invalid. The requirement that such a contract by a physician be supported by consideration is discussed in Annotation, Contract to Effect Specific Medical Result, 43 A.L.R. 3d 1221, in which it is stated, at 1233: “No case herein denies that the general rule of contract law that any contract must be supported by consideration to be enforceable is applicable to a *239physician’s contract to effect a cure or specific result. In the following cases, moreover, the courts have stated that such a contract would not be supported by the consideration paid for the physician’s normal undertaking to use due care and skill, but under the particular circumstances involved, must be supported by a separate consideration.” Cases which hold that an asserted express warranty by a physician, made after the agreement to operate had been reached, must be supported by a separate consideration, are Herrera v. Roessing, 533 P. 2d 60 (Colo. App. 1975); Coleman v. Garrison, 349 A. 2d 8 (Del. Supr. 1975); Rogala v. Silva, 305 N.E.2d 571 (Ill. App. 1973); Gault v. Sideman, 191 N.E.2d 436 (Ill. App. 1963); and Wilson v. Blair, 211 P. 289 (Mont. 1922). The Annotation suggests that in cases which have not required a showing of a separate consideration, the alleged warranties were made before the agreement for the physician’s services was reached. We consider it logical, and consistent with other legal principles, to hold that an alleged express warranty cannot be enforced as a warranty unless, (1) it was made before the operation was performed, and was relied upon by the patient in contracting for the service, or, (2) it was supported by a separate consideration. We do so hold. There was no evidence in this case of a separate consideration for the alleged express warranty made after the operation. Therefore, there was no enforceable warranty. The directed verdict on the seventh and eighth causes of action was correct. Judgment affirmed. Appellants to pay costs. . We are not dealing here with an emergency which requires prompt action, or with consent given by one person on behalf of another who is, at the time, incapable of making a decision. . Some of the cases which have held that expert opinion evidence of the standard of care is required are Getchell v. Mansfield, 489 P. 2d 953 (Ore. 1971); Ohligschlager v. Proctor Community Hosp., 283 N.E.2d 86 (Ill. 1972); Trogun v. Fruchtman, 207 N.W.2d 297 (Wis. 1973); Downer v. Veilleux, 322 A. 2d 82 (Me. 1974); and Young v. Group Health Cooperative, 534 P. 2d 1349 (Wash. 1975). Contrary holdings are found in Canterbury v. Spence, supra; Wilkinson v. Vesey, 295 A. 2d 676 (R.I. 1972); Congrove v. Holmes, 308 N.E.2d 765 (Ohio 1973); and Scaria v. St. Paul Fire and Marine Ins. Co., 227 N.W.2d 647 (Wis. 1975). See also, Annotation, Necessity and Sufficiency of Expert Evidence to Establish Existence and Extent of Physician’s Duty to Inform Patient of Risks of Proposed Treatment, 52 A.L.R. 3d 1084, and Harney, Medical Malpractice (1973) at 63. . When the standard of care rendered by other physicians is an issue, many of the cases and writers say that the evidence must relate to the same community, or locality. Maryland takes a broader view. In Shilkret v. Annapolis Emergency Hosp., 276 Md. 187, 349 A. 2d 245 (1975), the Court of Appeals held, without regard to a geographical medical community or *232locality, that, “a physician is under a duty to use that degree of care and skill which is expected of a reasonably competent practitioner in the same class to which he belongs, acting in the same or similar circumstances.” Id. at 200. . It was brought out in the plaintiffs’ examination of Dr. Hardy that the technique he chose to employ in the tubal litigation at the time of a Caesarean section had, according to a study on the subject, a failure rate of one in fifty. . The parties, and the trial judge, placed more importance than we do upon an authorization form, signed by Mrs. Sard and Mr. Sard before the operation. It was requested of them by the hospital, not by Dr. Hardy. It said: “A UTH ORIZA TION FOR STERILIZATION Date 3-25-68 I/We do hereby request and authorize the Memorial Hospital and the doctors thereof to perform upon Mrs. Katie Sue Sard , an operation intended to effectuate sterilization. I/We understand what is meant by sterilization and I/We understand that if this operation is successful, the above named patient will be unable in the future to produce children, but I/We understand that an operation intended to effect sterilization is not effective in all cases. I/We consider that this operation will be for the best interest and physical well being of the above named patient. I/We have come to the hospital voluntarily and I/We hereby certify that the above named patient is submitting voluntarily to the operation. Being mentally capable of giving a valid authorization I/We are signing this paper of our own free will and accord. David P. Sard, Jr. Katie Sue Sard” Spouse Patient Two individuals, presumably hospital personnel, signed as witnesses. Mr. Sard testified that he signed the authorization, but did not read it. He said that he could not read. He finished the eighth grade in school. He did not ask anyone to read it t<5 him, or to explain it to him. Mrs. Sard testified that the form was presented to her 10 or 15 minutes before she was taken to the operating room. She was told that it was necessary, to authorize the sterilization. She said that she did not read it, nor ask for any further explanation. She was not in any pain, and did not remember that she had any medication. We do not discuss the general rule of law that a person is bound by what he signs, whether he reads it or not. The significance of the authorization is the statement that an operation intended to effect sterilization is not effective in all cases. We have already concluded in this case that the risk of failure was not material to the patient’s decision.

2023-08-22 21:20:55.559477+00

Davidson

Davidson, J., dissenting: In its opinion, the majority fails to consider material facts, fails to consider the central issue decided by the trial *240court, unnecessarily decides issues, and decides those issues erroneously. I respectfully dissent. I Viewed in the light most favorable to the appellants,1 the record shows that in 1965, during the eighth month of her first pregnancy, Mrs. Said developed eclampsia and suffered 21 convulsions. It was possible, as a result, that she and her baby might die. An emergency Caesarian section was performed in an effort to save them both. The baby did not survive. In March, 1967, Mrs. Sard gave birth, again by Caesarian section, to a healthy child who survived. In November, 1967, Mrs. Sard consulted Dr. Hardy concerning her third pregnancy. A few weeks before she was to deliver the baby he pointed out that given her past medical history, it was medically inadvisable for her to become pregnant again. He recommended that she use birth control pills or an intrauterine device, or that she have her tubes tied at the time the third Caesarian section was to be performed. He did not tell her about other methods of birth control such as vasectomy. Mrs. Sard made it plain to the doctor that she did not want any more children by explicitly saying that she had “lost a lot of blood,” “couldn’t afford any more children and didn’t really want any more at that time.” She then told him, “I would rather be sterilized because I believe it might be more safer than taking a pill. That way I will know I am sterilized and won’t have to worry about having to get pregnant again.” Mrs. Sard did not know and Dr. Hardy did not then advise her that the sterilization procedure which he proposed was fallible and that she could become pregnant even after it was performed. Rather, he told her that if he performed the proposed tubal ligation she would not have any more children.2 He gave her no information as to how successful *241birth control pills or intrauterine devices might be in preventing pregnancy. Believing that the recommended procedure was the only certain method of permanently preventing pregnancy, Mrs. Sard chose that course of treatment. Dr. Hardy advised her to go home and think about her choice. At a subsequent visit, she elected to be “sterilized.” Had she known that the operation was not necessarily effective in all cases, she would not have consented to it.3 *242About 15 minutes before the operations were performed, a nurse told Mrs. Sard that if she wanted to be sterilized she had to sign a hospital form in order to “authorize sterilization.” The form stated in pertinent part that “an operation intended to effect sterilization is not effective in all cases.” Believing the form to be nothing more than an authorization for the sterilization, Mrs. Sard signed it without reading it or having it read to her, after a nurse told her she did not have time to read it. Following the operations, Dr. Hardy told Mrs. Sard, “Have all the fun you want. You don’t have to worry about getting pregnant.” He also stated that she was “guaranteed 100 per cent.” Believing that she was sterile, Mrs. Sard thereafter engaged in sexual relations with her husband. On 11 January 1971, she gave birth by Caesarian section to a normal child. II Here, the appellant contends that the question of whether she consented to the performance of the tubal ligation should have been submitted to the jury. She maintains that the evidence was sufficient to show that, because the doctor not only failed to disclose that the proposed sterilization might not prevent a future pregnancy, but rather told her that it would prevent further pregnancies, her consent to its performance was not “informed.” The appellee contends that the evidence that the appellants signed a hospital form, which specifically stated that the proposed sterilization was not effective in all cases, established, as a matter of law, that the appellants’ consent was “informed.” The trial court, assuming without deciding that the appellants’ consent had to be “informed,” applied the basic principle of contract law that one who signs a contract is presumed to know its contents, nature and consequences, and is bound by its terms.4 He agreed with the appellee that the appellants’ consent was “informed.” *243In my view, the only question decided by the trial judge with reference to the issue of informed consent was whether Mrs. Sard’s signature on the hospital form precluded her recovery.51 believe that this is the only question which need be considered here.61, like the trial court, would assume that the doctrine of informed consent applies in Maryland. I would, however, find that the trial court erred in applying a contract principle associated with arm’s length transactions without considering the fiducial qualities of the doctor-patient relationship. Under the principles of contract law applicable to arm’s length transactions, one who signs a contract having read it or without reading it or having it read to him is presumed to know its contents, nature and consequences and is bound by *244its terms.7 Even an illiterate who executes a contract under a mistake as to its contents is bound.8 The rationale underlying this presumption is that in an arm’s length transaction the relationship ■ between the parties is such that each is independent of the other, has no duty or obligation to the other, and is responsible solely for protecting his own interests. Accordingly, a signatory to a contract in an arm’s length transaction has an obligation to inform himself and is negligent if he fails so to do.9 As stated in Spitze v. Baltimore & Ohio R.R.: 10 ... it would lead to startling results if a person who executes, without coercion or undue persuasion, a solemn release under seal, can subsequently impeach it on the ground of his own carelessness, though at the very time of its execution, he might, had he seen fit, have advised himself fully as to the nature and legal effect of the act he was doing. He cannot, under these circumstances, be heard to complain that an imposition was practised upon him. He cannot invoke his own heedlessness to impeach his solemn release, and then call that heedlessness some one else’s fraud. If he did not know what he was signing, it was his plain duty to inquire. He had no right to act as one who understood what he was doing, unless he intended *245to lead those with whom he was dealing to believe that he did understand the act that he did. Different considerations are involved when there is a fiducial relationship between the parties. In Herring v. Offutt,11 the Court of Appeals quoted with approval Justice Gardozo, then Chief Judge of the New York Court of Appeals: 12 “ Many forms of conduct permissible in a workday world for those acting at arm’s length, are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior. As to this there has developed a tradition that is unbending and inveterate. Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the ‘disintegrating erosion’ of particular exceptions. Only thus has the level of conduct for fiduciaries been kept at a level higher than that trodden by the crowd.” In a fiducial relationship, one of the parties is justifiably dependent to some extent upon the other. Consequently, the dominant party has certain duties and obligations toward the other and is responsible for protecting the other’s interests. Included among those duties and obligations is a duty to disclose any information which it is important for the other party to know.13 The dependent party is not obligated to inform himself and is entitled to rely upon the dominant party to provide him with the information he *246needs.14 Accordingly, the dependent party’s failure to inform himself does not constitute negligence and such a party is not precluded from showing a lack of knowledge of the contents, nature and consequences of a signed document. In short, where there is a fiducial relationship between the parties, the presumption of knowledge of the contents of a written document does not apply.15 As stated in dicta in Bollock v. Bollock: 16 . . . the natural and ordinary presumption is, that where one in the full possession of his mental faculties executes a deed, will, or other instrument, conferring a benefit upon another, by affixing his signature thereto, that his act is free, intentional, and voluntary.. . . But the presumption is rebuttable, and has no application where a beneficiary under the instrument stands in a confidential relation to the donor. (Emphasis added.) In Maryland, a confidential or fiduciary relationship is presumed “whenever two persons stand in such a relation to each other that one must necessarily repose trust and confidence in the good faith and integrity of the other,” 17 and “where the one in whom such confidence is reposed is thereby enabled to exert a dominating and controlling influence over the other.” 18 It has long been recognized implicitly that a physician occupies a position of trust and confidence in relation to his patient.19 Courts in other *247jurisdictions agree.20 Thus, the Court of Appeals of Missouri has said:21 A physician occupies a position of trust and confidence as regards his patient — a fiduciary position. It is his duty to act with the utmost good faith. This duty of the physician flows from the relationship with his patient and is fixed by law — not by the contract of employment. The law’s exaction of good faith extends to all dealings between the physician and the patient. A person in ill health is more subject to the domination and influence of another than is a person of sound body and mind. The physician has unusual opportunity to influence his patient. Hence, all transactions between physician and patient are closely scrutinized by the courts which must be assured of the fairness of those dealings. (Citations omitted.) I am convinced that there are fiducial qualities in the doctor-patient relationship which require the application of principles different from those governing arm’s length transactions. Applying such principles to the instant case would produce a clear result. Under the doctrine of informed consent, it is the fiducial quality of the relationship between the doctor and the patient which imposes upon the doctor an obligation to disclose to the patient all material facts reasonably necessary to provide the basis of an informed intelligent *248decision as to a proposed treatment. Thus, the U.S. Court of Appeals for the District of Columbia Circuit in determining that it is the doctor’s duty to impart information which the patient has every right to expect, including the available therapy alternatives and the goals expectably to be achieved, has said:22 The patient’s reliance upon the physician is a trust of the kind which traditionally has exacted obligations beyond those associated with arms-length transactions. His dependence upon the physician for information affecting his well-being, in terms of contemplated treatment, is well-nigh abject. As earlier noted, long before the instant litigation arose, courts had recognized that the physician had the. responsibility of satisfying the vital informational needs of the patient. More recently, we ourselves have found “in the fiducial qualities of [the physician-patient] relationship the physician’s duty to reveal to the patient-that which in his best interests it is important that he should know.” Similarly, the Supreme Court of California has said:23 . . . the patient, being unlearned in medical sciences, has an abject dependence upon and trust in his physician for the information upon which he relies during the decisional process, thus raising an obligation in the physician that transcends arms-length transactions. It is also the fiducial quality of the relationship which relieves the patient from the obligation to inform himself. If the doctor fails to provide the material facts necessary for an intelligent decision, the patient’s consent to the proposed treatment, being uninformed, is invalid.24 *249If the doctor does provide information to the patient, the patient has the right to rely upon the fact that it is accurate and complete. A patient would not normally expect that a consent form which he was asked to sign would contain material different from that provided by the doctor.25 Because under such circumstances the patient would have no obligation to inform himself, he should not be presumed to know the contents of a signed consent form.26 Here, there was evidence to show that before she decided to undergo a tubal ligation, the doctor told the patient that if the procedure were performed she would not have any more children. Fifteen minutes before the operation, hospital personnel told her that if she wanted to be sterilized she had to sign an authorization form. That form indicated that sterilization is not effective in all cases. In addition, hospital personnel told her that she did not have time to read the form. Under these circumstances, she signed the form without reading it or having it read to her. In the absence of a presumption that she knew the contents of the document she signed, this evidence was sufficient to raise a question as to whether the patient knew that the proposed tubal ligation would not necessarily be effective.27 Again, assuming without deciding that the *250patient’s consent had to be “informed,” and that the doctor had a duty to disclose accurate, relevant information to the patient, that question should have been submitted to the jury. Accordingly, I would reverse and remand for a new trial. Ill The majority fails to consider the question of whether Mrs. Sard’s signature on the hospital form precluded her recovery. Instead, they unnecessarily decide that the doctrine of informed consent is applicable in Maryland and that under that doctrine, a doctor has a duty to make “an adequate disclosure of substantial facts which would be material to the patient’s decision.” They then delineate the scope of the duty to disclose as disclosure of risks of death or bodily harm peculiar to the proposed procedure. They make it plain that there is no need to disclose risks that are likely to be known by the average patient, or that are in fact known by the patient. Moreover, they determine that there is no duty to discuss the relatively minor risks inherent in common procedures when it is common knowledge that such risks are of very low incidence. The majority finds that materiality is “the significance a reasonable person, in what the physician knows or should know is his patient’s position, would attach to the disclosed risk or risks in deciding whether to submit or not to submit to surgery or treatment.” They hold that “a reasonable person, in Mrs. Sard’s position, would attach no material significance to the risk of one chance in fifty that she would derive no benefit from the operation.” Were I to consider the questions of the scope of the doctor’s duty to disclose and whether there was sufficient evidence of a breach of that duty to require submission to the jury, I would reach the opposite result. I agree with the majority that the scope of the doctor’s duty to disclose information to the patient is determined by the patient’s *251need to know. As stated by the Court of Appeals of Washington: 28 The inquiry as to each item of information ... is “Would the patient as a human being consider this item in choosing his or her course of treatment?” I do not believe that these “items of information” are limited to disclosure of risks of physical harm resulting from the operation. I would delineate the scope of the doctor’s duty to disclose differently from the majority by clearly articulating that additional factors are included. Some courts which have considered the scope of the doctor’s duty to disclose have indicated that: .. . before a patient will be deemed to give an informed consent, it may be necessary that he know the alternative methods of treatment available to him and the inherent dangers and possibilities of success of such alternatives.29 (Emphasis added.) Other courts have indicated that the duty to disclose not only requires a doctor to provide adequate information, but also accurate information. They recognize that the duty to disclose prohibits a doctor from giving misleading information. As stated by the Supreme Court of New Mexico:29a A physician who misleads a patient by not only failing to give a warning of reasonable and recognized risks inherent in a treatment after which the patient would have refused the treatment, but by affirmatively assuring her that there are no risks, knowing such statement to be *252untrue, is liable for the harmful consequences of the treatment. Such a failure to disclose, or the giving of an untrue answer as to the probable consequences of a treatment constitutes malpractice; and a doctor who fails to so advise his client, or gives an untrue answer as to such consequences, is liable for malpractice unless his failure to do so comes within one of the exceptions to the rule requiring candor and disclosure. Under the circumstances of this case, a fact issue was presented for determination by the jury . . . (Emphasis added.) I would hold that under appropriate circumstances, the doctor’s duty to disclose requires him to give a patient adequate and accurate information concerning the alternative methods of achieving a therapeutic goal and the relative chance of success of each of those alternatives. Applying this standard to the instant case would produce a clear result. Here, the facts, many of which were not even considered by the majority, show that the appellant was not concerned with the possibility of physical harm resulting from the performance of the tubal ligation, but rather was concerned with the question of what available method of birth control would give her the greatest possibility of achieving total, permanent sterility. The record further shows that before she made her decision, her doctor advised her of three available alternative methods of birth control — pills, an intrauterine device, and a tubal ligation. He failed to advise her of other methods such as vasectomy. Moreover, with respect to two of the three suggested methods, birth control pills and intrauterine devices, he gave her no information. He failed to tell her how successful they might be in preventing pregnancy. With respect to the third method, tubal ligation, he gave her misinformation. He not only failed to tell her that that method was fallible, but rather told her that if that procedure were performed, she would not have any more children. Having provided her with this inadequate and inaccurate information, he told her to go *253home and think about which of the alternatives she wished to pursue. Relying upon this inadequate information and misinformation, she elected the tubal ligation procedure. On the basis of these facts, I cannot conclude, as a matter of law, that the doctor adequately disclosed “substantial facts material to the patient’s decision.” Indeed, on the basis of these facts, I cannot conceive that a reasonable person could reach an intelligent and informed decision as to which of the suggested alternatives should be pursued. I would have concluded that, under the circumstances here, the doctor had a duty to provide the patient with adequate and accurate information concerning available alternative methods of birth control and the relative chance of success of each of those alternatives. I would further have found that the question of whether the doctor breached his duty to disclose should be submitted to the jury. Moreover, I cannot agree with my colleagues that, as a matter of law, under the present circumstances “a reasonable person, in Mrs. Sard’s position, would attach no material significance to the risk of one chance in fifty that she would derive no benefit from the operation.” 301 believe *254that in determining the significance a reasonable person would attach to a risk, one must consider not only its incidence, but also the severity of its potential consequences. As the court in Canterbury stated:31 A very small chance of death or serious disablement may well be significant; a potential disability which dramatically outweighs the potential benefit of the therapy or the detriments of the existing malady may summons discussion with the patient. There is no bright line separating the significant from the insignificant; the answer in any case must abide a rule of reason. .. . The disclosure doctrine, like others marking lines between permissible and impermissible behavior in medical practice, is in essence a requirement of conduct prudent under the circumstances. Whenever nondisclosure of particular risk information is open to debate by reasonable-minded men, the issue is for the finder of the facts. In accord with this rationale, courts in other states have recognized that the jury should determine whether a particular risk should have been disclosed, when there was evidence that that risk was of low incidence but serious consequence.32 *255Here, the record shows that there was a two per cent chance that a person could become pregnant, notwithstanding the performance of a tubal ligation. It also shows that what I regard as serious consequences would flow if a person with Mrs. Sard’s past medical history were to become pregnant again. Pregnancy for any woman entails some physical discomfort. A person with Mrs. Sard’s past medical history would have been told by her own doctor that further pregnancies were medically inadvisable. She would suffer more than the usual physical discomforts of pregnancy. In addition, she would suffer the emotional stress and anxiety created by the fear of serious physical disability or death resulting from the performance of a Caesarian section. Moreover, she would undergo the pain and discomfort associated with that major surgery. Finally, assuming that neither she nor the baby died or were physically harmed, she would have to live with the cost, and, in some instances, the emotional stress of raising an unwanted child. Given the serious consequences which would befall a person in Mrs. Sard’s position, were she to become pregnant, I am unable to conclude, as a matter of law, that in deciding to undergo a tubal ligation such a person would attach no material significance to the fact that she had a two per cent chance of becoming pregnant after that procedure was performed. Under the circumstances here, I believe that the question of whether the doctor made an adequate disclosure of substantial facts which would have been material to the patient’s decision should have been submitted to the jury. Accordingly, I would have reversed. IV The majority additionally unnecessarily decides that the evidence was insufficient to require that the question of whether there was a breach of an enforceable express warranty be submitted to the jury. They hold that an alleged express warranty cannot be enforced unless “1) it was made *256before the operation was performed, and was relied upon by the patient in contracting for the service, or 2) it was supported by a separate consideration.” They say that “in the record in this case there is no evidence of a pre-operative warranty.” They find that “there was no evidence in this case of a separate consideration for the alleged express warranty made after the operation.” They conclude that “there was no enforceable warranty.” Were I to consider the question of whether there was sufficient evidence of a breach of an enforceable express warranty to require submission to the jury, I would reach the opposite result. I agree with the majority that an express warranty made before the operation was performed and relied upon by the patient in contracting for the service can be enforced without a separate consideration.33 I disagree with the majority that here “there is no evidence of a pre-operative warranty.” In Maryland, the question of whether a doctor’s representation as to the effectiveness of a proposed therapeutic procedure constitutes an enforceable express warranty or is nothing more than an “ordinary medical reassurance” has not been considered. Some courts have recognized that such representations can constitute express warranties.34 Other courts which have considered the question of whether a particular representation is a “warranty” or a “reassurance” have recognized that it involves a question of fact which ordinarily should be submitted to the jury.351 agree. Here, the record shows that before Mrs. Sard decided to undergo the proposed tubal ligation, the doctor told her that if that procedure were performed she would not have any *257more children.36 She made it plain to her doctor that her reason for electing and undergoing the proposed tubal ligation was the fact that it would result in total permanent sterility. Had she known that the proposed procedure was fallible, she would not have agreed to have the tubal ligation performed.37 This evidence is sufficient to show that here the doctor made an express promise to effect a specific result which was relied upon by Mrs. Sard in contracting for the tubal ligation and before the operation was performed. It was, therefore, sufficient to support a finding that there was a pre-operative express warranty. The issue should have been submitted to the jury. Accordingly, I would have reversed. . Katz v. Holsinger, 264 Md. 307, 311, 286 A. 2d 115, 118 (1972); Holloway v. Hauver, 22 Md. App. 303, 319, 322 A. 2d 890, 898-99 (1974). . The majority opinion indicates that there was no evidence to show jthat before the operation the doctor told Mrs. Sard that the proposed tubal ligation would result in permanent sterilization. The record shows that, in both the pre-trial deposition and at trial, Mrs. Sard testified that before she decided to undergo the proposed tubal ligation, the doctor told her that if *241that procedure were performed, she would not have any more children. More particularly, the record shows that at the trial the following colloquy took place: Q. Now also [in your deposition did you say], “Q. Now did Dr. Hardy or any other doctor you mentioned you have consulted or having been examined by or having been operated upon prior to your decision to be sterilized give you any indication as to the continuing effect of having further children?” Your answer, “Well, Dr. Hardy, all he told me was I would not have no more, I didn’t have to worry about having any more.” A. That’s what he told me. Q. He told you before your operation and before your decision to have the sterilization that you would not have any more children? A. Yes, he did. . The majority states that the appellants “do not complain that the operation should not have been performed.” The appellants’ pleadings support an inference to the contrary. They state, in pertinent part: That at all times herein mentioned, said Defendant was negligent in failing to inform the Plaintiff Katie Sue Sard that said surgical procedure and sterilization of her person was not absolute in nature and that a possibility did exist that she could thereafter become pregnant and that the actions and conduct of the Defendant, in failing to properly notify and inform said Plaintiff so that she might declare her decision in accepting or rejecting said surgical procedure, without full information or notice as to the potential results thereof, proximately brought about the Plaintiff s pregnancy and the subsequent birth of her fifth [sic] child.” (Emphasis added.) The majority also finds that Mrs. Sard “produced no evidence to show that she would have refused the operation if she had known that there was a chance of failure.” Mrs. Sard’s testimony establishes that she was primarily concerned with not having any more children. She objected to the other alternatives and chose the tubal ligation because she was told and believed that that procedure would prevent future pregnancies. Viewed in the light most favorable to the appellant, this testimony supports an inference that had Mrs. Sard been told that the tubal ligation might fail to sterilize her. she would have rejected it. Cobbs v. Grant, 23 Cal.App.3d 236, 100 Cal. Rptr. 98, 102 (1972); Natanson v. Kline, 187 Kan. 186, 354 P. 2d 670, 673-74 (1960); DeBarth v. Swedish Hosp. Medical Center, 81 Wash. 2d 12, *242499 P. 2d 1, 12-13 (1972). See Hamilton v. Hardy, 549 P. 2d 1099, 1105 (Colo. App. 1976). . See n. 7 below. . At the trial, the doctor moved for a directed verdict. During argument on the motion, the parties, like the trial judge, assumed that the doctrine of informed consent applied in Maryland. They disagreed as to the extent of the doctor’s duty to disclose. Mrs. Sard contended that the doctor was required to give her accurate information concerning available alternatives and their probability of success. The doctor asserted that he was required only to inforni her of available alternatives and possible physical risks “peculiarly associated with the performance of the procedure.” While the court expressed the view, in passing, that the patient had to be informed of even a one per cent chance of failure, its decision to grant the motion for directed verdict was not ultimately based either upon the finding that the doctor had a duty to disclose the success rate of the operation, or upon the fact that there was insufficient evidence to show that the doctor violated that duty. . Maryland Rule 1085. While it has long been recognized in Maryland that a doctor must obtain his patient’s consent before undertaking a therapeutic procedure, the question of whether that consent must be “informed” has not been explicitly determined by the Court of Appeals. Questions such as the scope of the duty to disclose, whether that scope is to be determined by the standards of the §rofession, thus requiring expert opinion evidence or may be etermined by a jury without the aid of expert opinion, whether that scope is to be determined by the objective “reasonable person” standard or a subjective standard, and the scope and extent of a doctor’s privilege not to disclose, have not been resolved by that Court. New areas of the law presently involve moi’e complexity and controversy than that of informed consent. See generally, Canterbury v. Spence, 464 F. 2d 772 (D.C. Cir. 1972); Natanson v. Kline, 186 Kan. 393, 350 P. 2d 1093 (1960); Informed Consent in Medical Malpractice, 55 Calif.L.Rev. 1396 (1967); Informed Consent — A Proposed Standard for Medical Disclosure, 48 N.Y.U. L.Rev. 548 (1973); 75 Harv.L.Rev. 1445 (1962). In my view, such questions should be resolved by this Court only when absolutely necessary. . Merit Music v. Sonneborn, 245 Md. 213, 220, 225 A. 2d 470, 474 (1965); Rossi v. Douglas, 203 Md. 190, 199, 100 A. 2d 3, 7 (1953); Western Maryland Dairy Corp. v. Brown, 169 Md. 257, 262, 181 A. 468, 471 (1935) (dictum); Spitze v. Baltimore & Ohio R.R., 75 Md. 162, 171, 23 A. 307, 310 (1892); Wolfe v. Madison Nat’l Bank, 30 Md. App. 525, 531, 352 A. 2d 914, 917 (1976). See Canaras v. Lift Truck Services, 272 Md. 337, 344, 322 A. 2d 866, 870 (1974). . Rossi, supra, 203 Md. at 199, 100 A. 2d at 7; Wilson v. Pritchett, 99 Md. 583, 593, 58 A. 360, 362 (1904); Spitze, supra, 75 Md. at 169-71, 23 A. at 309-10; Serdenes v. Aetna Life Ins. Co., 21 Md. App. 453, 461-62, 319 A. 2d 858, 863 (1974). . Merit Music, supra, 245 Md. at 224-25, 225 A. 2d at 474-75; Boyle v. Rider, 136 Md. 286, 291, 110 A. 524, 526 (1920); Smith v. Humphreys, 104 Md. 285, 290-91, 65 A. 57, 59 (1906); Spitze, supra, 75 Md. at 171, 23 A. at 310. . 75Md. 162, 171, 23 A. 307, 310 (1892). . 266 Md. 593, 597, 295 A. 2d 876, 879 (1972). . Meinhard v. Salmon, 249 N. Y. 458, 164 N. E. 545, 546 (1928). . Herring, supra, 266 Md. at 597, 295 A. 2d at 879; Hall v. Hall, 147 Md. 184, 191-92, 127 A. 858, 861 (1925); Williams v. Williams, 63 Md. 371, 397-98 (1885); Todd v. Grove, 33 Md. 188, 192 (1870); see also Gingell v. Backus, 246 Md. 83, 92, 227 A. 2d 349, 353 (1967). . Desser v. Woods, 266 Md. 696, 709, 296 A. 2d 586, 593 (1972); Herring, supra, 266 Md. at 600-01, 295 A. 2d at 880-81; see also Merchants Mortgage Co. v. Lubow, 275 Md. 208, 215-16, 339 A. 2d 664, 669 (1975). . Desser, supra, 266 Md. at 708-09, 296 A. 2d at 593; Farmer v. O’Carroll, 162 Md. 431, 444-46, 160 A. 12, 17 (1932); Cumberland Coal & Iron Co. v. Parish, 42 Md. 598, 606-07 (1875); Todd, supra, 33 Md. at 195-96. In addition to establishing the inapplicability of the presumption of knowledge, these cases further shift the burden of proof on the question of knowledge from the dependent party to the dominant party. . 169 Md. 407, 410-11, 182 A. 317, 318 (1935). . Gaver v. Gaver, 176 Md. 171, 185, 4 A. 2d 132, 139 (1939). . Tracey v. Tracey, 160 Md. 306, 318, 153 A. 80, 85 (1931). . Williams, supra, 63 Md. at 404 (dissenting opinion); Todd, supra, 33 Md. at 194, . Canterbury, supra, 464 F. 2d at 782; Sheets v. Burman, 322 F. 2d 277, 279 (5th Cir. 1963); Lilly v. Comm’r of Internal Revenue, 188 F. 2d 269, 271 (4th Cir. 1951), rev’d on other grounds, 343 U. S. 90 (1952); Hammonds v. Aetna Casualty & Surety Co., 243 F. Supp. 793, 802-03 (N.D. Ohio 1965); Berkey v. Anderson, 1 Cal.App.3d 790, 82 Cal. Rptr. 67, 77-78 (1970); Stacey v. Pantano, 177 Neb. 694, 131 N.W.2d 163, 165 (1964); Demers v. Gerety, 87 N. M. 52, 529 P. 2d 278, 280 (1974); Allison v. Blewett, 348 S.W.2d 182, 184 (Tex.Civ.App. 1961); Hunter v. Brown, 4 Wash. App. 899, 484 P. 2d 1162, 1166 (1971); Mason v. Ellsworth, 3 Wash. App. 298, 474 P. 2d 909, 916 (1970); 41 Am. Jur., Physicians & Surgeons, § 74; see Davis v. Arizona State Dental Board, 57 Ariz. 239, 112 P. 2d 870, 877 (1941); Mattingly v. Sisler, 198 Okl. 107, 175 P. 2d 796, 799 (1946); Alexander v. Knight, 197 Pa. Super. 79, 177 A. 2d 142, 146 (1962); Hodge v. Shea, 252 S. C. 601, 168 S.E.2d 82, 84, 87 (1969). . Moore v. Webb, 345 S.W.2d 239, 243 (Mo. 1961). . Canterbury, supra, 464 F. 2d at 782. . Cobbs v. Grant, 104 Cal. Rptr. 505, 513, 502 P. 2d 1, 9 (1972). . Canterbury, supra, 464 F. 2d at 783; Dunham v. Wright, 423 F. 2d 940, 943-44 (3d Cir. 1970); Berkey, supra, 82 Cal. Rptr. at 77; Salgo v. Leland Stanford Jr. University Bd. of Trustees, 154 Cal.App.2d 560, 317 P. 2d 170, *249181 (1957); Natanson v. Kline, 186 Kan. 393, 350 P. 2d 1093, 1106-07 (1960); Getchell v. Mansfield, 260 Ore. 174, 489 P. 2d 953, 954-55 (1971); Cooper v. Roberts, 220 Pa. Super. 260, 286 A. 2d 647, 649 (1971); Gray v. Grunnagle, 423 Pa. 144, 223 A. 2d 663, 674 (1966); Ball v. Mallinkrodt Chemical Works, 53 Tenn. App. 218, 381 S.W.2d 563, 567 (1964); Holt v. Nelson, 11 Wash. App. 230, 523 P. 2d 211, 216 (1974). . Campbell v. Oliva, 424 P. 2d 1244, 1251 (6th Cir. 1970). . See Campbell, supra, 424 F. 2d at 1251; Gray, supra, 223 A. 2d at 674. See also n. 13 above. The cases there cited establish not only that where there is a fiducial relationship, a presumption of knowledge of the contents, nature and consequences of a signed document is inapplicable, but also that the burden of proof on the question of knowledge is shifted. The Court of Appeals of Maryland has placed the burden of proof in malpractice actions upon the patient. State, ex rel. Janney v. Housekeeper, 70 Md. 162, 171, 16 A. 382, 384 (1889). I wish to make it clear that I would not here incorporate into malpractice actions all of the ramifications of fiduciary law. While I would hold that under the present circumstances a presumption of knowledge is inapplicable, I would not shift the burden of persuasion on the question of knowledge from the patient to the doctor. See Demers, supra, 529 P. 2d at 280. . It is unnecessary to consider whether the husband knew or should *250have known the contents of the consent form. The wife’s consent, not her husband’s, was necessary. Housekeeper, supra, 70 Md. at 170, 16 A. at 384. . Miller v. Kennedy, 11 Wash. App. 272, 522 P. 2d 852, 860 (1974). , Dunham, supra, 423 F. 2d at 944. See Canterbury, supra, 464 F. 2d at 782, n.27; Russell v. Harwick, 166 So. 2d 904, 905 (Fla. 1964); Bang v. Charles T. Miller Hosp., 251 Minn. 427, 88 N.W.2d 186, 190 (1958); Gray, supra, 223 A. 2d at 669-70; Miller, supra, 522 P. 2d at 860; Hunter, supra, 484 P. 2d at 1167. See also, Powell, “Consent to Operation,” 21 Md.L.Rev. 189, 192-93 (1961); Louisell & Williams, Medical Malpractice § 22.01 (1976). . Woods v. Brumlop, 71 N. M. 221, 377 P. 2d 520, 525 (1962). See Berkey, supra, 82 Cal. Rptr. at 77, . In reaching their conclusion, the majority considered three factors: 1) that “the physical harm to the patient was zero;” 2) “that there was one chance in fifty that the benefit would be zero;” 3) that Mrs. Sard "produced no evidence to show that she would have refused the operation if she had known that there was a chance of failure.” The fact that physical harm resulting from the operation was zero is irrelevant. The question here is not whether the doctor violated a duty to disclose risks of bodily harm peculiar to the proposed procedure, but rather whether the doctor violated a duty to disclose alternative methods of treatment and their success rates. Moreover, while physical harm to the patient resulting from a breach of the duty to disclose is relevant to the issue of proximate cause and damages, it has no bearing on the issues of the scope of the duty to disclose and the breach of that duty. Mrs. Sard did, in my view, produce evidence that she would not have consented to the operation had she known that there was a chance of failure. See n.3 above. Even if she had failed to produce such evidence, that fact would be irrelevant. Evidence that disclosure would not have resulted in a decision against the proposed procedure, like evidence of physical harm resulting from a failure to disclose risks, is relevant to the issue of proximate cause, and has no bearing on the issues of the scope of the duty to disclose and the breach of that duty. See Canterbury, supra, 464 F. 2d at 790-91. . Canterbury, supra at 788. . Canterbury, supra, 464 F. 2d 772 (1% risk of paralysis); Cobbs, supra, 104 Cal. Rptr. 505 (5% risk of injury to spleen); Berkey, supra, 82 Cal. Rptr. 67 (“rare and remote” incidence of foot drop); Hamilton v. Hardy, 549 P. 2d 1099 (Colo. App. 1976) (“possible relationship” between the use of oral contraceptives and thromboembolism); Coleman v. Garrison, 349 A. 2d 8 (Del. Supr. 1975) (l%-2% chance of pregnancy after a tubal ligation); Fogal v. Genesee Hospital, 41 A.D.2d 648, 344 N.Y.S.2d 552 (1973) (“rare and unlikely” possibility of necrotic injuries); Cooper, supra, 286 A. 2d 647 (1 in 2500 risk of perforation of stomach); Hunter, supra, 484 P. 2d 1162 (“minimal risk1’ that “dermabrasion” might not be successful in removing dark pigmentation spots from patient’s face); Bowers v. Talmage, 159 So. 2d 888 (Fla. 1963) (3% risk of paralysis). Contra, Starnes v. Taylor, 272 N. C. 386, 158 S.E.2d 339 (1968) (¼ of 1% risk of perforation of esophagus); Mason v. Ellsworth, 3 Wash. App. 298, 474 P. 2d 909 (1970) (¼ to ¾ of 1% risk of perforation of esophagus). It is interesting to note that in Cobbs, supra, 104 Cal. Rptr. 505, and Wilkinson v. Vesey, 295 A. 2d 676 (R.I.1972), upon which the majority relies *255to establish the standard for the duty to disclose, the question of adequate disclosure was submitted to the jury. In Cobbs, there was a 5% possibility of injury to the spleen. . Guilmet v. Campbell, 385 Mich. 57, 188 N.W.2d 601, 605-607 (1971). Contra, Coleman, supra, 349 A. 2d at 11; Rogala v. Silva, 16 Ill.App.3d 63, 305 N.E.2d 571, 573 (1973). . Custodio v. Bauer, 251 Cal.App.2d 303, 59 Cal. Rptr. 463, 471 (1967); Vilord v. Jenkins, 226 So. 2d 245, 246 (Pla. App. 1969). See 41 Am. Jur., Physicians & Surgeons § 105. . Crawford v. Duncan, 61 Cal. App. 647, 215 P. 573, 574 (1923); Guilmet, supra, 188 N.W.2d at 606; Hawkins v. McGee, 84 N. H. 114, 146 A. 641, 643 (1929). See Perin v. Hayne, 210 N.W.2d 609, 616 (Iowa 1973). . See n.2 above. . See n.3 above.

2013-10-30 06:32:40.766354+00

Watkins

152 F.Supp. 506 (1957) INLAND MUTUAL INSURANCE COMPANY, a corporation, Plaintiff, v. PEERLESS INSURANCE COMPANY, a corporation, Defendant. No. 840. United States District Court S. D. West Virginia, Huntington Division. June 26, 1957. *507 L. E. Woods, Jr., and C. F. Bagley, Jr., Campbell, McNeer & Woods, Huntington, W. Va., for plaintiff. Robert W. Lawson, Jr. and Charles W. Yeager, Steptoe & Johnson, Charleston, W. Va., for defendant. HARRY E. WATKINS, District Judge. Inland Mutual Insurance Company, hereafter called Inland, has paid $27,500 in settlement of certain litigation and has incurred expenses totalling $11,560.99 in connection therewith. Under the provisions of a reinsurance treaty between the parties, Inland, a West Virginia corporation, seeks reimbursement for two-thirds of this expenditure, or $26,040.66, from Peerless Insurance Company, a New Hampshire corporation, hereafter called Peerless. The case primarily turns upon a construction of the *508 reinsurance treaty, and the issues presented to this Court, sitting without a jury, are very narrow: (1) In an action in the Circuit Court of Fairfax County, Virginia, against an insured of Inland, did Inland keep Peerless fully informed of the proceedings in the case, as required by the reinsurance treaty, and to what extent did Peerless participate in the negotiations surrounding that case? (2) Was attorney Charles Pickett, who represented Inland in the defense of the insured in that action, also the agent of Peerless? (3) Does this reinsurance agreement cover a loss of this type, where Inland has paid its insured $27,500 over and above the amount of insurance coverage, as damages for the failure of Inland's agents to use due diligence to settle a case against an insured? Under the evidence of this case, and the law applicable thereto, I find that these questions must be answered in the affirmative, and that Inland must prevail in this action. Findings of Fact On March 28, 1951, while the reinsurance agreement between these parties was in full force and effect, the plaintiff issued a vehicle liability policy to Lota H. Yeatts, T/A Yeatts Transfer Company, of Alta Vista, Virginia, hereafter referred to as Yeatts, or insured. This policy was in the form of the National Standard Automobile Liability Policy, Non-Assessable, in use at that time. Under the terms of that policy, Inland agreed, inter alia, to indemnify Yeatts against liability for personal injuries arising out of the operation of the insured's vehicles to the extent of $15,000 for injuries to one person in any one accident. Pursuant to the reinsurance treaty, Inland retained $5,000 of this coverage and ceded to Peerless the excess, forwarding to Peerless the appropriate proportion of the premium paid by Yeatts. On April 20, 1951, while both the policy described above and the reinsurance treaty between these parties were in full force and effect, a collision occurred in Fairfax County, Virginia, between a truck owned by Yeatts and an automobile driven by one John J. Arms, in which Arms was seriously injured. Inland received a preliminary notice of this accident on April 23, 1951, from the Nichols Adjusting Company, of Washington, D. C., to whom the truck driver had reported the accident. Inland immediately set aside $1,500 on its books as a reserve for the case. A week later, upon receiving a more detailed report from the Nichols agency, Inland increased its reserve to $3,500. After further investigation reports from the Nichols agency, as well as from other sources, on September 21, 1951, Inland increased its reserve to $7,500, and for the first time notified Peerless of the accident, using a "Preliminary Loss Advice" form provided by Peerless. Thereafter, until February 4, 1952, when Arms filed suit against Yeatts demanding $125,000 damages, six letters passed between Inland and Peerless regarding this accident. In addition to the correspondence, on October 4, 1951, Kellogg P. Sherwood, the assistant secretary of Peerless who handles reinsurance claims, went to the home office of Inland in Huntington, West Virginia, and examined, discussed, and made notes on the Yeatts-Arms collision file, along with some other cases. After Arms filed suit, Peerless was advised by Inland of all the pertinent developments of the case, through several letters and through another visit of Sherwood to Inland's home office. A reading of this correspondence discloses that medical reports, investigation reports, and opinions of counsel, were furnished Peerless. On February 14, 1952, Inland informed Peerless by letter that Inland had retained the law firm of Barbour, Garnett, Pickett & Keith, of Fairfax, Virginia, to handle the case. While Peerless disagreed with Inland as to the value of the case and whether there was any liability on the part of the defendant, Peerless did not secure independent counsel to participate in the case, although both parties concede that Peerless could have done so, under the terms of the reinsurance *509 treaty, if Peerless were not satisfied with the manner in which the attorneys retained by Inland handled the case. Until the date of trial, October 29, 1952, there were no negotiations for settlement of the case, as Arms' attorneys were demanding $60,000 and Inland and Peerless considered that sum much too high. The insured employed attorney Robert J. McCandlish, Jr., of Fairfax, Virginia, as its counsel, and he joined Charles Pickett, of the firm retained by Inland, in defending the case. On the morning of the second day of the trial, after all the evidence was in, Arms' attorney offered to accept $17,500 in full settlement of the action. That figure was in excess of the policy limits of the insured's coverage, so Yeatts agreed to put up $2,500 of this sum if Inland would pay the entire policy coverage of $15,000. McCandlish conveyed this information to Pickett, indicating that he felt the offer should be accepted, and stated to Pickett that if Inland rejected the offer, Yeatts would look to Inland to pay any amount by which the judgment might exceed the $15,000 policy limits. Pickett telephoned Harold G. Talbott, claims supervisor of Inland, at Inland's home office, and advised Talbott of these developments. Pickett stated at that time that he felt that the insured would prevail in the case, or at least the verdict would be low in amount, so that he would be reluctant to recommend paying more than $7,500 in settlement of the Arms' litigation, and was of the opinion that even that sum would be a gift. Talbott discussed the matter with his superiors, who told him to rely upon the advice of his trial attorney, since Pickett was more familiar with the progress of the trial than anyone at the home office. Talbott then called Sherwood, in New York City, and related to him substantially all that had happened. Sherwood consented to the $7,500 figure and Talbott notified Pickett to offer that sum. Pickett offered Arms' attorney $7,500, which was rejected; the case continued and the jury returned a verdict of $75,000, upon which judgment was entered and appeal denied. Inland paid Yeatts $15,000, and was reimbursed by Peerless in the amount of $10,000. On January 6, 1954, the insured instituted an action against Inland which was removed to the United States District Court for the Eastern District of Virginia, Richmond Division. This action sought $160,000 for damages allegedly sustained as a result of the negligence and bad faith of Inland and its agents in not accepting the $17,500 offer of Arms to settle his action against Yeatts. The alleged damages consisted of $60,000, representing the difference between the $15,000 paid by Inland to Yeatts and the $75,000 judgment against Yeatts, plus $100,000 alleged damage to the business of the insured by reason of attachments levied against the insured's trucks by Arms in an effort to obtain satisfaction of his $75,000 judgment. Peerless was informed by Inland of this action, but Peerless refused to participate in the defense except for offering suggestions to Inland. After a motion for summary judgment was denied, and the case was set for a jury trial, Inland negotiated an agreement with Yeatts and Arms whereby Inland paid Yeatts $27,500 in full settlement of insured's suit against Inland, which sum Yeatts paid to Arms along with an additional $15,000, in full settlement of Arms' judgment against Yeatts. These payments were in addition to the $15,000 paid by Inland under its policy. In its complaint in the instant action, Inland asked for full reimbursement from Peerless of the $27,500 paid Yeatts, but at the trial Inland reduced its claim and now seeks two-thirds of that sum, as well as two-thirds of the expenses incurred in the two cases. In its answer, and at the trial, Peerless expressed a willingness to pay its two-thirds share of the expenses in the case of Arms v. Yeatts, when informed of the amount thereof, but denied liability as to the other claims of Inland. Plaintiff has introduced Exhibit No. 19 listing the expenses it incurred in the case of Arms *510 v. Yeatts, indicating a total of $1,695.37, but one item listed thereon in the amount of $200 includes a notation that the insured paid $50 of that sum while Inland paid only $150. Defendant's Exhibit No. 16 substantiates the fact that the insured paid $50 of the $200 figure, so it appears that Inland's actual expenses in the case of Arms v. Yeatts amounted to $1,645.37. Plaintiff's Exhibit No. 20 lists expenses incurred in the case of Yeatts v. Inland, totalling $9,915.62. In summary plaintiff seeks two-thirds of $27,500, $1,645.37 and $9,915.62, which aggregate $39,060.99, of which two-thirds is $26,040.66. Looking at the evidence as it developed in 1951 and 1952, I find that Inland kept Peerless fully and adequately informed of the significant developments in the case of Arms v. Yeatts. A costly error was made in evaluating the Arms claim, but Peerless cannot now be allowed to avoid its share of the loss by pointing out errors of human judgment through the use of hindsight. Peerless stresses the point that the collision of April 20, 1951, was not reported to it until September 21, 1951, although this was a case involving $75,000. However, as the facts trickled into Inland's home office during the intervening five months, in the judgment of Inland's experienced claims men the case was not one involving over $5,000 so that Peerless should be informed. When it became apparent to Inland's officials that the injuries were quite serious, then Peerless was advised of the claim. Reporting the claim to the reinsurer involved human judgment which, when exercised without the benefit of hindsight such as Peerless now uses, I cannot condemn as insufficient. The record is replete with testimony adduced by the defendant to the effect that in 1951 and 1952, Sherwood of the Peerless Company insisted that Arms v. Yeatts was a dangerous, potentially costly case, but he could not convince Inland's officers of that fact. With such prescience on the part of Sherwood, it is difficult to see how Peerless can now say that it was not sufficiently informed regarding the details of this accident to make a proper decision concerning payment of the full coverage. Although Peerless did not take part in investigating the accident, or in selecting the law firm to handle the defense of the case, these actions were carried out by Inland for the mutual benefit of Inland and Peerless, as both companies were concerned with a potential loss. The negotiations for settlement of Arms v. Yeatts were carried on through Inland's attorney, Pickett, but again the action taken was for the mutual benefit of both insurance companies. When Pickett reported to Talbott that the case could be settled for $17,500, Inland's officers conferred among themselves and acceded to Pickett's suggestion that not over $7,500 be offered. Pickett was a competent and experienced lawyer in such matters. But before issuing instructions to Pickett, Talbott felt it necessary to call Sherwood because it was Peerless's money that was at stake; whether $7,500 or $17,500 were paid in settlement, only $5,000 of it would come from Inland, for that was Inland's retention under the reinsurance treaty. There is a conflict as to the exact conversation between Talbott and Sherwood on October 30, 1952, even though each man dictated a memorandum of the telephone call at that time, but it is clear that Sherwood was made to understand that the Arms case could probably be settled if the insurance companies would pay the full policy coverage. Sherwood left the matter up to Talbott, and tacitly agreed with a maximum offer of $7,500. Under this evidence, I find that Peerless actively participated in the negotiations for settlement of the Arms litigation. It was Peerless which stood to gain if the $7,500 offer were accepted by Arms; the rejection of Arms' $17,500 offer was made for Peerless's benefit, with Sherwood's knowledge and consent. Peerless urges that Inland had a definite interest in keeping the Arms loss down to $7,500 because of a provision in the reinsurance agreement that Inland was to receive a 15 per cent contingent *511 commission on net profits accruing to Peerless on business covered by the reinsurance contract. Peerless has introduced no evidence, however, from which the Court can find that a savings of $7,500 on this one loss would have resulted in a commission to Inland of any amount; there could have been a net loss in that year which would not have been eradicated by even a $7,500 savings. There is no evidence in this case to show that Inland had anything to gain by rejecting the $17,500 offer. In fact, Inland would have been responsible for an additional one-third of the $1,645.37 costs and expenses of the trial if the $7,500 offer had been accepted by Arms, for expenses were paid by the companies in direct proportion to the amount of loss paid and if $7,500 were paid Inland's $5,000 would constitute two-thirds of the loss, whereas when $15,000 was paid Inland's portion was only one-third of the loss. Conclusions of Law The pertinent provisions of the reinsurance treaty of August 6, 1947, between these parties are these ("Company" is Inland; "Reinsurer" is Peerless): "Article III "Liability of Reinsurer: "The actual payment by the Company of any loss shall be a condition precedent to any recovery under this Agreement, and subject to such condition, the liability of the Reinsurer shall follow that of the Company in every case and shall be subject in all respects to all the general and special stipulations, clauses, waivers and modifications of the Company's policy, binder or other undertaking, and any endorsements thereon. "No error or omission in reporting any risk reinsured or marked to be reinsured shall invalidate the liability of the Reinsurer; but the reporting of reinsurance not authorized by this Agreement or by special acceptance hereunder shall not bind the Reinsurer except for the return of premiums paid therefor." "Article IV "Claims: "The Company will advise the Reinsurer promptly of all claims and any subsequent developments pertaining thereto, which may in the Company's opinion develop into losses involving reinsurance hereunder. Inadvertent omission in dispatching such advices shall in no way affect the liability of the Reinsurer under this Agreement, provided the Company informs the Reinsurer of such omission or oversight promptly upon its discovery. "When so requested, the Company will afford the Reinsurer an opportunity to be associated with the Company, at the expense of the Reinsurer, in the defense or control of any claim or suit or proceeding involving this reinsurance, and the Company and the Reinsurer shall cooperate in every respect in the defense of such suit or claim or proceeding. "All court costs and expenses, including interest on judgments, paid by the Company, (excluding salaries of permanent officials and employees of the Company) connected with any resistance to, investigations of, or negotiations concerning settlement of such claims, shall be apportioned in proportion to the respective interests as finally determined. * * *" Under the policy issued by Inland to Yeatts on February 23, 1951, Inland agreed: "I Coverage A—Bodily Injury Liability "To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the *512 ownership, maintenance or use of the automobile." The policy further states: "As respects the insurance afforded by the other terms of this policy under coverages A and B the company [Inland] shall: "(a) defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company may make such investigation, negotiations and settlement of any claim or suit as it deems expedient; * * * "The amounts incurred under this insuring agreement, except settlements of claims and suits, are payable by the company in addition to the applicable limit of liability of this policy." Peerless takes the position that its liability under the reinsurance agreement was limited to the dollar coverage of the policy issued the insured. In the Yeatts policy, the limit of liability for personal injury was $15,000, of which Inland retained $5,000; Peerless claims that when it paid $10,000 on the Yeatts policy, it completed all its obligations under the reinsurance agreement (except paying two-thirds of the expenses of the Arms suit, which Peerless admits it owes). Inland, however, points to Article III of the reinsurance contract quoted above, where it states that the liability of Peerless follows that of Inland in every case and shall include all undertakings of Inland with respect to every policy issued and covered by the reinsurance agreement. Under the policy issued to Yeatts, Inland incurred obligations— (a) To indemnify Yeatts for personal liability loss up to $15,000, (b) To defend any suit against the insured, and reserved the right to make investigations, and to negotiate and make settlement of all claims. Both Inland and Peerless did undertake to defend and investigate, and to negotiate and control the settlement of the Arms claim. The courts in many jurisdictions have construed the right to negotiate and settle claims, coupled with the right reserved in the policy to control the case, as imposing an obligation on the insurer to use reasonable diligence and good faith in its settlement negotiations. Inland says that its expenditure of $27,500 in settlement of the Yeatts-Inland case, plus $9,915.62 expenses connected with the suit, was an expense under undertaking (b) above, and according to the express terms of the Yeatts policy, as quoted above, not subject to the $15,000 limit of the policy. Inland says that the liability arising out of the obligation of the insurer to use due diligence and good faith in its settlement negotiations becomes the liability of the reinsurer, Peerless, and once payment has been made by Inland in settlement of that liability, the obligation of the reinsurer, Peerless, becomes fixed. To support this position, Inland cites American Casualty Co. of Reading, Pa. v. Howard, 4 Cir., 1951, 187 F.2d 322. In that case the insurer took the position that once it had paid its maximum coverage of $5,000 on a liability policy, it had no further obligation to defend further litigation. The court held in an opinion written by Judge Dobie that there was no merit in the insurer's contention, that even though the insurer had paid the full coverage of $5,000, there remained an obligation by insurer to defend subsequent litigation, and pay the costs and expenses arising out of that litgation. It is said that this case clearly holds that the obligation of the insurer is not limited to the payment of the maximum coverage of a policy, and that such insurer has other obligations under the policy which can be quite expensive. It is urged that if there had been a reinsurance agreement in the case just cited, the reinsurer would have been required to pay its proportionate part of the additional expense involved. *513 No cases have been cited by counsel, nor has the Court found any, relating to the question of whether payment by a reinsured for negligence and bad faith in settling a claim falls within the coverage of a reinsurance contract. The courts have consistently held that a liability insurer which undertakes to defend, investigate, negotiate and settle any claim or suit against an insured, and assumes control of the right of settlement of claims against the insured, may become liable in excess of its undertaking under the policy provisions if it fails to exercise "good faith" in considering offers to compromise the claim for an amount within the policy limits. 40 A.L.R.2d 168, 178. Applying the unambiguous language of Article III, above, to Inland's undertakings under the Yeatts policy, the conclusion is inescapable that Peerless's liability followed Inland's, including liability to defend, investigate, negotiate and settle any claim or suit against the insured. Defendant's contention that all it was required to do was pay $10,000 on the Yeatts loss is untenable. Contrary to the contentions of Peerless, there is nothing in the reinsurance agreement which limits Peerless's liability to $15,000 on the Yeatts policy. Combining the duties of the two insurance companies under the reinsurance treaty and the reinsured Yeatts policy, I conclude that in consideration for the premiums paid by Yeatts (65% of which went to Peerless and 35% to Inland), the two companies undertook the following obligations: Inland was required to stand ready to pay up to $5,000 to Yeatts for personal injury liability; Peerless was required to stand ready to pay an additional sum, up to $10,000; the two companies were required to defend, and allowed to investigate, negotiate and settle any claim or suit against Yeatts, and share the costs of such action (except for salaries of their own officials and employees) according to the interests of the two companies as finally determined when a claim was paid. Article III of the reinsurance contract further provides that actual payment by Inland is a condition precedent to reimbursement from Peerless. Inland has shown a payment of $27,500 to Yeatts, which Peerless concedes was paid in good faith settlement of the case of Yeatts v. Inland, and has shown payment of $9,915.62 in counsel fees and other expenses relating to that case. Inland's liability to Yeatts arose out of the negligence and bad faith of attorney Pickett, of Talbott and his superiors at Inland, and of Sherwood representing Peerless, in failing to settle a claim against an insured. Under the language of the reinsurance treaty, the payment of $37,415.62 by Inland is an expense arising out of the case of Arms v. Yeatts and must be shared by the parties according to their interests in that case, just as the $1,645.37 expenses for which Peerless admits liability. Peerless having paid $10,000 in the Arms case, while Inland's share was $5,000, Peerless must reimburse Inland for two-thirds of $37,415.62, as well as two-thirds of $1,645.37, or a total of $26,040.66. Peerless takes the further position that attorney Charles Pickett was solely the agent of Inland, and any negligence or bad faith on his part could not bind Peerless in any way, but there is no merit in this contention. While Peerless had no part in the employment of Pickett, under the second paragraph of Article IV of the reinsurance treaty, as quoted above, Peerless could have employed independent counsel if it wished and joined in the defense of the Arms v. Yeatts action. Its failure to employ other counsel ratified Inland's employment of Pickett, and Pickett acted for the mutual benefit of Inland and Peerless, so that any negligence or bad faith on his part was the negligence and bad faith of both of his principals, Inland and Peerless. Pickett's fee is included in the $1,645.37 expenses for which Peerless admits two-thirds liability, which is an indirect admission by Peerless that Pickett's services were rendered *514 in Peerless's behalf. As stated in the leading treatise on insurance law, 13 Appleman's Insurance Law & Practice, § 7698, p. 480: "An agreement by the reinsured to employ counsel and defend the claim creates merely an agency, and not a trust in equity; and the reinsuring companies, by allowing the defense to proceed, make the attorneys so employed their own." A similar statement of the law is found in 46 C.J.S. Insurance § 1231(b), pp. 214-215: "* * * if reinsurer fails, after notice, to participate in the defense of the action, reinsured, by operation of law, becomes reinsurer's agent sub modo for the management of the defense, and in the conduct thereof it is bound to exercise the utmost good faith. Reinsured does not, however, became a trustee for reinsurer or incur a trustee's liability. Since reinsurer may become bound by the judgment rendered against reinsured in an action on the original insurance policy, * * * it necessarily follows that reinsurer is at liberty to become a party to that action, and to make any defense thereto which is necessary and proper for the protection of its rights and the failure of reinsurer, after notice, to take part in the defense of the action by the original insured does not irrevocably commit the defense to reinsured alone, but at any time during the progress of the cause reinsurer is entitled to interfere and interpose its defense to protect its own interests, as a party who may be bound by the judgment to be rendered. Under an agreement by reinsured to employ counsel and defend the action, reinsurer, by allowing the defense to proceed, makes the attorney so employed its own, so as to be bound by the result." As discussed earlier in my Findings of Fact, Peerless interposes the defense that it was not promptly and fully informed of the proceedings in the Arms case. The terms of the reinsurance treaty, Article IV, quoted above, provide that Inland was to advise Peerless of all claims and developments therein which in Inland's opinion might develop into losses involving reinsurance, leaving the matter to Inland's judgment, and further provide that inadvertent omission should in no way affect the liability of Peerless if Inland corrected the oversight promptly upon discovery—which the facts show was done here. Thus not only do the facts of this case refute Peerless's argument, but the reinsurance agreement itself provides that if Peerless had not been promptly and fully informed it would not affect Peerless's liability. It is also significant to note that Peerless unhesitatingly paid $10,000 on the Arms claim, and admits liability for its proportionate share of some of the expenses in that case, yet takes an inconsistent position with respect to the additional expenses of the case and alleges that Inland failed to keep Peerless promptly and fully advised. Under the facts of the case, and the provisions of the reinsurance agreement, Peerless cannot avoid liability on the ground that it was not kept informed. In this case, the two insurance companies which are parties here cooperated in the handling of a claim in which both were interested. If their agent, Pickett, negligently and in bad faith rejected an offer to settle a case against the insured, Inland's officers and Peerless's man, Sherwood, ratified Pickett's acts. Under the clear terms of the reinsurance treaty, Peerless must pay its share of the loss occasioned by that alleged negligence and bad faith. Counsel may prepare an order in accordance with the views expressed in this opinion.

