author: MULLIGAN, Circuit Judge:

text:
    UNITED STATES of America, Appellee, v. Alleyne F. ROBINSON et al., Defendants-Appellants.
    Nos. 686, 698, 703, Docket 74-2483, 74-2492 and 74-2541.
    United States Court of Appeals, Second Circuit.
    Argued Feb. 20, 1975.
    Decided March 17, 1975.
    T. Barry Kingham, Asst. U. S. Atty., New York City (Paul J. Curran, U. S. Atty. for the Southern District of New York, Lawrence S. Feld, Asst. U. S. Atty., of counsel), for appellee.
    Manuel Taxel, New York City (Louis Noah Forman, New York City), for defendant-appellant Alvarez.
    Phylis Skloot Bamberger, New York City (The Legal Aid Society, New York City), for defendant-appellant Villegas.
    Samuel Zuckerman, New York City, for defendant-appellant Robinson.
    Before ANDERSON, MULLIGAN and VAN GRAAFEILAND, Circuit Judges.
   MULLIGAN, Circuit Judge:

These are appeals by Alleyne F. Robinson, Jose Antonio Acosta Alvarez and Joseph M. Villegas from judgments of conviction entered on November 7, 1974 in the United States District Court for the Southern District of New York after a two-week jury trial before Hon. Dudley B. Bonsai, United States District Judge. The indictment in various counts charged the three defendants with a conspiracy to violate, as well as substantive violations of, 29 U.S.C. § 501(c) by the conversion of the property of the National Maritime Union (NMU), where Robinson served as an official and his co-defendants as employees. The defendants were convicted on all counts on which they were tried. Robinson received a one-year suspended sentence, was placed on probation for one year and fined a total of $1000 to be paid during the year of probation. Alvarez and Villegas were sentenced to probation for three months and a fine of $250 to be paid within that time.

I

The NMU is a labor organization representing unlicensed seamen on commercial and Government vessels, including those operated by the Government’s Military Sea Transportation Service (MSTS). The NMU divided seamen into groups for the purpose of allocating work. In 1968-70, only full-fledged members of the NMU were classified in Group I. Seamen who were in three lower groups could compete for jobs on a priority basis only after Group I seamen had been offered the opportunity. To qualify for Group I status a seaman had to have served at least 800 days at sea on NMU vessels within a five-year period. To establish eligibility for Group I status certain forms had to be completed by the applicant. If he had served on commercial vessels, he would complete a “white form” and furnish copies of “discharges” received at the end of a voyage to support his claim of time at sea. This information then had to be verified by the NMU staff at headquarters, where records were kept of Pension and Welfare Fund contributions by commercial employers; these contributions were computed according to the amount of each NMU member’s seatime. If the seaman claimed MSTS service, he would complete a “green form” detailing his time at sea on MSTS vessels, which the union could verify by checking MSTS personnel files in Brooklyn. Upon verification a Group I union book and “blue card” would be issued and the seaman would pay a $150 initiation fee and $30 for quarterly dues thereafter.

Robinson, who was an elected official of the Union, acted as a liaison between the seamen aboard vessels in port and the shore-based union offices. He also maintained an office in the NMU hall in New York City, where his particular responsibility was to handle the processing of applications for seamen who claimed MSTS experience.

On trial, the Government produced nine seamen who had applied to Robinson for Group I status although they admittedly lacked the necessary experience at sea. Five of the seamen were introduced to Robinson by Villegas and Alvarez, who were respectively a Patrolman and a Master-at-Arms of the NMU. Villegas and Alvarez charged the seamen fees ranging from $500 to $750 to get Group I classification. The Government’s proof established that, in the case of six seamen who had executed the green (MSTS service) forms, when the forms were returned by Robinson they contained entries of sea service which were false and had not been given to Robinson. All of the forms when returned to the NMU from the Brooklyn MSTS office bore the signature of E. U. Maynard in the space for verification by the personnel office of MSTS. Although Mrs. Maynard did not appear as a witness, the Government’s theory was that she, as one of the two clerks in the MSTS office, was acting in concert with Robinson to verify falsely the forms which noted sea service which had never taken place.

On appeal, Alvarez and Villegas challenge, inter alia, the sufficiency of the evidence on both the substantive and conspiracy counts. In view of the evidence of illicit payments by seamen to each man and their presence when these seamen executed forms in blank in order to procure Group I status, the claim that the evidence was insufficient is of no substance. Several other points raised by the appellants are frivolous.

II

The only argument raised on appeal which merits discussion is the position taken by all the appellants that the conduct which was the basis for the indictment and conviction here does not constitute a crime under 29 U.S.C. § 501(c). At the end of the trial, all defense counsel renewed their motions to dismiss on this ground, and Judge Bonsai denied the motions in a memorandum dated November 7, 1974.

Section 501(c) of the Labor-Management Reporting and Disclosure Act of 1959 provides:

Any person who embezzles, steals, or unlawfully and willfully abstracts or converts to his own' use, or the use of another, any of the moneys, funds, securities, property, or other assets of a labor organization of which he is an officer, or by which he is employed, directly or indirectly, shall be fined not more than $10,000 or imprisoned for not more than five years, or both.

The theory of the Government is that the defendants conspired to convert, and that Robinson, aided and abetted by Alvarez and Villegas, did in fact convert to their own use and personal profit, the Group I application forms which were NMU property. The contention of the defendants was and is that the forms which were converted had no value and that the NMU actually profited from the activity of the defendants, who enriched the treasury of the NMU by adding new paying members. The argument continues that the legislative history of the statute demonstrates that, although broad fiduciary responsibilities for union officials were established in section 501(a) of the statute, the criminal conversion and embezzlement subdivision, section 501(c), was not given a similarly broad scope. It is urged that, while the conduct involved here may constitute a violation of the fiduciary obligations of the defendants, the remedy is properly a civil action by the union or its employees under section 501(b), which implements 501(a), but not a criminal proceeding under 501(c).

There is no question but that the legislative history of the statute reveals that the Congress was principally concerned with the looting of union treasuries by union leaders for their personal profit. It is understandable that this kind of obvious abuse by union officials was the principal concern of congressional leaders in the hearings and debates which preceded the enactment of the statute in question. However, it is evident from the clear and unambiguous language employed by the statute that the behavior condemned is not limited to the embezzlement or conversion of union funds. The statutory language condemns the embezzlement or conversion not only of moneys, funds and securities, but also of “property, or other assets of a labor organization . . . directly or indirectly . . . .”

It cannot be disputed that the green and white forms here were converted by the defendants and that they constituted union property. The argument that there was no violation of the statute because the forms had no intrinsic value is not persuasive. In the first place, the statute does not require that the property be of any particular value. The forms obviously were not taken to be used as scrap paper or to make paper hats. When, through the connivance of the defendants, the forms were filled in with false information, their value to the unqualified seamen was great enough to persuade them to pay $500 to $850 to the defendants to receive an NMU union book and blue card.

The contention that there was no statutory violation since the NMU lost nothing and in fact benefited by the transaction to the extent that it obtained the dues of new members is not convincing. The new members were spurious and presumably the privileges of Group I membership are dependent upon meaningful experiential norms which have been established in good faith by the union. The erosion of these standards by the meretricious machinations of the defendant officials and employees consti- ■ tuted a breach of trust which cannot possibly be characterized as a benefit to the union. The only beneficiaries were the defendants who were selling fraudulent union credentials. The fact that union funds were not depleted does not remove the case from the reach of the statute. One of the aims of the criminal provision here involved was to preclude the unjust enrichment of union officials and agents, which was precisely what occurred here. The allocation of jobs by priority is certainly a principal benefit of union membership and, insofar as the process was thwarted and frustrated by the scheme employed here, the union and its bona fide members suffered a loss which, although not readily calibrated in terms of dollars, is nonetheless real. The statute here does not attempt to draw common law distinctions between grand and petit larceny, as it well could have, but is addressed to defendants who embezzle, steal or unlawfully and willfully abstract or convert any of the property of a labor organization. Such conduct was engaged in by the defendants in this case.

Although appellants claim that this is a case of first impression, that is true only to the extent that the fact pattern is unusual. However, this court has had the obligation to construe section 501(c) on previous occasions. In United States v. Silverman, 430 F.2d 106 (1970), cert. denied, 402 U.S. 953, 91 S.Ct. 1619, 29 L.Ed.2d 123 (1971), Judge Friendly pointed out that in section 501(c), as in other comparable criminal provisions, the Congress has

gone beyond the common law offense of larceny and the old statutory crime of embezzlement because “gaps or crevices have separated particular crimes of this general class and guilty men have escaped through the breaches,” Morissette v. United States, 342 U.S. 246, 271-272, 72 S.Ct. 240, 254, 96 L.Ed. 288 (1952). But, as was there held, despite minor variations in language the common thread is that the defendant, at some stage of the game, has taken another person’s property or caused it to be taken, knowing that the other person would not have wanted that to be done.

430 F.2d at 126-27 (emphasis added). The Court in Silverman also essentially defined the unlawful and willful conversion of union property;

It is easy to understand how a union employee does this when he “unlawfully and willfully” uses union funds in a manner that works to the personal benefit of himself or the payee and does not benefit the union, whether or not the union went through the form of authorization; the “union” presumably would have objected if it had been able to speak freely.

430 F.2d at 127. See also United States v. Ottley, 509 F.2d 667 (2d Cir., 1975).

In our view, the activities of the defendants here fall within Judge Friendly’s description of the crime Congress intended to establish. They utilized the property of the union in a way which benefited themselves and not the union. Their action was not authorized and presumably the NMU and its membership would have objected had it been made known. The judgments must therefore be affirmed.

Affirmed.

      . These five seamen paid fees to Alvarez or Villegas prior to meeting with Robinson. Other seamen paid various amounts, up to $850, to Robinson or unknown co-conspirators when the application forms were signed.

      . Section 501(a) provides in pertinent part as follows:
      The officers, agents, shop stewards, and other representatives of a labor organization occupy positions of trust in relation to such organization and its members as a group. It is, therefore, the duty of each such person, taking into account the special problems and functions of a labor organization, to hold its money and property solely for the benefit of the organization and its members and to manage, invest, and expend the same in accordance with its constitution and bylaws and any resolutions of the governing bodies adopted thereunder, to refrain from dealing with such organization as an adverse party or in behalf of an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interests of such organization, and to account to the organization for any profit received by him in whatever capacity in connection with transactions conducted by him or under his direction on behalf of the organization.

