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    UNITED STATES of America, Plaintiff-Appellee, v. SECOND NATIONAL BANK OF NORTH MIAMI, Defendant-Appellant.
    No. 73-2586.
    United States Court of Appeals, Fifth Circuit.
    Oct. 4, 1974.
    Rehearing Denied Oct. 31, 1974.

      Sheldon Rosenberg, North „ Miami, Fla., for defendant-appellant.
    Robert W. Rust, U. S. Atty., Melvyn L. Ames, Asst. U. S. Atty., Miami, Fla., Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Tax Div., Dept, of Justice, Robert E. Noel, Atty., Tax Div., Internal Revenue Service, Bennet N. Hollander, Arthur L. Bailey, Tax Div., Dept, of Justice, Washington, D. C., for plaintiff-appellee.
    Before WISDOM and GOLDBERG, Circuit Judges, and LYNNE, District Judge.
   GOLDBERG, Circuit Judge:

A little-known weapon in the government’s tax collection arsenal has turned a bank employee’s mistake into a banker’s nightmare. Originally financial go-between for a harried general contractor and a financially-troubled subcontractor, the Second National Bank of North Miami now finds itself caught between the relentless federal tax collector and a resourceful taxpayer. The hapless bank appeals an adverse judgment which has left it holding the bag of someone else’s tax liability. We affirm.

I. FACTS

The skeletal framework of this controversy is undisputed although several important factual details remain bones of contention. In the fall of 1970 Medallion Electric Company, Inc. [Medallion], an electrical subcontractor working for The Hannon Company [Hannon] on the construction of the Midway Mall Shopping Center in Dade County, Florida, began having difficulties meeting its payroll and setting aside sufficient amounts to pay withholding taxes due the United States. After a series of payroll checks drawn on defendant-appellant Second National Bank [bank] were returned unpaid due to insufficient funds, the business agent of Medallion’s employees’ union, acting pursuant to the contract with Medallion, refused to accept further payroll payments except in the form of cash, cashiers’ checks, or the equivalent. To meet the union’s demand and to prevent fui'ther interruptions in the progress of the construction, Medallion and Hannon arranged a net payroll financing operation with appellant bank as financial intermediary.

Under the arrangement Hannon would draw a check in the amount of the net payroll on its account at City National Bank to the joint order of appellant bank and Medallion, and would deposit this check in Medallion’s payroll account at appellant bank, where Medallion also maintained a general account. With these funds Medallion would purchase 190 individual money orders signed and issued by appellant. Working from a payroll schedule furnished by Medallion, appellant would prepare each money order with the payee blank but in the exact amount of an employee’s net weekly wages. Medallion would then fill in the name of the employee-payee. No withholding tax was set aside.

The bank issued the first set of 190 money orders on or about October 5, 1970. Because an influential bank customer had guaranteed Hannon’s check, appellant bank issued the money orders on uncollected funds, that is, before Hannon’s check had cleared City National Bank. Medallion received the money orders, filled in the names of the employees, and met the payroll. Subsequently Hannon’s check cleared and was paid by City National Bank.

Sometime before appellant was to issue the second series of money orders, employees of the Internal Revenue Service met with Medallion representatives, including Leonard Gutkin, president of Medallion, and Alphonse Schwitalla, Medallion’s attorney, regarding Medallion’s withholding taxes for the third quarter of 1970. Although who said what to whom and in what tone of voice is a matter of some dispute, it is clear that Medallion agreed to turn the second set of money orders over to the IRS for application against existing tax liability.

On October 14 Hannon’s second check, in the amount of $83,000, was delivered to appellant and credited to Medallion’s payroll account. Since no one had guaranteed payment of this check, appellant’s president, Alfred Slobusky, did not, as he had done the first week, approve the issuance of the money orders on uncollected funds. Unfortunately, after telephoning City National Bank to verify that Hannon had sufficient funds on deposit to cover the check, appellant’s assistant cashier followed the previous week’s procedure and issued the 190 money orders in the total face amount of $92,355.86. Medallion then delivered the money orders to the IRS, which inserted in each payee blank the words “to the order of the Internal Revenue Service, Room 426, 51 S.W. 1st Avenue, Miami, Florida, 33130.”

On learning from Medallion’s employees that they had not been paid, Hannon stopped payment on the $83,000 check, which had not yet cleared City National Bank. In its turn appellant stopped payment on the money orders, and immediately informed the Collection Division of the IRS of its reasons for the action. On October 27 the money orders were presented for payment and returned unpaid. In the meantime, Hannon paid the regular net wages to Medallion’s employees, as well as an additional $10,000 in penalty payments due under Medallion’s union contract for late payment of wages. Thereafter Hannon sued appellant in state court to recover the penalty payments, and won a $10,000 judgment, which appellant has paid.

The United States filed suit in the United States District Court to reduce its claim on the money orders to judgment and to foreclose a statutory lien on appellant’s assets, asserted pursuant to 26 U.S.C. § 6311(b)(2). The bank de-ied liability on the money orders, and in addition filed a counterclaim under the Federal Tort Claims Act, 28 U.S.C. § 1346(b), to recover the amount of the judgment paid by the bank in Hannon’s state courts suit. Following a bench trial the district court held that the United States is a holder in due course of the money orders; that the bank is liable to the United States in the amount of $92,355.86, the face amount of the money orders, plus interest; that a lien exists in favor of the United States on all bank assets to secure payment of the judgment; and that the counterclaim is meritless. The bank raises four issues on appeal, which we treat seriatim.

II. APPLICABILITY OF SECTION 6311

Appellant’s first line of attack focuses on the statutory underpinnings of the judgment below. Section 6311 in its entirety provides:

Payment by check or money order
(a) Authority to receive. — It shall be lawful for the Secretary or his delegate to receive for internal revenue taxes, or in payment for internal revenue stamps, checks or money orders, to the extent and under the conditions provided in regulations prescribed by the Secretary or his delegate.
(b) Check or money order unpaid.—
(1) Ultimate liability. — If a check or money order so received is not duly paid, the person by whom such check or money order has been tendered shall remain liable for the payment of the tax or for the stamps, and for all legal penalties and additions, to the same extent as if such check or money order had not been tendered.
(2) Liability of banks and others. —If any certified, treasurer’s, or cashier’s check or any money order so received is not duly paid, the United States shall, in addition to its right to exact payment from the party originally indebted therefor, have a lien for the amount of such check upon all the assets of the bank or trust company on which drawn or for the amount of such money order upon all the assets of the issuer thereof; and such amount shall be paid out of such assets in preference to any other claims whatsoever against such bank or issuer except the necessary costs and expenses of administration and the reimbursement of the United States for the amount expended in the redemption of the circulating notes of such bank.

Appellant asseverates that the statutory lien provision applies only when (a) money orders or other negotiable instruments have been drawn explicitly in payment for taxes and (b) the bank has received sufficient funds to cover the instruments and (c) the bank has either failed or closed due to a bank holiday of the sort common during the 1930’s. Since none of these conditions existed in the case at bar, bank argues, the district court should have refused to impose a lien on the bank’s assets in favor of the United States. We disagree.

Our review of appellant’s applicability argument must begin with the principle that our duty “is to give effect to the intent of Congress, and in doing so our first reference is . to the literal meaning of the words employed.” Flora v. United States, 1958, 357 U.S. 63, 65, 78 S.Ct. 1079, 1081, 2 L.Ed.2d 1165, 1167. “Often these words are sufficient in and of themselves to determine the purpose of the legislation. In such cases we have followed their plain meaning.” Perry v. Commerce Loan Co., 1966, 383 U.S. 392, 400, 86 S.Ct. 852, 857, 15 L.Ed.2d 827, 833, quoting United States v. American Trucking Associations, 1940, 310 U.S. 534, 543, 60 S.Ct. 1059, 84 L.Ed. 1345, 1350; Ray Bailie Trash Hauling, Inc. v. Kleppe, 5 Cir. 1973, 477 F.2d 696, 707. And we must be constantly mindful that

there is no need to refer to the legislative history where the statutory language is clear. “The plain words and meaning of a statute cannot be overcome by a legislative history which, through strained processes of deduction from events of wholly ambiguous significance, may furnish dubious bases for inference in every direction.” Gemsco, Inc. v. Walling, 324 U.S. 244, 260, 65 S.Ct. 605, 615, 89 L.Ed. 921, 933 (1945).

Ex parte Collett, 1949, 337 U.S. 55, 61, 69 S.Ct. 944, 947, 93 L.Ed. 1207, 1211; General Electric Co. v. Southern Construction Co., 5 Cir. 1967, 383 F.2d 135, 138 & n. 2, cert. denied, 1968, 390 U.S. 955, 88 S.Ct. 1049, 19 L.Ed.2d 1148.

We are convinced that on careful, reasonable examination, the text of section 6311 yields a plain, unambiguous meaning. The statute allows taxpayers to use certain types of negotiable instruments in paying their internal revenue taxes. In addition it supplies two means of protecting the interests of the United States in the event the particular negotiable instrument is not duly paid: the taxpayer remains liable for the taxes ; and the United States may also have a lien on the assets of the bank or trust company that issued or on which the instrument was drawn. Bank complains of the harsh result from this plain, common-sense reading of the statute. Our answer must be that we cannot “discard the plain substance of a statute because of theoretical and irrelevant ambiguities” and that “[hjarshness does not in itself constitute ambiguity.” First National City Bank v. Compania de Aguaceros, S.A., 5 Cir. 1968, 398 F.2d 779, 784. We see nothing in the statutory language to suggest the limitations proposed by the bank; and giving the statute its obvious, apparent meaning, we can find no error in the decision of the trial court to apply it to the facts of the instant case.