2023-08-22 21:20:56.300328+00

Per Curiam

*983Per Curiam. In this case the Court of Appeals for the Ninth Circuit granted respondent’s habeas corpus petition and held invalid on due process grounds her conviction for summary contempt before a state-court judge for conduct in open court. The Court of Appeals misinterpreted the constitutional requirements for imposition of a summary contempt order. We grant the petition for a writ of certiorari and reverse. Respondent Penelope Watson is an attorney who represented William Mora in a multidefendant murder trial in the Superior Court of the State of California in and for the County of Los Angeles. The Honorable William Pounders presided over the case, and he is the petitioner here. On April 7, 1994, counsel for one of Mora’s codefendants repeatedly raised in open court the issue of the punishment defendants might receive if they were convicted. Judge Pounders stated that possible punishment “ ‘is not a subject that’s open to discussion. It should not be explored.’ ” App. to Pet. for Cert. 20. Though it is not clear whether this was said at a bench conference only or reiterated in open court, it seems respondent remained at the defense table during the bench conference. Her co-counsel, Joseph Gutierrez, was at the bench on behalf of their client Mora. In later proceedings, Judge Pounders noted that “Miss Watson is no more than six feet away from us when we’re at the side bar conference. She’s at the end of the center table closest to the bench and only a matter of feet away.” Id., at 36. *984On April 20, counsel for a different codefendant again raised the issue of punishment. Judge Pounders stated in open court: “ ‘[T]he subject of sentencing of Mr. Fernandez is not part of the conversation. But more than that, it is prejudicial under [Cal. Evid. Code Ann. § ]352 [(West 1966)]. It’s not a subject the jury is entitled to discuss. This is not a death penalty case, so penalties are not something to discuss ... .’” Id., at 21. The next day, respondent’s co-counsel Gutierrez asked a series of questions in which he stated that defendants were “looking at life in prison.” At a bench conference, while respondent remained at the defense table, Judge Pounders told Gutierrez: “ ‘You had an ulterior motive in bringing out the amount of time [the witness] spent [in prison], and I think it’s to show the contrast between what he got and what your clients may be facing. . . . I’m saying that’s the last time I want to hear anything about a sentence. . . . You’ve covered it. Do not cover it again.’” Watson v. Block, 102 F. 3d 433, 435 (CA9 1996). After the side bar, Gutierrez apologized in open court: “ ‘Judge, I would just like the record to reflect that I apologize to this court for asking the question as to or informing this witness through my question that he served six months in jail and three years probation. . . . I obviously defied the Court Order, and I misunderstood the Court and I apologize.’ ” Ibid. In response, Judge Pounders said in open court: “ ‘It’s simply that punishment is not an issue for this jury to decide, and the more that counsel want to harp on this issue of punishment, the more inappropriate it becomes.’ ” Ibid. On June 21, while respondent was questioning Mora, the following examination and colloquy occurred: *985By Ms. Watson: “[Throughout this trial sometimes you’ve had to get up at 4:00 in the morning and not go to sleep until 10:00 at night? “Ms. Walker [for the People of California]: Objection, your honor, relevance. “The Court: Sustained. “By Ms. Watson: And during that four years [that you have been in prison], you were facing the death penalty until just the day before we started. “Ms. Walker: Your honor, People are going to object. “The Court: Sustained. “Ms. Walker: Ask Miss Watson to be admonished and the Court— “The Court: Sustained. We’ve already talked about this at side bar. Follow the Court’s admonitions. “By Ms. Watson: You’re facing life without possibility of parole?” App. to Pet. for Cert. 30-31. At that point, Judge Pounders called counsel to the bench. The judge asked respondent why he should not hold her in contempt for discussing punishment after he had “at least twice ordered counsel not to cover” the issue. Respondent replied, “I think it goes to [Mora’s] state of mind as to why he would take this risk at this point in revealing that he was the person who called 911.” When the judge asked why respondent did not raise the point at sidebar, particularly when her co-counsel Gutierrez had been admonished for raising the issue, Watson responded: “I wasn’t at side bar with any of that involving Mr. Gutierrez . . . .” The judge said, “You’re in violation of a court order. You do not think that’s relevant to anything?” Watson responded, “I didn’t think it was.” Id., at 31, 32. Judge Pounders then found respondent in contempt for violating Cal. Civ. Proc. Code Ann. § 1209(a)(5) (West 1997), which provides that “[disobedience of any lawful judgment, *986order, or process of the court” is grounds for contempt. The next day, on June 22, the judge issued a written order of contempt finding that “the questions asked by contemnor of Defendant Mora in the presence of the jury had as its [sic] sole purpose improperly advising the jury of the potential penalty for the defendants in violation of the court order.” App. to Pet. for Cert. 26. He found “contemnor was aware of the Order,” since she was “at all times . . . present (a) at or immediately adjacent to all side bar conferences and (b) present in open court on April 7,1994, when the initial warning was given, and (c) on April 20, 1994, when the warning was repeated in open court, and (d) on April 21, 1994, when co-counsel Mr. Gutierrez apologized in open court for defying that same order.” Ibid. The court imposed a 2.-day jail sentence to be served after trial. On July 8, two days after the murder case was submitted to the jury, Judge Pounders gave respondent another opportunity to justify her actions. She again explained and argued through her counsel that she thought her questions were relevant and “ ‘not covered by the court’s previous rulings or admonitions.’” 102 F. 3d, at 436. Judge Pounders was not convinced. Respondent, he noted, did not ask for a side bar for clarification. He found: “T think she has permanently prejudiced this jury in favor of her client.... They know the penalty he’s facing . . . and they know that the person that was killed [a gang member] isn’t worth that penalty, and so they are not going to find him guilty of the major charge. “ ‘And when the penalty is as extreme as this one is presented to the jury, I think that’s a prejudice that cannot be overcome.... *987“ ‘And I believe that the result is going to be that [the jury] will not find Mr. Mora guilty of the main offense, which is murder, that they may not find him guilty of much at all.’” Ibid. Respondent’s habeas petitions to the California Court of Appeal and the California Supreme Court were denied summarily. She filed this federal habeas corpus action in the United States District Court for the Central District of California. The District Court denied the petition on September 8, 1994, finding “[t]he record makes it quite clear that multiple statements made in open court gave Petitioner adequate warning to put a person of reasonable intelligence on notice as to what conduct Judge Pounders had prohibited, satisfying due process notice requirements.” App. to Pet. for Cert. 15. Respondent appealed to the United States Court of Appeals for the Ninth Circuit, arguing that her due process rights were violated because she did not have notice of the prohibited conduct and because the trial judge could not have known without a hearing whether her conduct was willful. The Court of Appeals did not dispute the state trial court’s findings on these points. Instead, it held that “her conduct was not so disruptive as to justify use of summary contempt procedure,” 102 F. 3d, at 437. Longstanding precedent confirms the power of courts to find summary contempt and impose punishment. See, e. g., Ex parte Terry, 128 U. S. 289 (1888). In Cooke v. United States, 267 U. S. 517 (1925), the Court said: “To preserve order in the court room for the proper conduct of business, the court must act instantly to suppress disturbance or violence or physical obstruction or disrespect to the court when occurring in open court. There is no need of evidence or assistance of counsel before punishment, because the court has seen the of*988fense. Such summary vindication of the court’s dignity and authority is necessary. It has always been so in the courts of the common law and the punishment imposed is due process of law.” Id., at 534-535. As we have recognized, however, the contempt power may be abused. We have held the summary contempt exception to the normal due process requirements, such as a hearing, counsel, and the opportunity to call witnesses, “includes only charges of misconduct, in open court, in the presence of the judge, which disturbs the court’s business, where all of the essential elements of the misconduct are under the eye of the court, are actually observed by the court, and where immediate punishment is essential to prevent ‘demoralization of the court’s authority’ before the public.” In re Oliver, 333 U. S. 257, 275 (1948) (quoting Cooke, supra, at 536). We have stressed the importance of confining summary contempt orders to misconduct occurring in court. Where misconduct occurs in open court, the affront to the court’s dignity is more widely observed, justifying summary vindication. See In re Green, 369 U. S. 689, 692 (1962) (relying on due process cases); Harris v. United States, 382 U. S. 162, 164 (1965) (defining boundary between summary and ordinary contempt under Fed. Rule Crim. Proc. 42). United States v. Wilson, 421 U. S. 309 (1975), sheds light on the case before us. In Wilson, the prosecution called two witnesses who, in open court, refused to testify. The United States District Court granted immunity and ordered them to answer. The witnesses still refused, and the court summarily held them in contempt. We noted that although the witnesses’ refusals to testify were “not delivered disrespectfully,” id., at 314, their conduct nevertheless justified summary contempt under Rule 42(a). It was not intimated that the contempt convictions there violated due process. “The face-to-face refusal to comply with the court’s order itself constituted an affront to the court, and when that kind of refusal disrupts and frustrates an ongoing proceeding, as it *989did here, summary contempt must be available to vindicate the authority of the court. ..Id., at 316. Even the dissent suggested contempt convictions would have been warranted if the witnesses had engaged in “'insolent tactics.’” Id., at 326 (Brennan, J., dissenting) (quoting Harris, supra, at 165). In this case the state trial court made an express finding that respondent willfully refused to comply with the court’s order. Again and again the trial court admonished counsel, both in open court and at bench conferences when respondent was sitting a few feet away, not to discuss punishment. After respondent asked her client whether he had been facing the death penalty, the court sustained an objection and said: “ ‘We’ve already talked about this at side bar. Follow the Court’s admonitions.’” App. to Pet. for Cert. 24. Undaunted, respondent’s next question was, “ ‘You’re facing life without possibility of parole?’ ” Id., at 25. The Court of Appeals did not question the willfulness finding in its opinion. 102 F. 3d, at 438 (“[W]e do not decide the issue whether Ms. Watson willfully disobeyed a court order”). Instead, the Court of Appeals held her conduct was not sufficiently disruptive because she herself “did not engage in a pattern of repeated violations that pervaded the courtroom and threatened the dignity of the court” and because the record did not indicate she would have repeated the references to punishment unless she were held in summary contempt. Ibid. All that is before us is the ruling that respondent’s conduct was not disruptive enough to justify contempt, and on this issue we are in disagreement with the Court of Appeals. Nothing in our cases supports a requirement that a contem-nor “engage in a pattern of repeated violations that pervaded the courtroom,” ibid., before she may be held in summary contempt. To the contrary,.in Wilson, the summary contempt convictions were upheld after a single refusal to give immunized testimony, “not delivered disrespectfully.” 421 *990U. S., at 314. We nevertheless held that the conduct there “disrupted] and frustrated] an ongoing proceeding.” Id., at 316. And we have not required that a court determine a contemnor would have repeated the misconduct but for summary punishment. While we have approved, in the context of reviewing a federal contempt order, the equitable principle that only “ 'the least possible power adequate to the end proposed’ should be used in contempt cases,” id., at 319 (quoting Anderson v. Dunn, 6 Wheat. 204, 231 (1821)), we found that principle satisfied in the circumstances in Wilson because, during an ongoing trial, the court is justified in acting swiftly “to prevent a breakdown of the proceedings.” 421 U. S., at 319. Likewise, in Sacher v. United States, 343 U. S. 1, 5 (1952), the Court upheld summary contempt convictions of counsel where the misconduct had the following characteristics: “It took place in the immediate presence of the trial judge; it consisted of breaches of decorum and disobedience in the presence of the jury of his orders and rulings upon the trial; the misconduct was professional in that it was that of lawyers” and conviction was based “upon a course of conduct long-continued in the face of warnings that it was regarded by the court as contemptuous.” See also Groppi v. Leslie, 404 U. S. 496, 506 (1972). Cf. Illinois v. Allen, 397 U. S. 337, 343 (1970) (“We believe trial judges confronted with disruptive, contumacious, stubbornly defiant defendants must be given sufficient discretion to meet the circumstances of each case”). Here the trial court expressly found that respondent’s questions had “permanently prejudiced the jury in favor of her client” and that the prejudice “cannot be overcome.” The Court of Appeals glossed over the state-court finding, saying “we can understand Judge Pounders’ concern that her two questions might prejudice jurors in favor of her client,” 102 F. 3d, at 438 (emphasis added). Seriously prejudicing the jury is comparable in terms of damage to the administration of justice to the refusals to testify in Wilson. The trial court’s finding that respondent’s comments had prejudiced *991the jury — together with its assessment of the flagrance of respondent’s defiance — support the finding of the need for summary contempt to vindicate the court’s authority. While the Due Process Clause no doubt imposes limits on the authority to issue a summary contempt order, the States must have latitude in determining what conduct so infects orderly judicial proceedings that contempt is permitted. As we have noted, we have used various phrases to describe the type of conduct required. We need not explore these limitations and standards, however, for the conduct of counsel here was well within the range of contumacious conduct disruptive of judicial proceedings and damaging to the court’s authority. Advocacy that is “fearless, vigorous, and effective,” Sacher, supra, at 13, does not extend to disruptive conduct in the course of trial and in knowing violation of a clear and specific direction from the trial judge. On the record before us, the Court of Appeals was in error. It was error for the Court of Appeals to rule, as a matter of law, that the contempt order went beyond those necessities pertaining to the ordered administration of justice. The ruling of the Court of Appeals, not reviewed en banc, introduced uncertainty into routine proceedings of the many state courts within the Court of Appeals’ large geographical jurisdiction. The judgment is reversed. It is so ordered.

2023-08-22 21:20:56.305428+00

Stevens

Justice Stevens, with whom Justice Breyer joins, disseiiting. As the Court correctly explains, the record supports the conclusion that respondent defied a court order when she asked two questions about her client’s potential punishment. I assume, therefore, that she acted in contempt of court. The record also demonstrates, however, that no further misconduct or disruption of the trial occurred. The question the Court of Appeals addressed was whether these circumstances justified a summary contempt proceeding conducted by the judge before whom the contempt occurred. I do not *992agree with the Court that the answer to this question is so clear as to justify summary reversal. In the majority of the cases relied on by the Court, the summary contempt power was invoked to punish conduct that threatened to disrupt the court’s ongoing proceedings. See, e. g., United States v. Wilson, 421 U. S. 309 (1975). A more substantial question arises when the summary contempt proceeding is not invoked to prevent disruption of the trial, but to punish action that has already occurred. As Justice Frankfurter recognized in his dissenting opinion in Sacher v. United States, 343 U. S. 1 (1952), concerns about the adequacy of procedural safeguards are heightened in cases involving summary contempt procedures: “Summary punishment of contempt is concededly an exception to the requirements of Due Process. Necessity dictates the departure. Necessity must bound its limits. In this ease, the course of events to the very end of the trial shows that summary measures were not necessary to enable the trial to go on. Departure from established judicial practice, which makes it unfitting for a judge who is personally involved to sit in his own case, was therefore unwarranted. .. . “This, then, was not a situation in which, even though a judge was personally involved as the target of the contemptuous conduct, peremptory action against contem-nors was necessary to maintain order and to salvage the proceedings. Where such action is necessary for the decorous continuance of a pending trial, disposition by another judge of a charge of contempt is impracticable. Interruption for a hearing before a separate judge would disrupt the trial and thus achieve the illicit purpose of a contemnor.” Id., at 36-37, 39. We recognized these limits to a court’s summary contempt power in In re McConnell, 370 U. S. 230 (1962), where we granted plenary review and set aside a $100 contempt sane*993tion for conduct that was more disruptive (although arguably more justified) than what occurred in this case.* We emphasized: “To preserve the kind of trials that our system envisages, Congress has limited the summary contempt power vested in courts to the least possible power adequate to prevent actual obstruction of justice, and we think that that power did not extend to this case.” Id., at 236. Given that the respondent in this case asked two inappropriate questions over the course of a three and a half month long trial and that the trial continued without incident for two weeks after her contemptuous conduct, a substantial question exists as to whether fair procedure required a hearing before another judge. Neither the Court nor the petitioner contends that this summary contempt power was exercised to prevent the “actual obstruction of justice,” such that a hearing before an entirely disinterested judge would have been impractical. Because I believe that these questions are important and not clearly answered by our precedents — indeed, the Court does not cite a single case that is at all comparable to this one on its facts — it is unwise to answer it without full briefing and argument. Accordingly, I respectfully dissent. In McConnell, the judge had erroneously ruled that plaintiff’s counsel could not try a charge of conspiracy, holding that he must do so in a separate trial. To preserve his client’s rights on appeal, counsel persisted in asking questions in the presence of the jury regarding the conspiracy charge. Counsel then refused to obey the judge’s order to stop asking the questions, and stated that he would continue to do so unless stopped by the bailiff. After a recess, plaintiff’s counsel returned to trial and asked no more forbidden questions. Following trial, and after holding a hearing, the trial judge summarily found counsel guilty of contempt and imposed a jail sentence. On appeal, the Court of Appeals sustained the convictions, but reduced the sentence to a fine of $100.

2013-10-30 06:32:40.776727+00

Odom

535 S.W.2d 357 (1976) O. D. MOORE, Appellant, v. The STATE of Texas, Appellee. No. 51220. Court of Criminal Appeals of Texas. April 14, 1976. Macon D. Strother, San Augustine, for appellant. Bill A. Martin, Dist. Atty., Newton, Jim D. Vollers, State's Atty., and David S. McAngus, Asst. State's Atty., Austin, for the State. OPINION ODOM, Judge. This is an appeal from a conviction for murder with malice under our former Penal Code. A jury assessed punishment at confinement for life. Appellant contends the trial court erred in requiring him to wear handcuffs in the presence of his jury. The record reflects that on two occasions, in full view of the jury panel, the sheriff escorted appellant in handcuffs into the courtroom and removed the handcuffs after appellant was seated. Objections were made outside the hearing of the jury on each occasion and a motion to dismiss the panel and draw another panel was made and overruled. Three other times during *358 the trial appellant was brought into the courtroom in handcuffs and seen by jurors. After the first objection the trial judge stated that he would consult the sheriff as to the necessity of the handcuffs. At the hearing on appellant's motion for new trial, the sheriff attempted to explain the use of handcuffs.[1] As justification for the action complained of, the sheriff testified that it was necessary to take appellant "out of [my] jail, across the courthouse campus, up inside the courthouse, upstairs, and into an empty room, which is the district clerk's office, and then into the courtroom." Because large crowds were gathered, it was felt that for the protection of all appellant should be handcuffed during the trips between the jail and the courthouse. No justification at all was necessary for handcuffing the appellant during trips between the jail and the courthouse, for the record does not reflect that any juror would have had occasion to see him during such trips. This is not true of such display before jurors. The harm that a defendant suffers when the jury sees him in handcuffs is that his constitutional presumption of innocence is thereby infringed. Thompson v. State, Tex.Cr.App. 514 S.W.2d 275; Walthall v. State, Tex.Cr.App., 505 S.W.2d 898; Hernandez v. Beto, 443 F.2d 634 (5th Cir. 1971); see also American Bar Association Standards Relating to Trial by Jury, Sec. 4.1 (Approved Draft, 1968). In Gray v. State, 99 Tex. Crim. 305, 268 S.W. 941, this Court stated: "We desire to make it perfectly plain that we regard a trial with the prisoner in irons as obnoxious to the spirit of our laws and all ideas of justice, and it is only when the record brings the case clearly within one of the rare exceptions that we would consent for a conviction to stand. Before a judge should permit a case to proceed under such circumstances, he should be very sure of his ground." 268 S.W. at 950. The "rare exceptions" referred to in Gray are: ". . . if, in the sound discretion of the court, it appears necessary to retain his shackles to prevent the escape or self-destruction of the prisoner, or to prevent him from injuring bystanders or officers of the court, or if necessary to maintain a quiet and peaceable trial, the court may try the prisoner without having the shackles removed; his action being subject to the closest scrutiny and review by the appellate court." 268 S.W. at 949. In the instant case apparently neither the sheriff nor the trial judge believed that any such "rare exceptions" existed because appellant was in fact allowed to sit free and unfettered during the trial itself. We conclude from the failure of the record to affirmatively reflect sufficient reasons for the appellant to be viewed by the jurors in handcuffs that the trial court abused its discretion in permitting such action over appellant's objection. Because of our disposition of this ground of error, it is not necessary to rule on appellant's complaint relating to jury misconduct during punishment deliberations. We note, however, that jury discussion of parole laws is always misconduct; whether the same constitutes such error as to mandate reversal depends upon the particular circumstances of each case. Heredia v. State, Tex.Cr.App., 528 S.W.2d 847. The trial court should always attempt to eliminate the possibility of such *359 misconduct by instructing the jury at the punishment phase that it should not discuss or consider the possible effects of the parole laws or system. No such instruction appears in the record herein. The judgment is reversed and the cause remanded. NOTES [1] We note that but for the evidence adduced at this hearing the record would be barren of any justification for the sheriff's actions. We reiterate that it is the responsibility of the trial court to cause the record to reflect the reasons why a defendant must appear before the jury in handcuffs. Thompson v. State, 514 S.W.2d 275, Tex.Cr.App.; Walthall v. State, 505 S.W.2d 898 (Tex.Cr.App.); Romero v. State, 493 S.W.2d 206, Tex.Cr.App.

2013-10-30 06:32:40.803344+00

Harbison

535 S.W.2d 854 (1976) FENTRESS COUNTY BANK and Union Bank, Appellants, v. Gene HOLT, Tax Assessor et al., Appellees. Supreme Court of Tennessee. April 5, 1976. *855 Burnett, Ray & Ramsey, Neal & Craven, Jamestown, for appellants. John A. Turnbull, Roberts & Turnbull, Livingston, Thomas E. Looney, Swafford & Looney, Crossville, for appellees. OPINION HARBISON, Justice. These actions were instituted by banking institutions against officials of Fentress County, Tennessee and the City of Jamestown, challenging assessments made on the outstanding capital stock of the banks pursuant to T.C.A. §§ 67-715 et seq. The complaints alleged that the local taxing officials had assessed the tax against the banking institutions, rather than against the individual shareholders, and it was contended that the assessments thus made were unauthorized, illegal and void. Motions to dismiss were filed by the defending parties upon the ground that the complaints failed to show that existing administrative remedies had been utilized and that the complaints did not allege payment of any of the taxes under protest. The chancellor sustained the motions to dismiss, and the banks have appealed. It is conceded in this Court that none of the taxes in question have been paid, under protest or otherwise. Counsel for appellants accordingly have conceded in this Court that the actions may not be maintained against the City of Jamestown. Under present statutes, municipal taxes must either be paid under protest and suit brought for their refund, T.C.A. §§ 67-2303, 2313, or administrative review of the assessment through local and state boards of equalization must be sought. See State v. Delinquent Taxpayers, 526 S.W.2d 453 (Tenn. 1975). Accordingly the assignments of error are overruled and the judgment of the chancellor is affirmed insofar as the City of Jamestown and its officials are concerned. Taxpayers insist that they may proceed, however, against Fentress County and *856 its officials. In the case of Holloway v. Putnam County, Tenn., 534 S.W.2d 292 (1976), this Court noted that the statutory provisions concerning payment under protest and suits for refund, T.C.A. §§ 67-2301 et seq., do not have application to county taxes, as contrasted with state and city taxes. There is contained in T.C.A. § 67-2301 a provision for settlements and adjustments by the county court clerks, but in the Holloway case the Court concluded that this provision "... is a permissive and alternate administrative remedy but is not mandatory or exclusive." Accordingly, in the Holloway case, the Court said: "We hold that a taxpayer has two remedies for the recovery of county taxes, viz: (1) the administrative procedure provided under § 67-2301, T.C.A. and (2) payment under protest and a common law suit for recovery." In that case it was held that if payment is made under protest, suit for refund may be filed within six years since the time limitations contained in T.C.A. §§ 67-2303 and 2313 do not pertain to county taxes. The Holloway case, of course, dealt only with the recovery of taxes previously paid. In addition to the two remedies referred to in that opinion, an aggrieved taxpayer also has the additional administrative remedy of challenging his assessment before the local board of equalization, with appeal to the state board of equalization, and ultimate judicial review in the courts, before payment of the taxes is required. T.C.A. §§ 67-801 et seq. In the present case, none of these remedies or procedures has been utilized. Instead the taxpayers have brought a direct action for declaratory judgment in the courts, challenging the validity of their assessments, without either first paying the tax or seeking review of the assessments through the boards of equalization. The question presented is whether an action may be maintained under these circumstances. Taxpayers place great reliance upon the case of Rosewood, Inc. v. Garner, 476 S.W.2d 273 (Tenn. App. 1971), in which the Court of Appeals stated that a taxpayer might seek direct relief from illegal assessments in the courts, rather than going through the boards of equalization. In that case the Court of Appeals stated: "After a review of the authorities the Chancellor made what we deem to be a proper distinction between this type of complaint pertaining to the right to an exempt status on the one hand, as distinguished from the complaint of the taxpayer that he has been grossly, fraudulently, or intentionally overvalued or discriminated against. In the latter type of complaint, the primary issue is the valuation of the property, and the Board, because of its presumed expertise in valuation, is best qualified to hear and correct any abuse suffered. Whereas, the first type of complaint (assessing exempt property) involves primarily questions of law, with the fact questions being incidental thereto, and renders the court the proper tribunal to hear and correct these abuses which are challenged as void assessments." 476 S.W.2d at 276. It should be noted, however, that in the Rosewood case the taxpayer had in fact paid the taxes under protest, and the suit was brought to recover these and to seek an injunction against future taxation. This sharply distinguishes that case from the case at bar, where no payment under protest has been made. Because of the absence of such payment, the Rosewood decision is not authority for the position now being taken by the taxpayers. Nor does the case of Oak Ridge Hospital v. City of Oak Ridge, 57 Tenn. App. 487, 420 S.W.2d 583 (1967), cited in Rosewood, support them, since in that case the taxpayer had been through the local board of equalization and the state board of equalization and, in addition, had paid the taxes under protest before filing suit for refund. There are, however, some earlier cases in this state indicating that a taxpayer need not pay under protest in order to obtain a *857 determination as to the legality of an assessment. Probably the leading case permitting such an action was Nashville Labor Temple v. Nashville, 146 Tenn. 429, 243 S.W. 78 (1921). That case and several others involved city taxes, and the procedure permitted there is no longer available, since present statutes governing city taxes do require payment under protest. In the case of University of the South v. Franklin County, 506 S.W.2d 779 (Tenn. App. 1973), a declaratory judgment was utilized, apparently without payment of county taxes and without exhaustion of administrative remedies, although the State Board of Equalization was permitted to intervene in the case in the trial court. In a concurring opinion on petition to rehear, one member of the Court of Appeals pointed out the irregular procedure which had been followed, but noted that this had not been assigned as error or argued on appeal. Likewise, in the recent case of Metropolitan Government of Nashville and Davidson County v. Schatten Cypress Company, 530 S.W.2d 277 (Tenn. 1975), the taxpayer filed a direct action in the chancery court challenging the legality of its assessment. No procedural issues were raised in the case, however, and the issue of whether the taxpayer should have paid the taxes under protest before filing suit was not discussed. It appears that there has been some ambiguity or uncertainty in the case law, insofar as procedural requirements are concerned, as to when a taxpayer may file a direct action challenging the legality of his assessment. We are of the opinion that it is proper to require the taxpayer to pay his county taxes under protest before being permitted to file such direct action in the courts to recover them or to challenge the legality of his assessment. We believe that the Rosewood decision is a sound one, and that a taxpayer ought not to be required in all cases to go through boards of equalization or other administrative procedures in order to raise strictly legal issues. He may go through these agencies, of course, without first paying his taxes. He should, however, be permitted access to the courts to raise purely legal questions, but only after he has first paid the taxes under protest. Accordingly, any earlier cases in this state, which may have permitted direct suits against county taxing authorities without first requiring payment of the taxes under protest, are now modified. A county taxpayer may follow the procedure approved in Rosewood, supra, pay his county taxes, and file suit to recover them, when he only seeks to present legal questions as to the validity of his assessment;[1] or he may go through the equalization boards, challenging any aspect of his assessment, without first paying the disputed taxes. He may not, however, have access to the courts without first pursuing one or the other of these courses of procedure. The judgment of the chancellor, dismissing the suits of taxpayers who followed neither of these procedures, is affirmed, at the cost of appellants. FONES, C.J., and COOPER, BROCK and HENRY, JJ., concur. NOTES [1] Since the taxpayers here did not follow either procedure, we need not determine, nor do we attempt to decide, whether the allegations of their complaints sufficiently assert a purely legal issue so as to fall within the purview of Rosewood. Taxpayers do not challenge the legality of the tax or the liability of the banks to pay it under T.C.A. § 67-727, so that it is possible that they would have to resort to an administrative remedy in all events to obtain any relief.

2013-10-30 06:32:40.891697+00

Holt

535 S.W.2d 830 (1976) William Chester WARD, Appellant, v. CONSOLIDATED UNDERWRITERS and Medallion Insurance Company, Appellees. No. 75-305. Supreme Court of Arkansas. May 3, 1976. *831 Eubanks, Files & Hurley, by Hugh F. Spinks, Little Rock, for appellant. Plegge, Lowe & Whitmore, by Perry V. Whitmore, Little Rock, for appellees. HOLT, Justice. Appellee Consolidated Underwriters issued to appellant an automobile liability insurance policy which included an uninsured motorist provision as required by Ark. Stat.Ann. § 66-4003 (Repl.1966). Appellee Medallion Insurance Company assumed the policy coverage. The policy included coverage for injuries caused by a "hit-and-run automobile" which was defined thusly: "Hit-and-run automobile means an automobile which causes bodily injury to an insured arising out of physical contact of such automobile with the insured or with an automobile which the insured is occupying at the time of the accident, provided: (1) there cannot be ascertained the identity of either the operator or owner of such "hit-and-run automobile...." Appellant suffered physical injuries when he was forced off the road by an unknown driver of a vehicle. Appellant invoked the uninsured motorist coverage of his policy. Appellee Medallion denied coverage on the ground that there was no physical contact between appellant's vehicle and the unidentified car that allegedly ran him off the road. Appellant brought suit for a declaratory judgment asking that the physical contact limitation be declared void as against public policy of the State of Arkansas. The trial court held that "since this [the hit-and-run policy provision] is greater coverage than the pertinent statute required, * * the `impact provision' is contractual and valid." Appellant's sole contention on appeal is that the trial court erred in failing to find that the physical impact provision of the Medallion policy of insurance was void as against the public policy of the state. Appellant argues that since the uninsured motorist statute is remedial in nature, the court should construe the act liberally to accomplish its remedial purpose. Appellant acknowledges that we have held that the burden of showing the other vehicle is uninsured is on the plaintiff. South. Farm Bur. Cas. Ins. v. Gottsponer, 245 Ark. 735, 434 S.W.2d 280 (1968). In the case at bar, however, appellant argues that although *832 this may be a proper requirement as to the burden of proof when the driver is known and can be identified, it should not be required where, as here, the driver and vehicle are unknown. § 66-4003, which requires uninsured motorist coverage, reads in pertinent part: No automobile liability insurance * * shall be delivered or issued for delivery in this State * * * unless coverage is provided therein or supplemental thereto * * * for the protection of persons insured thereunder who are legally entitled to recover damages from the owners or operators of uninsured motor vehicles.... Plainly, the statute only requires that coverage be provided for the protection of persons who are legally entitled to recover damages from the owners of uninsured motor vehicles. As indicated, we have interpreted this statute as requiring that the plaintiff has the burden of showing that the other vehicle is uninsured. South. Farm Bur. Cas. Ins. v. Gottsponer, supra. Here the policy does not require this burden of proof when there is physical contact and "the operator or owner of such `hit-and-run automobile'" cannot be ascertained. Therefore, it appears the policy in question is a liberalization of the coverage required by our statute. See Amidzich v. Charter Oak Fire Insurance Co., 44 Wis. 2d 45, 170 N.W.2d 813 (1969); Phelps v. Twin City Fire Insurance Company, 476 S.W.2d 419 (Tex.Civ.App.1972); and Ward v. Allstate Insurance Company, 514 S.W.2d 576 (Mo. 1974). In the case at bar, in our view, the physical impact provision in the policy is valid and does not contravene public policy. Appellant recognizes that if the physical contact requirement of the policy is not against the public policy, it is a legitimate objective and contractually binding. Affirmed.

2013-10-30 06:32:40.904112+00

Register

152 F. Supp. 126 (1957) NORTHERN PACIFIC RAILWAY COMPANY, a corporation, Plaintiff, v. ASSOCIATED GENERAL CONTRACTORS OF NORTH DAKOTA, a corporation, and C. L. Hoffman, Defendants. Civ. No. 3135. United States District Court D. North Dakota, Southwestern Division. May 29, 1957. *127 *128 Charles A. Feste, of Conmy & Conmy, Fargo, N. D., for plaintiff. Richard P. Rausch, of Rausch & Chapman, Bismarck, N. D., for defendants. REGISTER, Chief Judge. This suit is one which arises under the Interstate Commerce Act, 49 U. S.C.A. § 1 et seq., and specifically Sections 3(2) and 6(7), which is a law regulating commerce, by reason of which this court has jurisdiction. The suit was brought by the Northern Pacific Railway Company, a corporation, against the Associated General Contractors of North Dakota, a corporation, and C. L. Hoffman, to recover alleged freight charges on a shipment of roofing slabs, which shipment moved over the lines of the plaintiff in interstate commerce. Said shipment is described generally in paragraph 4 of the plaintiff's amended complaint. The action is now before this court for determination of plaintiff's motion for summary judgment, made in accordance with the provisions of Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A. The plaintiff having apparently abandoned its claim against the defendant Associated General Contractors of North Dakota, a corporation, this memorandum, when referring to "the defendant", refers specifically to Mr. C.L. Hoffman only. The facts, as appear from all the pleadings and affidavits on file herein, are as follows: Defendant C. L. Hoffman placed an order with the Cemex Corporation, a manufacturer of certain building materials, of Quincy, Illinois, for 99 roofing slabs. This material was shipped by the manufacturer, F.O.B. Quincy, Illinois, over the plaintiff's and connecting carrier's lines, consigned to the defendant at Bismarck, North Dakota. Notice of arrival of the shipment was duly received by defendant from plaintiff's agent. Defendant inquired of such agent whether the freight charges were prepaid or collect, and was informed that he, the agent, did not know. However, permission was given by plaintiff's agent, to the defendant, to unload the shipment. The goods were thereupon unloaded and delivered to defendant's building site in Bismarck, North Dakota, where defendant intended to use the slabs in the construction of a new home. The unloading and delivery of said goods were done by a local delivery service, which was then acting as defendant's agent and pursuant to defendant's specific employment, request and authority. After the material was placed at the job site, defendant examined same and found it to be wet, and discovered that some pieces thereof were broken or cracked. Defendant thereupon notified the manufacturer's representative of the condition of the slabs, and refused the shipment and has also refused to pay the freight charges thereon. Defendant was initially informed by the manufacturer's representative that a claim for goods damaged in transit would be filed, by the shipper, with the receiving carrier. However, just five days later, in a letter from the president of the Cemex Corporation to his representative, a copy of which was sent to the defendant, the defendant was advised that he should file the claim for damaged goods with the delivering carrier, the plaintiff in this action. The basis of this later advice was apparently the shipper's realization that the goods had been shipped freight collect; the initial advice was *129 based upon information that the goods had been shipped freight prepaid. Apparently there is some misunderstanding between the shipper and consignee as to the terms of the original purchase order as regards the payment of freight charges; there is nothing before this court which shows the original agreement regarding the payment of freight charges, other than a copy of the original bill of lading, which positively indicates the goods were shipped collect, the freight charges to be paid by the consignee, the defendant herein. On the face of the bill of lading appears the following: "Subject to Section 7 of conditions, if this shipment is to be delivered to the consignee without recourse on the consignor, the consignor shall sign the following statement: The carrier shall not make delivery of this shipment without payment of freight and all other lawful charges. (Signed) The Cemex Corp." This is generally referred to as the "nonrecourse" clause, and was duly signed by the consignor. The purpose and effect of the execution of such non-recourse clause is to relieve the consignor from liability for all freight and other lawful charges, and to place such liability upon the consignee, upon delivery of the goods. "* * * if the non-recourse clause is signed by the consignor and no provision is made for prepayment of freight, delivery of the shipment to the consignee relieves the consignor of liability * * * and acceptance of the delivery establishes the liability of the consignee to pay all freight charges." Illinois Steel Co. v. Baltimore & Ohio Railroad Co., 320 U.S. 508, 513, 64 S. Ct. 322, 325, 88 L. Ed. 259, citing Louisville & Nashville R. Co. v. Central Iron & Coal Co., 265 U.S. 59, 66 (note 3), 44 S. Ct. 441, 68 L. Ed. 900; Pittsburgh, Cincinnati, Chicago & St. Louis R. Co. v. Fink, 250 U.S. 577, 581-583, 40 S. Ct. 27, 63 L. Ed. 1151; and New York Central & Hudson River R. Co. v. York & Whitney Co., 256 U.S. 406, 408, 41 S. Ct. 509, 65 L. Ed. 1016. The clauses of the uniform bill of lading govern the rights of the parties to an interstate shipment and are prescribed by Congress and the Interstate Commerce Commission in the exercise of the commerce power; they have the force of federal law. Illinois Steel Co. v. Baltimore & Ohio Railroad Co., supra. The defendant here, C. L. Hoffman, was a "* * * party to an interstate shipment * * *" and he is bound by the provisions of the Bill of Lading under which the goods were shipped to him, as consignee. Defendant contends that he did not accept the shipment. However, in his own affidavit filed in opposition to plaintiff's motion for summary judgment, the defendant states, in effect, that after he received notice from plaintiff's agent that the shipment had arrived, he asked for and received permission to unload the goods (after being told by plaintiff's agent that he, the agent, did not know whether the material was sent prepaid or collect); that it was unloaded and transported and delivered to defendant's building site by a local transfer company which was employed for that purpose, and authorized to do so, by defendant; that, at the job site defendant personally examined the shipment; and that after discovering some damage to a part thereof a test was made, at which time defendant's contractor was present and assisted therewith. From such facts it clearly appears, for the purpose of this motion, that said defendant assumed, had, and exercised full and complete control and authority of and over said roofing slabs from the time they were unloaded and taken from the possession and custody of the plaintiff. This court finds, as a fact, for the purpose of this motion, that said defendant did accept said shipment. In the event of a failure on the part of a consignee to accept delivery of goods shipped to him, the carrier has the right to offer the goods for sale and sell *130 the same, thereby reducing the amount of freight charges due by the amount received from the sale of the goods. Lowden v. McAndrews, D.C., 2 F.R.D. 36. In this case such procedure could not be followed by plaintiff, since the custody, possession and control of the shipment had passed from plaintiff to defendant. The only course of action left to plaintiff, since the consignor was relieved of liability for such charges by virtue of its having executed the non-recourse clause of the bill of lading, was to demand payment from the defendant and to proceed to collect the lawful charges. This it is plaintiff's legal duty to do, pursuant to the provisions of the Interstate Commerce Act. Central Warehouse Co. v. Chicago, R. I. & P. Ry. Co., 8 Cir., 20 F.2d 828. Various assertions are made by defendant in his pleadings and in his affidavit filed in opposition to the motion now under consideration, by way of defense. Defendant asserts that the shipment should have been, under the contract between consignor and consignee, sent prepaid, and that in fact consignor's agent had erroneously informed him, in writing, that it had been sent prepaid. Even though this be true, it is not a defense to plaintiff's cause of action. While such facts may have placed defendant in a position whereby his liability for freight charges is a hardship upon him, yet his legal liability therefor is not affected. "* * * [It] * * * may be in the present as well as some other cases a hardship upon the consignee * * *; but instances of individual hardship cannot change the policy which Congress has embodied in the statute in order to secure uniformity in charges for transportation." And, "It is alleged that a different rule should be applied in this case because Fink by virtue of his agreement with the consignor did not become the owner of the goods until after the same had been delivered to him. There is no proof that such agreement was known to the carrier, nor could that fact lessen the obligation of the consignee to pay the legal tariff rate when he accepted the goods." (Emphasis added.) Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. v. Fink, supra [250 U.S. 577, 40 S. Ct. 28]. Defendant also asserts that the first time he saw the shipment was after delivery thereof to the job site; that examination there disclosed damage to some of the material, in that there was some breakage and an appearance that it was wet and not usable; that he promptly advised consignor's agent of his findings; and that thereafter he (defendant) failed to file a claim with plaintiff carrier because he believed that the consignor had filed or was filing proper claim, and that he further believed all matters concerning such damage, including any claim relative thereto, were being handled between plaintiff and the consignor. There is nothing before the court that establishes the cause of or liability for such alleged damage. That a counter-claim or setoff for damaged goods may be asserted against a carrier to reduce the amount of the unpaid freight charges is clear. Chicago & N. W. Ry. Co. v. Lindell, 281 U.S. 14, 50 S. Ct. 200, 74 L. Ed. 670. However, in this case no counter-claim or setoff for such alleged damage has been pleaded by defendant, and no such issue is before the court. Also, the bill of lading here involved provides that a claim for damage must be filed within nine months after delivery of the goods, and if the claim is disallowed it must be sued upon within two years and one day from the day when notice in writing of disallowance of such claim is given to the claimant by such carrier. Filing within the required time is a condition precedent to recovery. No claim has been filed; the time within which such claim may be filed has elapsed; and no suit for damages has been instituted. Therefore, assertion of such a claim at this time is barred. Norton v. Shotmeyer, D.C., 72 F. Supp. 188. *131 Defendant further asserts that "The bill of lading * * * is an acknowledgment of the receipt of goods in good order and is a prima facie evidence of condition * * *"; that "The agent for plaintiff filed a report which conclusively shows the damage"; and that "This has never been a question involving quality of merchandise but of damage in transit with a failure to accept." As heretofore stated, no claim for such alleged damage was filed within the required time, no counter-claim or set-off was pleaded, and such matter is not at issue. It appears to the court that the defendant, as a matter of law, is liable for the full amount of the freight charges. Defendant also contends that the plaintiff has made settlement with the consignor for the damaged goods, without the knowledge or consent of the defendant, and that by reason thereof, said defendant is not liable for the freight charges. This contention is contrary to the law as stated in Louisville & Nashville R. Co. v. Central Iron & Coal Co., supra, wherein it is said [265 U.S. 59, 44 S. Ct. 442]: "Nor could any act or omission of the carrier (except the running of the statute of limitations) estop or preclude it from enforcing payment of the full amount by a person liable therefor." This general statement of the law applies to all acts or omissions of the carrier, whether the same were intentional, F. Burkhart Mfg. Co. v. Fort Worth & D. C. Ry. Co., 8 Cir., 149 F.2d 909, or unintentional, Central Warehouse Co. v. Chicago, R. I. & P. Ry. Co., supra. It clearly appearing that there is no genuine issue as to any material fact, and for the reasons hereinbefore stated, the plaintiff's motion for summary judgment against defendant C. I. Hoffman is granted. "An issue of fact is not genuine unless it has legal probative force as to a controlling issue * * *. If it is made clearly to appear on such (motion for summary judgment) that even though there is an issue under the pleadings there is in fact no dispute as to the controlling material facts, then the court should enter summary judgment." Durasteel Co. v. Great Lakes Steel Corp., 8 Cir., 205 F.2d 438, 441. It is so ordered.

