author: WINTER, Circuit Judge:

text:
    CENTRAL OPERATING COMPANY, Appellee, v. UTILITY WORKERS OF AMERICA, AFL-CIO, et al., Appellants.
    No. 73-1714.
    United States Court of Appeals, Fourth Circuit.
    Argued Nov. 7, 1973.
    Decided Jan. 24, 1974.

      Irwin Geller, New York City (Donald F. Menagh, New York City, and Mus-grave & Musgrave, Point Pleasant, W. Va., on brief) for appellants.
    William B. Poff, Roanoke, Va., (Woods, Rogers, Muse, Walker & Thornton, Roanoke, Va., E. Dennis White, Jr., Vinson, Meek & White, Huntington, W. Va., on brief) for appellee.
    Before CLARK, Associate Justice, and WINTER and RUSSELL, Circuit Judges.

       Supreme Court of the United States, retired, sitting by designation.

   WINTER, Circuit Judge:

Plaintiff, the owner and operator of an electric power plant, sued the local union, the national union and certain individuals, who were plaintiff’s employees and officers of the local union, alleging a violation of the “no strike” provision of the collective bargaining agreement to which plaintiff and the union defendants were parties and claiming injunctive relief and damages. It obtained a default judgment against all defendants. All defendants later moved to have the default judgment set aside; and from the denial of their motions, all defendants appeal.

We agree with the national union that the district court lacked in personam jurisdiction over it. We find no basis on which to disturb the judgment against the local union. Plaintiff has suggested that if the default judgment against the local union is not disturbed, the judgments against the individual defendants may be set aside or vacated. We reverse as to the national union, affirm as to the local union and vacate the judgments against the individual defendants, remanding the case to the district'court for dismissal of the complaint against individual defendants with prejudice.

I.

The collective bargaining agreement of July 19, 1971 between the parties contained a “no strike” provision. In May of 1972, a dispute arose concerning the overtime call procedures in effect at plaintiff’s Philip Sporn plant in Mason County, West Virginia. This dispute culminated in a work stoppage that began in the late evening of May 27, 1972, and continued into the next day. It is undisputed that this work stoppage violated the “no strike” clause of the collective bargaining agreement, but each defendant denies responsibility for the breach.

On May 28, 1972, while the stoppage was still in progress, plaintiff filed its complaint in this action. It alleged that defendants had threatened to call a work stoppage if plaintiff did not act favorably on the overtime grievance and that they had made good on such threat on May 27th. Defendants have, throughout the course of this litigation, maintained that they never threatened a work stoppage, were not responsible for such stoppage as occurred, and, indeed, actively sought to prevent it. The complaint prayed for a temporary restraining order against continuance of the work stoppage pending a hearing and compensatory and punitive damages.

On May 28, 1972, the district judge ordered that defendants appear on June 1, 1972, to show cause why a preliminary injunction against picketing and striking at the Philip Sporn plant should not issue. In the interim, defendants, their agents and members were temporarily restrained from those activities. Copies of the complaint, summons, and temporary restraining order were personally served upon the local union and upon five of the individual defendants within the State of West Virginia. Service upon the national union was obtained by delivering copies of the complaint, summons and temporary restraining order to Mr. Potter, a national staff representative of the national union, at his home in Girard, Ohio, on June 10, 1972.

When the existence of the temporary restraining order became known to the employees participating in the work stoppage at the Philip Sporn plant, they discontinued picketing and returned to work. As a result of plaintiff’s successive ex parte applications, the hearing on the temporary injunction set for June 1, 1972, was continued by orders entered on June 1, 1972, June 12, 1972, June 22, 1972, June 30, 1972, and July 11, 1972. Defendants did not appear on any of the dates set for the continued hearing; and during this period, no attorney entered an appearance in behalf of any of the defendants. No answer to the complaint was ever filed despite the fact that such an answer was due by June 22, 1972, according to the terms of the summons. The district court’s final continuance order of July 11, 1972, set the date of the continued hearing for July 20, 1972, and also provided that “the Defendants shall file it’s [sic] answer or any other responsive pleading prior to the aforesaid date.”

When none of the defendants appeared at the hearing on July 20, 1972, and no answer or other responsive pleading had been filed, plaintiff moved for judgment by default. The district court granted the motion, and after having heard plaintiff’s evidence on the damages it suffered as a result of the work stoppage, entered a judgment against all defendants, jointly and severally, in the amount of $13,701.38.

Between July 25, 1972 and August 4, 1972, copies of the district court’s judgment order were served upon all defendants. On November 22, 1972, all defendants appeared in the proceedings, moved to set aside the default judgment, and tendered an answer to the original complaint. As grounds for the motion, the national union urged that the judgment against it was void because it had never been subjected to the district court’s in personam jurisdiction by service of process in a manner authorized by law. The individual defendants asserted that the judgment was void as to them because' the district court lacked subject matter jurisdiction over the claim against them individually for breach of contract. The local union and the individual defendants both urged that they never received notice of the continuance orders in this action and that the entry of default under such circumstances deprived them of due process of law, thereby rendering the judgment void. Finally, the local union and the individual defendants asserted that they ought to be relieved of the judgment pursuant to Rule 60(b)(1) F.R.Civ.P. on the ground that entry of default was due to mistake and excusable neglect on their part and that they had a meritorious defense to the claim.

After an evidentiary hearing, the district court, by memorandum order, denied defendants’ motion. The court was satisfied that all the defendants had been properly served, and that it had subject matter jurisdiction under 29 U. S.C. § 185(a) over all the claims in the suit. The court denied relief from judgment under Rule 60(b)(1) because of defendants’ “inexcusable dereliction” in failing to seek relief from judgment until almost four months after receiving notification. As a further ground for denying the motion to vacate, the district court said that “defendants have failed to carry their burden of showing they have a meritorious defense to the claim.”

II.

It is axiomatic that a federal court cannot acquire in personam jurisdiction over a defendant who does not voluntarily appear unless he is served with process in a manner authorized by federal statute or rule. Robertson v. Railroad Labor Bd., 268 U.S. 619, 622, 45 S.Ct. 621, 69 L.Ed. 1119 (1925). We therefore turn to the national union’s contentions that because extraterritorial service of the summons and complaint upon its agent in Ohio was not authorized by any statute or rule, in person-am jurisdiction over the national union was not acquired, and the judgment against the national union was void.

Rule 4(f), F.R.Civ.P., provides that the process of the district court may be served beyond the territorial limits of the state in which the court sits when such service is authorized by statute of the United States or the federal rules of civil procedure. Plaintiff contends that 29 U.S.C. § 185(d) authorizes service of process upon unions, named as defendants in suits within the grant of subject matter jurisdiction contained in § 185(a), to be effected anywhere in the United States. Section 185(d) provides that:

The service of summons, subpoena, or other legal process of any court of the United States upon an officer or agent of a labor organization, in his capacity as such, shall constitute service upon the labor organization.

Plaintiff claims that the phrase “any court” manifests Congress’ intention to permit a United States court in any district to summon a union defendant by service effected in any other district.

We find plaintiff’s reading of § 185(d) a strained one. The section, on its face, appears to be concerned with the proper agent for receipt of process upon the union and not the locale of service, and this reading is supported by the legislative history of the Labor Management Relations Act. Section 185 was designed to provide a federal forum for the adjudication of disputes between unions and employers arising out of violations of collective bargaining agreements. Prior to the enactment of § 185(d), a major obstacle to such suits had been the status of unions under state law as unincorporated associations. As such, they lacked capacity to sue and be sued and, concomitantly, could not be summoned before the court by service of process upon their agents. We believe that Congress enacted § 185(d) in order to remove such obstacles by providing that the service of summons upon an agent of a union would be adequate to subject such union to the jurisdiction of the federal court issuing the summons. Plaintiff has not pointed to any legislative history suggesting that Congress also intended to authorize the execution of such summons beyond the borders of the state in which the issuing court sits, and we have found none.

Nor are we persuaded that, in order to effectuate the general congressional purpose to subject unions to suit for breach of collective bargaining agreements to which they are parties, it is necessary to interpret § 185(d) to authorize extraterritorial service. Plaintiff contends that unless § 185(d) is so interpreted, employers will be unable to sue a national union for breach of a collective bargaining agreement in federal court in the state where the employees covered by the agreement work as long as an agent authorized to accept service for such national union cannot be found in such state, even though, the national union is amenable to suit for breach in such state, and venue lies therein. 29 U.S.C. § 185(c). It is urged that we should not tolerate such an anomaly.

We are not convinced that the anomaly is great enough to impair substantially the congressional purpose of providing a federal forum for suits against unions for breach of collective bargaining agreements. If there is venue for an action against a union in a certain district court, the likelihood is great that agents of the union will be present from time to time in that district in pursuit of their representational activities and the employer will have a fair opportunity to effect service. In the instant case, the record reveals that Mr. Potter was in West Virginia, subsequent to the filing of complaint in this suit, conferring with plaintiff’s officers about this dispute. Service might have been effected on any of those occasions. Furthermore, any extraterritorial service provisions of the state in which the district court is held will be available to the employer through .the borrowing provision of Rule 4(e), F.R.Civ.P. Most states have substitute service of process provisions as part of their long-arm statutes which are adequate to effect services upon unions amenable to suit in a district court held in such state on an action under 29 U.S.C. § 185(a). Thus, we see no compelling reason to interpret § 185(d) to authorize nationwide service of process in order to effectuate the policy of providing a federal forum for suits against unions for breach of collective bargaining agreements.

Plaintiff also argues that proper service was effected in accordance with certain provisions of the West Virginia rules, made applicable to federal actions by virtue of Rule 4(e) F.R.Civ.P. We conclude, however, that service upon Mr. Potter in Ohio was ineffective, under the West Virginia rules cited by plaintiff, to acquire in personam jurisdiction over the national union.

Section 31-1-71, W.Va.Code (1972 Replacement Volume) provides that a foreign corporation “doing business” in West Virginia, as defined by the statute, may be sued in the courts of that state on certain kinds of claims arising out of such business. Service upon the foreign corporation in such suits is to be made upon the West Virginia state auditor. Assuming, without deciding, that the national union is a “foreign corporation” under the statute, and that its representation activity and execution of the collective bargaining agreement rendered it amenable to suit in West Virginia under § 31-1-71, we are met with the undisputed fact that service upon the state auditor was not made in this instance. Service upon the state auditor is the only authorized manner of extra-ration.

While Rule 4(d)(9), W.Va.R.Civ.P. Appendix W.Va.Code (1966), authorizes service upon an unincorporated association by delivering a copy of the summons and complaint to “any agent” of such association, all of the types of service authorized in the subdivisions of Rule 4(d) must be executed “within the State.' Service in Ohio is therefore not authorized.

