author: GODBOLD, Circuit Judge:

text:
    Lola SAINE, Plaintiff-Appellant, v. The HOSPITAL AUTHORITY OF HALL COUNTY and the City of Gainesville and the Secretary of the Department of Health, Education and Welfare, Defendants-Appellees.
    No. 73-3054.
    United States Court of Appeals, Fifth Circuit.
    Oct. 11, 1974.
    James E. Palmour, III, Gainesville, Ga., John R. Myer, Atlanta, Ga., for plaintiff-appellant.
    James A. Dunlap, Gainesville, Ga., John W. Stokes, Jr., U. S. Atty., Julian M. Longley, Jr., Asst. U. S. Atty., Atlanta, Ga., for defendants-appellees.

      Before GODBOLD, SIMPSON and INGRAHAM, Circuit Judges.
   GODBOLD, Circuit Judge:

Plaintiffs sued the Hospital Authority of Hall County and City of Gainesville [Georgia] and the Secretary of Health, Education and Welfare, claiming damages against the Authority and injunc-tive relief against the Secretary ordering him to compel the Authority to cease violating the Hill-Burton Act, 42 U.S.C. § 291 et seq. Jurisdiction was predicated upon the Hill-Burton Act itself.

The court dismissed for failure to state a claim on which relief could be granted. We reverse.

Plaintiff alleged that the Authority operates a hospital, that she was sent by her doctor to the hospital for X-rays which were refused because she could not make an immediate payment, that she was refused medical and hospital treatment to which she was entitled under the provisions of the Hill-Burton Act, and that there is not made available in the hospital facility a reasonable volume of services to persons unable to pay therefor. She alleged also that the Department of Health, Education and Welfare is responsible for enforcing obligations and commitments under the Hill-Burton Act.

These allegations are sketchy, but they were sufficient to bring the plaintiff within the class of persons entitled to seek free services and to confer standing upon her. Euresti v. Stenner, 458 F.2d 1115 (CA10, 1972).

I. The existence of a private remedy

The District Court held that the Act did not provide expressly or by implication for a private civil remedy as a means of enforcing the Act’s provisions. There is no express authorization but we hold there is implied authorization. The District Judge noted two lines of authority concerning implying a private remedy under the Hill-Burton Act, and elected to follow Stanturf v. Sipes, 224 F.Supp. 883 (W.D.Mo.1963), aff’d 335 F.2d 224 (CA8, 1964) cert. denied, 379 U.S. 977, 85 S.Ct. 676, 13 L.Ed.2d 567 (1965), and Don v. Okmulgee Memorial Hospital, 443 F.2d 234 (CA10, 1971), while declining to follow Euresti, supra, and two District Court decisions from this circuit, Organized Migrants in Community Action v. James Archer Smith Hospital, 325 F.Supp. 268 (S.D.Fla.1971), and Cook v. Ochsner Foundation Hospital, 319 F.Supp. 603 (E.D.La.1970). In Cook the District Court concluded without resort to the legislative history that the provisions of the Hill-Burton Act evidenced a design, “at least in part, to benefit persons unable to pay for medical services,” just as this court had concluded in Gomez v. Florida State Employment Service, 417 F.2d 569 (CA5, 1969), that the Wagner-Peyser Act was intended to benefit migratory farm workers. Noting that the “mechanisms by which the two acts are administered are similar,” the District Court decided that the analysis supporting the implication of a private cause of action in Gomez was applicable in Cook as well. 319 F.Supp. at 605-606. Organized Migrants adopts the reasoning of Cook. Independent of Gomez, Cook, and Organized Migrants, Justice Clark’s opinion in Euresti examines both the Act and its legislative history and concludes that the Act was clearly intended to provide indigents with hospital services and that,

[w]ith this clear intent, it is not decisive that the language of the Act included no explicit indication that indigents were to have a right to enforce the Act’s provisions. A civil remedy may be implied for those clearly within the protective realm of legislation or regulations in the public interest. Texas & Pacific Ry. Co. v. Rigsby, 241 U.S. 33, 40, 36 S.Ct. 482, 60 L.Ed. 874 (1916).

458 F.2d at 1118. Stanturf v. Sipes, supra, provides only weak support for the District Court’s conclusion. There the plaintiff apparently did not argue for implication of a private cause of action, but asserted the somewhat different theory that he was a third-party beneficiary of a contract between the hospital and the United States. Stating simply that “[n]o authority has been cited to sustain this position nor have I been able to find any,” the District Judge rejected the argument. 224 F.Supp. at 890. The relevance of Don v. Okmulgee Memorial Hospital, supra, is still more attenuated. There an osteopathic physician and some of his patients claimed that a hospital’s action in denying him admission to the hospital staff violated, inter alia, the Hill-Burton Act. It was in this context, one different from that of the present action, that the Tenth Circuit stated that “the Act itself creates no personal rights or causes of action. . . .” A year later the same court, with the judge who wrote Don sitting as a member of the panel, decided Euresti. We believe that Euresti, Cook and Organized Migrants are persuasive on the issue here and should have been followed by the District Judge.