2013-10-30 06:32:40.909961+00

McNEILLY

367 A.2d 1010 (1976) Ronald PAYNE et al., Defendants below, Appellants, v. The STATE of Delaware, Appellee. Supreme Court of Delaware. Submitted April 5, 1976. Decided November 16, 1976. Roger P. Sanders of Prickett, Ward, Burt & Sanders, Wilmington, for defendant Ronald Payne. Henry A. Wise, Asst. Public Defender, Wilmington, for defendant Carl Vincent Henry. Francis J. Trzuskowski of Connolly, Bove & Lodge, Wilmington, for defendant Thomas LeGrande. Alfred J. Lindh, Wilmington, for defendant Lester M. Johnson. Ben T. Castle of Young, Conaway, Stargatt & Taylor, Wilmington, for defendant Gary Watson. Richard R. Wier, Jr., and Charles P. Brandt, Deputy Attys. Gen., Wilmington, for State of Del. Before HERRMANN, C. J., and DUFFY and McNEILLY, JJ. *1012 McNEILLY, Justice: Defendants appeal their Superior Court jury convictions of assault with intent to commit murder (11 Del.C. § 577),[1] assault on a prison guard (11 Del.C. § 813(b)),[2]*1013 conspiracy to commit those crimes (11 Del.C. § 105),[3] and their sentences thereon. They contend that: (1) pretrial publicity prevented a fair trial; (2) their right of self-representation was violated; (3) certain evidence was erroneously admitted; (4) their wearing of prison garb, coupled with certain security measures, prevented a fair trial; and (5) presence on the jury of a juror who had a personal relationship with a prison guard prevented a fair trial. I The defendants, inmates of the Delaware Correctional Center, were charged with attacking a guard of that institution and stabbing him sixteen times. At trial, the guard identified four of the defendants as his assailants, while a fifth was identified as a co-conspirator; the defendants contended that the attack was perpetrated by other inmates. The jury convicted the defendants on all counts charged. We affirm. II The defendants' first contention is that adverse pretrial publicity deprived them of their due process right to a fair trial by an unbiased jury. They cite several cases in support of this position, including Sheppard v. Maxwell, 384 U.S. 333, 86 S. Ct. 1507, 16 L. Ed. 2d 600 (1966); Estes v. Texas, 381 U.S. 532, 85 S. Ct. 1628, 14 L. Ed. 2d 543 (1965); In re Murchison, 349 U.S. 133, 75 S. Ct. 623, 99 L. Ed. 942 (1955); United States ex rel. Clark v. Anderson, D.Del., 356 F. Supp. 445 (1973), reversed on other grounds, 3 Cir., 502 F.2d 1080 (1974); Commonwealth v. Pierce, 451 Pa. 190, 303 A.2d 209, cert. denied, 414 U.S. 878, 94 S. Ct. 164, 38 L. Ed. 2d 124 (1973). In the instant case, we find that extensive voir dire of the ninety prospective jurors was conducted concerning pretrial publicity, prior communications about the case, and acquaintances with defendants, attorneys, witnesses, and employees of the Correctional Center. Those who responded to having knowledge of the pretrial publicity were questioned individually in Chambers; those few who responded to additional voir dire were questioned individually at side-bar. In each instance the Trial Judge questioned each prospective juror for possible prejudice, exercising his discretion liberally in excusing all who appeared to have any prior involvement or knowledge. During the questioning the defendants and all counsel were present, permitted to ask pertinent questions, and participated, outside the presence of the prospective jurors, in all conferences concerning excuse for cause.[4] We further note the presence of other factors militating against defendants' contention that they did not receive a fair trial by an unbiased jury: (1) approximately six months elapsed between the *1014 complained of publicity and trial; (2) defendants concede that no demonstrable jury bias or prejudice resulted from the pretrial publicity; (3) the Trial Judge in the exercise of extreme caution, permitted defendants thirty peremptory challenges, more than they used, and more than they were entitled to under Superior Court Criminal Rule 24(b).[5] We find Sheppard, Estes, Murchison and Pierce to be factually inapposite. In Sheppard the Trial Court failed to use any effort to take precautions against influence of pretrial publicity available to prospective jurors even during voir dire (reversal based on totality of circumstances including trial rulings); in Estes the Trial Court failed to control trial publicity accessible to the jury; in Murchison the Trial Judge sat in contempt proceedings in which the contempt charged had been committed before him as a so-called one-man grand jury; in Pierce the Trial Court refused to grant a motion for change of venue after the community, in which defendant was tried, had been informed by the prosecutors and police that defendant was a confessed "triggerman" with a past record of violent crimes, and exposed to pictures of a staged re-enactment of the crimes and other widespread publicity; but in Clark, the Court reviewed the totality of circumstances and, as in this case, found no likelihood of jury bias from the pretrial publicity. In the recent decision of Nebraska Press Association v. Stuart, 427 U.S. 539, 96 S. Ct. 2791, 49 L. Ed. 2d 683 (1976) holding that prior restraint of pretrial publicity is impermissible under the First Amendment, Chief Justice Burger stated: "Cases such as these (Sheppard and Estes) are relatively rare, and we have held in other cases that trials have been fair in spite of widespread publicity. In Stroble v. California, 343 U.S. 181, 72 S. Ct. 599, 96 L. Ed. 872 (1951), for example, the Court affirmed a conviction and death sentence challenged on the ground that pretrial news accounts, including the prosecutor's release of the defendant's recorded confession, were allegedly so inflammatory as to amount to a denial of due process. The Court disapproved of the prosecutor's conduct, but noted that the publicity had receded some six weeks before trial, that the defendant had not moved for a change of venue, and that the confession had been found voluntary and admitted in evidence at trial. The Court also noted the thorough examination of jurors on voir dire and the careful review of the facts by the state courts, and held that petitioner had failed to demonstrate a denial of due process. See also Murphy v. Florida, 421 U.S. 794, 95 S. Ct. 2031, 44 L. Ed. 2d 589 (1975); Beck v. Washington, 369 U.S. 541, 82 S. Ct. 955, 8 L. Ed. 2d 98 (1962). "Taken together, these cases demonstrate that pretrial publicity — even pervasive, adverse publicity — does not inevitably lead to an unfair trial. * * * "Most of the alternatives to prior restraint of publication in these circumstances were discussed with obvious approval in Sheppard v. Maxwell, 384 U.S., at 357-362, 86 S. Ct. 1519-1522: (a) change of trial venue to a place less exposed to the intense publicity that seemed imminent in Lincoln County; (b) postponement of the trial to allow public attention to subside; (c) use of searching questioning of prospective jurors, *1015 as Chief Justice Marshall did in the Burr case, to screen out those with fixed opinions as to guilt or innocence; (d) the use of emphatic and clear instructions on the sworn duty of each juror to decide the issues only on evidence presented in open court. Sequestration of jurors is, of course, always available. Although that measure insulates jurors only after they are sworn, it also enhances the likelihood of dissipating the impact of pretrial publicity and emphasizes the elements of the jurors' oaths." 427 U.S. at 554, 563-564, 96 S. Ct. at 2800, 2805, 49 L. Ed. 2d at 694-95, 700. And in the concurring opinion of Mr. Justice Brennan, with whom Mr. Justice Stewart and Mr. Justice Marshall concurred, it is stated: "And, more basically, there are adequate devices for screening from jury duty those individuals who have in fact been exposed to prejudicial pretrial publicity. "* * * In particular, the trial judge should employ the voir dire to probe fully into the effect of publicity. The judge should broadly explore such matters as the extent to which prospective jurors had read particular news accounts or whether they had heard about incriminating data such as an alleged confession or statements by purportedly reliable sources concerning the defendant's guilt. See, e. g., Ham v. South Carolina, 409 U.S. 524, 531-534, 93 S. Ct. 848, 852-854, 35 L. Ed. 2d 46 (1973) (opinion of Marshall, J.); Swain v. Alabama, 380 U.S. 202, 209-222, 85 S. Ct. 824, 829-836, 13 L. Ed. 2d 759 (1965). Particularly in cases of extensive publicity, defense counsel should be accorded more latitude in personally asking or tendering searching questions that might root out indications of bias, both to facilitate intelligent exercise of peremptory challenges and to help uncover factors that would dictate disqualification for cause. Indeed, it may sometimes be necessary to voir dire prospective jurors individually or in small groups, both to maximize the likelihood that members of the venire will respond honestly to questions concerning bias, and to avoid contaminating unbiased members of the venire when other members disclose prior knowledge of prejudicial information. * * *" 427 U.S. at 601, 602, 96 S. Ct. at 2822, 49 L. Ed.2d at 682-83. We find no merit to defendants' first contention. III Defendants assert that they had an absolute right to represent themselves at trial (pro se), which was violated by the Trial Court. During a pretrial conference, the defendants expressed their desire not to be represented by court-appointed attorneys, but did not express an intention to represent themselves without the aid of counsel.[6]*1016 After further consideration, the defendants decided to use court-appointed counsel as "amicus curiae" and relied extensively on counsel throughout the trial.[7] In the recent case of Faretta v. California, 422 U.S. 806, 95 S. Ct. 2525, 45 L. Ed. 2d 562 (1975), the United States Supreme Court held that denial of a literate, competent, understanding, and voluntary request for pro se representation made weeks before trial, violated the Sixth and Fourteenth Amendments. The factual situation presented by this case varies greatly from that of Faretta. In Faretta, the defendant was denied any participation in his trial as counsel, 422 U.S. at 810-11, 95 S.Ct. at 2529, 45 L. Ed. 2d at 568, while the record before us is replete with instances of defendants' conduct of their defense and unequivocal statements from the Trial Court that their participation was permitted.[8]*1017 Defendant Johnson participated extensively in the trial, opening to the jury and cross-examining witnesses, and the other defendants also were permitted this opportunity. This trial presented another dimension not present in Faretta — that of the disruptive defendant. On numerous occasions defendants uttered profanities and engaged in disruptive conduct. Defendants Payne and LeGrande were ejected from the courtroom several times; the Trial Court, however, made it clear that they could return whenever they would conform their conduct to acceptable standards. Standards required of members of the Bar must be adhered to by defendants undertaking their own defense, and gross deviations from those standards constitute a waiver of the right of self-representation. The Court in Faretta considered this issue: "We are told that many criminal defendants representing themselves may use the courtroom for deliberate disruption of their trials. But the right of self-representation has been recognized from our beginnings by federal law and by most of the States, and no such result has thereby occurred. Moreover, the trial judge may terminate self-representation by a defendant who deliberately engages in serious and obstructionist misconduct. * * * Of course, a State may — even over objection by the accused — appoint a `standby counsel' to aid the accused if and when the accused requests help, and to be available to represent the accused in the event that termination of the defendant's self-representation is necessary. * * *" 422 U.S. at 834, n. 46, 95 S. Ct. at 2541 n. 46, 45 L. Ed. 2d at 581 n. 46. We find the defendants' contention to be without merit. IV Defendants' third contention is that admission into evidence of four homemade knives and the bloodstained shirt worn by the victim constituted reversible error because irrelevant (the knives) and inflammatory (the shirt). A. The knives were found shortly after the stabbing in two rooms located near the scene of the attack. Defendants argue that the knives were not relevant because no evidence established a direct link between the defendants and the knives. This argument is without merit, because, as the jury is permitted to draw inferences from circumstantial evidence, Howard v. State, Del.Supr., 303 A.2d 653, 657 (1973), weighing the chances that the evidence correctly points to guilt against the possibility of inaccuracy or ambiguous inferences. Henry v. State, Del.Supr., 298 A.2d 327, 330 (1972). Thus, whether the knives were those used in the assault was a matter for the determination of the jury. There was no error in their admission. B. The admission of the victim's bloodstained shirt into evidence was similarly not erroneous. The shirt was relevant to illustrate the number and size of the cuts received by the victim and to establish a nexus between the knives and the assault by permitting the jury to match the *1018 knives with the slits in the shirt. The record does not indicate that the shirt was used to inflame the jury, and the admission of a bloodstained shirt is not per se inflammatory. Longoria v. State, Del.Supr., 3 Storey 311, 168 A.2d 695, 703, cert. denied, 368 U.S. 10, 82 S. Ct. 18, 7 L. Ed. 2d 18 (1961). V. Defendants next content that their presumption of innocence was impaired by the cumulative effect of their appearance in prison garb and certain security measures undertaken at the trial. During a pretrial conference the Trial Court overruled Mr. Wise' (attorney for defendant Henry) objection to trying the defendants in prison garb;[9] however, the Trial Court subsequently inquired, before the trial, whether the defendants had any personal clothing which they wished to wear and were not permitted to wear.[10] This inquiry by the Trial Court cured any possible error that might have resulted from its earlier ruling, placing the resolution of this issue within the parameters drawn by the Supreme Court in Estelle v. Williams, 425 U.S. 501, 96 S. Ct. 1691, 48 L. Ed. 2d 126 (1976), where it was held that no Fourteenth Amendment violation resulted from the trial of a defendant in prison garb when no objection to the attire was made. Furthermore, this case is distinguishable from Williams, as in that case the prison garb worn by the defendant was clearly identifiable as such, 425 U.S. at 503, 96 S. Ct. at 1692, 48 L. Ed. 2d at 129, while the clothing worn by these defendants was not marked so as to be readily apparent as prison garb.[11] *1019 Additionally, the defendants here were on trial for a crime allegedly committed in prison, making their identity as prisoners a fact which they could not have concealed from the jury, while in Williams the defendant was not an inmate when accused. We quote from United States ex rel. Stahl v. Henderson, 5th Cir., 472 F.2d 556, cert. denied, 411 U.S. 971, 93 S. Ct. 2166, 36 L. Ed. 2d 694 (1973); "Stahl's complaint of being tried in prison garb, if indeed he was, gives us little pause. He was on trial for the murder of a fellow inmate in the Louisiana State Prison where prison garb was Stahl's normal attire. The jury necessarily knew that he was a prison inmate both at the time that he was alleged to have committed the crime and at the time of the trial. No prejudice can result from seeing that which is already known. * * *" 472 F.2d at 557. The defendants' contention that the security precautions undertaken at the trial impaired their presumption of innocence is similarly without merit. The Trial Court limited the number of uniformed officers present in the courtroom to six and strived to maintain this number in the face of disruptive tactics of the defendants and spectators. A metal detector installed at the door of the courtroom was kept from the knowledge of the jurors — its efficacy was demonstrated by the refusal of certain spectators to pass through it. The security measures, of themselves, or when considered in the context of the defendants' garb, did not impair the defendants' presumption of innocence. VI Defendants' final contention is that the presence on the jury for nine days of a juror who had a personal relationship with a prison guard constituted reversible error. The Trial Court held an evidentiary hearing on the matter upon its being brought to the Court's attention. A witness at the hearing testified that she saw the guard and the juror recognize and wave to one another in the presence of other jurors, outside the courtroom. The guard testified that he had known the juror for seven years; that his son played with the juror's son; that he was at the Court House and active in connection with other trials during this trial; that he recognized and spoke a word of greeting to the juror on the occasion in question; that he was in uniform when the incident occurred, and that his only connection with this trial pertained to security measures outside the courtroom and escorting an inmate witness from the courtroom. The Court then denied defendants' motion for a mistrial on the grounds there was no showing of prejudice, but agreed to question the juror on the matter. The juror stated that he had in no way communicated his relationship with the guard to the other jurors and that the other jurors were unaware of the greeting that passed between them. The Trial Court, at the request of the defense, struck the juror from the panel, replacing him with an alternate. *1020 This case differs markedly from Turner v. Louisiana, 379 U.S. 466, 85 S. Ct. 546, 13 L. Ed. 2d 424 (1965), where a murder conviction was reversed because two principal prosecution witnesses, deputy sheriffs, "ate with [the jurors], conversed with them, and did errands for them." 379 U.S. at 468, 85 S.Ct. at 547, 13 L. Ed. 2d at 426. The Turner Court contrasted that relationship with a brief encounter, the situation presented here. 379 U.S. at 473, 85 S.Ct. at 550, 13 L. Ed. 2d at 429. We agree with the Trial Court that no prejudice resulted from the juror's presence on the jury and that removal was the proper remedy upon discovery of the relationship. Affirmed. NOTES [1] 11 Del.C. § 577 (1953) provided: "Whoever, with violence, assaults another with intent to commit murder is guilty of a felony, and shall be fined not less than $500 nor more than $1,000, and imprisoned not more than 20 years." [2] 11 Del.C. § 813(b) (1966) provided: "(b) Whoever, with intent to do bodily harm, assaults and causes serious bodily harm to a duly constituted police officer, prison guard, or other law enforcement officer acting in the lawful performance of his duties, while in uniform, or after evidence of authority has been exhibited, or after authority has been specifically declared, shall be fined not less than $500 nor more than $5,000, and shall be imprisoned not less than 1 year nor more than 5 years." [3] 11 Del.C. § 105 (1953) provided: "Whoever commits or is guilty of * * * conspiracy * * * shall be fined in such amount, or imprisoned for such term, or both, as the court, in its discretion, may determine." [4] Superior Court Criminal Rule 24(a) provides: "(a) Examination. In addition to any examination required by statute, the Court shall permit or conduct such examination as is reasonably calculated to ascertain prejudice of a juror. The Court may permit the defendant or his attorney and the Attorney General to conduct the examination of prospective jurors or may itself conduct the examination. In the latter event the Court shall permit the defendant or his attorney and the Attorney General to supplement the examination by such further inquiry as it deems proper or shall itself submit to the prospective jurors such additional questions by the parties or their attorneys as it deems proper." [5] Superior Court Criminal Rule 24(b) provides in its pertinent part: "In noncapital cases the State shall be entitled to 6 peremptory challenges and the defendant or defendants shall be entitled to a total of 6 peremptory challenges which shall be exercised after the jury is impanelled. The defendant or defendants shall first exercise or refuse to exercise the right of challenge. Challenges shall then proceed alternately until each side has exhausted its challenges or has expressed itself as content. "If there is more than one defendant, the Court may allow the defendants additional peremptory challenges and permit them to be exercised separately or jointly." [6] The Court: "Mr. Payne, do you wish to add anything? Defendant Payne: "Yes, I would like to say something. This is the first time I seen this actor since June. I don't want the pig to represent me. * * *" * * * * * Defendant LeGrande: "I would like to make a motion. I would like to charge Mr. Trzuskowski with racism like, whatever his name is, Hitler. You removed him June 27 and I would like you to remove him today." * * * * * Defendant Watson: "I would like to say something. Do we have a right to choose counsel of our own choice?" The Court: "Mr. Watson, I don't know that I have addressed you in letter form, but I have the others and I have told them that if you are not in a position to retain or hire counsel, Court will appoint that counsel. With respect to who that counsel is that the Court appoints, no, you don't have a choice. I appoint competent counsel. Defendant LeGrande: "Are you God?" * * * * * Defendant LeGrande: "Aren't there any more lawyers in this State?" * * * * * Defendant Henry: "As far as the matter remaining now, he is supposed to be representing me but, like, as you can recall, several months ago I asked you to — I wanted to have a private lawyer to represent me and you refused." * * * * * The Court: "Mr. Henry, you are not precluded from having a private attorney represent you; none of you are. Any private attorney who appears and indicates he is ready to represent you will be permitted to come into this case, and that has been true from the beginning." Defendant Henry: "Your Honor, being that this is another portion of my life being threatened, or about to be taken away from me, I think it is up to my consent who I should have represent me, but as far as it stands now, he is representing me, but if there are any further actions that we may take through court explaining our position, I am included." The Court: "Very well, Mr. Wise, the Court directs you to remain in the case and represent Mr. Henry." [7] Defendant Johnson: "My thoughts are already in the record, your Honor. I made my position clear that I do not want no severance, and counsel can act as amicus curiae and that is it." * * * * * The Court: "He [LeGrande] has indicated to the Court very clearly that he doesn't want you to share in any part of it." Mr. Trzuskowski: "Is that correct, Mr. LeGrande?" * * * * * Defendant LeGrande: "I am reconsidering that. I would use him as amicus curiae." Defendant Payne: "I will take the same position." * * * * * Mr. Wise: "You want my help, don't you Carl?" Defendant Henry: "Yes." [8] The Court: "Yes, if you are going to represent yourself, then you represent yourself and the lawyer isn't involved in it. When it is time to ask questions, you ask the questions * * * and when you are ruled on by the Court, you take it and sit down and someone else gets up, but you don't jump up and yell and do things of this kind or the Court will be disrupted; it is that simple." * * * * * The Court: "* * * Before we commence trial in the matter, one or more of the defendants indicated that they would prefer to handle their cases without attorneys assigned. The Court has not permitted the attorneys to withdraw from the case and has asked them to stand by and assist in whatever way they can. In the course of the jury drawing there was assistance given, as was evident, and I should like to know before the actual trial itself starts, the position of each of the defendants with respect to the attorney assigned to him. Let me say this, gentlemen * * * if an individual is representing himself, it will be necessary to abide by the rules of the Court, which include responding at various times and not interrupting others and being heard the proper way * * * I am not telling you you have to have an attorney, any of you, but I am asking you to give some thoughts to it. * * *" * * * * * (The defendants decided to use their attorneys.) * * * * * Mr. Weir: [the Attorney General] "I am going to make a request that if counsel asks questions on cross-examination, the defendants not ask questions. * * * I think they can make the decision whether they want to represent themselves or whether they want to be represented by counsel." * * * * * The Court: "The Court indicated earlier that this would be permitted and, unless we have undue problems, it will be permitted. * * * * * The Court: "The ruling, as indicated before trial commenced, was that counsel would ask questions and the defendants, if they wished to." [9] The Court: "It will become evident very shortly that they are in prison and whether they are in prison garb or not, I don't think it is going to make that much difference in terms of prejudice. The objection is overruled." [10] The Court: "Do you have personal clothing that you would wish to wear and you are not permitted to, any of you?" Defendant LeGrande: "They won't give me my shoes." The Court: "Mr. LeGrande wants his shoes." Defendant Henry: "My stuff came in about a month or two ago and I am being deprived of it, my shoes." * * * * * The Court: "Can we check into that?" Guard Ira Short: "I work in the receiving room, sir." The Court: "Can you check on that and see what you can get for them to wear personally tomorrow and from then on?" Guard Ira Short: "Yes, sir." (No other requests were made.) [11] The Court: "Now that being determined, let me ask something that Mr. Wise raised yesterday and I have been curious about it. He was concerned about your clothing. You are not in prison garb, strictly speaking, are you? Mr. Johnson, you have a nice suit and tie and shirt and some of the others have what appear to be personal garments." Defendant Payne: "I think, you know, they have seen us now." The Court: "But I don't know what prison garb is, if what you wore yesterday is prison garb." Defendant Payne: "This is prison garb." The Court: "What you have on Mr. Henry, is prison garb?" Defendant Henry: "Yes." The Court: "How about what you have on?" Defendant LeGrande: "Yes." Defendant Johnson: "The reason why I wore prison garb yesterday, yesterday was a bath day, and from last Friday and over the weekend coming in court I didn't want to put on clean clothes, stinking, you know, so I waited till last night to take a bath." The Court: "Okay. Yours is a combination, I guess, Mr. Watson; you have some part of your garb that is prison garb and some isn't." Defendant Watson: "No, all of it." The Court: "Those jerseys are prison garb, too?" Defendant Watson: "Yes." The Court: "All right. Mr. Wise, do you have further comments on that point?" Mr. Wise: [attorney for defendant Henry] "Are there any markings of any sort that are visible to indicate that they are the property of the State of Delaware?" Mr. Sanders: [attorney for defendant Payne] "Yes, the back of the pants and around the waistband." Mr. Wise: "Because if there isn't any visible marking —" Defendant Payne: "You are not allowed to have your personal clothing anyway within the institution. "Maximum security" it says on the back (indicating)."

2013-10-30 06:32:40.926879+00

Shangler

535 S.W.2d 469 (1976) STATE of Missouri, Respondent, v. Jimmy D. DAYTON, Appellant. No. KCD27649. Missouri Court of Appeals, Kansas City District. March 1, 1976. Motion for Rehearing and/or Transfer Denied March 29, 1976. Application to Transfer Denied May 5, 1976. *471 Philip F. Cardarella, Kansas City, for appellant. John C. Danforth, Atty. Gen., Timothy J. Verhagen, Asst. Atty. Gen., Jefferson City, for respondent. Before WASSERSTROM, P. J., and SHANGLER and DIXON, JJ. SHANGLER, Judge. The defendant Jimmy Dayton was indicted on four separate counts of felony. He was accused, in concert with others, of kidnapping two male youths and practicing upon them abominable and detestable crimes against nature. The jury returned convictions of ten years imprisonment for each count of kidnapping and ninety-nine years of imprisonment on each of the other two counts. The trial court ordered that the sentences be served consecutively. The evidence of the State showed that Jerry Dayton and Sam Dayton, brothers of the defendant, and Millard Swenson, their uncle, were co-actors in the episodes of abduction and pederasty for which the defendant was convicted. The defense was both alibi and innocence on the open-court testimony of Jerry Dayton that it was he and three others who had seized the youths and submitted them to torture and molestation. The victims of these perversions were D.E., a boy of eleven years and his playmate, G.D., who was then seven years old. On the late afternoon of April 12, 1974, the *472 boys had rummaged a trash bin on the parking lot of the Baltimore Bank at 31st and Main and were about to leave, when a blue-green car pulled onto the lot. According to the testimony of D.E., the older of the boys, after a preliminary inquiry of street location, the two occupants identified themselves as police officers and told the boys they were in arrest for the trespass of private property. [The witness identified the defendant as the driver.] One of the men flashed a badge and ordered the boys into the car. The men then told the boys that they were in search of two others for shoplifting; the car proceeded south on Main to Linwood where they encountered two men walking down the street carrying J. C. Penney bags. The car stopped, picked them up, then proceeded to a motel [identified by photographic exhibit as the Travelodge at 3240 Broadway], and entered room 210. It was the further testimony of D.E. that once inside the room, their abductors continued to conduct themselves as police officers; they feigned a search of the room, undertook a mock interrogation of the other two men and ordered the boys to disrobe and be searched for weapons. The men also disrobed. The boys were then made to shower on the pretext that such an amenity would not be available in jail. The boys were separated; D.E. was brought into the bedroom and the younger boy was made to remain in the bathroom. Once in the bedroom, the defendant directed D.E. to take his penis into his mouth, but the boy refused. The boy was then made to lie on the bed, and thus prone, was gagged and blindfolded with cloth and tape, and tethered by his wrists and ankles to the four corners of the bed. D.E. testified that five separate acts of anal penetration followed, the first four by men of different weights who lay upon him in succession, and the fifth by a hard irregular object which hurt him. [The latter reference was to the dildo, an artificial priapus of exaggerated size, the boy had first seen in the bathroom of the motel and then in the bedroom strapped to the defendant.] At the time the dildo [exhibit 11] was inserted into the boy, one of the men warned the others that it would kill him, but it was applied anyway. This penetration caused the boy to scream and induced a defecation which covered the bedsheet. The boy was also shocked and hurt by the intermittent application of a cattle prod against parts of his body. At the conclusion of these molestations, the ties, gag and blindfold were removed and D.E. was released to wash in the bathroom and dress. The boys were separated once again; while D.E. was in the bathroom, his younger companion was taken into the bedroom. The testimony of G.D. corroborated the narrative given by D.E. of abduction by two men who identified themselves as police officers, and their asportation by car to the motel in the company of the other two men picked up by the others. G.D. identified the defendant as the driver of the vehicle. He, too, was told to disrobe and bathe and remained there alone while his companion was in the bedroom. First one of the men, and then another [neither of whom he could identify], came into the bathroom and placed his penis into the mouth of the boy. Then he was taken into the bedroom, spread upon the bed and tied, gagged and blindfolded, he was subjected to a single act of rectal sodomy. Also, he was shocked by the cattle prod. G.D. recalled the defendant led him into the bedroom from the bathroom, but could not say whether he was in the room when the perversions were practiced upon him or who or how many took part. When the boys had dressed, they were taken to the automobile, warned not to report the event, and released at the Foremost Dairy premises at 31st and Gilham Road. Immediately upon their return home, each boy reported what had happened to his parents. The mother of G.D. noticed rope burns on the hands and legs of her son. [D.E. testified that similar impressions had been made on his body.] She testified that her son arrived home about 8 P.M. on that day and that she had last seen him with D.E. at about 4:00 P.M. Thus, *473 although neither of the boys could remember the time of the criminal events at the trial, it is apparent that they took place sometime between those hours. The police were called and they responded shortly after 9:00 P.M. The boys were taken to Childrens Mercy Hospital for examination. D.E. was found to have suffered a tear of the anal mucosa; the findings on the medical examination of G.D. were not disclosed in evidence. The older of the two boys, D.E., then led Officer Dale Meadows and Detective Bernard Gowin of the Kansas City police department to the site of the abduction, and then led them along the same route they had been taken to the motel. He told of the blue-green Chevrolet, gave a general description of the four suspects, the badge and other paraphernalia used in the crimes. At the motel parking lot, D.E. pointed out the car, and then led the officers to room 210. The officers learned from the desk that the room was let to the defendant, his two brothers and uncle. In order to avoid a confrontation between D.E. and the suspects, the boy was left with the manager. It was about 1:00 A.M. when the officers knocked on the door of room 210 and were admitted. They found the three Dayton brothers and Swenson ready for bed. The four suspects were arrested and a search of the premises recovered tape from a receptacle in the bed area, towels, washcloths and bedpad from the bathroom. These were given to a police evidence technician at the scene for laboratory analysis. He testified that towel and cloth were stained red and yellow, and that marks of blood and defecation appeared on the bedpad. A search of Sam Dayton revealed a knife [identified by G.D. as the weapon wielded by one of the abductors]. As the men were led to the police wagon, Sam Dayton asked Officer Gowin for his jacket from the car. He gave the officer the key to the Chevrolet. Gowin then picked up the jacket from the car seat and noticed a wallet which was found to contain a badge with the inscription: Special Police, Maryland. The four suspects were taken to the police station where Officer Gowin conducted a line-up. Six men comprised the line-up; the four suspects and two others. The two boys were kept separate and free from suggestion during the identification procedure; each was given a card for the notation of the number designation of any of the men on view who had been involved in the events earlier that day. The numbers noted by D.E. identified the three Daytons and Swenson as the men who had abused him. At the trial, he identified the same four men from a photograph of the line-up taken by Gowin. The younger boy, G.D., picked three from among the six men at the line-up, Jerry Dayton, Millard Swenson and the defendant Jimmy Dayton, but identified all four from the photograph at the trial. The final witness for the prosecution was Doctor Matthias Yoong, a forensic chemist, who examined the property impounded by Mosby, the police evidence technician. He obtained cranial hair standards from the two boys and the four suspects for comparison with hair filaments taken from the tapes found in the motel room receptacle. The strands from the tapes fell within the limits of variance of the cranial standards taken from the two boys, but not within those taken from any of the suspects. Hairs collected from the bedpad were compared with standards taken from the four men and were found to fall within the limits of the head hair standards taken from Sam Dayton and Millard Swenson. Doctor Yoong also found seminal and fecal stains on the bedpad, blood on the washcloths, and seminal stains on the towel. The defense was alibi. The defendant Jimmy Dayton testified that he had come to Kansas City from his Maryland residence and registered at the Travelodge Motel. On the day of events in issue, he with his brothers, Jerry and Sam, and uncle, Millard, left the motel at about noon for the residence of one Tyler. Once there, he spent the afternoon in an upper bedchamber with Susan Hogan, who lived there with the Tylers, and did not emerge until about 5 P.M. He, brothers and uncle, left about 9 *474 P.M. but did not arrive at the motel until after 10:30 P.M. They found the room in disarray. It was not until two weeks later that his brother Jerry told him that he and three others, strangers to the defendant, had abducted and molested the two boys. The brother of the defendant, Jerry Dayton, also under indictment for the same charges, corroborated the testimony of the defendant that the four kinsmen left the motel at about noon of the day in question for the Tyler residence. There an argument developed between Jerry and brother Sam concerning the attentions of Patty McCormick, one of the guests, so at about 2:30 P.M. he left in the Chevrolet. He drove around, sniffed glue, drank beer, and about an hour later, joined four men with whom he had worked in the carnival [Billy Smith, Paul Asher, Hurst Jones and Hip]. At the bank lot, they abducted the boys, took them to the motel room, tortured and abused them, and finally released them at about 9 P.M. at a dairy stand. Jerry Dayton testified that he lured the boys with the defendant's special police badge, told them they were going to jail, required them to undress and bathe, blindfolded and gagged the boys, and in turn staked each to the bed. Hurst Jones became frightened at these antics and left. The remaining four each forced rectal intercourse with D.E. One of them, Asher, penetrated D.E. with a dildo which induced defecation and rectal bleeding. It was the further testimony of Jerry Dayton that the younger boy, G.D., was forced to take into his mouth the penis of two of the men, and to submit to the rectal sodomy of one other. This boy was also tortured by cattle prod. On cross-examination, the witness acknowledged that he was suffering from cancer but denied that it was terminal or that his testimony was prompted by such an extremity. The defense presented the testimony of two other alibi witnesses, Edna Sue Hogan and Thomas Raye, both resident guests at the Tyler home on April 12, 1974, the day in issue. Ms. Hogan, seventeen years of age, admitted to conviction for burglary in complicity with Mary Dayton, sister of the defendant. It was her testimony that on that day, the three Daytons and Swenson arrived at the Tyler home at about noon and left together at about 9:30 P.M. She remembered well because on that afternoon she had yielded her maidenhood to the blandishments of the defendant in the bedchamber. Her testimony was equivocal as to whether Jerry was in the house when she and the defendant emerged from the bedroom at about 5:00 P.M. The other witness, Tom Raye, saw the four arrive and then leave at about 9:30 P.M. He had been occupied for hours on a telephone in an upper room during their stay and did not say with any definiteness whether he saw Jerry between those hours. On this appeal, the defendant brings a congeries of errors, most of which were not assigned on motion for new trial and are asserted as plain error. Among them, the contentions that: 1. the motel bathroom and automobile were subjected to illegal searches and that the seizure of linens and other accoutrements from the bedroom, and the discovery of the badge in the car, were fruits of warrantless and excessive searches; 2. The testimony of G.D. did not evince a sufficient memory of independent recollection of the observations of the alleged offense and should have been excluded; 3. The testimony of G.D. was suggested to him by leading questions and should have been excluded; 4. The identification of the defendant by the boys was induced by a suggestive line-up and should have been excluded; and 5. the closing argument of the prosecutor was so calculated to inflame the jury and arouse their prejudice against the defendant as to deprive him of due process of law. Two other points, actually of single import, were preserved for our review and raise the contention that exculpatory evidence had been withheld from the defendant *475 in violation of due process and the rules of criminal discovery. Rule 27.20(c) which allows consideration on appeal of plain errors affecting substantial rights though not preserved for review does not propose to meliorate every trial lapse but only those of constitutional dimension. State v. Beasley, 404 S.W.2d 689, 690[1, 2] (Mo.1966); State v. Murphy, 521 S.W.2d 22, 25[2-4] (Mo.App.1975). The grant of relief by this rule, however, is one of discretion and conscience, and is rightly given only in cases where justice has miscarried. State v. Meiers, 412 S.W.2d 478, 480[1] (Mo.1967). There are constitutional errors which are legitimately refused consideration even under the plain error rule as where the procedures adopted to ensure orderly presentation and determination of such claims have not been met. Thus, a contention that a search and seizure were unlawful made for the first time on appeal may not generally be recognized. The procedures of Rule 33.03 provide that the adjudication of that issue shall be made by a motion made, in advance of trial, to suppress the evidence so obtained. The movant has then the burden to sustain the contention by evidence, to keep the issue alive by timely objection, and to preserve it by motion for new trial. State v. Fields, 442 S.W.2d 30, 33 (Mo.1969); State v. Yowell, 513 S.W.2d 397, 402[1, 2] (Mo. banc 1974). This procedure for contemporaneous objection at the trial as a condition for review of an unlawful search and seizure claim serves a valid state interest and therefore does not deny due process of law. Henry v. Mississippi, 379 U.S. 443, 448[6, 7], 85 S. Ct. 564, 13 L. Ed. 2d 408 (1965). The interest served is the formulation by evidentiary hearing on the motion to suppress of a record which allows informed appellate review. State v. Thompson, 490 S.W.2d 50, 52[2] (Mo.1973). The brief of the defendant on appeal asserts for the first time that the conviction of the defendant rests on evidence discovered as the result of an illegal foray by police into the lavatory of the motel room and an excessive search of the automobile. The contentions are that these searches, without formal warrants, were not otherwise incident to the arrest; that although the law allows search incident to a lawful arrest to prevent the suspect from access to a weapon or the destruction of evidence, Chimel v. California, 395 U.S. 752, 89 S. Ct. 2034, 23 L. Ed. 2d 685 (1969) confines such police activity to an area within the control of the arrestee, which under the circumstances excludes the motel bathroom. The other contention is that the badge was discovered as the result of an exploratory automobile search; that although the initial access to the vehicle was legitimate response by the police to the request by an arrestee for his coat, the badge was encased and not in plain view, and thus the search and seizure fall within the condemnation of Coolidge v. New Hampshire, 403 U.S. 443, 91 S. Ct. 2022, 29 L. Ed. 2d 564 (1971). These contentions were not presented to the trial court; there was neither pretrial motion to suppress, nor objection at the trial to the admission of the evidence, nor preservation for review in the motion for new trial. The same void which inhibits review of these issues in the normal course inhibits review as plain error: a record which lacks pertinent data. In the serious circumstances presented, in consideration that the evidence the defendant impugns as illegal so pervaded the trial and the judgment, we would have been disposed to a review of the searches and seizures under Rule 27.20(c) had these issues been formulated by evidence on a motion to suppress, even though the defendant may not otherwise have objected to the admission of the evidence at the trial or assigned the error in the motion for new trial. See: State v. Yowell, supra, l. c. 402[1, 2]. But the State here was not allowed opportunity to justify the search which a motion to suppress may have proved. The evidence as it came in at the trial was not oriented to the validity of the searches, but to the discovery of the evidence. Even this random record suggests consent to the automobile seizure and the discovery of evidence open to view in the bathroom. See: State v. Thompson, *476 supra, l. c. 52[2]. These assignments are denied review as plain error. The next points relate to the competency of G.D. to give testimony and to an alleged prejudice to the defendant from suggestive questions asked of the boy by the prosecutor. These are contentions of trial error and are not subject to remedy under the plain error rule. State v. Murphy, supra, l. c. 25[2-4]; State v. Smith, 261 S.W.2d 50, 55[4, 6] (Mo.1953). They were not preserved for appellate review, so we do not reach their merits. It is sufficient to say that the voir dire examination of the witness satisfied all the tests of competency of a child who gives testimony. See: State v. Young, 477 S.W.2d 114, 116[1, 2] (Mo. 1972). As to the suggestiveness of the questions, in the most important particulars the responses were not elicited and were otherwise corroborated by other evidence. The prosecutor did lead the child and aid him to describe, in his own idiom, the phallus and the act of fellatio, but that was more a matter of delicacy than advantage. These points are denied review as plain error. The claim that the line-up identifications of the defendant by the boys were suggested is also presented as plain error. The defendant did not move to suppress the identifications, nor object at the trial to the photographs of the procedure, thus his appellate position lacks systematic development in the record. The contentions here are that the line-up was exhibited early in the morning, a time when the boys were weary and sleepy, and that the array of the four suspects with only two others was so suggestive as to have induced the identifications as virtually inevitable. These criticisms are trivial. The evidence shows that at the time of the line-up the boys were alert, separated from each other, and carefully instructed in the identification procedure. The record affirmatively shows that they were kept from the undue police suggestion. State v. Word, 527 S.W.2d 708, 710[2, 3] (Mo.App.1975). Nor does the contention that only one of the persons on line-up exhibited facial hair render the procedure invalid. The law does not require such exactness of physical and personal features of the participants. In any event, the uninterrupted exposure over a prolonged time to the physical presences of the four suspects provides an independent basis for their court identification of the defendant as an abductor and assailant. This point is denied. The final contention of plain error is that the display of the artificial penis during the closing argument and other comment inflamed the passion and prejudice of the jury. The closing argument went without objection by the defendant. There is no suggestion here why the artificial device, otherwise legitimate evidence, should have been kept from the view of the jury. The contention is made that the exhibit as well as certain excerpted portions of argument were calculated to arouse the personal hostility of the jurors towards the defendant and resulted in the denial of due process. We have reviewed the record with care and conclude that the argument of the prosecutor was fair comment on the evidence. The point is denied. The appellant next contends here, as did his motion for new trial, that the sentences of ninety-nine years on each count of sodomy constitute cruel and unusual punishment in violation of the Eighth Amendment to the United States Constitution. The punishment was within the statutory allowance and therefore, as a matter of law, is neither cruel nor unusual. State v. Vermillion, 486 S.W.2d 437, 441[9] (Mo. 1972). In his motion for new trial the defendant also contends that the failure of the prosecutor to disclose certain evidence was a denial of due process and, cumulatively, Rule 25 which relates to discovery in felony causes. The defendant had made pre-trial request of the State for discovery under Rule 25.32 for disclosure of (5) Any reports or statements of experts, made in connection with the particular *477 case, including results of physical or mental examinations and of scientific tests, experiments, or comparisons; (9) Any material or information, within the possession or control of the state, which tends to negate the guilt of the defendant as to the offense charged, or reduce the punishment. At the hearing on the motion for new trial, the state acknowledged that prior to the trial the State had received a written report of the physical examination of G.D., the younger boy, made by Dr. Joseph Gialde on the night of the offense. The report contained statements made by the boy to Dr. Gialde, but neither the report nor the statements was disclosed to the defendant. The portion of the report which the defendant contends was withheld to his prejudice stated: On specific and direct questioning, he [G.D.] denies any felatio (sic) or anal penetration [with] any object at all. States that men did not strike him at all. The defendant asserts that he was denied fundamental fairness by the nondisclosure because this statement contradicts the testimony of the complainant, and thus would have been admissible not only for impeachment but also as direct proof that sodomy was not committed upon the boy. The defendant cites Brady v. Maryland, 373 U.S. 83, 87, 83 S. Ct. 1194, 1196, 10 L. Ed. 2d 215 (1963) for the principle that [T]he suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to the guilt or punishment, irrespective of the good or bad faith of the prosecution. This is a duty which our courts have also recognized and which discovery Rule 25.32[1] reposes on the prosecutor. State v. Abernathy, 525 S.W.2d 414, 416 (Mo.App.1975). On the motion for new trial, the prosecutor sought excuse for the nondisclosure on the contention that, in response to the discovery request, he had opened his file to the defendant, but by some misadventure the medical report was overlooked by the defendant or misplaced by the prosecutor, and that the State should not be penalized for such an innocent neglect. The deception from a negligent nondisclosure causes no less injury to the administration of criminal justice than a suppression made by design or guile. The duty to disclose, whether under Brady or Rule 25.32, rests on the prosecutor, and the material and information are within his possession or control, the cause of his failure cannot soften the sanction. Giglio v. United States, 405 U.S. 150, 154, 92 S. Ct. 763, 31 L. Ed. 2d 104 (1972); Levin v. Katzenbach, 124 U.S.App.D.C. 158, 363 F.2d 287, 290[2] (1966). The questions remain whether the evidence requested suppressed was favorable to the defendant and material on guilt or punishment. Brady v. Maryland, supra, 373 U.S. l. c. 86, 83 S. Ct. 1194. The Brady requirement of materiality is satisfied when the evidence does no more than impeach the credibility of a witness whose testimony prejudiced the defense. State v. McClain, 498 S.W.2d 798, 799 (Mo. banc 1973). And, certainly, the purpose of Rule 25.32 includes opportunity to a defendant to prepare in advance of trial for the impeachment of a witness by his own statement. State v. Buckner, 526 S.W.2d 387, 392[3, 4] (Mo.App.1975). It is the contention of the State that, notwithstanding nondisclosure, the evidence of Jerry Dayton for the defendant admitted that G.D. had been assaulted, forced to the act of fellatio, and tortured with a prod, so that the statement by the boy to Dr. Gialde was not material on any issue and, even if available, could not have affected the outcome of the trial. The defendant complains *478 that the nondisclosure shaped a strategy of defense which proceeded on the assumption that the prosecutor had met his duty to make discovery. Whether prejudice results in a given case depends upon the nature of the charge, the evidence presented by the State, and the role the undisclosed testimony would likely have played. Barbee v. Warden, Maryland Penitentiary, 331 F.2d 842, 847[6] (4th Cir. 1964). It is clear that the medical document was relevant only upon Count III, the allegation of sodomy by the defendant upon G.D., and did not bear upon either count of abduction or the molestation of the other boy, D.E. The statement by G.D. to Dr. Gialde affected the other charges only to the extent that the conflict between his statement to the physician and his trial testimony may have disparaged the credibility of the boy before the jury. The proof by G.D. of the other counts was merely corroborative of the other sufficient and clear testimony of guilt and, in reasonable likelihood, the failure to disclose the contradictory statement made by G.D. to the physician would not have affected the judgment of the jury. Napue v. Illinois, 360 U.S. 264, 271, 79 S. Ct. 1173, 3 L. Ed. 2d 1217 (1959); Ingram v. Peyton, 367 F.2d 933, 936[3] (4th Cir. 1966); State v. Allen, 530 S.W.2d 415, 419[3] (Mo.App.1975). As to Count III, the specific sexual abuses upon his person narrated by G.D. at the trial were proved independently by the defense, and unless we are to believe that the testimony of Jerry Dayton was contrived—an assumption we are unwilling to make—it is not apparent how the nondisclosure worked the defendant prejudice. We conclude, accordingly, that the evidence was not of a character to raise a reasonable likelihood that, if known at the trial, would have affected the result. We reverse and remand the cause for retrial of Count III, however, because the judgment entered was on a submission without support in the evidence. In doing so, we deny the contention that the defendant was entitled to acquittal because the evidence was not responsive to the indictment. Count III of the indictment undertook to charge the abominable and detestable crime against nature, an offense created by § 563.230, RSMo 1969. In terms, that section provides that Every person who shall be convicted of the detestable and abominable crime against nature, committed with mankind or with beast, with the sexual organs or with the mouth, shall be punished by imprisonment in the penitentiary not less than two years. The accusation of the indictment charged that [O]ne JIMMY D. DAYTON . . . did then and there unlawfully, feloniously, either alone or knowingly acting in concert with others, and wickedly and against the order of nature, commit the abdominable and detestable crime against nature by then and there inserting the penis of him, the said JIMMY D. DAYTON into the mouth of G. . . D. . . In fact, there was no proof that it was the sexual organ of the defendant which was placed into the mouth of the boy. According to the State, the incident occurred in the bathroom when G.D. was separated from his older companion who was then under assault in the bedroom. G.D. could not identify which of the four men accosted him in the bathroom, and D.E. did not know what happened to the other boy during their separation. The evidence of the defendant disclaimed that he was involved in any manner. The contention is not that Count III of the indictment fails to fairly charge sodomy against the defendant, but that the allegations of that accusation require proof that it was the procreative organ of the defendant which was placed in the mouth of G.D., and without such proof the conviction may not stand. The purpose of an indictment is to enable the accused to make his defense and to enable him to assert double jeopardy in bar of a further prosecution; it is also the pleading by which the *479 court determines whether the facts alleged are sufficient to support a conviction. State v. Moore, 501 S.W.2d 197, 199[3, 4] (Mo.App.1973). The term sodomy embraces any unnatural corporeal copulation [State v. Oswald, 306 S.W.2d 559, 562[4-6] (Mo.1957)], and on penetration the crime becomes complete. State v. Wilson, 361 Mo. 78, 233 S.W.2d 686, 688[2] (1950). As with other crimes, all persons who knowingly participate in the perpetration of sodomy upon another are equally guilty of the offense. State v. Cain, 507 S.W.2d 437, 440[3] (Mo. App.1974). Sodomy is of a vile and degrading nature, and for that reason, the strict rules of pleading have not been followed in charging the crime. 70 Am.Jur.2d 818, § 17. As long as the act of sodomy charged falls within the statutory definition and the indictment informs the accused of the charge against him, the details of the commission are generally unnecessary. 81 C.J.S. Sodomy § 4. The indictment was a statement sufficient to inform the defendant that he, in concert with others, inserted a male penis into the mouth of G.D. That, also, was the proof. Thus, the defendant was accused as an aider and abettor and is treated in our law as a principal. § 556.170, RSMo 1969. The State need not plead evidence in an indictment, thus the facts by which the defendant aided and abetted the commission of the crime were not essential to the validity of the accusation. State v. Spica, 389 S.W.2d 35, 40[1-4] (Mo.1965). Accordingly, the phrases of him, the said JIMMY D. DAYTON, which appears within the indictment pleading JIMMY D. DAYTON . . . either alone or in knowingly acting in concert with others, and wickedly and against the order of nature [did] commit the abominable and detestable crime against nature by then and there inserting the penis of him, the said JIMMY D. DAYTON into the mouth of G.D. stands as mere surplusage to the otherwise sufficient allegation of sodomy against the defendant as a principal who aided and abetted the crime. State v. Lemon, 504 S.W.2d 676, 681[3, 4] (Mo.App.1973). Although the evidence was responsive to the indictment allegation that the defendant acted in concert to commit the crime, the judgment was corrupted by a submission which did not conform to the facts proved. Instruction No. 8 directed a conviction on Count III if the jury found that the defendant "either alone or knowingly acting in concert with others, inserted his penis into the mouth of G.D." There was no evidence whose organ consummated the perversion. Instructions in a criminal case must rest on substantial evidence, otherwise the conviction rests on conjecture and must be set aside. State v. Cole, 377 S.W.2d 306, 307[1, 2] (Mo.1964); State v. Lemon, supra, l. c. 681[3, 4]. The judgments on Counts I, II and IV are affirmed; the judgment on Count III is reversed and remanded for new trial. All concur. NOTES [1] Rule 25.32: (A) Except as otherwise provided in these Rules as to protective orders, the state shall, upon written request of defendant's counsel, disclose to defendant's counsel such part or all of the following material and information within its possession or control designated in said request: (9) Any material or information, within the possession or control of the state, which tends to negate the guilt of the defendant as to the offense charged, mitigate the degree of the offense charged, or reduce the punishment.