Rule 4(f), W.Va.R.Civ.P., provides for personal service outside the state on both resident and non-resident defendants. However, in the casé of non-resident defendants, such extraterritorial personal service has only the effect of constructive service. It cannot be seriously contended that the national union is a resident of West Virginia. Therefore, the service upon Mr. Potter in Ohio had only the effect of constructive service upon the national union. Under West Virginia law, a judgment that operates in personam cannot be rendered against a defendant upon whom only constructive service has been executed. Fabian v. Kennedy, 333 F.Supp. 1001 (N.D.W.Va.1971).

Since there was no authority, under either federal or West Virginia law, for effective service of process upon an agent of the national union in Ohio, we conclude that the default judgment against the national union was void, and we reverse it. Since we reverse for lack of jurisdiction, our reversal is without prejudice to plaintiff’s right to seek further relief if valid service of process is effected.

III.

The only attempt to notify any of the defendants of the continuance orders obtained upon plaintiff’s ex parte motions was undertaken by plaintiff's attorney. He sent copies of each order to two officials of the national union, Mr. Munger and Mr. Potter, but none was ever sent to the local union or to the individual defendants. The local union and the individual defendants did have knowledge that the hearing on the temporary injunction scheduled for June 1, 1972 had been postponed. Mr. Munger called defendant Searls, president of the local union, on May 31, 1972, and told him that the June 1st hearing had been “delayed.” Mr. Searls was not told the date of the rescheduled hearing because Mr. Munger had just elicited a promise from plaintiff’s attorney to seek a continuance by ex parte motion and the date of the continued hearing was not as yet known. At a grievance hearing held on or about June 7, 1972, Mr. Searls asked an agent of plaintiff, Mr. Larew, whether- these proceedings were still in progress. Mr. Larew responded in the affirmative but did not indicate the date of the next hearing.

The individual defendants and the local union contend that the entry of the default judgment against them for failing to appear or file a responsive pleading by July 20, 1972, the date of the last continued hearing, in the absence of actual notice of the continuance order of July 11, 1972, violated due process of law.

Default judgments entered for failure, after proper service, to answer within the time allowed do not violate due process. Defendants were in default for failing to answer within the allowed period. The record does not disclose any reason for them to believe that the time for answer had been enlarged. At best, they had grounds to believe that the hearing on the temporary injunction had been postponed indefinitely. Had the court entered a default judgment during the period between the date when the time for answer expired, June 22, 1972, and the last continuance order, July 11, 1972, there would be no doubt that the default judgment satisfied the requirements of due process.

The order of July 11, 1972 enlarged the time for answering the complaint to July 20, 1972. We have no doubt that, had defendants filed an answer by that date, entry of default would have been improper. While the July 11th order had the effect of affording defendants the opportunity to cure their default by responding within the enlarged time, we do not think that it made the subsequent entry of a default judgment upon their failure to answer within the new limit violative of due process.

Subsequent to June 22, 1972, defendants were subject to the entry of a default judgment at any time without prior notice; and their right to due process was no bar. Their right to due process was not enhanced by an order, of which they had no knowledge, suspending the effect of a prior default. Failure to give defendants notice of the July 11th order may have deprived them of their newly acquired opportunity to cure their default, but this opportunity was not “property” within the meaning of the due process clause unless defendants had knowledge of it and could, therefore, form expectations with respect to it. Cf. Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). Thus, the failure to give the individual defendants and the local union notice of the continuance orders in this case does not render the judgment void as to them.

Individual defendants and the local union alternatively contend that the failure to give notice of the July 11th order violated Rules 5(a) and 77(d), F. R.Civ.P. This contention is without merit, since the requirement to serve court orders set forth in those rules does not apply to service of a party “in default for failure to appear.” At the time the July 11th order was entered, the defendants had both failed to enter an appearance and failed to answer within the time allotted in the complaint. They were, therefore, not entitled, under the rules, to notice of that order.

IV.

The individual defendants and the local union also sought relief from the default judgment under Rule 60(b)(1) on the ground that their default was caused by inadvertent and excusable mistake and erroneous belief. The granting of relief from judgment on such grounds is a matter committed to the discretion of the district court, the exercise of which will not be disturbed on appeal absent a showing of abuse. Universal Film Exchanges, Inc. v. Lust, 479 F.2d 573, 576 (4 Cir. 1973) ; Consolidated Masonry & Fireproofing v. Wagman Construction Corp., 383 F.2d 249, 251 (4 Cir. 1967). In order to obtain relief under Rule 60(b)(1), a party must show that he had an acceptable excuse for lapsing into default and that he has a meritorious defense to the action. Defendants probably made a sufficient showing on both of these points. However, delay in seeking relief from a default judgment may properly be considered by the district court in determining whether to grant such relief. Consolidated Masonry & Fireproofing, Inc. v. Wagman Construction Corp., 383 F.2d at 251. Defendants waited almost four months after receiving notice of the default judgments before filing their motions to vacate. They provide no satisfactory explanation for this delay. We cannot, therefore, say that the district judge abused his discretion in relying upon the delay, characterized by him as “inexcusable dereliction,” in denying relief from judgment. Since the district court placed primary reliance upon the factor of delay, we affirm its denial of relief under Rule 60(b) (1).

V.

In argument of this appeal, plaintiff has conceded that if its judgment is undisturbed against the local union, the judgments against individual defendants should not stand. Since the complaint alleges only the acts of the individual defendants as the basis of the local union’s liability, it would seem to follow that, if the local union is liable, the individual defendants’ conduct must have been performed in their capacity as union officials. Under Atkinson v. Sinclair Refining Co., 370 U.S. 238, 82 S.Ct. 1318, 8 L.Ed.2d 462 (1962), there would probably be no right under federal law to relief against them individually.

Accepting plaintiff’s concession, we therefore vacate the judgments against the individual defendants and remand the case to the district court for dismissal of the complaint as to them with prejudice.

Reversed in part; affirmed in part; and remanded. Costs to be divided equally between the parties.

      . Plaintiff was Central Operating Company (hereafter called “plaintiff” or “Central”). The local union was Local 426 of the Utility Workers Union of America, AFL-CIO (hereafter called “the local union”), and the national union was Utility Workers Union of America, AFL-CIO (hereafter called “the national union”). Suit was based on § 301 of the Labor Management Relations Act, 29 U.S. C. § 185.

      . The district judge erroneously characterized the delay between notification of default judgment and defendants’ motion to vacate as “some five months.” However, we do not regard this minor miscalculation as material.

      . The national union concedes that it had sufficient contacts with West Virginia to render it amenable to suit in federal court there for breach of the collective bargaining agreement in this case. It further concedes that Mr. Potter was a proper agent for receipt of process directed at the national union under 29 U.S.C. § 185(d).

      . The only other court known to have considered this contention rejected it. Daily Review Corp. v. Int’l Typographical Union, 9 F.R.D. 295 (E.D.N.Y.1949).

      . Federal common law governs the substance of suits brought under 29 U.S.C. § 185(a). Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). In the absence of an applicable statute, the amenability of a person not found within the state to suit on a federal cause of action in a district court sitting in that state is governed by the same standards that set the due process limits on a state’s judicial enforcement powers. Lone Star Package Car Co. v. B. & O. R.R., 212 F.2d 147 (5 Cir. 1954) ; Fraley v. C. & O. Ry., 397 F.2d 1 (3 Cir. 1968). Thus, where a national union performs acts of representation in behalf of employees who work in a certain state and is a party to their collective bargaining agreement, the minimum contacts necessary to render it amenable to suit in such state, would seem to be satisfied. See, McGee v. Int’l Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957).

      . Section 185 (c) provides that:
      For the purposes of actions and proceedings by or against labor organizations in the district courts of the United States, district courts shall be deemed to have jurisdiction of a labor organization (1) in the district in which such organization maintains its principal office, or (2) in any district in which its duly authorized officers or agents are engaged in representing or acting for employee members.
      It has been uniformly held that subsection (c) is a venue provision in spite of the use of the word “jurisdiction.” See, e. g., United Rubber, Cork, Linoleum and Plastic Workers of America, AFL-CIO, Local 102 v. Lee Rubber & Tire Corp., 394 F.2d 362 (3 Cir.), cert. denied, 393 U.S. 835, 89 S.Ct. 108, 21 L.Ed.2d 105 (1968).

      . Rule 4(d) (9) reads :
      (d) Personal or substituted service of process shall be made by delivering or posting within the State a copy of the summons and of the complaint together, in the manner prescribed in this subdivision.
      (9) Unincorporated Associations.—. . .

      . Although plaintiff’s failure to give defendants notice of the July 11th order did not violate Rules 5(a) and 77(d), it probably qualifies as a good excuse for the default which occurred on July 20th. The July 11th order was obviously designed to elicit some response from defendants. It hardly accords with the spirit of that order for notice thereof never to reach the defendants.
      In spite of the district judge’s finding that defendants failed to carry their burden of showing of a meritorious defense, the record indicates otherwise. Mr. Searls testified at the hearing on the motion to vacate that neither he nor any of the other individual defendants called the work stoppage and that he himself actively sought to prevent it. There was no evidence to contradict this testimony, but it seems clear that the district judge did not believe Searls’ testimony. However, to warrant relief, a party is not required to establish a meritorious defense by a preponderance of the evidence. The purpose of the motion was only to open the default judgment so that there may be a trial on the merits; he did not seek a judgment in his favor. Therefore, we are of the view that a party satisfies his burden of demonstrating a meritorious defense when he introduces uncontradicted testimony which, if believed, establishes facts constituting a meritorious defense. See, Tolson v. Hodge, 411 F.2d 123, 130 (4 Cir. 1969), where the mere assertion of facts constituting a meritorious defense in an original complaint apparently satisfied the requirement of showing a meritorious defense to a counterclaim upon which default judgment had been entered.
      The erroneous view that the district judge took of a party’s burden of demonstrating a meritorious defense did not harm defendants because of the alternative independent basis for denying' relief discussed infra.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Anthony Vince PERNA, Defendant-Appellant.
    No. 73-1429.
    United States Court of Appeals, Sixth Circuit.
    Argued Nov. 26, 1973.
    Decided Jan. 31, 1974.

      Stuart Friedman, Cleveland, Ohio, for defendant-appellant; James D. London (Court-appointed), Cleveland Public Defender, Cleveland, Ohio, on brief.
    Paul Brickner, Cleveland, Ohio, for plaintiff-appellee; Frederick M. Coleman, U. S. Atty., Timothy J. Potts, Asst. U. S. Atty., Cleveland, Ohio, on brief.
    Before PHILLIPS, Chief Judge, PECK, Circuit Judge, and JOINER, District Judge.