Ordinarily, the determination that a statute has, on its face, a plain, unambiguous meaning obviates the necessity for extended statutory interpretation. Appellant insists, however, that we must accept its restrictive reading of the statute if we are to avoid colliding with clearly established legislative purpose. Pointing to the history, case law, and regulations pertaining to § 6311, appellant argues that “the purpose of this statute is to enable the United States to maintain a preferential position as against general creditors under circumstances . . . where checks, certified by the defendant bank and forwarded to the collector of Internal Revenue, were not paid by reason of a bank holiday proclaimed by the President of the United States.” Reply Brief of Appellant at 16.

The courts of this country have long disfavored the rigid rule of our English brethren that “If Parliament does not mean what it says it must say so.” C. I. R. v. Mercantile National Bank, 5 Cir. 1960, 276 F.2d 58; see C. Nutting, S. Elliott, & R. Dickerson, Legislation — Cases and Materials 413-14 (1969). For example, in Church of the Holy Trinity v. United States, 1892, 143 U.S. 457, 459, 12 S.Ct. 511, 512, 36 L.Ed. 226, 228, the Supreme Court said:

It is a familiar rule that a thing may be within the letter of the statute and yet not within the statute, because not within its spirit, nor within the intention of its makers. . . . [F]or frequently words of general meaning are used in a statute, words broad enough to include an act in question, and yet a consideration of the whole legislation, or of the circumstances surrounding its enactment, or of the absurd results which follow from giving such broad meaning to the words, makes it unreasonable to believe that the legislator intended to include the particular act.

The Court has also noted that “even when the-plain meaning did-not produce absurd results but merely an unreasonable one ‘plainly at variance with the policy of the legislation as a whole’ this Court has [frequently] followed that purpose, rather than the literal words.” United States v. American Trucking Associations, 1940, 310 U.S. 534, 543, 60 S.Ct. 1059, 1064, 84 L.Ed. 1345, 1350, quoted in Perry v. Commerce Loan Co., 1966, 383 U.S. 392, 400, 86 S.Ct. 852, 15 L.Ed.2d 827, 833-834; accord, United States v. Public Utilities Commission, 1953, 345 U.S. 295, 315, 73 S.Ct. 706, 97 L.Ed. 1020, 1037; Brennan v. Greene’s Propane Gas Service, Inc., 5 Cir. 1973, 479 F.2d 1027, 1030 & n. 10; see United States v. Louisiana, E.D.La.1963, 225 F.Supp. 353, 361 (Wisdom, Circuit Judge), aff’d, 1965, 380 U.S. 145, 85 S.Ct. 817, 13 L.Ed.2d 709. When faced with an argument that the literal meaning of a statute is at variance with the legislative purpose, a court can follow no better guide than Sir Edward Coke’s “Mischief Rule”: “The Office of Judges is always to make such construction as to suppress the Mischief and advance the Remedy; and to suppress subtle Inventions and Evasions for Continuance of the Mischief.” Hey don’s Case, 3 Co. 7a, 7b, Mag*dalon College Case, 11 Co. 66b, 73b, quoted in Burstein v. United States Lines, Co., 2 Cir. 1943, 134 F.2d 89; accord, Miller v. Lykes Brothers Steamship Co., 5 Cir. 1972, 467 F.2d 464, 467; Richland Development Co. v. Staples, 5 Cir. 1961, 295 F.2d 122, 128; Stanga v. McCormick Shipping Corp., 5 Cir. 1959, 268 F.2d 544, 549.

With the aid of the Historical Note following 26 U.S.C. § 6311, the historical lineage of the statutory lien provision is not difficult to trace. The genesis was apparently “An Act To Authorize the receipt of certified checks drawn on national and State banks for duties on imports and internal taxes, and for other purposes,” Act of Mar. 2, 1911, ch. 191, § 1, 36 Stat. 965. The abbreviated legislative history of this statute clearly indicates that the statute was intended to relieve taxpayers of the inconvenience, inefficiency, and danger concomitant with the then current requirement that all customs duties be paid in actual cash or gold. The first-lien provision was designed to protect against all possibility of loss the interests of both the United States and the revenue collectors, who at that time retained liability for taxes collected until payment was final. Nothing in either the House Committee Report or the debates accompanying passage of the statute suggests the restrictive interpretation proposed by appellant. In 1913 the statute was amended in order to allow certified checks to be acceptable payment for any and all federal taxes. Act of Mar. 3, 1913, ch. 119, 37 Stat. 733. Both the Committee Reports and the brief floor remarks indicate that the change was intended only to broaden the use of certified checks in payment for taxes because of favorable experience under the 1911 statute. No mention was made of the lien provision, which was carried forward unchanged.

The 1911 act as amended became § 3656 of the 1939 Internal Revenue Code, Act of Feb. 10, 1939, ch. 2, 53 Stat. 1, 447. Although the new code formally arranged the provisions in a different fashion, the legislative history indicates that the act — -“To Consolidate and codify the internal-revenue laws of the United States” — wrought no changes in the substance of the existing tax laws. In 1944 Congress amended § 3656 to broaden the types of negotiable instruments that could be received in payment of federal taxes, Act of Dec. 22, 1944, ch. 672, 58 Stat. 912. The change, designed entirely for the convenience of taxpayers, simply extended the payment and lien provisions relating to certified checks to include cashiers’ and treasurers’ checks and various types of money orders. Again, nothing in the legislative history suggests any intention that the plain words of the statute be narrowly interpreted.

Section 3656 of the 1939 Code as amended became § 6311 of the 1954 Internal Revenue Code, 26 U.S.C. § 6311. Although the 1954 Code rearranged the provisions of § 3656, no significant substantive changes — and none at all relating to the proper interpretation of the lien provision — were made.

As we read this legislative history, the statutory lien provision was designed as a counter-weight to the allowance of new methods of paying internal revenue taxes; at the same time that taxpayers were offered increased convenience, the government was to receive increased protection of its interest in receiving the taxes owing not only by retaining the right to pursue the taxpayer, but also by gaining the right to hold the respective bank or trust company for negotiable instruments not duly paid. Congress may have foreseen that the principal need for the lien protection would arise in the case of bank failures or holidays, but to assert that to be the only situation in which they desired to protect the government’s interests would require the most extravagant legislative psychoanalysis. The legislature may not have predicted that a bank would someday issue negotiable money orders on funds it did not yet have in hand, but that is no justification for niggardly statutory construction. Appellant’s proposed interpretation of the statute would not, in our view, suppress the mischief and advance the remedy encompassed by this law, and would on the contrary constitute a “subtle invention and evasion for continuance of the mischief.”

Although we do not deny that in ascertaining the meaning and purpose of a statute “consideration must be given to . the operation and administration of the statute prior to litigation,” we can find no more support for the bank’s legislative purpose argument in the case law and regulations relating to § 6311 and its predecessors than we could in the legislative history. No reported decisions treat § 6311, and the few that involve prior statutory configurations offer no persuasive basis for the bank’s argument.

Certainly the only case cited by appellant, American Tobacco Co. v. South Carolina National Bank, E.D.S.C.1936, 15 F.Supp. 215, offers no solace. To the extent that the decision retains vitality, a question about which we intimate no view, it stands for no more than that when because of a bank holiday a bank has refused to honor one of the particular negotiable instruments and the taxpayer has been forced to pay the taxes in another manner, the taxpayer may, with the government’s cooperation, stand in the government’s shoes regarding the statutory lien. Nothing in the opinion suggests that the statute’s utility be limited to such a situation.

Moreover, even recognizing that regulations under the Internal Revenue Code are entitled to considerable weight in construing the Code, cf. Weeks v. Southern Bell Telephone & Telegraph Co., 5 Cir. 1969, 408 F.2d 228, 235, we find nothing ineluctable, or even persuasive, in the fragment of the regulations cited by appellant that “District Directors may accept checks drawn in payment for Internal Revenue taxes .” Brief for Appellant at 28, citing 26 C.F.R. § 301.6311-1 (a). Appellant interprets this language to' mean that a District Director may not accept a taxpayer’s tender of cashiers’, certified, or treasurers’ checks or money orders for taxes if payment of the taxes was not the original motive for drawing the instruments. The most obvious defect in this interpretation is that it runs counter to the undisputed legislative purpose of making payment of taxes more convenient through use of negotiable instruments. We decline to affix such basically extraneous and irrelevant considerations as the taxpayer’s motive in acquiring instruments onto a bank’s normal obligations on the instruments.

Finally, the bank suggests that application of § 6311 to the facts of this case would constitute a taking of its property without due process in violation of the Fifth Amendment to the United States Constitution. We see no merit in this argument. It has long been recognized that liens to guarantee payment of taxes are an important element of the sovereign’s taxing power. See International Harvester Corp. v. Goodrich, 1956, 350 U.S. 537, 544, 76 S.Ct. 621, 100 L.Ed. 681, 689; Barkley v. Board of Levee Commissioners, 1876, 93 U.S. (23 Wall.) 258, 265, 23 L.Ed. 893, 896. And “[t]he establishment of a tax lien by Congress is an exercise of its constitutional power ‘To lay and collect Taxes. Article 1, § 8 of the Constitution. United States v. Snyder, 149 U.S. 210, 13 S.Ct. 846, 37 L.Ed. 705.” Michigan v. United States, 1943, 317 U.S. 338, 340, 63 S.Ct. 302, 303, 87 L.Ed. 312, 314. The tax lien is usually attached to the property of the taxpayer though it is not extinguished simply by the transfer of the property. United States v. Bess, 1958, 357 U.S. 51, 57, 78 S.Ct. 1054, 2 L.Ed.2d 1135, 1142. Where, however, a bank has issued a money order, a very particular type of negotiable instrument whose use is controlled by a specific body of law, which is subsequently tendered for taxes, we see nothing unusual or impermissible in a decision to attach the lien to the bank’s assets in the event the money order is not duly honored. This is no more than a decision to trace the taxpayer’s assets. If the bank does not receive the consideration promised for the money orders, it has all the protections supplied by the law relating to negotiable instruments. The bank can really expect no more when it chooses to deal in negotiable instruments. In short, as applied to the facts of this case, § 6311 is a constitutional exercise of Congress’ authority, the wisdom of which as a matter of federal tax policy is beyond our authority to judge. Glass City Bank v. United States, 1945, 326 U.S. 265, 268, 66 S.Ct. 108, 110, 90 L.Ed. 56, 59.