2023-08-22 21:21:02.362175+00

Price

PRICE, Judge. On June 13, 1974, appellant Donna Lynne Milligan filed a petition for a writ of habeas corpus to recover *258custody of her son Bryan from appellees Frank E. Davison and his wife, Vivian. Hearings were held on the petition on July 12 and August 20, 1974. On August 20, 1974, the trial court dismissed the. petition and that order was affirmed by the court en banc on August 1, 1975. The testimony at the hearings established that the appellees became involved with Bryan in August or September, 1973, when appellant was injured in a motorcyle accident. Unable to care properly for Bryan, appellant asked the appellees to take Bryan into their home.1 Appellant expected this arrangment to last for one weekend, but when she returned to the appellees’ home, she agreed to allow them to retain custody of Bryan as long as she, appellant, would be permitted to visit Bryan when she desired. On one occasion, the appellees refused to allow the mother to see her son, and it was that action that precipitated the present dispute. The fact-finding function, of course, is for the lower court. However, our scope of review in custody matters is very broad, Commonwealth ex rel. Ulmer v. Ulmer, 231 Pa.Super. 144, 331 A.2d 665 (1974); Commonwealth ex rel. Bowser v. Bowser, 224 Pa.Super. 1, 302 A.2d 450 (1973), and we must be able to conclude that the findings of the lower court are supported by competent evidence. Commonwealth ex rel. Myers v. Myers, 468 Pa. 134, 360 A.2d 587 (1976). The polestar in a custody proceeding is the best interests of the child. Davidyan v. Davidyan, 230 Pa.Super. 599, 327 A.2d 145 (1974). In order to determine whether the best interests of the child have been served, we must have a complete record. Gunter v. Gunter, 240 Pa.Super. 382, 361 A.2d 307 (1976); Augustine v. Augustine, 228 Pa.Super. 312, *259324 A.2d 477 (1974); Commonwealth ex rel. Grillo v. Shuster, 226 Pa.Super. 229, 312 A.2d 58 (1973). At the time of the hearings in this case, appellant was seventeen years old, unmarried, and the mother of three children. Although, at one time, appellant had been receiving social security, it appears that at the time of the hearing, her sole source of income consisted of welfare payments. Appellant’s first son, born when appellant was fourteen years of age, was placed for adoption by the County Child Welfare Agency. A daughter, Erica, two and one-half years old at the time of the hearings, had always resided with her mother. Bryan was one and one-half years old. Appellant testified that she never declined an opportunity to visit Bryan when he was away from her. Kenneth Karnash, a social worker employed by the Pennsylvania Department of Public Welfare, testified that in March, 1974, appellant became one of his clients. He visited appellant at her apartment on several occasions to evaluate appellant’s ability to care for Bryan. Karnash testified that the apartment was immaculate whenever he visited. Both appellant and her daughter were clean and well fed. There were displays of obvious affection between mother and daughter. In the opinion of Mr. Karnash, appellant was quite capable of caring for Bryan. In contrast, the appellees produced no evidence of their own child-rearing capabilities. There was no evidence introduced of the relationship' between Bryan and the appellees. There was no evidence of Bryan’s development with the appellees as compared with his development while he was with appellant. There was no evidence of the appellees’ fiscal responsibility. The reason for this dearth of evidence is made clear by the trial court’s opinion filed pursuant to former Rule 46 *260of the Rules of the Superior Court of Pennsylvania.2 The court was concerned that the appellees would incur the expense of an attorney while appellant’s legal services were supplied by the government. The court therefore held that appellant had “not made out a claim for relief . . .and dismissed the petition without evidence of the appellees’ capabilities. The proceedings in the trial court and the briefs filed with this court demonstrate conclusively that appellees are and have been represented ably by private counsel. Therefore, the logic of the trial court’s action is, at the least, questionable. However, it is clear that the reason appellees did not introduce evidence is because the trial judge determined that they need not do so. In his opinion, the trial judge supplies us with many relevant facts. Appellee Frank Davison is a steadily employed postman living in Waynesburg, Pennsylvania. He is a typical representative of middle America. His family is respectable. Appellant, on the other hand, has no useful training or skills, is immature, and has been “badly confused by the values of the counterculture.” However, these findings are not supported by any evidence of record. Further, they are not facts of which a court may ordinarily take judicial notice. Therefore, they cannot enter into the decision of this case.3 The court en banc approved the trial court’s decision, noting that appellant admitted the qualifications of *261appellees when she placed the child with the appellees in the first place. However, we reiterate that summary conclusions are inappropriate when the custody of a child is the concern. Gunter v. Gunter, supra. From examining the evidence that is properly before us, we can conclude only that appellant is a fit and capable mother. The record establishes nothing about Bryan or the appellees. Thus, it is impossible to determine from this record where the best interests of Bryan lie. We recognize that depriving a parent of her child is one of the most serious interferences that the state can impose on an individual. We also recognize that in a dispute over custody between a natural parent and one other than a parent, those seeking to deprive the parent of custody face an enormous burden. See In re Custody of Myers, 242 Pa.Super. 225, 363 A.2d 1242 (filed September 27, 1976), and cases cited therein. In this case, however, we would be shirking our responsibilities were we to attempt to decide the best interests of Bryan from a barren record. This court has frequently indicated that where the record is incomplete, remand is necessary. Gunter v. Gunter, supra; Augustine v. Augustine, supra; Commonwealth ex rel. Grillo v. Shuster, supra; Commonwealth ex rel. Ashfield v. Cortes, 210 Pa.Super. 515, 234 A.2d 47 (1967). Therefore, the order of the lower court is vacated and the case is remanded for proceedings consistent with this opinion. JACOBS, J., joins in this opinion as well as the concurring opinion below. HOFFMAN, J., concurs in the result of this opinion as well as that of the concurring opinion below. SPAETH, J., files a concurring opinion in which JACOBS, J., joins and in which HOFFMAN, J., concurs in the result. . The relationship between Bryan and the appellees was never conclusively established. The appellees are the aunt and uncle of Duane Rawls, who admitted to fathering Bryan. However, George Hughes also admitted being the father. Appellant was uncertain, but suspected that Duane Rawls was not the father of her son. . Rule 46 was abrogated effective July 7, 1976, by Pa.R.A.P. 5102. Lower courts are now required to file opinions pursuant to Pa.R.A.P. 1925. . The lower court also justifies its decision on the grounds of “racial tensions”. Appellant is white. George Hughes, Duane Rawls, and appellees are black. The trial court decided that under the standards of the community, Bryan’s welfare would be enhanced by his living with a black family. However, “problems related to racial identity [are] inapplicable in custody proceedings. . . .” Commonwealth ex rel. Myers v. Myers, 468 Pa. 134, 143, 360 A.2d 587, 591 (1976).

2023-08-22 21:21:02.367383+00

Spaeth

*262SPAETH, Judge (concurring): I agree that the case must be remanded. In remanding, however, I should require two procedures to be followed. —1— The hearing judge imposed the burden of proof on appellant. The majority correctly notes that that was error: the burden is on the party seeking to deprive a mother of custody of her child; and it is an “enormous burden.” In addition, however, there is another procedural point that we should in my opinion insist upon. I agree with the majority that in a custody proceeding the question is likely to arise as to where the child’s best interests lie. (I say “likely to arise” because much will depend on the sort of custody proceeding, and who the parties are. Compare with each other such recent decisions as In re: John and James LaRue, 244 Pa.Super. 218, 366 A.2d 1271 (1976); Gunter v. Gunter, 240 Pa.Super. 382, 361 A.2d 307 (1976); Stapleton v. Dauphin County Child Care Service, 228 Pa.Super. 371, 324 A.2d 562 (1974).) The best interests test, however, is a comparative test. The occasion to apply it, therefore, never arises until there is some reason to compare the mother of the child with the person who refuses to return the child; and there is no such reason unless the mother has in some respect failed to provide proper care for the child. It follows that at the hearing on remand, the following procedure should be followed. First, appellees must prove that in some respect appellant has failed to provide proper care for the child. If they fail in such proof, that should be the end of the matter: the case would be no different than if, suppose, a mother were to send her child to summer camp, and at the end of the camp season one of the counselors refused to return the child simply *263because he had grown fond of it. Second, if appellees are able to prove that in some respect appellant has failed to provide proper care for her child, then, and only then, should the hearing judge determine whether the best interests of the child require an order that appellant and her child be separated. —2— One reason the hearing judge erroneously imposed the burden of proof on appellant is that she is poor and is represented by Legal Aid. Extraordinary as this statement may seem, the judge leaves one in no doubt about its accuracy. Thus in his opinion he says: Another equity enters here. The prosecutrix is indigent; in fact she is on welfare. The respondents are not. I know he is a postman in Waynesburg who lives in Washington. Such a person walks the tight rope between indigency and affluence and is representative of that Middle America that pays the bills, supports the government, and doesn’t have much left over at the end of the month. Quarts of ink and buckets of tears have been shed over the plight of the criminal defendant opposed by the whole weight and panoply of the Commonwealth and the scales of justice have been heavily weighted in favor of the criminal defendant because of this seeming imbalance. What then of the plight of the small holder compelled to face the resources, not merely of the Commonwealth of Pennsylvania, but of the United States of America, in its capacity as Free Legal Services? I do not go so far as to say that this imbalance should alter the burden of proof or change the rules of evidence. I do believe, however, when one party to a private thing in action is paying lawyer’s fees from his wages (already subject to withholding and wage tax) and the other is calling upon the government in its role as parens patriae, we *264should be careful not to let the individual party be worn out by the wealth of the government. Consequently I did not feel that when Miss Milligan was unable to prevail on her own proof, I should subject the Davisons to further protracted hearings at their expense. Slip opinion of lower court at 5-6. This statement demonstrates that the hearing judge was unable to render an impartial adjudication in this case. Accordingly, on remand we should require that the case be decided by another judge. HOFFMAN, J., concurs in the result of this opinion as well as that of the majority opinion. JACOBS, J., joins in this opinion as well as in the majority opinion.

2013-10-30 06:32:40.952562+00

Lederle

152 F. Supp. 483 (1957) STATE OF MARYLAND for the use and benefit of Elsie C. WOODZELL, Barbara Ann Woodzell, and Alice Jane Edwards, Elsie C. Woodzell, Executor of the Last Will and Testament of Peyton C. Woodzell, Deceased, Plaintiffs, v. GARZELL PLASTICS INDUSTRIES, Inc., a Michigan corporation, Arena Craft Corp., a Michigan corporation, and Dan Arena, individually and d/b/a Dan Arena Company, Defendants. No. 16469. United States District Court E. D. Michigan, S. D. June 28, 1957. Cary & BeGole, Detroit, Mich., for plaintiffs. John F. Noonan, R. E. Rutt, Foster, Meadows & Ballard, Detroit, Mich., for defendants. LEDERLE, Chief Judge. This is an action to recover for the wrongful death of Peyton C. Woodzell, who was drowned when the boat which he had purchased from agents of defendants, Arena and Arena Craft Corp., broke apart in the Potomac River. The complaint alleges that the hull of this boat was negligently made by defendant Garzell Plastics Industries, Inc., and that it was the hull which broke causing the boat to sink. Garzell Plastics Industries, Inc. (hereinafter called Garzell) has moved to dismiss the action as to it on the ground that, under applicable Maryland law, it could not be liable to the plaintiffs in the circumstances presented. This motion raises the familiar and troublesome question of a manufacturer's duty of care to a remote vendee. Since the Maryland decisions on the problem are not entirely clear, a brief review of the principles involved seems in order. It would seem that on the ordinary principles of negligence that a manufacturer would have a duty of care to all those who may come into contact with his product if he must know that the article will be dangerous if not carefully made. However, in Winterbottom v. Wright, 152 Eng.Reprint 402 (1842), it was held that one who had contracted with the Postmaster General to supply mail coaches and to keep them in a fit, proper and safe condition, could not be held liable to one who was injured when one of these coaches broke down. Since the plaintiff was attempting to rely on the contract between the defendant and the Postmaster General, the court's objection that plaintiff was a stranger to *484 that contract had some merit. The court stated that the only safe rule in such cases was to confine the right to recover to those who were parties to the contract. Disregarding the actual facts of this case and the nature of the holding, many courts quickly applied it as authority for the proposition that manufacturers could not be held liable for negligence in the making of their goods except to their immediate vendees. This rule developed despite the fact that it had never before been the law that there must be a contract involved before there can be liability for negligence. Almost as soon as this so-called general rule of nonliability was recognized, its obvious injustice led to the creation of "exceptions." The most important of these exceptions can be traced to Thomas v. Winchester, 6 N.Y. 397, in which a manufacturing druggist was held liable for damages resulting from his negligence in putting the label of a harmless medicine on a bottle of deadly poison. It was said that the general rule of nonliability did not apply to products which were inherently dangerous to human life. This exception to the so-called general rule was later extended and applied to a wide variety of products, such as poisons, drugs, guns, explosives, and subsequently to articles of foodstuffs. The final extension of this "dangerous instrumentality exception" came in the celebrated decision of Justice Cardozo in MacPherson v. Buick Motor Company, 217 N.Y. 382, 111 N.E. 1050, L.R.A. 1916F, 696. In that case, the court held that an automobile manufacturer was liable for negligence to a remote vendee, who was injured when a wheel of the car in which he was riding broke down causing a collision. The evidence indicated that even though the wheel was not made by the defendant manufacturer, it was defective when made and the defect in it could have been discovered by the automobile manufacturer on due inspection. Justice Cardozo did not attempt to eliminate the use of the phrase "inherently dangerous," rather, he vastly widened the scope of that phrase by holding that it applied to any article which may be foreseen to result in injury to anyone properly using it if the article has been defectively made. In Carter v. Yardley & Co., 1946, 319 Mass. 92, 64 N.E.2d 693, 164 A.L.R. 559, plaintiff was injured by the application of some perfume which was manufactured by the defendant and purchased from an independent retailer. The court, in reversing a judgment for the defendant, held that there was sufficient evidence of negligence and causation and that a manufacturer could be held liable in those circumstances. The court in so doing noted that the doctrine of the MacPherson case is now generally accepted. "Its acceptance has brought all dangerous things into the same class as the `inherently dangerous' things to which the principle already stated has always been applied. The MacPherson case caused the exception to swallow the asserted general rule of nonliability, leaving nothing upon which that rule could operate. Wherever that case is accepted, that rule in truth is abolished, and ceases to be part of the law. * * * The time has come for us to recognize that that asserted general rule no longer exists. In principle it was unsound. It tended to produce unjust results. It has been abandoned by the great weight of authority elsewhere. We now abandon it in this commonwealth." 64 N.E.2d 693, at page 700, 164 A.L.R. 559, at page 568. Winterbottom v. Wright has been unable to withstand the double body blows of MacPherson v. Buick Motor Co. and Carter v. Yardley. In the annotation to Carter v. Yardley, 164 A.L.R. 570, at page 595, the annotater notes that the retention of the general rule (of nonliability) and exceptions have enlarged and not diminished the problems of the courts and the simplest way out of the difficulty is the route taken in Carter *485 v. Yardley to abandon the general rule and go back to the ordinary principles of tort without regard to notions about "privity of contract." The American Law Institute Restatement of the Law of Torts makes a clear statement which is on its way towards general acceptance as the rule of manufacturer's liability: "A manufacturer who fails to exercise reasonable care in the manufacture of a chattel which, unless carefully made, he should recognize as involving an unreasonable risk of causing substantial bodily harm to those who lawfully use it for a purpose for which it is manufactured and to those whom the supplier should expect to be in the vicinity of its probable use, is subject to liability for bodily harm caused to them by its lawful use in a manner and for a purpose for which it is manufactured." Restatement Torts, Sec. 395. This section has been expressly cited and approved in numerous Federal and state court decisions. In many recent decisions of U. S. Courts of Appeal, the extent of the duty of the manufacturer has not even been discussed, it being assumed that the manufacturer did have a duty of care extending beyond the persons with whom he had contractual relations. Smith v. General Motors Corp., 5 Cir., 227 F.2d 210; Panther Oil & Grease Corp. v. Segerstrom, 9 Cir., 1955, 224 F.2d 216; Wieland v. C. A. Swanson & Sons, 2 Cir., 1955, 223 F.2d 26. The Sixth Circuit has also given recognition to the modern rule. In O'Donnell v. Geneva Metal Wheel Co., 6 Cir., 1951, 183 F.2d 733, 738, it was said: "Judge Cardozo laid down the fundamental rule that if the nature of a finished product placed on the market by a manufacturer to be used without inspection by his customers is such that it is reasonably certain to place life and limb in peril if the product is negligently made, it is then a thing of danger; its nature gives warning of the consequences to be expected; and, if to the element of danger there is added knowledge that the thing will be used by persons other than the purchaser and used without new tests, then irrespective of contract, the manufacturer of the dangerous instrumentality is under a duty to make it carefully; and this principle is not limited to poisons, explosives, and things of like nature which, in their normal operation, are implements of destruction. The rule thus announced is followed by this court and the majority of federal and state courts." In the MacPherson case, the question of the liability of a manufacturer of parts, which were to be later assembled into a completed product, was expressly left open. This opening did not last long. In Smith v. Peerless Glass, 1932, 259 N.Y. 292, 181 N.E. 576, one who had been injured by the explosion of a soda pop bottle sued both the manufacturer of the bottle and the bottler who had purchased the bottle and filled it with soda pop. The court noted that the bottle maker was in the same position as the wheel maker in the MacPherson case. It then stated that the law as to such manufacturers was no longer in doubt and affirmed the judgment against the bottle maker and reversed the judgment against the bottler. The Maryland cases cited by Garzell in support of its motion to dismiss do not show that Maryland will not accept the modern rule of manufacturer's liability. State of Maryland to Use of Bond v. Consolidated Gas, Electric Light & Power Co., 1924, 146 Md. 390, 126 A. 105, 42 A.L.R. 1237 did not involve the liability of a manufacturer at all but was an action against a party who had sold a defective gas heater to the father of the deceased. The complaint did not allege that the defendant had manufactured the heater, knew that it was defective, or that the heater was an imminently dangerous object. The action *486 was based on warranty, not negligence and so the decision that it could not be maintained in the absence of privity was technically correct and in no way inconsistent with the MacPherson doctrine. Rounds v. Phillips, 1934, 166 Md. 151, 170 A. 532, 536, was not concerned with either manufacturer's liability or warranty. It was an action against the parents of a boy who had been furnished an auto even though the parents knew that he was a habitually negligent driver. In overruling the demurrer to the complaint, the court stated, "We have definitely held that an automobile is not an inherently dangerous instrumentality but is an instrument which is potentially dangerous." In Otis Elevator Co. v. Embert, 1951, 198 Md. 585, 84 A.2d 876, the Maryland court did not reject the doctrine of MacPherson but merely held that there had been no proof of negligence. The Baltimore City Court, which is a court of first instance, has specifically applied the MacPherson doctrine in a case with facts substantially the same as those in the MacPherson case. After reviewing the Maryland authorities, Chief Judge Dennis stated: "It is to be gathered * * * that when confronted with a case for decision which presents the same controlling features as were present in 217 N.Y. 382 [111 N.E. 1050], which the case at bar as made out in the declaration manifestly does, that the Maryland Court of Appeals will follow the precedent, so luminously and convincingly set by Justice Cardozo." Kemich v. Legum (November 17, 1933) Upon all the foregoing it cannot be imagined that the Maryland Court of Appeals would deny the liability of Garzell Plastics in the circumstances here presented. Winterbottom v. Wright belongs to the Nineteenth Century—the Twentieth Century is guided by MacPherson v. Buick Motor Co. The motion to dismiss must be overruled

2013-10-30 06:32:41.008894+00

Littleton

152 F. Supp. 66 (1957) Paul KARRER v. The UNITED STATES. No. 485-52. United States Court of Claims. May 8, 1957. Roswell Magill, New York City, for the plaintiff. Albert Rosenblum, New York City, was on the briefs. Gerard J. O'Brien, Washington, D. C., with whom was Charles K. Rice, Asst. Atty. Gen., for the defendant. Andrew D. Sharpe and Jerome S. Hertz, Washington, D. C., were on the brief. Before JONES, Chief Judge, and LITTLETON, WHITAKER, MADDEN and LARAMORE, Judges. LITTLETON, Judge. This is an action to recover $201,504.88 in Federal income taxes which plaintiff alleges were erroneously and illegally assessed and collected from him for the years 1941 to 1946, inclusive. The question presented is whether payments made by a domestic corporation to a nonresident alien under a contract between the nonresident alien and a nonresident foreign corporation constitute income to the individual from sources within the United States for the purposes of the income tax imposed by § 211(a) (1) (A) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 211(a) (1) (A). The plaintiff, Paul Karrer, is, and has been since 1918, a professor of chemistry at the University of Zurich, Zurich, Switzerland, where he is Director of the Chemical Institute. He won the Nobel Prize in 1937 for his work in the field of synthetic vitamin structure. Professor Karrer has not been in the United States since 1933, when he spent several weeks here delivering lectures, and does not maintain an office or carry on any business activities in this country. Plaintiff's duties at the University of Zurich are to give lectures, direct and manage the Chemical Institute and to do scientific research work. Although the university requires him to devote full time to his work, he is free to do what he wishes in such spare time as he may have. *67 In the early 1930's, Professor Karrer became interested in the flavins, which are yellow dyestuffs that occur frequently in the plant and animal kingdom. Since some researchers had assumed that vitamin B-2 was identical with certain flavins, plaintiff undertook the investigation of the vitamin B group, especially vitamin B-2. Karrer's researches required the extraction of a flavin which could be most conveniently obtained from sweet whey, a by-product of the manufacture of cheese. This flavin substance extracted from whey was lactoflavin and is present in very small quantities only. It was therefore necessary for Karrer to make arrangements for the processing of large quantities of whey from which might be recovered the required amount of lactoflavin needed for his research in the vitamin B field. On May 7, 1934, plaintiff approached the F. Hoffmann-LaRoche & Co. Ltd. of Basle, Switzerland, hereinafter referred to simply as Basle, and asked it to support his investigations in the vitamin B-2 field by processing a large quantity of whey in accordance with his instructions. At this time, the chemical structure of vitamin B-2 was not known and consequently no one knew whether a synthesis of vitamin B-2 could be made or if it would have any commercial value. On May 8, 1934, Basle wrote plaintiff that it would be glad to cooperate with him and, in July 1934, began processing whey in accordance with instructions received from the professor. Just before Basle began processing the whey, it wrote plaintiff that it was proceeding with the work on the assumption that he would grant Basle the sole right to exploit the manufacturing processes resulting from his investigations if his research proved to be of commercial value. Basle stated that if any process worked out by plaintiff as a secret process showed considerable improvement over existing knowledge, or if the process led to a patent, Basle would grant plaintiff a participation in the net proceeds of the sales of vitamin B-2 products manufactured and sold by it. Plaintiff accepted Basle's proposal by letter. Under Swiss law the exchange of letters between plaintiff and Basle constituted a contract which may be designated as a special employment contract under the terms of which all patents resulting from plaintiff's discoveries belonged to Basle, the employer. Both parties understood that plaintiff would be responsible for the scientific work, that Basle would develop the processes for commercial exploitation, that all commercial rights in secret processes or formulae discovered by plaintiff would belong to Basle, together with the right to patent and market products developed therefrom, and that Basle would pay plaintiff a percentage of the net proceeds of the sale of such products. The contract at that time stated the rights of the parties, including the compensation to be paid to plaintiff, in general terms only, because commercial prospects could not then be evaluated. From the processed whey produced by Basle in accordance with its special employment contract with Karrer, the professor isolated natural vitamin B-2 and sent the prescription to Basle. In August 1934, plaintiff determined the chemical structure of natural vitamin B-2 and from this he proceeded to discover how vitamin B-2 could be produced synthetically in the laboratory. Plaintiff turned this discovery over to Basle, which proceeded to develop the manufacturing processes for the commercial exploitation of vitamin B-2. Basle did not begin marketing synthetic vitamin B-2 in quantity until 1940, because it was not clear until about that time that the vitamin had an important function in the human body or was of any real commercial value. During the period in 1934, when the plaintiff was doing research on synthetic vitamin B-2, Basle refused to allow plaintiff to work with others in vitamin B-2 experiments. From time to time plaintiff prepared scientific papers for publication in a Swiss chemical journal, but before he submitted such *68 papers for publication he would send the paper to Basle for its approval. Basle would either approve the paper without change or suggest that certain statements be added or deleted. During the period from 1934 to 1939, Basle filed applications in many countries for patenting the discoveries and syntheses of Karrer. The plaintiff actively assisted and materially aided Basle in preparing and filing the patent applications and also aided Basle during subsequent litigation involving the patents. Early in 1939, plaintiff told Basle that he had heard that lactoflavin ampules were on the market and that he assumed Basle would give him a percentage of the sales. A representative of Basle stated that negotiations as to the extent of plaintiff's participation would be concluded as soon as certain patent questions were settled. On December 9, 1940, after he heard that the sales of lactoflavin could be increased in the future, plaintiff wrote Basle to remind it of its agreement to grant him a participation in the net proceeds of vitamin B-2 sales. After some bargaining between the parties as to the extent of plaintiff's participation it was agreed that plaintiff was to participate in the sales for a period of twelve years. Basle gave the plaintiff the choice of starting participation either on January 1, 1940, or on January 1, 1941, and he selected the latter date. On January 15, 1941, the parties entered into a formal contract specifying the percentage of net proceeds to be paid by Basle to the plaintiff as 5 percent. In 1937, plaintiff began the study of vitamin E. He discovered that vitamin E substance occurs in the germ of wheat. Because his laboratory in Zurich did not have the equipment necessary to perform all of the experiments required in his research on vitamin E, the plaintiff asked Basle to perform certain experiments for him on extracts from the wheat germ. After isolating natural vitamin E, plaintiff determined the chemical structure of the vitamin and was thereafter able to establish the synthesis of vitamin E. Dr. Otto Isler, a Basle employee, performed extensive experiments in connection with the synthesis of vitamin E, and Basle kept plaintiff informed of Isler's work in that connection. Basle had the same relationship with plaintiff with respect to vitamin E as it had with respect to vitamin B-2. After Basle received the vitamin E synthesis from plaintiff, Basle proceeded to develop the manufacturing process that made it possible to exploit the synthesis commercially. On August 11, 1938, plaintiff and Basle entered into a formal contract pertaining to the exploitation of the commercial possibilities of their work on vitamin E and fixing the percentage of the net proceeds of the sales which plaintiff was to receive. The contract provided that plaintiff and Basle would collaborate in the synthesis of vitamin E and referred to the parties as partners. Basle had the sole right to take out patents resulting from the collaboration either in its own name or that of Karrer. Patents that were taken in Karrer's name had to be transferred to Basle upon its request, irrespective of whether the patents were applied for before or during the collaboration. The collaboration was to extend for a period of three years and thereafter until one party gave six months' notice to end the agreement. Basle had the exclusive right to commercial utilization of the products of the collaboration and Karrer was to receive 3 percent of the net proceeds of synthetic vitamin E for a period of 12 years. In a supplement to the contract, plaintiff agreed to inform Basle before publishing any article was respect to vitamin E. Plaintiff received payments under the vitamin E contract from December 1, 1938 to November 30, 1950. In all of his collaboration with Basle, plaintiff never was asked by Basle to participate in the manufacture or sale of the vitamins, nor did he direct or exercise any control over the marketing of the vitamin products. *69 Basle did not, at any time pertinent to this suit, have a place of business or a permanent establishment in the United States, nor did it engage in any trade or business in this country. On January 27, 1941, Basle and Hoffmann-LaRoche, Inc., of Nutley, New Jersey, hereinafter called Nutley, a New Jersey corporation doing business in the United States as a chemical manufacturing firm with emphasis in the fields of pharmaceutical specialties and vitamins, entered into a contract whereby Nutley was granted the exclusive enjoyment and use within the United States of all of Basle's secret processes and scientific developments pertaining to certain products, including the vitamins which had been synthesized by Karrer. In return, Nutley agreed to pay Basle 4 percent of the net proceeds of sales made by Nutley. This contract terminated a previous agreement between Basle and Nutley whereby for a stated consideration to be paid to Basle, Nutley was given the right to receive and commercially exploit in the United States the results of Basle's research activities. Plaintiff, who had no contractual relationship with Nutley, was not a party to the January 27, 1941, contract between Basle and Nutley. In all countries other than the United States, Basle applied for patents covering plaintiff's discoveries in its corporate name. In the United States a patent application can be filed only by a natural person, the inventor, and Basle therefore required the plaintiff to file the applications on his vitamin B-2 and vitamin E discoveries. Plaintiff was reimbursed by Basle for all expenses that he incurred with respect to filing the patent applications. Also at Basle's request, plaintiff assigned the vitamin B-2 and vitamin E United States patent applications to Nutley before the patents were granted. The patent assignments to Nutley were thereupon recorded in the United States Patent Office, and the patents themselves were issued to Nutley as owner and assignee of plaintiff, and, in a few instances in the case of vitamin E, as assignee of Dr. Isler, who had worked with plaintiff in vitamin E research. The procurement of the United States patents was paid for by Nutley or Basle. The termination dates of the participation contracts entered into between plaintiff and Basle with respect to vitamin B-2 and vitamin E precede the expiration dates of all the United States patents on the two vitamins. Nutley, the American corporation, produced and marketed vitamin B-2 and vitamin E products and, although Nutley had no contract of any kind with plaintiff, it paid to plaintiff a percentage of all its sales of products containing vitamin B-2 and vitamin E. The percentage paid depended upon the type of preparation involved and was in the amounts specified in the contracts entered into between plaintiff and Basle. Nutley was aware at the time it entered into its contract with Basle that plaintiff was entitled to a percentage of the net proceeds of vitamin B-2 and vitamin E sales made by Basle. In fact Nutley had copies of the contracts entered into between Basle and Karrer, but no mention was made anywhere or at any time in writing of a liability on the part of Nutley to make payments to Karrer. These payments to plaintiff were made by Nutley pursuant to instructions by the president of Nutley. He thought that, although Nutley had no contract with Karrer, since it manufactured synthetic vitamin B-2 and vitamin E products under the Karrer inventions, Nutley should make the payments to Karrer called for by the inventor's contracts with Basle. These payments made to plaintiff by Nutley were characterized on the books of Nutley as royalties. Nutley withheld and paid United States income taxes on behalf of plaintiff in the sum of $92,978.22 for the years 1941 through 1945. Plaintiff timely filed United States income tax returns for the years 1941 through 1946 and paid a balance shown to be due thereon of $108,526.66. Plaintiff has timely filed claims for refund amounting to $201,504.88, representing the total amount of *70 United States taxes paid and withheld from plaintiff on account of the payments made by Nutley to plaintiff with respect to the sale in the United States of vitamin B-2 and vitamin E products. It is with respect to the payment of these taxes that plaintiff filed its claims for refund and now brings suit before this court. Switzerland accords to citizens of the United States the right to prosecute claims against the Government of Switzerland in its courts and therefore plaintiff has standing to sue in the United States in this court. The defendant says that the payments from Nutley to Karrer were subject to Federal income tax because they were fixed, periodical income to plaintiff from sources within the United States falling within the provisions of section 211(a) (1) (A) of the Internal Revenue Code of 1939. This section provides in part as follows: "Tax on nonresident alien individuals "(a) No United States business or office "(1) General rule "(A) Imposition of tax. There shall be levied, collected, and paid for each taxable year, in lieu of the tax imposed by sections 11 and 12 upon the amount received, by every nonresident alien individual not engaged in trade or business within the United States, and not having an office or place of business therein,[1] from sources within the United States as interest (except interest on deposits with persons carrying on the banking business), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income, a tax of * * * per centum of such amount, except that such rate shall be reduced, in the case of a resident of any country in North, Central, or South America, or in the West Indies, or of Newfoundland, to such rate (not less than 5 per centum) as may be provided by treaty with such country." It is plaintiff's position that the payments made to him by Nutley were for services performed outside of the United States and are therefore not from sources within the United States so as to provide a basis for the imposition of a United States income tax. In order to determine this question we must define "gross income from sources within the United States" as that term is used in the context of the statutes imposing, limiting and defining the taxes on nonresident aliens. Section 211(a) (1) (A), above quoted, prescribes a tax upon income from sources within the United States which consists of fixed or determinable, annual or periodical, income. There seems little question from the facts in this case that Karrer received fixed, periodical income as those terms are used in the Code. We must determine, therefore, whether or not as a matter of contract or law the income was from sources within the United States, since section 212 (a)[2] of the Code specifically includes gross income of a nonresident alien only income which is derived from sources within the United States. A definition of what is "gross income from sources within the United States" is contained in section 119 of the Code, which provides in pertinent part, as follows: "Income from sources within the United States—(a) Gross income from sources in the United States. The following items of gross income shall be treated as income from sources within the United States: *71 * * * * * * "(4) Rentals and royalties. Rentals or royalties from property located in the United States or from any interest in such property, including rentals or royalties for the use of or for the privilege of using in the United States, patents, copyrights, secret processes and formulas, good will, trade-marks, trade brands, franchises, and other like property; and * * * * * * (c) Gross income from sources without the United States. The following items of gross income shall be treated as income from sources without the United States: * * * * * * "(3) Compensation for labor or personal services performed without the United States." 26 U.S.C.A. § 119. It is clear from the foregoing excerpt that if the payments to plaintiff by Nutley were for the use of plaintiff's property located in the United States, then those payments are properly characterized as income from sources within the United States and subject to the tax imposed by section 211. On the other hand, should we determine, as plaintiff would have us do, that the payments were compensation for labor or services performed by plaintiff without the United States, we must necessarily hold that the income tax thereon was illegally assessed and collected on income exempted from taxation by section 212(a), supra. The issue is, therefore, directed to the precise nature of these payments. The fact that the payments here in question were made by a United States corporation is not determinative of the right to tax the nonresident alien who is the recipient of such payments. The only criterion for imposing the tax is that the "source" of the income to be taxed must be within the United States. The "source" of income in this connection is not necessarily the payor, but may be the property or the services from which the particular income is derived as indicated in section 119 of the Internal Revenue Code. In the instant case the vitamin B-2 and vitamin E patents, together with the right to use and sell their commercial values were income producing property and thus a "source" of income. Furthermore, the United States patents and Nutley's right to use and exploit their commercial value were property located within the United States so that payments made by Nutley for such use or for the privilege of such use, would be clearly taxable to the recipient of such payments under section 211. However, we are of the opinion that the payment made by Nutley to Karrer were not payments for the right of Nutley to use any income producing property or interest therein belonging to Karrer. The right to use and exploit in the United States the patents granted on the discoveries of Karrer was granted to Nutley by Basle pursuant to the terms of the contract of January 27, 1941, and not by Karrer. Basle was the owner of the commercial rights in Karrer's discoveries and it alone could convey this right to another. Plaintiff's only interest in the sales of the vitamins produced and sold arose out of his contractual relationship with Basle. Defendant urges that the payments made to Karrer were in the nature of royalty payments, but that argument is premised upon the assumption that Karrer's contracts with Basle were royalty contracts. The contracts between Karrer and Basle under which the payments in question were made were entered into in Switzerland between Swiss nationals, and their character and interpretation must be governed by Swiss law. The only evidence as to the nature of the contractual relationship between plaintiff and Basle under Swiss law was offered by plaintiff and was to the effect that the relationship was one of special employment. As such, all payments under the Swiss participation contracts to Karrer were payments of compensation for services rendered in Switzerland. Inasmuch as defendant has not refuted this testimony, *72 we must accept it as a correct statement of Swiss law. Under all the facts and circumstances, and regardless of the particular manner in which the parties to the two Swiss contracts may have referred to each other, it does not appear that there ever existed between Basle and Karrer any relationship other than that of special employment. The arrangement was analogous to the usual one of a person employed to make inventions for his employer, the employer thereby acquiring title to such inventions and to any patents secured thereon. Payments made to such an employee, even though based on a percentage of the proceeds of the sales of the invented process or object, would be compensation for the employee's services rather than royalties, because the employee's right to such payments derives from his services to his employer and not from any rights in inventions owned by the employee. If the services just described were rendered in a foreign country by a nonresident alien they would not be taxable under the clear wording of section 119(c) (3) and section 212(a) of the Internal Revenue Code. It is true that Karrer received the payments in suit from Nutley, an American corporation, rather than from the Swiss corporation for which he had performed the services and which Swiss corporation was under contractual obligation to compensate him therefor. This circumstance, however, in no way alters the character of the obligation or of the payments made pursuant thereto. Since Nutley paid the plaintiff amounts due on an obligation owing to plaintiff by Basle for services performed for Basle by plaintiff in Switzerland, they do not represent payments for plaintiff's rights or interest in property located in the United States, but rather payments for services performed outside the United States, and are therefore exempt from taxation. Nutley's denomination of the payments as royalties on its books cannot change the true character of these payments. Defendant cites several cases and urges that Commissioner v. Wodehouse, 337 U.S. 369, 69 S. Ct. 1120, 93 L. Ed. 1419, and Bloch v. United States, 2 Cir., 200 F.2d 63, are applicable to this case. In the Wodehouse case, P. G. Wodehouse, a nonresident alien, sold to a United States publishing house the rights to publish and sell certain stories written by him. The consideration paid for such rights were lump sum payments which the taxpayer contended were the proceeds of the sale of personal property not taxable to a nonresident alien under section 211 of the Code, and, in the alternative, that if the court should find that these payments were in fact royalties, they were not "annual" or "periodical" payments and should therefore be excluded from taxation. The Supreme Court reversed the lower court decision favorable to the plaintiff and held that the lump sum payments were in the nature of advances of royalty payments which were intended to be taxed under section 211. The Court in the Wodehouse case necessarily found that the payments were from sources within the United States, and this finding would seem to follow readily from the fact that Wodehouse himself or his agent had sold the rights directly to a United States publishing house. The situation presented in the case now before the court is clearly distinguishable on its facts since Karrer sold nothing to Nutley, the American corporation, nor did Basle sell anything to Nutley as the agent for Karrer. As we pointed out earlier herein, Karrer had nothing to sell to Nutley since all rights in his inventions and any patents thereon had vested in Basle. In the Bloch case, supra, the taxpayer had retained rights in the patents and had in fact granted licenses. Karrer herein never granted to anyone a license to use or exploit his inventions or the patents thereon because he never had such rights under his contract with Basle. It is the opinion of the court that the payments received by Karrer from Nutley *73 were income from sources without the United States and were not taxable under the internal revenue laws in effect during the period in suit. Plaintiff is entitled to judgment in the amount of $201,504.88, together with interest provided by law. Judgment will be entered to that effect. It is so ordered. JONES, Chief Judge, and LARAMORE, MADDEN and WHITAKER, Judges, concur. NOTES [1] 1942 amendment, Act Oct. 21, 1942, 56 Stat. 861, struck out the words "and not having an office or place of business therein". [2] "§ 212. Gross income—(a) General Rule. In the case of a nonresident alien individual gross income includes only the gross income from sources within the United States." 26 U.S.C.A. § 212.

2013-10-30 06:32:41.023856+00

Jones

535 S.W.2d 57 (1976) Ben SHINN et ux., Appellants, v. Richard HEATH, Director of the Department of Finance and Administration of the State of Arkansas, Appellee. No. 75-284. Supreme Court of Arkansas. April 12, 1976. *58 Chambers & Chambers by Melvin T. Chambers, Magnolia, for appellants. James R. Cooper, H. Ray Hodnett, Robert G. Brockman and James R. Eads, Jr., Little Rock, for appellee. JONES, Justice. This is an appeal by Ben Shinn and his wife from an adverse decree of the chancery court on a petition they filed for the return of $6,461.65 in income taxes assessed for 1967 through 1970 and paid under protest. The question on this appeal is whether the appellants were residents of Arkansas and liable for income tax under the Income Tax Act of 1929, Ark.Stat.Ann. § 84-2001, et seq. (Repl.1960). Under § 84-2003 an income tax is imposed upon every individual resident of Arkansas and § 84-2002(9) and (10) defines resident and nonresident as follows: "(9) The word `resident' means natural persons and includes for the purpose of determining liability to the tax imposed by this act upon or with reference to the income of any taxable year, any person domiciled in the State of Arkansas and any other person who maintains a permanent place of abode within the State and spends in the aggregate more than six [6] months of the taxable year within the State. (10) The word `nonresident' when used in connection with this act, shall apply to any natural person whose domicile is without the State of Arkansas, or who maintains a place of abode without the State, and spends in the aggregate more than six [6] months of the taxable year without the State." The appellants were born and reared in Arkansas and the substance of their testimony was to the effect that for the past several years they have been engaged in building and selling motels, primarily in the State of Texas. It was their contention that their residence for tax purposes followed their occupation, in that they lived in the motels they would construct until the motel was sold and they would then move on to a new location and build and sell another motel. It was their contention, and they so testified, that they maintained a mailing address in Magnolia, Arkansas, and would return to Magnolia periodically to pick up their mail from a post office box they maintained in Magnolia. All of their relatives lived in and around Magnolia. Some of the motels were sold before they were finished and in other instances the motels were built and operated by the appellants until they were sold. Mr. and Mrs. Shinn filed Arkansas income tax returns for 1967 and gave their home address as "Post Office Box 338, Magnolia, Columbia County, Arkansas." In 1968 the Shinns filed a "nonresident (resident for part of year)" income tax return in Louisiana for 1967 and showed their home address as Box 338, Magnolia, Arkansas. Their 1968 and 1969 federal and state income tax returns showed the same address. On January 19, 1975, Mr. Shinn registered to vote in Arkansas and on his affidavit for registration he designated his home address as 916 Highland, Magnolia, and after designating his school district and voting precinct *59 in Magnolia, he stated he had lived at that address for eight years. According to Mr. and Mrs. Shinns' testimony, most of their time was spent in and around Tyler, Texas. They said that in 1969 they contemplated building a home in Tyler, but the motel business took them to other parts of Texas and they never did buy a lot or build a home in Tyler. They said they owned a house in Magnolia from 1962 until they sold it in 1970, but they never did live in the house. They said the house in Magnolia was unfurnished; that the house was under construction for about 18 months while they were in and out of Magnolia; that it was never furnished and that they sold it unfurnished. They said that since that time, however, [apparently since 1970] they have built a home in Magnolia. Mr. Shinn said the reason they did not furnish the original house in Magnolia was that a banker from whom he borrowed money in Tyler, Texas, insisted that they settle down in Tyler, and they were thinking of doing so. He said he had been building and selling motels in Texas since 1959; that he maintained an office in a trailer on the job site while a motel was under construction and he would move it from job to job in various towns where he constructed motels. Both Mr. and Mrs. Shinn had Arkansas driver's licenses which they had kept and renewed through the years. Mr. Shinn said he would be unable to pass a driver's examination in Texas. Mr. Shinn said he registered to vote in Arkansas for the purpose of obtaining a liquor permit in connection with a motel he had built in Texarkana, Arkansas, while living across the state line in Texas. He said that while they kept the house in Magnolia from 1967 to 1970, he had a next-door neighbor look after it and mow the lawn. He said he never did vote in Arkansas and had no intention of doing so when he executed his voter registration affidavit. Mr. Shinn said he did not know what address J. W. put on his income tax returns.[1] Mr. Shinn then testified in part as follows: "Q. Mr. Shinn, while you were in Texarkana, did you intend one day to return to Magnolia where you say your relatives and ... A. No, I really didn't. I loved Texas and I like it and still like it, and I really intended to stay in Texas, but I didn't. But, anyhow, Texas, one time I thought we would live in Texas because all our business was there. Q. But you did, in fact, change your mind and return to Arkansas? A. I will have to say we are in Arkansas now, uh huh. THE COURT: Did you tell anybody in Texas you were from Arkansas or did you hold yourself out to be from some place else? A. If I was in Greenville, Texas, I am from Greenville, Texas. In Tyler, from Tyler, Texas. Wherever I was living, at that time that is where I was living." Mrs. Shinn testified that from January to May, 1967, they were in Manny, Louisiana; from May 1 to September 21, 1967, they were in Arkansas and were unemployed during that time. She said that from September, 1967, to June, 1968, they were in Sherman, Texas; that following vacation in 1968 they were in Tyler, Texas, from August, 1968, to August, 1969; that from August, 1969, to December, 1969, they were in Greenville, Texas; that the motel jobs they had in Greenville and Tyler overlapped and that while they were operating the motel in Tyler before they sold it, they began construction on one in Greenville. She said that following their vacation in 1970, they were in Alexandria, Louisiana, from February to July; that they were on vacation in August, 1970, and were in Texarkana from September, 1970, to March, 1971. She said they were building a motel in Texarkana, Arkansas, but were living in Texarkana, Texas. She said they lived in furnished apartments much of the time and owned no furniture. On cross-examination Mrs. Shinn said that when they built the house in Magnolia *60 in 1962, they thought they would live there. She said they kept the house and did not rent it until 1970 when they sold it. She said she also had an Arkansas driver's license and had purchased it in Arkansas when she began to drive and had maintained it ever since. Referring to the house built in Magnolia in 1962, Mrs. Shinn testified as follows: "Q. Did you ever intend to come back and live at that house? A. When you say ever, that is a long time. That covers an awful lot of time. But as we became more and more busy in our work in other parts of the country, we decided that since we were not using the house, we would sell the house. Q. You sold the house in 1970 after you had owned it since 1962? A. I believe we sold the house, I think, in 1969." We deem it unnecessary to discuss the testimony further for the reason that this case actually turns on the statutory definition of who is a resident for tax purposes under the above statute. The appellants have designated the points on which they rely for reversal as follows: "I. That section 84-2002, sub-sec. 9 of Arkansas statutes annotated does not include the appellants as being residents of the State of Arkansas for the time or years involved herein. II. That section 84-2002, sub-sec. 10 of Arkansas statutes annotated excludes the appellants as `residents' of the State of Arkansas for and during the time, or years, involved herein. III. Exclusive of the definition contained in statutes involved the appellants are not subject to the taxes for the years involved for the following reasons: a. They were not residents of the State of Arkansas at the times involved. b. They were residents of the State of Texas during the times involved. IV. The appellants are not restricted from changing their domicile or residence. V. The appellants are entitled to a `Commercial Domicile' for income tax purposes [under] sub-sec. B of § 84-2055, Ark.Statutes Anno." In defining the word "resident" within the meaning of the statute here involved, the appellants rely on the general definition as set out in Shelton v. Shelton, 180 Ark. 959, 23 S.W.2d 629 (1930), and Jarrell v. Leeper, 178 Ark. 6, 9 S.W.2d 778 (1928), rather than as specifically defined in § 84-2002(9)(10), supra. The Shelton case involved the appointment of administrator and the question was whether the administrator was a resident of the county in which he was appointed. The statute under which the appointment was made, Crawford & Moses' Digest, § 5, recited in part as follows: "`Letters testimentary and of administration shall be granted in the county in which the testator or intestate resided; or, if he had no known residence ...'" This court quoted from Krone v. Cooper, 43 Ark. 547 (1884), in the Shelton case, as follows: "`We may conclude from the cases that, in contemplation of the attachment laws, residence implies an established abode, fixed permanently for a time, for business or other purposes, although there may be an understanding all the while to return at some time or other to the [principal] domicile; but so difficult is it found to provide a definition to meet all the varying phases of circumstances that the determination of this question may present, that the courts say that, subject to the general rule, each case must be decided on its own state of facts.' See also, Jarrell v. Leeper, 178 Ark. 6, 9 S.W.2d 778." In Shelton we found that the trial court correctly held that the decedent resided at Brinkley, Monroe County, at the time of his death, and that the trial court did not err in holding the letters void. In Shelton we cited other cases in which the words "resident" and "residence" were defined for the various purposes pertaining to the case involved and in doing so we said: *61 "In Smith v. Union County, 178 Ark. 540, 11 S.W.2d 455, 456, this court held, in construing the statute providing for the listing of property for taxation, section 9890, C. & M. Digest: `Residence,' as used in section 9890, Crawford & Moses' Digest, means the place of actual abode, and not an established domicile or home which one expects to return to and occupy at some future time.' The same construction was placed upon the word `residence' under the taxation laws as had been given it under the attachment laws of the State." If the appellants in the case at bar were relying on the definition of residence for purposes of listing property for taxation, as set out in Smith v. Union County, and cited in Shelton, the statute applicable to Smith v. Union County clearly distinguishes the meaning in that case from the definition applicable in the case at bar. Crawford & Moses' Digest, § 9890, provided as follows: "Every person of full age and sound mind shall list the real property of which he is the owner, situated in the county in which he resides. ..." (Our emphasis). In Krone v. Cooper, supra, cited in Shelton, the action was an attachment on a judgment in personam and in that case this court further said: "The terms `resident' and `non-resident' used in the provisions of our statute governing attachments, have never been defined by this court, and the provisions themselves do not profess to determine the meaning that was intended in their use. No exact definition of these terms, to fit all cases, is practicable, for the reason that their meaning varies with the subject matter to which they are applied. * * * * * * ... A mere presence, or temporary sojourn, in this state, whether on business or pleasure, unaccompanied by the intention of remaining for a length of time that would give some idea of permanency, would not constitute residence within the meaning of the attachment laws, though by permanency we are not to understand a determination to stay always. Such residence, when established, may be lost by departure from the state with the intention of not returning, or of taking up an abode elsewhere; but a mere temporary absence from the state, without this intention, would not render one amenable to the attachment law as a non-resident." The Civil Code pertaining to attachments, as brought forward in Ark.Stat.Ann. § 31-101 (Repl.1962), simply refers to "residents" and "nonresidents" without further definition. Jarrell v. Leeper, supra, relied on by the appellants, was also an attachment case and in that case this court said: "What constitutes a nonresident within the meaning of our attachment law, was considered and thoroughly discussed in the case of Krone v. Cooper, 43 Ark. 547. The court recognized that the words `resident' and `nonresident,' as used in our statute relating to attachments, had never been defined by this court, and that no exact definition, which will fit all cases, is practical. The court recognized that domicile has a broader meaning than residence, and includes residence." The statute here involved, § 84-2002(9) and (10), supra, defines a resident for tax purposes under subsection (9) as any person domiciled in the state of Arkansas and also any person who maintains a permanent place of abode within the state and spends in the aggregate more than six months of the taxable year within the state. Subsection (10) defines a nonresident as a person whose domicile is without the state of Arkansas, or who maintains a place of abode without the state, and spends in the aggregate more than six months of the taxable year without the state. Although the appellants contend that they were not domiciled in Arkansas, they argue that the statutory requirement of spending more than six months of the taxable year in Arkansas makes the place of their domicile unimportant. The second exclusion of subsection (10), appellants, argue, "excludes those who maintain a place of abode outside of the *62 State and spend more than six (6) months of the taxable year outside the state." Actually the appellants failed to prove that they maintained any particular place of abode outside of Arkansas, they did maintain such place of abode in Magnolia but testified they did not abide there. In any event, to adopt the construction advocated by the appellants would put the two subsections into conflict. Subsection (9) makes "any person domiciled in the State of Arkansas" a resident. The primary rule in the construction of statutes is to ascertain and give effect to the intention of the Legislature. Duty v. City of Rogers & Benton Cty., 255 Ark. 309, 500 S.W.2d 347 (1973). In determining legislative intent, the courts look to the language of the whole statute or Act. John B. May Co., Inc. v. McCastlain, Comm'r, 244 Ark. 495, 426 S.W.2d 158 (1968). In order to give effect to every part of a statute, it is the court's duty, as far as practicable, to reconcile the different provisions so as to make them consistent, harmonious and sensible. McLeod v. Santa Fe Trail Transp. Co., 205 Ark. 225, 168 S.W.2d 413 (1943). To carry out the general purpose and intent of a statute, either civil or criminal, the words "and" and "or" are convertible. Williams v. State, 99 Ark. 149, 137 S.W. 927 (1911); Pickens-Bond Const. Co. v. N. L. R. Elec. Co., 249 Ark. 389, 459 S.W.2d 549 (1970). Subsection (10), supra, can be made consistent with subsection (9) by reading the "or" which follows "State of Arkansas" as an "and." Even so, the case at bar falls within the purview of what we said in Cravens v. Cook, Comm'r, 212 Ark. 71, 204 S.W.2d 909 (1947). In that case it was stipulated that Congressman Cravens was domiciled in Arkansas but that he maintained a place of abode in Washington and that he spent more than six months each year without the state. In rejecting his contention that he was exempt under the last clause of subsection (10), supra, this court said: "Appellant argues, however, that under the last clause (Subdivision (10) of § 14025, Pope's Digest) it must be held that appellant is a nonresident, within the meaning of the tax law, because it was stipulated that he had maintained a place of abode without the state and had spent more than six months of each year without the state. We cannot agree with this contention. We think the words `place of abode' as used in this Act means something more than a place of temporary sojourning, and that they imply a degree of permanence that did not attach to appellant's stay in Washington. This court has frequently held that `place of abode' as used in our statute relating to service of process means a place where a person has fixed his permanent home, and that a given place may be a `place of abode' of a party, though he may be actually absent therefrom for a long period of time. Du-Val v. Johnson, 39 Ark. 182; McGill v. Miller, 183 Ark. 585, 37 S.W.2d 689; Shephard v. Hopson, 191 Ark. 284, 86 S.W.2d 30; Husband v. Crockett, 195 Ark. 1031, 115 S.W.2d 882. In the last cited case we held that `usual place of abode' is synonymous with residence. The stipulation shows that appellant was a resident of Arkansas, and did not establish or maintain without the state such a `place of abode' as would constitute him a non-resident." We have accepted "place of abode" and "residence" as synonymous terms within the context of an insurance policy. Central Mfr's Mut. Ins. Co. v. Friedman, 213 Ark. 9, 209 S.W.2d 102 (1948). But we have held that "domicile" and "residence" are not synonymous terms since "residence" denotes an act, and "domicile" denotes an act coupled with an intent. Jarrell v. Leeper, supra. In Leflar, Conflict of Laws, § 10, is found the following language: "Under the common law every person has a domicile; when any person attains his age of majority he at that moment has a domicile previously assigned to him by law. He may thereafter acquire a new domicile, but if he does not acquire a new one the old one persists. The principle manner by which a new domicile can be acquired is by physical presence at a new *63 place coinciding with the state of mind of regarding the new place as HOME. New domicile arises instantaniously when these two facts concur." See also Restatement (2d) of Conflicts of Laws, §§ 11-20 (1971). In Phillips v. Sherrod Estate, 248 Ark. 605, 453 S.W.2d 60 (1970), this court said: "We have held that to effect a change of domicile from one locality or state to another, there must be an actual abandonment of the first domicile, coupled with an intention not to return to it and there must be a new domicile acquired by actual residence in another place or jurisdiction, with intent of making the last acquired residence a permanent home. Weaver v. Weaver, 231 Ark. 341, 329 S.W.2d 422, and cases cited therein." In Charisse v. Eldred, 252 Ark. 101, 477 S.W.2d 480 (1972), a case involving residential qualifications to vote and run for office under an election statute, the word "residence" was treated as synonymous with "domicile" in the context of the statute, but in that case we held that the question of intent (to make a certain place one's domicile) is one of fact to be ascertained not only by the statements of the person involved, but by his conduct as well. The chancellor in the case at bar determined that the appellants were residents of Arkansas, and that determination is sustained by evidence in the record. Although the appellants contend that they were physically located outside of Arkansas, numerous documents prepared by appellants listed Arkansas as their address. Furthermore, appellants had Arkansas driver's licenses and they owned a house in Arkansas which they did not rent. Mr. Shinn registered to vote in Arkansas in 1970 and declared that Arkansas had been their residence for the eight previous years. The appellants lived at no place outside Arkansas with the intent, or even the stated intent, of staying there. The appellants argue that they did not intend Arkansas to be their residence, but in Charisse v. Eldred, supra, we said: "[T]he fact finder is not bound to accept claims of intent when the circumstances point to a contrary conclusion. * * * When acts are inconsistent with a person's declarations, the acts will control, and declarations must yield to the conclusions to be drawn from the facts and circumstances proved." The appellants' contention that they were entitled to a "commercial domicile" for income tax purposes under Ark.Stat. Ann. § 84-2051 et seq. (Supp.1975) is without merit. That statute applies to income "from business activity which is taxable both within and without this state." (§ 84-2056). There was no evidence in the case at bar the appellants paid any income tax in the State of Texas or that Texas even had an income tax law. See Collins v. Skelton, 256 Ark. 955, 512 S.W.2d 542 (1974). The decree is affirmed. FOGLEMAN, J., concurs in the result. BYRD, J., dissents. NOTES [1] The returns show that J. W. Powell of Magnolia, Arkansas, made out the returns.