       Honorable Charles W. Joiner, Judge, United States District Court for the Eastern. District of Michigan, sitting by designation.

   PER CURIAM.

Appellant seeks reversal of his conviction under a two count indictment for possessing and uttering counterfeit currency in violation of 18 U.S.C. §§ 472 and 473.

Appellant, Anthony Vince Perna, and one Trunzo were charged on two separate identical indictments and their cases were consolidated for trial. On the day of the trial, but before it had commenced, Trunzo entered a plea of guilty and was released on bond.

The trial of Perna proceeded and the Government called three witnesses, all Secret Service agents. It is the testimony of undercover Agent Marchitello that provides the basis for this appeal.

Marchitello first testified that Trunzo, the original co-defendant, introduced appellant to him as “my source . this is my man for the counterfeit currency.” Marchitello next testified that he and appellant then engaged in further conversation in which, inter alia, appellant said that he had been dealing in counterfeit currency for five years and had never been caught, that it would take him about fifteen minutes to get the counterfeit currency, and that his terms were nine per cent in genuine currency.

At this point in the proceedings, the District Judge ruled that a joint criminal venture had been established and permitted Agent Marchitello to testify further as to utterances of Trunzo that implicated appellant. Marchitello testified, inter alia, that Trunzo told him that front money, an advance payment, would have to be furnished before any delivery could take place, unless they talked directly with appellant. Further, Marchitello testified that Trunzo had told him “we’ll go see Tony Perna [appellant], the man who will do the deal on the hill.”

Appellant now contends that the District Court committed reversible error in permitting in evidence Agent Marchitello’s testimony of the out of court statements made by Trunzo, the original co-defendant, which implicated appellant. In support of this contention, appellant asserts that (1) the Confrontation Clause of 'the Sixth Amendment to the Constitution guarantees his right to confront Trunzo, (2) no independently proven conspiracy was established prior to the introduction of the questioned testimony, and (3) Trunzo was available to testify and evidentiary rules require the unavailability of a declarant prior to admitting hearsay of a co-conspirator’s utterances.

We find appellant’s assertions unpersuasive.

Although the Confrontation Clause guarantees an accused the right to confront his accuser, it has long been established, under the co-conspirator exception to the hearsay rule, that the declarations of one conspirator may be used against another conspirator. Dutton v. Evans, 400 U.S. 74, 91 S.Ct. 210, 27 L.Ed.2d 213 (1970); Hitchman Coal & Coke Co. v. Mitchell, 245 U.S. 229, 38 S.Ct. 65, 62 L.Ed. 260 (1917); Clune v. United States, 159 U.S. 590, 16 S.Ct. 125, 40 L.Ed. 269 (1895), and Campbell v. United States, 415 F.2d 356 (6th Cir. 1969).

The rationale for the rule was best expressed in Hitchman Coal & Coke, supra, 245 U.S. at 249, 38 S.Ct. at 72, in which the Supreme Court, in deciding a civil suit with a similar factual situation, stated:

“The rule of evidence is commonly applied in criminal cases, but is of general operation; indeed, it originated in the law of partnership. It depends upon the principle that when any number of persons associate themselves together in the prosecution of a common plan or enterprise, lawful or unlawful, from the very act of association there arises a kind of partnership, each member being constituted the agent of all, so that the act or declaration of one, in furtherance of the common object, is the act of all, and is admissible as primary and original evidence against them.”

The co-conspirator hearsay exception is equally well established in a case such as the instant one where there is an absence of a conspiracy count. See United States v. Talbot, 470 F.2d 158, 159 (6th Cir. 1972), and authorities cited therein.

The receipt of such testimonial proof, however, is conditioned on a sufficient showing by evidence aliunde of a concert of action between the defendants before the extrajudicial declarations of the co-defendants are admissible. See Talbot, supra, and authorities cited therein. In the present case, the District Judge correctly ruled that a joint criminal venture had been established and thereafter permitted Agent Marchitello to testify as to Trunzo’s remarks, which clearly implicated appellant.

Appellant’s final assertion that since Trunzo was available to testify, Marchitello’s hearsay should not have been permitted in evidence is equally misfounded. Although the Government may have erred in its trial strategy in not calling Trunzo, and this might have been the better procedure, we are cited to no case or rule of evidence that makes unavailability of the hearsay declarant a requirement for application of the co-conspirator exception to the hearsay rule.

Affirmed.


author: WEICK, Circuit Judge.

text:
    Emmett C. WORLEY, Plaintiff-Appellee, v. COLUMBIA GAS OF KENTUCKY, INC., Kentucky Gas Transmission Corporation, Defendants-Appellants. Emmett C. WORLEY, Plaintiff-Cross-Appellant, v. COLUMBIA GAS OF KENTUCKY, INC., et al., Defendants-Cross-Appellees. Emmett C. WORLEY, Plaintiff-Appellee, v. MUTUAL PIPELINE CONTRACTORS, INC., et al., Defendants-Appellants.
    Nos. 73-1204, 73-1205, 73-1207.
    United States Court of Appeals, Sixth Circuit.
    Argued Oct. 3, 1973.
    Decided Dec. 27, 1973.
    Rehearing Denied Feb. 1, 1974.

      Joseph L. Arnold, Lexington, Ky., and Thomas E. Motean and H. Raymond Andrews, Jr., Charleston, W. Va., on brief, for Kentucky Gas Transmission Corporation and Columbia Gas of Kentucky, Inc.

      Arthur L. Brooks, Lexington, Ky., and Leslie W. Morris, II, Stoll, Keenon & Park, Lexington, Ky., on brief, for Mutual Pipeline Contractors, Inc., John T. Dix and Chester Nowicke.
    David C. Graves, Jr., Lexington, Ky., on brief, for Emmett C. Worley.
    Before WEICK, EDWARDS and CELEBREZZE, Circuit Judges.
   WEICK, Circuit Judge.

Mutual Pipeline Contractors, Inc. (hereinafter referred to as Mutual), John T. Dix and Chester Nowicke (Mutual’s principal officers), Columbia Gas of Kentucky, Inc. (hereinafter referred to as Columbia Gas), and Kentucky Gas Transmission Corporation (hereinafter referred to as Kentucky Gas Transmission), have appealed from a judgment entered in the District Court against them in favor of the plaintiff Worley, in the amount of $800,000, on a complaint charging the defendants with conspiring to maliciously prosecute plaintiff Worley for the offense of issuing checks drawn on a bank, which checks were not paid because of lack of sufficient funds. In the testimony these checks were referred to as cold checks.

Motions were made by defendants for a directed verdict at the close of plaintiff’s evidence, and were renewed at the close of all the evidence, and were denied by the Court. The Court submitted the issues to the jury which returned a verdict against all defendants, in the sum of $750,000 for compensatory, and $750,000 for punitive damages. The Court denied defendants’ motions for judgments notwithstanding the verdicts, but granted their motions for new trials unless Worley agreed to a remittitur of $700,000 in the punitive damage award. Worley agreed and judgment was entered on the verdict in the amount of $800,000.

The principal error assigned by the appellants is that the Court should have directed a verdict in their favor. Worley appealed from the order of remittitur, although he had consented to it without protest.

Kentucky Gas Transmission is a Delaware corporation, authorized to do business in Kentucky. Columbia Gas is a Kentucky corporation, and is a public utility, subject to the jurisdiction of the Kentucky Public Service Commission, and is engaged in selling gas at retail in the Commonwealth of Kentucky.

The case arose out of the Kentucky Gas Transmission pipeline construction project in Brachin, Lewis and Mason Counties in Kentucky, in 1969. The prime contractor for construction of the pipeline was Mutual, whose major responsibility was to dig ditches for the pipe. Mutual awarded a subcontract to Worley, doing business as Inland Pipeline Construction Company, to do the work of bending, laying and welding the pipe furnished by Kentucky Gas.

The contract provided that Mutual was to be paid twice a month by Kentucky Gas, based on estimates prepared at the middle and end of each month. Worley was to receive payment from Mutual on a fixed price per foot. Worley’s total expected payment for the contract was to be $158,000; he was also to be paid for extra work done beyond the terms of the contract. Worley needed funds to commence operations, and Mutual arranged to and did advance to him about $25,000, in two installments.

Problems immediately arose over welds made by Worley’s employees, which welds were rejected by Kentucky Gas inspectors. Worley’s position was that these rejects were due to faulty pipe; Kentucky Gas contended that the fault was in improper welding.

Originally, Worley was to be paid by Mutual after the estimate procedure with Kentucky Gas had been completed; however, because of the reject problem, a pattern developed in which Mutual was assisting in meeting Worley’s payroll by making advances to Worley, often before payment by Kentucky Gas on the estimates.

On August 14, 1969 Worley opened a bank account with First Security National Bank and Trust Company in Lexington: Prior to this time Worley had been meeting his payroll on an account which he had with an Iowa bank.

Worley contended that Mutual, through Dix, promised him that he could write payroll checks as he saw fit, and that Mutual had made arrangements with First Security National Bank in Lexington, to cover such checks. Dix denied making any such promise. In addition, Gerald Hodges, the bank official responsible for such arrangements, testified that he had no knowledge of any such authorization.

Mutual gave as the reason for their ceasing advances that they thought their prior advances reached the point where they were approaching Worley’s total expected payment on the project. Indeed, Mutual claimed it had already paid Worley $60,000 beyond the contract price.

In August and September, 1969, Worley and other Inland officers issued 150 payroll checks totaling $34,000, which checks were dishonored by the bank for insufficient funds. Eleven of these checks were issued in August, the remainder in September. On September 10, 1969 the bank sent Worley a notice informing him of his balance and listing the returned checks. An additional notice was sent on September 12, 1969.

On September 13, 1969 Oral Curtis, a sawmill operator, personally contacted Worley concerning a lumber bill for $2,600, on which payment was overdue; thereupon Worley paid him with two checks post-dated September 27, 1969 and October 11, 1969, because Worley knew he had insufficient funds to cover such checks as of September 13th, the date of actual issuance.

More payroll checks were issued on September 13, 14, 15, 16, 17, and 18. Of the 150 checks written, some were signed by Worley himself, some were signed by his employee, Richard Given, and some were signed by his employee and son-in-law, Douglas Hammock. Most of the cheeks were for labor; some checks were for material furnished to Worley.