      . Section 501(b) provides in pertinent part as follows:
      When any officer, agent, shop steward, or representative of any labor organization is alleged to have violated the duties declared in subsection (a) of this section and the labor organization or its governing board or officers refuse or fail to sue or recover damages or secure an accounting or other appropriate relief within a reasonable time after being requested to do so by any member of the labor organization, such member may sue such officer, agent, shop steward, or representative in any district court of the United States or in any State court of competent jurisdiction to recover damages or secure an accounting or other appropriate relief for the benefit of the labor organization.

      . For example, Senator McClellan, Chairman of the Senate Select Committee on Improper Activities in the Labor-Management Field, and Senator Curtis discussed on the floor of the Senate the union corruption at which the legislation was aimed:
      Mr. McClellan. That is correct. In the select committee we found many instances of violations of that trust. Probably the most flagrant instance was the Beck situation. Instead of assuming his responsibility and the obligation to handle union money as if it belonged to the union, he simply handled it for his own personal profit and gain. In other words, he pilfered nearly $400,000 of union funds, as we discovered.
      Mr. Curtis. We uncovered a number of instances wherein union funds and profits were handled by corrupt officers, just as though they had a proprietary interest in the money.
      Mr. McClellan. Yes.
      Mr. Curtis. That situation obtained in some of the Johnny Dio unions in New York. It also was true of the operating engineers in San Francisco. In a number of cases individuals handled union money without regard to who owned the money.
      Mr. McClellan. Yes. I may remind my distinguished colleague — and I say this for the information of all Senators — that the Teamsters’ Union in St. Louis was bought out and paid off. The officers were, in effect, bought out and the union was turned over to the person who is there now, Gibbons. How was that money obtained? The retirement pay money was used.
      Mr. Curtis. Or severance pay.
      Mr. McClellan. Yes. The retirment or severance pay money was given to the officers who were bought out.
      I do not think the union members, the working people, pay their dues in the unions for that sort of manipulation. If we establish a fiduciary responsibility under the law, I do not think union officers could perpetrate such acts.

      . This situation is analogous to the stealing of blank checks, belonging to the United States, with an intrinsic value of a total of six cents, which was held to violate a statute making it a crime to steal “any kind or description of property belonging to the United States.” Keller v. United States, 168 F. 697 (7th Cir. 1909) (per curiam). The intrinsic value of the converted forms in this case is similarly very small and the statute violated is similarly broad, prohibiting the conversion of “any of the . . . property . . . of a labor organization . . . .” See also Lotto v. United States, 157 F.2d 623, 629 (8th Cir. 1946), cert. denied, 330 U.S. 811, 67 S.Ct. 1082, 91 L.Ed. 1266 (1947); Donegan v. United States, 287 F. 641, 646 (2d Cir. 1922), cert. denied, 260 U.S. 751, 43 S.Ct. 251, 67 L.Ed. 495 (1923); Clark v. United States, 268 F. 329, 331 (6th Cir. 1920).

      . See, e. g., 18 U.S.C. §§ 641, 643, 644 & 648; N.Y.Penal Law §§ 155.25 to 155.35.

      . Most of the litigation in this circuit arising under the statute has concerned alleged violations of section 501(a) and relief has been sought under section 501(b). We have consistently given a relatively narrow interpretation to these provisions, refusing to intervene in matters which we have considered to involve simply the internal operations of a union. Head v. Brotherhood of Railway Clerks, 512 F.2d 398 (1975); Coleman v. Brotherhood of Railway Clerks, 340 F.2d 206 (1965); Gurton v. Arons, 339 F.2d 371 (1964). We have, however, made it clear that those sections do apply “to fiduciary responsibility with respect to the money and property of the union . . . .” Gurton v. Arons, supra, 339 F.2d at 375. To the same effect, Head v. Brotherhood of Railway Clerks, supra, 512 F.2d at 398 n. 3. Other circuits have given a broader reading to section 501(b). E. g., Pignotti v. Local # 3, Sheet Metal Int’l Ass’n, 477 F.2d 825 (8th Cir.), cert. denied, 414 U.S. 1067, 94 S.Ct. 576, 38 L.Ed.2d 472 (1973); Sabolsky v. Budzanoski, 457 F.2d 1245 (3d Cir.), cert. denied, 409 U.S. 853, 93 S.Ct. 65, 34 L.Ed.2d 96 (1972).


source: Caselaw Access Project

author: TUTTLE, Circuit Judge:

license: Public Domain

text:
    Kenneth B. MOFFETT, Petitioner-Appellant, v. Louie L. WAINWRIGHT, Director, Division of Corrections, Respondent-Appellee.
    No. 74-2118.
    United States Court of Appeals, Fifth Circuit.
    April 30, 1975.
    Rehearing Denied June 10, 1975.

      Robert J. Buonauro, Orlando, Fla., William A. .Patterson (Court appointed), St. Petersburg, Fla., for petitioner-appellant.
    Guy E. LaBalme, Asst. Atty. Gen., Palm Beach, Fla., William I. Munsey, Jr., Asst. Atty. Gen., Tampa, Fla., for respondent-appellee.
    Before TUTTLE, COLEMAN and SIMPSON, Circuit Judges:
   TUTTLE, Circuit Judge:

Kenneth Moffett was convicted by a jury in state court in 1964 for armed robbery and aggravated assault. He was sentenced to a life term. After unsuccessfully pursuing his direct appeal, he brought a petition for federal habeas corpus relief, 28 U.S.C. § 2254. The federal district court denied the petition, and Moffett appeals.

I. FACTS

The Public Loan Company office in Orlando, Florida was robbed on February 21, 1964. Ten days later, on March 3, the defendant, Kenneth Moffett, was arrested in Jacksonville, Florida on a charge of vagrancy. The arresting officer was one C. L. Cody, a detective sergeant in the Duval County Sheriff’s office. Moffett was booked and placed in the Duval County Jail; bond was set at $50,000. The defendant was not brought before a magistrate for three days; when he was arraigned, bond was reduced to $25.

Shortly after he booked Moffett into the Duval County Jail, Sgt. Cody joined by one Sgt. Súber, sought out Mildred (Mickey) Thompson, known to them to be a friend of Moffett. They found her at the Green Derby Restaurant where she was working, and asked her about Moffett’s apartment at 1812 Riviera Parkway; Sgt. Cody testified she told him that it was Kenny’s apartment, but she agreed to accompany him to the apartment. When they arrived at the apartment, Mickey opened the door. Sgt. Cody testified that he found within the residence two other young girls, Yelveline Addison and Judy Allen Frazier. He testified they identified themselves to him as occupants of the premises, and he then requested their permission to search the apartment. After hearing from Sgt. Cody that Kenny was believed to have participated in certain crimes, and that they were suspected of also being involved in those crimes, the girls agreed to permit the officers to search the apartment.

Sgt. Cody testified at Moffett’s trial that he had no independent knowledge as to who had rented the apartment, or who was paying the rent; he testified that he had no information as to how long the three girls had been living at that address, other than because “they had all their clothes in the house” he therefore “figured they had been there long enough to move in.”

In the course of his search of the apartment, Sgt. Cody discovered a pair of gloves and a gun later identified as having been used by the robber of the Loan Company office, as well as money bags taken during the robbery. These items were introduced at his trial over defendant’s objection.

On March 4, after Moffett had spent the night in the Duval County Jail, Cody and Súber confronted him with the items they had found in his apartment; Moffett testified that at first he refused to admit his involvement in the Loan Company robbery, but that after he was told that the police were investigating the three girls found in his apartment and several other girls of his acquaintance, he agreed to cooperate. He then made the confession which was admitted in trial against him.

From the time he was arrested until he confessed Moffett was not permitted to make a phone call, despite the undisputed fact that he requested several times to use the phone, nor was he given any warnings concerning his rights to remain silent and to consult an attorney. Moffett testified that he asked both Cody and Súber to call an attorney, but had been denied that request; Sgt. Cody and Sgt. Súber testified that they had no memory of such a request. Moffett testified that the superintendent of the jail told him that he wasn’t to use the telephone, or receive any visitors; the next morning, when he was taken to the sheriff’s office for questioning, he testified he again requested permission to call a lawyer, but he was told he would have the right to use the telephone only after his questioning was completed. He testified he was also told that he could not consult a lawyer. He testified that before he was informed his various friends were under investigation, he had told the police that he did not wish to make a statement.

The federal district court found that the vagrancy arrest was a sham charge, and that Sgt. Cody lacked probable cause to make it. The state does not challenge this finding that the arrest was illegal. Sgt. Cody testified that he arrested Moffett because “he had no visible means of support. He wasn’t employed at the time,” but that “we had reason to believe that the defendant had been engaged in criminal activity in Duval County, through confidential sources— that was the primary reason.” [Emphasis added.]

In his habeas petition Moffett challenged both the constitutionality of the search of his apartment, and the use of his confession against him. The habeas trial court found that the search had been conducted following proper consent by co-inhabitants of the apartment, that their consent had not been coerced, and that despite the fact Moffett had been illegally arrested on a sham charge, his subsequent confession was wholly voluntary, and properly introduced against him. We reverse.

II. THE SEARCH

The only evidence in the record as to the authority of the three girls to consent to the warrantless search of Moffett’s apartment is the testimony of Sgt. Cody, the officer who arrested Moffett and who then searched his apartment. He testified:

“Kenny related to me he paid the rent on the apartment; and, however, the white females that were present at the time of the search they stated it was their home, or their dwelling.”

He acknowledged on cross-examination that he had no knowledge of the girls’ authority or their rights to the premises, save for what they had told him. He had no knowledge as to how long they had been in the apartment or who had rented the apartment; Sgt. Cody admitted he lacked any first-hand information as to the authority of the three girls to consent to a warrantless search of Moffett’s apartment. None of the girls testified at trial. “[C]onsent to a search is not to be lightly inferred, but should be shown by clear and convincing evidence.” Phelper v. Decker, 401 F.2d 232, 236 (5th Cir. 1968). In our view, the state failed to prove that the warrantless search of Moffett’s apartment had been consented to by third parties with sufficient rights to the premises.