2013-10-30 06:32:41.024947+00

Powers

34 Md. App. 389 (1977) 367 A.2d 85 DONALD W. ARMES ET AL. v. WILLIAM R. COOK ET AL. No. 511, September Term, 1976. Court of Special Appeals of Maryland. Decided January 3, 1977. The cause was argued before POWERS, MENCHINE and MOORE, JJ. Frank Sacks for appellants. No appearance for appellees. POWERS, J., delivered the opinion of the Court. This case was initiated by the filing in the Superior Court of Baltimore City, on 17 September 1973, of a declaration claiming damages for personal injuries alleged to have been sustained in a motor vehicle collision in Fairfax County, Virginia. Plaintiffs were Donald W. Armes, joined by his wife, Mary Armes, and James N. Miller, all of Baltimore. Armes and Miller had been passengers in an automobile driven by William R. Cook, of Baltimore, who was named as one of the defendants. Other defendants were a truck driver, with an address in Colorado, and the corporate owner of the truck, with an address in Missouri. Defendant Cook was served, and filed a general issue plea. On a preliminary motion, judgment was entered for the trucking company. The driver was never served. Although the case remained alive against Cook, no proceedings of record had been taken between 11 March 1974, and 24 December 1975, when the clerk of the court sent notification to the parties that as provided by Maryland Rule 530 an Order of Dismissal for Lack of Prosecution would be entered after 30 days, unless a motion were filed under section c. of Rule 530. Through counsel, the plaintiffs invoked the discretion *391 given to the court in Rule 530, § c., and filed, on 14 January 1976, a motion to suspend the operation of the Rule. On the same day Judge Shirley B. Jones signed an order which read: "ORDERED that the operation of Rule 530 be and it is hereby suspended in the above captioned case for a period of 90 days days from the date of this Order. If not tried within said 90 days, the case shall be dismissed. SBJ" The part of the order which is underlined was handwritten by Judge Jones. Counsel filed with the clerk a request that the case be placed upon the Consolidated Jury Trial Docket. The docket shows this entry, made 20 April 1976: "Dismissed under Rule 530 of the Maryland Rules of Procedure for lack of prosecution. Judgment absolute in favor of the defendants for costs." On 26 April 1976 the plaintiffs filed a motion to "Overturn the Dismissal" and reinstate the case. The motion alleged that a trial date of 2 June 1976 had been set. The motion was heard before Judge Jones on 11 May. On 26 May 1976 she denied the motion. In a brief memorandum Judge Jones said: "Plaintiffs' counsel contends in the present motion that he was advised by the Assignment Office that the case would be assigned in numerical order for trial on June 2, 1976, and that the case would not be dismissed because it had been assigned for trial. If counsel relied on such advice, as he claims to have done, such reliance was misplaced. The terms of the suspension were made a part of the January 14th order pursuant to Rule 530 c., and were abundantly clear. There is no showing, and indeed no claim that a trial date within the prescribed time could not have been obtained pursuant to that order. The act of simply obtaining any trial date did not comply with the order. "In the judgment of this court, Rule 625 is not *392 intended under circumstances such as these to abrogate the intent of Rule 530. This intent has been abundantly enunciated by the appellate courts." The appeal before us brings up only the lower court's denial of the motion to reinstate the case. Presumably the motion, filed within thirty days after the entry of the judgment, invoked the discretionary revisory power and control over such judgment committed to the court by Maryland Rule 625, § a. The discretionary power to suspend or not to suspend the operation of Rule 530, discussed by the Court of Appeals in Stanford v. District Title Ins. Co., 260 Md. 550, 555, 273 A.2d 190 (1971), had already been exercised by Judge Jones, favorably to the plaintiffs, upon what she termed "very minimal cause shown". It appears that the Rules do not contemplate a second discretionary judicial look at a case after the entry of a judgment of dismissal for failure to comply with the terms of an earlier order suspending the operation of Rule 530, and granting the "brief reprieve" referred to in Stanford. In Pappalardo v. Lloyd, 266 Md. 512, 295 A.2d 221 (1972), a notice of contemplated dismissal under Rule 530 had been sent; the plaintiffs had moved the court to suspend the operation of the Rule; the lower court had entered an order suspending the operation of Rule 530, but had also ordered that the Rule would be enforced unless the cause were set for trial by a specified date; the date had passed, and the case had not been set for trial; and the court had ordered the case dismissed for want of prosecution. The plaintiffs had moved to reinstate the case, and their motion had been denied. The Court of Appeals said, at 514-15: "This case was ripe for dismissal and the notice required by the Rule was given April 26, 1971. The Order which suspended the operation of the Rule set forth that the suspension was conditioned upon a specific act to be performed by plaintiffs' counsel. When they failed to comply within the time *393 allowed, the case was in effect dismissed upon the expiration of the time fixed in the Order. The formal Order of Dismissal entered by the court on January 7, 1972 required no further notice and simply reduced to writing what was an accomplished fact." If we apply Pappalardo as we read it, the dismissal of the case now before us became an accomplished fact by the operation of the self-executing provisions of Rule 530, and there was no further room for the exercise of discretion. If, on the other hand, a motion to reinstate a case after entry of a judgment of dismissal under Rule 530 requires the court to take another discretionary look at it, Judge Jones did so. Her memorandum makes it clear that she found no good cause to support the motion to reinstate the case. We hold that her denial of the motion was not an abuse of discretion. Order affirmed. Appellants to pay costs.

2013-10-30 06:32:41.076305+00

Madden

152 F. Supp. 953 (1957) The UINTAH AND WHITE RIVER BANDS OF UTE INDIANS v. The UNITED STATES. No. 47569. United States Court of Claims June 5, 1957. As Amended October 9, 1957. *954 Carl S. Hawkins, Washington, D. C., for plaintiffs. Ernest L. Wilkinson, F. M. Goodwin, Wilkinson, Cragun, Barker & Hawkins, Washington, D. C., were on the briefs. Floyd L. France, Washington, D. C., with whom was Asst. Atty. Gen. Perry W. Morton, for defendant. Before JONES, Chief Judge, and LITTLETON, WHITAKER, MADDEN and LARAMORE, Judges. MADDEN, Judge. This is a suit against the United States by the Uintah and White River Bands of Ute Indians. They assert, and the Government denies, that this court has jurisdiction of the case under the special Ute Jurisdictional Act of June 28, 1938, as amended.[1] By section 1 of that Act this court is authorized to "hear, determine, and render final judgment on all legal and equitable claims of whatsoever nature which the Ute Indians or any tribe or band or any constituent band thereof, may have against the United States, including, * * * claims arising under or growing out of any treaty or agreement of the United States, law of Congress, executive order, or by reason of any lands taken from them, without compensation." The plaintiffs claim just compensation for 973,777 acres of the former Uintah Indian Reservation in Utah, taken by the United States on July 14, 1905, by incorporation into the Uintah National Forest. The questions now ready for decision are whether the plaintiffs were the owners of the land at the time in question; if they were, what was the value of the land at the time it was taken; and are they entitled to interest on that value. The Plaintiffs' Title By an Executive Order of October 3, 1861, 1 Kappler p. 900, President Lincoln approved a recommendation of the Secretary of the Interior that "the Uintah Valley, in the Territory of Utah, be set apart and reserved for the use and occupancy of Indian Tribes". The lands involved in this case lie within the area described in the Executive Order. The Act of May 5, 1864, 13 Stat. 63, authorized and required the Superintendent of Indian Affairs to bring together and settle in the Uintah Valley as many of the Indians of Utah Territory as might be found practicable. It said that the Uintah Valley "is hereby set apart for the permanent settlement and exclusive occupation of such of the different tribes of Indians of said territory as may be induced to inhabit the same." Pursuant to an Act of February 23, 1865, 13 Stat. 432, a treaty was negotiated with numerous Indian tribes in Utah providing for their surrender of all their rights in land in that territory which was suitable for agricultural and mineral purposes, but reserving to the Indians for their exclusive use and occupation "the entire valley of the Uintah River within Utah Territory". Although the treaty just described was never ratified, various individual Indians and groups of Utah Indians, from time to time after 1865, moved into the Uintah Valley. An Indian Agency was established *955 there, the area became known as the Uintah Indian Reservation, and the Indians so migrating into the reservation, as well as those already there before the reservation was established, and their descendants, became and have since been known as the Uintah Indians or Uintah Ute Indians, one of the plaintiffs herein. In 1868, 15 Stat. 619, a treaty was made with seven bands of Ute Indians, sometimes thereafter known as "The Confederated Bands of Ute Indians". This treaty was later duly ratified. It set apart a large reservation, wholly within the Territory of Colorado, for the Indians named in the treaty and for such other friendly Indians as they might be willing to admit among them. The Indians relinquished all claims and rights to land not included within the reservation. In an agreement embodied in the Act of June 15, 1880, 21 Stat. 199, with the Confederated Bands of Ute Indians in Colorado, the Indians ceded the then remaining portions of their Colorado reservation and the various bands agreed to settle in other places designated in the agreement. Of interest in this case were the provisions that the White River Utes agreed to remove to the Uintah Reservation in Utah and the Uncompahgre Utes agreed to remove to an area on the Grand River, in Colorado, or to other lands in that vicinity and in Utah. The White River Utes then moved to the Uintah Reservation in Utah, and their descendants have continued to live on that reservation. This band and the Uintah band are the plaintiffs in this case. The Uncompahgre Utes were settled upon a reservation in Utah which was not within the area of the Uintah Reservation. Thus far, on the question of title, we have the 1864 Act setting apart the Uintah Reservation "for the permanent settlement and exclusive occupation of such of the different tribes of Indians of said territory (Utah) as may be induced to inhabit the same." We have Indians who were already in the area and others of different Utah bands moving into the area and settling there, apparently losing their identity and becoming known as "Uintah Ute" Indians. It could well be urged that these Indians, having fulfilled the conditions of the statute, became the grantees, or at least "recognizees" under the statute. It is as if one made a deed "to the first of my grandsons who shall reach the age of 25". The Indian Claims Commission, on February 21, 1957, in the case of The Uintah Ute Indians of Utah v. United States, Docket No. 45, held that the United States is liable to the Uintah Ute Indians for the undivided share of the reservation which the United States turned over to the White River Utes pursuant to the 1880 statute. The Act of May 24, 1888, 25 Stat. 157, provided that a designated portion of the Uintah Valley Reservation should be restored to the public domain and sold if three-fourths of the adult male Indians residing on the reservation consented. The statute provided: "That all moneys arising from the sales of this land shall belong to said Indians and be paid into the Treasury of the United States and held or added to any trust funds of said tribes now there." In the administration of this Act, the consent of the Uintah and the White River Indians was obtained, the lands were sold, and the receipts were credited to these two bands of Indians. In 1902, Congress appropriated $10,000 more to these Indians for other lands detached from the reservation pursuant to the 1888 statute. Bills were introduced in Congress in 1893 proposing that the Uncompahgre Indians be allotted lands in the Uintah Reservation. The Secretary of the Interior and the Commissioner of Indian Affairs, being asked to comment on the bills, opposed the bills on the ground that the Indians residing on the Uintah Reservation owned the land, and that it should not be taken from them except by negotiation and purchase. The bills were not passed. *956 In finding 14 we recite administrative actions taken in 1892, 1897, and 1898 on the express assumption that the Uintah and White River Utes owned the land in the Uintah Reservation. Pursuant to statutes cited in our findings 15, 16, and 17, some Uncompahgre Indians were given allotments in severalty in the Uintah Reservation, and the Uintah and White River Utes were paid $60,064.48 for the lands so allotted. By the Act of May 27, 1902, 32 Stat. 245, 263, the Secretary of the Interior was directed, if a majority of the adult male Indians of the Uintah and White River Bands consented, to make individual allotments to the Indians and then restore all of the unallotted lands of the Uintah Reservation to the public domain, to be sold under the homestead law for $1.25 an acre, the proceeds to be used for the benefit of said Indians. The allotments were made, and sales of the lands restored to the public domain ultimately produced proceeds of $1,184,996.33 which were placed in an account headed "Proceeds of Uintah and White River Ute Lands". Our finding 19 shows that later in 1902, and before the allotments had been made and the unallotted lands restored to the public domain, Congress directed the Secretary of the Interior to set apart for the Indians a common grazing area in the reservation. The statute seems to have reduced the allotments of the Uncompahgre Indians, but gave them rights in the common grazing area. By the Act of March 3, 1905, 33 Stat. 1048, 1069-1070, Congress, among other things, authorized the President to set apart and reserve, as an addition to the Uintah Forest Reserve, such portions of the lands within the Uintah Indian Reservation as he considered necessary. The President, on July 14, 1905, 34 Stat. Pt. III, 3116, set aside 1,010,000 acres of land under this authority. This land was, of course, a part of the land which, under the Act of May 27, 1902, was to have been restored to the public domain, sold, and the proceeds used for the benefit of the Uintah and White River Indians. No provision was made for paying the Indians for the 1,010,000 acres of land, and they are now suing for its value. In this opinion we have abbreviated the history of the dealings of Congress and the Executive with these Indians in relation to this land. A much fuller history appears in our findings. It plainly appears from it, we think, that Congress in its statutes, and the Executive in interpreting those statutes, repeatedly recognized the plaintiff bands as the owners of the Uintah Reservation. They were the ones whose consent had to be obtained, when transactions relating to the land were contemplated. They were the ones to whom the money was to be paid and was paid, when reservation land was disposed of to third persons. Between 1924 and 1929 several unsuccessful attempts were made to obtain passage of special jurisdictional acts to permit the plaintiff bands to sue in this court for the taking of the 1,010,000 acres of land. In 1930 a bill was introduced providing for a direct payment for the lands, at the rate of $1.25 per acre. In this bill, for the first time, the Uncompahgre Band of Utes was included with the Uintah and White River Bands. The committee report and material inserted in the Congressional Record discussed only the title of the Uintah and White River Bands. There is no explanation or mention of a reason for including the Uncompahgre in the bill. The bill was enacted on February 13, 1931, 46 Stat. 1092, and provided for the direct payment of $1,217,221.25 for 973,777 acres of land, which was at the rate of $1.25 per acre. The bill said that the payment was to be in full satisfaction of all claims of the Indians in relation to the 973,777 acres of land. The remainder of the land, 36,223 acres, was said to be coal land, and action on it was reserved. The appropriated money was distributed per capita to the three bands of Indians, the Uncompahgre receiving $439,466.88 of it. The coal lands *957 are the subject of another suit now pending in this court. The Jurisdictional Act The jurisdictional act, cited supra, gives the court jurisdiction to decide the plaintiffs' claims arising "by reason of any lands taken from them without compensation." Section 1. The Government points to the payment made under the 1931 Act and says that these lands were not taken without compensation. We have no doubt that the Jurisdictional Act was intended to include these claims. The pertinent committee reports say so in express words. House Rept.No.1028, 75th Cong., 1st sess., on HR 3162, pp. 2-3; Senate Rept.No.1219, 75th Cong., 1st sess., pp. 2-3. And section 5 of the Jurisdictional Act itself provides that payments made by the United States upon or in satisfaction of any claim sued on under the Act should not operate as an estoppel, but only as a setoff against the claim. Our conclusion is that the court has jurisdiction of the claim. The Value of the Land The land was taken in 1905, and must be valued as of that date. The valuation of an area of land such as the one here involved, as of today, would be a task of great difficulty, and the figure arrived at would be, at best, an approximation, reached by weighing a large number of elements of greater or lesser significance, and giving each the weight which it was thought to merit. In the instant case, the relevant events and elements are those of fifty years ago. Highly competent experts were presented by the parties. But they disagreed as to whether 1905 was an unusually dry season, or on the other extreme, was a year of record-breaking rainfall; whether the edible plant growth was more abundant in 1905 than now, because it had been overgrazed during World War I, or the management of the Forest Service had so improved it that it is better now than it ever was; whether in 1905, small tracts of this kind of land brought higher prices per acre than large ones, or vice versa. Thus there was disagreement, even as to relevant historical facts. There was disagreement as to conclusions to be drawn even from undisputed historical facts, such as the prices at which the railroads in the area sold their alternate sections of land. Did they sell them cheap in order to settle the country and get in cash to retire their bonds, or did they hold out for about the market price? There was disagreement as to how far from the area in question land transactions might take place, and still be helpful in arriving at the market value of these lands. Many lay witnesses were presented by the plaintiffs, old residents who recollected, more or less accurately, events and transactions of the time in question. Commissioner Hogenson of this court presided over the lengthy trial and has made an able and obviously careful report. He had a better opportunity than we have to acquire a realistic understanding of the problem of the value of these lands as of 1905, and we think his conclusion is substantially right. We therefore find, as he did, that the value was $1.25 per acre. The Payment to the Uncompahgres As we have seen, the 1931 Act required the payment of a share of the money granted by that act to the Uncompahgre Indians, and $439,466.88 of the money was paid to them. They had no title or interest in the Uintah Reservation except in the allotments which were bought for them from the plaintiffs, and in the common grazing area. They had, therefore, no interest in the 973,777 acres of the land placed in the Forest Reserve, for which the 1931 payment was made. The United States is entitled to no credit for the $439,466.88 which was paid to the Uncompahgre Indians. It is entitled to credit for the $777,754.37 which was paid to the plaintiffs. Interest The parties disagree as to whether our judgment should include interest upon the sum which we find to be the 1905 value of the land in question. As *958 we have said, the plaintiffs were the owners of the land in question, with a title repeatedly recognized by Acts of Congress, and by Executive actions taken pursuant to statutes. The United States, pursuant to an Act of Congress, took possession and ownership of the land for itself for its Forest Reserve. No plainer case of an expropriation could be stated. In that respect the case is like United States v. Creek Nation, 295 U.S. 103, 55 S. Ct. 681, 79 L. Ed. 1331 and Shoshone Tribe of Indians of Wind River Reservation in Wyoming v. United States, 299 U.S. 476, 57 S. Ct. 244, 81 L. Ed. 360. It was held in those cases that in the case of an expropriation of lands owned by Indian Tribes, interest from the time of the taking must be included as a part of just compensation, in order to satisfy the Fifth Amendment. The decision in United States v. Alcea Band of Tillamooks, 341 U.S. 48, 71 S. Ct. 552, 95 L. Ed. 738, was based on the Court's conclusion that no taking such as is contemplated by the Fifth Amendment occurred in that case. If the plaintiffs were not, as we think they are, entitled to interest as a constitutional right, we think they would be entitled to interest under the provisions of the Jurisdictional Act. If Congress did not intend that the measure of recovery constitutionally required in expropriation cases should be applied, there was no reason for its express statement in section 6 that, if it found that the plaintiffs' lands had been taken without compensation, "the court shall render judgment in favor of said Indians, and shall award to them, as for a taking under the power of eminent domain, compensation for all such lands * * *." An interesting question arises as to the effect of the payment of the $777,754.37 by the United States to the plaintiffs in 1931 on the computation of interest. If it is applied to reduce the principal, it would follow that no interest on that part of the principal would accrue after 1931. If it is applied on the interest accrued up to 1931, it is not enough to pay that interest, and would leave all of the principal continuing to draw interest since 1931. The plaintiffs say that a payment not large enough to pay both interest and principal is to be applied first to interest, citing Story v. Livingston, 13 Pet. 359, 371, 38 U.S. 359, 371, 10 L. Ed. 200. The Government says that this is the rule unless the debtor, when he makes his payment, stipulates that it is to be applied to principal. The authorities cited by the Government seem to relate not to the question of principal and interest, but to situations where the debtor owes the creditor more than one debt, and stipulates that his payment should, for example, be applied to a secured debt, when the creditor would prefer to apply it to an unsecured debt. However, although there seems to be no precedent, we think that the general rule should be that the debtor may effectively direct the application of his payment. If he makes a payment stipulating that it shall be applied to principal, it would seem that the creditor would have no right to retain the payment and apply it to interest. If the interest is overdue, he may collect it by suit, but he can't do it by self-help, by using for a purpose which he prefers, money which is put into his hands for another purpose. If the intention of the debtor were controlling in the instant case, we have no doubt about the intention of Congress in 1931. It said that its payment was to be in full satisfaction of all claims relating to the land, and it fixed a price of $1.25 per acre for the land. It was thinking of principal, not interest. The plaintiffs urge that the Jurisdictional Act has directed us how to apply the 1931 payment by saying, in section 5 "No payment or payments which have been made by the United States upon or in satisfaction of any claim or claims asserted in any suit brought hereunder * * * shall apply as an estoppel against any suit brought hereunder, but there *959 shall be set off against any recovery * * * any payment made * * *." The plaintiffs say that this language directs us to compute their recovery as if no payment had been made in 1931, and then set off the 1931 payment against the result of that computation. This is a fair argument, and we are by no means certain that it is not correct. We conclude, however, that it was not meant by Congress as a specific direction as to how the computation should be made, but only as an assurance that the claims were not to be barred completely by a prior payment purportedly made in full satisfaction. We think Congress left to the Court the details of the computation, and expected us to make it in the same way that such a computation would be made in private litigation. We do not adopt the proposal of either litigant. As to the Government's contention as to the application of the 1931 payment, we think that in the instant situation the intention of the debtor is not controlling. The "debt" is not an obligation incurred by agreement, but one imposed by the law of the Constitution. Our duty, we think, is to apply the 1931 payment in such a way as to most nearly approach the Constitutional objective of compensation for the value at the time of taking, plus compensation, in the form of interest, for delay in paying for the value at the time of taking. When the $777,754.37 was paid to the plaintiffs in 1931, 26 years of interest at 5% had accrued upon the 1905 value of the land. The $777,754.37 was, therefore, sufficient to pay principal (100%) plus accrued interest (130%) upon only $338,154.08 of the principal ($777,754.37 ÷ 2.30 = $338,154.08). We think it should be so applied. That means that as to that much of the principal, the payment was in full, and no further interest accrued. As to the balance of the principal, $879,067.17, no payment has ever been made, and that sum draws interest from 1905 to the date of payment. We realize, of course, that such a formula, attempted to be patterned to fit a situation as unusual as the instant one where the Constitutional obligation has remained unfulfilled for more than fifty years, has rather rough edges. But it seems fairer to us than those proposed by the parties. The plaintiffs are entitled to recover $879,067.17, with interest thereon, as a part of just compensation at 5% from July 14, 1905 to July 14, 1934, and at 4% from the latter date to the date of payment.[2] The question of the remaining offsets, if any, has not been determined, and the case will be remanded to the commissioner for further proceedings on that matter under Rule 38(c), 28 U.S.C.A. It is so ordered. JONES, Chief Judge, and LARAMORE, WHITAKER and LITTLETON, Judges, concur. NOTES [1] The Ute Jurisdictional Act of June 28, 1938, c. 776 (52 Stat. 1209), as amended by the Act of July 15, 1941, c. 299 (55 Stat. 593); June 22, 1943 (57 Stat. 160); June 11, 1946, c. 378 (60 Stat. 255); and Sections 1, 2, 11 and 25 of the Act of August 13, 1946, c. 959 (60 Stat. 1049), 25 U.S.C.A. §§ 70, 70a, 70j, 70 note. [2] See Alcea Band of Tillamooks v. United States, 87 F. Supp. 938, 115 Ct. Cl. 463; Rogue River Tribe of Indians v. United States, 89 F. Supp. 798, 116 Ct. Cl. 454, certiorari denied 341 U.S. 902, 71 S. Ct. 610, 95 L. Ed. 1342.

2013-10-30 06:32:41.122598+00

Preslar

535 S.W.2d 410 (1976) Linoa Carol BANEGAS, as next friend and guardian of the minor child, Cynthia Lynn Holmquist Cole, Appellant, v. Oscar Burton HOLMQUIST, Jr., et al., Appellees. No. 6462. Court of Civil Appeals of Texas, El Paso. March 24, 1976. *411 Stewart W. Forbes, Arthur A. Abraham, El Paso, for appellant. Kerr, Fitz-Gerald & Kerr, Ted M. Kerr, Midland, Conway L. Wallace, Houston, for appellees. OPINION PRESLAR, Chief Justice. This is a dispute over Workmen's Compensation death benefits between the parents of a deceased workman and a child of the workman, who had been adopted by someone else. The trial Court, on undisputed facts, rendered a summary judgment awarding the benefits to the parents of the deceased workman. We affirm. Two questions are presented on appeal, the first being whether a child who has been adopted by another is entitled to death benefits of the child's natural parent; the second is whether the denial of such benefits violated the equal protection clause of the Fourteenth Amendment to the United States Constitution. Cynthia Lynn Holmquist Cole is the sole minor child of Ralph B. Holmquist who was killed in an industrial accident for which death benefits are payable under the Workmen's Compensation Act, Art. 8306, Tex. Rev.Civ.Stat.Ann. Long before his death, he and Cynthia Lynn's mother were divorced and the mother married one Clifton Cole, who adopted Cynthia Lynn. The Travelers Insurance Company, the Compensation carrier for Ralph Holmquist's employer, has admitted that his death is compensable and has paid the benefits into court because of the conflicting claims of the minor, Cynthia Lynn Cole, and the parents, Oscar and Beulah Holmquist, Appellees herein. As indicated, the trial Court determined that the parents of the deceased, instead of the natural child who had been adopted by another, were entitled to the death benefits. This precise question was decided by our Supreme Court in Patton v. Shamburger, Tex., 431 S.W.2d 506 (1968). The question before the Supreme Court in that case is identical to the question before this Court; that is, whether Workmen's Compensation death benefits should be paid to a deceased workman's parent or to his minor child who, before his death, had been adopted by another. The Court held that the adoption statute, Art. 46a, Tex.Rev.Civ. Stat.Ann., prevents the recovery of such benefits by a child because such adopted child is no longer the workman's "minor children" as that term is used in the Workmen's Compensation statute, Art. 8306, § 8a. Appellant urges that since the decision in Patton v. Shamburger in 1968, the adoption statutes have changed in that Texas has now enacted the Family Code. Section 15.07, Tex.Family Code Ann., has the same wording as § 9 of Art. 46a, the old adoption statute, this being the language construed by the Court in Patton. We fail to see how the adoption of the new Family Code affects the decision in that case; no other provision of the Family Code conflicts with that opinion. The case before us is not distinguishable from the Patton case and it is controlling of our decision. It was followed by the Eastland Court of Civil Appeals in Zanella v. Superior Insurance Company, 443 S.W.2d 95 (Tex.Civ.App.—Eastland 1969, writ ref'd). Appellant's first point of error is overruled. Appellant's second point of error is that the judgment of the District Court *412 operates as a taking of her property without due process of law and is contrary to the equal protection clause of the United States Constitution. In support of this position, Appellant cites Dickerson v. Texas Employers' Insurance Association, 451 S.W.2d 794, a no writ case by the Dallas Court of Civil Appeals, decided in 1970. In Dickerson, the Court recognized the holding in Patton and Zanella as controlling, but reasoned that there was no constitutional question in those cases whereas one existed in the case before it. In Dickerson, one of the children of the deceased workman had been adopted and the others had not. The court held that to exclude the child who was adopted by a third person would amount to a denial of equal protection under the Fourteenth Amendment of the United States Constitution. This decision followed Levy v. Louisiana which declared that the exclusion of illegitimates from recovery under the Louisiana wrongful death statute was unconstitutional. 391 U.S. 68, 88 S. Ct. 1509, 20 L. Ed. 2d 436 (1968). There is a distinction between the illegitimate child situation and that of the adopted child. The illegitimate child is deprived of any recovery from any source; he has no other place to turn for a recovery of benefits, while the adopted child simply changes parents; he loses the right to recover from his natural parent, but he is given the right to recover from the adoptive parent. Article 16.09 of the Family Code provides: "(a) On entry of a decree of adoption, the parent-child relationship exists between the adopted child and the adoptive parents as if the child were born to the adoptive parents during marriage." The Supreme Court confirmed that in the Patton case, saying: "Our holding is that they are no longer `minor children' of the natural father under the workmen's compensation statute but are the minor children of the adoptive father and his wife, the natural mother of the children." Since Appellant is not deprived of a right but simply had that right transferred from one parent to another, we hold that there is no violation of the equal protection clause of the Fourteenth Amendment, United States Constitution. The judgment of the trial Court is affirmed.

2013-10-30 06:32:41.161902+00

Rendlen

535 S.W.2d 492 (1976) STATE of Missouri, Plaintiff-Respondent, v. Nathaniel WADE, Defendant-Appellant. No. 36152. Missouri Court of Appeals, St. Louis District, Division One. March 2, 1976. Motion for Rehearing or Transfer Denied April 13, 1976. *493 Charles D. Kitchin, Public Defender, Richard A. Knutson, James C. Jones, Asst. Public Defenders, St. Louis, for defendant-appellant. John C. Danforth, Atty. Gen., Preston Dean, Asst. Atty. Gen., Jefferson City, Brendan Ryan, Circuit Atty., Richard A. Heidenry, Asst. Circuit Atty., St. Louis, for plaintiff-respondent. RENDLEN, Judge. Defendant, Nathaniel Wade, found guilty of burglary second degree, § 560.070 RSMo. 1969, V.A.M.S., and sentenced to ten years *494 imprisonment by the court under the Second Offender Act, § 556.280 RSMo.1969, V.A.M.S., appeals that conviction. Appellant's questioning of the sufficiency of the State's case requires a detailed recital of the evidence. On Sunday, August 12, 1973, Richard Klaus, an off-duty policeman working with an assigned partner as security guard inside the Transport Motor Express Building on North Seventeenth Street in St. Louis, was attracted by a "crashing" sound at the west side of the building.[1] Going there he observed someone breaking splinters to enlarge a fresh hole in the panel of an exterior door. Not able to see who was at the door, he waited and watched. When this activity ceased, Klaus went to the north end of the building and told his partner what was happening, asked him to stand by in case help was needed, returned to the broken door and waited. Presently appellant crawled head first through the hole in the door panel, stood up and proceeded about 15 feet into the building. Klaus stepped around a corner where he had been waiting, identified himself as a security officer, told appellant to halt, and as he did so, brought up the shotgun he was holding in his right hand. Appellant turned, saw Klaus and said: "Don't shoot, I'm just in here to hand things out through the panel." Searching appellant for weapons and finding none, Klaus handcuffed him to a nearby doorknob. As he was doing this, Klaus heard whispering outside the broken door and what sounded like footsteps. He phoned the police and walked around the building in search of other suspects. Several officers arrived in response to Klaus' call, advised appellant of his "rights" and took him to the district station for booking. Appellant, testifying in his own defense, told quite another story. He claimed he was standing near the south side of the Transport Motor Express Building waiting for his car to be repaired at a shop across the street. He further testified Klaus came from the Transport building, approached appellant, pointed a shotgun at him, and asked him why he was there. The guard then forced appellant to accompany him into the building where he handcuffed and searched him, then took his wallet, $112, pocketknife and keys. These matters were categorically denied by Klaus. After being advised of his rights at the station by officer Thurmon Moore, appellant stated that security guard Klaus had taken $150 from him. At that time officer Moore asked appellant if he had broken into the building and in response appellant said he had a narcotic habit. Testimony concerning this matter was as follows: "Q. [Circuit Attorney] I want you to tell me what you asked him exactly, and what his response was? A. [Witness Moore] I asked him if he broke into the place and I said, `You know, the security guard said he caught you inside. Did you break out the panel?' And he said, `I have to support my habit in some way.' Q. What did you do then? Did you say anything to him in response to that? A. I looked at him and said, `It don't look to me you have a habit.' And he showed me his arms. Q. He showed you the underside of his arms? A. Yes, sir. He did. Q. What did you observe there? A. Marks down the veins of each arm." As corroboration of his assertion that Klaus had taken $112 from him, appellant offered the arrest register to show appellant had no money or wallet when he was booked. By his first two contentions of error, appellant asserts the evidence is insufficient to support the verdict, claiming the identity and guilt of defendant were not established and that defendant's alibi was confirmed by the evidence. By these contentions, appellant ignores the fact the jury chose not to believe him and instead was persuaded by the contrary evidence. The State's evidence established the necessary elements of the offense. In addition to abundant direct evidence as to the manner *495 of entry and presence of appellant in the burglarized building, appellant's incriminating statement that he was in the building to hand things out through the door (admitted into evidence without objection) was sufficient to establish intent. Though the actual removal did not occur, it is unnecessary to show a completed act of stealing if a breaking and entering with accompanying intent appears. State v. Smith, 357 S.W.2d 120, 123[5] (Mo.1962). The intent to steal was further shown by the testimony of officer Moore who asked appellant if he had broken into the building and in response was told that appellant had a [drug] habit to support, showing the officer marks down the veins of each arm. From this the jury could find appellant was telling Moore why he had broken in and could reasonably infer the breaking and entering with intent to steal had indeed occurred. Where sufficiency of evidence is challenged, we review to determine if there is sufficient substantial evidence to support the jury's verdict and we consider as true all evidence favorable to the State including reasonable inferences that may be drawn therefrom. State v. Cain, 507 S.W.2d 437, 438[1] (Mo.App.1974). Appellant urges his claim of alibi should have been believed; however, the jury is entitled to believe or disbelieve the testimony of a witness and consider the testimony of one witness as it relates to all the circumstances and facts in the case. It is the responsibility of the trier of fact to weigh and determine the credibility of the witnesses as presented and all other evidence in the case. State v. Wynn, 391 S.W.2d 245, 247[1] (Mo.1965). From the record we find sufficient substantial evidence to sustain the jury's verdict and judgment. Appellant next contends the court erred in overruling his oral motion to suppress his admission made in the presence of security guard Klaus at the time of apprehension, i. e., "Don't shoot, I'm just in here to hand things out through the panel." This untimely oral motion made on the morning of trial was overruled by the court and the point was not preserved for review as appellant failed to object when the statement or admission was offered at trial. State v. Stavricos, 506 S.W.2d 51, 57[10] (Mo.App.1974); State v. Simone, 416 S.W.2d 96, 100[11] (Mo.1967). Examining for plain error, we find none as the mere fact a weapon was pointed at appellant when he was told to halt, absent any interrogation or demand that he speak up, did not render appellant's spontaneous statement, involuntary. As the court said in State v. Hart, 292 Mo. 74, 237 S.W. 473, 479[9] (1922): "The weapon was not leveled at the defendant to induce him to confess, but to compel surrender. . . . He was bound to know that as soon as he yielded and was safely in custody no danger of violence remained." The security officer acted only with proper caution in apprehending a suspect in the apparent act of committing burglary who might have been armed. He could not, nor was he required to prevent the appellant from speaking until he could be informed of his Miranda rights. Neither time nor circumstances permitted giving the Miranda warnings and it is absurd to suggest the facts here required such warnings at the moment of arrest and before appellant could blurt his statement. Here, as in State v. Hart, supra, the gun was leveled at appellant to apprehend, not to coerce confessions. The statement was voluntary and thus was not constitutionally barred from use at trial. See Boyer v. State, 527 S.W.2d 432 (Mo.App.1975). Appellant contends the court erred in denying his request for continuance[2] to permit calling officer Klaus for testimony in connection with the untimely motion to suppress. This contention is without merit. It appears appellant was less than diligent in securing Klaus' presence at the pre-trial motion. Further appellant failed to show how the testimony of Klaus would have *496 proved the statements of defendant inadmissible and the oral request for continuance and to delay the trial for 24 hours, failed to conform to requirements of Rule 25.08, V.A.M.R. Officer Klaus was the first witness for the State in the presentation of its case in chief. Appellant had a full and fair opportunity to cross-examine at that time and Klaus' testimony was diametrically opposed to that of appellant at the hearing on the motion to suppress. In light of these circumstances we cannot see how defendant was prejudiced by the court's actions. In reviewing appellant's various requests for continuance, we note that: "The trial court has great discretion in granting or denying a continuance, and `it requires a very strong showing to induce a higher court to interfere, and it will disturb the action of the trial court only where a clear abuse of discretion is shown.'" State v. Thomas, 433 S.W.2d 537, 539[1] (Mo.1968); State v. Amerison, 399 S.W.2d 53, 55[5] (Mo.1966); State v. Cuckovich, 485 S.W.2d 16, 22[8] (Mo. banc 1972). Finding no abuse of discretion in denying the oral application for continuance, the point is ruled against appellant. On the morning of the trial's commencement, appellant made an additional oral motion for continuance to permit time to employ counsel of his own choice in lieu of the assigned public defender. He stated he had hired an attorney who failed to appear and his family was then in the process of mortgaging their home to employ other counsel. The court, denying the motion, noted that appellant had had seven months since his arrest to procure private counsel. Under the court's questioning, appellant admitted he had no complaint concerning service of the public defender and though his family was attempting to raise money for a private attorney, appellant could not say when they might be ready. Appellant's assertion is correct that he is entitled to a fair chance to prepare his defense, State v. Stucker, 352 Mo. 1056, 180 S.W.2d 719, 720[3] (Mo.1944); however, he has failed to show how the court's denial of his request for a continuance has prejudiced him in this regard. The right to counsel does not mean the accused is entitled to any particular attorney, State v. Williams, 419 S.W.2d 49, 54[8] (Mo.1967); and "the accused's right to private counsel is limited by the state's right to proceed to trial after the accused has been afforded a fair opportunity to engage his own counsel and adequate time to prepare his defense, and does not include the right to defeat or impede the orderly processes of the administration of justice." State v. Crider, 451 S.W.2d 825, 828[4] (Mo.1970). In view of the ample time appellant had to procure a private attorney and the fact that the public defender was ready to proceed, we find no abuse of discretion in denying a motion for continuance made on the day of trial. See State v. Jefferies, 504 S.W.2d 6 (Mo.1974). Immediately after the noon recess on the second day of trial, the defense again moved for continuance, this time asking an opportunity to locate and produce one Tyree McIntyre as a witness. Defense counsel explained that at 9:30 that morning appellant had given him the name of Herbert McIntyre as a possible witness. During the noon recess, defense counsel had talked to Herbert McIntyre, then an inmate of the city jail, who in corroboration of defendant's testimony stated that he and his brother Tyree had witnessed the arrest of appellant on August 12, 1973. Counsel indicated he chose not to call Herbert since he had an extensive criminal record but wished to locate and call his brother Tyree, requesting a continuance until after four that afternoon. Counsel had a telephone number and address of Tyree McIntyre but the prospective witness could not be reached until after 4 p. m. The oral motion for continuance, understandably denied, did not meet the requirements of Rule 25.08, V.A.M.R., requiring movant to show "where the evidence may be and that due diligence has been used to obtain it." Further defense counsel by the oral motion for continuance did not show a subpoena had been issued for either Herbert or Tyree McIntyre. See *497 State v. Johnson, 461 S.W.2d 724, 726[3] (Mo.1971); and this motion failed to show Tyree McIntyre's residence or whereabouts and the probability of procuring his testimony and within what time that testimony might be obtained. As noted above, defense counsel admitted he was able to present by Herbert the same matters to which Tyree McIntyre might testify and Herbert was available but less desirable as a witness. Appellant by so doing sought to avoid the requirement of the Rule that "he is unable to prove such facts by any other witness whose testimony can be as readily procured." Also, no assurances were given the court that the grant of continuance would result in the presence of Tyree McIntyre at trial, Rule 25.08 and State v. Nunley, 482 S.W.2d 503, 504 (Mo.1972); and nothing indicates defense counsel made an effort to obtain a subpoena for Herbert or Tyree McIntyre at any earlier time. However, the principal share of fault in this situation seems to lie with appellant, who was a difficult client to represent and had not discussed the case with defense counsel for approximately two months prior to trial. Finally, it is important that Tyree or Herbert McIntyre's testimony would be cumulative in nature and it is not probable a different result would obtain had the prospective witness testified. State v. Scott, 338 S.W.2d 873 (Mo.1960); State v. Reece, 505 S.W.2d 50 (Mo.1974). We find there was no abuse of discretion in the court's refusal to grant appellant's unsworn motion for continuance. After appellant testified and before the State's rebuttal evidence, appellant moved orally for continuance to procure the presence and testimony of an absent witness, one Sergeant Gregory Sullivan. The evidence shows that immediately prior to the motion for continuance a subpoena duces tecum had been served by a member of the public defender's staff upon Sergeant Sullivan. The subpoena directed Sullivan to bring the arrest records of appellant to corroborate his statements he had no money in his possession when booked. The court properly refused the application as it patently failed to meet the requirements of Rule 25.08 and there was no showing of prejudice by the court's ruling since Sergeant Sullivan testified shortly thereafter and the desired testimony was elicited. Appellant next alleges error in the giving of an instruction based on MAI-CR 2.10. At trial, a general objection only was made to the instructions and the sole allegation of error in the motion for new trial was: "The court erred in failing to properly and adequately instruct the jury as to all questions of law applicable to the case." This fails to raise the issue with sufficient particularity as required by Rules 27.20(a) and 20.03, V.A.M.R. Where a specific objection is not made to an instruction at trial or in the motion for new trial, the point is not preserved for review. State v. Mitchell, 500 S.W.2d 320, 323[7] (Mo.App.1973); State v. Gray, 525 S.W.2d 367, 370[6] (Mo. App.1975). Appellant next contends that the trial court erred in refusing his offered instruction # A (MAI-CR 3.54) directing the jury to consider prior statements made by defendant in determining the truthfulness of his testimony at trial. We hold against appellant on this contention as none of his prior statements are truly "consistent" with his testimony at trial, an indispensible prerequisite for giving the instruction. MAI-CR 3.54, Notes on Use. Appellant's brief directs our attention to the testimony of officer Moore stating: "Officer Moore testified that defendant had told him that Richard Klaus had forced him inside the building and had taken his money." An examination of the record indicates that this statement is only partially accurate; the relevant portion of Moore's testimony is as follows: "Q. [By Prosecutor Heidenry] Did he [Wade] make a statement to you, after you advised him of his rights? A. He referred to security guard Klaus, and said he had taken $150.00 from him. Q. Did he say $150.00? A. Yes, he did. Q. You remember that clearly, at that time? *498 A. Yes, sir. Q. Did he make any other statement, at any time you had him in custody, after you advised him of his rights? A. After I advised him of his rights, he said all he wanted was the $150.00 that the security guard had taken from him. Q. Did you ask him anything? A. I remember asking him if he had broken into the store there, and he referred to the habit he had, a narcotic habit. Q. I want you to tell me what you asked him exactly, and what his response was? A. I asked him if he broke into the place and I said, `You know, the security guard said he caught you inside. Did you break out the panel?' And he said, `I have to support my habit in some way.' * * * * * * Q. [By Defense Attorney Knutson] Do you recall any statement by Mr. Wade that he was arrested by security guard Klaus in front of the Transport Company? A. Not to me he didn't. Q. Did you hear him make such a statement? A. No, I did not. Q. Did you hear him at any point? A. I heard other people mentioning it, but nothing was said to me about it." At no point did Moore testify appellant told him he had been forced into the building; in fact, appellant's reply concerning his drug habit seems to impel the opposite conclusion. Further, while Moore testified appellant complained Klaus had taken money from him, appellant's statement contradicts his subsequent testimony as to the amount of money and other items taken. Appellant next complains that a statement made by the prosecutor in closing argument attributed to appellant a crime for which he was not charged (i. e., first degree burglary) and charges error in the court's refusal of an instruction to disregard or for mistrial. The prosecutor's offending statement follows: "MR. HEIDENRY (continuing) Ladies and gentlemen: If on this evidence, you find this man not guilty, the next time you read something in the paper, don't scoff. These burglars break into homes or apartments where women are home alone, the likes of him—" We believe the remedial action called for by appellant was properly refused. "The prosecution attorney is generally permitted considerable latitude in arguing the necessity of law enforcement and the responsibility resting on trial juries." State v. King, 334 S.W.2d 34, 40[10] (Mo.1960); State v. Pruitt, 479 S.W.2d 785, 790[9] (Mo. banc 1972). Unlike the attorney in State v. Heinrich, 492 S.W.2d 109 (Mo.App.1973), the prosecutor here did not characterize appellant himself as a threat to the jurors and their families; he referred to burglars plurally, contending that the threat came from "the likes of" appellant. This type of argument does not unfairly personalize appellant in the eyes of the jury and has long been permitted by Missouri courts, State v. Heinrich, supra at 114[9]; State v. Crawford, 478 S.W.2d 314, 320[14] (Mo.1972) app. dis. 409 U.S. 811, 93 S. Ct. 176, 34 L. Ed. 2d 66 (1972); State v. McKinney, 475 S.W.2d 51, 55[5] (Mo.1971), and does not suggest appellant was charged or on trial for first degree burglary. Appellant's final point, numbered eleven charging bias of the trial court, was not raised in appellant's motion for new trial and thus not properly before us on this appeal. See Rule 27.20(a) and State v. Henderson, 510 S.W.2d 813 (Mo.App.1974). We have reviewed the point for plain error under Rule 27.20(c), V.A.M.R., and find none. The judgment is affirmed. WEIER, P. J., and DOWD, J., concur. NOTES [1] The building occupies one-half of a city block, the west side facing an alley. [2] Immediately before trial appellant, in connection with his oral motion to suppress, also orally moved for a continuance.