When Dix became aware of Worley’s actions, he consulted an attorney, John H. Clarke, Jr., in Maysville, Kentucky, a town near the project site. Clarke advised Dix that under Kentucky law the payees of the cold checks issued by Worley could obtain mechanic’s liens against the project, which liens Mutual would eventually have to pay off.

Clarke set up a procedure to pay off the checks in return for releases to prevent subsequent lien claims. Clarke began this payment program on September 18. On the preceding day Roy Clark, Patrick Sappington and Tommy Coker (all employees of Worley) brought their payroll cheeks to Clarke’s office. Clarke told these men that in his opinion an offense had been committed and that they were entitled to obtain warrants. Sappington and Coker were willing to sign complaints, and Clarke took them to the courthouse.

The County Attorney presented the affidavits for warrants, sworn by these two men, to Mason Circuit Judge John A. Breslin, who issued warrants for Worley’s arrest based on these two counts. On the same day a local merchant, Clyde Barbour, who had cashed sixteen payroll checks for Worley’s employees, sought warrants. Judge Breslin also issued arrest warrants on affidavits signed by Barbour relating to these sixteen cheeks. There was no evidence that any of the defendants had anything to do with Barbour’s pressing of charges against Worley.

Worley had been spending most of his time in Aberdeen, Ohio, but came into Kentucky on September 18th for a meeting of project participants, to discuss results of examination of the pipe. While at this méeting Worley was arrested and lodged in the Mason County jail, on the eighteen arrest warrants obtained by Sappington, Coker and Barbour. Worley claimed that the meeting was a subterfuge to get him into the state and county. Roy Clark, one of Worley’s employees, testified that he had told Worley about the outstanding warrants on the very day they were issued, September 17th.

Worley was in jail from 3:00 p. m. on September 18, 1969 until 10:00 a. m. on September 20, 1969 when a preliminary hearing was held. Worley was bound over to the county grand jury on all eighteen warrants considered by the Judge on September 17th.

On September 22, 1969 the grand jury was in session. On this same day two other employees of Worley, James C. Lykins and Howard Moore, Jr., came to Clarke’s office to obtain payment of cold checks issued to them on September 6, which they had been unable to cash at the bank. Following discussions with Clarke, Moore and Lykins went before the grand jury. Moore testified that he understood he would get his check cashed by Clarke regardless of whether or not he appeared before the grand jury.

The grand jury returned two indictments on the checks of Moore and Lykins. Worley was arraigned on these charges on September 22, 1969, but was released on his own recognizance, and spent no time in jail under these indictments.

On September 25, 1969 J. C. Penney Co. obtained two warrants for Worley’s arrest for issuing cold checks.

Trial on Moore’s and Lykins’ charges was set for September 11, 1970. The indictment as to Moore was dismissed becáuse the prosecuting attorney could not obtain Moore’s presence. The indictment on the Lykins matter was tried to a jury and the defendant, Worley, was found not guilty.

No disposition has been made concerning the warrants which were obtained by Sappington, Coker and Barbour. These matters are still pending before the grand jury.

There are pending civil actions in other courts arising out of disputes between the parties. Thus, the final economic resolution of the contract controversy does not rest with this decision.

It is noteworthy that although Worley sued three corporations and the officers of one of them (Mutual) for conspiracy to maliciously prosecute him for issuing cold checks, he did not sue any of the holders of these cold checks, who signed the affidavits for warrants under which he was arrested and jailed, or who were responsible for his indictment.

We find there is not even a scintilla of evidence in the record that Columbia Gas ever conspired with the other defendants to maliciously prosecute Worley. It had no contractual relationship with Worley or with Mutual. Jimmy E. Sligh, who Worley claimed was an agent of Columbia Gas, was not employed by Columbia Gas but was an inspector for Kentucky Gas Transmission. There is no proof that Columbia Gas had anything to with either Worley’s arrest or his prosecution. The District Court erred in denying its motion for a directed verdict.

Kentucky Gas Transmission’s contractual relationship was with Mutual. Worley was Mutual’s subcontractor.

Worley sought to tie Kentucky Gas Transmission into the alleged conspiracy by proof of the activity of its Chief Inspector on the pipeline project, Jimmy E. Sligh. Sligh was in charge of all inspectors on the pipeline project, and it was his duty to see that specifications and codes were adhered to and that all phases of the job were properly and correctly performed. He was not a welding inspector.

There was no proof that Sligh had actual or apparent authority from his employer, Kentucky Gas Transmission, to prosecute Worley for the cold checks which Worley issued to his own employees and materialmen.

The evidence on which Worley relied to prove Sligh’s alleged participation in the conspiracy was that Sligh sat in the courtroom at the Lykins trial; the disputed evidence that Sligh attended a meeting in Attorney Clarke’s office when Sappington and Coker signed affidavits for warrants for the arrest of Worley; and Sligh’s conversations with Worley’s employees, Roy Clark, Paul J. Schulien, Eugene Harness and Charles Kaufman.

There was no evidence that any affidavits for the arrest of Worley, or the indictment, were induced by or resulted from any of these conversations or incidents.

In our opinion, the District Court erred in denying the motion for a directed verdict filed by Kentucky Gas Transmission, for the reason that its inspector Sligh had no actual or apparent authority from his employer either to conspire to or to cause the arrest of Worley, and in fact, did not cause his arrest or indictment.

This disposition of the case determines the issue of conspiracy, because Mutual could not conspire with itself or with its own officers to prosecute Worley. Mutual could be liable only for acts of its officers on the theory of respondeat superior. The corporation can act only through its officers and agents. We will consider only whether there is substantial evidence to prove that Mutual, Dix and Nowicke are liable for malicious prosecution of Worley.

The remaining defendants assign numerous errors. Their basic contentions are that Worley failed to establish the elements of even a prima facie case of malicious prosecution. First, the defendants contend that Worley failed to show that they were the proximate and efficient cause of the prosecution. Second, they contend that Worley has failed to show that the prosecution, which allegedly caused his damages, had been terminated in his favor. Third, even assuming the first two arguments as rejected, it is asserted that Worley failed to show a lack of probable cause for his prosecution. Fourth, the defendants contend that advice of counsel is an absolute bar to a malicious prosecution action. Fifth, the defendants contend that the verdict was grossly excessive; that it resulted from passion and prejudice and the misconduct of plaintiff’s counsel ; and that it was tainted by the admission of incompetent evidence concerning the disputes between the parties, which disputes are the subject of various civil actions.

We consider first the question of whether there had been a termination of the prosecution which caused the alleged damages. Such a termination is required by Kentucky law. Freeman v. Logan, 475 S.W.2d 636 (Ky.1972); VanArsdale v. Caswell, 311 S.W.2d 404 (Ky.1958), and Conder v. Morrison, 275 Ky. 360, 121 S.W.2d 930 (1938).

The eighteen warrants issued by Judge Breslin on September 17, 1969 were still pending when this action was brought. The only charge that had terminated was the grand jury indictment based on Moore’s and Lykins’ testimony, returned on September 22, 1969, two days after Worley was released from jail upon his execution of a personal bond in the amount of $5,000. Worley did not spend time.in jail on the Moore-Lykins indictment. He was not even arrested on the indictment. Worley’s complaint alleges damages resulting from his imprisonment on September 18th to 20th, but this imprisonment was based on eighteen warrants that have not even begun to be processed through the legal system, let alone terminated.

With respect to the terminated prosecution, Worley’s alleged damages flowing from such action are his expenses of litigation. He was not arrested nor confined. It would hardly support a verdict and judgment of $1,500,000. Worley did not even claim any real business losses flowing from the Moore-Lykins indictment.

Even assuming that Worley could show that the defendants were the proximate cause of his prosecution, he would not be entitled to recover if there was probable cause to warrant the prosecution. Freeman v. Logan, 475 S.W.2d 636 (Ky.1972); Schott v. Indiana Nat’l Life Ins. Co., 160 Ky. 533, 169 S.W. 1023 (1914); McClarty v. Bickel, 155 Ky. 254, 159 S.W. 783 (1913). Worley had the burden of making a clear showing that 'there was no probable cause. Reid v. True, 302 S.W.2d 846 (Ky.1957) and Lexington Cab Co. v. Terrell, 282 Ky. 70, 137 S.W.2d 721 (1940).

There was a dispute in the testimony of Worley and Dix as to whether Mutual had ever agreed to advance funds to cover Worley’s payroll checks. The bank in Lexington, on which the cold checks were drawn, was never informed by Worley of any such arrangement. It was Worley’s burden to show clearly that Dix had agreed to advance funds to cover the payroll checks, and that Dix never changed his position, because only then could Worley show lack of probable cause. The mere conflict in testimony makes Worley’s task almost impossible.

There are two Kentucky cases dealing with the issue of probable cause in cold check cases: Haseldon v. York, 271 Ky. 567, 112 S.W.2d 984 (1938), and Davis v. Brady, 218 Ky. 384, 291 S.W. 412 (1927). In Haseldon, supra, plaintiff York’s check was refused payment for want of funds when Haseldon tried to negotiate it. Payment was refused a second time and thereafter York withdrew from the bank what funds he did have there. The Court found that probable cause existed on this set of facts and held that Haseldon’s motion for a preemptory instruction should have been granted. In the present case, the checks that Moore and Lykins were attempting to cash had been refused payment. The checks in question were dated September 6, 1969 and it was September 22, 1969 before the two men went to the grand jury. Their inability to negotiate the checks at the bank clearly resulted in probable cause to think that an offense had been committed.

In Davis, supra, the plaintiff issued a check to the defendant’s son (who was also defendant’s agent) for rental payment. The son’s usual practice was to make deposits at the end of each week. When the son deposited the check at the end of the week it was returned n. s. f. The son went before a Justice of the Peace and obtained a warrant. The plaintiff’s attorney claimed that his client had sufficient money on deposit in the bank on the day she issued the check, but she drew other checks in the interim. The Court concluded that the only reasonable conclusion any attorney could reach was that a violation of the statute had taken place. The Court found that probable cause clearly existed for the issuance of a warrant. If the issuance of one check in this manner, knowing sufficient funds might not be on hand if presentment were delayed only shortly, is sufficient to establish probable cause, Worley’s actions in writing checks which he had some reason to suspect might not be covered by Mutual, sufficed to show probable cause that a violation of the cold check statute had taken place.