III. HOLDER IN DUE COURSE

Bank next argues that even granting a broad interpretation of § 6311 it had a legal right to refuse payment on these particular money orders. Since it is not, therefore, liable to the United States on the basis of the unpaid money orders, the bank continues, the United States should not be able to claim the existence of the statutory lien. This argument requires us to turn to Florida law and the provisions of the Uniform Commercial Code, which became effective in Florida on January 1, 1967, prior to the transactions here at issue.

The keystone of the bank’s argument is that the United States possessed the money orders as a simple holder, rather than as a holder in due course. Section 3-305 of the UCC provides that a holder in due course takes an instrument free from:

(1) All claims to it on the part of any person; and
(2) All defenses of any party to the instrument with whom the holder has not dealt except:
(a) Infancy, to the extent that it is a defense to a simple contract; and
(b) Such other incapacity, or duress, or illegality of the transaction, as renders the obligation of the party a nullity; and
(c) Such misrepresentation as has induced the party to sign the instrument with neither knowledge nor reasonable opportunity to obtain knowledge of its character or its essential terms; and
(d) Discharge in insolvency proceedings ; and
(e) Any other discharge of which the holder has notice when he takes the instrument.

Fla.Stat.Ann. § 673.3-305. A simple holder, by contrast, takes an instrument subject to all defenses of any party which would be available in an action on a simple contract, as well as the defenses of want or failure of consideration, non-performance of any condition precedent, non-delivery, or delivery for a special purpose. Id. § 673.3-306. Since the principal defense to .liability raised by the bank — failure of consideration resulting from Hannon’s action in stopping payment on its check for the money orders— is unavailable against the IRS if it is a holder in due course, the bank can prevail only if the United States enjoys the less exalted status of mere holder.

A substantial hurdle blocks the bank’s path to success in this Court. The district court explicitly found that the United States is a holder in due course of the 190 money orders. The government insists that this holding is a finding of ultimate fact, resting on certain implicit subsidiary findings of fact, and that our review is limited by the clearly erroneous rule, Fed.R.Civ.Pro. 52(a). See Humphrey v. Southwestern Portland Cement Co., 5 Cir. 1974, 488 F.2d 691, 694. The bank, on the other hand, characterizes the court’s conclusion as a mixed question of fact and law and urges us to re-examine it free from the insulation of Rule 52(a). See Galena Oaks Corp. v. Scofield, 5 Cir. 1954, 218 F.2d 217; 9 C. Wright & A. Miller, Federal Practice and Procedure § 2589.

Section 3-302(1) of the UCC supplies the definition of a holder in due course: a holder in due course is a holder who takes an instrument for value, in good faith, and without notice that it is overdue or has been dishonored or of any defense against it on the part of any person. Fla.Stat.Ann. § 673.3-302(1). While the Code also provides statutory meaning for the terms “taking for value,” id. § 673.3-303, and “notice to purchaser,” id. § 673.3-304, it is apparent that the application of these subsidiary definitions in order to determine whether a party is a holder in due course will very often turn heavily on the facts of a particular case. This is not to deny that.a conclusion that a party is a holder in due course might depend largely or entirely on a question of law, which would of course come to us free of the “buckler and shield” of Rule 52(a). When, as in the case at bar, however, the determination was essentially factual, it should not be reversed unless clearly erroneous. Bowling Green, Inc. v. State Street Bank and Trust Co., 1 Cir. 1970, 425 F.2d 81, 85; Blow v. Ammerman, 1965, 121 U.S.App. D.C. 351, 350 F.2d 729, 731; Walsh v. Lockart Associates, 5 Cir. 1964, 339 F.2d 417; accord, Sample v. Wilson, 1931, 101 Fla. 818, 134 So. 549 (on rehearing), rev’g 101 Fla. 818, 139 So. 144; Baum v. Spector, Fla.Ct.App.1968, 211 So.2d 228; see Commissioner v. Duber-stein, 1960, 363 U.S. 278, 289, 80 S.Ct. 1190, 1198, 4 L.Ed.2d 1218, 1227; cf. In Re Pennyrich International, Inc., 5 Cir. 1973, 473 F.2d 417, 421 n. 4; Dupre v. Gaubert Industries, Inc., 5 Cir. 1968, 403 F.2d 207.

The bank argues that the evidence in the case will not support the trial court’s implicit finding that the United States received the money orders in good faith, as required of a holder in due course. The bank also disputes the trial court’s implicit finding that the United States did not have notice of a claim or defense to the money orders. While we concede that certain evidence supports the bank’s defensive theories, two principles must guide our evaluation of appellant’s challenge to the trial court’s findings. First, “when district court findings of fact are challenged ‘[t]he question is not simply whether the reviewing court would have found otherwise but whether the trial court could permissibly find as it did.’ Movible Offshore, Inc. v. The M/V Wilken A. Falgout, 5 Cir. 1973, 471 F.2d 268, 271.” Guardian Life Insurance Co. v. Eagle, 5 Cir. 1973, 484 F.2d 382, 384. Secondly, “[i]n determining whether a finding is clearly .erroneous the rule requires that due regard be given to the opportunity of the trial court to judge the credibility of the witnesses.” 9 C. Wright & A. Miller, supra, § 2585 at 732; accord, United States v. Reddoch, 5 Cir. 1972, 467 F.2d 897, 898.

On the basis of our careful review of the record as a whole, we find more than ample evidence to support the trial court’s findings. Because we are not “left with the definite and firm conviction that a mistake has been committed,” United States v. United States Gypsum Co., 1948, 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746, we must reject appellant’s argument that the United States was not a holder in due course.

IV. EQUITABLE CONSIDERATIONS

As an alternative ground for relief, appellant notes the essentially equitable nature of an action to foreclose a lien and insists that dirt on the hands of the IRS agents should have made the United States an unwelcome supplicant in the equity courtroom. Conceding the absence of actionable fraud, bank nevertheless urges that “at the very least, the conduct of [the United States’] agents in procuring and seeking to enforce such alleged lien did . . . amount to ‘overreaching,’ was ‘unconscionable,’ ‘oppressive,’ and ‘concealed important facts,’ even if such actions by plaintiff’s agents were ‘strictly within the law.’ ” Brief for Appellant at 21 (emphasis in the original).

Certainly when seeking an equitable remedy the United States is no more immune to the general principles of equity than any other litigant. Although these principles “will not be applied to frustrate the purpose of its laws or to thwart public policy,” see Pan American Petroleum & Transport Co. v. United States, 1927, 273 U.S. 456, 506, 47 S.Ct. 416, 424, 71 L.Ed. 734, 747; Deseret Apartments v. United States, 10 Cir. 1957, 250 F.2d 457, 458, in general “there is no authority by which equity can come to the aid of an illegal and fraudulent scheme, regardless of the beneficence of the ultimate purpose.” In re Mutual Leasing Corp., 5 Cir. 1971, 449 F.2d 811, 815. On the other hand, “unless the Government did something which in good conscience it should not have done, or failed to do something fair dealing required it to do, it comes into court with clean hands and is entitled to the equitable relief it obtained.” Deseret Apartments, supra, 250 F.2d at 458.

The conduct of the IRS agents obviously disturbed the trial judge: “You keep talking about a moral issue, and to be perfectly frank with you, I don’t find it a very pleasing thing that the government did here, my government, frankly . . . .” App. at 209. He nevertheless correctly perceived the real issue to be whether the government, through the IRS agents, had a lawful right to do what it did; that is, receive the money orders in payment for taxes and request that the bank honor them. Having determined that the United States acted with sufficient good faith and in ignorance of the bank’s defenses to the money orders to attain the status of holder in due course, the court not surprisingly concluded that the United States was entitled to have its statutory lien enforced. On the basis of the evidence in this case we are unwilling to quarrel with the trial judge’s belief that conduct insufficiently malignant to deprive a party of holder in due course status is likewise an inadequate reason for refusing to grant an equitable remedy. Whether the contamination of one seeking equity justifies the chancellor in turning a deaf ear is, in the first instance, for the chancellor to decide; we see nothing in the conduct of the IRS agents that should have compelled him to call the men pariahs.

V. COUNTER CLAIM

Finally, appellant protests the district court’s rejection of its Federal Tort Claims Act counterclaim. According to bank’s theory of liability, the IRS agents negligently omitted to notify the bank that the money orders would not be used to pay the electricians, but rather had been tendered in payment for Medallion’s taxes. The bank suggests that had it been so notified, in timely fashion, it could have notified Hannon, which in turn could have paid the electricians in time to avoid the late payment penalty for which bank was subsequently assessed in state court.

The district court recognized that a private party would be liable for a failure to notify another only if an underlying duty to notify existed between the two parties. E. g., Modlin v. City of Miami Beach, Fla.1967, 201 So.2d 70, 75. Concluding that the IRS had no such duty to give notice to the bank of the delivery of the money orders, the court could find no basis for imposing liability on the United States. We detect no error in this reasoning. The fact of being a holder in due course of the money orders certainly created no legal duty on the part of the United States to notify the bank. Nor can we find the basis for such a duty in the statement from Hatahley v. United States, 1956, 351 U.S. 173, 181, 76 S.Ct. 745, 752, 100 L.Ed. 1065, 1074, relied on by appellant that “ ‘[d]ue care’ implies at least some minimal concern for the rights of others.” The words “due care” point to the issue of whether a party’s conduct complies with or violates a duty owed to another; they provide no independent answer to the preliminary question whether a duty exists at all. Having failed to supply an affirmative answer to that initial question, the bank was not entitled to procede with its claim.