2013-10-30 06:32:41.204503+00

Graven

152 F. Supp. 726 (1957) Ellen BEEGHLY and Kindig & Beebe, Plaintiffs, v. Glen H. WILSON, also known as Glenwood H. Wilson; Washington National Insurance Company; United States of America, Defendants. Civ. No. 942. United States District Court N. D. Iowa, W. D. July 5, 1957. *727 George Davis, Whicher & Davis, Sioux City, Iowa, for plaintiffs. Yelderman, Martin & Smith, Austin, Tex., for defendant Glen H. Wilson. John J. Vizintos, Shull, Marshall, Mayne, Marks & Vizintos, Sioux City, Iowa, for Washington Nat. Ins. Co. F. E. Van Alstine, U. S. Dist. Atty., and Philip C. Lovrien, Asst. U. S. Dist. Atty., Sioux City, Iowa, for defendant United States. GRAVEN, District Judge. In this case the plaintiffs are holders of judgments against the defendant Glen H. Wilson. That defendant was a general agent of the defendant Washington *728 National Insurance Company. Under his general agent's contract he was entitled to commissions on renewal premiums paid on the policies written by him. That contract is dated November 1, 1949. The defendant United States of America, hereinafter referred to as the Government, is the holder of claims for unpaid income taxes against the defendant Glen H. Wilson which are the subject of a tax lien. The Government claims priority over the plaintiffs as to the renewal commissions owing and to become owing the defendant Glen H. Wilson. The defendant Washington National Insurance Company makes a claim in connection with the renewal commissions to which reference will be made later. On November 4, 1953, the plaintiff Ellen Beeghly recovered a judgment against the defendant Glen H. Wilson in the District Court of Iowa in and for Woodbury County in the sum of $5,000. On the same day the plaintiff Kindig & Beebe also recovered a judgment against that defendant in the same court in the sum of $2,000. On November 8, 1954, the Commissioner of Internal Revenue made an assessment against the defendant Wilson for delinquent income taxes in the sum of $1,819.43 for the tax year 1952 and in the sum of $1,088.40 for the tax year 1953. Prior to the fore-part of 1953 the defendant Wilson was a resident of and domiciled at Sioux City, Woodbury County, Iowa. From that time until the present he has been a resident of and domiciled in Travis County, Texas. The Commissioner filed notice of the tax liens in the office of the County Clerk of Courts of Travis County, Texas, on January 13, 1955. He also filed notice of those liens in the office of the County Recorder of Woodbury County, Iowa, on January 21, 1955. On December 16, 1955, the plaintiffs caused general executions to be issued on their judgments. Under those executions notices of garnishment were served on the defendant Washington National Insurance Company on December 20, 1955. As of the date of the garnishment that garnishee was not indebted to the defendant Wilson for renewal premiums. However, as of August 1, 1956, it was indebted to him for such commissions in the sum of $552.73. Under the defendant Wilson's general agent's contract, he also was entitled to commissions on the renewal premiums paid after August 1, 1956, on policies which had been written by him. Chapter 630, Code of Iowa 1954, I.C.A., makes provision for proceedings auxiliary to execution. On January 21, 1956, the plaintiffs commenced the present proceedings in the District Court of Iowa in and for Woodbury County under the provisions of that Chapter. The original parties defendant to the proceedings were Glen H. Wilson and the Washington National Insurance Company. On February 10, 1956, the Government served notice of levy on the Washington National Insurance Company claiming a lien upon renewal commissions owing and to become owing Glen H. Wilson under his general agent's contract. Glen H. Wilson and Washington National Insurance Company appeared and filed pleadings in the proceedings instituted by the plaintiffs. In its answer filed therein, the Washington National Insurance Company set forth that it had been served with the Government's notice of levy. The plaintiffs thereupon made application to the District Court of Iowa in and for Woodbury County to have the United States of America made a party defendant to the action. That application was granted. Upon being made a party to the action, the United States of America removed to this Court. There is not involved in this case Section 191, Title 31, U.S.C.A., which is known as the Government priority statute. That statute is only applicable in insolvency cases. In the present case there is no claim or showing that the defendant. Glen H. Wilson was or is insolvent. There is involved Sections 6321, *729 6322, and 6323, Title 26, U.S.C.A. Those sections provide as follows: Section 6321: "If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person." Section 6322: "Unless another date is specifically fixed by law, the lien imposed by section 6321 shall arise at the time the assessment is made and shall continue until the liability for the amount so assessed is satisfied or becomes unenforceable by reason of lapse of time." Section 6323: "(a) Invalidity of lien without notice. — Except as otherwise provided in subsection (c), the lien imposed by section 6321 shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the Secretary or his delegate— "(1) Under state or territorial laws. — In the office designated by the law of the State or Territory in which the property subject to the lien is situated, whenever the State or Territory has by law designated an office within the State or Territory for the filing of such notice * * *" It is not controverted that the office of the County Clerk of Courts in Texas and the office of the County Recorder in Iowa are the proper offices for the filing of notices of federal tax liens under Section 6323 (a) (1). See Section 335.11, Code of Iowa 1954, I.C.A. The Internal Revenue Code of 1954 became effective August 16th, 1954. Under the provisions of that Code the claim of the Government for taxes becomes a lien on the date of their assessment. Prior to the effective date of that Code such a claim did not become a lien until the date the Collector of Internal Revenue received from the Commissioner of Internal Revenue an assessment list carrying the unpaid tax liability of the delinquent taxpayer. In the present case the claims of the Government were assessed on November 8th, 1954, and the lien of the Government came into existence on that date. In the present case the right of the defendant Glen H. Wilson to the renewal commissions constituted intangible property, i. e., a chose in action. Section 6321 is broad in its scope. It makes a Government tax lien a lien "upon all property and rights to property, whether real or personal." In the case of Citizens State Bank of Barstow, Texas v. Vidal, 10 Cir., 1940, 114 F.2d 380, 382-383, the Court in referring to the tax lien statute stated: "The statute covering collection of taxes is broad and comprehensive and Congress intended to subject all of a taxpayer's property, except that specifically exempt to the payment of taxes. `Property' is a word of very broad meaning and when used without qualification, may reasonably be construed to include obligations, rights and other intangibles, as well as physical things." Section 6321 was formerly Section 3670, 26 U.S.C. In the case of Glass City Bank of Jeanette Pennsylvania v. United States, 1945, 326 U.S. 265, at page 267, 66 S. Ct. 108, at page 110, 90 L. Ed. 56, the United States Supreme Court stated: "By Section 3670, U.S.C., 26 U.S. C.A.Int.Rev.Code, § 3670, Congress impressed a lien upon `all property and rights to property, whether real or personal, belonging' to a tax delinquent. Stronger language could hardly have been selected to reveal a purpose to assure the collection of taxes." It is well settled that under that statute the Government has a lien upon *730 the intangible property of a delinquent taxpayer. The tax lien is a continuing lien and will attach to obligations which come into existence thereafter. Glass City Bank of Jeanette Pennsylvania v. United States, supra. In that case the tax lien was held to attach to the claim of a taxpayer for services rendered subsequent to the time the lien came into existence. The tax lien has been enforced against various types of intangible property. It has been enforced against the cash surrender value of life insurance policies owned by the taxpayer and this without reference to the question of whether the policies were fully matured or whether notice was given to the beneficiaries. Kyle v. McGuirk, 3 Cir., 1936, 82 F.2d 212; Knox v. Great West Life Assur. Co., D.C.1952, 109 F. Supp. 207; United States v. Ison, D.C. 1946, 67 F. Supp. 40; Smith v. Donnelly, D.C.1946, 65 F. Supp. 415. It has been enforced against annuity and endowment policies. Cannon v. Nicholas, 10 Cir., 1935, 80 F.2d 934; United States v. Trout, D.C.1942, 46 F. Supp. 484. The tax lien has been enforced against disability payments payable under life insurance policies. Fried v. United States, D.C.1955, 150 F. Supp. 486, reversed sub nom, Fried v. New York Life Insurance Co., 2 Cir., 1957, 241 F.2d 504, certiorari denied 77 S. Ct. 1382. It has been enforced against a cause of action of a contract vendee of real estate against his vendor for restitution. Bensinger v. Davidson, D.C.1956, 147 F. Supp. 240. In an article by Paul E. Anderson entitled "Federal Tax Liens — Their Nature and Priority," 41 California Law Review 241 (1953), the author states (p. 251): "Once the federal tax lien has attached to certain property, the taxpayer is powerless to affect or to destroy the rights of the Government. * * * As of the date that the lien attaches, the property has, in effect, two owners, the United States and the taxpayer." In the case of Bensinger v. Davidson, supra, there was a tax lien outstanding against a contract vendee of real estate who had made substantial payments under the contract. Under the California law he had a cause of action for restitution against his vendor. The contract vendee released his claim to the property by executing a quitclaim deed for a modest sum. It was held that such a settlement was not binding upon the Government and that it could enforce its tax lien against the vendor for the amount due the vendee as determined by the applicable California law. Where there is a tax lien outstanding against a taxpayer, it would seem that if the Government chose to enforce that lien against intangibles to the fullest extent, then any bank paying a check of such taxpayer, any insurance company making payments of cash surrender values, disability payments or annuity payments, any party making payment to such taxpayer for services, or any party settling either a contract or tort claim with such taxpayer would be subject to the hazard of paying the same over again to the Government. Except as to such parties that come within the protection of Section 6323, the tax lien would for all practical purposes be a secret lien since it would come into existence and continue from the time the taxes were assessed in Washington, D. C. It would appear that the Government as a matter of policy has been sparing in its enforcement of tax liens against intangibles of the kind noted. See Note, Effect Of A Federal Tax Lien On A Bank Deposit, 42 Iowa L.Rev. 412-420 (1957). In this connection it should be noted that state laws relating to exemptions are ineffective as against a Government tax lien. The only exemptions as to federal tax liens are those contained in Section 6334, 26 U.S.C.A. Those exemptions are: "(1) Wearing apparel and school books. — Such items of wearing apparel and such school books as are necessary for the taxpayer or for members of his family; "(2) Fuel, provisions, furniture and personal effects. — If the taxpayer is the head of a family, so much of the fuel, provisions, furniture, *731 and personal effects in his household, and of the arms for personal use, livestock, and poultry of the taxpayer, as does not exceed $500 in value; "(3) Books and tools of a trade, business, or profession. — So many of the books and tools necessary for the trade, business, or profession of the taxpayer as do not exceed in the aggregate $250 in value. * * * * * * "(c) No other property exempt. — Notwithstanding any other law of the United States, no property or rights to property shall be exempt from levy other than the property specifically made exempt by subsection (a)." It is to be noted that no exemption is afforded as to insurance or personal earnings. It seems clear in the present case that the Government acquired a lien upon the chose in action for renewal commissions owned by the defendant Glen H. Wilson. The next question is whether that lien has priority over the claims of the plaintiffs. In that connection it is desirable to summarize the chain of events in chronological order. That order is as follows: (1) - November 4, 1953: Plaintiffs recover judgments in District Court of Iowa in and for Woodbury County. (2) - November 8, 1954: Government tax lien comes into existence. (3) - January 13, 1955: Government files notice of tax lien in Travis County, Texas, under Section 6323. (4) - January 21, 1955: Government files notice of tax lien in Woodbury County, Iowa, under Section 6323. (5) - December 20, 1955: Garnishment notices served on Washington National Insurance Company under executions issued pursuant to plaintiffs' judgments. (6) - January 21, 1956: Plaintiffs institute proceedings auxiliary to their executions in District Court of Iowa in and for Woodbury County. (7) - February 10, 1956: Government serves notice of levy under tax lien on Washington National Insurance Company. The situation is (1) the plaintiffs recovered their judgments before the Government's tax lien came into existence; (2) the Government's tax lien was in existence and notices of it had been filed in the county offices before the Washington National Insurance Company was served with garnishment notices under the executions issued pursuant to plaintiffs' judgments; (3) those garnishment notices preceded the Government's notice of levy, and (4) the plaintiffs' proceedings auxiliary to execution were instituted prior to the Government's notice of levy. The plaintiffs' claim to priority is based upon several grounds. They claim that since their judgments were rendered prior to the time the Government filed its notices of tax liens in the county offices referred to they are "judgment creditors" within the purview of Section *732 6323 above set out which provides that a Government tax lien shall not be valid against a "judgment creditor" until notice is filed in the designated office. They also claim priority because their garnishment notices were served and their proceedings auxiliary to execution in the nature of a Creditors' Bill were instituted before the Government served its notice of levy. This latter claim involves several provisions of the Iowa law. Chapter 626, Code of Iowa 1954, I.C.A., relates to executions. Section 626.1 of that Chapter provides, in part, as follows: "Judgments or orders requiring the payment of money, or the delivery of the possession of property, are to be enforced by execution. * * *" Section 626.21 of that Chapter provides as follows: "Judgments, money, bank bills, and other things in action may be levied upon, and sold or appropriated thereunder, and an assignment thereof by the officer shall have the same effect as if made by the defendant." Section 626.26 of that Chapter provides as follows: "Property of the defendant in the possession of another, or debts due him, may be reached by garnishment." Rule 54(b) of the Iowa Rules of Civil Procedure, 58 I.C.A., provides, in part, as follows: "The officer serving a writ of attachment or execution shall garnish such persons as the plaintiff may direct as supposed debtors, or having in possession property of the principal defendant, which shall be effected by a notice served in the manner and as an original notice in civil actions, forbidding his paying any debt owing such defendant, due or to become due, and requiring him to retain possession of all property of the defendant in his hands or under his control, to the end that the same may be dealt with according to law, * * *." Chapter 630, Code of Iowa 1954, I. C.A., under which the plaintiffs instituted these proceedings relates to proceedings auxiliary to execution. Section 630.16 of that Chapter provides as follows: "At any time after the rendition of a judgment, an action by equitable proceedings may be brought to subject any property, money, rights, credits, or interest therein belonging to the defendant to the satisfaction of such judgment. In such action, persons indebted to the judgment debtor, or holding any property or money in which such debtor has any interest, or the evidences of securities for the same, may be made defendants." Section 630.18 of that Chapter provides as follows: "In the case contemplated in sections 630.16 and 630.17, a lien shall be created on the property of the judgment debtor, or his interest therein, in the hands of any defendant or under his control, which is sufficiently described in the petition, from the time of the service of notice and copy of the petition on the defendant holding or controlling such property or any interest therein." In this connection the claim of the plaintiffs is that they come within the scope of the "diligent creditor" rule. In support of that claim they rely upon the cases of Bridgman v. McKissick, 1863, 15 Iowa 260, and United States v. Fidelity & Deposit Co., 5 Cir., 1954, 214 F.2d 565. In both cases a debtor had transferred property in fraud of creditors. In the case of Bridgman v. McKissick, supra, it was held that a judgment creditor who brought an action to set aside a fraudulent conveyance had priority over the holder of an older judgment who had not instituted such an action. In the case of United States v. *733 Fidelity & Deposit Co., supra, it was held that a bonding company which was a creditor of a taxpayer and which filed suit to set aside a fraudulent conveyance had priority over a Government tax lien which was not in existence at the time the conveyance was made. The rationale of those decisions was that after the conveyance the grantor did not have any interest in the property which was the subject matter of the conveyance to which a lien could attach and that the only right any creditor had was the right to bring an action to set aside the conveyance. As pointed out in those decisions, a conveyance which is fraudulent as to creditors is nevertheless binding as to the grantor and after such a conveyance he cannot claim any interest in the property which was the subject matter of the conveyance. It is believed that the situation in the present case does not come within the purview of the decisions in those cases. In the present case, as heretofore noted, the property in question, i. e., the chose in action for renewal commissions, was in existence and owned by the defendant Glen H. Wilson at the time the Government's tax lien came into existence. Thus it is not a case like the cases relied on by the plaintiffs where there was no property interest to which a lien could attach. It is well settled that under the Iowa law no lien is acquired by garnishment — all that the garnishor acquires is the right to proceed against the garnishee personally. Pierre v. Pierre, 1930, 210 Iowa 1304, 232 N.W. 633. Proceedings auxiliary to execution under Chapter 630, Code of Iowa 1954, I.C.A., are in the nature of a Creditors' Bill. Under Section 630.18 of that Chapter the commencement of such proceedings does create a lien against the property involved. In this case the plaintiffs' garnishments were made and the proceedings auxiliary to execution were instituted after the Government had filed its notices of lien. See United States v. Liverpool & London & Globe Insurance Co., 1955, 348 U.S. 215, 75 S. Ct. 247, 99 L.Ed 268, where the Government's tax lien was subsequent to the plaintiff's garnishment but prior to the plaintiff's judgment. It seems clear that the plaintiffs' claims for priority based upon the "diligent creditor" rule or upon their garnishments or by their institution of proceedings auxiliary to execution are not well founded. That leaves for consideration their claim that they are entitled to priority because of the provisions of Section 6323 heretofore set out. Under that Section a Government lien for taxes is not "valid as against any * * * judgment creditor" until notice of the same has been filed. In the present case the plaintiffs' judgments were rendered on November 4, 1953. The notice of the Government's tax lien was not filed until January, 1955. It is the claim of the plaintiffs that the judgments obtained by them on November 4, 1953, gave each of them the status of a "judgment creditor" under the provisions of Section 6323. It is the claim of the Government that a creditor by merely obtaining a judgment does not thereby become a "judgment creditor" within the provisions of Section 6323. It is the claim of the Government that the plaintiffs did not acquire a lien upon the property involved prior to the filing of the notice of the Government's tax lien and that lacking such lien the plaintiffs are not entitled to priority under Section 6323. Judgment liens are creatures of statute. Miller v. Bank of America, 9 Cir., 1948, 166 F.2d 415, 417. See also Riesenfeld, Collection of Money Judgments In American Law — A Historical Inventory and A Prospectus, 42 Iowa Law Review 155 (1957). Under Section 624.23, Code of Iowa 1954, I.C.A., a judgment becomes a lien upon the real estate of the judgment debtor upon its rendition. A judgment becomes a lien upon personal property of the judgment debtor by levy. Rule 260, Iowa Rules of Civil Procedure. In the present case there was no levy under the plaintiffs' judgments prior to the filing of the notice *734 of the Government's tax lien. The plaintiffs had not acquired any lien upon the property in question prior to the filing of the notice of the Government's tax lien. At that time they had the status of creditors who had reduced their claims to judgment but who had not acquired any lien as to any personal property of the judgment debtor. In the present case there is not involved the vexatious question of a "specific and perfected" lien. See Kennedy, The Relative Priority of the Federal Government: The Pernicious Career of the Inchoate and General Lien, 63 Yale L.J. 905 (1954). At a recent Bar meeting the current state of the law in regard to conflicts between holders of non-federal claims and the Government was summarized as follows: "If it's heads the Government wins; if it's tails the holder of the non-federal claim loses." In this connection it is to be noted that the tax lien of which the Government filed notice is most general and inchoate. However, the "specific and perfected" lien rule adopted by the United States Supreme Court is not applicable to Government tax liens; it is only applicable to non-federal liens which come in conflict with Government tax liens. Section 6323 heretofore set out purports to afford protection to mortgagees, pledgees, purchasers and judgment creditors. However, in order to come within the protection of that Section they must meet the "conventional type" test. United States v. Gilbert Associates, Inc., 1953, 345 U.S. 361, 73 S. Ct. 701, 97 L. Ed. 1071. Unless the judgment or mortgage is of the conventional type it does not come within the scope of Section 6323. The judgments involved in the present case were conventional money judgments rendered by a court of record of general and original jurisdiction. Therefore, they cannot be eliminated from the provisions of Section 6323 by the "conventional type" test. There is for consideration the question of whether the plaintiff judgment holders are without the scope of Section 6323 because of their lack of liens. Section 6323 makes no reference to the matter of lien in connection with "judgment creditors." Section 6323 makes no reference to the matter of recording, yet recording is required. See cases cited in Mason City and Clear Lake Railroad Co. v. Imperial Seed Co., D.C.N.D.Iowa, 152 F. Supp. 145. Somewhat similarly, it is held that in order for the holder of a judgment to be a "judgment creditor" within the provisions of Section 6323 he must be a judgment lien creditor. Miller v. Bank of America, 9 Cir., 1948, 166 F.2d 415; United States v. Levin, D.C.1955, 128 F. Supp. 465; United States v. Fisher, D.C.1948, 93 F. Supp. 73; Bank of America National Trust and Savings Ass'n v. United States, D.C.1946, 73 F. Supp. 303. In the case of United States v. Fisher, supra, the rule is stated as follows (93 F.Supp. at page 76): "The creditor must have obtained his judgment, and in the case of personal property have execution levied thereon, before a lien capable of priority over that of the United States for taxes could be created." The case of Miller v. Bank of America, supra, involved the priority of claims to the taxpayer's bank account between a judgment holder and the Government, under what is now Section 6323. The Government was the holder of tax liens. The creditor obtained his judgment but had not obtained a lien on the property at the time the Government filed notice of its tax liens and gave notice of levy thereunder. The trial court granted priority to the Government. The judgment holder appealed. The holding of the trial court was affirmed by the United States Court of Appeals for the Ninth Circuit. That Court stated (166 F.2d at page 417): "Appellant asserts that the above federal statutes should be literally construed and since the word `lien' is omitted in connection with the term `judgment creditor' as used therein, that it was not necessary *735 for him to take any further action to perfect his right to the fund on deposit with the Bank of America: that the entry and docketing of the judgment was sufficient to entitle him to priority over the perfected lien of the Government in said fund. "The principle that a clear and unambiguous statute must be literally construed is long established. "If a literal construction would defeat the object or scope intended by Congress, or would result in `absurdities so gross "as to shock the general moral sense", then the courts may be entitled to depart from the strict wording in order to give the statute a reasonable construction.' "While the interpretation of the statute insisted upon by appellant probably would not have absurd or shocking results, it would clearly defeat the object intended by Congress. Moreover, it would be unreasonable to conclude that the Government intended to place itself at a disadvantage in procuring a tax lien when the decisions of the courts and the very history of the legislation in question show that before the enactment of the above statutes no lien whatsoever existed in favor of any class or classes of creditors. "Although the precise question presented has not been decided, there have been many decisions under the statutes here involved where the courts by implication exclude the theory advanced by appellant. In all these cases it is certain that it is the lien created by the claim of a creditor within the meaning of recording acts which is contemplated, and not just the claim itself." The "lien" requirement rule has been recognized in the following cases: Ersa, Inc., v. Dudley, D.C.1955, 134 F.Supp 627; United States v. 52.11 Acres of Land, D.C.1947, 73 F.Supp 820; United States v. Record Pub. Co., D.C.1945, 60 F. Supp. 194. In those cases it was held that the judgment holder met the requirement. The United States Supreme Court has not as yet passed upon the question but, as above noted, the Federal Courts that have passed upon the question are in agreement that in order for the holder of a judgment to constitute a "judgment creditor" within the purview of Section 6323 such holder must have acquired a lien prior to the filing by the Government of notice of its tax lien. It is the holding of the Court in the present case that the Government is entitled to priority as to the property involved. The defendant Washington National Insurance Company claims the right to deduct from any funds due to the defendant Wilson its expenses, attorney fees, and costs in connection with the garnishment proceedings. This claim is based upon a provision in the contract between Wilson and the insurance company which gives the company a first lien upon all commissions payable for any debt due from Wilson to the company. The contract states that all money expended by the company in answering or defending any attachment or garnishment involving the defendant Wilson shall constitute a debt due. Set-off has been allowed when that remedy is available under local law. Karno-Smith Co. v. Maloney, 3 Cir., 1940, 112 F.2d 690. And set-off has been allowed pursuant to an agreement which was prior to the lien asserted by the United States. United States v. Winnett, 9 Cir., 1947, 165 F.2d 149. It has been held that at the time the Government levied upon a depositor's bank account nothing was owed since a demand note held by the bank liquidated the balance. United States v. Bank of United States, D.C.1934, 5 F.Supp 942; cf. Transmix Concrete of Rockdale v. United States, D.C.1956, 142 F.Supp 306. But cf. United States v. Bank of Nevada, D.C.Nev.1957, ___ F.Supp ___. Even where the set-off and the tax liens attach simultaneously the federal tax lien is superior. United *736 States v. Graham, D.C.1951, 96 F.Supp 318. But in the instant case the federal tax lien attached before any garnishment was effected and so before any right of set-off accrued. The United States Supreme Court in United States v. Liverpool & London & Globe Insurance Co., 1955, 348 U.S. 215, 217, 75 S. Ct. 247, 248, 99 L. Ed. 268, commented upon allowing attorney fees to the garnishee as follows: "If the garnishment lien is not prior to the Government liens, and we have held that it is not, certainly fees allowed in that proceeding are not prior to the Government liens, and the authorization of the payment of the attorney's fees prior to the Government liens was error." It is the holding of the Court that the defendant Washington National Insurance Company may not deduct the expenses and attorney fees incurred by it in connection with the garnishment proceedings from the renewal commissions owing or to become owing to the defendant Glen H. Wilson under his general agent's contract. The general agent's contract of the defendant Glen H. Wilson was dated November 1, 1949. It was cancelled on October 9, 1950. The cancellation left unaffected his right to renewal commissions on policies written by him. During the pendency of these proceedings such renewal commissions have been accumulating. The right to such renewal commissions will continue for some time in the future. The Government requests that the Court order the defendant Washington National Insurance Company to pay it the accumulated renewal commissions to apply upon its tax lien. The Government also requests that the Court order the defendant Washington National Insurance Company pay to it for similar application the renewal commissions which become owing to the defendant Glen H. Wilson in the future. The question is raised as to the form of relief that may properly be granted in connection with the renewal commissions. Section 6332, Title 26, United States Code, provides, in part, as follows: "Any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made shall, upon demand of the Secretary or his delegate, surrender such property or rights (or discharge such obligation) to the Secretary or his delegate, * * *" The procedure provided in that Section is in substance garnishee process. Section 7403, Title 26, United States Code, provides, in part, as follows: "(a) Filing.—In any case where there has been a refusal or neglect to pay any tax, or to discharge any liability in respect thereof, whether or not levy has been made, the Attorney General or his delegate, at the request of the Secretary or his delegate, may direct a civil action to be filed in a district court of the United States to enforce the lien of the United States under this title with respect to such tax or liability or to subject any property, of whatever nature, of the delinquent, or in which he has any right, title, or interest, to the payment of such tax or liability. "(b) Parties.—All persons having liens upon or claiming any interest in the property involved in such action shall be made parties thereto." The Government was brought in as a party defendant in proceedings auxiliary to execution. Those proceedings developed into an action having all the characteristics of an action under Section 7403. Proceedings auxiliary to execution are equitable in character. It is the view of the Court that it may mold its relief to fit the situation presented herein. It is held that unearned wages of a debtor are not subject to garnishment. Stowe v. Breen, 1941, 230 Iowa 1215, 300 N.W. 518. This is true even though the statutes relating to garnishment purport *737 to provide for amounts "to become due." Thomas v. Gibbons, 1883, 61 Iowa 50, 15 N.W. 593. In United States v. Long Island Drug Co., 2 Cir., 1940, 115 F.2d 983, the Court refused to give the Government a judgment against the delinquent taxpayer's future earnings. The Court stated (115 F.2d at page 987): "We find nothing in § 3690 or § 3710 which varies the general rule that a garnishee process is not to be extended to future earnings, * * *" However, a situation involving unearned wages is to be distinguished from a situation involving an obligation payable to the debtor in installments. See Cox v. Russell, 1876, 44 Iowa 556. In that latter situation a judgment in garnishment may be rendered under which the installment payments are applied for the benefit of the creditor. See 1949, 7 A.L. R.2d 680. An existing obligation for services rendered is properly subjected to a Government tax lien. Glass City Bank of Jeanette, Pennsylvania v. United States, 1945, 326 U.S. 265, 268, 66 S. Ct. 108, 90 L. Ed. 56. In Fried v. New York Life Insurance, 2 Cir., 1957, 241 F.2d 504, certiorari denied, May 27, 1957, the Court required monthly disability payments under an insurance policy to be paid to the Government to apply on the insured's delinquent taxes. Apparently the Court required those sums to be paid each month as they accrued. Those payments were unlike future earnings in that they were the product of a contractual right which the insurance company could not defeat and were contingent only upon the continued life of the insured. In the present case the services which entitle the defendant Glen H. Wilson to the renewal commissions have already been rendered. They are payable under an existing obligation. The Government could reach renewal commissions hereafter accruing by repeated levies. Such levies would entail frequent additional and unnecessary expense. It is the view of the Court that this Court may properly provide that the renewal commissions to which the defendant Glen H. Wilson is entitled on premiums hereafter paid on policies written by him shall be paid by the defendant Washington National Insurance Company to the Government to apply upon its tax lien. It Is Hereby Ordered that judgment shall be entered (1) adjudging and decreeing that the claim of the Government under its tax lien is prior and superior to the claim of the plaintiffs to the renewal commissions in question which are now owing and which will hereafter become owing; (2) denying the claim of the defendant Washington National Insurance Company for expenses and attorney fees incurred in connection with the garnishment proceedings; (3) ordering the defendant Washington National Insurance Company to pay to the Government the accumulated renewal commissions now owing to apply upon its tax lien; (4) ordering that the defendant Washington National Insurance Company pay to the Government quarterly the renewal commissions which have become owing during the quarter. As permitted by Rule 52 of the Federal Rules of Civil Procedure, 28 U.S.C.A.; It Is Further Ordered that this opinion shall constitute the findings of fact, conclusions of law, and order for judgment in this case.

2013-10-30 06:32:41.261023+00

Onion

535 S.W.2d 362 (1976) Ex parte Michael JEWEL. No. 51692. Court of Criminal Appeals of Texas. April 14, 1976. *363 Ted Redington, Huntsville, for appellant. Joe Max Shelton, City Atty. and W. Ralph Petty, Jr., Asst. City Atty., Sherman, Jim D. Vollers, State's Atty., and David S. McAngus, Asst. State's Atty., Austin, for the State. OPINION ONION, Presiding Judge. This is an application for writ of habeas corpus brought under the provisions of Article 11.07, Vernon's Ann.C.C.P. See Ex parte Young, 418 S.W.2d 824 (Tex.Cr.App. 1967). The petitioner contends he has been placed in double jeopardy by being convicted for murder with malice and robbery by assault with a firearm growing out of the same transaction upon the same victim, Fred Wright. The record reflects that on August 26, 1970, in Cause No. 28,779 in the 59th District Court of Grayson County the petitioner was convicted by a jury of murder with malice aforethought of Fred Wright, and his punishment was assessed at death, which was commuted by the Governor to life imprisonment in May of 1973. On September 17, 1970, in Cause No. 28,778 in the same District Court the petitioner entered a guilty plea to robbery by assault with a firearm, and his punishment was assessed by the court at confinement for ninety-nine (99) years. Both causes were heard before the same trial judge. No appeal was perfected in either case. *364 In his application for post-conviction habeas corpus it was alleged that the petitioner and one James Roger Farris allegedly approached Fred Wright with a gun and demanded his money, and that Wright refused and a struggle ensued in which the petitioner and Farris shot and killed Wright and then took his money and left the scene. Upon the application being presented to the convicting court, the judge, who was not the same judge who had presided at the prior trials, concluded the facts were not in dispute and an evidentiary hearing was not necessary. He did file findings of fact and conclusions of law as a result of which he concluded the petitioner was not entitled to relief. Among other things, he noted that petitioner had pled guilty and had not appealed, and habeas corpus cannot be substituted for an appeal, and before relief can be granted on collateral attack the error must be fundamental and the conviction void. This court is, of course, not bound by the findings of the trial court in a habeas corpus proceeding. Ex parte Bazemore, 430 S.W.2d 205 (Tex.Cr.App.1968); Ex parte Swinney, 499 S.W.2d 101 (Tex.Cr.App.1973); Ex parte Statuts, 482 S.W.2d 638 (Tex.Cr. App.1972); Ex parte Bagley, 509 S.W.2d 332 (Tex.Cr.App.1974). It is well established that "the prosecuting attorney may carve as large an offense out of a single transaction as he can, but he must cut only once ...." 1 Branch's Ann.P.C., 2d Ed., Sec. 654, p. 625; Fleming v. State, 168 Tex. Crim. 505, 330 S.W.2d 457 (Tex.Cr.App.1959). An accused cannot be placed in jeopardy for the same criminal act. See also Article 1.10, Vernon's Ann.C.C.P. Still further, in Benton v. Maryland, 395 U.S. 784, 89 S. Ct. 2056, 23 L. Ed. 2d 707 (1969), the United States Supreme Court declared the double jeopardy provisions of the Fifth Amendment applicable to the states. In Herera v. State, 35 Tex. Crim. 607, 34 S.W. 943 (1896), it is written: ". . . Applying the test to ascertain whether or not the indictments are for the same offense, it will be seen that in the second case, charged against the appellant, to sustain the robbery it was necessary to prove the assault. Indeed, the robbery could not be sustained without proof of the same assault for which appellant had previously been convicted on a charge for assault with intent to murder. The offenses, in part, at least, are of a like character. They relate to one transaction. And, while the charge of robbery contains more of criminality than the other, yet upon the assaulting part of the charge, upon which the robbery only could be sustained (though embraced in it), the assault with intent to murder is predicated. The offenses, though bearing different names, would appear, by the rule laid down within our constitutional guaranty, the same." See also Paschal v. State, 49 Tex. Crim. 911, 90 S.W. 878 (1905). In Moore v. State, 33 Tex. Crim. 166, 25 S.W. 1120, 1121 (1894), the conviction was for assault with intent to murder. The defendant had been previously convicted of robbery from the same person. There it was written: "It has been well said that `the assault or violence in the robbery case being an essential element or ingredient of the offense, and constituting an important and material part of that offense, as it does in the offense of assault with intent to commit murder, and having been once punished in the robbery case, as a material part thereof, it cannot be again punished as it would be if the judgment below were allowed to stand.'" And more recently in Duckett v. State, 454 S.W.2d 755 (Tex.Cr.App.1970), it was held that where the defendant was convicted of robbery by assault with a firearm and was later convicted of assault with intent to murder arising out of the same transaction *365 and based on the same evidence, the second conviction would be reversed in view of the double jeopardy provisions of the State and Federal Constitutions. United States Constitution, Fifth Amendment; Article I, Sec. 14, Texas Constitution; Article 1.10, Vernon's Ann.C.C.P. In Duckett it was noted that the same rule was applied in Doggett v. State, 130 Tex. Crim. 208, 93 S.W.2d 399 (1936), which involved, as does the instant case, convictions for murder and robbery with a firearm. In that case, under similar circumstances as in the case at bar, the victim was shot when he failed to comply with the order to put his hands up and the money was then taken. See also Taylor v. State, 41 Tex. Crim. 564, 55 S.W. 961 (1900). We conclude that the petitioner's second conviction for robbery by assault with a firearm was obtained in violation of the double jeopardy provisions of the State and Federal Constitutions and must be set aside. It is true that petitioner did not object at his robbery trial to a violation of the carving doctrine or the double jeopardy doctrine. It is noted, however, that the failure to object under such circumstances does not constitute a waiver of the right to raise the matter in a post-conviction collateral habeas corpus attack. Ex parte Evans, 530 S.W.2d 589 (Tex.Cr.App.1975), and cases there cited. It is also true that the petitioner did not file a special plea of former jeopardy in accordance with Articles 27.05(2) and 27.06, Vernon's Ann.C.C.P., at the time of his second trial, but it has been held that where a trial is had on an indictment charging the same transaction no plea of former jeopardy or former conviction is necessary where it is in the same court and before the same judge as in the instant case. See Ex parte Scelles, 511 S.W.2d 300, 301 (Tex.Cr.App. 1974), and cases there cited. Further, the fact that petitioner pled guilty to the robbery indictment would not preclude him from now raising the double jeopardy contention. Robinson v. Neil, 409 U.S. 505, 93 S. Ct. 876, 35 L. Ed. 2d 29 (1973); Ex parte Scelles, supra; Duckett v. State, supra. Cf. Blackledge v. Perry, 417 U.S. 21, 94 S. Ct. 2098, 40 L. Ed. 2d 628 (1974). The relief sought is granted. The conviction for robbery by assault with a firearm is set aside.

2013-10-30 06:32:41.29494+00

Wright

152 F. Supp. 619 (1957) SEATRAIN LINES, Inc., Plaintiff, v. UNITED STATES of America, Defendant, and Interstate Commerce Commission and Pan-Atlantic Steamship Corporation, Intervening Defendants. Civ. A. No. 1847. United States District Court D. Delaware. May 23, 1957. *620 Daniel O. Hastings, of Hastings, Lynch & Taylor, Wilmington, Del., S. S. Eisen, New York City, and Raoul Berger, Washington, D. C., for plaintiff. Victor R. Hansen, Asst. Atty. Gen., James E. Kilday and John H. D. Wigger, Washington, D. C., and Leonard G. Hagner, U. S. Atty., Wilmington, Del., for the United States. Robert W. Ginnane, Gen. Counsel, and H. Neil Garson, Asst. Gen. Counsel, Washington, D. C., for Interstate Commerce Commission. Aaron Finger, of Richards, Layton & Finger, Wilmington, Del., William H. Armbrecht, Jr., Mobile, Ala., and Warren Price, Jr., Washington, D. C., for Pan-Atlantic S. S. Corp. Before MARIS, Circuit Judge, and RODNEY and WRIGHT, District Judges. CALEB M. WRIGHT, District Judge. This is an action brought under 28 U.S.C. Sections 1336, 1398, 2201, 2284, and 2321 to 2325 inclusive, to restrain, enjoin, set aside and annul an order of the Interstate Commerce Commission (hereafter referred to as the Commission), or to obtain a declaratory judgment that such order is unlawful and invalid. Pan-Atlantic Steamship Corporation (hereafter referred to as Pan-Atlantic), is a common carrier by water which holds a certificate from the Commission authorizing it to transport passengers and commodities generally between specified Atlantic and Gulf ports. Plaintiff, Seatrain Lines, Inc. (hereafter referred to as Seatrain), is a common carrier by water authorized by the Interstate Commerce Commission to transport *621 commodities generally in interstate and foreign commerce between specified ports, some of which are the same ports at which Pan-Atlantic is authorized to call. The Commission order under attack granted to Pan-Atlantic the right to carry in truck trailers or containers as deck loads on converted tankers, the general commodities its certificate issued by the Commission authorizes it to transport along with bulk petroleum without subjecting the bulk petroleum to regulation. The transportation of bulk petroleum alone in a given vessel is exempt under Section 303(d) of the Interstate Commerce Act, 49 U.S.C.A. § 903(d). However, when bulk petroleum is carried in a vessel which also carries regulated dry cargo, the bulk petroleum is subject to regulation unless an exemption order such as that under attack is obtained from the Commission. Seatrain operates specially designed vessels for the carriage of dry cargo. Each of these vessels also contains ten large side tanks with a capacity equivalent to more than one-third of the carrying capacity of each vessel. Prior to July 14, 1949, this capacity was not utilized because Seatrain was unable to compete for bulk petroleum on equal terms with exempt tank vessel carriers[1] while any bulk petroleum it proposed to carry remained subject to regulation. This inability to compete was rectified in July, 1949 when the Commission, pursuant to 49 U.S.C.A. § 903(e) (2), exempted from regulation Seatrain's transportation of bulk petroleum when such transportation was combined in the same vessel with the transportation of general commodities. In the summer of 1955, Pan-Atlantic complemented its fleet of conventional C-2 type dry cargo vessels with the acquisition of T-2 type tankers. These tankers were subsequently equipped with cargo decks to permit the transportation thereon of containers and truck trailers. As a consequence, Pan-Atlantic found itself in a position analogous to that of Seatrain prior to the order of the Commission granting Seatrain an exemption from regulation of the bulk petroleum when carried with dry cargo on the same vessel. Accordingly, by application filed with the Commission on August 22, 1955, Pan-Atlantic sought the same exemption on virtually the identical petroleum products granted to Seatrain in 1949. This application for exemption was opposed by Seatrain and certain Southern and Southwestern railroads. On July 3, 1956, Division 4 of the Commission issued an order exempting from regulation transportation by Pan-Atlantic of bulk petroleum from the provisions of Part III of the Interstate Commerce Act, 49 U.S.C.A. § 901 et seq., when carried on the same vessel with dry cargo. The exemption order relates only to bulk petroleum and does not affect the cargo to be carried on the spar decks of the converted T-2 tankers. The deck cargo, even when transported on the converted tankers with the exempt bulk petroleum will be carried at published tariff rates, and will be subject to regulation by the Commission just as it is when carried by conventional cargo vessels. Seatrain petitioned for reconsideration of the Commission order. This petition was denied on September 20, 1956 and the Commission made the Division 4 order effective as of October 22, 1956. On October 16, 1956, Seatrain instituted this action. The railroad protestants before the Commission did not join Seatrain in its prosecution of this action. Seatrain does not urge the Commission exceeded its statutory authority under the Interstate Commerce Act in the exercise of its discretion in the grant of the exemption. Rather, the Commission order is attacked because of alleged lack of jurisdictional findings that the exemption was consistent with the National *622 Transportation Policy and because the exemption allegedly renders discrimination possible and is therefore contrary to the public interest and the National Transportation Policy, 49 U.S.C.A. note, preceding Section 901. Pan-Atlantic challenges the right of Seatrain to bring this action. Therefore, before the validity of the order may be considered, it must first be determined whether plaintiff has standing to maintain this suit. Seatrain would circumvent any question of standing by seeking to find an unqualified right to bring this action. This unqualified right would first be found on the theory that intervention by Seatrain in the Commission hearing on the Pan-Atlantic application conferred on Seatrain the right to bring this action. Early in the history of the law of standing there was an implication that intervention before the Commission conferred standing upon one to institute an action to challenge the order of the Commission.[2] This implication has been completely and utterly destroyed by later pronouncements of the Supreme Court. In Pittsburgh & W. Va. Ry. v. United States, 1930, 281 U.S. 479, 486, 50 S. Ct. 378, 381, 74 L. Ed. 980, where the District Court based its conclusion that plaintiff had standing partially upon the fact that plaintiff had intervened before the Commission, the Court in reversing the District Court, said: "The mere fact that appellant was permitted to intervene before the Commission does not entitle it to institute an independent suit to set aside the Commission's order in the absence of resulting actual or threatened legal injury to it * * *." Accord: Moffat Tunnel League v. United States, 1933, 289 U.S. 113, 53 S. Ct. 543, 77 L. Ed. 1069; Sprunt & Son v. United States, 1930, 281 U.S. 249, 50 S. Ct. 315, 74 L. Ed. 832; Atchison, Topeka & Santa Fe Ry. Co. v. United States, D.C.E.D.Mo.1955, 130 F. Supp. 76, affirmed, 1955, 350 U.S. 892, 76 S. Ct. 152, 100 L. Ed. 785, rehearing denied, 1956, 350 U.S. 943, 76 S. Ct. 299, 100 L. Ed. 822. A second basis advanced by Seatrain in support of its right to maintain this action is that after relief is denied at a rehearing of the Commission, the statute confers an unqualified right to bring an action in the appropriate court. A reading of the applicable statutory provision, 49 U.S.C.A. § 17(9)[3] reveals that the provisions of law applicable in the case of suits to enforce, enjoin, suspend or set aside orders of the Commission govern the right to bring this action. In order to proceed under these applicable provisions of law, plaintiff must first establish its standing to use those provisions. The statutory provisions do not confer this right. In order to determine whether Seatrain has standing, the exact nature of the interest of Seatrain in the exemption order must first be ascertained. This interest must be found in the record, specifically, the complaint and the affidavit accompanying Seatrain's motion for a temporary restraining order.[4] The complaint charges the exemption order of the Commission is invalid and unlawful in that: (1) the Commission declined to consider or make findings as *623 to whether the exemption would promote adequate service and foster sound economic conditions in transportation and among the several carriers as is required by the National Transportation Policy,[5] (2) the Commission action was arbitrary and capricious and constitutes an abuse of discretion, because the exemption permits the transportation of exempt and regulated freight in a combined dual-operation, creating opportunity for undue and unlawful discrimination, preference and prejudice, contrary to the public interest, the National Transportation Policy and the policy of the Interstate Commerce Act,[6] (3) the Commission failed to make findings relating to the charge that the exemption poses the threat of rate wars and the concomitant dissipation of carrier revenues which would be harmful to the economic stability of national transportation and therefore, contrary to the National Transportation Policy,[7] and (4) the Commission erroneously refused to grant a rehearing to consider a radical shift in the facts which had taken place since the hearing and which altered the future competitive impact of the exemption on existing common carrier services.[8] Nowhere in the complaint is there an allegation Seatrain is in any manner adversely affected or subjected to injury of any nature or type. The most Seatrain urges in the complaint is the public interest in enforcement of the Interstate Commerce Act and the National Transportation Policy was not served when the Commission granted the exemption order. In order to have standing, the Complainant must possess something more than a common concern for obedience to law. See: Com. of Massachusetts v. Mellon, 1923, 262 U.S. 447, 43 S. Ct. 597, 67 L. Ed. 1078. The complaint, considered alone, does not confer standing upon plaintiff to prosecute this action. If standing is to be found, it must arise from allegations contained in the affidavit of an officer of Seatrain.[9] The gist of the affidavit is that Pan-Atlantic has taken certain measures which place Seatrain at a substantial competitive disadvantage. The first measure complained of is Pan-Atlantic, in anticipation of receiving the exemption, has instituted a policy of absorbing the cost of marine insurance in the published freight rates and charges on rail-water-rail service of dry cargo shipped on converted T-2 type tankers. This insurance charge has traditionally been borne by the shippers or receivers. Consequently, Seatrain has suffered a loss of revenue resulting from a diversion of traffic from Seatrain. It is further alleged, if Seatrain is to meet this competitive disadvantage, it will have to include marine insurance in its rail-water-rail rate structure at a cost of approximately $80,000 per annum in increased operating expense. The second measure complained of is "that in anticipation of obtaining said exemption, which makes possible the subsidy of the general freight operation by the handling of bulk petroleum, Pan-Atlantic Steamship Corporation published, and continues to maintain rates lower than the rates maintained by Seatrain Lines, Inc. * * *", thereby causing an actual diversion of traffic from Seatrain to its irreparable damage.[10] A third measure complained of is further proposed rate reduction by Pan-Atlantic to a level below that of Seatrain, causing either a further diversion of traffic from Seatrain or requiring Seatrain, if it is to maintain competitive equality, to reduce its rates to the level proposed by Pan-Atlantic, in consequence of which its revenues will be diminished to its irreparable detriment. *624 Finally, the affidavit alleges Pan-Atlantic is planning to acquire additional capacity which will correspondingly increase the diversion from Seatrain. As a consequence, Seatrain is reluctant to acquire new vessels because of the competitive situation. This reluctance has resulted in an estimated loss of $6,000 in revenue per day per projected vessel. This final allegation does not support standing in plaintiff. At most, it decries the difficulty of making a business decision by reason of the exemption order and alleges future losses of an entirely too speculative nature. The question becomes one of determining whether actual and prospective diversion of traffic from Seatrain with concomitant loss of revenue caused by actual and proposed rate reductions and absorption of marine insurance charges,[11] confers standing upon plaintiff to attack the exemption order. No case has been cited nor has research revealed any decision of the Supreme Court treating standing to attack an Interstate Commerce Commission exemption order. In situations where standing to attack Commission orders has been treated, the particular order under attack concerned adjustment in rates affecting shippers[12] or the grant of new operating rights so as to increase competition for traffic among carriers,[13] or the acquisition in some form of one carrier by another thereby changing the competitive situation for other carriers,[14]*625 shippers,[15] or other interested parties.[16] Under recent pronouncements of the Supreme Court, a sufficient showing of detriment to Seatrain has been made to confer standing upon it to challenge the order for alleged lack of jurisdictional findings. In Federal Communications Commission v. Sanders Brothers Radio Station, 1940, 309 U.S. 470, 60 S. Ct. 693, 696, 84 L. Ed. 869, the question was whether a rival station, which would suffer economic injury by the grant of a license to another station, had standing to appeal under the terms of the Act. The court held the "resulting economic injury to a rival station is not, in and of itself and apart from considerations of public convenience, interest or necessity, an element the petitioner [FCC] must weigh, and as to which it must make findings, in passing on an application for a broadcasting license." The court further held petitioner had the requisite standing. In so holding the court pointed out "that while a station license was not a property right, and while the Commission was not bound to give controlling weight to economic injury to an existing station consequent upon the issuance of a license to another station, yet economic injury gave the existing station standing to present questions of public interest and convenience by appeal from the order of the Commission." Federal Communications Commission v. National Broadcasting Company, 1943, 319 U.S. 239, 247, 63 S. Ct. 1035, 1038, 87 L. Ed. 1374. The principle that the person with standing represents the public interest and not his own private interest is established by Federal Communications Commission v. Sanders Brothers Radio Station, supra, as later modified and clarified by Scripps-Howard Radio v. Federal Communications Commission, 1942, 316 U.S. 4, 62 S. Ct. 875, 86 L. Ed. 1229, and Federal Communications Commission v. National Broadcasting Company, supra. However, in order to avoid clogging of the Courts by reason of mass vindication of the public interest by anyone who might be so inclined, and because of the constitutional requirement of "case or controversy", the one bringing suit must also show personal injury of a substantial character in order to have standing to institute the action. Therefore, as was demonstrated in Sanders, the interest asserted on the appeal from the Commission order may very well be different from that which confers standing to appeal.[17] Applying these general principles to this litigation, it becomes clear Seatrain has the requisite standing to attack the exemption order. Seatrain has alleged injury of a substantial character in the form of actual and projected losses of revenue due to the rate structure of Pan-Atlantic. Seatrain does not seek in this action a declaration that such rates are unjustified. Rather, it seeks to protect the public interest by having the Commission base its decision upon findings under the National Transportation Policy. Such a procedure is not without precedent in cases involving standing to attack orders of the Interstate Commerce Commission. In Alleghany Corp. v. Breswick & Co. (Interstate Commerce Commission), 77 S. Ct. 763, a case involving *626 standing to attack an order of the Interstate Commerce Commission, the Supreme Court found standing on the basis of a threatened financial injury stemming from dilution of plaintiff's interest in a corporation. As a consequence, standing was found to attack a status order, even though such standing would probably have been lacking if only the status order were being attacked.[18] As the status order was the causal source of the order which made possible the threatened injury to plaintiff in Alleghany Corp. v. Interstate Commerce Commission, supra, so in an analogous fashion, the causal source of Seatrain's injury is the exemption order.[19] The attack on the Commission order is predicated upon the alleged failure of the Commission to consider the National Transportation Policy and to make findings that the exemption was consistent with the National Transportation Policy. Two questions are raised: (1) did the Commission consider the National Transportation Policy in granting the exemption order, and (2), if the Commission did not consider the National Transportation Policy, was it required to do so when granting an exemption order under 49 U.S.C.A. § 903 (e) (2). An examination of the Report of Division 4 of the Commission[20] indicates the Commission did not consider the National Transportation Policy.[21] The report of the Commission states Seatrain "fears that the transportation of exempt and regulated cargo by applicant in the same vessels * * * may result in discriminatory practices contrary to the public interest." While the report of the Commission conclusively shows Seatrain raised this issue, the Commission expressly declined to consider it and limited itself to one issue as follows: "The sole issue before us here is to determine whether the transportation by applicant as a contract carrier, which by reason of the inherent nature of the commodities transported, their requirement of special equipment, or their shipment in bulk, is not actually and substantially competitive with transportation by any common carrier subject to part I, II, or III. If this question is answered in the affirmative, under the provisions of section 303(e) (2) (49 U.S.C.A. § 903(e) (2))* of the *627 act, we are authorized to exempt by order from the provisions of part III such of the transportation engaged in by applicant as we find necessary to carry out the therein declared policy of Congress. In the circumstances there is no occasion in this proceeding for determining issues relative to discrimination, dual operations under section 310 of the act, or forfeiture of dormant operating authorities." * (Insertion added.) The issue as framed by the Commission is in the language of 49 U.S.C.A. § 903 (e) (2).[22] The narrow statement of the issue in conjunction with the declaration that there was "no occasion * * * for determining issues relative to discrimination", establishes the Commission did not consider the National Transportation Policy. This conclusion is not altered by the following language found in the opening paragraph of the Commission report: "Exceptions and requested findings not discussed in this report nor reflected in our findings or conclusions have been given consideration and are found not justified." If the Commission report were to indicate other alleged necessary criteria and findings were considered, such all embracive language would be curative.[23] However, in the instant report, the Commission negated its consideration of all questions except "whether the transportation by applicant as a contract carrier, which by reason of the inherent nature of the commodities transported, their requirement of special equipment, or their shipment in bulk, is not actually and substantially competitive with transportation by any common carrier subject to part I, II, or III. * * *" Under this circumstance, the record shows the Commission did not consider those various aspects of the National Transportation Policy which were raised and asserted to be of manifest importance. Whether the Commission had to make jurisdictional findings under the National Transportation Policy when granting an exemption to a carrier under Section 903(e) (2) is a question of first impression. If one were to accord a literal reading to the National Transportation Policy, remand to the Commission would be necessary because the last sentence of the National Transportation Policy provides: "All of the provisions of this Act shall be administered and enforced with a view to carrying out the above declaration of policy." If "all" means "all", the Commission erred by reason of its failure to make jurisdictional findings under the National Transportation Policy. An examination of the Water Carriers Act,[24] particularly 49 U.S.C.A. § 903(b), (c) and (d), reveals "all", as employed in the National Transportation Policy, means something less than "all". These provisions provide for exemption from regulation without regard to the National Transportation Policy. It is not for this court to say it would be better policy to grant the Commission authority to *628 determine whether proposed exemptions are inimical to the National Transportation Policy. It suffices that Congress has decided such a Commission determination is not necessary for enjoyment of these exemptions. If the applicant otherwise qualifies, the Commission cannot withhold these exemptions by reason of operating rights under the exemptions being contrary to the National Transportation Policy. By reason of the statute itself, the National Transportation Policy need not, and indeed, cannot be considered in connection with every exemption. Since the National Transportation Policy does not control enjoyment of all exemptions under Section 903, what is there to indicate this Policy was to be taken into acount in the grant of the exemption to Pan-Atlantic under Section 903(e) (2) ? Plaintiff argues unless an exemption by its terms is clearly insulated from consideration by the Commission in terms of the National Transportation Policy, the grant of the exemption must be in agreement with the stated aims of the National Transportation Policy. By way of illustration, plaintiff urges the Court to compare Section 903 (e) (1) with Section 903(e) (2). 49 U.S.C.A. § 903(e) (1) provides: "(e) (1) Notwithstanding any provision of this chapter the Commission may, by order, from time to time, upon application, or upon its own initiative without application, exempt from the requirements of this chapter the transportation of passengers between points in the United States by way of a foreign port or ports, upon a finding that application of such requirements thereto is not necessary to carry out the national transportation policy declared in this chapter and chapters 1, 8 and 13 of this title." 49 U.S.C.A. § 903(e) (2) insofar as here pertinent provides: "(2) It is declared to be the policy of Congress to exclude from the provisions of this chapter, in addition to the transportation otherwise excluded under this section, transportation by contract carriers by water which, by reason of the inherent nature of the commodities transported, their requirement of special equipment or their shipment in bulk, is not actually and substantially competitive with transportation by any common carrier subject to this chapter or chapter 1 or 8 of this title. Upon application of a carrier, made in such manner and form as the Commission may by regulations prescribe, the Commission shall, subject to such reasonable conditions and limitations as the Commission may prescribe, by order exempt from the provisions of this chapter such of the transportation engaged in by such carrier as it finds necessary to carry out the policy above declared * * *." Plaintiff urges the language of Section 903(e) (1), "Notwithstanding any provision of this chapter" is so strong as to have caused Congress to fear the exemption would be insulated from the National Transportation Policy. In order to avoid this result plaintiff states Congress brought the exemption back within the coverage of the National Transportation Policy by virtue of the last clause of Section 903(e) (1). Plaintiff then argues that the language of Section 903(e) (2), "It is declared to be the policy of Congress to exclude from the provisions of this chapter" is so weak when compared with the opening language of Section 903(e) (1), that Congress could not have meant to eliminate all consideration of the National Transportation Policy since it knew how to do so as shown by the beginning language of Section 903(e) (1). This argument is not convincing. The Act provides for absolute exemptions[25] and qualified exemptions.[26] Exemptions are absolute in the sense that carriers may operate free from Commission *629 regulation or scrutiny if specified conditions are satisfied. Exemptions are qualified in the sense that the Commission by order can create an exemption[27] or remove an otherwise existing exemption.[28] With respect to each type of qualified exemption, Congress has spelled out the basis upon which such exemption is to be extended or withdrawn by Commission order. Whether a carrier operates under a 903(e) (1) exemption or a 903(g) exemption is dependent upon whether operation under such an exemption would be consistent with achievement of the aims of the National Transportation Policy. On the other hand, in Section 903(e) (2) no mention is made of the National Transportation Policy. Rather, the basic consideration is whether transportation by contract carrier is actually and substantially competitive with transportation by any carrier subject to the water, rail or motor provisions of the Interstate Commerce Act. If it is found such transportation is not substantially competitive, either by reason of the inherent nature of the commodities transported, their requirement of special equipment or their shipment in bulk, the Commission may exempt so much of such transportation as is necessary to accomplish the stated policy of Congress to exclude such transportation from regulation. Stated differently, the exemption provisions found in 49 U.S.C.A. § 903 are nothing more than legislative policy determinations that the ends of National Transportation would best be served either by non-regulation in all instances,[29] by non-regulation except where necessary to carry out the stated ends of the National Transportation Policy,[30] or by non-regulation where there is absent substantial competition with regulated carriers for any one of three reasons.[31] With respect to certain of the exemptions the Commission has no power to grant or withhold them.[32] But where the statute does empower the Commission to grant or withhold an exemption,[33] it also spells out the considerations upon which that power should be exercised. These considerations vary with the type of exemption. If the Commission were to exercise its power and grant or withhold an exemption upon a consideration other than that stated in the statute in relation to any particular exemption, the Commission would have erred. In granting exemptions under Section 903(e) (2), accomplishment of the aims of the National Transportation Policy is not set forth as a consideration upon which the Commission should grant an exemption. The essential finding here is whether the exemption of the transportation applied for was actually and substantially competitive with transportation by common carriers subject to part I, II or III of the Act. The Commission found it was not because of the requirement of special equipment or shipment in bulk. The report discloses ample facts to substantiate this finding. The Commission did not act arbitrarily or capriciously. Nothing more was necessary to the validity of its order. There are cases with statements to the effect that all relevant factors of the National Transportation Policy must be at least considered in every proceeding of the Commission,[34] or the National Transportation Policy must serve as a guide to the Commission in all its decisions.[35] However, these statements are found in *630 cases arising under the rate provisions of the Act or in connection with the granting of a certificate of convenience and necessity. These statements are not found in cases dealing with exemptions from regulations under Section 903(e) (2) of the Act. The motion to dismiss the complaint of the plaintiff, Seatrain, is granted. An order in accordance herewith may be submitted. NOTES [1] 49 U.S.C.A. § 903(d). [2] Chicago Junction Case, 1924, 264 U.S. 258, 44 S. Ct. 317, 68 L. Ed. 667. [3] 49 U.S.C.A. § 17(9). "(9) When an application for rehearing, reargument, or reconsideration of any decision, order, or requirement of a division, an individual Commissioner, or a board with respect to any matter assigned or referred to him or it shall have been made and shall have been denied, or after rehearing, reargument, or reconsideration otherwise disposed of, by the Commission or an appellate division, a suit to enforce, enjoin, suspend, or set aside such decision, order, or requirement, in whole or in part, may be brought in a court of the United States under those provisions of law applicable in the case of suits to enforce, enjoin, suspend, or set aside orders of the Commission, but not otherwise." [4] The motion for a temporary restraining order was denied. [5] Complaint, Sec. 11(a). [6] Complaint, Par. 11(b). [7] Complaint, Par. 11(c). [8] Complaint, Par. 11(d). [9] See note 4. The affidavit accompanied a motion for a temporary restraining order. [10] Affidavit of Harry Johnson, Par. 8. An example of representative movements contained in the affidavit alleged a loss of revenues of $140,271. [11] The allegation that the exemption order enables Pan-Atlantic to absorb without cost to itself, marine insurance charges on the regulated dry cargo which heretofore had been borne by shippers and receivers is nothing but a complaint about rates set by Pan-Atlantic. The only difference is that instead of alleging the setting of a lower rate, it is charged Pan-Atlantic provides more services for the same rate in the form of absorption of insurance charges. Therefore, the entire affidavit for purposes of this standing discussion will be viewed as a charge that the exemption order has enabled Pan-Atlantic to have a favorable rate structure on regulated dry cargo resulting in a diversion of traffic from Seatrain. [12] Youngstown Sheet & Tube Co. v. United States, 1935, 295 U.S. 476, 55 S. Ct. 822, 79 L. Ed. 1553: standing found to permit a shipper to attack an ICC order establishing minimum rates so as to equalize a competitive geographical advantage accruing to certain shippers by reason of new found availability of water transportation; Sprunt & Son v. United States, 1930, 281 U.S. 249, 50 S. Ct. 315, 74 L. Ed. 832: standing denied a shipper to attack a rate order which erased a competitive advantage existing by reason of a prior rate structure; Edward Hines, Yellow Pine Trustees, v. United States, 1923, 263 U.S. 143, 44 S. Ct. 72, 68 L. Ed. 216: standing denied a shipper to attack an order removing a penalty demurrage charge. [13] Atchison, Topeka & Santa Fe Ry. Co. v. United States, D.C.E.D.Mo.1955, 130 F. Supp. 76, affirmed, 1955, 350 U.S. 892, 76 S. Ct. 152, 100 L. Ed. 785, rehearing denied, 1956, 350 U.S. 943, 76 S. Ct. 299, 100 L. Ed. 822: standing denied a railroad where the order permitted joinder of motor carriers which might result in stronger competition, but did not involve a grant of new operating rights; Alton Railroad Co. v. United States, 1942, 315 U.S. 15, 62 S. Ct. 432, 86 L. Ed. 586: railroads held to have standing to attack an order granting a specialized motor carrier a certificate of public convenience and necessity to serve the same areas serviced by the railroads; Claiborne-Annapolis Ferry Co. v. United States, 1932, 285 U.S. 382, 52 S. Ct. 440, 76 L. Ed. 808: Ferry Company held to have standing when effect of the order was to grant new operating rights to another ferry to serve some of the same areas theretofore handled by plaintiff Ferry Company. [14] Pittsburgh & W. Va. Ry. Co. v. United States, 1930, 281 U.S. 479, 50 S. Ct. 378, 74 L. Ed. 980: standing denied since order could not affect plaintiff in its carrier status (alternative holding); Chicago Junction case, 1924, 264 U.S. 258, 44 S. Ct. 317, 68 L. Ed. 667: carrier had standing where the order resulted in a diversion of traffic from it. [15] Home Furniture Company v. United States, 1926, 271 U.S. 456, 46 S. Ct. 545, 70 L. Ed. 1033: shipper denied standing where order permitting acquisition had the effect of depriving the shipper of service of a competitive line. [16] Moffat Tunnel League v. United States, 1933, 289 U.S. 113, 53 S. Ct. 543, 77 L. Ed. 1069: unincorporated associations who feared acquisition would lessen the possibility of the building of an extension to serve their membership denied standing (alternative holding). See also: L. Singer & Sons v. Union Pacific Railroad Co., 1940, 311 U.S. 295, 61 S. Ct. 254, 85 L. Ed. 198: standing denied commission merchants to enjoin building of railroad extension even though railroad did not have necessary permission from ICC; and Western Pacific Cal. R. Co. v. Southern Pacific Co., 1931, 284 U.S. 47, 52 S. Ct. 56, 76 L. Ed. 160: standing granted to a competitor carrier where attack was based partially upon the failure to obtain a commission order. [17] See generally, "Standing to Challenge Governmental Action" by Kenneth Culp Davis, 39 Minn.L.R. 353 (1955). [18] See: Breswick & Co. v. United States, D.C.1956, 138 F. Supp. 123, 131-132. [19] In Alleghany Corporation v. Breswick & Co. (Interstate Commerce Commission), 77 S. Ct. 763, 768, minority common stockholders of Alleghany Corporation brought an action before a three-judge District Court to require the Commission to set aside its order granting Alleghany the status of a "non-carrier to be `considered as a carrier'" and its subsequent order approving a new class of preferred stock, and to restrain Alleghany from issuing the new preferred stock. In discussing the contention of Alleghany that the minority stockholders had no standing to attack the Commission orders, the Court states: "The appellees are common stockholders of Alleghany. The new preferred stock issue approved by the Commission is convertible, and under approved notions of standing, the threatened `dilution' of the equity of the common stockholders provided sufficient financial interest to give them standing. See American Power & Light Co. v. S. E. C., 325 U.S. 385, 388-389, 65 S. Ct. 1254, 89 L. Ed. 1683. "Having acquired standing to institute proceedings in the District Court by virtue of the threatened financial injury, appellees could also attack the order of the Commission conferring on Alleghany the status of a person not a carrier but to be `considered as a carrier.' The status order was a source of the threatened financial injury. If the Commission acted out of bounds in decreeing its status order, it had no power to approve the new preferred stock issue and the plaintiffs would be entitled to relief." [20] No. W-376 (Sub-No. 14), decided July 3, 1956. [21] However, the absence of destructive competition within the meaning of the National Transportation Policy was incidental to a finding of absence of substantial competition within the meaning of 49 U.S.C.A. § 903(e) (2). [22] The pertinent portion of 49 U.S.C.A. § 903(e) (2) is as follows: "(2) It is declared to be the policy of Congress to exclude from the provisions of this chapter, in addition to the transporation otherwise excluded under this section, transportation by contract carriers by water which, by reason of the inherent nature of the commodities transported, their requirement of special equipment or their shipment in bulk, is not actually and substantially competitive with transportation by any common carrier subject to this chapter or chapter 1 or 8 of this title. Upon application of a carrier, made in such manner and form as the Commission may by regulations prescribe, the Commission shall, subject to such reasonable conditions and limitations as the Commission may prescribe, by order exempt from the provisions of this chapter such of the transportation engaged in by such carrier as it finds necessary to carry out the policy above declared * * *." [23] County Board of Arlington County, Va. v. United States, D.C.E.D.Va.1951, 101 F. Supp. 328. [24] 49 U.S.C.A. §§ 901-923. [25] 49 U.S.C.A. § 903(b), (c) and (d). [26] 49 U.S.C.A. § 903(e) (1), (e) (2) and (g). [27] 49 U.S.C.A. § 903(e) (1) and (e) (2). [28] 49 U.S.C.A. § 903(g); see, Section 903(l). [29] 49 U.S.C.A. § 903(b), (c) and (d). [30] 49 U.S.C.A. § 903(e) (1) and (g). [31] 49 U.S.C.A. § 903(e) (2). [32] 49 U.S.C.A. § 903(b), (c) and (d). [33] 49 U.S.C.A. § 903(e) (1), (e) (2) and (g). [34] See Cantlay & Tanzola, Inc., v. United States, D.C.S.D.Cal.1953, 115 F. Supp. 72. [35] See Luckenbach S.S. Co. v. United States, D.C.S.D.N.Y.1954, 122 F. Supp. 824.