Moreover, Lykins’ case, which was the only one resulting in an acquittal, had come from an indictment by the county grand jury. In Jones v. Louisville & N. R. Co., Ky., 29 Ky.Law Rep. 945, 96 S.W. 793 (1906), the Court of Appeals stated:

“The true doctrine is that the finding by the grand jury is prima facie evidence of probable cause.” Ulman [Ullman] v. Abrams, [Ky.] 9 Bush. 738; Bruks v. Ferrell, [Ferriell] [Ky.] 80 S.W. 809, 26 Ky.Law Rep. 36; Lancaster v. Langston, [Ky.] 36 S.W. 521, 18 Ky.Law Rep. 299. (96 S. W. at 794).

The affidavits for the warrants were approved by the attorney who prepared them, by the County Attorney, and by the Circuit Judge who issued the warrants. The grand jury found sufficient evidence to return an indictment on two counts. At the trial the Circuit Judge submitted the issues to a jury for its determination.

The fact that Worley was acquitted on the Lykins charge does not show a lack of probable cause. Conder v. Morrison, 275 Ky. 360, 121 S.W.2d 930 (1938); Haseldon v. York, 271 Ky. 567, 112 S.W.2d 984 (1938); Sills v. Paducah Box & Basket Co., 251 Ky. 783, 66 S.W.2d 24 (1933); Stephens v. Gravit, 136 Ky. 479, 124 S.W. 414 (1910).

Even if Worley had been able to establish a prima facie case, the defendants would have had an affirmative defense in that all recommendations for obtaining warrants came from an attorney. Under Kentucky law such advice of counsel is a complete defense to an action for malicious prosecution. Taylor v. Shepherd, 391 F.2d 263 (6th Cir. 1968); Puckett v. Clark, 410 S.W.2d 154 (Ky.1966); Mayes v. Watt, 387 S.W.2d 872 (Ky.1964); Bell v. Jewel Tea Co., 135 F.Supp. 745 (W.D.Ky.1955); Cravens v. Long, 257 S.W.2d 548 (Ky. 1953); Lexington Cab Co. v. Terrell, 282 Ky. 70, 137 S.W.2d 721 (1940); Davis v. Brady, 218 Ky. 384, 291 S.W. 412 (1927); National Life & Acc. Ins. Co. v. Gibson, Ky., 31 Ky.Law Rep. 101, 101 S.W. 895 (1907); Tandy v. Riley, Ky., 26 Ky.Law Rep. 98, 80 S.W. 776 (1904); Farmers' & Shippers' Tobacco Whse. Co. v. Gibbons, 107 Ky. 611, 55 S.W. 2 (1900); Mesker v. McCourt, Ky., 19 Ky.Law Rep. 1897, 44 S.W. 975 (1898); Lancaster v. Langston, Ky., 18 Ky.Law Rep. 299, 36 S.W. 521 (1896).

In this case Attorney Clarke informed Moore, Lykins, Sappington and Coker that there was probable cause to obtain warrants. There is no indication in the record that Attorney Clarke was operating with insufficient facts on which to base his judgment.

The judgment of the District Court is reversed and the cause is remanded with instructions to dismiss the complaint. The cross-appeal of Emmett C. Worley is hereby dismissed at his cost.

ON PETITION FOR REHEARING

ORDER

I

These appeals came on to be heard on a petition for a rehearing with a suggestion that they be heard en banc. No Judge having requested that a voté be taken thereon, the petition was heard and determined by the panel.

In our opinion in this case we found as to Columbia Gas that there was not even a scintilla of evidence that it had conspired with anyone to maliciously prosecute Worley. In his petition for rehearing plaintiff-appellee raises no argument challenging this finding.

As to Kentucky Gas Transmission Corporation, we found that its only possible participation in the alleged conspiracy would have been through the acts of Jimmy E. Sligh, its Chief Inspector on the project; and we further found his acts clearly insufficient to establish such conspiracy. Plaintiff contends that Sligh admitted to threatening the arrest of Worley. Plaintiff relies on Sligh’s response to two of Worley’s employees, Roy Clark and Ronald Harness, who had followed him to his automobile and who asked him how they might get their pay cheeks cashed. Worley’s employees testified that Sligh said that the best thing they could do was to have Worley arrested. That states only his opinion, and does not show that he conspired with them. Nor does Sligh’s conversation with Paul J. Schulien and his employee, Charles Kaufman, who was a supplier of materials to Worley, indicate any conspiracy with them. As we pointed out in our opinion, there was no evidence that Worley’s arrest on the eighteen warrants or the indictment resulted from any of these conversations.

As to Mutual Pipeline Contractors, Inc., we reversed, holding that even if the activities of Mutual or of its officers (John Dix and Chester Nowicke) were the proximate cause of the prosecution, (1) there was probable cause for the prosecution, and (2) the advice of counsel served as an absolute defense.

Relevant to the probable cause issue, plaintiff’s counsel says that the testimony of Bob Bates, a bank official, showed that Dix had told First Security Bank to cover checks written by Worley. What Bates testified to was that Dix asked him “to take care of” Worley’s banking needs. Bates admittedly took that to be a request not to let any of Worley’s checks bounce.

Gerald Hodges, another bank official, testified that there had been absolutely no commitment by Dix to cover Worley’s checks, and that he [Hodges] was the responsible officer in charge of such arrangements. Besides the fact that Bates’ interpretation of the given words seems bizarre, the mere conflict between Bates and Hodges militates against Worley because he must make a clear showing that there was no probable cause. Reid v. True, 302 S.W.2d 846 (Ky.1957), and Lexington Cab Co. v. Terrell, 282 Ky. 70, 137 S.W.2d 721 (1940).

Worley knew that the bank was not covering his cold checks. With knowledge that he did not have sufficient funds in the bank, he wrote a total of 150 n.s.f. checks, totaling $34,000, over a period of two months.

Also supporting probable cause to obtain the warrants was the fact that J. C. Penney Co. and Clyde Barbour, a local merchant, also obtained warrants against Worley, for writing cold checks. Worley did not allege that either the Penney Co. or Barbour were part of the “corporate octopus” that Worley believed was “out to get him”. If they thought they had probable cause, it is a strong indication that the other persons who obtained warrants also thought so.

On the advice of counsel issue, plaintiff suggests that Attorney Clarke was prejudiced merely because he signed the bond as attorney in fact for defendant’s insurance carrier. We do not see how this could make Clarke prejudiced because he was not subject to personal liability. Moreover, Kentucky law requires only that an attorney be in possession of all the facts, not that he be disinterested, for the defense of advice of counsel to be valid in a malicious prosecution case.

The probable cause and advice of counsel bases also support the judgment as to the Kentucky Gas Transmission Corporation and Columbia Gas of Kentucky, even though we found for those defendants on the ground of insufficient evidence to show conspiracy to maliciously prosecute.

In our previous opinion we discussed the issue of termination of a supposed malicious prosecution. We found that there was no evidence that the counts on which Worley had been imprisoned had been successfully terminated in his favor. We clearly noted that the Moore and Lykins indictment had been terminated successfully in Worley’s favor, but that in our opinion 'it hardly justified an award of $1,500,000. Thus, we did not decide against Worley on the termination issue since the Court submitted to the jury only the issues with respect to the Moore indictment.

Attached to the petition for rehearing plaintiff’s attorney has filed a copy of an order of Judge Breslin, stating that the Sappington, Coker, Penney Co. and Barbour warrants, on which Worley had been imprisoned, had been abandoned. A copy of that order was not made a part of the record in this case.

In their briefs the appellants had raised the issue of lack of the necessary court order terminating the warrants, and appellee’s counsel did not offer any such order in evidence, if indeed he knew that it existed. Had our prior decision been based solely on the termination issue, we would be faced with a difficult question as to the effect of Judge Breslin’s order, and whether plaintiff was estopped from introducing it into the record at this late date; however, since there are other grounds to support our decision, we need not consider the effect of the state court order.

The petition for rehearing is denied.

II

ON MOTION TO AMEND COMPLAINT

Plaintiff has moved to amend his complaint to state a violation of the federal civil rights statutes against defendants in addition to his original charge of conspiracy to maliciously prosecute.

We refuse to allow such amendment because it is a well-established principle of law that an appellate court will not allow amendments to conform to evidence, by a losing party, to bring about reversal of a judgment which is otherwise correct. United States v. Shapiro, Inc., 92 U.S.App.D.C. 91, 202 F.2d 459 (1953); Trantham v. Canal Ins. Co., 117 F.Supp. 241 (E.D. Tenn.1953), aff’d, 220 F.2d 752 (6th Cir. 1955).

Our denial of plaintiff’s petition for rehearing has previously expressed our belief in the correctness of the judgment in this case. To allow amendment would be a futile gesture because any civil rights violation would necessarily have to rise or fall on the establishing of the requisite elements of malicious prosecution. The supposed new theory is actually dependent on the old.

The issues of probable cause, advice of counsel, and lack of proof of conspiratorial activity, have been decided adversely to plaintiff, and plaintiff is now barred from invoking them in a civil rights action by the doctrines of res judicata and collateral estoppel.

Furthermore, “a complaint cannot be amended on appeal where the amendment raises issues not within the theory on which the case was tried.” 3 Moore’s Fed.Prac., ¶ 15.11 (2d ed. 1964).

We think a fair reading of the record shows that the case was not tried on the issues raised at this late date.

Plaintiff’s motion to amend is denied

      . Worley called Circuit Judge John A. Breslin, who presided at his trial, to prove his acquittal on the Lykins indictment. Judge Breslin was asked about a number of other matters, concerning which his recollection was vague. He did testify that a number of civil suits had been filed; that the matter “pretty soon became what I describe as a can of worms”; and that he would have to go by his records completely as he had no recollection of individual events. In response to a question by plaintiff’s counsel as to whether there were any charges pending in his court against Worley, he answered, “Not to my knowledge.” This does not prove that the charges were terminated, They could be terminated only by a “no bill” or a dismissal by the court. The Circuit Court in Kentucky is a court of record, and its entries can be proven only by its records. Simpson v. Antrobus, 260 Ky. 641, 86 S.W.2d 544 (1935) ; cf. Poynter v. Smith, 290 Ky. 169, 160 S.W.2d 380 (1942). The burden of proof to show termination, was on plaintiff, and he did not meet that burden.


author: COFFIN, Chief Judge.

text:
    Frank C. RODWAY, Plaintiff-Appellant, v. AMOCO SHIPPING COMPANY, Defendant and Third-Party Plaintiff-Appellee, v. PEERLESS #5 CORPORATION, Third-Party Defendant-Appellee.
    No. 73-1272.
    United States Court of Appeals, First Circuit.
    Argued Dec. 3, 1973.
    Decided Jan. 24, 1974.