The rule in this Circuit is that “where two persons have equal rights to the use or occupation of the premises, either may give consent to a search, and the evidence thus disclosed may be used against either.” United States v. Hughes, 441 F.2d 12, 17 (5th Cir. 1971); United States v. Thompson, 421 F.2d 373, 375 (5th Cir. 1970); Gurleski v. United States, 405 F.2d 253, 262 (5th Cir. 1968). Nothing in the record in this case establishes that the three girls upon whom Sgt. Cody relied to consent to his search had such “equal rights” to Moffett’s apartment as to justify the warrantless search.

The habeas trial court believed that the evidence that Sgt. Cody observed some women’s clothing in the apartment proved that the girls were co-inhabitants with rights to the apartment equal to Moffett’s. We must disagree. There was no evidence as to what clothing was observed, where it was observed, or to whom it belonged. We do not believe the state can sustain its burden of justifying its warrantless search solely on the basis that some female clothing was observed in Moffett’s apartment — and that is the only direct evidence as to the three girls’ authority to consent to a search. On the record before us there is simply no evidence sufficient to establish that the warrantless search complied with constitutional standards.

Despite the fact the state did not raise the issue in its brief, at oral argument this Court observed that there may be a procedural bar to raising this substantive question in a collateral proceeding. There is substantial ambiguity in the record as to whether the trial court considered the motion to exclude the evidence which resulted from the search, as defense counsel had failed to make a motion before trial to suppress the evidence, which was apparently the appropriate procedural technique by which such searches could be challenged. Despite the fact that the judge heard on voir dire the account of the two officers as to how they obtained consent to search the apartment, the state trial court limited the voir dire examination of the defendant to the question of the voluntariness of his confession. Out of the presence of the jury he said:

“As I understand it, the only thing we are concerned with as far as testimony or any evidence is as to the admissibility of the confessions. In other words, I do not understand the law to be that we can now get into a question as to whether or not the testimony presented by the state as to the legality of the search and seizure can be controverted — if you understand my point: in other words, there was no motion to suppress filed in this case, and that would have been the time for the Court to go into the question; the statement still shows it was admissible, and a legal search and seizure — was admissible as a legal search and seizure, but we can’t stop the trial to go into the question of whether or not a motion to suppress by the defense is proper. I don’t know if you understand me. Call your witness and we will proceed.”

On direct appeal the Florida Court of Appeals described this colloquy, and stated that it “appears, therefore that the court overruled the defendant’s objections to the admissibility of the evidence seized in the search solely on the ground that the defendant had not moved to suppress prior to trial.” Moffett v. State, 179 So.2d 408, 411 (2 D.C.A.1965) and on that basis affirmed what the court understood the ruling of the trial court to have been.

In 1964 the rule that a motion to suppress prior to trial was essential to dispute the constitutionality of a search was a matter of common law practice, not as yet codified. The leading case was Robertson v. State, 94 Fla. 770, 114 So. 534 (1927) where the Florida Supreme Court discussed the rule, stating that it was “the better and safer practice” to move to suppress in advance of trial yet noted that “such a preliminary motion is not always indispensable.” 114 So. at 537. The Florida Court of Appeals decision in Moffett v. State implies that the decision to consider a motion to suppress during trial is a matter of discretion left to the trial court, and based its decision that the trial court had refused to consider the constitutionality of the search on its reading of the record. In reading the same record, the federal district court believed that the state trial court had considered the constitutionality of the search and had implicitly held that the search was constitutional inasmuch as the officers had secured proper consent before they performed it. The federal district court agreed that the search was constitutional.

Under certain circumstances legitimate state procedural rules can preclude consideration of a federal question on federal habeas review, if the state rule substantially serves a legitimate state interest, Henry v. Mississippi, 379 U.S. 443, 85 S.Ct. 564, 13 L.Ed.2d 408 (1965); Fay v. Noia, 372 U.S. 391, 83 S.Ct. 822, 9 L.Ed.2d 837 (1963). We do not feel we confront a Henry v. Mississippi question in this case, however, as in our view the question before us is whether the state trial court in fact imposed a procedural bar to consideration of the search issue during voir dire examination at trial. While the record is not without its ambiguity, in our view both because the state trial judge took evidence as to the consent the officers obtained before searching, and because the court stated that “the statement still shows it was admissible, and a legal search and seizure,” it appears to us that the state trial court considered the search, and determined that it was constitutional. We thus agree with the federal district court that the matter is not barred from collateral attack due to the failure to comply with state procedural requirements, yet we disagree that the search met proper constitutional standards.

Because the state failed to show that the warrantless search was properly consented to by persons with the requisite authority over the searched premises, the items seized from Moffett’s apartment were improperly introduced at his trial and his conviction must accordingly be reversed.

We believe the use of his confession also necessitates reversal.

II. THE CONFESSION

Moffett’s confession was obtained while he was held in custody following what was found by the federal district court to have been an illegal arrest. The state does not now attempt to defend the original arrest, recognizing as we do that by Sgt. Cody’s own admission, his arrest of Moffett for vagrancy was wholly a sham, a pretext by which he intended to pursue his investigation into Moffett’s possible connection with recent armed robberies. Admittedly then the officer lacked probable cause to arrest Moffett on the vagrancy charge, and the enormous bond of $50,000 was apparently designed solely to guarantee that the defendant would remain in custody while the investigation proceeded. Moffett challenges the use of the confession he made while he was being illegally detained, arguing that such a statement constitutes “fruit of the poisonous tree,” Wong Sun v. United States, 371 U.S. 471, 488, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963).

Prior to Wong Sun an illegal arrest did not necessarily taint a subsequent confession unless the arrest and detention were part of a framework of coercion, whether physical or psychological. See Smith v. United States, 103 U.S.App.D.C. 48, 254 F.2d 751 (1958) cert. denied 357 U.S. 937, 78 S.Ct. 1388, 2 L.Ed.2d 1552 (1958); United States v. Walker, 176 F.2d 564 (2d Cir. 1949) cert. denied 338 U.S. 891, 70 S.Ct. 239, 94 L.Ed. 547 (1949); Brinegar v. United States, 165 F.2d 512 (10th Cir. 1948) aff’d 338 U.S. 160, 69 S.Ct. 1302, 93 L.Ed. 1879 (1948). The Supreme Court in Wong Sun, however, held that certain statements made following an illegal arrest were inadmissible, despite the fact that the statements could not have been said to have resulted from coercion. “Rather, the more apt question in such a case is ‘whether, granting establishment of the primary illegality, the evidence to which instant objection is made has been come at by exploitation of that illegality or instead by means sufficiently distinguishable as to be purged of the primary taint.’ ” 371 U.S. at 488, 83 S.Ct. at 417. Restated in slightly different form, the question is not simply whether the statement can be said to have been voluntary but whether the statement “was sufficiently an act of free will to purge the primary taint of the unlawful invasion.” 371 U.S. at 486, 83 S.Ct. at 416.

As this Court stated shortly after the Supreme Court’s decision in Wong Sun, “just as evidence taken during or directly resulting from an illegal arrest is inadmissible under the doctrine of Weeks v. United States, 1914, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652, Silverthorne Lumber Co. v. United States, [251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319] and Mapp v. Ohio, 1961, 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed.2d 1081, so are oral statements by persons arrested . which are so inextricably bound up with an illegal arrest so as to become ‘tainted’ ”, Rogers v. United States, 330 F.2d 535, 541 (5th Cir. 1964) cert. denied 379 U.S. 916, 85 S.Ct. 265, 13 L.Ed.2d 186 (1964).

This Court has not established a per se rule that statements made during a period of illegal detention are necessarily excluded, Phelper v. Decker, 401 F.2d 232, 237, n. 13 (5th Cir. 1968); Rogers v. United States, supra. The Supreme Court in Wong Sun noted that “we need not hold that all evidence is ‘fruit of the poisonous tree’ simply because it would not have come to light but for the illegal actions of the police,” 371 U.S. at 487 — 88, 83 S.Ct. at 417, and indeed the Court upheld the use of Wong Sun’s statement.

In evaluating the admissibility of statements obtained during a period of illegal detention this Court has looked to many different factors in deciding whether the statement was sufficiently related to the initial illegal arrest as to render it inadmissible. Among these factors are the circumstances surrounding the arrest, Thomas v. United States, 377 F.2d 118, 120 (5th Cir. 1967); cert. denied, 389 U.S. 917, 88 S.Ct. 246, 19 L.Ed.2d 273 (1967); Rogers v. United States, supra, 330 F.2d at 542; whether the custody was continuous, Thomas v. United States, supra, 377 F.2d at 120; the duration of the custody; United States v. Cox, 459 F.2d 986 (5th Cir. 1972); Thomas v. United States, supra; Rogers v. United States, supra; the pattern of interrogation; Phelper v. Decker, supra; Thomas v. United States, supra; Rogers v. United States, supra and perhaps most importantly whether the suspect had been apprised of his legal rights, and whether he has thus knowingly waived the opportunity to consult with an attorney, or to end the interrogation. United States v. Cox, 459 F.2d

986 (1972); Harney v. United States, 407 F.2d 586 (5th Cir. 1968); Samora v. United States, 406 F.2d 1095 (5th Cir. 1969); Phelper v. Decker, supra; Alexander v. United States, 390 F.2d 101 (5th Cir. 1968); Thomas v. United States, supra. In short, as we stated in Phelper v. Decker, supra, two considerations stand out as most prominent — whether substantial intervening occurrences take place between the time of the illegal arrest and the statements which are sought to be admitted, as for example the opportunity to consult with an attorney, or to terminate interrogation, and secondly, the extent to which the arrest was a “gross violation of legal processes” as opposed to a “failure to comply with technical requirements.” 401 F.2d at 237 — 38. Based on these two factors, we believe Moffett’s confession was inextricably tainted by his illegal detention, and that no intervening act of free will could be said to have occurred which would dissipate the taint of the illegal arrest.