2013-10-30 06:32:41.322845+00

Bryan

152 F. Supp. 646 (1957) In re PETROLEUM INDUSTRY INVESTIGATION. United States District Court E. D. Virginia, Alexandria Division. May 20, 1957. John F. Sonnet, Cahill, Gordon, Reindel & Ohl, New York City (William M. Sayre, New York City, of counsel), for Standard Oil Co. of Texas. Joseph E. McDowell, Atty., Dept. of Justice, Washington, D. C., Gordon B. Spivack, Atty., Dept. of Justice, Washington, D. C., A. Andrew Giangreco, Asst. U. S. Atty., Eastern Dist. of Virginia, Arlington, Va., for United States. ALBERT V. BRYAN, District Judge. For convenience in the study of the books and papers produced by the witnesses appearing before the grand jury, the court has allowed the Government attorneys to remove this evidence to their offices in the Department of Justice, just across the Potomac in Washington. But it exacts of them a receipt for each document withdrawn. The receipt binds the attorney, as an officer of the court, to return the evidence to the Clerk, meanwhile to keep it from the public eye and separated from the records of other witnesses or companies. Full ready to tender all the papers described in the grand jury's subpoena duces tecum, the Standard Oil Company of Texas, however, moves the court to straiten the receipt by adding the stipulation that, "unless otherwise directed by the court", the documents shall be used by Government counsel "in this proceeding only" and be returned to the grand jury or the witness "with all copies". The Government demurs to this restriction in the use of the papers as well as to the requirement for surrender of the copies. It recognizes, of course, its obligation to return the originals of the books and papers. Obviously, the motion springs from the Company's fear lest the documents, or the information contained in them, be used by the Government for a purpose different from that for which they were subpoenaed. The Company further urges, in its concern, that access to the documents during the Government's custody be limited to those attorneys authorized by the warrant of the Attorney General to appear before the grand jury. The public interest would always be safeguarded, Standard maintains, by the suggested reservation in the receipt of the right to the Government, at any time or times, to ask from the court a different direction in respect to the evidence. Such directions could, presumably, include the impounding of the documents, together with all copies, while the court considered the legality of the requested use. *647 Without reflection, the possibility of the Government's devotion of the documents to another use affronts the sense of fair play. It implies an abuse of process. But, studied, the diversion proves to be altogether correct, legally and ethically. In the study it must be remembered, always, that the books and papers necessarily have first been obtained without treading upon the Fourth or Fifth Amendment, or upon any other Constitutional protection. This is true because the evidence would not otherwise be before the grand jury. The present motion is unsound because it ignores realities. Suppose inspection of the documents in a given case should expose the commission of a criminal offense; or suppose the revelation should unearth a criminal scheme; and suppose the committed or the planned offense to be wholly foreign to the object for which the records have been requisitioned. Is the Government attorney to close his eyes to the disclosure or forswear his duty to enforce the law? To obtain the consent of the court before acting would, by delay or signal, thwart apprehension or prosecution of the accused. Akin is the anticipated use by the Government of the documents, or the knowledge derived from them, in a civil action should the grand jury not indict. A civil suit predicated on antitrust or similar legislation, when brought by the Government, is in fact and in law a prosecution. Its aim is not compensation but correction. The obligation of the Justice Department to invoke civil remedies in an appropriate situation is just as bounden as its duty to institute requisite criminal proceedings. Consequently, if books and papers coming to the knowledge of the Government's attorneys in a grand jury investigation develop a demand, and an adequacy of proof, for resort to civil litigation in the public interest, it is certainly proper, indeed incumbent upon them, to use for that purpose the information in their hands. This is nonetheless true though no process available in a civil action has the competency to discover this data beforehand. Likewise impracticable is the position taken by Standard opposing the retention by the Department of copies of the papers produced. Indisputably, Government counsel would be entitled to make notes of the contents of the papers as they are produced in the grand jury room. If they can make notes, they can make extensive notes, and these might approach copies. Moreover, if notes or copies can be made in the grand jury room without impropriety, they can be made, under the surveillance of the court, in another room in the Federal building or in the not-distant offices of the Department. The surrender of all of this memoranda at the end of the grand jury's deliberations would hardly be practicable. Officializing their work sheets, the very requirement would injuriously hamper the Government attorneys in the investigation. If the notes consisted only of copies of the papers, the copies might be collected and returned. But a covenant for the return even of the copies seems but a futile gesture. The attorneys would know the papers' content; their right and their duty would enjoin them to use that knowledge in the public interest. United States v. Wallace & Tierman Co., 1949, 336 U.S. 793, 799, 69 S. Ct. 824, 93 L. Ed. 1042. To hold that the Government may avail itself of the memory of its attorneys, but it cannot retain the same information in the form of copies of the papers, would be an absurdity. The sovereign, not private competitors, retains the copies or the knowledge. It is preserved in the public interest. Against their improper use, as well as against an unjustified calling of a grand jury to educe the evidence, reliance must be placed in the honesty of the officers of the Department of Justice, with the right to seek the judgment of the court upon the validity of their acts. United States v. United States District Court, 4 Cir., 1956, 238 F.2d 713, 721. These are not slender reeds. Our entire system *648 of government rests on the integrity of its officials, always with recourse to the courts for determination of any doubt in the propriety of their conduct. Motion denied.

2023-08-22 21:21:42.574349+00

Price

Dissenting Opinion by Price, J.: To my view the majority opinion in this appeal could well be entitled “Requiem for Compulsory Non-Suit.” If there was ever a case where the entry of a compulsory non-suit was proper, this is such a case. The majority quite accurately summarizes the factual situation as presented by appellants’ testimony and also quite accurately summarizes the duties of an appellate court upon review in such a situation. However, after so doing, they conclude that appellants are entitled to go to a jury. I must strongly disagree with that conclusion. The obvious weaknesses of appellants’ case are numerous. The first is that appellants are unable to prove what, if anything other than the floor tile, the appellant wife slipped on, and even if the inference could be drawn that she slipped on debris or liquid, it was not a hidden danger or peril which a reasonably prudent invitee would not have seen. It seems to me that the law is clear that evidence to inferentially establish causation for a fall because wetness was seen on a floor and the back of the person’s clothes were damp is insufficient to infer a cause or constructive notice. Further the law is well settled that there is no duty to guard or warn a *262guest or business visitor against a danger that is known or obvious and that a business visitor who enters and remains upon another’s land with full knowledge of the risk of injury created by the activity thereon, assumes the risk and may not recover. Appellate courts of this state have over recent years been narrowing the historic concept of compulsory non-suits. Until today I had recognized that the concept was on the critical list but had held hopes for its ultimate recovery. With today’s decision I abandon that hope, and although the name lingers on in our procedural rules and in our reports, I feel that it will soon fade to a dim memory of better days gone by. Quite obviously I would affirm the entry of the compulsory non-suit by the lower court. JACOBS, J., joins in this dissenting opinion.

2013-10-30 06:32:42.272807+00

Hall

535 S.W.2d 46 (1976) Violet M. FOWLER, Appellant, v. Douglas C. BROWN et ux., Appellees. No. 5499. Court of Civil Appeals of Texas, Waco. March 18, 1976. Rehearing Denied April 8, 1976. *47 E. H. O'Dowd, Robinson, for appellant. Walter D. Kettler, Waco, for appellees. HALL, Justice. This appeal was brought to question an order temporarily enjoining the appellant from violating a deed restriction which limits her use of her homeplace to "residential purposes exclusively." We affirm. The appellees pleaded, and the evidence shows without contradiction, that they own and reside on Lot 4, Block 3, of the Wiebusch Addition, Part No. one, to the City of Robinson in McLennan County; that the appellant owns and resides on Lot 3, Block 3, of said addition; that duly recorded deed restrictions are in effect in said addition and were in effect when these parties purchased their respective lots; and that restriction number one provides, "All of such lots shall be used for residential purposes exclusively." Additionally, the appellees alleged that the appellant is preparing to open a business on her lot in violation of the deed restriction and to the appellants' irreparable damage. The appellant responded with a lengthy answer which we need not detail. The appellant asserts that there is no evidence of a violation or threatened violation by her of the deed restriction. There is evidence that the appellant wants to operate a retail florist shop at her residence; that she canvassed the neighborhood seeking permission to do so from the other owners in the addition; that after the appellees, through their attorneys, informed the appellant that they disapproved and assured her they would bring legal action to prevent a violation of the deed restriction by her, she took a course in floral designing at a cost to her of approximately $500, and closed in a garage and made other changes in her residence toward accommodating a florist shop at an expense of over $6,000; that her plans call for a retail business which will be 90% delivery and 10% walk-in trade; that the business hours will be from 9:00 A.M. to 5:00 P.M.; and that she expects to profit from the business so that she can supplement her other income. While there is other proof of similar import, this evidence is legally sufficient to show an intended violation of the deed restriction by the appellee. The appellant pleaded waiver of the restriction, and now asserts that this defense is conclusively established by the proof of other business ventures within and without the subdivision in question. We disagree. "A waiver takes place where one dispenses with the performance of something which he has a right to exact, and occurs where one in possession of any right, whether conferred by law or by contract, with full knowledge of the material facts, does or forbears to do something, the doing of which or the failure or forbearance to do which is inconsistent with the right or his intention to reply upon it." Ford v. Culbertson, 158 Tex. 124, 308 S.W.2d 855, 865 (1958). Violations of restrictions outside the area in question cannot be relied upon as a waiver by the appellees of violations within the area. Davis v. Hinton, 374 S.W.2d 723, 726 (Tex.Civ.App.—Tyler, 1964, writ ref., n. r. e.). The trial court was justified in finding that two asserted violations within the addition relied upon by the appellant to support her contention of waiver are trivial in character in comparison to one she intends. These will not support waiver. Stewart v. Welsh, 142 Tex. 314, 178 S.W.2d 506, 509 (1944). *48 The seventh restriction in the deeds provides, "No noxious or offensive activity shall be carried on upon any lot, nor anything be done thereon which may be or become an annoyance or nuisance to the neighborhood." Because there is no evidence that the appellant's intended use of her residence as a florist shop would be a "noxious or offensive activity" or a "nuisance to the neighborhood" she says the temporary writ of injunction must fall, asserting in effect that restriction number seven is a limitation on the "residential use only" restriction. We overrule this contention. The appellant's use of her house as a florist shop would be a business use in violation of the first restriction. The activities condemned in the seventh restriction would not necessarily arise by reason of, or only from, a commercial use of the property. The first and seventh restrictions are each independent. Neither is a limitation on the other. Vaccaro v. Rougeou, 397 S.W.2d 501, 503 (Tex.Civ.App.—Hou., 1966, writ ref., n. r. e.). Trial courts are endowed with broad discretion to grant or deny an application for temporary injunction, and the narrow question on appeal from such action is whether the order of the trial court constitutes a clear abuse of discretion. Janus Films, Inc. v. City of Fort Worth, 163 Tex. 616, 358 S.W.2d 589 (1962). There is no abuse of discretion in the issuance of the writ where the pleadings and the evidence show a probable right of recovery in the applicant and a probable injury to him if the writ is not granted. Camp v. Shannon, 162 Tex. 515, 348 S.W.2d 517, 519 (1961). We find no abuse of discretion, here. The appellant's points and contentions are overruled. The judgment is affirmed.

2013-10-30 06:32:42.277469+00

Wright

152 F. Supp. 104 (1957) Charles C. SCOTT, Plaintiff, v. LYKES BROS. STEAMSHIP CO., Inc., Defendant. Civ. A. No. 5772. United States District Court E. D. Louisiana, New Orleans Division. June 4, 1957. *105 Raymond H. Kierr, New Orleans, La., for plaintiff. Terriberry, Young, Rault & Carroll, William E. Wright, New Orleans, La., for defendant. J. SKELLY WRIGHT, District Judge. This case graphically depicts one man's courageous fight for control of his mental and physical faculties after suffering a disabling brain injury which paralyzed his speech process as well as his left arm and leg, already badly broken in the accident. By determined and continuous application of modern methods of rehabilitation under supervision, this plaintiff seaman has delivered himself from the life of a gibbering, hopeless, helpless cripple to that of a functional human being, able to speak, to walk, to work, and even to contain himself after months of being fitted with an artificial evacuation receptacle. The defendant maintains that the plaintiff, admittedly injured in the service of his ship, is not entitled to maintenance during this period of rehabilitation, that the ship's obligation to pay maintenance ended when plaintiff's condition became medically "static," and that the plaintiff was on his own during that period of time required to relearn to speak, to walk, to use his hands, to be a useful human being. This court holds that maximum cure, as defined by the Supreme Court,[1] is not achieved by the administration of pills and poultices alone, that maximum cure is reached, in the circumstances of this case, when, through the application of modern methods of rehabilitation under medical supervision, the seaman is returned, as near as may be, to the status of a functional human being. On December 26, 1951, Scott, while employed as a member of the crew of the defendant's S. S. Dr. Lykes and while that vessel was in port at San Pedro, California, was injured when a taxicab in which he was returning to the vessel was struck by a railroad train. In the accident Scott received a severe brain injury in addition to fractures of his left leg and left arm in the area of the elbow. For three months after the accident, Scott was in a coma as a result of a cerebral contusion. On finally being discharged from the United States Public Health Service Hospital on December 3, 1953, he was left with an inability to speak intelligibly, a left arm rigid with a 90° bend at the elbow, a useless left hand held in a clutched position, a left leg shortened and bent rigidly in place at the knee, and an inability to control his urine. At this time, December 3, 1953, the medical officer at the hospital advised the defendant that "Although I have not examined Mr. Charles C. Scott for several weeks, it is my opinion that he has probably reached a static situation as far as improvement is concerned." On receipt of this information from the hospital, the defendant terminated Scott's maintenance. On April 1, 1954, Scott was again re-admitted to the Public Health Service Hospital with a history of spells of unconsciousness. His brain syndrome at this time was diagnosed as Grand Mal. He was discharged from the hospital on April 26, 1954, with a prescription and a supply of Dilantin, which is a drug administered for the control and treatment of seizures. At this time Scott decided to return to his native state of Virginia to reside with his mother at Newport News. There he applied for admission to the Virginia State Rehabilitation Hospital near Staunton, Virginia, and after a medical examination on July 5, 1954, *106 to determine his eligibility for and receptivity to rehabilitation treatment, he was admitted on November 21, 1954. He remained at that hospital until March 3, 1955, at which time his mother, though working, was no longer able to pay for his keep there. On leaving the hospital, it was recommended to Scott that he continue his therapeutic exercises and that he seek some sheltered rehabilitation employment which would supplement the training in leg motion and manual dexterity he was given at the hospital. Consequently, on May 10, 1955, he commenced a six-month trial period of limited work as a handicapped person in the assembly plant of an aluminum window frame fabricator in Warwick, Virginia. He earned $900. Thereafter Scott returned to his mother's home and continued to perform the therapeutic exercises he had been taught to improve his speech, incontinence, leg motion and manual dexterity. On October 15, 1956, through the intercession of a friend with political connections whom he had met at the aluminum assembly plant, he was readmitted to the Virginia State Rehabilitation Hospital as a non-paying patient. At the time of the trial he was still a patient at that hospital undergoing physiotherapy, speech training and other exercises designed to improve his physical and mental condition. As a result of Scott's determined efforts under medical supervision to rehabilitate himself, he is now able to speak audibly and intelligibly. He can use his left hand and arm to tie and untie his shoes, his necktie, and even to put on his own cuff links. He has completely conquered his incontinence, and, while his left leg is still one inch short, much of the stiffness is gone from his knee. Although Scott will never be a normal person physically, he has made incredible strides toward overcoming his handicaps. He is enthusiastic. He is willing to work and he has tried to work, particularly and unceasingly at the exercises required to restore his body functions. He has found great satisfaction in religion and feels that he has had more than human help in his recovery. In short, he is a far different human being, mentally and physically, than the inarticulate, helpless cripple who was discharged from the Public Service Hospital on December 3, 1953, as having "reached a static situation as far as improvement is concerned." Under the circumstances, he had not reached maximum cure on that day but has continued to improve and there remains the possibility of further improvement. Farrell v. United States, supra; Aguilar v. Standard Oil Company, supra; Calmar Steamship Corp. v. Taylor, supra. He is, therefore, entitled to maintenance to the date of trial, excluding those days spent in hospitals. He is also entitled to recover the money expended for his treatment at the Virginia State Rehabilitation Hospital. The defendant is entitled to a credit in the amount of $900 which was earned by Scott during the period of his rehabilitation. The defendant, citing cases previously decided by this court,[2] contends that if additional maintenance is due, it should be at the rate of $6 per day rather than $8 since $6 was the going, or contract, rate at the time of his injury. It is true that this court has, on occasion, used as a guide the going rate of maintenance at the time of the injury or inception of the illness. But here the defendant itself has determined that a rate of $8 per day is a proper one and has paid plaintiff maintenance at that rate up to December 3, 1953. There appears no good reason why the defendant's judgment in this regard should be disturbed. Plaintiff's claim against defendant for failure to pay maintenance is denied as is his claim for reimbursement of $2,000 paid defendant by agreement out of proceeds of his settlement with third persons allegedly responsible in tort for his injuries. Judgment for plaintiff. NOTES [1] Farrell v. United States, 336 U.S. 511, 69 S. Ct. 707, 93 L. Ed. 850; Aguilar v. Standard Oil Company, 318 U.S. 724, 63 S. Ct. 930, 87 L. Ed. 1107; Calmar Steamship Corp. v. Taylor, 303 U.S. 525, 58 S. Ct. 651, 82 L. Ed. 993. [2] Lamon v. Standard Oil Co., D.C., 117 F. Supp. 831, 1954 A.M.C. 473.

2013-10-30 06:32:42.285632+00

Moylan

34 Md. App. 258 (1976) 367 A.2d 30 MICHAEL SEAN GARLAND v. STATE OF MARYLAND. No. 876, September Term, 1974. Court of Special Appeals of Maryland. Decided December 28, 1976. The cause was argued before[*] ORTH, C.J., and MOYLAN and[**] GILBERT, JJ. William H. Murphy, Jr., for appellant. Alexander L. Cummings, Assistant Attorney General, *259 with whom were Francis B. Burch, Attorney General, Milton B. Allen, State's Attorney for Baltimore City, and Joseph F. Lyons, Assistant State's Attorney for Baltimore City, on the brief, for appellee. (On Remand) MOYLAN, J., delivered the opinion of the Court. The appellant, Michael Sean Garland, was orginally indicted by the Baltimore City Grand Jury for murder and for the unlawful use of a handgun. At the suggestion of the State and over the vigorous objection of the appellant, the case was removed from Baltimore City to the Circuit Court for Montgomery County for trial. In the Circuit Court for Montgomery County in a jury trial, presided over by Judge Ralph G. Shure, the appellant was convicted of murder in the second degree and of the handgun violation. Upon appeal to this Court, the appellant raised initially ten contentions, the present cataloging of which is unnecessary. Following the argument in this Court but before a decision was handed down, the appellant moved for reargument because of the alleged pertinence of the then recently decided case of Mullaney v. Wilbur, 421 U.S. 684, which decision was handed down by the Supreme Court of the United States on June 9, 1975. Agreeing that the principles enunciated in Mullaney v. Wilbur were, indeed, pertinent, we granted the motion for reargument. In our decision in Garland v. State, 29 Md. App. 27, we reversed the conviction because of our belief that the appellant had been denied due process of law because of a jury instruction which arguably placed upon him the burden of lowering his degree of blameworthiness from the murder level to the manslaughter level. Upon appeal by the State, the Court of Appeals in State v. Garland, 278 Md. 212, reversed our judgment essentially on factual grounds, concluding that the instruction taken as a whole did not operate to shift unconstitutionally a burden of persuasion to the appellant, albeit certain portions of the instruction were inartfully phrased according to the hindsight of Mullaney v. Wilbur. The Court of Appeals remanded the case to us for *260 further consideration of the other contentions raised by the appellant. It is only necessary for us to come to grips with one of them: the claim by the appellant that he was denied the equal protection of the law when his case was removed from Baltimore City to Montgomery County. The case was fraught with racial overtones. The appellant, a black man, shot and killed a white policeman, Officer Norman Buchman, on April 6, 1973. The appellant shot Officer Buchman in the head six times in rapid succession with the officer's own service revolver. Immediately preceding the shooting, both the appellant and the victim had been fighting and rolling to the ground outside the appellant's mother's home on Quantico Avenue in Baltimore City. There was evidence, from the appellant and others, that Officer Buchman had engaged in a pattern of harassment directed toward the appellant since the beginning of March, repeatedly following him, stopping him, arresting him, impounding the appellant's new car and treating him in a rude and contemptuous manner. There was, as we pointed out in Garland v. State, 29 Md. App. 27, 28, a genuine jury question in this regard: "The critical defensive issue in this case was mitigation in that the appellant allegedly killed his victim in a hot-blooded response to legally adequate provocation, to wit, in the course of mutual combat. Without detailing the long and involved factual picture, it is enough to point out that the evidence, both from the State's case and the defense case, was enough to generate a genuine jury issue on the subject of mitigation due to provocation." This case involved non-capital charges and therefore the decision on removal rested in the sound discretion of the trial judge and will not be reversed absent a showing that that discretion was abused. Gibson v. State, 17 Md. App. 246; Smith v. State, 16 Md. App. 317; Stevenson v. State, 9 Md. App. 152; McLaughlin v. State, 3 Md. App. 515; Benton v. State, 1 Md. App. 647. In looking to the question which the *261 hearing judge must decide, however, it is clear that the State must allege in writing and under oath that it cannot receive a fair and impartial trial. Furthermore, "It shall be necessary for the party making such suggestion to make it satisfactorily appear to the court that such suggestion is true, or that there is reasonable ground for the same." Maryland Constitution, Article IV, § 8. And see Mason v. State, 12 Md. App. 655. The moving party in this case was the State of Maryland. The appellant vigorously opposed the suggestion of removal. We conclude that the State failed to carry its burden "to make it satisfactorily appear to the court" that it could not receive a fair and impartial trial in the City of Baltimore. The State supported the suggestion by filing some twenty-eight exhibits. At initial glance, the mass of exhibits is impressive. Upon more thorough examination, however, a full 95 percent of the allegedly prejudicial pretrial publicity is revealed to be immaterial to the issue upon which it is offered. We note initially that the State alleged in its Suggestion for Removal "that neither the State nor the Defendant can have a fair and impartial trial in this Court." It is not the prerogative of the State, however, to assert the rights of the appellant. As far as any impact upon the appellant was concerned, the appellant concluded that he could receive a fair trial in Baltimore City and made no move whatsoever to have his case removed. Indeed, he opposed the move. We will, therefore, look to the supporting evidence for the only material issue raised by the State — that it (the State) could not receive a fair trial. Most of the exhibits filed by the State would have been very relevant if they had been filed by the appellant upon his own motion for removal. Those things which might tend to show that the appellant could not receive a fair trial, however, do not tend to show that the State could not receive a fair trial. We believe that the unduly broad brushstrokes used by the State may have lured the eminently fair and impartial jurist, who ordered the removal, into a false sense of solicitude for the appellant, which solicitude the appellant was not seeking and did not wish. *262 The shooting occurred on April 6. There was significant, but not excessive, press coverage during the period of April 6 to April 10. Several radio stations and several television stations briefly reported the killing of the policeman. A few newspaper articles appeared — in The Morning Sun, in The Evening Sun, in The News-American and in The Afro-American. Except for a banner headline on one occasion in The News-American, the articles were of moderate tone and length and were not particularly prominently displayed. The only basis for the State's claim that it could not receive a fair trial was the fact that the defense attorney, shortly after the appellant's arrest, claimed that his client had been beaten by the police and predicted that they would extract a confession from him. The total coverage on this claim in all of the stories in all of the media consisted of no more than a few paragraphs. Indeed, the great bulk of the pretrial publicity, during its several days of relative prominence, militated strongly in favor of the State and not against it. The banner headline in The News-American and the lead paragraphs of most of the stories featured the fact that the appellant had shot and killed a policeman. The only photographs were of the slain policeman, his widow and orphaned daughter. The Fraternal Order of Police called for a crackdown on police killers. Governor Mandel called for a reinstitution of the death penalty in view of the police killing. Civic watchdog Hyman Pressman called for an investigation as to why judges are "soft" on police killers. Some of the stories made much of the prior criminal record of the appellant. Some made much of the hospital examination which tended strongly to negate his claims of having suffered physical harm at the hands of the police. All of this might well have supported his suggestion for removal, had he made one. The State, however, may not beef up its own case or obscure its lack of a case by making a case for the opposing party. The publicity had entirely run its course by April 10. The hearing was not held until November 19. The State did point out one arguable flurry of renewed publicity in early September in conjunction with Fallen Heroes Day. This, *263 however, was a civic memorial for all policemen and firemen who had died in the line of duty. Included were some mentions of the slain Officer Buchman. In this context, however, the entire thrust of the mentions was by way of eulogizing the slain officer. This brief flurry of renewed publicity could only have enhanced the prosecution's chances of success, not injured them. The amount of demonstrated pretrial publicity that arguably worked against the interests of the State was minimal. It was already seven months into the past at the time of the hearing on the question of removal. There was no indication whatsoever that voir dire examination could not easily have factored out any potential jurors who had any conceivable knowledge of the case. Although we are confident that the hearing judge himself made every effort to be preeminently fair to both sides, we think he was lured into error by the overly broad allegations and the overly broad supporting data of the State. They beefed up their own claim by making a claim on behalf of the appellant which it was not the State's prerogative to make. They camouflaged their own lack of any substantial evidence of pretrial publicity running against their interests by surrounding it with substantial evidence of pretrial publicity running against the interests of the appellant, which evidence was, of course, irrelevant to the State's claim. It is, moreover, clear that the issue of pretrial publicity was, at least subconsciously, a smoke screen for what really was at stake. It was clear that the trial of the case would be heavy with racial overtones. The hearing judge very candidly and perceptively pinpointed the problem: "In the selection of a jury for the trial of a racially charged case, such as is present in the instant case, no one who is even remotely familiar with the trials of such cases in Baltimore City will dispute the accepted fact that these jurors will be chosen primarily because of the color of their skin. This blunt statement is distressingly true. Instead of having a jury representing a fair cross section of *264 the city, therefore, the probable jury in this case, if it is tried in Baltimore City, will be oriented, subtly or otherwise, toward the underlying tragic issue of racial appeal. Thus, it would be anything but a fair cross section of the city." The State was, in the last analysis, not concerned with potential jurors who had been tainted by pretrial publicity. Not simply was the bulk of that taint unmistakably in favor of the State, but such a handful of potential jurors, if there had been any at all, could easily have been screened out by voir dire examination. What was really at stake was the ultimate racial composition of the jury regardless of whether there had or had not been any pretrial publicity. The unspoken premise which underlies the State's case is that a black juror would be unfairly sympathetic to a black defendant charged with killing a white policeman under circumstances where his defense was that he had been incensed by harassment into a hot-blooded killing in immediate response to legally adequate provocation, thereby lowering the degree of blameworthiness to the level of manslaughter. Such a proposition is totally unacceptable to our jurisprudence. If it could be claimed that a black juror would be unduly sympathetic to such a defense, it could be claimed with equal validity that a white juror would be unfairly unsympathetic to such a defense. Yet the ultimate racial composition of the jury, whether tainted or untainted by pretrial publicity, appeared to be the issue at stake. We notice evidence of this concern in the remarks about the imbalance in the allocation of peremptory strikes: "Maryland Rule 746 provides that, in the trial of all criminal cases involving imprisonment of twenty years or more, each defendant is permitted twenty peremptory challenges, while the State is permitted only ten peremptory challenges for each defendant. No one has ever advanced a logical explanation for this mysteriously unbalanced allocation of challenges. It is difficult to understand why, for example, if one person attempts to murder *265 another person, and his aim is faulty and he does not kill his victim but merely cripples or maims him for life, the State and that person are each allowed four peremptory jury challenges; however, if he has superior marksmanship and kills his victim, he is allowed twenty such challenges to ten for the State. ... The decisive test, in the opinion of this Court, is whether removal should be granted if the provisions of Maryland Rule 746 were reversed — this is, if the State should be allowed twenty challenges and the defendant ten. To pose the question is to answer it. Without hesitation, removal should be granted any defendant faced with such a challenge handicap." There is no relationship between the issue of pretrial publicity and the use of peremptory challenges. Had a prospective juror been exposed to pretrial publicity, he might be struck for cause. Peremptories would not even be employed until the panel had been screened of any who had been exposed to incurable pretrial publicity. Peremptories are used to mold and to manipulate the composition of the ultimate jury from the pool of those untainted by pretrial publicity. The fact that the State had ten peremptory challenges and that the appellant had twenty was immaterial to the issue of unfair pretrial publicity. The very reference to a so-called "challenge handicap" unmistakably points to the ultimate selection process and not to the threshold process of obtaining an untainted panel from which to select. Although we attribute no ignoble motives to the State, the unspoken assumption of the State's position is that it feared not so much prospective jurors who had prejudged the case in a manner sympathetic to the defense but rather that it feared a jury, albeit free of prejudgment, which would judge the case in a manner sympathetic to the defense upon the evidence adduced at the trial. To the extent to which there *266 were racial overtones resonating through the case, the racial overtones were of a general character, geographically speaking, and were not of some local and parochial significance peculiar to Baltimore City. The unavoidable implication of the State's position is that Baltimore, as a forum to try the case, was not unique because its black jurors, in a general sense, might be more sympathetic to the defense than would black jurors in other parts of the State, but rather that, as a demographic reality, a significantly heavier percentage of prospective black jurors would be upon the jury panels in Baltimore. If there were any validity to the unspoken assumption that black jurors as a group might be more inclined to believe and/or to understand and/or to sympathize with the defense theory of mitigation because of police harassment (we attribute no validity to the assumption at all), the notion that there is a fundamental value in having, at least representatively, such an audience is the democratizing rationale that underlies the very institution of trial by jury — the judgment of one's peers. Demographically speaking, the "peer group" must be a randomly selected sample of a particular community as it is. Beyond the tactical use of peremptory challenges, which the law in its wisdom has allocated to the respective parties, neither the State nor the defense may manipulate the composition of that ultimate "peer group" either within the community or by removing the case from the community. The State did not adequately show that this case had been prejudged adversely to its interests. It may not show, on the basis of the racial composition of Baltimore City and the so-called "challenge handicap," that it would be judged adversely to its interests. Judgments reversed; case remanded to the Circuit Court for Montgomery County for return to Baltimore City for retrial; costs to be paid by Mayor and City Council of Baltimore. NOTES [*] Reporter's Note: Orth, C.J., participated in the hearing of the case and in the conference approving the opinion but was appointed Associate Judge of the Court of Appeals prior to the filing of the opinion. [**] Reporter's Note: Gilbert, J., appointed Chief Judge of the Court of Special Appeals on June 8, 1976.

2016-07-06 07:27:43.171732+00

O'Toole

{¶ 1} In this consolidated appeal, appellants Louis J. Vitantonio and others contend that the Lake County Court of Common Pleas erred in dismissing their appeal from the Wickliffe Board of Zoning Appeals for lack of a final, appealable order. For the reasons that follow, we reverse the judgment and remand the cause. {¶ 2} On August 23, 2006, appellants were cited with multiple notices of property-maintenance violations issued by the city of Wickliffe's building commissioner. Each notice explained that the failure to come into compliance within ten days could result in the filing of a complaint and summons in the Willoughby Municipal Court. On September 15, 2006, appellants filed a notice of appeal with the Wickliffe Board of Zoning Appeals ("BZA"). The building commissioner subsequently filed four criminal complaints and summonses with the Willoughby Municipal Court on September 19, 2006. While these complaints were pending, on December 28, 2006, the BZA conducted a public hearing on appellants' notice of appeal. After the hearing, the BZA affirmed the building commissioner's issuances of violations. On January 24, 2007, appellants filed a notice of appeal to the Lake County Court of Common Pleas. {¶ 3} On March 7, 2007, the city dismissed the criminal complaints without prejudice for failure of proper service. Subsequently, on March 20, 2007, the city re-filed the criminal complaints and perfected service upon all proper parties. {¶ 4} In the meantime, in the action before the court of common pleas, appellee moved to dismiss appellants' administrative appeal. In a judgment entry dated September 28, 2007, the lower court granted appellee's motion. The court first pointed out that it did not have jurisdiction to grant the relief sought by appellants, namely, a reversal of the BZA's determination with the goal of triggering a dismissal to the criminal charges. The trial court stated that the appellants could not use R.C. Chapter 2506 as a vehicle to appeal the issuance of criminal charges. The court further determined: {¶ 5} "[T]he [BZA's] decision to sustain the Notices of Violations is not a final order, adjudication or decision of a political subdivision that is appealable under *Page 357 R.C. Chapter 2506 because the decision was issued preliminary to a criminal proceeding that is currently pending in the Willoughby Municipal Court." {¶ 6} Although it did not specifically rule on the issue, the trial court noted its doubts whether the BZA possessed jurisdiction under the city's codified ordinance to hear appellants' appeal. Appellants now appeal, asserting the following assignment of error: {¶ 7} "The trial court erred to the prejudice of plaintiffs-appellants in granting defendant-appellee's motion to dismiss." {¶ 8} The grant or denial of a motion to dismiss is a legal conclusion, which an appellate court reviews de novo. Jacobs v. Budak, 11th Dist. No. 2007-T-0033, 2008-Ohio-2756, 2008 WL 2332543, ¶ 87. {¶ 9} Under their sole assignment of error, appellants argue that they followed the proper procedural channels for challenging the building commissioner's citations for property-maintenance violations and therefore the Lake County Court of Common Pleas erred in dismissing their appeal from the BZA's decision. Specifically, appellants maintain that the trial court's conclusion that the BZA's decision was not a final, appealable order was error. Appellants' argument has merit. {¶ 10} R.C. 2506.01, the statute governing appeals from decisions of any agency of a political subdivision, allows for the administrative appeal of any "final order, adjudication, or decision." A final order, adjudication, or decision is defined as any "order, adjudication, or decision that determines rights, duties, privileges, benefits, or legal relationships of a person, but does not include * * *any order, adjudication, or decision that is issuedpreliminary to or as a result of a criminal proceeding.'" (Emphasis added.) R.C. 2506.01(C). {¶ 11} Here, approximately one month after appellants were given notice of multiple building-maintenance violations, the building commissioner filed several criminal complaints and summonses in the Willoughby Municipal Court. The criminal proceedings had commenced at the time the BZA issued its decision affirming the building commissioner's citations on December 28, 2006. Consequently, as the criminal proceedings remained pending against appellants at the time of the BZA's decision, the trial court concluded that the BZA's decision was "preliminary" to those proceedings, thus rendering that decision not final and appealable pursuant to R.C. 2506.01(C). {¶ 12} While the trial court's interpretation is understandable, we disagree that the final phrase of R.C. 2506.01(C) should be interpreted as a temporal mandate. Rather, we find it to be procedural. We believe that the exception from finality for administrative decisions "issued preliminary to or as a result of a criminal *Page 358 proceeding" applies to administrative decisions that are either predicates for a criminal proceeding or that arise as a consequence of the institution of criminal proceedings. If the prohibition against finality for administrative decisions set forth in the statute is read as a temporal injunction, then parties whose substantial rights have been determined by an administrative decision would have no timely recourse to appeal if the same subject matter has resulted in the institution of criminal proceedings — as herein. {¶ 13} Put another way, if an administrative decision results in criminal proceedings, or flows from criminal proceedings, it is not final and appealable until those proceedings are final and appealable. But that is not the situation presented by this appeal. The building commissioner could have proceeded simply by issuing the property-maintenance citations. He could have proceeded simply by filing the criminal complaints. He could do what he in fact did — file both. But the matters are not dependent on each other. They are simply separate arrows he may draw from his quiver when targeting perceived violations of Wickliffe's building code. {¶ 14} We further note that the BZA did have authority to hear appellants' appeal of the citations issued. The Wickliffe Building Commission is authorized to "interpret, administer and enforce the building, electrical and plumbing ordinances of the City and any other ordinances now in effect or hereafter created or passed relating to the construction of any building, of whatever character and for whatever purpose the same may be used, and interpret and enforce the ZoningOrdinance of the City * * *" (Emphasis added.) Wickliffe Ordinance 1105.03. {¶ 15} Further, Wickliffe Ordinance 1105.11 provides: "Any person or the head of any department or division of the City aggrieved by a decision of theBuilding Commissioner may appeal such decision to the Board ofZoning Appeals in the manner provided in Chapter 1335 of thePlanning and Zoning Code." (Emphasis added.) {¶ 16} Thus, the Wickliffe building commissioner is vested with authority to enforce the building and zoning codes, and decisions rendered under either code are appealable to the Board of Zoning Appeals as provided for in R.C. Chapter 1335. Cf. Wickliffe Ordinance 1335.30(a) (stating that the Board of Zoning Appeals is "[t]o hear appeals on decisions made by the Building Commissioner"). {¶ 17} For the reasons discussed above, appellants' sole assignment of error has merit, and the decision of the Lake County Court of Common Pleas is hereby reversed, and this matter is remanded for further proceedings consistent with this opinion. *Page 359 {¶ 18} It is the further order of this court that appellee is assessed costs herein taxed. {¶ 19} The court finds that there were reasonable grounds for this appeal. Judgment reversed and cause remanded. GRENDELL, P.J., concurs. RICE, J., dissents.