      Grover G. Alexander, Gray, Maine, with whom Arthur Chapman, Jr., Portland, Maine, was on brief, for plaintiff-appellant.
    Thomas R. McNaboe, Portland, Maine, with whom Richard B. Kydd, Boston, Mass., was on briefs for appellees.
    Before COFFIN, Chief Judge, and ALDRICH and CAMPBELL, Circuit Judges.
   COFFIN, Chief Judge.

This is an appeal from a judgment on a directed verdict for the defendant in a suit to recover for injuries incurred aboard the T/V DEAN REINAUER, a coastal tanker, a vessel which takes oil and gas products from larger vessels. The action was brought, under the Jones Act, 46 U.S.C. § 688, against the owners of the S/S AMOCO LOUISIANA' on which plaintiff was employed as a seaman. Peerless # 5 Corp., owner of the DEAN REINAUER, was impleaded as third-party defendant.

In Portland harbor on December 30, 1969 the DEAN REINAUER prepared to take on gasoline from the AMOCO LOUISIANA. Captain Crocker made his routine tour of the ship, noting casually that the engine room continued to suffer from a minor leak in a bleeder valve. He made the Coast Guard required cursory inspection but had no more standard forms to fill. An AMOCO crewman boarded before loading to insure the first quality gas would not be tainted by some lesser grade remaining in the DEAN REINAUER’S tanks. Then the transfer of fuel was commenced.

A few hours later, while the fuel was still being transferred, an explosion of some force occurred on the DEAN REINAUER. The crew of both ships sprang to action, firefighting equipment was activated, and a steady stream, followed soon by a fog spray of water, played upon the fire in the engine room, Several crew members of the AMOCO LOUISIANA courageously boarded the burning vessel to rescue men trapped by the blaze. The plaintiff was among the rescuers. He sought and received permission from his Captain to board the flaming ship. While aboard, he was injured by a second explosion.

At the conclusion of the plaintiff’s evidence, the district court directed a verdict for Amoco on the grounds that he failed to establish an unfulfilled duty on the part of the AMOCO LOUISIANA to inspect DEAN REINAUER or any negligence or unseaworthiness attributable to the AMOCO LOUISIANA. We must affirm.

The appellant claims that the owners and operators of the AMOCO LOUISIANA had an obligation to inspect the DEAN REINAUER before commencing the transfer of cargo. He relies for this contention on railway law made applicable under the Jones Act, Shenker v. Baltimore and Ohio RR Co., 374 U.S. 1, 83 S.Ct. 1667, 10 L.Ed.2d 709 (1963). Shenker sued under the Federal Employers Liability Act for injuries sustained while he was loading a mail car belonging to another railroad at a station managed by the B & 0. He was hoisting mailbags into the car and injury resulted from a defective door. The court held there was a duty on the part of the railroad employer to furnish employees with a reasonably safe place to work and to that end reasonable inspection would be required.

The distinguishing feature of Shenker, a case building on a body of law governing railroad car accidents, is that it concerned the obligations of an employer relating to the place where it required its employees to work. The railroad knew its employee had to work with the car door when he was loading mail onto the car. In appellant’s case, there was no way for the owners of the AMOCO LOUISIANA to foresee that employees would be doing any work aboard or with the facilities of the DEAN REINAUER. The fact that these employees undertook rescue work in the highest sea-going tradition does not mean that any place where life-saving efforts might find them would be temporarily converted into a “place to work”, with consequent prior obligations of inspection and readying on the part of the employer. Because the ship which the AMOCO LOUISIANA was loading was not reasonably foreseeably a place of work for the seamen of the AMOCO LOUISIANA there could be no duty to inspect except insofar as visible danger aboard the DEAN REINAUER might directly result in injury to those aboard the AMOCO. That case is not presented. The duty to inspect in Shenker is a duty to inspect “before permitting . . . employees to work” on the vehicle. Id. at p. 8, 83 S.Ct. 1667.

Similarly, appellant’s contention that the DEAN REINAUER was the statutory agent of the AMOCO LOUISIANA and that any negligence or unseaworthiness on the part of Peerless # 5 Corporation is imputable to Amoco must be rejected. Reliance on Sinkler v. Missouri Pacific RR Co., 356 U.S. 326, 78 S.Ct. 758, 2 L.Ed.2d 799 (1957) is misplaced. That case too is directed toward affording protection in the working environment. It held simply that where injury to an employee is caused by the fault of those performing, under contract, operational activities incident to the business of his employer, and furthering the employer’s enterprise, those performers may be considered “agents” of the employer. Here each ship was carrying on its own business of transporting gasoline. They were transferring the product from one to another; their cooperative venture did not result in injury to the appellant on the job. His injury took place only when he voluntarily undertook a rescue.

The appellant’s additional contentions are that dismissal was improper because negligence was evidenced by (1) the fact that the declaration of inspection was not received from the DEAN REINAUER pursuant to 46 CFR § 35.-35-30 and self-inspection should then have been undertaken; (2) failure to properly supervise operating pressure in violation of 46 CFR § 35.35-35; (3) the method of securing the mooring lines between the two vessels, which interfered with casting off and resulted in delay in separating the two vessels; (4) the allegedly improper use of a fog spray of water as opposed to foam fire combatants by the AMOCO LOUISIANA’S master acting in an emergency. Finally, appellant charges that the district court improperly denied his claim that the AMOCO LOUISIANA was itself unseaworthy.

Although the hurdles which a plaintiff must surmount to get his ease to a jury in Jones Act and F.E.L.A. cases are low indeed, Rogers v. Missouri Pacific R. Co., 352 U.S. 500, 77 S.Ct. 443, 1 L.Ed.2d 493 (1956), a careful review of the testimony and the offer of proof reveal that no evidence was presented to establish a causal link between these allegedly negligent acts and the second explosion which caused the appellant’s injuries. We must conclude that appellant’s virtue must be its own reward. The district court properly directed the verdict in favor of the defendant-appellee.

Affirmed.

      . We reject the contention that AMOCO LOUISIANA’S captain was negligent in permitting the volunteers to essay a life-saving activity or in failing to separate immediately the two vessels and leave the burning DEAN REINAUER and its crew to its own devices.

      . Our treatment of the agency claim disposes of both the claim of negligence and unseaworthiness aboard the DEAN REINAUER and thus sustains the district court rulings excluding evidence on these issues.

      . We also hold that the district court was correct in ruling that the conduct of the crew of the AMOCO LOUISIANA during the fire on the DEAN REINAUER under the stress of emergency did not amount to negligence on the part of AMOCO or create a condition of unseaworthiness.


author: MOORE, Circuit Judge: OAKES, Circuit Judge

text:
    UNITED STATES of America, Appellee, v. Michael CATALANO et al., Defendants-Appellants.
    Nos. 199, 237, 303, Dockets 73-1559, 73-1984, 73-1985.
    United States Court of Appeals, Second Circuit.
    Argued Sept. 26, 1973.
    Decided Jan. 21, 1974.

      Herbert I. Handman, New York City, for appellant Catalano.
    Neal J. Hurwitz, New York City, for appellant Goldman.
    Herald Price Fahringer, Buffalo, N. Y. (Joseph Panzer, New York City, of counsel), for appellant Dellacroce.
    Shirah Neiman, Asst. U. S. Atty., New York City (Paul J. Curran, U. S. Atty. S. D. N. Y., New York City, Robert - P. Walton, James E. Nesland, Michael B. Mukasey, Richard Wile, John W. Nields, Jr., Asst. U. S. Attys., of counsel), for appellee.
    Before MANSFIELD, MOORE and OAKES, Circuit Judges.
   MOORE, Circuit Judge:

Aniello Dellacroce, Michael Catalano and Martin Goldman appeal from judgments of conviction entered against them in the United States District Court for the Southern District of New York after a jury trial and from orders denying motions for a new trial. The indictment contained three counts. Count ONE charged a conspiracy amongst the three defendants and certain non-defendant co-conspirators to evade income taxes due from Dellacroce to the United States for the calendar year 1968 (26 U.S.C. § 7001, 18 U.S.C. § 371). Count TWO charged Dellacroce with filing a false tax return for that year (26 U.S.C. § 7201). Count THREE charged Dellacroce with making and subscribing a false tax return wherein “wages, salaries, tips, etc.” were stated as $10,400 whereas in fact and to his knowledge they were $134,500 (26 U.S.C. § 7206(1)). All three defendants were convicted of conspiracy; Dellacroce, in addition, was found guilty of false filing and tax evasion.

Many trial errors are asserted by the defendants; many overlap. To the extent that they are claimed to apply only to one of the defendants, they will be considered as to him alone.

The Conspiracy

The gist of the conspiracy to enable Dellacroce to defraud the government of income taxes is that in 1968 Dellacroce allegedly received 22,500 shares of Yankee Plastics, Inc. stock (valued at approximately $123,000) for services rendered by Dellacroce and Catalano (1) to help Yankee Plastics, Inc. acquire a company known as Mr. Hanger, Inc. and (2) to insure “labor peace” for Mr. Hanger, Inc. In order to avoid showing this stock as income to Dellacroce (and hence to evade a tax to him), devious means were employed. The 22,500 shares were placed in the name of a nominee, Preston Smith. The certificates representing these shares were never in the physical possession of Dellacroce. Thus the government’s case is based upon his dominion and control of the shares and his resultant constructive possession.

To trace the physical custody of the 22.500 chares requires the introduction of other persons, Rosen, Goldman, Terranova and Catalano.

Rosen and Goldman, using Preston Smith as a nominee, purchased 15,000 shares of Mr. Hanger, Inc. which, upon its merger with Yankee Plasties, became 22.500 shares of that company’s stock. In the summer of 1968, Goldman told Terranova, the government’s chief witness and through whom these transactions became known, that the shares were being held for Dellacroce in Smith’s name so that Dellacroce would not have to report them as income. Goldman requested Terranova to replace Smith as nominee. Accordingly, the single certificate for the 22,500 shares in Smith’s name was cancelled and forty-five 500-share certificates, issued in Smith’s name but endorsed by Smith with a signature guarantee, were delivered by Goldman to Terranova. The stock was now in negotiable form.

Goldman and Terranova then opened an account, still using Smith’s name, with Francis I. duPont and Company and deposited the 22,500 shares there.

Catalano enters the picture, according to Terranova’s testimony, as an accomplice and employee of Dellacroce.