The suspects in virtually all our prior cases which upheld the admissibility of their statements despite their prior illegal detention were fully apprised of their rights to counsel, and to end their interrogation without answering any questions. Here, despite the fact that we recognize that Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), is inapplicable, because the arrest in question occurred in 1964, Johnson v. New Jersey, 384 U.S. 719, 86 S.Ct. 1772, 16 L.Ed.2d 882 (1966), we note that Moffett was given no warnings whatever. In addition he was held incommunicado on a $50,000 bond having to wait several days before being brought before a magistrate. Although the facts are disputed as to whether he actually requested to speak to an attorney, it is undisputed that he repeatedly asked to use a telephone but was denied that request both by the arresting officers, the superintendent of the Duval County Jail, and his interrogators. Thus, despite the fact that full Miranda warnings are not required as a constitutional prerequisite to admission of the confession, we nonetheless believe that the opportunity to consult with counsel, or at least having been apprised of one’s right to do so, is substantial evidence that any subsequent confession is “an act of free will,” and thus distinct from the prior illegal arrest. Miranda, though inapplicable directly, clearly teaches us to view with “judicial skepticism,” Alexander v. United States, 390 F.2d 101, 110 (5th Cir. 1968) any claims by police interrogators that a suspect who has not been warned of his rights to remain silent or to consult with an attorney freely, knowingly and deliberately chose to cooperate with his questioners.

In addition, we note that while Moffett’s interrogation was not continuous, it was rigorous and intense — and conducted by what the record shows to have been ten different officers; Moffett was immediately confronted on the morning of March 4 with the evidence seized from his apartment, and coupled with this were what Moffett testified he understood to be implied threats against the girls found in his apartment and other girls of his acquaintance. Given these conditions, and the fact that the record shows the object of the illegal detention was to pursue Moffett’s questioning without interruption, we believe no intervening circumstances were shown which would have the effect of dissipating the taint of the initial illegal arrest.

In addition, and most importantly, we believe the arrest was the type of “gross violation of legal processes” Phelper v. Decker, 401 F.2d at 238 that justifies exclusion of the confession. Unlike instances where the arrest suffered only from a technical deficiency such as Ralph v. Pepersack, 335 F.2d 128, 136 (4th Cir. 1954), here there was a virtual acknowledgment by the arresting officer that no probable cause existed to believe that Moffett had in fact violated the vagrancy statute; the sole purpose for the arrest was to continue the investigation of Moffett’s possible connection with a series of armed robberies. He was booked, held on a huge bond, denied access to a telephone, denied visitors, and was eventually told the next morning that he would be able to make a telephone call only after his questioning was completed. The record shows this questioning began at 8:00 a. m. on March 4, and was conducted by ten different officers. We can reach no conclusion other than “an object of the illegal conduct” Allen v. Cupp, 426 F.2d 756, 759 (9th Cir. 1970) was the obtaining of Moffett’s statement as to his connection with the armed robbery of the loan company office. This is precisely the kind of gross police misconduct the rule of Wong Sun was intended to prevent.

In sum, we find the confession secured against Moffett to be illegally tainted by his initial unlawful detention; we find no evidence that an intervening act of free will so dissipated the taint that the confession ultimately obtained cannot be said to have been due to the exploitation of the original illegal detention. Both the circumstances of the arrest, and the pattern of interrogation convince us that Wong Sun dictates that the confession be excluded.

Accordingly, we reverse and remand for proceedings not inconsistent with this opinion.

      . Sgt. Cody testified that at that time he was working on information that these girls had “been seen in Moffett’s company, had been traveling with him; in fact, their clothes were in the house, in that apartment where he was supposed to be living — I still can’t testify to the fact that he was living there. I believe he was; he told me he was.”

      . On cross-examination Sgt. Cody testified:
      “Q: Did he at any time tell you he wanted to consult with an attorney?
      A: I don’t remember that he made that statement; I don’t remember.
      Q: He may have, and you don’t remember?
      A: I don’t remember his making that statement to me; I don’t remember his saying: “I want legal counsel.”
      On redirect the prosecutor asked, without objection:
      Q: Well, is it your statement, Sergeant, that he did or did not request the services of an attorney?
      A: He did not. I have no memory of it. He did not to me.
      Sgt. Súber testified on cross-examination:
      Q: Did he mention anything about making a phone call?
      A: I don’t recall.
      Q: Do you recall that he wanted a lawyer?
      A: No sir, I don’t recall it.”
      Once again the prosecutor attempted to ask a leading question on redirect to have Sgt. Súber restate his lack of memory in more affirmative terms, but at this point defense counsel objected to the form of the question, and was sustained by the trial court.

      . This rule was not codified until 1967 when Rule 1.190 Fla.R.Crim.P. was adopted. It provides that a motion to suppress evidence obtained through an unlawful search and seizure “shall be made prior to trial unless opportunity therefor did not exist or the defendant was not aware of the grounds for the motion, but the court in its discretion may entertain the motion or an appropriate objection at the trial.” This rule was closely styled after present Rule 41(e) F.R.Crim.P.

      . The Florida Court of Appeals noted that Robertson v. State, 94 Fla. 770, 114 So. 534 (1927) apparently held that a pretrial motion to suppress is not essential when the illegality “appeared from an admitted or uncontroverted state of fact” thereby raising a question of law. 179 So.2d at 412. In response to the defendant’s attempt to invoke this exception the state appellate court held that
      “The state’s evidence did not disclose a search without warrant of an apartment exclusively controlled by defendant upon the purported authority of persons present merely as casual guests. On the contrary, it indicated that the young women who consented to the search resided in the apartment, sharing its use with defendant under circumstances not disclosed by the record. So far as appears, the consent thus given was based on substantial but undefined possessory rights and interests of the young women in the premises, not upon any authority from defendant, express or implied.” [Emphasis added.] 179 So.2d at 412-13.
      This statement is factually inaccurate. The only evidence in the record as to “possessory rights” are the various hearsay accounts of Sergeants Cody and Súber as to what the three girls and Moffett had said — and these hearsay statements are unanimous that Moffett was the sole lessee of the premises. While no substantial evidence whatever exists as to the authority of the three girls to consent to the search, the record shows the undisputed understanding of the searching officers to be that Moffett was the apartment’s tenant — and there is nothing in the record to indicate that the three girls exercised any authority over the premises other than that which they derived from the defendant. Thus if the state appellate court meant to construe Robertson to justify the defendant’s failure to make a pretrial motion to suppress if the sole basis for the third parties’ authority to consent was derived from the defendant, this was in fact the precise situation here. As a factual matter, then, the state court misread the record in such a way as to affect its holding on a possible exception to the common law requirement of a pretrial motion to suppress.
      This affords a second reason why no procedural bar exists to limit our consideration of the validity of the search.

      . Moffett also argues that his confession was inadmissible because the state failed to comply with the rule of Escobedo v. Illinois, 378 U.S. 478, 84 S.Ct. 1758, 12 L.Ed.2d 977 (1964) in that he was denied the opportunity to consult with an attorney after he requested one, and in the alternative that the confession was not given voluntarily inasmuch as it was induced by the coercion of implicit threats made by the police against Moffett’s friends should he not cooperate. In light of our decision that the confession is inadmissible due to the taint of the prior illegal arrest, we need not reach either of these alternative grounds.

      . Moffett was charged under a vagrancy statute subsequently held to be unconstitutional in Papachristou v. City of Jacksonville, 405 U.S. 156, 92 S.Ct. 839, 31 L.Ed.2d 110 (1972). The unconstitutionality of the statute does not, however, establish that Moffett’s arrest was illegal within the meaning of Wong Sun; as we held in United States v. Kilgen, 445 F.2d 287, 289 (5th Cir. 1971) “overturning a conviction due to an invalid statute does not automatically render the previous arrest and detention illegal absent some showing that police officials lacked a good faith belief in the validity of the statute.”

      . But see Hale v. Henderson, 485 F.2d 266 (6th Cir. 1973) cert. denied 415 U.S. 930, 94 S.Ct. 1442, 39 L.Ed.2d 489 (1974) which establishes a very restrictive test as to when statements following an illegal arrest can be used.

      . See also Allen v. Cupp, 426 F.2d 756, 759 (9th Cir. 1970); Thompson v. Warden, 413 F.2d 454, 455 (4th Cir. 1969).

      . See also Allen v. Cupp, supra; United States v. Close, 349 F.2d 841 (4th Cir. 1965); Commonwealth of Pennsylvania v. Maroney, 348 F.2d 22 (3d Cir. 1965); Burke v. United States, 328 F.2d 399 (1st Cir. 1964).

      . Only in Rogers v. United States, 330 F.2d 535 (5th Cir. 1964) cert. denied 379 U.S. 916, 85 S.Ct. 265, 13 L.Ed.2d 186 (1964) was the defendant not advised of his constitutional rights to consult with counsel or to refuse to answer the questions of his interrogators. In Rogers, however, this Court emphasized the total lack of oppressive circumstances surrounding the defendant’s arrest, the fact that his interrogation was non-continuous, and the fact that there was a delay between the time of his arrest and his confession. In Rogers we placed primary emphasis upon this later factor, stating that this reliance on a separation in time between arrest and subsequent confession was only a tentative construction of Wong Sun; we have subsequently held that time alone is not a sufficient consideration to offset the taint, for to rely solely on a separation in time between arrest and statement would permit the police to maintain a suspect “on ice” for an interminable period, and then be free to use whatever he says. Phelper v. Decker, 401 F.2d at 237.

      . We note that on several occasions courts have emphasized the use of discretionary warnings despite the fact the arrest occurred before Miranda. See Thomas v. United States, 377 F.2d 118, 120 (5th Cir. 1967) cert. denied 389 U.S. 917, 88 S.Ct. 246, 19 L.Ed.2d 273 (1967); Allen v. Cupp, 426 F.2d 756 (9th Cir. 1970); Commonwealth of Pennsylvania v. Maroney, 348 F.2d 22 (3d Cir. 1965); Burke v. United States, 328 F.2d 399 (1st Cir. 1964).


author: BROWN, Chief Judge:

text:
    In the Matter of Marilyn Sliman McBEE, wife of/and Hal Dean McBee, Bankrupts, Appellants, v. Florence SLIMAN and St. Landry Bank & Trust Co., Appellees.
    No. 74-3152
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    May 2, 1975.
    Rehearing Denied May 28, 1975.

      Rudolph R. Schoemann, New Orleans, La., for appellants.
    William E. Logan, Jr., Lafayette, La., James T. Guglielmo, Opelousas, La., Leonard Avery, Asst. U. S. Atty., New Orleans, La., for appellees.
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, Circuit Judges.