2013-10-30 06:32:42.310639+00

Levet

152 F. Supp. 3 (1957) Bronislawa HEITNER, Libelant, v. ZIM ISRAEL NAVIGATION CO., Ltd., and American-Israeli Shipping Co., Inc., Respondents. United States District Court S. D. New York. June 24, 1957. Peter J. Unger, New York City, proctor for libelant. Kirlin, Campbell & Keating, New York City, Proctors for respondents, William J. O'Brien, New York City, of counsel. LEVET, District Judge. This is a motion by the respondents for an order dismissing the libel herein on the ground that this court should refuse to accept jurisdiction of the subject matter. Libelant, a citizen of Israel, now residing in Argentina, seeks to recover damages in this district for personal injuries allegedly sustained at sea while she was a passenger aboard the SS Israel, a vessel owned by respondent, Zim Israel Navigation Co. Ltd. Said respondent is a foreign corporation, organized and existing under the laws of Israel. The co-respondent, American-Israeli Shipping Co., Inc., represents the vessel's owner in this country and is a New York corporation which neither owns, operates nor manages the SS Israel. The libelant purchased her ticket in Israel for a passage from Israel to the United States. Clause (v) of paragraph 6 of the Passage Contract, which is printed in English and Hebrew, provides as follows: "This contract shall be construed, and all rights and liabilities and all disputes between the passenger or his executors, administrators and assigns and the Company or the Vessel, or any of their agents or servants, thereunder or in connection therewith or incidental thereto shall be determined, solely, in accordance with the Law of Israel. "It is agreed that all disputes and matters whatsoever under, in connection with or incidental to these presents shall be litigated upon in and before the Courts of Israel to the exclusion of the Courts of any other country. "Nothing in these presents contained shall in any manner whatsoever affect, alter, qualify or minimize the provisions of this Clause or any of them." It has been held in Wm. H. Muller & Co., Inc., v. Swedish American Line Ltd., 2 Cir., 1955, 224 F.2d 806, certiorari denied 350 U.S. 903, 76 S. Ct. 182, 100 L. Ed. 793, that it was not unreasonable to enforce a clause in a bill of lading which provided that all controversies arising thereunder would be decided according to Swedish law. Accordingly, in that case the court's refusal to entertain jurisdiction was held to be within the lawful limits of judicial discretion. Notwithstanding the provisions of the Passage Contract, the suit is one which involves a claim by an alien non-resident *4 against a foreign corporation and its New York representative for a cause of action arising outside the United States. Under such circumstances, a federal court has inherent power to refuse to entertain the suit on the ground of forum non conveniens. DeSairgne v. Gould, D. C.S.D.N.Y.1949, 83 F. Supp. 270, affirmed 2 Cir., 1949, 177 F.2d 515. See Canada Malting Co., Ltd., v. Paterson Steamships, Ltd., 285 U.S. 413, 52 S. Ct. 413, 76 L. Ed. 837. The motion to dismiss the libel herein is granted. So ordered.

2013-10-30 06:32:42.333113+00

Odom

535 S.W.2d 651 (1976) Lindsey Henton BENTLEY, Appellant, v. The STATE of Texas, Appellee. No. 51851. Court of Criminal Appeals of Texas. April 20, 1976. *652 Daniel H. Benson, Lubbock, for appellant. Alton R. Griffin, Dist. Atty. and Mark L. Withrow, Asst. Dist. Atty., Lubbock, Jim D. Vollers, State's Atty. and David S. McAngus, Asst. State's Atty., Austin, for the State. OPINION ODOM, Judge. This appeal is from an order revoking probation. Appellant was convicted of possession of marihuana on September 28, 1971. Punishment was assessed at eight years. Imposition of sentence was suspended and probation granted. Among the conditions of probation was the requirement that appellant: "(a) Commit no offense against the laws of this or any other State or the United States. . . ." On February 25, 1975, the State filed a motion to revoke probation, alleging that: "On or about the 22nd day of February, A.D.1975, in Lubbock County, Texas, after having heretofore been placed on probation, Probationer did then and there appear in a public place, to-wit: a Gulf Service Station located at the intersection of Brownfield Highway and Quaker Avenue in the City of Lubbock, Lubbock County, Texas, under the influence of Alcohol to the degree that the said LINDSEY HENTON BENTLEY might endanger himself and others." Following a hearing, the trial court found that appellant had violated condition (a) of his probation, as alleged in the State's motion to revoke. The trial court accordingly revoked his probation, reducing his sentence to three years. The sole ground of error challenges the sufficiency of the evidence to support the trial court's finding that he was guilty of the offense of public intoxication. V.T.C.A. Penal Code, Sec. 42.08 provides in pertinent part: "(a) An individual commits an offense if he appears in a public place under the influence of alcohol or any other substance, to the degree that he may endanger himself or another. . . ." It is not contested that appellant at the time of his arrest was in a public place, as that term is defined in V.T.C.A. Penal Code, Sec. 1.07(a)(29). Further, appellant does not assert that the evidence was insufficient to show that he was under the influence of alcohol; he himself testified that he had had three drinks of whisky and Sevenup at a tavern shortly before the arrest. Although he denied that he was "drunk", he admitted that he could "feel the alcohol." Appellant argues, rather, that there was no evidence that he was under the influence of alcohol "to the degree that he may endanger himself or another." The arresting officer testified that when he entered the service station appellant was sitting in a chair in the office. His testimony continued as follows: "Q. [by the prosecutor]: Did you notice anything unusual about him? "A. [by officer Adcock]: When we walked in the office Mr. Bentley was seated and when he saw us he stood up and he had to hold his hand on the desk as he was swaying just a little bit. "Q. All right. What else did you notice? "A. We noticed that he smelled strongly of alcohol, his eyes were bloodshot. "Q. Did you speak to him? "A. Yes, sir, we did. "Q. Did you notice anything about his speech? *653 "A. His speech was slurred, very slurred. "Q. All right. Then what happened? "A. We asked—since the office was very little, we asked him to step out into the front part of the station. "Q. What did you notice at that time? "A. When he started walking out toward the station he had to hold against the wall as he was swaying coming out of the station. "Q. All right. Then what happened? "A. We asked the subject his name, he did state it, we asked him had he been drinking and he said yes, that he had been over to the Comix Club drinking beer. "Q. All right, then what happened? "A. We talked to the subject further, it was hard to understand him, his speech was slurred, so we both—since he couldn't stand up by himself, we each— me and Officer McNeice, we took hold of his arms and led him out to the police car, he was weaving and couldn't stand on his own power. "* * * "Q. And did you form an opinion on the night of February 22, 1975 as to whether or not Mr. Bentley was in fact intoxicated? "A. Yes, sir, I did. "Q. And what was that opinion? "A. That he was intoxicated. "* * * "Q. Okay. Officer, why did you place Mr. Bentley under arrest? "A. Because he was intoxicated." Appellant denied that he was so drunk that he could not walk without assistance. He testified that at the time of the arrest he was attempting to telephone his father. Evidence relating to circumstances that appellant may have endangered himself or another was contained in his own testimony upon direct examination. "Q. [by defense attorney]: All right. Will you tell the Court why you were at the gas station and what took place there? "A. [by appellant] Well, I went to get some snow chains to put on my tires because it was snowing very heavy and my Dad called while I was there and he said I couldn't borrow those snow chains. "Q. You wanted to borrow snow chains from him? "A. Yes, sir. "Q. All right. "A. And I told him I needed some clothes, I was fixing to come home and get some clothes and he said he would just bring them to me and while I was waiting that is when the officer's came." The trial judge construed this testimony and the other evidence in this case, as he stated when revoking probation, as follows: "I heard you testify a few moments ago about calling your father about chains for your tires for your car. I couldn't help but shudder to think that if you had got those chains, maybe we would have you killing somebody on the streets that night. You know as well as I know that a person in your condition, the danger that you afford to the public. Now, you were placed on probation under certain terms and conditions; part of those terms and conditions were meant to help rehabilitate you. The other part were terms and conditions set up to help protect the public and certainly having you moving around in this community in a drunken condition is a danger to the community." We find the trial court's evaluation of the evidence reasonable and further find no abuse of discretion in the decision to revoke probation. The dangers of which the trial judge spoke were supportive of the conclusion that appellant was under the influence of alcohol to the degree that he might well have endangered himself and others. The judgment is affirmed.

2013-10-30 06:32:42.350502+00

Walsh

152 F. Supp. 167 (1957) Marie ROLLAND, also known as Marie Romain Rolland and Madeleine Rolland, Plaintiffs, v. HENRY HOLT AND COMPANY, Incorporated, Pocket Books, Inc., Fred Reinfeld and Gilbert Cannan, Defendants. United States District Court S. D. New York. March 21, 1957. Marie Louise Stern, New York City, for plaintiffs. Satterlee, Warfield & Stephens, New York City, for defendants Henry Holt & Co., Inc., Pocket Books, Inc., & Fred Reinfeld. WALSH, District Judge. Defendants Henry Holt and Company, Pocket Books, Inc., and Reinfeld, the only defendants who have been served have moved to dismiss the complaint for failure to state a claim upon which relief can be granted. Their motion is granted. Plaintiffs, claiming to represent the interests of the now deceased author and the original French publisher of Jean Christophe, complain that the defendants, by publishing an abridgment of this work, have intruded upon their rights. The complaint must be dismissed because it fails to allege that the work is protected in this country by either copyright or contract, and it fails to allege any other basis upon which recovery could be granted. Neither in the complaint nor in plaintiffs' brief, nor in the extended argument which their counsel was permitted to make, have I been able to find a comprehensible statement of their theory of recovery. The brief disclaims any claim *168 of copyright infringement and the complaint alleges no facts upon which plaintiffs could claim any right to any existing copyright. There is no claim of any express contractual restriction upon the defendants. Plaintiffs describe their claim as follows: "At the outset, it may be stated that the plaintiffs are not suing for infringement of a copyright or copyrights as such may have been registered in the United States Copyright Office for the French or English editions of the aforesaid literary work. Rather, plaintiffs base their claim on the facts of their case, which are supported and buttressed on all sides by well recognized principles of contract and tort law, as applied to dealings between publishers and authors in this country and other civilized countries of the world for some generations past. In short, the action may be described as an `action on the case', and its determination will depend on this Court's interpretation of a certain contract made in Paris, France, on March 25, 1910 (Exhibit `E' attached to the complaint)." As best I can restate the claim, it seems to be that the author under French law retained control of the publication of his work, except in so far as he, by contract with his French publisher and by subsequent contract with a British publisher, released control of part of his rights. It is contended that the rights released did not include the right to publish an abridgment because the contract with the British publisher permitting it to bring out an English translation required that the English translation be one "conforming to the original edition". It is further claimed that the defendant, Holt, "obtained from" the English publisher the right to publish and sell the English edition in the United States (Paragraph 19); that Pocket Books published its abridgment "by arrangement with" the defendant Holt; and that the defendant Reinfeld was the person who prepared the abridgment for Pocket Books. It is apparently the plaintiffs' contention that the contract between the author and the English publisher restricts the actions of the defendants, although there is no allegation that they ever agreed to be so restricted. This claim, of course, does not spell out a right of recovery for a breach of contract. Neither does it establish a claim for interference with any other right of the plaintiffs. In the absence of some right by contract or copyright, whatever right the author may have retained under the French law did not prevent the publication of his work in this country after it had been published in France. Publication unprotected by United States copyright releases a work for copying; it is then dedicated to the public and the author's common law rights no longer protect the work against duplication. Caliga v. Inter Ocean Newspaper Co., 215 U.S. 182, 30 S. Ct. 38, 54 L. Ed. 150; Holmes v. Hurst, 174 U.S. 82, 19 S. Ct. 606, 43 L. Ed. 904; Palmer v. DeWitt, 47 N.Y. 532. In this respect publication abroad has the same effect as publication here. American Code Co., Inc. v. Bensinger, 2 Cir., 282 F. 829, 833; Universal Film Mfg. Co. v. Copperman, D.C.S.D.N.Y., 212 F. 301, 304, affirmed, 2 Cir., 218 F. 577; The Mikado Case (Carte v. Duff), C.C. S.D.N.Y., 25 F. 183, 184; Basevi v. Edward O'Toole Co., D.C.S.D.N.Y., 26 F. Supp. 41, 45, 46.[1] See Palmer v. DeWitt, *169 supra; Scribner v. Stoddart, C.C., 21 Fed.Cas. page 876, No. 12,561. Publication, protected only by foreign copyright statutes, releases the work for general duplication here. The statutory rights of authors do not extend beyond the sovereignty of their origin. The Mikado Case (Carte v. Duff), supra, 25 F. 183, 184. The only copyright apparently in force is one upon the English translation and that is held by the translator, Gilbert Cannan, who is named as a defendant but who was never served and made a party to this action. Whatever rights he may have are not available to the plaintiffs. Contrary to the plaintiffs' view, a trust upon the translator's copyright will not be implied in favor of the author. Complaint dismissed. NOTES [1] Basevi v. Edward O'Toole Co., D.C.S.D. N.Y., 26 F. Supp. 41, 45, 46, has been modified by Heim v. Universal Pictures Co., 2 Cir., 154 F.2d 480, to the extent that publication abroad without notice of United States copyright will not preclude the owner from subsequently obtaining a valid United States copyright if the United States has a treaty extending copyright protection to citizens of the foreign country involved, in accordance with 17 U.S.C.A. § 9(b), and if under the laws of that country the publication there did not result in putting the work in the public domain. Here, however, plaintiffs have disclaimed any right to recovery under a copyright theory.

2013-10-30 06:32:42.363824+00

McNEILLY

367 A.2d 627 (1976) Kenneth PENDRY and Timothy Pendry, Appellants, v. STATE of Delaware, Appellee. Supreme Court of Delaware. Submitted April 12, 1976. Decided September 28, 1976. *629 John B. Kennedy, Wilmington, for defendants below, appellants. Dana C. Reed, Deputy Atty. Gen., Dover, for State of Del. Before HERRMANN, C. J., and DUFFY and McNEILLY, JJ. *628 McNEILLY, Justice: Timothy and Kenneth Pendry appeal from their Superior Court jury convictions and life sentences for first degree murder. Timothy also appeals from his conviction and concurrent 10 year sentence for possession of a deadly weapon during the commission of a felony. Timothy was indicted and tried as principal, Kenneth as his accomplice. Defendants contend (1) that the Trial Court erred in its instructions to the jury on the issue of extreme emotional distress; (2) that the Trial Court erred in failing to instruct the jury on the defense of voluntary intoxication and justification; and (3) that the Trial Court erred in instructing the jury to disregard the defense attorney's opening statement that neither of the defendants had been convicted of any misdemeanor. I Clifford Faulkner (the victim) was shot and killed by Timothy Pendry following an argument between the victim and defendants concerning defendants' sister, who had lived intermittently with the victim in a stormy relationship, and was, at the time, being held by the victim in her trailer against her will. The defendants went to their sister's trailer, and after some discussion with her, confronted the defendant, ordering him to leave the trailer. They testified that the victim refused to leave, and picked up a whiskey bottle, threatening to kill them. Timothy left the trailer, returned with a shotgun, and fired the three shots which killed the victim. II The defendants assert that the Trial Court deprived them of due process in instructing the jury on the issue of extreme emotional distress under 11 Del.C. § 641.[1] The defendant Timothy presented some credible evidence of extreme emotional distress at the time of the shooting. During the pendency of the appeal of this case this Court held § 641 unconstitutional. Fuentes v. State, Del.Supr., 349 A.2d 1 (1975); Rivera v. State, Del.Supr., 351 A.2d 561 (1976); Eaton v. State, Del.Supr., 363 A.2d 440 (1976). Here, as in those cases, an instruction in accord with § 641 is error which requires reversal of Timothy's murder conviction. Similarly, as in Fuentes and Rivera, justice does not require a new trial, as the thrust of Timothy's argument is that he was denied the opportunity to be convicted of the lesser included offense of manslaughter. Thus, judgment of manslaughter, included within first degree murder under 11 Del.C. § 206(b)(3),[2] and sentence thereon, will resolve this issue in Timothy's favor. *630 With the concurrence of the State, we so hold. The resolution of the extreme emotional distress issue raised by Kenneth rests on different grounds. Although the defense, in opening, indicated that both defendants would raise the issue and had psychiatric examinations performed on both defendants, the record shows: (1) psychiatric testimony was introduced as to Timothy's emotional state at the time of the homicide, but not as to Kenneth's; (2) other evidence (the testimony of the defendants' sister) was introduced to prove Timothy's emotional state at the time of the homicide, but was not offered as relevant to Kenneth's; (3) although evidence that the victim had assaulted Kenneth two months before the homicide was introduced, there was no evidence that this factor was operative at the time of the killing; (4) the defense attorney specifically stated that extreme emotional distress was not being raised by Kenneth;[3] (5) no other evidence indicates that Kenneth was subject to extreme emotional distress at the time of the homicide. We conclude, therefore, that the record contains no credible evidence that the issue of extreme emotional distress was raised by Kenneth, leaving him without right to a jury instruction on that issue; and none was given. Thus, the holding of Fuentes does not apply to Kenneth. But Kenneth also asserts that since his guilt is as an accomplice, he can be convicted of no greater crime than Timothy, the principal. The record shows that Kenneth's defense was based on this erroneous assumption.[4] Several cases are cited by Kenneth in support of this proposition: United States v. Prince, 4th Cir., 430 F.2d 1324 (1970), People v. Allsip, 268 Cal. App. 2d 830, 74 Cal. Rptr. 550 (1969), State v. Hess, 233 Wis. 4, 288 N.W. 275 (1931); but these cases, setting forth the common law rule of accomplice liability, are made inapplicable in Delaware by 11 Del.C. § 272, which "denies a defense in situations in which the old common law, for purely technical raasons, would have been forced to grant an acquittal." Delaware Criminal Code with Commentary, at 50. Section 272 provides in its pertinent part: "In any prosecution for an offense in which the criminal liability of the accused is based upon the conduct of another person pursuant to § 271 of this Criminal Code, it is no defense that: "(1) The other person is not guilty of the offense in question * * * because of other factors precluding the mental state required for the commission of the offense; or "(2) The other person * * * has been convicted of a different offense or in a different degree, *631 * * * * * * * * * * * * Under subsection (1) the fact that Timothy's extreme emotional distress negatives the mental state required for conviction of murder in the first degree does not relieve Kenneth from liability for first degree murder, while under subsection (2) Timothy's conviction of manslaughter does not preclude Kenneth's conviction of murder in the first degree. III The defendants also assert that the Trial Court denied them due process and the right to a fair trial by failing to instruct the jury on the defense of voluntary intoxication 11 Del.C. § 421.[5] We will consider this issue only as it applies to Kenneth, since a resolution of the issue favorable to Timothy could at most reduce his conviction to one for manslaughter, a result already reached by this Court. The record shows that on the evening of the homicide, Kenneth, Timothy, and a third person consumed about one-half of a case of beer among them. There is no evidence that Kenneth consumed more than a proportional amount, that is, four cans. And while there is evidence as to "drinking" by the three persons, there is none which identifies or describes Kenneth as "intoxicated". In our opinion, the general nature of such evidence, even when combined with an inference that Kenneth drank four beers over the course of an evening, does not constitute evidence of intoxication sufficient to require a jury instruction under § 421. There is, as we said, no evidence that Kenneth acted in a manner indicating intoxication. We conclude that on the record Kenneth was without the right to an instruction on the intoxication issue, even assuming voluntary intoxication was a defense at the time, which is an open question.[6] IV The defendants' next contention is that the Trial Court denied them due process and the right to a fair trial by failing to instruct the jury on the defense of justification, 11 Del.C. §§ 461, 464.[7] The record *632 contained no credible evidence that either defendant believed deadly force was necessary to protect himself against death or serious physical injury; therefore, under § 464 and 11 Del.C. § 303(c), neither Timothy nor Kenneth is entitled to a jury instruction on justification. V The defendants' final contention is that the Trial Court denied them due process and the right to a fair trial by instructing the jury to disregard the defense attorney's opening statement that neither of the defendants had been convicted of a misdemeanor.[8] On cross-examination of Kenneth the Attorney General attempted to ask him whether it was true that he had never previously been convicted of a misdemeanor, basing the question on a previous assault conviction of Kenneth. An objection to the question was sustained, but the Trial Judge, in order to rectify the incorrect impression created by the defense attorney, and without objection from the defense, instructed the jury to disregard the comments. We find no error in so doing. * * * Reversed and remanded as to Timothy Pendry with directions to strike the judgment of conviction of murder in the first degree and sentence thereon, and to enter a judgment of conviction of manslaughter and to impose an appropriate sentence therefor. Judgment of conviction of possession of a deadly weapon during the commission of a felony affirmed as to Timothy Pendry. Judgment of conviction of murder in the first degree affirmed as to Kenneth Pendry. NOTES [1] 11 Del.C. § 641 provided: "The fact that the accused intentionally caused the death of another person under the influence of extreme emotional distress is a mitigating circumstance, reducing the crime of murder in the first degree as defined by § 636 of this Criminal Code to the crime of manslaughter as defined by § 632 of this Criminal Code. The fact that the accused acted under the influence of extreme emotional distress must be proved by him by a preponderance of the evidence. The accused must further prove by a preponderance of the evidence that there is a reasonable explanation or excuse for the existence of the extreme emotional distress. The reasonableness of the explanation or excuse shall be determined from the viewpoint of a reasonable person in the accused's situation under the circumstances as he believed them to be." [2] 11 Del.C. § 206(b)(3) provides: "(b) A defendant may be convicted of an offense included in an offense charged in the indictment or information. An offense is so included when: * * * * * "(3) It involves the same result but differs from the offense charged only in the respect that a less serious injury or risk of injury to the same person, property, or public interest or a lesser kind of culpability suffices to establish its commission." [3] Mr. Green [Trial Attorney for defendants]: "The point is that there has been no notice that they are relaying the defense of emotional distress, and to go into any evaluation of the medical testimony of Kenny would be totally irrelevant to the issue. The issue we are talking about, we are talking about, we are talking about whether Timmy was under emotional distress." (sic). * * * * * The Court: "Yes, but you are not using the severe emotional distress as an affirmative defense for Kenneth?" Mr. Green: "Absolutely. That is true." [4] The Court: "You are indicating now that that will not be a defense?" Mr. Green: "For Kenny?" The Court: "Yes, as an affirmative defense for Kenny." Mr. Green: "Right. Not that Kenny personally was — he is charged as an accomplice, so he would be an accomplice to whatever Timmy is guilty of...." [5] 11 Del.C. § 421, as set forth in the Bound Volume, provides: "The fact that a criminal act was committed while the person committing such act was in a state of intoxication, or was committed because of such intoxication, is no defense to any criminal charge if the intoxication was voluntary." 11 Del.C. § 421, as set forth in the 1975 Cumulative Supplement, provides: "(a) Except as provided in subsection (b) of this section, voluntary intoxication is an affirmative defense in a prosecution for a criminal offense only if it negatives the element of intentional or intentionally." [6] We note a recent enactment of the State Legislature making it clear that voluntary intoxication is no longer a defense. The Legislature enacted House Bill No. 831, signed by the Governor on August 3, 1976, which provides: Section 1. Amend § 421, Chapter 4, Part 1, Title 11 of the Delaware Code by striking said section in its entirety, and substituting in lieu thereof the following: "§ 421. Voluntary Intoxication The fact that a criminal act was committed while the person committing such act was in a state of intoxication, or was committed because of such intoxication, is no defense to any criminal charge if the intoxication was voluntary." [7] 11 Del.C. § 461 provides: "In any prosecution for an offense, justification, as defined in §§ 462 through 470, is a defense." * * * * * 11 Del.C. § 464 provides: "(c) The use of deadly force is justifiable under this section if the defendant believes that such force is necessary to protect himself against death, serious physical injury, kidnapping or sexual intercourse compelled by force or threat." * * * * * [8] In his opening argument the defense attorney stated, concerning the appellants, "Never before either of them having been convicted in a criminal court for a felony or a misdemeanor; arrested for traffic violations, that is their prior experience."

2013-10-30 06:32:42.383722+00

Cashin

152 F. Supp. 535 (1957) John R. BROOKS, Plaintiff, v. The UNITED STATES of America, Defendant. United States District Court S. D. New York. June 20, 1957. *536 John R. Brooks, in pro. per. Paul W. Williams, U. S. Atty., Edwin J. Wesely, Asst. U. S. Atty., New York City, for defendant. CASHIN, District Judge. This is a motion by the Government— (1) for judgment under either Rule 12(b) or Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A. on the grounds of (a) Lack of jurisdiction over the subject matter; or (b) Failure to state a claim upon which relief can be granted; or in the alternative (2) For an order for a more definite statement of the claim under Rule 12(e) of the Federal Rules of Civil Procedure. There is apparently a rather long history of litigation between plaintiff, always appearing pro se, and the Pennsylvania Railroad, wherein plaintiff sought recovery for goods shipped on the defendant railroad, and lost en route.[1] Plaintiff was uniformly unsuccessful. According to the present complaint, plaintiff wrote letters to incumbent United States Attorneys for the Southern District of New York on January 27, 1955 and April 3, 1956, charging the Pennsylvania Railroad and an attorney in the firm representing the railroad in a civil suit brought in this District with "perjury, documentary falsification, blackmail and swindling". The basis of plaintiff's charge is that the attorney, in a covering letter returning briefs served by plaintiff purportedly in reference to a pending appeal before the Supreme Court, denied that there was such an appeal pending and referred to his belief that plaintiff's amended complaint in that action had been dismissed. Because no action was taken by the United *537 States Attorney for the Southern District of New York to prosecute the attorney or the railroad, plaintiff now states that "* * * the United States of America has fallen down on its constitutional government, and has been guilty of Totalitarian practices, and has thereby inflicted upon the plaintiff damage and injury in the sum of One Million ($1,000,000) dollars". I am not unaware of the teaching of Dioguardi v. Durning[2] to the effect that a complaint inartistically drawn by a layman must be closely scrutinized to determine if some claim can be found therein. However, the closest scrutiny of the present complaint fails to reveal any such claim. It is axiomatic that no claim against the United States is cognizable unless the Congress has authorized it.[3] The only statute which can be thought to resemble even remotely such an authorization is the Federal Tort Claims Act.[4] The relief granted by this Statute is not available to plaintiff, however, on two grounds. First, because the statute imposes on the United States only a vicarious liability,[5] and, second, because the statute specifically excepts from its operation any acts taken in the exercise of discretion even if the discretion be abused.[6] Were the particular United States attorneys concerning whose nonfeasance the plaintiff complains, sued individually, it would be a complete defense to them that their non-feasance resulted from decisions made in the exercise of their official duties,[7] and this would be true even if a malicious intent were ascribed to the United States attorneys.[8] Since no liability can attach to the Government agents for the acts complained of, none can attach to the United States under the doctrine of respondeat superior. Even if personal liability could be attached to the United States attorney individually, nevertheless plaintiff would be barred in the present suit because of the express exception contained in 28 U.S.C.A. § 2680(a) concerning discretionary acts. While rather abstruse questions might arise as to what precise decision of a Government agent should be considered discretionary,[9] there can be no doubt that a decision to prosecute or not to prosecute criminally is a discretionary function.[10] The motion to dismiss the complaint for failure to state a claim upon which relief can be granted, is granted. Settle order. NOTES [1] The reported Opinions are, D.C.S.D.N.Y. 1950, 91 F. Supp. 101, affirmed, 2 Cir., 1951, 187 F.2d 869 and, 5 Cir., 1949, 178 F.2d 602. [2] 2 Cir., 1944, 139 F.2d 774. [3] Feres v. United States, 340 U.S. 135, 71 S. Ct. 153, 95 L. Ed. 152; United States v. Shaw, 309 U.S. 495, 60 S. Ct. 659, 84 L. Ed. 888. [4] 28 U.S.C.A. § 1346(b) and § 2671 et seq. [5] 28 U.S.C.A. § 1346(b); United States v. Campbell, 5 Cir., 1949, 172 F.2d 500. [6] 28 U.S.C.A. § 2680(a). [7] Gregoire v. Biddle, 2 Cir., 1949, 177 F.2d 579, certiorari denied 339 U.S. 949, 70 S. Ct. 803, 94 L. Ed. 1363; Cooper v. O'Connor, 1938, 69 App.D.C. 100, 99 F.2d 135, 118 A.L.R. 1440, certiorari denied 305 U.S. 643, 59 S. Ct. 146, 83 L. Ed. 414. [8] Yaselli v. Goff, 2 Cir., 1926, 12 F.2d 396, 56 A.L.R. 239, affirming D.C.S.D.N.Y. 1925, 8 F.2d 161. [9] See Dalehite v. United States, 346 U.S. 15, 73 S. Ct. 956, 97 L. Ed. 1427. [10] See Cooper v. O'Connor, supra.

2013-10-30 06:32:42.394445+00

Taylor

367 A.2d 651 (1976) Harry TOY, Plaintiff, v. Robert CHERICO, Defendant. Superior Court of Delaware, New Castle. Submitted December 10, 1976. Decided December 17, 1976. Stephen B. Potter, Wilmington, for plaintiff. Francis J. Trzuskowski, of Trzuskowski & Kipp, Wilmington, for defendant. TAYLOR, Judge. The issue here is whether a person other than a parent who has paid support for a minor child may bring an action in this Court against the father for support that has been expended. Defendant contends that the action should be brought in Family Court, and in support of that contention cites Wilderman v. Wilderman, Del. Super., 330 A.2d 149 (1974) and Quarles v. Brewer, Del.Super., Civil Action No. 390, 1975 (Sussex County), Opinion January 7, 1976, Bush, J. In Wilderman, this Court held that the liability of a defendant in a suit for reimbursement for monies paid for support of a minor child must be founded upon the duty of the defendant to support the minor child. After reviewing the applicable statutory provisions and decisions relating thereto, the Court concluded that such an action must be considered to be one for the support of a child within the meaning of 10 Del.C. § 921(3). Jurisdiction to try cases involving support is vested exclusively in the Family Court. 10 Del.C. §§ 921 and 925. Wife, P. v. Husband, P., Del. Ch., 287 A.2d 409 (1972). Plaintiff relies heavily on Stat v. Porter, Del.Supr., 314 A.2d 172 (1973) in which the Supreme Court held that compliance with 13 Del.C. § 502 and § 702 was not a prerequisite or bar to an action by a stepfather for reimbursement for child *652 support from the father of a minor child. Nothing in the Per Curiam Opinion in Stat indicates that the Supreme Court was addressing itself to the question of whether, considered in the light of the applicable Family Court statutory provisions, the Superior Court had jurisdiction to entertain that suit. It should be noted that the provisions of the Family Court Act which are under consideration here and were under consideration in Wilderman were adopted in June 1971, 58 Delaware Laws, Chapter 114, effective 90 days after adoption. It was decided by the Court of Chancery in August 1972 that by virtue of the 1971 Act the Court of Chancery no longer has jurisdiction over matters involving support of minor children. Wife, S. v. Husband, S., Del.Ch., 295 A.2d 768 (1972). It appears that the initial suit in Stat was brought in the Court of Chancery and that action was dismissed by the Court of Chancery on the ground that there was an adequate remedy at law. Suit was filed in this Court and it was dismissed on the ground that the proper remedy was to pursue 13 Del.C. § 502, which provided a remedy under the criminal process. Upon appeal, the Supreme Court held that resort to the criminal remedy under 13 Del.C. § 502 is neither a prerequisite nor a bar to civil action for reimbursement for support paid for a minor. Nothing in its Per Curiam Opinion indicates that the Supreme Court gave any consideration to the question of whether the matter should properly have been in the Family Court or in this Court. Finally, the date of filing of the Stat complaint in this Court precludes the possibility that Stat could have involved consideration of the exclusivity of the present 10 Del.C. § 921(3). The Stat complaint was filed in this Court June 17, 1971. Chapter 114, 58 Del.Laws, which adopted the present 10 Del.C. § 921(3) giving Family Court exclusive jurisdiction over support matters, became effective September 7, 1971. Hence, Stat was governed by prior law under which the totality of jurisdiction over support matters, including exercise of remedies which could have been exercised in other Courts, was vested in the Family Court. Wife, P. v. Husband, P., supra. This Court held in Wilderman and Quarles that jurisdiction for reimbursement for support payments lies in the Family Court. The exclusive jurisdiction relating to support of minors is vested in the Family Court. 10 Del.C. § 921(3). Since the asserted right of reimbursement must be founded upon payments by plaintiff which performed a duty of defendant to support the child, this proceeding must involve matters which are traditionally considerations in support proceedings in the Family Court, namely, the existence of defendant's duty to support, his ability to support and the amount of support for which he should be held liable. 69 A.L.R. 2d 203, 229. In view of the volume of support proceedings in the Family Court and the decisional standards which develop from that volume of cases, practical considerations support the wisdom of disposition in the Family Court of all cases in which support is an issue. This consideration undoubtedly entered into the adoption of the present law which provided that support matters be heard exclusively in the Family Court. No statutory basis nor valid reason has been presented in support of the proposition that Family Court jurisdiction over child support should be confined to parental liability for future support payments while jurisdiction over a claim involving parental liability for past child support expenditures must exist elsewhere. Plaintiff argues that Wilderman is not applicable because it involved a claim by a mother while this case involves a claim by a stranger. On the other hand, both Wilderman and this case seek to found a claim upon the duty of the father to support his minor child. It is that duty which is common to all claims of this sort if recovery is to be justified. No case has been cited for the proposition that the right of a stranger to *653 be reimbursed by the father for support of his minor child — assuming it exists — differs from the right of a mother to such reimbursement. Stat states that intention is the determinant which a plaintiff must meet in a claim for reimbursement (assuming legal responsibility of defendant for support of the minor). Whatever difference in qualification may exist between a mother and a stranger claiming reimbursement, it does not rise to such significance as to affect jurisdiction. I conclude that the family relationship (or absence thereof) of the claimant to the minor child does not control jurisdiction to hear a suit for reimbursement for support payments in the face of legislative investiture of exclusive jurisdiction in Family Court. I conclude that this proceeding should properly be tried in Family Court. IT IS ORDERED that the motion to dismiss is granted, subject to plaintiff's right to transfer the claim to the Family Court under 10 Del.C. § 1901.

2013-10-30 06:32:42.405857+00

Fones

535 S.W.2d 334 (1976) Patricia Elaine HARVEY, Petitioner, v. Jerry BIRCHFIELD, Respondent. Supreme Court of Tennessee. March 29, 1976. Charles B. Dungan, Jr., Meares & Dungan, Maryville, for petitioner. D.K. Thomas, Maryville, for respondent. OPINION FONES, Chief Justice. This case arises under the uninsured motorist provision of T.C.A. § 56-1153. The issue presented is whether an insurer served with process pursuant to said code section is required to raise the defense of lack of insurance coverage in the tort action and upon failure to do so is bound by the judgment, or whether the plaintiff can only obtain judgment against the uninsured motorist in the tort action and must bring a *335 second lawsuit against the insurer wherein the insured is permitted to litigate the issue of coverage. We hold that the insurer must raise the defense of absence of coverage under the insurance policy in the tort action or be estopped from later relying on it as a defense. On November 13, 1972, Patricia Harvey was riding as a passenger in her automobile being driven by one Larry Wilson. The Harvey automobile was struck by an automobile driven by Jerry Birchfield, an uninsured motorist. Petitioner filed suit against Jerry Birchfield on December 20, 1972, for damages arising out of that collision, and pursuant to T.C.A. § 56-1153, caused a summons to be issued against respondent, State Farm Mutual Insurance Company, as the uninsured motorist carrier. Neither Birchfield nor respondent filed an answer within the thirty (30) days after service of summons, and a default judgment was entered against both parties on February 13, 1973. Respondent's claim superintendent did notify petitioner's attorney by letter dated January 23, 1973, that respondent would not defend petitioner's claim against Birchfield: "It is our position that the uninsured motorist coverage carried by our named insured, Truman Wilson, under which is son, Larry Wilson, would have protection, would not provide any benefits to Patricia Harvey under the uninsured motorist provisions." On May 7, 1973, the trial court, sitting without a jury, found damages for plaintiff in the amount of nine thousand ($9,000) dollars personal injury and one thousand five hundred ($1,500) dollars property damage. This judgment was entered on May 8, 1973. Respondent filed a motion to set aside judgment on August 14, 1973, which was overruled by the trial court on May 7, 1974. The Court of Appeals reversed the trial court, holding that in the tort action, the insurer is bound by the judgment only as to the liability of the uninsured motorist; that the insurer may raise the issue of coverage either in the tort action or at a later date. The applicable code section is T.C.A. § 56-1153, which reads in part: 56-1153. Service upon the insurance carrier — Arbitration not required. — Any insured intending to rely on the coverage required by §§ 56-1148 — 56-1153 shall, if any action is instituted against the owner and operator of an uninsured motor vehicle, serve a copy of the process upon the insurance company issuing the policy in the manner prescribed by law, as though such insurance company were a party defendant; such company shall thereafter have the right to file pleadings and take other action allowable by law in the name of the owner and operator of the uninsured motor vehicle or in its own name; provided, however, that nothing in this paragraph shall prevent such owner or operator from employing counsel of his own choice; provided, further, that the evidence of service upon the insurance carrier shall not be made a part of the record. ..... Three Tennessee cases have construed this section. In the first, Glover v. Tennessee Farmers Mutual Insurance Company, 225 Tenn. 306, 468 S.W.2d 727 (1971), the insured brought an action directly against the insurer. The Court held this was not authorized by the statute, and in response to the insurer's argument that any other construction would require that two lawsuits be maintained, said: "This interpretation of the act will not, as the Glovers argue, require a suit against the insurance company after recovery of a judgment against the uninsured motorist. It is clear that when the requirement of § 56-1153, with respect to affording the insurance carrier the right to defend the uninsured motorist is complied with, the insurance carrier is bound by the judgment. The whole intent and purpose of the uninsured motorist act, is, in essence, to provide protection by making the insurance carrier stand as the insurer of the uninsured motorist, with *336 two necessary consequences. (1) The suit has to be brought against the uninsured motorist, with the fact of insurance excluded as a possible prejudicing factor, as in any other such case; and (2) the insurance company is bound by the judgment rendered in that suit, to the extent of its policy limits, where it is afforded the statutory opportunity to defend the uninsured motorist." (citations omitted) 468 S.W.2d at 730. The Glover case held that the act does not require a suit against the insurance company after recovery of a judgment against the uninsured motorist and that the insurance company is bound by the judgment to the extent of its policy limits. No distinction was made between being bound as to coverage or as to liability. The insurance carrier in Thearp v. Travelers Indemnity Company, 504 S.W.2d 763 (Tenn. App. 1972), maintained that no coverage was provided by either of two policies issued by it, pursuant to which the plaintiff's might claim, and made a motion for severance in order to litigate the coverage issue separately. This motion was denied, and the Court of Appeals held the motion for severance should have been granted so that the presence of insurance coverage would not be brought before the jury. The Court then looked to the effect of the Glover decision: "Since we construe the opinion of the Supreme Court in the Glover case to hold that Travelers would have been bound to the extent of its coverage by the judgments in favor of the plaintiffs in the tort cases against Green, we hold that Travelers, after being regularly served with process, became legally a party defendant in the tort cases though not so designated by name. Section 56-1153 provides that the evidence of service of process shall not be made a part of the record. We interpret this provision of the statute to mean that process should not be part of the record for the consideration of the jury trying the tort cases. Our opinion is fortified by the fact that Section 56-1153 expressly provides `. . such company shall thereafter have the right to file pleadings and take other action allowable by law in the name of the owner and operator of the uninsured motor vehicle or in its own name . .' We hold that Travelers had a right under the statute to file a plea in abatement or other pleadings necessary to present the question whether or not Travelers did, in fact, have uninsured motorist coverage in the tort cases then before the Circuit Court. It is our opinion the Travelers would have been estopped to deny coverage after the judgments became final if it had not made application to the Trial Judge for permission to litigate its coverage in tort cases." 504 S.W.2d at 766, 767. In McCall v. Maryland Casualty Company, 516 S.W.2d 353 (Tenn. 1974), the appellants were unable to obtain service of process upon the uninsured motorist, and alleged that because the insurance carrier had been served with process, it was under an obligation to appear and defend on behalf of the uninsured motorist. This Court rejected that contention and summarized, but in no way limited, the holding of Thearp: "The statutes in question do provide for service of process upon the insurance carrier affording coverage for uninsured vehicles. It was held by the Court of Appeals in the case of Thearp v. Travelers Indemnity Co., 504 S.W.2d 763 (Tenn. App., W.S. 1972), that insurance carriers served with process under the provisions of T.C.A. § 56-1153 became legally parties defendant in a tort action. The Court in that case held that the insurance carriers were entitled to raise questions of coverage by appropriate pleadings in the tort cases, and that if they were erroneously denied this right, they could later raise such questions when sued upon judgments rendered against the uninsured motorist. Nothing in either the Glover case or the Thearp case, supra, indicates that insurance *337 carriers, served with process under T.C.A. § 56-1153, have any duty or obligation to defend the action on behalf of the uninsured motorist. They are given that right, but there is no duty on their part to do so, nor is service of process upon the uninsured motorist dispensed with by the statutory provisions."[*] 516 S.W.2d at 354, 355. The quoted language in McCall merely points out that the statute does not make it mandatory that the insurance carrier defend the uninsured motorist; it may do so in its discretion. If, however, the carrier chooses not to defend, it is bound by the judgment. Glover and Thearp make that clear. We hold that respondent had sufficient notice that it would be bound by the judgment in the trial court as to any additional defenses that it might assert. The decision in Thearp v. Travelers Indemnity Company, supra, was released five (5) months before respondent received service of process from the Commissioner of Insurance. Glover v. Tennessee Farmers Mutual Insurance Co., supra, had been decided approximately one and one-half years prior to the service of process. Additionally, the summons itself required respondent to answer the complaint within thirty (30) days, or "[i]f you fail to do so, judgment by default will be taken against you for the relief demanded in the complaint." Our holding today that an insurance carrier served with process under T.C.A. § 56-1153 must assert any defenses in the trial court that it might have, or be estopped from later raising them comports with equitable principles. See Staunton v. Clark, 56 Tenn. 669 (1872); Evans v. International Trust Co., 59 S.W. 373 (Tenn.Ch.App. 1900). The proper procedure in the instant case would have been for the respondent to have filed a motion or an answer denying coverage under the uninsured motorist provision of the policy, and a motion for severance to try the issues separately. Having sustained petitioner's first assignment of error, we pretermit the second assignment asserting that respondent's motion for relief under Rule 60 T.R.C.P. was untenable. The judgment of the Court of Appeals is reversed and that of the trial court is reinstated. Costs are adjudged against respondent, State Farm Mutual Insurance Company. COOPER, HENRY, BROCK and HARBISON, JJ., concur. NOTES [*] This was amended by Acts 1975, ch. 164 § 1. That Act provides that when service of process on an uninsured motorist is returned unserved, "... the service of process against the uninsured motorist carrier, pursuant to this section, shall be sufficient for the court to require the said insurer to proceed as if it is the only defendant in such case." T.C.A. § 56-1153.

2013-10-30 06:32:42.420443+00

Madden

152 F. Supp. 78 (1957) George T. GOGGIN, Trustee in Bankruptcy in the Matter of Eugene C. Brisbane, Bankrupt, and Brisbane & Company, A Limited Partnership, Bankrupt, v. The UNITED STATES. No. 49224. United States Court of Claims. May 8, 1957. I. H. Wachtel, New York City, for plaintiff. Francis X. Daly, Washington, D. C., with whom was Acting Asst. Atty. Gen. *79 Geo. S. Leonard, for defendant. Francis J. Robinson, Arlington, Va., was on the brief. Before JONES, Chief Judge, and LITTLETON, WHITAKER, MADDEN and LARAMORE, Judges. MADDEN, Judge.[1] The plaintiff sues as the trustee in bankruptcy of Brisbane & Company, a limited partnership. The subject of the suit is certain termination claims arising out of a contract which Brisbane & Company, hereinafter called Brisbane, had with the United States Maritime Commission, for the manufacture of 16 shipsets of pontoon hatch covers. The contract was terminated, before completion, for the convenience of the Government. The Government in its answer alleges that Brisbane in its termination claims fraudulently included as alleged costs incurred in the performance of the contract items which had no relation to the contract. It says that because of this fraud, the claims are forfeited, pursuant to 28 U.S.C. § 2514, the general statute forfeiting claims against the United States where fraud is practiced or attempted in their proof, statement, establishment or allowance, and pursuant to 41 U.S.C.A. § 119, which is Section 19 of the Contract Settlement Act of 1944 and provides for certain forfeitures for fraud in connection with the termination or settlement of contracts. The Government's answer also includes counterclaims demanding judgment for $2,000 for each fraudulent representation contained in the claims, and for an amount equal to 25 percent of the amount sought to be obtained by the false claims. The counterclaims are also based upon the provisions of 41 U.S.C.A. § 119. The plaintiff has moved for a summary judgment striking the Government's defense of forfeiture, and dismissing the Government's counterclaims. We consider first the question of the asserted forfeitures. The forfeiture provision of the Contract Settlement Act, 41 U.S.C.A. § 119 is not applicable. It says that one who practices fraud "shall forfeit and refund any such benefit, payment, compensation, allowance, loan, advance and emolument received as a result thereof * * *." Brisbane received nothing as a result of the alleged fraud. The plaintiff says that the general forfeiture statute, 28 U.S.C. § 2514, should not be applied because this suit is not a suit by the perpetrator of the fraud, but is a suit by a trustee in bankruptcy, for the benefit of the bankrupt's creditors. He suggests that the case is analogous to our case of Arlington Trust Co. v. United States, 100 F. Supp. 817, 121 Ct. Cl. 32, where we held that the claim of an assignee under the Assignment of Claims Act, 31 U.S.C.A. § 203 would not be forfeited. There is some equity in the plaintiff's argument. It is a misfortune for the creditors to be deprived of a valuable asset because the bankrupt attempted to defraud the Government. But this court in Jerman v. United States, 96 Ct. Cl. 540, held that the forfeiture statute applied against a receiver, appointed by a state court to conserve and liquidate the assets of an insolvent. The court said that the statute would also apply against a trustee in bankruptcy, and we think it must. He is not a purchaser for value. His rights are derivative, and are not superior to those of the bankrupt. In connection with the problem of the general forfeiture statute, 28 U.S.C. § 2514, there is an interesting variation from the normal in this case. When the Government terminated the contract, for its convenience, Brisbane had on hand raw material, work in process and jigs *80 which, the plaintiff says, had cost it some $32,000. Under the contract, it was obliged to turn these things over to the Government, if the Government demanded them. Normally, when the Government does so demand, the contractor's termination claim is increased by the amount of their cost, or by the amount which they would have been worth to the contractor if he had been allowed to keep them. The plaintiff says that at the time the Government demanded the turning over of these things from Brisbane, it already knew it was going to forfeit the termination claim for fraud, or at least knew the facts upon which it now bases the forfeiture. The plaintiff says the Government should be barred by the doctrines of estoppel and waiver from asserting a forfeiture of the value of goods which, when it took them, purportedly under a contract which would require it to pay for them, it knew or should have known that it would never pay for them. We are inclined to agree with the plaintiff, and will consider this question further when the evidence is in. With this qualification, we hold that the general forfeiture provision of 28 U.S.C. § 2514 will be applicable if fraud is proved. As to the Government's counterclaims for the $2,000 payments for each fraudulent act, and the payment of 25 percent of the amount fraudulently claimed as provided for in section 19 of the Contract Settlement Act, the plaintiff points to 28 U.S.C. § 2462 as a statute of limitation barring the assertion by the Government of such claims more than five years from the date when the claim first accrued. The Government filed its counterclaims on March 9, 1955, alleging that the plaintiff's bankrupt filed fraudulent termination claims on November 14, 1945, which date is more than five years before the filing of the counterclaim. Section 2462 of 28 U.S.C. provides that "Except as otherwise provided by an Act of Congress, an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued * * *." It is the position of the Government that the counterclaims herein asserted are not barred by 28 U.S.C. § 2462 because they do not provide for the enforcement of a civil penalty but are for the recovery of liquidated damages. It cites Rex Trailer Company, Inc. v. United States, 350 U.S. 148, 76 S. Ct. 219, 100 L. Ed. 149, and United States v. Weaver, 5 Cir., 207 F.2d 796. In plaintiff's motion for rehearing and reconsideration he contends that if we accept the Government's position that the claims under section 19 are for liquidated damages then such claims are provable and allowable in Bankruptcy Court and must be filed in the time and manner prescribed in the Bankruptcy Act, 11 U.S.C.A. § 93, sub. n. This section states in part: "* * * Claims which are not filed within six months after the first date set for the first meeting of creditors shall not be allowed: * *" Plaintiff says that since the Government did not file its Contract Settlement Act claim in the bankruptcy proceedings within the six month period required by the above quoted excerpt from the Bankruptcy Act, it may not now assert it as a counterclaim because 11 U.S.C.A. § 108, sub. b provides: "* * * A set-off or counterclaim shall not be allowed in favor of any debtor of the bankrupt which (1) is not provable against the estate and allowable under subdivision (g) of section 93 of this title; * * *" The Government admits that at the time it filed its counterclaims to plaintiff's suit in this court the claims were no longer provable in bankruptcy proceedings by reason of the time limitation of 11 U.S.C.A. § 93, sub. n, but contends that 11 U.S.C.A. § 108 has application to bankruptcy proceedings only and not to plenary actions brought by the trustee in another court. This presents a very *81 interesting problem with respect to the interpretation and application of the bankruptcy laws, but one we need not now decide in view of recent decisions of this court. This court in Erie Basin Metal Products v. United States, Ct.Cl., 150 F. Supp. 561, had occasion to determine the applicability of 28 U.S.C. § 2462 to counterclaims pursuant to section 19 of the Contract Settlement Act. In Erie Basin the court rejected the Government's contention that recoveries under section 19 were in the nature of liquidated damages and held that they were civil penalties subject to the limitation imposed by 28 U.S.C. § 2462.[2] It further held that 28 U.S.C. § 2462 is not only a time limitation upon the bringing of suit, but makes the bringing of the suit within the specified time a condition precedent to the right to sue. Therefore the statute is never tolled by a plaintiff's filing his suit in this court even though the counterclaim is based upon the same transaction. See Canned Foods, Inc. v. United States, Ct.Cl., 146 F. Supp. 470. Plaintiff's motion for rehearing and reconsideration is granted to the extent that under the authority of Erie Basin, supra, plaintiff is entitled to summary judgment dismissing defendant's counterclaims under section 19 of the Contract Settlement Act, since the date upon which the Government's claims first accrued is more than five years from the filing of the counterclaim herein. Plaintiff's motion for rehearing is denied to the extent that it requests the striking of defendant's affirmative defense of forfeiture under 28 U.S.C.A. § 2514. The opinion and dissenting opinion of May 1, 1956, are vacated and this opinion is substituted in their place. It is so ordered. JONES, Chief Judge, and LARAMORE, WHITAKER and LITTLETON, Judges, concur. NOTES [1] On May 1, 1956, 140 F. Supp. 557, the court rendered an opinion denying plaintiff's motion for summary judgment dismissing defendant's counterclaims and striking affirmative defenses. On May 31, 1956, plaintiff filed a motion for rehearing and reconsideration and the case is now before the court pursuant to that motion. [2] For the views of the writer of this opinion upon this question, see his dissenting opinion in Erie Basin, supra.