VI. CONCLUSION

This case has required us to explore one of the lesser known chambers in a labyrinthine Internal Revenue Code honeycombed with obscure passageways. But if unfamiliar and infrequently visited, section 6311(b)(2) may be understood without the specialized tools of statutory speleology. Framed in relatively straightforward English, its meaning is readily apparent; and though the unwary may find it a trap, passage around the danger is marked by accepted commercial practices and established principles of the law of negotiable instruments. Our federal tax code may appear to operate with a rigidity that makes its collectors bereft of human pity, conscience, or compassion; its operation is also an illustration that ours is a government of laws, not men.

Affirmed.

      . Apparently these checks were intended to be partial payments for work already completed by Medallion rather than extensions of credit.

      . Although the quarter ended in September 1970, Medallion’s tax return for the period was not due until the end of October.

      . Hannon’s October 14 check, for $83,000, was insufficient to cover Medallion’s payroll for the ..week; on discovering the shortage from appellant’s assistant cashier, however, Hannon wirpd the necessary additional funds, $9,434.61, to appellant, which then credited the funds to Medallion’s account.

      . As we read the statute, the placement of the first-preference provision in a separate clause of § 6311(b) (2) means that this is an additional protection for the United States, not as the bank would have it, the only protection.

      . In undertaking to probe the legislative history of this statute, we are wary of the dan- - gers of reaching a decision that, in the eloquent words of Mr. Justice Jackson,
      pulls federal law, not only out of the dark where it has been hidden, but into a fog in which little can be seen if found. Legislative history here as usual is more vague than the statute we are called upon to interpret.
      United States v. Public Utilities Commission, 1953, 345 U.S. 295, 320, 73 S.Ct. 706, 720, 97 L.Ed. 1020, 1040 (concurring opinion).

      . In pertinent part this statute provided that it shall be lawful for collectors of customs and of internal revenue to receive for duties on imports and internal taxes certified checks drawn on national and State banks, and trust companies . . . [No person who tenders such check shall be released from liability until the certified check is duly paid] ; and if any such check so received is not duly paid by the bank on which it is drawn and so certifying, the United States shall, in addition to its right to exact payment from the party originally indebted therefor, have a lien for the amount of such check upon all the assets of such bank ....

      . I-I.R.R.ep.No.2041, 61st Cong., 3d Sess.' (1911) ; 46 Cong.Rec. 2076, 2077-78, 2083 (1911).

      . The limited debate in both the House of Representatives and the Senate focused on whether the statute would diminish the supply of gold in the hands of the United States and whether the act should include state banks and trust companies, who it was feared would suffer competitively if omitted but over the assets of whom the authority of the United States to acquire a lien was questioned. 46 Cong.Rec. 2077, 2078, 2083, 2240, 2501, 3411, 3412 (1911). One representative (lid remark of the lien provision “that upon failure of the bank those checks should have priority of payment,” id. at 2077 (remarks of Rep. Mann), but we hardly think that passing reference justifies a conclusion that bank failure was the sine qua non of the operation of the lien provision. We note also that the Senate defeated an amendment that would have substituted a different version of the text omitting the lien provision. Id. at 3412.

      . The statute as amended provided, inter alia, that
      it shall be lawful for collecting officers to receive certified checks drawn on national and State banks and trust companies, in payment for duties on imports, internal taxes, and all public dues, including special customs deposits ....

      . H.R.Rep.No.841, 62d Cong., 2d Sess.
      (1913) ; S.Rep.No.1276, 62d Cong., 2d Sess. (1913) ; 48 Cong.Rec. 8307, 8308 (1913). According to both Committee Reports, which are identical, the bill “removes all limitations as to the use of certified checks in the payment of dues by authorizing the receipt of such checks in the payment of all Government dues without further legislation.”

      . At various times in the intervening years Congress passed special legislation authorizing receipt of certificates of indebtedness of the United States and uncertified checks in payment of income, war-profits, and excess profits taxes. Act of Oct. 3, 1917, ch. 63, § 1010, 40 Stat. 327 (War Revenue Act); Act of Feb. 24, 1919, ch. 18, § 1314, 40 Stat. 1145 (Revenue Act of 1918) ; Act of Nov. 23, 1921, ch. 136, § 1325, 42 Stat. 316 (Revenue Act of 1921). None of those statutes contained lien provisions; and both § 3656(b) of the 1939 Code and the current version .of § 6311(b) (2) continue to distinguish certified (‘hecks, cashiers’ checks, and treasurers’ checks and money orders, which give rise to liens, from all other checks, which do not.

      . § 3656. Payment by cheek and money orders

        (a) Certified, cashiers’, and treasurers’ checks and money order

        (1) Authority to receive. It shall be lawful for collectors to receive for internal revenue taxes or in payment of stamps to be used in payment of internal revenue taxes certified, cashiers’, and treasurers’ checks drawn on National and State banks and trust companies, and United States postal, bank, express, and telegraph money orders, during such time and under such regulations as the Commissioner, with the approval of the Secretary, may prescribe.

        (2) Discharge of liability.

        (A) Check duly paid. No person who may be indebted to the United States on account of internal revenue taxes or stamps used or to be used in payment of internal revenue taxes who shall have tendered a certified, cashier’s, or treasurer’s check or money order as provisional payment therefor, in accordance with the terms of this subsection, shall be released from the obligation to make ultimate payment thereof until such certified cashier’s or treasurer’s check or money order so received has been duly paid.

        (B) Check unpaid. If any such check or money order so received is not duly paid the United States shall, in addition to its right to exact payment from ,tlie party originally indebted therefor, have a lien for the amount of such check upon all the assets of the bank on which drawn or for the amount of such money order upon all the assets of the issuer thereof; and such amount shall be paid out of its assets in preference to any or all other claims whatsoever against said bank or issuer except the necessary costs and expenses of administration and the reimbursement of the United States for the amount expended in the redemption of the circulating notes of such bank.

        (b) Other checks.

        (1) Authority to receive. Collectors may receive checks in addition to those specified in subsection (a) in payment of taxes other than those payable by stamp during such time and under such rules and regulations as the 'Commissioner, with the approval of the Secretary, shall prescribe.

        (2) Ultimate liability. ■ If a check so received is not paid by the bank on which it is drawn the person by whom such check has been tendered shall remain liable for the payment of the tax and for all legal penalties and additions to the same extent as if such check had not been tendered.

      . H.R.Rep.No.6, 76th Cong., 1st Sess. 3 (1939); S.Rep.No.20, 76th Cong., 1st Sess. 1 (1939); 84 Cong.Rec. 646 (1939).

      . H.R.Rep.No.2018, 78th Cong., 2d Sess. 1 (1944) ; S.Rep.No.1357, 78tlx Cong., 2d Sess. (1944) ; 90 Cong.Rec. 8911-12 (1944).

      . According to the House Committee Report,
      The Collection of taxes will not be impaired inasmuch as all the instruments have the common characteristic that once in the hands of the collector they cannot be revoked and their acceptance would be subject to regulations prescribed by the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury.
      H.R.Rep.No.2018, 78th Cong., 2d Sess. 1 (1944).

      . The only apparent substantive change effected by the 1954 Code related to payment for internal revenue stamps. Section 3656(b) (1) had limited checks other than certified, • cashiers’, and treasurers’ and money orders to “payment of taxes other than those payable by stamp.” Section 6311(a) of the 1954 Code removed this limitation as to the use of other checks in payment for internal revenue stamps. H.R. Rep.No.1337, 83d Cong., 2d Sess. ch. 64 (1954), U.S.Code Cong. & Admin.News, p. 4025; S.Rep.No.1622, 83d Cong., 2d Sess. ch. 64 (1954), U.S.Code Cong. & Admin. News, p. 4629.

      . 2 Sutherland, Statutory Construction 321 (Horaek ed. 1943), quoted in Woodwork Mfg. Assn. v. NLRB, 1967, 386 U.S. 612, 620 n. 5, 87 S.Ct. 1250, 1255, 18 L.Ed.2d 357, 364 n. 5.

      . In American Tobacco Co. the taxpayer attempted to use three certified checks drawn on defendant bank to pay internal revenue taxes, but the checks were not paid due to a bank holiday. Subsequently the taxpayer paid the tax liability and received from the IRS both the unpaid certified checks and an assignment of the government’s statutory lien against the bank’s assets. When the bank refused to honor the certified checks, taxpayer brought suit. The bank argued that since the statutory lien was only for the benefit of the government, allowing the taxpayer to recover would be unjust to the other creditors of the bank. The court disagreed ; reasoning that the funds originally deposited for the checks and subject to immediate demand by the government never changed in nature simply because the government chose to pursue the taxpayer rather than the lien, the court concluded that to refuse to allow taxpayer to stand in the government’s shoes in enforcing the lien would only unjustly enrich general creditors with money over which they had no legitimate claim. Accord, Cuesta, Ray & Co. v. New-som, 1931, 102 Fla. 853, 136 So. 551.