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

   BROWN, Chief Judge:

Marilyn and Hal McBee appeal from the denial by a referee of their discharge in bankruptcy — affirmed in turn by the District Court. They contend that it was an abuse of discretion for the referee to deny a discharge to both or at the least to Marilyn McBee individually. We disagree and affirm.

The McBee creditors challenged the voluntary petition in bankruptcy on the ground that the bankrupts had failed to maintain books or accounts to satisfactorily explain a loss of $14,000 in assets as required by 11 U.S.C.A. § 32. By their objections, the creditors brought to the fore the petitioner’s burden to explain what happened to the money. Minella v. Phillips, 5 Cir., 1957, 245 F.2d 687; 1A Colliers on Bankruptcy § 14.12, p. 1310 (1973 rev.). Together the McBees testified that the $14,000 — Marilyn McBee’s separate property — was placed in a closet in their home for approximately two weeks. Then Hal McBee, unbeknownst to his wife, took the money and went on a junket to a Las Vegas gambling casino in an attempt to recoup enough to pay his debts. Within 24 hours he had lost all at the black jack tables and flew home with only airline ticket stubs and hotel receipts to account for the $14,000 loss. He was able to testify that the Sands was the scene of his debacle but except for the fact that the dealer had a mustache, McBee’s memory of specific bets and the manner of the losses was vague. Who hit whom or with what and when was never revealed.

The referee found the gambling spree explanation unacceptable to justify the absence of any records to account directly for the loss. He emphasized the cavalier, nonchalant attitude shown by the McBees toward their loss, as well as the fact that this was a substantial sum as compared to the petitioners’ income— $10,000 to $12,000 a year. While allowing that gambling records were by their nature hard to come by, the referee concluded that a bankrupt had to produce some kind of direct evidence in order to defeat an objection to his petition based on a failure to explain loss of assets. Since there was no justification offered by the petitioners for their failure to maintain records of the loss, the discharge was denied.

Broad discretion is vested in the referee to grant or deny a bankruptcy petition based on a determination that books or records are adequate under the terms of the statute and the facts of each case. Goff v. Russell Company, 5 Cir., 1974, 495 F.2d 199, 202. Where the referee’s determination has been upheld by the District Court, it will not be overturned “except for the most cogent reasons.” Baum v. Earl Millikin, Inc., 7 Cir., 1966, 359 F.2d 811. By this standard we find no justification in the arguments offered by petitioners or the facts of their case to justify reversal. For himself Hal McBee contends that the inherent impracticability of maintaining gambling records is adequate justification. In addition, his lack of technical legal title to his wife’s separate property should, he contends, eliminate any responsibility he may have to account for the $14,000. First, he misunderstands his burden under the statute. It is to convince the referee either by direct or circumstantial evidence that the money was in fact lost and the gambling explanation was not merely a ruse to evade creditors. See generally 1A Colliers on Bankruptcy § 14.12, pp. 1303-06 (1973 rev.). Second, Hal McBee had absolute control over his wife’s income and assets. Therefore, he cannot avoid the responsibility to account for sums that inured to his benefit. See, e. g., In Re Gentile, W.D.Ky.1954, 123 F.Supp. 723, 727.

Similarly, we affirm the denial of a discharge to Marilyn McBee despite some slight hesitancy. While it is true that- — if Hal McBee is to be believed— the property was lost through no fault of her own, she did participate in what can only be judged as a very stealthy handling — if not outright concealment— of the money. While there is no contradiction to her story that Hal McBee did not disclose his gambling mission until after his return, we would point out that such collusion would be virtually impossible to prove. In any case, the burden under the bankruptcy law to explain the loss and justify the absence of records applies as evenly to Marilyn McBee as it does to her husband.

Affirmed.


author: PHILLIPS, Chief Judge.

text:
    Claudia E. MAGRUDER, Plaintiff-Cross-Defendant- Appellant, v. NORTHWESTERN MUTUAL LIFE INSURANCE CO., Defendant-Cross-Plaintiff, and Linda C. Magruder et al., Cross-Defendants-Appellees.
    No. 74-1647.
    United States Court of Appeals, Sixth Circuit.
    March 5, 1975.
    John E. Hundley, Memphis, Tenn., for appellant.
    Edward G. Thompson, Memphis, Tenn., for appellees.
    Before PHILLIPS, Chief Judge, MILLER, Circuit Judge, and DeMASCIO, District Judge.

       Honorable Robert E. DeMascio, Judge, United Michigan, sitting by designation. States District Court for the Eastern District of

   PHILLIPS, Chief Judge.

This is an interpleader action brought to determine the right to the proceeds of a life insurance policy. District Judge Harry W. Wellford held that the insured had failed to do all that he reasonably could have done to comply with the procedure necessary to change the beneficiaries named in the policy. We affirm.

The action originally was filed in the Chancery Court of Shelby County, Tennessee, and was removed to the District Court. Northwestern Mutual Life Insurance Company, the insurer, filed an answer and cross-complaint for interpleader. Jurisdiction is based upon diversity of citizenship, and the interpleader statute, 28 U.S.C. § 1335. Tennessee law controls.

The policy has a cash value of $11,-571.94 and was issued to the insured, Milton V. Magruder, on August 15, 1953. The insured had been in the insurance business in Memphis for many years before his death. The original beneficiary was Mr. Magruder’s first wife, Mrs. Jeanne E. Magruder. After a divorce had terminated his first marriage, the insured executed a change of beneficiary form designating his three children, or their trustee for so long as they were minors, as the beneficiaries. This form was mailed to the home office of the insurance company and recorded. Endorsement was formally waived by the registrar of the company. These children and their trustee maintain that subsequent events did not change their status as beneficiaries.

On August 21, 1971, Mr. Magruder sent a handwritten note to the insurance company’s home office in Milwaukee, Wisconsin, stating, “I have remarried and want to change my beneficiary to read Claudia E. Magruder. Please send a form if necessary.”

The insurance company mailed a change of beneficiary form in October 1971 along with a form response stating: “[t]he form should be completed as required, signed as indicated and returned to us.” Mr. Magruder performed the first two of these instructions. In October 1971 he entered the name of Mrs. Claudia E. Magruder on the form as the new beneficiary. The signatures then were attested by the appropriate witnesses, including one witness who was the trustee for the existing beneficiaries, the three children.

After the insured had executed the form, he and Mrs. Claudia E. Magruder experienced marital difficulties. A separation occurred and she went to live with her daughter by a former marriage. On May 2, 1972, Mrs. Magruder filed a complaint for a divorce, which was pending at the time of the death of the insured. Judge Wellford found that: “Despite Mr. Magruder’s problems with drinking, it is apparent that he was competent to manage his affairs while not drinking.” This finding of mental competency is supported by the record and is not challenged on appeal.

Even though the change of beneficiary form had been executed, it was not mailed to the insurance company during Mr. Magruder’s lifetime. After his death the form was found with his papers and was mailed to the insurance company by Mrs. Claudia E. Magruder’s attorney. The executed form had remained in Mr. Magruder’s possession for ten months.

Mrs. Claudia E. Magruder’s claim to the insurance proceeds must be founded either on actual or substantial compliance with the policy provisions governing the change of beneficiaries. We agree with the District Court that allegations of actual compliance were without merit. Under the original policy the insured had the right to change the beneficiary, but an endorsement provision was as follows:

No designation, revocation, change or direction shall be effective unless duly made in writing and until filed at the Home Office accompanied by this Policy for endorsement prior to or at the time this Policy becomes payable by reason of the death of the Insured. (Emphasis added.)

The change of beneficiary form which named the children contained an amendment to this provision which allowed the company to waive endorsement. The amendment further provided that “A request for . . change of beneficiary must be filed at the Home Office and shall then be effective as of the day the request was signed.” We further agree with the District Court that the language of this amendment only modified the date on which the change would have become effective, once it was received. Receipt of the change and either endorsement or waiver of endorsement by the insurance company still was required. See Life & Casualty Ins. Co. v. Cornish, 44 Tenn.App. 476, 480, 315 S.W.2d 6 (1958). Therefore, by the terms of the policy the change had to be filed with the company “prior to or at the time this Policy becomes payable by reason of the death of the Insured.”

Under the law of Tennessee, the absence of actual compliance with the terms of the policy provisions is not always fatal to effecting a change of beneficiary. After a comprehensive analysis of Tennessee law on this point in Republic Nat’l Life Ins. Co. v. Sackmann, 324 F.2d 756, 758 (6th Cir. 1963), we stated that:

Under the authorities in Tennessee, the beneficiary in an insurance policy may be effectively changed if the insured substantially complies with the provisions of the policy for such a change of beneficiary. The test of substantial compliance is whether the insured has done everything that he could do to make the change.

The equitable basis for this rule is explained in Cronbach v. Aetna Life Ins. Co., 153 Tenn. 362, 367, 284 S.W. 72, 73 (1925), which approves and adopts the following statement:

On the principle that equity regards as done that which ought to be done, the courts will give effect to the intention of insured by holding that the change of beneficiary has been accomplished where he has done all that he could to comply with the provisions of the policy, as where he sent a proper written notice or request to the home office of the company but was unable to send the policy by reasons of circumstances beyond his control, as where it has been lost, or was in the possession of another person who refused to surrender it or was otherwise inaccessible, or where he sent both the policy and a proper written notice or request and all that remained to be done were certain formal and ministerial acts on the part of the company, such as the indorsement of the change of the policy, and these acts were either not done at all or were done after the death of insured. Of course the rule is not applicable where insured has not done all that he reasonably could to meet the conditions of the policy. (Citation omitted.)

See 5 Couch on Insurance 2d, § 28.66 at 157. As a corollary to the requirement that the insured perform “all that he reasonably could to meet the conditions of the policy,” 5 Couch on Insurance 2d, § 28.74 at 178 says:

The mere expression of the intention of the insured to change the beneficiary without any positive steps to accomplish such change is not sufficient, and the few cases in which an opposite result has been reached are clearly out of line with the general trend of authority.
Even if the insured goes one step further and not only expresses his intention to effect a change of beneficiary but in addition thereto takes the necessary steps to make a formal request to the insurer but dies before the application for a change of beneficiary actually leaves his or his agent’s hands, most of the courts take the position that the insured has not done everything required of him and that therefore a change of beneficiary has not been effected, . . .. (Footnote omitted.)