During the ensuing months, there were many meetings between Goldman and Terranova on the one hand and Dellacroce and Catalano on the other, at which the stock, still in the brokerage account, was discussed. Dellacroce was advised not to sell since it was thought that Yankee Plasties was doing well. However, the stock was eventually removed from the duPont account and kept in offices at 312 Fifth Avenue, maintained by a company operated by Goldman and Terranova. In May 1969 they (Terranova and Goldman) put 7,500 shares into an account with First Hanover Corporation. In June 1969 4,000 shares were sold, realizing some $21,000. The remaining 3,500 shares were delivered to Terranova. In November 1969 the balance of the 22,500 shares (37 certificates for 500 shares each) were delivered into the custody of a private attorney, and in March 1971 they were released to Terranova’s wife who, in turn, gave them to Goldman. The 37 certificates finally reappeared via Goldman’s attorney at the trial, ostensibly from Goldman.

The theory of the government's case is that Dellacroce received the stock in 1968 in payment for services rendered by him and his assistant, Catalano, to insure labor “peace” and to aid in the merger of Mr. Hanger and Yankee Plastics. Despite the many resting places of the stock and the inferentially suspicious character of the methods employed, the fundamental appellate question is centered around the testimony that the stock was given to Dellacroce for his services and was handled in such a way as would enable him to evade income taxes thereon. There was much embellishing proof which would support inferences to this effect but essentially the case rests upon jury belief or disbelief in Terranova’s testimony. It chose to believe. It also chose to believe the involvment of Goldman and Catalano. Each appellant, however, raises particular points of alleged trial error which must be considered separately.

Dellacroce

Dellacroce argues that in his previous appearance before a New York County grand jury he received transactional immunity regarding events relating to the subject matter of the present indictment. This previous grant of immunity places upon the government a heavy burden of proving that the indictment did not stem from information given to the grand jury. If this were not so, a defendant’s Fifth Amendment rights would be considerably abrogated, Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972). The problem is complicated in this case by the fact that the County Assistant District Attorney who interrogated Dellacroce before the grand jury transferred from the County to the Federal prosecutor’s office and in part presented this case to the Federal grand jury. In this case, however, that burden was met. Dellacroce’s testimony before the grand jury was circumspect in the extreme; so much so that he was cited for contempt. Further, the large bulk of the questions were of a leading nature from which it may be concluded that the prosecutor knew what the response would be. This conclusion is buttressed by an affidavit of Goldman dated before the grand jury hearings, covering the subject matter of several of the questions.

A hearing on Dellacroce’s motion to dismiss the indictment led the court to conclude that nothing material had been disclosed in Dellacroce's County grand jury testimony which provided the Federal prosecutor’s office with either information or leads. In keeping with the mandate of Kastigar the proof, which included testimony by the former County (and later Federal) prosecutor, not only negatived any possibility of taint, but also carried the affirmative burden of proving a legitimate, wholly independent source of evidence. In the face of this showing Dellacroce would have us hold that access to grand jury testimony ipso facto prevents the government from carrying its burden under Kastigar. This we decline to do. Neither Murphy v. Waterfront Commission, 378 U.S. 52, 84 S.Ct. 1594, 12 L.Ed.2d 678 (1964), nor Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972), purports to establish such a peremptory rule. United States v. McDaniel, 482 F.2d 305 (8th Cir. 1973), relied upon by Dellacroce, is clearly distinguishable. The defendant there, in his prior testimony before the State grand jury, had poured forth three volumes of self-incriminating testimony. The court sensibly concluded that the United States Attorney who read this testimony in its entirety could not wholly obliterate it from his mind in his preparation and trial of the federal case. Furthermore, unlike the present case, the United States Attorney there made no attempt to show that he had prior knowledge of the information revealed by the grand jury testimony and his offer of F.B.I. reports as proof of an independent source failed to satisfy the burden of showing that he had not used the testimony in some significant way short of introducing it. By way of contrast the prosecutor here established that he had prior knowledge of substantially all the information covered in the Dellacroce testimony, thus foreclosing the possibility that he made “any use, direct or indirect, of the compelled testimony and any information derived therefrom.” Kastigar v. United States, 406 U.S., at 460, 92 S.Ct. at 1664. A review of the record supports this conclusion. The Kastigar rule is aimed at preventing the misuse of information gained under a grant of immunity; it does not require information not gained in this fashion to be discarded. The motion to dismiss the indictment was properly denied.

Dellacroce next argues the question which to him “dominates this appeal” (Dellacroce Br. p. 27). He states that he “cannot be convicted of income tax evasion for failure to report the alleged receipt of stock which was not registered in his name, which was never possessed by him, and which was being held in escrow subject to adverse claims.” He is, of course, correct that he is not taxable for income that he never received. However, the test of receipt is not the registering of the stock in one’s name. This contention ignores the entire theory of conspiracy and of constructive possession. Were Dellacroee’s contention correct, anyone wishing to shelter income could have it paid to a nominee and kept in the custody of another. Thus, it was for the jury to decide whether he possessed it or not. Likewise, the contention that the stock was subject to adverse claims, sufficient to prevent his constructive possession, was one properly submitted to the jury and decided by them.

Dellacroce further alleges that there was error in the admission of a statement by Goldman which stated in part that he knew Dellacroce, employed him, met with him at the Ravenite Club, knew him to meet there with Catalano, and knew the relationship between Dellacroce and Catalano. It is contended that under the rule of Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968), this statement should have been excluded. However, this argument disregards the fact that independent evidence was presented to support each factual proposition made by Goldman, linking Dellacroce to the conspiracy. Bruton extends only to situations where “the testimony concerning the complaining co-defendant is clearly inculpatory . . . and (2) the testimony is vitally important to the government’s case.” United States v. Cassino, 467 F.2d 610, 623 (2d Cir. 1972), cert. denied, 410 U.S. 928, 93 S.Ct. 957, 959, 35 L.Ed.2d 276 (1973). In this case the complained-of testimony was merely repetitive of other evidence, and the careful admonitions of the judge that the jurors consider the Goldman statement only against him makes any improper use of the statement highly unlikely.

Dellacroce next contends that evidence concerning a gambling trip allegedly made by him to Puerto Rico in 1968 under an assumed name was irrelevant to the present case and thus improperly admitted. The government argued that the evidence was proper in that it was probative of Dellacroce’s intent to evade taxes, certainly an important element of the charged offense and, on this basis, it was admitted. A gambling “junket” usually has one of two results—profit or loss. If profit were the result, an alias would be useful to hide the gain from scrutiny by the I.R. S. Thus, it might well be that the use of an alias during a gambling trip made in the year of the alleged tax evasion bears on the intent to evade tax. Of course, there might be several alternative reasons why Dellacroce may have used an assumed name. His counsel was free to suggest any of these or to offer evidence that Dellacroce did not go to Puerto Rico at all in that year or that he did not do so under an assumed name. However, the fact remains that the use of an alias under the circumstances is relevant to an intent to evade taxes although it is certainly far from conclusive. The degree of relevancy required for admissibility is one that generally is determined in the discretion of the trial court—a discretion correctly employed here.

An allied argument raised by Dellacroce is that the prejudicial implications of this evidence outweighs its probative worth. It is stated that “[t]his condemning evidence became a ‘damned spot’ on appellant’s case of which he could not rid himself.” (Dellacroce Br. p. 42). Certainly, potential prejudice to the defendant is a factor to be considered in weighing the pros and cons of admitting a particular piece of evidence. For this reason evidence of a prior crime may only be introduced in limited circumstances, C. McCormick, A Handbook of the Law of Evidence, § 157 (1954). In this case, however, the actions of Dellacroce did not constitute a crime since he did not, in fact, win any money. Thus, the trial judge was not faced with the problem of a prior criminal act. This, however, did not relieve him of his general duty to balance probative worth against potential prejudice. The lengthy dialogue between judge and prosecutor (312a-319a) concerning this bit of evidence, the instruction to the jury at the time of its submission to them (936a), and the charge to the jury on this matter (1701a) reveal the careful consideration given to the possibility of prejudice. Dellaeroee contends that “. . the prosecutor strategically waiting until the very end of the summation, lashed out at the jury with his highly volatile evidence [the trip to Puerto Rico], searing it into their minds.” (Dellaeroee Br. p. 40). Nonetheless, the probative worth of this evidence, far from being “frivolous” as it was characterized by appellant, was properly presented for jury consideration. In general, it is for the trial judge to do the balancing required here and it cannot be said that his discretion was misused.

Another issue raised is whether Dellacroce’s motion for a new trial based on newly discovered evidence was properly dismissed without a hearing. This evidence consisted of testimony suggesting that Dellaeroee did not make the trip to Puerto Rico in 1968. The judge, after learning the nature of the evidence and its source, denied the motion without a hearing on the grounds that the evidence was not newly discovered. Motions of this sort are not held in great favor. United States v. Costello, 255 F.2d 876 (2d Cir.), cert. denied, 357 U.S. 937, 78 S.Ct. 1385, 2 L.Ed.2d 1551 (1958). In light of the facts in this case, there is no reason to believe that the court erred.

Finally, Dellaeroee contends that the government improperly withheld information that would have helped to impeach Terranova, the government’s chief witness. The information consisted of a government file on Terranova, gathered in relation to an unconnected bribery indictment against him, the records of Jody Associates, which also related to this indictment, and the logs of surveillance made in 1967 and 1968 on the Ravenite Club, a meeting place of the alleged conspirators. In addition there is a claim of error in regard to sustaining a government objection to a defense question put to Terranova in an attempt to impeach him. To deal with the files relating to the bribery indictment, the trial court, after a representation by the government that their file contained nothing on the defendant’s guilt or innocence, and after its own inspection of the corporate files which also revealed nothing, denied the request for inspection. There is no doubt that this decision was proper. The defense had had a full opportunity to examine Terranova at length concerning his alleged misdeeds. There was no abuse of discretion in the judge’s preventing another case being tried in his court as part of an attempt to impeach a witness.

The surveillance logs, which were requested under 18 U.S.C. § 3500, the Jencks Act, are related to the testimony in his trial of the agent who prepared them. He testified on his own recollection that the defendants frequented the Ravenite Club. The defense wanted the logs in an attempt to prove that Dellaeroee did not attend the Ravenite Club on a particular occasion with Goldman, a meeting testified to by Terranova. The judge denied the request for inspection of these logs on the grounds that they were not verbatim or substantially verbatim reports of statements made by a witness as required by § 3500. The purpose of the Jencks Act was to provide the defense with the means of impeaching a government witness by means of a prior inconsistent statement, United States v. Aaron, 457 F.2d 865 (2d Cir. 1972), while not allowing an unrestrained search through government files. The determination of whether a particular document is within the ambit of § 3500 is ordinarily one for the trial court whose ruling should not be disturbed unless clearly erroneous, Canaday v. United States, 354 F.2d 849 (8th Cir. 1966). In this instance, since the Agent did not testify that Dellaeroee was present at the time stated by Terra-nova, the logs would be useless to impeach the Agent on this point. Further, these documents were not used to refresh the witness’s memory before his testimony. The witness, in fact, admitted that he did not recall certain matters that could be found in the logs. Thus, it may be seen that these research surveillance logs are of the same nature as the Agent’s diary as to the people he met with which has been held to be outside § 3500 in Canaday v. United States, 354 F.2d 849 (8th Cir. 1966). Therefore, there was no error here.