II. The sovereign immunity of the Secretary

The decision of the District Judge was predicated on a determination that plaintiff had no cause of action under the Hill-Burton Act, a conclusion which we reject. The Secretary of HEW, however, urged both below and on appeal that insofar as the suit sought injunc-tive relief compelling him to enforce the requirements of the Hill-Burton Act against the Hospital Authority it was barred as an unconsented to suit against the United States. Taking into account the limited extent to which the parties have addressed themselves to sovereign immunity, the fact that the District Judge did not address the issue in his opinion, and the complexity of the doctrine, we decline to determine at this time whether the Secretary is correct in his contention. We do, however, attempt to provide some guidance for the District Court.

The Secretary’s brief raises by one perfunctory reference, the issue of sovereign immunity, relying upon the following statement from Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 1006, 10 L.Ed.2d 15, 23 (1963) :

[The suit is against the United States] if “the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration,” Land v. Dollar, 330 U.S. 731, 738, 67 S.Ct. 1009, 1012, 91 L.Ed. 1209 (1947), or if the effect of the judgment would be “to restrain the Government from acting, or to compel it to act.” Larson v. Domestic and ■ Foreign Commerce Corp., supra (337 U.S. at 704, 69 S.Ct. 1457 at 1468, 93 L.Ed. 1628) ....

In Zapata v. Smith, 437 F.2d 1024, 1025 (CA5, 1971) we recognized the rule, but we also noted the traditional exceptions to it:

[A] line of cases, usually spoken of as an exception to this rule, hold[s] that a suit against an official is not one against the United States if it is alleged either that the official acted beyond the statutory limitations of his power or, even though within the scope of his authority, the powers themselves are constitutionally void. See Dugan v. Rank, supra; Malone v. Bowdoin, 1962, 369 U.S. 643, 82 S.Ct. 980, 8 L.Ed.2d 168; Larson v. Domestic and Foreign Commerce Corp., 1949, 337 U.S. 682, 69 S.Ct. 1457, 93 L.Ed. 1628, 1631. Suit is justified on the theory that the official’s conduct cannot be attributed to the sovereign because the official had no power in fact to do the challenged act. Larson v. Domestic and Foreign Commerce Corp., supra.

But analysis can no more be frozen at the exception than at the rule, for as Zapata explains “there is a well recognized exception to the exception,” the modern formulation of which stems from footnote 11 in Larson v. Domestic and Foreign Commerce Corp., supra, 337 U.S. at 691, 69 S.Ct. at 1462, 93 L.Ed. at 1636, which states:

Of course, a suit may fail, as one against the sovereign, even if it is claimed that the officer being sued has acted unconstitutionally or beyond his statutory powers, if the relief requested cannot be granted by merely ordering the cessation of the conduct complained of but will require affirmative action by the sovereign or the disposition of unquestionably sovereign property. North Carolina v. Temple, (1890) 134 U.S. 22, 10 S.Ct. 509, 33 L.Ed. 849.

In Zapata, we held that the nature of the suit brought it within the “exception to the exception” because the relief sought, back pay, could only be satisfied out of the public treasury and would thus affect the “disposition of unquestionably sovereign property” in the form of public monies. Granting the relief requested against the Secretary in the present case would not effect a raid on the treasury, but the question remains whether it would “require affirmative action by the sovereign” of such a nature that it too must fail under footnote 11 of Larson. While we have not previously . addressed this question, the Courts of Appeals for the Ninth and District' of Columbia Circuits have done so, and both have concluded that footnote 11 of Larson does not bar all actions seeking affirmative action by governmental officials.

In Knox Hill Tenant Council v. Washington, 145 U.S.App.D.C. 122, 448 F.2d 1045 (1971), plaintiffs sued officials of the Department of Housing and Urban Development (HUD), the National Capital Housing Authority (NCHA), and the District of Columbia Government seeking enforcement of housing regulations. At least with respect to the HUD defendants, whose responsibility was described in the opinion as “to police the performance of” contracts with local housing authorities, Knox Hill seems analogous to this case. The District Court had concluded that to the extent that the suit was one against officers and employees of HUD and NCHA sovereign immunity precluded jurisdiction. The Court of Appeals, in an opinion by Judge McGowan, examined Larson’s footnote 11 and our decision in Gardner v. Harris, 391 F.2d 885 (CA5, 1968), concluded that both were inapposite, and reversed. The court stated, “There is nothing new about judicial entertainment of suits which charge that federal officials are acting outside of, or in conflict with, the responsibilities laid upon them by the Congress or the Constitution,” citing in a footnote Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), and noting that long before Young “judicial authority was exercised through the writ of mandamus to compel public officials to adhere to the duties imposed upon them in their official capacities.” 448 F.2d at 1052.