The failure of the insured to send the form to the company has no reasonable explanation which would invoke the equitable powers of the court. There is no question that he had ample opportunity to return the forms, or that he had the requisite physical and mental capacity to do so. He did not set the procedures in motion by placing the form changing the beneficiary in the hands of a representative of the insurance company. There is also other evidence which supports the position that the failure to mail the forms was intentional. For example, the marital difficulties began to develop after the forms were signed and might have led to a decision not to mail them.

Since the change of beneficiary form was not submitted in actual or substantial compliance with the terms of the insurance policy, Judge Wellford was correct in holding that the change is ineffective. The decision of the District Court is affirmed.

No costs are taxed. Each party will pay his own costs on this appeal.


author: PER CURIAM:

text:
    Tom LINEBERY and Evelyn Linebery, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.
    No. 74-4063
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    April 30, 1975.
    Rehearing and Rehearing En Banc Denied June 30, 1975.
    William Monroe Kerr, Midland, Tex., for plaintiffs-appellants.
    William S. Sessions, U. S. Atty., San Antonio, Tex., Scott P. Cramp ton, Asst. Atty. Gen., Grant W. Wiprud, William S. Estabrook, III, Attys., Tax Div., Dept, of Justice, Gilbert E. Andrews, Acting Chief, App. Sec., Dept, of Justice, Washington, D. C., Eugene G. Sayre, Dept, of Justice, Dallas, Tex., for defendant-appellee.
    Before THORNBERRY, MORGAN and RONEY, Circuit Judges.

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

   PER CURIAM:

This suit for refund of income taxes poses the issue of whether the grant of certain mineral rights and easements by the taxpayer sellers was a sale entitling the taxpayers to capital gains treatment, or whether the conveyances were in the nature of mineral leases, the payment therefore being taxable as ordinary income. The district court granted summary judgment for the Government on the ground that the underlying transaction, including the documents of conveyance, was in all material respects identical to the one in Vest v. Commissioner of Internal Revenue, 481 F.2d 238 (5th Cir.), cert. denied, 414 U.S. 1092, 94 S.Ct. 722, 38 L.Ed.2d 549 (1973).

On this appeal the taxpayers recognize the controlling nature of Vest, but urge us to overrule it, asserting that it is a “genetic sport” which needs correcting. There is a firm policy in this Circuit that one panel will not overrule a decision of another panel. See, e. g., United States v. Lewis, 475 F.2d 571, 574 (5th Cir. 1972); United States v. Bailey, 468 F.2d 652, 669 (1972), aff’d, 480 F.2d 518 (5th Cir. 1973) (en banc); United States v. Hereden, 464 F.2d 611, 613 (5th Cir.), cert. denied, 409 U.S. 1028, 93 S.Ct. 472, 34 L.Ed.2d 322 (1972); Manning v. M/V “Sea Road,” 417 F.2d 603, 610-611 n. 10 (5th Cir. 1969). The decision in Vest being dispositive of all issues presented on this appeal, it is unnecessary for us to reconsider the merits of that holding.

Affirmed.


author: ENGEL, Circuit Judge.

text:
    NAT HARRISON ASSOCIATES, INC., Plaintiff-Appellant, Plaintiff-Appellee, v. LOUISVILLE GAS AND ELECTRIC CO., and Ohio Valley Transmission Corp., Defendants-Appellees, Defendants-Appellants.
    Nos. 73-1468, 73-1469.
    United States Court of Appeals, Sixth Circuit.
    Jan. 13, 1975.
    Certiorari Denied May 27, 1975.
    See 95 S.Ct. 1992.

      Thomas C. Carroll, Louisville, Ky., James E. Glass, Miami, Fla., John Robert Terry, Miami, Fla., for plaintiff-appellant, plaintiff-appellee.
    Gerald Kirven, Joseph R. Gathright, Jr., Jefferson D. Stewart, III, Louisville, Ky., for defendants-appellees, defendants-appellants.
    Before EDWARDS, CELEBREZZE and ENGEL, Circuit Judges.
   ENGEL, Circuit Judge.

These appeals are the result of a contractual dispute between plaintiff Nat Harrison, Inc. (hereinafter Harrison) and defendants Louisville Gas and Electric Company and Ohio Valley Transmission Corporation, (hereinafter jointly referred to as Louisville).

In early 1968, Louisville solicited private bids for performing all work and furnishing certain materials needed to install conductors, shield wire, and line hardware on a new 345,000 volt double circuit steel tower transmission line. The line was to run from Cane Run Generating Station in Louisville, Kentucky to Middletown Substation near Middle-town, Kentucky, a distance of approximately forty-two miles (hereinafter referred to as the Cane Run project). Harrison was the successful bidder. Upon completion of the transmission line, Harrison instituted a diversity action against Louisville. The complaint contained two counts. Count I sought reformation of the contract price, alleging that Harrison made a mistake in computing and submitting its bid. It further alleged that Louisville knew or should have known that a material mistake had been made because of its experience in this field, the estimate of its own engineers, and the amount of other competitive bids. Count II sought money damages for breach of contract arising from an alleged failure by Louisville to supervise and direct the work.

This lawsuit was tried twice, both times before a jury. In the first trial, the district court granted a defense motion to dismiss count II, but submitted count I to the jury. The jury, however, was unable to reach a verdict and was discharged. Louisville’s motion for judgment notwithstanding the jury’s failure to agree was denied by the district court. Count I was retried and following the second trial, the jury reformed the contract and awarded damages in the amount of $293,230.00.

APPEAL NUMBER 73-1469

In appeal number 73 — 1469, appellant Louisville contends that it was entitled to judgment in its favor on count I notwithstanding the jury’s failure to agree at the first trial. In reviewing the denial of Louisville’s Rule 50(b) motion, we view the evidence, and reasonable inferences to be drawn therefrom, in the light most favorable to Harrison. Fortner Enterprises, Inc. v. United States Steel Corp., 452 F.2d 1095 (6th Cir. 1971), cert. denied 406 U.S. 919, 92 S.Ct. 1773, 32 L.Ed.2d 119. This being a diversity of citizenship case, the substantive law of Kentucky applies.

Harrison sought reformation of the contract on the theory that it made a unilateral mistake in submitting its bid, accompanied by fraud or inequitable conduct on the part of Louisville in accepting the bid, when it knew or should have known that a material mistake had been made in the bid. Kentucky recognizes this theory as a basis for reformation of a contract. City of Campbellsville v. Taylor County Telephone Co., 229 Ky. 843, 18 S.W.2d 305 (1929) and Beatty v. Donahue, 249 S.W.2d 33 (Ky.1952). The parties concede that under Kentucky law a party sustains the burden of proving a right of reformation on the ground of mistake if evidence favorable to it is sufficient in quantity and quality to be clear and convincing. Deskins v. Leslie, 387 S.W.2d 596 (Ky.1965). Each case must be viewed against its own peculiar facts and circumstances. The rule in essence means nothing more than that the entire proof, together with the surrounding circumstances, shall be sufficient to convince a reasonable mind of the truth of the grounds alleged, and to dispel any well founded doubts on the subject. Glass v. Bryant, 302 Ky. 236, 194 S.W.2d 390, 393 (1946). While this case is unusual in its submission of normally equitable issues to a jury, we conclude that the threshold issue of sufficiency of the evidence, measured by the clear and convincing rule, was for the trial judge to determine.

The facts involved in this case are quite involved, but it is necessary to repeat them here in some detail, since it is from the facts presented, construed in the light most favorable to appellee, that we must determine whether Harrison was entitled to have its case put to the jury. The Cane Run project was part of a larger expansion program which had been in the planning stage at Louisville for some five years prior to 1968. Although Louisville had its own special construction department capable of doing all the work on this project, the press of work persuaded it to solicit bids for the wire stringing aspect of the project. Louisville did, however, plan to construct the foundations and erect the steel towers which would support the transmission line.

In 1967 Robert Somers, an employee of Louisville’s special construction department, estimated that the wire stringing costs of the Cane Run project, if done by an independent contractor, would total $721,075, including indirects and a 10% profit.

Louisville sent proposals for wire stringing to nine contractors and invited them to a pre-bid conference at its offices in late February or early March of 1968. Harrison was represented at this conference by its vice president, Mr. Allan C. Baker, a man of considerable experience in the construction of high voltage transmission lines. Louisville disseminated to each contractor the various contract documents and job specifications relating to the work, and took the representatives, including Baker, on a tour of part of the line. The bidders were also directed to submit with their proposed bids a description of the methods and equipment to be used for the wire stringing. Finally, Louisville expressly reserved the right to open the bids privately and unannounced and to reject any or all bids.

Harrison, an electrical and general contractor, had previously installed high voltage lines such as the one called for on the Cane Run project. Mr. Baker prepared Harrison’s bid.

According to Baker, the wire stringing job for which bids were solicited by Louisville, consisted of six basic operations: hanging insulators and travelers on the towers, installing guard structures, pulling lead lines, pulling conductors, making up dead-ends and jumpers, and clean-up. In preparing Harrison’s bid, Baker assigned a work crew and equipment to each operation. On an “estimating form” Baker estimated separately for each of the six operations involved, the labor costs of each crew assigned to that operation. On an “equipment sheet”, Baker estimated the equipment costs that would be incurred at each operation. He then attached the estimating form of each project to the corresponding equipment sheet. In arriving at Harrison’s bid, Baker apparently computed the total of these estimates, from that data that he had compiled.

The contract documents distributed by Louisville directed the bidders to submit a lump sum bid as well as a breakdown into work performed in Kentucky, work performed in Indiana, and work performed at river crossings. Harrison’s final lump sum bid was $687,500 and was broken down into $486,000 for work in Kentucky, $154,000 for work in Indiana, and $47,000 for work at the river crossings. The contract documents also required the bidder to supply unit prices on which the bidder would agree to make changes in the work. These unit prices covered the installation of conductors over the two river crossings, the installation of conductors over the remainder of the line, and the installation of shield or ground wire over the entire line. The bidders were also asked to provide a price per mile figure for the installation of these three types of conductors. Harrison’s bid allocated $20,000 per mile for the installation of conductors at the river crossings, $15,000 per mile for the installation of conductors over the remainder of the line, and $1,500 per mile for the installation of shield wire over the entire line.