      . These regulations provide, inter alia:

      (a) Authority to receive — (1) In general. (i) District directors may accept checks drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any State, Territory, or possession of the United States, or money orders in payment for internal revenue taxes, provided such checks or money orders are collectible in U. S. currency at par, and subject to the further provisions contained in this section. District directors may accept such checks or money orders in payment for internal revenue stamps to the extent and under the conditions prescribed in subpar-agraph (2) of this paragraph. A check or money order in payment for internal revenue taxes or internal revenue stamps should be made payable to the Internal Revenue Service. A check or money order is payable at par only if the full amount thereof is payable without any deduction for exchange or other charges. As used in this section the term “money order” means: (a) U. S. postal, bank, express, or telegraph money order; (b) money order issued by a domestic building and loan association (as defined in section 7701 (a) (19)) or by a similar association incorporated under the laws of a possession of the United States; (c) a money order issued by such other organization as the Commissioner may designate; and (d) a money order described in subdivision (ii) of this subparagraph in cases therein described. However, the district director may refuse to accept any personal check whenever he has good reason to believe that such check will not be honored upon presentment.
      (b) Checks or money order not paid— (1) Ultimate liability. The person who tenders any check (whether certified or uncertified, cashier’s, treasurer’s, or other form of check) or money order in payment for taxes or stamps is not released from his liability until the check or money order is paid; and, if the check or money order is not duly paid, he shall also be liable for all legal penalties and additions, to the same extent as if such check or money order liad not been tendered. For the penalty in case a check or money order is not duly paid, see section 6657 and § 301.-6657-1. For assessment of the amount of a cheek or money order not duly paid, see section 6201(a)(2)(B) and paragraph (a) (2) (ii) of § 301.6201-1.
      (2) Liability of banks and others. If any certified, .treasurer’s, or cashier’s check or money order is not duly paid, the United States shall have a lien for the amount of such check upon all assets of the bank or trust company on which drawn or for the amount of such money order upon the assets of the issuer thereof. The unpaid amount shall be paid out of such assets in preference to any other claims against such bank or issuer except the necessary costs and expenses of administration and the reimbursement of the United States for the amount expended in the redemption of the circulating notes of such bank. In addition, the Government lias the rij»lit to exact payment from the person required to make the payment.
      (c) Payment in nonconvertible foreign currency. For rules relating to payment of income taxes and taxes under the Federal Insurance Contributions Act in nonconvertible foreign currency, see section 6316 and the regulations thereunder. [32 F.R. 15241, Nov. 3, 1967, as amended by T.D. 7188, 37 F.R. 12795, June 29, 19721.

      . The district court apparently did not pass on this argument; appellant, however, did raise it, albeit somewhat cursorily, in both its trial brief and its oral argument to the trial judge. Thus the question is properly before us.

      . The bank also appears to suggest the possibility of misrepresentation on the part of Medallion that the second series of money orders would be paid to the electricians. This defense, too, would be unavailable against a holder in due course.

      . Bank argues, for example, that the IRS agents engaged in conduct that effectively amounted to deliberate deception of the bank by inducing, instructing, or requiring Medallion to use the money orders for taxes, knowing that the bank had issued them for payroll. Bank also argues that the United States demonstrated its bad faith by proceeding against the bank rather than by immediately levying on Medallion’s account or attempting to collect the withholding taxes from Hannon pursuant to 26 U.S.C. §§ 3505, 6672.

      . It is settled by the terms of the UCO that a payee, such as the United States in this case, may be a holder in due course. Fla. Stat.Ann. § 673.3-302(2) ; Exchange Nat. Bank v. Beshara, Fla.Ct.App.1970, 236 So.2d 198, 200.

      . The Government argues that under the UCO the bank lacked the right to stop payment on the money orders. IVe pretermit consideration of this argument as unnecessary to our disposition of the case.

      . On an alternate tack bank suggests that this case is an example of a situation in which a party should not be allowed to be in effect a third-party beneficiary of one party’s fraud on another. The district court obviously did not accept this theory and we see no reason to disburb that conclusion.

      . 28 U.S.C. § 1346(b) grants to federal district courts
      exclusive jurisdiction of civil actions on claims against the United States, for money damages, accruing on and after January 1, 1945, for injury or loss of property .' . . 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.

      . In Hataldey government agents acting pursuant to the Federal Range Code had impounded Navajo livestock unlawfully grazing on federal lands, and the Indians had filed suit against the United States under the Tort Claims Act. Since the agents had failed to comply with notice provisions of the Federal Range Code, they were found to have been trespassers whose conduct entitled the plaintiffs to recover money damages. Whether the agents’ acts were, in the operative words of 28 U.S.O. § 1346(b), “negligent” or “wrongful,” the crucial measure of their conduct came from the statutory duty to give notice. I11 the case sub judice, by, contrast, the IRS agents were subject to no such statutory command.
      In addition, as both the court below and the United States have suggested, the Ha-taldey Court made the statement cited by appellant in the course of holding inapplicable a statutory provision excepting from § 1346(b) “[ajny claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation . . . .”28 U.S.O. § 2680(a). For reasons not entirely clear to us, the government insists that the applicability of this exception is not an issue in the case at bar. Since our disposition of appellant’s counterclaim argument need not turn on the issue, we omit further discussion of the point. ,

      . The government argues that in any event the district court lacked jurisdiction to entertain the bank’s counterclaim because it is a “claim arising in respect of the assessment or collection of any tax,” specifically excluded from the provisions of § 1346(b) by 28 U.S.C. § 2680(c). The bank, of course, disagrees, emphasizing that its counterclaim rests not on the conduct of the IRS agents in collecting the money orders from Medallion, but rather on the independent, separate omission relating to the bank. We need not resolve this particular dispute, and decline to do so.


source: Caselaw Access Project

author: GOLDBERG, Circuit Judge:

license: Public Domain

text:
    Ioana DRAGANESCU et al., Plaintiffs-Appellants, v. FIRST NATIONAL BANK OF HOLLYWOOD et al., Defendants-Appellees.
    No. 74-2286
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Oct. 7, 1974.
    Rehearing Denied Nov. 6, 1974.
    John T. Carlon, Jr., Fort Lauderdale, Fla., Wm. E. Allison, St. Petersburg, Fla., John R. Vintilla, Cleveland, Ohio, for plaintiffs-appellants.
    Jack F. Weins, Hollywood, Fla., for First Nat. Bank of Hollywood.
    Merle Litman, Hollywood, Fla., for Schweikert.
    Before WISDOM, GOLDBERG and GEE, Circuit Judges.

       Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir. 1970, 431 F.2d 409, Part I.

   GOLDBERG, Circuit Judge:

This diversity case began as a suit by the heirs of Mary Radu, all Romanian nationals and residents, against defendant-appellee First National Bank of Hollywood [the bank] for negligent failure to prepare a will. Plaintiffs-appellants allege that the decedent asked Victoria Vintilla to commission defendants-appel-lees to draw up a will. After Victoria’s first visit to the bank, John R. Vintilla, her brother and an Ohio attorney who specializes in the representation of Romanian emigrees and nationals, called the bank. He appears to be the only person who spoke with the bank’s lawyer regarding the exact terms and time requirements of the proposed will.

When Mary Radu died intestate, plaintiffs-appellants hired the same John Vintilla to represent them. Pursuant to Rules of the United States District Court for the Southern District of Florida Vintilla found local co-counsel, and then instituted this action. His fee was dependent on the outcome of the case. In a Pre-Trial Order, Appendix page 2, the district judge ruled that Vintilla could not represent plaintiffs while appearing as a material witness for them. The judge therefore ordered Florida co-counsel to take responsibility for the suit. Plaintiffs ask us to reverse the court’s order. We decline to do so.

Since only “final judgments” are appealable, 28 U.S.C. § 1291, this Court must first determine that the removal of counsel in the pre-trial order is “final.” In Cohen v. Beneficial Industrial Loan Corp., 1949, 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528, the Supreme Court said that a collateral order — one which did not terminate an action — was final and appealable when it finally determined claims separable from rights asserted in the main action, was too important to be denied review, and was too independent of the cause itself to require that the appeals court defer consideration until the whole case could be adjudicated. This Court has applied the Cohen rule to find orders on motions to disqualify counsel appealable.

As we said in [Tomlinson v. Poller, 5 Cir. 1955, 220 F.2d 308, 311] this is “a matter entirely disconnected with the principal contention of the taxpayers in the pending suit,” and, “This order constitutes a final decision on that ancillary matter.” Here, if the order was in error, the harm resulting therefrom is in the nature of the frustration of a public policy which cannot be avoided or mitigated by any appeal taken after the trial ... is finally ended.

Tomlinson v. Florida Iron and Metal Inc., 5 Cir. 1961, 291 F.2d 333 at 334. See also Uniweld Products, Inc. v. Union Carbide Corp., 5 Cir. 1967, 385 F.2d 992, 994.

The Florida law which guides us in evaluating the ruling of the trial court is contained in the Code of Professional Responsibility, 32 Fla.Stat.Ann. 127 (Supp.1974), adopted by the Florida Supreme Court in 1970. The provision falls under the Disciplinary Rules, about which the Florida Court says: “The Disciplinary Rules, unlike the Ethical Considerations, are mandatory in character. The Disciplinary Rules state the minimum level of conduct below which no lawyer can fall without being subject to disciplinary action.” Id. at 130 (Supp.1974).

Disciplinary Rule DR 5-101(B) reads:

A lawyer shall not accept employment in contemplated or pending litigation if he knows or it is obvious that he or a lawyer in his firm ought to be called as a witness, except that he may undertake the employment and he or a lawyer in his firm may testify:
(1) If the testimony will relate solely to an uncontested matter.
(2) If the testimony will relate solely to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony.
(3) If the testimony will relate solely to the nature and value of legal services rendered in the case by the lawyer or his firm to the client.
(4) As to any matter, if refusal would work a substantial hardship on the client because of the distinctive value of the lawyer or his firm as counsel in the particular case.

Disciplinary Rule DR 5-102(A) provides :

If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm ought to be called as a witness on behalf of his client, he shall withdraw from the conduct of the trial and his firm, if any, shall not continue representation in the trial, except that he may continue the representation and he or a lawyer in his firm may testify in the circumstances enumerated in DR 5-101(B)(1) through (4).

Although there has been little interpretation of the current provisions. Florida courts have regularly applied the previous incarnation of these provisions. Thus, in In re Estate of Freeman, Fla.Dist.Ct. of App., 3d Dist., 1970, 240 So.2d 656, the court reversed a trial judge who allowed a witness to the testamentary capacity of the deceased to continue as executor’s counsel. In Dudley v. Wilson, 1943, 152 Fla. 752, 13 So.2d 145, the Florida Supreme Court upheld the decision of the lower court to prevent plaintiff’s counsel from testifying about the nature of the consideration for the conveyance of real property given the deceased party, for whom plaintiff was administrator. See also Milliean v. Hunter, Fla.1954, 73 So.2d 58; Hubbard v. Hubbard, Fla.Dist.Ct. of App., 4th Dist., 1970, 233 So.2d 150.