With respect to the question put to Terranova as to which the objection was sustained, Terranova had been interviewed by an F.B.I. Agent on July 13, 1970. The Agent had recorded in writing his version in summary form of that interview (GX30 for identification). Terranova, after reading the statement, still persisted in his lack of recollection concerning the question being asked. Thereupon, the cross-examiner asked:

“Mr. Terranova, I ask you this question and if you will, please, answer it yes or no, if you can. You have just had occasion to read this F.B.I. report dated the 13th of July, 1970. Isn’t it true that nowhere in this statement do you mention anything about meetings at the Ravenite Club on Mulberry Street with. Mr. Dellacroee?” The government’s objection to the question was sustained. The report was not in evidence. There was no foundation laid to show that Terranova had told the Agent about any meetings or that the Agent had recorded verbatim the interview. And the Agent, himself, could have been asked whether the report recorded all that was said. Furthermore, Dellacroce’s attorney was given full opportunity to ask Terranova whether he had told the Agent about the meetings, of which opportunity he took advantage by asking specifically about three meetings inside the Ravenite Club, as follows:

“I ask you, Mr. Terranova, on July 13, 1970, when you spoke with Agent Hughes in the parking lot in Hicksville on that day, on July 13 for about 20 minutes, you did not tell him, did you, anything about three meetings inside the Ravenite Club with Mr. Dellacroee? Yes or no.”

The answer was, “I sincerely don’t recall, sir.”

Dellacroee suffered no prejudice from this incident.

Goldman

Turning now to the arguments of appellant Goldman, it is contended that testimony given by a government witness to the effect that Goldman had committed a prior similar act to the one charge was improperly admitted. William Stone, the witness in question, testified that in 1965 he had been hired by Goldman for the sum of $200,000, payable in stock, to handle a labor dispute between the Teamster’s Union and one of Goldman’s companies. Shortly after that conversation, in a meeting with Catalano and Goldman, Stone was told that Catalano would handle the matter and that Stone should not pursue it further. The judge instructed the jury that this testimony could be considered only as probative of Goldman’s intent to conspire. Goldman contends that this evidence was irrelevant to the case at hand in that there was no labor dispute at all at Yankee Plastics, and that the testimony of Stone in no way suggests that Goldman knew of any intent to help Dellacroce or Catalano evade taxes. It is argued further that this evidence was highly prejudicial in that it revealed a prior criminal act. The government’s response chiefly lies in the contention that this evidence had a direct bearing on whether Goldman intended the Yankee Plastics stock for Dellacroee and not for the various alternative purposes suggested by the appellants. Thus, it could well be argued the transfer would constitute income to Dellacroee and the various machinations with the stock could be taken as showing Goldman’s knowledge of, and participation in, Dellacroce’s attempt to evade taxes. On this theory, the evidence was properly admitted, United States v. Glasser, 442 F.2d 994 (2d Cir.), cert. denied, 404 U.S. 854, 92 S.Ct. 96, 30 L.Ed.2d 95 (1971).

Goldman further contends that the prosecutor failed to disclose to his attorney evidence allegedly suggesting that the witness Stone had been paid for his testimony. The evidence consisted of tapes of severál phone conversations between Stone and a government agent and one conversation between Stone and the prosecutor. These tapes came to light when Stone offered to sell them to Goldman for use in his efforts to reverse his conviction. It would serve no purpose to set out the contents of the tapes. It is sufficient to say that the judge below found that there was no merit in Goldman’s claims and that such a finding is not unwholly supported by the evidence, United States v. Kahn, 472 F.2d 272, 287 (2d Cir.) cert. denied, 411 U.S. 982, 93 S.Ct. 2270, 36 L.Ed.2d 958 (1973). Certainly there is no satisfactory proof that the government deliberately suppressed this evidence that would merit the application of a less stringent rule, Id. In light of the evidence presented, it is reasonable to conclude, as did the trial court, that Stone, by offering the tapes, was attempting to “shake down” Goldman for their price.

Goldman argues that he was denied a fair trial because of prejudicial publicity during the trial. Certainly the trial did gain some notoriety. However, a reading of the record reveals the great care of the judge in insuring that the jurors were not exposed to such publicity. There was no evidence that any juror saw any publicity or commentary on the case which affected his or her judgment, unlike the cases of Sheppard v. Maxwell, 384 U.S. 333, 86 S.Ct. 1507, 16 L.Ed.2d 600 (1966) and United States v. Rattenni, 480 F.2d 195 (2d Cir. 1973) cited by appellant. Appellant’s reference to Estes v. Texas, 381 U.S. 532, 85 S.Ct. 1628, 14 L.Ed.2d 543 (1965) is equally inapposite.

Goldman’s fourth contention is that there was insufficient evidence of, and an incorrect charge on, the issue of his knowledge and intent. As to the issue of proof there was direct testimony on this point by Terranova. If the jury chose to believe him, they certainly had the right to do so. The charge was equally proper. The court stated in part:

To find a defendant guilty of conspiracy you must find that he knowingly and willfully joined the conspiracy with the specific intent and purpose of furthering its objective.

This read in light of the nature of the conspiracy was sufficient to apprise the jurors of the elements of the offense.

Goldman’s fifth allegation of error centers around the court’s refusal to charge the jury that they must find, beyond a reasonable doubt, that an overt act, alleged in the indictment, occurred in the Southern District of New York. However, venue need not be proven beyond a reasonable doubt, United States v. Trenary, 473 F.2d 680, 682 (9th Cir. 1973); see also United States v. Braver, 450 F.2d 799, 804 n. 11 (2d Cir. 1971), cert. denied, 405 U.S. 1064, 92 S.Ct. 1493, 31 L.Ed.2d 794 (1972). And in the present record there is abundant evidence from which a jury could find proper venue in'the Southern District. Thus, this contention of Goldman’s is also without merit.

Finally, Goldman contends that the government violated the rule of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963) in that it failed to reveal an alleged deal with Terranova. This point has been covered in the discussion of the final argument raised by Dellacroce and nothing more is necessary here than to reaffirm the propriety of the judge’s action.

Catalano

Turning finally to the contentions of appellant Catalano who adopts all the arguments considered above and specifically reiterates and stresses the second argument raised by Goldman concerning alleged prosecutorial misconduct, for the reasons above stated we find that they do not constitute reversible error.

In conclusion, each argument raised by the respective appellants has been considered and found to be without merit. The judgment and the orders appealed from are affirmed.

OAKES, Circuit Judge

(concurring):

I concur in the result.


author: PER CURIAM:

text:
    EASTERN ASSOCIATED COAL CORP., Petitioner, v. INTERIOR BOARD OF MINE OPERATIONS APPEALS et al., Respondents.
    No. 73-1859.
    United States Court of Appeals, Fourth Circuit.
    Argued Dec. 3, 1973.
    Decided Feb. 12, 1974.
    R. Kenneth Wheeler, Richmond, Va. (Joseph C. Kearfott, Hunton, Williams, Gay & Gibson, Richmond, Va., Thomas E. Boettger, Associate Counsel, Eastern Associated Coal Corp., Pittsburgh, Pa., on brief), for petitioner.
    Judith S. Feigin, Atty., U. S. Dept. of Justice, and J. Philip Smith, Asst. Sol., Mine Health and Safety Div., U. S. Dept. of the Interior (Irving Jaffe, Acting Asst. Atty. Gen., Robert E. Kopp, Atty., U. S. Dept. of Justice, and Michael M. Hunter, Trial Atty., U. S. Dept. of the Interior, on brief), for respondents.
    Before BRYAN, Senior Circuit Judge, and WINTER and CRAVEN, Circuit Judges.
   PER CURIAM:

Eastern Associated Coal Corp. (Eastern) seeks review of an order of the Secretary of the Interior, acting by the Interior Board of Mine Operations Appeals, which, in turn, sustained an order of withdrawal to Eastern requiring Eastern to close a portion of one of its mines in Rachel, West Virginia, until certain allegedly unsafe conditions were corrected. The withdrawal order issued upon the determination by a federal mine safety inspector that the unsafe conditions constituted an “imminent danger” within the meaning of § 104(a) of the Coal Mine Health and Safety Act of 1969, 30 U.S.C. § 814(a). The unsafe conditions were an accumulation of debris in a passageway, limiting vertical clearance, together withTwo loose roof bolts, which, in conjunction, could conceivably cause persons or vehicles passing through the passageway to be struck by the bolts.

In the proceedings before the Secretary, the dispute revolved about what is an “imminent danger.” Eastern asserted that a danger is imminent only if there is a reasonable likelihood that it will result in injury before it can be abated, and that the admittedly dangerous conditions here did not constitute an “imminent danger” because Eastern had voluntarily withdrawn miners from the affected area until the conditions were corrected prior to issuance of the order. The Secretary determined, and we think correctly, that “an imminent danger exists when the condition or practice observed could reasonably be expected to cause death or serious physical harm to a miner if normal mining operations were permitted to proceed in the area before the dangerous condition is eliminated.” (Emphasis added). We therefore affirm the Board’s order.

At argument, we questioned whether Eastern was a “person aggrieved” by the order sought to be reviewed within the meaning of § 106(a) of the Act, 30 U.S.C. § 816(a), since the withdrawal order was terminated within hours after its issuance. Our doubts on this score have been allayed. Even if we put aside the doctrine articulated in Southern Pacific Terminal Co. v. I. C. C., 219 U.S. 498, 31 S.Ct. 279, 55 L.Ed. 310 (1911), that review is not always defeated when short term orders, capable of repetition, expire, § 109(a) of the Act, 30 U.S.C. § 819(a), authorized the imposition of civil penalties for violations of a mandatory health or safety standard, the amount of the penalty to be determined, inter alia, by “the gravity of the violation.” The issuance of a withdrawal order is a factor bearing upon the gravity of a' violation, and its validity or the correctness of the factual basis on which it rests may not be relitigated in a § 109 (a) proceeding. Spring Branch Coal Company, 2 IBMA 154 (1973); Buffalo Mining Company 2 IBMA 327, 333 (1973); Zeigler Coal Company, 2 IBMA 216, 223-24 (1973). Thus, Eastern has a present interest in the outcome of the instant case.

Affirmed.