Bids were to be submitted to Louisville no later than 5:00 p. m. March 29, 1968, and were to be directed to the attention of Louisville’s superintendent of special construction, Mr. M. S. Winstandley. Harrison’s original bid of $747,000 was mailed to Louisville on March 26, 1968. A letter from Baker to Winstandley accompanied Harrison’s bid, and read in part:

“Our firm is most desirous of doing this work for you and we feel our qualifications would prove a substantial savings in time and other expenditures to your company.
“This project would prove most timely for our mutual interest, since we will complete a major wire stringing project at least three weeks prior to this time, and, therefore, would be in a position to offer a complete spread of equipment and management intact for your project. It is conceivable that crews could be moved from the project now underway to your operation without any lost time.
“This, of course, would keep our efficiency at a maximum and provide the reflected cost savings as we have indicated.”

Louisville received Harrison’s bid and the bid of Power Constructors, Inc. on March 28, 1968. On March 29, 1968 Baker telephoned Winstandley to be sure that the Harrison bid had been received. Baker also wanted to find out, if he could, where Harrison stood in the bidding. Baker testified that Winstandley told him that all bids looked good and “you’re in the park, but I can’t tell you you’re low bidder.”

Baker testified that his conversation with Winstandley gave him the impression that Harrison was not the low bidder and, therefore, he discussed the possibility of reducing the bid with the president of the company, Mr. Nat Harrison. Baker and Mr. Harrison decided to cut in half the profit from the job and submit a reduced bid, if Louisville would accept it. Mr. Winstandley agreed to Harrison lowering its bid to $687,500 and the new bid was confirmed by telegram.

Of the nine contractors invited to bid, only five submitted bids, as follows:

Day & Zimmerman $1,098,000
Miller Construction Co. 1,040,227
Power Constructors 888,000
R. H. Bouligny, Inc. 864,677
HARRISON 747,000

On April 4, Mr. Baker was informed that Harrison’s bid was being considered by Louisville. On April 10, Baker attended a meeting at Louisville’s offices to review the equipment that Harrison proposed to use on the job. At the conclusion of the April 10th meeting, Baker was given a document entitled “Addendum No. 1”, which he was to fill out and return to Louisville. Baker explained that Addendum No. 1 covered unit prices in case there was a change in the line. The units of work covered by Addendum No. 1 involved attachments to the towers and conductors. Baker testified that in order to supply the unit prices called for in Addendum No. 1, he utilized computations from the “individual crew budget sheets” which he used in preparing the original bid.

Harrison furnished a performance bond and the contract between Louisville and Harrison was signed on April 25, 1968.

Mr. Baker was responsible to Harrison for the project from the first week of August until the last week of October in 1968, when he was relieved, and responsibility for the project was turned over to Robert E. Stoneberger.

The contract contemplated that Harrison would complete the work by March I, 1969. However, by December of 1968 only 25% of the work had been completed and Harrison was experiencing numerous problems on the job. Toward the end of December Stoneberger ordered the job shut down for two weeks. Concerning the December shut-down, Stoneberger testified: “The money was going out of Miami like it was going out of style. There was no harmony on the job between Louisville Gas & Electric and my supervision.” Stoneberger also indicated that Harrison was having difficulty in working with the towers because “they were not as strong as they appeared to be . . .or we thought they were.”

James D. Bondesen, Harrison’s superintendent on the Cane Run project, stated that the job was shut down in December because of the muddy right-of-way and equipment difficulties. Indeed, Harrison hired an expert, Mr. Robert L. Smith, to evaluate its difficulties on the job. Smith visited the Cane Run project on December 11, 12 and 13, and concluded that there was a sufficient quantity of equipment, but that its general condition was poor and 25% of it was either totally inoperative or so deficient as to be very inefficient. Smith also found the morale of the crews to be very low due to the lack of positive supervision. Smith further concluded that the job lacked overall direction. Smith stated, however, that Harrison would not have lost any money on the contract if it had followed his recommendations and reorganized.

After the two-week shut-down, a meeting was held between Harrison and Louisville in January of 1969. At this meeting, Harrison agreed to complete the job. Louisville in turn gave Harrison until September to complete the job and meanwhile agreed to supply Harrison with progress reports. Harrison completed the job in October, 1969. The transmission line worked satisfactorily when it was energized in November of 1969.

Although Baker had himself ceased working on the Cane Run project, he was assigned the task one year later, of reviewing the project to ascertain for Harrison what had gone wrong to cause the heavy loss sustained. Baker came up with an explanation which formed the basis for the subsequent lawsuit based upon mistake. That explanation is at once simple and complicated.

It is significant, we believe, that there was no suggestion of mistake until after completion of the project and final billing and payment. Baker testified that by that time, he was unable to locate the working papers and estimates he used in formulating the original bid, documents he claims would, if discovered, support his claim of mistake. Lacking those, Baker proceeded by “working out the project” to locate what he claimed to be a $293,000 error in the original bid. Baker’s simplified explanation was that “in compiling the various budget operations, I one of the totals somehow escaped me and I just didn’t get them added in, that’s all.”

We find Baker’s explanation to be patently unbelievable and in conflict with the very evidence which was offered to prove it. Simply put, Baker’s claim is that Harrison, in compiling its bid on the wire stringing contract, forgot to include the costs of stringing the wire. The evidence shows quite convincingly that those costs were in fact included at all times.

In “working out the project” to prove his mistake, Baker claimed that he used computations from the “original crew sheets” of the original bid, since lost, in order to arrive at the figures for unit prices requested in Addendum No. 1. Thus, Baker implied that the unit prices from Addendum No. 1 should have been plugged in and added to the amount of the overall bid, the contract breakdown and the various progress billings. In effect, the “error” was, therefore, failure to include a charge of $7,100 per mile for stringing wire over the 41.3 miles of the project, a total of $293,235.

The contract obligated Louisville to make progress payments to Harrison based upon the latter’s estimate of its progress from time to time in completing the project. A total of ten progress billings and one final billing were prepared for Harrison and submitted to Louisville. The billings were prepared by Harrison’s office manager on the project, Gorden Bernard, after Bernard had first discussed the matter with Baker. On November 1, 1968 Bernard sent Winstandley a progress billing with a letter stating “Attached please find our contract breakdown based on bid documents issued at time of bidding. This breakdown is being used as a basis for monthly billings for work completed.” The attached progress billing was itemized in terms of the accepted bid of $687,500. Therefore, the evidence indicates that the lost documents were at least available to Bernard when he submitted the first progress billing to Louisville. Had such an error in fact existed, it seems almost certain that it would then have been uncovered by Bernard. That the wire stringing charges were included in the billings, and hence in the understood amount of the contract bid, appears particularly from the contract breakdown of the billings themselves:

Description Mobilization Detail # 1 2 3 4 5 6 7 8 10 11 12 13 Install bundle of 2-954 MCM Conductor Install two static, 16M alumoweld Install River Crossing Complete De-Moblllze Bid Quantity 1 6 438 474 36 500 12 24 12 285 12 314 96 Unit at at at at at at at at at at at at Unit Cost 28,000.00 49.00 50.00 75.00 60.00 380.00 320.00 225.00 225.00 170.00 100.00 18.00 40.00 82.6 ckt. Mile 3,200.00 41.3 Mile at at 700.00 15,000.00 15,200.00 Extension 28,000 21,900 35,550 2,160 190,000 3.840 5,456 2,728 48,450 1,200 5,652 3.840 264,320 28,910 30,000 15,200 Total 687,500

From the foregoing it is evident that the wire stringing costs themselves are included in the billings at a total of $7,100. Instead of billing $7,100 per mile, Bernard broke the billing down to 82.6 circuit miles at $8,200 per mile, or $6,400 per mile for stringing the double bundle of conductors, plus $700 per mile for installing the alumoweld, or a total of $7,100. This is consistent with the notes given Bernard by Baker, instructing him on how to make out the progress billings, including: “Wire stringing est + — $6,500 — M”.

We find that the foregoing proof of the alleged unilateral mistake in this case is anything but clear and convincing, even when viewed in the light most favorable to Harrison. The proof of mistake rests solely on the conclusionary testimony of Baker and his utilization of Addendum No. 1 in reconstructing the bid. Baker’s use of Addendum No. 1 to reconstruct the bid is highly questionable in view of the contract breakdown sent to Louisville by Bernard. Bernard’s letter accompanying the contract breakdown stated that the breakdown was “based on bid documents issued at the time of bidding.” The unit prices in this breakdown are not the same as those found in Addendum No. 1. In addition, the contract breakdown contains wire stringing costs and the total amount of the contract remained at $687,500. Finally, a review of the eleven progress billings shows that during the entire project Harrison did not use unit prices from Addendum No. 1 for the purpose of billing. In view of this evidence, Baker’s assertion that Addendum No. 1 unit prices were obtained from the original bid documents cannot carry much weight.

The testimony of Somers and Smith also casts a serious doubt as to the existence of a mistake. Somers’ estimate for the wire stringing aspect of the project was $721,075, which is within the range of Harrison’s bid. Moreover, Smith concluded that Harrison would not have lost money on the contract if its agents had followed his recommendation. Finally, the testimony at trial concerning Harrison’s difficulty with the muddy right-of-way, its equipment, and its inability to efficiently string a conductor through non self-supporting towers may well have caused Harrison’s loss, rather than the claimed omission of the wire stringing costs on the wire stringing contract. Therefore, based upon an extensive review of the testimony and documentary evidence at the first trial, we conclude that Harrison failed as a matter of law to establish the existence of a unilateral mistake by clear and convincing evidence.

Additionally, we conclude that there was no showing of fraud or inequitable conduct on the part of Louisville. If, in fact, a mistake did exist, the mere disparity in the range of bids was not sufficient to put Louisville on notice of such a mistake. Louisville’s own estimate, prepared by Mr. Somers, was close to the amount of Harrison’s bid. While Mr. Winstandley was somewhat surprised by Harrison’s bid, this surprise was surely tempered by Mr. Baker’s letter accompanying the bid which indicated Harrison’s eagerness to do the job, and made promises of cost-saving efficiency. In addition, Winstandley had only one other bid in his possession when he received Harrison’s bid. Thus, Winstandley’s statement to Baker that “You’re in the park” was neither misleading nor inequitable. Harrison had no right to receive advance information on the posture of his bid. Moreover, Louisville’s insistence that Harrison obtain a performance bond, urged as indicating Louisville’s recognition of mistake, is of little significance. It was required by the contract. Finally, Harrison’s own expert, Smith, while indicating he might question Harrison’s low bid, did state that such a large bid spread was not unusual. Thus, we conclude that as a matter of law, Harrison has failed to establish by clear and convincing evidence fraud, bad faith, or inequitable conduct on the part of Louisville.