Plaintiffs’ claim that removal of their lawyer will work a substantial hardship and that, under exception (4) to 5-101(B), he should therefore be reinstated. They argue that Vintilla is uniquely qualified to represent them because he can speak the Romanian language, knew decedent for many years, and has great familiarity with the task of representing Romanians. Moreover, they insist, other lawyers are reluctant to take cases involving Romanians on a contingent fee basis.

We are not convinced of these claims and do not believe that Vintilla’s removal will work a substantial hardship. His knowledge of the Romanian language will be of limited utility since he admits, “[T]he plaintiffs do not have any information to impart which will be of any value to you [a defendant’s counsel], All of the operative facts of our cause of action took place in Florida and the witnesses who shall establish them are in-the United States.” Appendix at 18. In any case, the trial court’s order does not bar Vintilla from acting as translator, should the need for a Romanian presence be established. The fact that Vintilla had known decedent for many years may make him a more credible witness on the nature of the will she is alleged to have commissioned, but it is not relevant to actions he would take in his lawyerly capacity. Plaintiffs fail to specify how Vintilla’s familiarity with Romanians bears on the quality of the representation he can give. Finally, they do not demonstrate that the lack of such familiarity makes disinterested counsel unwilling to work on a contingent fee basis.

The only relevant exception to the Florida rule forbidding a material witness to act as counsel arises where a party would otherwise bear a substantial hardship. Plaintiffs have not demonstrated that removal of counsel in this case would work such a hardship. We therefore affirm the order of the court below.

Affirmed.

      . In botli Unmeld and Florida Iron and Metal Inc. we upheld the finality of the denial of a motion to disqualify counsel. In the present case, we pass on the finality of an order to disqualify. An order erroneously depriving a party of its chosen counsel during the course of the trial would also frustrate public policy in a way which a post-trial appeal could not mitigate.

      . In Beavers v. Conner, Fla.Dist.Ct. of App., 3d Dist., 1972, 258 So.2d 330, the court, guided by new provision DR 5-101 (B), ruled that the trial court was not in error when it permitted a member of the law firm representing plaintiff to testify. However, the lawyer only testified to matters conceded by the defendant and therefore clearly fell within exception (1) of DR 5-101 (B). Even so, the court noted:
      It certainly would appear that, in order not to jeopardize a client’s cause of action, the better practice would be for counsel to arrange to have another conduct a trial proceeding when it is apparent that either he or a member of his firm will be required to testify on behalf of his client. Even though we have not found error in permitting the testimony in the instant case, each such situation will have to be scrutinized with utmost care whenever it arises and counsel should' be very careful in testifying for a client while handling the trial.
      258 So.2d 330 at 332.

      . Disciplinary Rules DR 5-101 and 5-102 replaced Code of Ethics, rule B, § 1, subd. 19, 32 F.S.A. 615 (1967), which read :

        Appearance of Lawyer as Witness for his Client. — When a lawyer is a witness for his client, except as to merely formal matters, such as the attestation or custody of an instrument and the like, he should leave the trial of the case to other counsel. Except when essential to the ends of justice, a lawyer should avoid testifying in court in behalf of his client.

      . Mr. Vintilla has noted in a letter to the district judge that local co-counsel desired to withdraw from the case once the judge had appointed the local attorney as counsel of record. Appendix at 22. Of itself, this desire to withdraw by one local counsel does not show that plaintiffs cannot secure alternative counsel.


author: PER CURIAM:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Sylvester WRIGHT, Defendant-Appellant.
    No. 71-1590
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Oct. 18, 1974.
    J. V. Eskenazi, Federal Public Defender, Charlene H. Sorrentino, Asst. Federal Public Defender, Miami, Fla., for defendant-appellant.
    Robert W. Rust, U. S. Atty., Joel C. Fanning, Asst. U. S. Atty., Miami, Fla., for. plaintiff-appellee.
    Before GEWIN, GODBOLD and CLARK, Circuit Judges.

       Rule 18, 5th Cir. See Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5th Cir. 1970, 431 F.2d 409, Part I.

   PER CURIAM:

Sylvester Wright was convicted under two counts of Selective Service violations, Count I, knowing failure to keep the local board advised of his home address, and Count II, knowing failure to keep the board informed of addresses where mail would reach him, both in violation of 50 U.S.C. App. § 462. He received three-year concurrent sentences. The crux of Wright’s case on appeal is that the court erred in giving jury instructions which presupposed that he had in fact changed his home address and acquired a new home address which he failed to give to his board, whereas the jury could have concluded that he never changed his home address but intended to and did retain the original home address given to the board.

Under the regulations in effect during the relevant time, a registrant was under two separate duties with respect to addresses. Under 32 C.F.R. § 1641.7 (1972), Wright was required to keep his local board currently advised of his home address, and under § 1641.3 advised of the address where mail would reach him. The home address and the mailing address may be but are not necessarily the same. If a registrant is in fact not at the mailing address given to the board, his duty with respect to a mailing address can be met by his providing (without notice to the board) a chain of addresses by which mail sent to the given mailing address may reasonably be expected to come into his hands in time for his compliance. Wright never supplied the board with any mailing address other than the home address. The form directed to him by the board asking for a current mailing address was mailed to the home address but never returned to the board. An intent on Wright’s pai’t not to change his home address during the time that he was staying first one place and then another did not free him of his duty to inform the board of a place where mail would reach him. Presumably, giving the home address will satisfy the requirement of a mailing address if the home is where mail will reach the registrant, or if mail sent there can reasonably be expected to timely come in the registrant’s hands.

Wright testified that he stayed in touch with his father who resided at the home address, and who, at least part of the time, brought his mail to him. Even if such an informal mode of “forwarding” mail would be sufficient to meet the “chain of forwarding address” ’ substitute for a current mail address given to the board, the jury was not required to accept as true Wright’s testimony that such an arrangement existed. A federal agent testified that when arrested Wright told government agents that he had never received any mail sent to him by Selective Service. The jury could accept this version as credible and, on the basis thereof plus the fact that no response was ever received by the board, could conclude that no forwarding arrangement existed. Thus the jury could find the mailing address requirement was not complied with. The jury was properly instructed concerning Count II, the mailing address count. Thus the conviction under that count was free of reversible error. Under the concurrent sentence doctrine we need not review the claim of error relating to instructions on Count I, the “home address” count. The conviction is, therefore, affirmed.


author: CRARY, District Judge:

text:
    Charles Farrell MALONE, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee.
    No. 74-1383.
    United States Court of Appeals, Ninth Circuit.
    Aug. 29, 1974.

      Peter E. Sheehan (argued), of American Civil Liberties Union, San Francisco, Cal., for petitioner-appellant.
    John D. O’Connor, Asst. U. S. Atty. (argued), San Francisco, Cal., for respondent-appellee.
    Before BARNES and KOELSCH, Circuit Judges, and CRARY, District Judge. ,

       Honorable E. Avery Crary, United States District Judge, Central District of California, sitting by designation.

   OPINION

CRARY, District Judge:

On February 23, 1973, the appellant was sentenced to a term of one year imprisonment and fined $1,000 for violation of Title 22, U.S.C. § 1934(c) (unlawful exportation of firearms from the United States to the United Kingdom). Execution of the sentence as to confinement was suspended and the appellant was placed on probation for a period of two years on the following terms and conditions:

“1. That he obey all local, state and federal laws;
2. That he comply with the rules and regulations of the Probation Office;
3. That he not participate in any American Irish Republican movement;
4. That he belong to no Irish organizations, cultural or otherwise;
5. That he not belong or participate in any Irish Catholic organizations or groups;
6. That he not visit any Irish pubs;
7. That he accept no employment that directly or indirectly associates him with any Irish organization or movement;
8. That he pay the fine provided for in this judgment in installments arranged through the Probation Office.”

On October 15, 1973, the appellant filed a petition, amended October 31, 1973, under Section 2255, Title 28, U.S. C., seeking discharge from the conditions of probation numbered three through seven, on the grounds the Court abused its discretion in imposing said conditions in that said conditions violate appellant’s rights under the First Amendment of the Constitution of the United States.

The District Court determined that there was “tremendous emotional involvement” on the part of the appellant in the Irish Republican movement. At the sentencing hearing, appellant’s counsel stated:

“In considering the probation report there was no profit motive on the part of Mr. Malone. Mr. Malone’s motive was something far deeper, emotional from his childhood background and training. It was a mistake, a mistake Mr. Malone admits was something he shouldn’t have done * * *. What motivated Mr. Malone is something very deep in his background and something in his childhood, something he learned at his father’s knee. It wasn’t done with malice and wasn’t done for the motive of profit. It was done for what he feels was a noble cause.” [Emphasis added.]

The courts strive to protect freedom of speech, religion and racial equality, but freedom of association may be restricted if reasonably necessary to accomplish the essential needs of the state and public order. Birzon v. King, 469 F.2d 1241 at 1242-1243 (2nd Cir. 1972).

In Porth v. Templar, 453 F.2d 330 at 334 (10th Cir. 1971), the Court observed that the trial court had the power to restrict the probationer’s association with “ * * * groups that would palpably encourage him to repeat his criminal conduct. See United States v. Smith, 414 F.2d 630, 636 (5th Cir. 1969).”

The question is, has the Court abused its discretion and acted unreasonably in its effort to prevent the appellant from activities or participation in or contact with groups or organizations that might fan his emotions or in any way cause his mind to dwell on subjects or activities which would conceivably encourage him to commit criminal acts of the nature here involved?