To permit the jury verdict to stand here would be contrary to Kentucky law. Accordingly, we hold the trial court erred in denying Louisville’s motion for judgment notwithstanding the jury’s failure to agree as to count I. Thus, as to count I in appeal number 73 — 1469, we reverse and hold as a matter of law that Louisville was entitled to a judgment of no cause of action.

APPEAL NUMBER 73-1468

Harrison appeals from the judgment entered in favor of Louisville on count II.

When Harrison rested its case in the first trial, Louisville moved for a directed verdict on count II. In that count, Harrison had sought $977,617 in damages and lost profits, resulting from what it charged was Louisville’s breach of contract in failing to supervise and direct the work in accordance with the terms of the contract. The district judge granted the motion. After a careful review of all of the evidence, we affirm.

It was Harrison’s theory in count II that the agreement between the parties imposed upon Louisville the general obligation to supervise and direct Harrison’s work, much as a general contractor would supervise the work of a sub-contractor. Harrison urged that this obligation was interwoven throughout the entire contract, and relied as well upon two specific provisions.

Pioneer Service & Engineering Company was designated by Louisville as its consulting engineer and field representative, and we agree with Harrison that under the contract any obligation of the engineer was, in fact, that of Louisville. Section 24.3 of the General Conditions of the contract provided:

“.3 ENGINEER’S Authority — The ENGINEER shall have general supervision and direction of the work. He has authority to stop the work or direct the order or sequence of the work whenever such action is required to insure the proper execution of the Contract. The ENGINEER shall decide all questions which may arise relative to the conformance of the work with the Plans and Specifications and have authority to reject any work which does not conform to the Contract Documents. The ENGINEER shall rule on questions which may arise between or with other Contractors concerning the work, the use of the premises, or the sequence of operations.”

Harrison in its brief also purported to quote in part Section 2.0 of the General Conditions of the contract to the effect that:

“. . . the CONTRACTOR shall construct and complete all work .... subject to the direction, control and approval of the ENGINEER . . .” (Italics from Harrison’s brief)

The complete provision, however, gives a much clearer and accurate understanding of the relationship between Harrison as the contractor and the engineer:

“2.0 ITEMS FURNISHED BY CONTRACTORS
Unless otherwise specified elsewhere in the Contract Documents, the CONTRATOR (sic) shall provide, pay for and deliver all equipment, material, labor, services, supervision, construction , equipment, transportation, tools and miscellaneous items, and do all things necessary to construct and complete all work shown on the drawings or described in the Specifications, all in accordance with the Contract Documents, subject to the direction, control and approval of the ENGINEER.” (Emphasis added)

A plain reading of the contract between the parties convinces us that Harrison was in every respect an independent contractor within the meaning of the contract terms. Under the contract, Harrison was designated as contractor. General Condition 1.5 provided that:

“During the performance of this Contract, the Contractor shall be deemed an independent Contractor and not an agent of the owner.”

This is consistent with the other provi- , sions of the contract.

The contract also demonstrates that Harrison was an independent contractor as that term is defined by Kentucky law. In Borderland Coal Co. v. Burchette, 193 Ky. 602, 237 S.W. 663, 666 (1922), the Court of Appeals of Kentucky held:

“The rule is, if the contractor furnishes his own assistance, and executes the work either entirely according to his own interests or according to plans previously given him by the person for whom the work is to be done, without being subject to the orders of the latter in respect to the details of the work, the persons so engaged will be regarded as an independent contractor, and the laborers he employs will be his servants, and not the servants of the owner of the property.”

See also, H. H. Miller Construction Co. v. Collins, 269 Ky. 670, 108 S.W.2d 663, 664; Standard Oil Co. v. Glenn, 52 F.Supp. 755, 757 (W.D.Ky.1943), aff’d. Glenn v. Standard Oil Co., 148 F.2d 51 (6th Cir. 1945).

A paragraph-by-paragraph examination of the contract persuades us, as it did the district judge, that while Louisville reserved to itself through its engineer the right to supervise the project to the extent necessary to determine compliance by Harrison with the contract specifications, it in no way was intended that the contract impose upon Louisville the responsibility for immediate direction and supervision of Harrison’s employees and work. See Dempster Construction Company v. Tackett, 215 Ky. 461, 285 S.W. 191 (1926); Diamond Block Coal Co. v. Sparks, 209 Ky. 73, 272 S.W. 31 (1925).

It is apparent from the record that when difficulty was encountered in December, 1968, Louisville increased its efforts to coordinate activities with Harrison, and in particular furnished progress reports which were of assistance to Harrison in the completion of its contract. There is, however, nothing in the contract to indicate that the failure to furnish the reports before then was in any way a breach of its obligations under the contract. The record is barren of any but the most vague and conclusory evidence that Louisville neglected or refused to cooperate with Harrison or that Harrison, in fact, made any complaint whatsoever in this regard until Harrison added the charge by an amendment to its complaint in the district court litigation in February, 1971. Meanwhile, the work had been complete, ten intermediate progress report billings had been submitted and a final accounting had been reached as of October 1, 1969. To be considered with the total absence of evidence of breach of contract on the part of Louisville is the cogent evidence, mentioned earlier, which points to Harrison’s own mismanagement and neglect as the prime source of its loss on the contract. We conclude that the district judge properly directed a verdict in favor of Louisville on count II of the complaint.

CONCLUSION

Accordingly, judgment of the district court upon the verdict of the jury in favor of Harrison is reversed and the case remanded with instructions to enter judgment on count I in favor of Louisville.

The judgment of the district court entered in favor of Louisville on count II of the complaint is affirmed.

      . Ohio Valley Transmission Corporation is a subsidiary of Louisville Gas and Electric Company.

      . Louisville made a general demand for a jury trial and Harrison requested a jury “on all issues so triable as a matter of right”. An action for reformation of contract, however, is equitable in nature and hence triable to the court. 5 Moore’s Federal Practice § 38.22 (2nd ed. 1971). Neither Louisville nor Harrison objected to count I being submitted to the jury. Under these circumstances, therefore, it was not error for the trial court to submit the issue to the jury. F.R.Civ.P. 39.

      . Prior to the second trial, Louisville moved to strike Harrison’s demand for a jury trial. This motion was denied by the district court and Louisville assigns this as one of the errors committed at the second trial. Because we find that the district court should have granted Louisville’s motion for judgment notwithstanding the jury’s failure to agree at the first trial, we do not need to decide whether it was error to submit count I to the jury in the second trial.

      . Apparently, these unit prices would be applicable if the transmission line was shortened or extended.

      . Conductor is the actual wire or cable that emits the electricity through it. Evidently, a different type of conductor was used over the river crossings than was used over the remainder of the transmission line.

      . Although these figures are applicable to changes in work, they give a reasonably accurate portrayal of Harrison’s lump sum bid. Thus, when the figures are multiplied by the number of miles of transmission line, the total is $733,000 (i. e., $20,000 X 2 river crossings = $40,000; + 15,000 X 42 miles = $630,-000; + $1,500 X 42 miles = $63,000). This figure is close to Harrison’s original bid of $747,000.

      . Mr. Winstandley testified that in his conversation with Mr. Baker he did not “entice or encourage him in any way to lower his bid”.

      . Baker testified that Nat Harrison anticipated a profit of $119,000 from the job.

      . Evidently, Harrison did not submit its method of wire stringing with the bid and Louisville wanted to know what type of equipment Harrison would use.

      . It appears that the unit prices in Addendum No. 1 refer to additions or subtractions of certain items on the transmission line, while the unit prices requested in the contract are applicable if there was an extension of reduction in the length of the transmission line.

      . In the contract documents Louisville retained an option that allowed it to require the contractor to furnish a performance bond in an amount not exceeding the lump sum price.

      . Apparently, Harrison was not familiar with stringing conductor through non self-supporting towers, but this is what the contract called for.

      . In making this judgment, Smith relied on the unit prices for the installation of conductor that Harrison supplied in the contract.

      . By disposing of this issue in this manner, it is unnecessary to discuss Louisville’s second issue which urges that it is entitled to a new trial on account of error made at the second trial. This disposition also renders it unnecessary to discuss an issue raised in Harrison’s appeal number 73-1468, namely that the trial court erred in its allowance of interest to Harrison’s judgment on count I.


text:
    Fred CARTER, Appellant, v. Caspar W. WEINBERGER, Secretary of Health, Education and Welfare, Appellee.
    No. 74-1768.
    United States Court of Appeals, Fourth Circuit.
    Submitted Jan. 10, 1975.
    Decided March 14, 1975.
    Sterl F. Shinaberry, Charleston, W. Va. (Hostler, Logsdon, Shinaberry & McHugh, Charleston, W. Va., on brief), for appellant.
    William Kanter, Richard A. Olderman, David M. Cohen, Attys., Dept, of Justice (John A. Field, III, U. S. Atty., Carla A. Hills, Asst. Atty. Gen., on brief), for appellee.
    Before BRYAN, Senior Circuit Judge, and WINTER and CRAVEN, Circuit Judges.
   PER CURIAM:

This is the third unsuccessful application by Fred Carter for disability benefits under the Social Security Act, 42 U.S.C. § 405(g), claiming disability since 1959. He last met.the special earnings requirement of the statute on March 31, 1965. The last application — the basis of the present action — was filed April 2, 1969.

The Federal District Court in West Virginia on April 18, 1974 upheld the denial of the claim by the defendant Secretary of Health, Education and Welfare, on the defense of res judicata, the Court finding that this decision was not without supportive substantial evidence. This conclusion was reached by the District Judge in an anatomized assessment of the proof and on his opinion we affirm the Court’s dismissal of this action, Carter v. Weinberger, Secretary of Health, Education and Welfare, 391 F.Supp. 1101 (S.D.W.V a.1974).

Affirmed.