Great discretion is allowed a court in setting conditions of probation. As stated by the Court in United States v. Smith, 414 F.2d 630, 636 (5th Cir. 1969):

18 U.S.C.A. § 3651 (1964) authorizes the trial court to place a criminal defendant on probation ‘for such period and upon such terms and conditions as the court deems best.’ Congress obviously intended by means of the broad statutory language to invest the court with great discretion to establish conditions which would lead to the defendant’s ultimate acceptance by society * * * ” [Emphasis added.]

To like effect, People v. Mason, 5 Cal.3d 759, 764, 97 Cal.Rptr. 302, 304, 488 P.2d 630, Supreme Court of Calif., 1971; and Birzon v. King, supra. Appellant urges that the Smith case, supra, was reversed “sub nom.” Schacht v. United States, 398 U.S. 58, 90 S.Ct. 1555, 26 L.Ed.2d 44 (1970). A reading of the opinion in that case discloses that conditions of probation were not involved.

The conditions here involved are not intended to infer that each member of a group or organization with which the appellant is forbidden to associate will necessarily lead him into criminal activities or be a bad influence. It is the incidental association with one or more who might lead him to future criminality that the Court seeks to prevent. If the trial Judge could only prohibit active association with a group having an illegal purpose then the Court would be, in effect, restricted to the standard condition that the probationer obey the law. It does not’ appear such limitation was intended. Here the crime stemmed from high emotional involvement with Irish Republic sympathizers.

There is reasonable nexus between the probation conditions and the goals of probation. A convicted criminal may be reasonably restricted as part of his sentence with respect to his associations in order to prevent his future criminality. Hyser v. Reed, 115 U.S.App.D.C. 254, 318 F.2d 225, 239.

The Court concludes that the conditions of probation numbered three through seven are not too vague and are reasonably related to the goals of probation and the accomplishment of public order and safety and that they do not constitute an abuse of the Court’s discretion in the circumstances.

The order of the District Court denying appellant’s petition for relief under Section 2255 is affirmed.


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Ray Michael BOUDREAUX and Henry Watson Jones, Jr., Defendants-Appellants.
    No. 74-1721
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Oct. 11, 1974.
    Jack La Sonde, Atlanta, Ga. (Court-appointed), for defendants-appellants.
    John W. Stokes, Jr., U. S. Atty., Stanley M. Baum, Sherman D. Johnson, Asst. U. S. Attys., Atlanta, Ga., for plaintiff-appellee.
    Before COLEMAN, DYER and RO-NEY, Circuit Judges.

       Rule 18, 5th Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5th Cir. 1970, 431 F.2d 409, Part I.

   PER CURIAM:

Ray Michael Boudreaux and Henry Watson Jones, Jr. were convicted by jury on a one-count indictment for bank robbery, in violation of 18 U.S.C. § 2113(a). We affirm.

Both defendants were represented during their trial by assigned counsel. They assert the trial court erred in permitting them to be represented by a single counsel without first warning them of the possibility of a conflict between their defenses.

Defendants’ counsel began his effort in defense of both defendants at their preliminary examination on November 29, 1973, almost two months prior to commencement of the jury trial and was officially appointed their attorney by the Court on December 14, 1973, for the trial which began on January 21, 1974. Neither the defendants nor their assigned counsel ever hinted at a possible conflict of interest in the court below.

The majority of the Circuits are in accord with this Court in holding that a trial court does not need to advise a defendant of the right to separate counsel in the event of a conflict of interest between co-defendants, where there was neither objection, claim, nor notice to the court of any alleged conflict between the interests of the defendants. Lott v. United States, 218 F.2d 675 (5th Cir. 1955), cert. denied, 351 U.S. 953, 76 S. Ct. 848, 100 L.Ed. 1477 (1956); see Wilson v. United States, 435 F.2d 162 (5th Cir. 1970); Morgan v. United States, 396 F.2d 110 (2d Cir. 1968); United States v. Paz-Sierra, 367 F.2d 930 (2d Cir. 1966), cert. denied, 386 U. S.-935, 87 S.Ct. 962, 17 L.Ed.2d 807 (1967); United States v. Luciano, 343 F.2d 172 (4th Cir.), cert. denied, 381 U.S. 945, 85 S.Ct. 1786, 14 L.Ed.2d 708 (1965); United States v. Bornstein, 447 F.2d 742 (7th Cir.), cert. denied, 404 U. S. 851, 92 S.Ct. 88, 30 L.Ed.2d 91 (1971); United States v. Williams, 429 F.2d 158 (8th Cir.), cert. denied, 400 U. S. 947, 91 S.Ct. 255, 27 L.Ed.2d 253 (1970); United States v. Christopher, 488 F.2d 849 (9th Cir. 1973); Glavin v. United States, 396 F.2d 725 (9th Cir.), cert. denied, 393 U.S. 926, 89 S.Ct. 258, 21 L.Ed.2d 262 (1968); Fryar v. United States, 404 F.2d 1071 (10th Cir. 1968), cert. denied, 395 U.S. 964, 89 S.Ct. 2109, 23 L.Ed.2d 751 (1969). But see United States v. Foster, 469 F.2d 1 (1st Cir. 1972); United States ex rel. Hart v. Davenport, 478 F.2d 203 (3d Cir. 1973); United States v. Rispo, 470 F.2d 1099 (3d Cir. 1973); United States v. Rispo, 460 F.2d 965 (3d Cir. 1972); Campbell v. United States, 122 U.S.App.D.C. 143, 352 F.2d 359 (1965).

This is unlike the situation in Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942), where Glasser was deprived of his right to assistance of counsel under the Sixth Amendment because the trial court over objection had required his counsel to represent a co-defendant with notice that their interests might be in conflict. Absent some notice that the right to effective counsel could be jeopardized by joint representation, the Court does not bear the responsibility of informing co-defendants of possible problems of joint representation.

In any event, a review of the proceedings below reveals no conflict in this case that would require separate counsel.

Defendants’ second objection relates to the admissibility of certain articles of clothing which they were wearing when arrested by the police minutes after the robbery took place. They allege the items were not properly identified as being the items worn by the bank robbers. This evidence was properly admitted even though the three eye-witnesses to the robbery were not able to state definitely that the items of clothing were identical to those worn by the robbers. Whether the articles of clothing recovered from the defendants were the same as those worn by the bank robbers goes to the weight of the evidence rather than its admissibility. United States v. Poe, 462 F.2d 195 (5th Cir. 1972), cert. denied, 414 U.S. 845, 94 S.Ct. 107, 38 L.Ed.2d 83 (1973).

Defendants finally contend that their motion for acquittal should have been granted. Viewing the relevant evidence in the light most favorable to the Government, we find adequate and sufficient evidence to support the conclusion of the defendants’ guilt beyond a reasonable doubt. United States v. Ducker, 491 F.2d 1190 (5th Cir. 1974).

Affirmed.


author: PER CURIAM.

text:
    Margie L. TAPLEY et al., Plaintiffs, v. LOCKWOOD GREEN ENGINEERS, INC., Defendant. WELDING AND STEEL FABRICATION CO., INC., Defendant and Third Party Plaintiff, v. George C. SEYBOLT et al., Third Party Defendants.
    No. 74-1514.
    United States Court of Appeals, Eighth Circuit.
    Sept. 16, 1974.
    Jerome W. Seigfreid, Mexico, Mo., for plaintiffs.
    Branham Rendlen, Hannibal, Mo., for defendant.
    Before GIBSON, Chief Judge, and LAY and STEPHENSON, Circuit Judges.
   PER CURIAM.

This case comes before the court after referral from the screening panel, Local Rule 6, upon appellees’ motion for summary dismissal. Local Rule 9 (b).

The case revolves around a Missouri wrongful death action. The initial complaint sought damages of $50,000, the maximum amount then recoverable under Missouri law for wrongful death. After the filing of this complaint the wrongful death statute of Missouri was amended to allow for unlimited recovery. Plaintiff-appellants in turn filed an amended complaint seeking $500,000 in damages. Defendants moved to strike the prayer of the amended complaint on the ground that the amendment to the statute did not apply retroactively. The district court issued its order granting the motion and stating that plaintiffs might amend their complaint by reducing the ad damnum to $50,000. Plaintiffs appealed. The appealability of that order is now before the court.

If the order is to be deemed appealable under 28 U.S.C. 1291, it must fall within the “collateral order doctrine.” Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546-547, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949); Eisen v. Carlisle and Jacquelin, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974); Baxter v. United Forest Products Co., 406 F.2d 1120, 1123 (8th Cir. 1969). The order is not a final decision in the ordinary sense. Compare Delta Theatres v. Paramount Pictures, 259 F.2d 563 (5th Cir. 1958).

We do not view this appeal as one where substantial rights of any party will be irreparably lost if review is delayed. Cohen, supra at 546, 69 S.Ct. 1221. Indeed, the problem here may be obviated by a verdict for defendants or a plaintiffs’ verdict for less than $50,000. If and when the case is ultimately appealed from final judgment, the issue presented here can be more appropriately dealt with at that time.

Appeal dismissed.

      . The appeal lias not been certified under 28 classes enumerated in 28 U.S.C. § 1292(a). U.S.C. § 1292 (b); nor does it fall within the


author: PER CURIAM: HUFSTEDLER, Circuit Judge

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Javier OJEDA-RODRIGUEZ, Defendant-Appellant.
    No. 73-2485.
    United States Court of Appeals, Ninth Circuit.
    July 5, 1974.
    As Amended Aug. 15, 1974.

      Hufstedler, Circuit Judge, concurred specially and filed opinion.
    Charles T. McCutcheon (argued), La Mesa, Cal., for defendant-appellant.
    Thomas M. Coffin, Asst. U. S. Attorney (argued), San Diego, Cal., for plaintiff-appellee.
    Before BARNES, HUFSTEDLER and , CHOY, Circuit Judges.
   OPINION

PER CURIAM:

Ojeda-Rodriguez appeals his conviction in a trial to the court of possession of about 805 pounds of marijuana with intent to distribute, in violation of 21 U.S.C. § 841(a)(1). The trial judge denied a motion to suppress the evidence, expressly finding that the stop and search of appellant’s car resulted from founded suspicion on the part of the border patrol agents. We affirm.

About 6:00 a. m. on April 11, 1973, two border patrol agents posted alongside Interstate 8, some ten miles north of the Mexican border, saw a 1969 Chrysler Imperial with a lone occupant pass by. The car was dusty with scratches on its side indicating it had passed through brush while the highway was well-paved. The agents knew that there were narrow, unpaved, brush-lined roads affording illegal border crossing into the United States from Mexico. Pulling out behind appellant’s Chrysler, the agents noticed that its muffler and tailpipe were dragging close to the ground and that the car was wandering, from side to side apparently difficult to control because it was heavily loaded in its rear.

Suspecting that the Chrysler contained a load of illegal aliens, the agents stopped it and asked appellant for identification. Appellant admitted he had no papers and was in the United States illegally. He said he had no key to the trunk, so one of the agents entered the car to open the rear seat and immediately smelled the marijuana.

We agree with the trial judge that the agents had founded suspicion for stopping the Chrysler for the purpose of limited inquiry in the course of routine investigation. United States v. Bugarin-Casas, 484 F.2d 853-854 (9th Cir. 1973); United States v. Jaime-Barrios, 494 F.2d 455 (9th Cir., 1974).

Under the circumstances present here, Almeida-Sanchez v. United States, 413 U.S. 266, 93 S.Ct. 2535, 37 L.Ed.2d 596 (1973) does not apply even though a “roving patrol” was involved.

Affirmed.

HUFSTEDLER, Circuit Judge

(concurring specially):

I concur under the compulsion of United States v. Bugarin-Casas (9th Cir. 1973), 484 F.2d 853 and its progeny.

I am unable to reconcile the rationale of Almeida-Sanchez v. United States (1973) 413 U.S. 266, 93 S.Ct. 2535, 37 L.Ed.2d 596, forbidding border agents on roving patrol to stop and search vehicles without probable cause (see United States v. Brignoni-Ponce (9th Cir. en banc 1974) 499 F.2d 1109), with the Bugarin-Casas line of cases permitting roving border patrol agents to stop vehicles under circumstances short of probable cause.


text:
    Herbert Edward HOYT, Jr., Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee.
    No. 73-2435.
    United States Court of Appeals, Fifth Circuit.
    Oct. 10, 1974.
    Rehearing Denied Dec. 27, 1974.
    William G. Whatley, Baton Rouge, La., for petitioner-appellant.
    Douglas M. Gonzales, U. S. Atty., Baton Rouge, La., Mary William Cazalas, Asst. U. S. Atty., New Orleans, La., for respondent-appellee.
    Before RIVES, WISDOM and MORGAN, Circuit Judges.
   PER CURIAM:

Herbert Edward Hoyt, Jr., after a jury trial in 1971, was found guilty of kidnapping, in violation of 18 U.S.C. § 1201(a), and sentenced by the District Court of the Eastern District of Louisiana to a term of twenty (20) years imprisonment. At the time of sentencing appellant was eighteen (18) years of age and was eligible for sentencing under the terms of the Federal Youth Corrections Act of 1950, 18 U.S.C. § 5005, et seq. This action under 28 U.S.C. § 2255 was filed in the United States District Court for the Middle District of Louisiana, and applicant, by later motion, seeks removal to the Eastern District of Louisiana.

The main thrust of argument by Hoyt on this appeal is that the District Court erred in failing to make an explicit finding that appellant Hoyt would not benefit from treatment under the Federal Youth Corrections Act, Section 5010(d). We have carefully reviewed the record of the sentencing and find that, although counsel for defendant at the time of the sentencing called the attention of the Court to the tender age of the defendant, neither the defendant’s counsel nor the District Court suggested in the record that the Federal Youth Corrections Act be considered at the time of sentencing.

We think that the case at hand is controlled by the recent Supreme Court decision of Dorszynski v. United States, 1974, 418 U.S. 424, 94 S.Ct. 3042, 41 L.Ed.2d 855, which holds that 18 U.S.C. § 5010(d) requires an explicit finding of “no benefit” as a condition precedent to sentencing an eligible offender as an adult. Chief Justice Burger in Dorszynski held:

“Literal compliance with the Act can be satisfied by any expression that makes clear the sentencing judge consider the alternative of sentencing under the Act and decided that the youth offender would not derive benefit from treatment under the Act.
“This case provides an example of the problems arising when the required finding is left to implication. Counsels’ references to the Act followed by the District Court’s sentence indeed afford support for the argument that by implication, the options of the Act were considered and rejected. However at the post-conviction hearing the District Court found from the record of the sentencing hearing the implication that the Act was ‘not applicable.’ It is thus unclear whether this meant the court believed petitioner to be legally ineligible for treatment under the Act — which would be error — or whether, realizing he was eligible, nevertheless deliberately opted to sentence him as an adult. An explicit finding that petitioner would not have benefited from treatment under the Act would have removed all doubt concerning whether the enlarged discretion Congress provided to sentencing courts was indeed exercised.”

418 U.S. 444, 94 S.Ct. 3053.

As to the appellant’s other assertions of error, we find there is no merit in the contention that the District Court erred in denying the motion to transfer the action from the Middle District to the Eastern District of Louisiana or that there was error in denying a hearing.

Accordingly, the sentence of the District Court is hereby vacated and the case is remanded to the District Court to conduct further proceedings consistent with this opinion.

Vacated and remanded.

      . Applicant Hoyt was tried, convicted and sentenced by the District Court for the Eastern District of Louisiana. Since the date of sentencing, July 2, 1971, a new dis-triet, the Middle District of Louisiana, has been created, and the Baton Rouge Division is now a part of the newly created district.

      . Immediately prior to sentencing, the Court stated:
      “I think that you have a long time before you can be considered fit to be in a free society. I think that possibly the Federal authorities might have some provisions whereby they can offer you training and maybe convince you that there is a better way than the way you have apparently chosen.”


text:
    UNITED STATES of America, Appellee, v. Peter GRADOWSKI, Appellant.
    No. 1248, Docket 74-1710.
    United States Court of Appeals, Second Circuit.
    Argued Aug. 13, 1974.
    Decided Sept. 10, 1974.

      John H. Doyle III, New York City, for appellant.
    John N. Bush, Asst. U. S. Atty. (Paul J. Curran, U. S. Atty., S. D. N. Y., John D. Gordan III, Asst. U. S. Atty., of counsel), for appellee.
    Before OAKES, Circuit Judge, FRANKEL and KELLEHER, District Judges.

       Of the Southern District of New York and the Central District of California, respectively, sitting by designation.

   PER CURIAM:

We affirm the appellant’s conviction on seven counts of an indictment relating to possession of stolen goods and mail fraud. 18 U.S.C. §§ 2113(c), 1341-1342.

Appellant’s principal ground for appeal is based on the trial court’s denial of his motion to suppress documents linking him with the crimes of which he was convicted, which were seized in a warrantless search of his automobile trunk. The search was found by the trial court to have been made with the consent of the Hammers, people at whose house appellant had left his car, to whom he had given the keys, and who — rather than being under any compulsioii from any previous wrongful assertion by the federal agents of authority to search their house — were quite happy to give the car keys to the agents, wanting as they were to be rid of any connection with appellant and his cohort, Mrs. Hammer’s brother. The finding of consent was amply justified by the evidence. Consent to a search by one with access to the area searched, and either common authority over it, a substantial interest in it or permission to exercise that access, express or implied, alone validates the search. United States v. Matlock, 415 U.S. 164, 170-171, 94 S.Ct. 988, 39 L.Ed.2d 242 (1974); United States v. Gargiso, 456 F.2d 584, 587 (2d Cir. 1972).

Judgment affirmed.


text:
    Earl Edward GANDY, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee.
    No. 74-2538
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Oct. 11, 1974.

      Earl Edward Gandy, pro se.
    Waymon G. Sherrer, U. S. Atty., Melton L. Alexander, Asst. U. S. Atty., Birmingham, Ala., for respondent-appellee.
    Before GEWIN, GODBOLD and CLARK, Circuit Judges.

       Rule 18, 5 Cir.; Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I.

   PER CURIAM:

This appeal is from an order of the district court denying the § 2255 petition of a federal prisoner. We vacate and remand.

The appellant was convicted upon trial by jury of two counts of selling counterfeit Federal Reserve Notes, in violation of 18 U.S.C. § 473. He was sentenced August 15, 1972, to five years under the first count and five years, subject to the provisions .of 18 U.S.C. § 4208(a)(2), under the second count, to run consecutively. On direct appeal the judgment was affirmed without opinion. United States v. Gandy, 5 Cir., 1973, 474 F.2d 1345.

In his § 2255 motion appellant attacked the validity of his conviction on grounds, inter alia, that three prior un-counselled convictions were considered by the district court in assessing sentence, in violation of United States v. Tucker, 404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592 (1972). The court held that this issue had been decided adversely to appellant on direct appeal, whereas the issue presented in that appeal was the use of the prior uncounselled convictions to impeach appellant’s credibility. Thus, the court below did not treat or decide the sole issue now presented for. review.

The government has conceded that appellant was without counsel when convicted in Shelby County, Alabama, in 1948 and 1955 and Randolph County, Alabama, in 1949, and has filed a response suggesting remand. The record is silent as to the specific considerations of the sentencing judge. The district court’s judgment is, therefore, vacated and remanded for a review of the circumstances and considerations which led the court to impose sentence. If it is determined that the sentence resulted from consideration of the prior uncounselled convictions, then the court must resentence appellant without consideration being given to the same. Mitchell v. United States, 5 Cir., 1973, 482 F.2d 289; Hazeltine v. United States, 5 Cir., 1973, 486 F.2d 219.

Vacated and remanded.