In State of Washington v. Udall, 417 F.2d 1310 (CA9, 1969), the Ninth Circuit in an opinion by Judge Ely explored the doctrine of sovereign immunity in a suit whereby Washington sought relief from an administrative determination by the Secretary of the Interior that certain state-owned land was not entitled to delivery of irrigation water from the Columbia Basin Project. Noting Professor Jaffe’s observation that Larson’s footnote 11 says that the suits therein discussed “may fail” and not that they “must fail” and the Supreme Court’s approving citation in Arizona v. California, 373 U.S. 546, 584-585, 83 S.Ct. 1468, 1489-1490, 10 L.Ed.2d 542, 569 (1963), of Ickes v. Fox, 300 U.S. 82, 57 S.Ct. 412, 81 L.Ed. 525 (1937), a decision compelling the Secretary of the Interior to deliver irrigation water, the court concluded that Larson’s footnote “was not intended to preclude, in the name of sovereign immunity, all suits for affirmative relief. . . .” 417 F.2d at 1318. Rather the footnote was held to mean that,

the purposes for the doctrine of sovereign immunity may be controlling in some suits against officers so that the suits must be dismissed as suits against the Government, even though the officers were not acting pursuant to valid statutory authority, because the relief sought would work an intolerable burden on governmental functions, outweighing any consideration of private harm.

Id.

We believe the approach outlined in Udall is a sound and workable one. On remand the District Court should determine whether refusing to enforce compliance by the Hospital Authority with the provisions of the Hill-Burton Act involved here is within the scope of authority given by statute to the Secretary, and if not, “whether the relief sought would work an intolerable burden on governmental functions, outweighing any consideration of private harm.”

III. Primary jurisdiction

The Hospital Authority asserts that the doctrine of primary jurisdiction requires that plaintiff first submit her claim to the state Hill-Burton agency before presenting it to the District Court. Plaintiff, however, asserts that no administrative procedure for reviewing individual complaints presently exists or has ever existed. On the record before us, we are unable to determine whether this is in fact so, and consequently we leave the matter for further exploration by the District Court.

Reversed and remanded.

      . Similarly in Simons v. Vinson, 394 F.2d 732 (CA 5, 1968), and Gardner v. Harris, 391 F.2d 885 (GA 5, 1968), the suits involved the rights of the United States in certain property. In denying equitable relief in those cases we noted that the plaintiffs could have a remedy by means of suits for just compensation in the District Court or the Court of Claims, depending on the dollar amounts involved. See 394 F.2d at 737 n. 10; 391 F.2d at 887 n. 5.

      . Followed in Association of N. W. Steelheaders, etc. v. U. S. Army Corps of Engineers, 485 F.2d 67 (CA 9, 1973).

      . Jaffe, Suits Against Governments and Officers : Sovereign Immunity, 77 Harv.L.Rev. 1, 34 (1963), discussed in 417 F.2d at 1317.

      . For discussions of when an official’s action is ultra vires, see, e. g., Larson v. Domestic and Foreign Commerce Corp., 337 U.S. 682, 692-695, 69 S.Ct. 1457, 1462-1464, 93 L.Ed. 1628, 1637-1639 (1949); Taylor v. Cohen, 405 F.2d 277, 281 (CA 4, 1968).

      . We leave with the District Court whether it should require plaintiff to amend her complaint so as to plead adequately any contention that the Secretary’s alleged refusal to enforce compliance is outside the scope of his authority. See Larson v. Domestic and Foreign Commerce Corp., 337 U.S. 682, 690, 69 S.Ct. 1457, 1461, 93 L.Ed. 1628, 1636 (1949).


source: Caselaw Access Project

author: JOHN R. BROWN, Chief Judge:

license: Public Domain

text:
    Bettye M. TWITTY, Plaintiff-Appellant, v. STATE FARM LIFE INSURANCE COMPANY, Defendant-Appellee.
    No. 73-2251.
    United States Court of Appeals, Fifth Circuit.
    Oct. 11, 1974.

      Sherman A. Kusin, Harry B. Friedman, Ralph J. Blagg, Texarkana, Tex., for plaintiff-appellant.
    William L. Peek, Jr., Texarkana, Tex., for defendant-appellee.
    Before BROWN, Chief Judge, and GODBOLD and SIMPSON, Circuit Jüdges.
   JOHN R. BROWN, Chief Judge:

Bettye Twitty appeals from the judgment entered on a directed verdict granted by the District Court Judge in favor of Insurer, State Farm Life Insur-anee Company, in her suit to collect the benefits of a policy on the life of Assured, her husband James E. Twitty. At the close of her evidence, the trial judge ruled that there was insufficient evidence that the lapsed policy had been reinstated to permit the case to go to the jury. We affirm this decision.

Bettye Twitty was the business manager of the trucking company owned by her and her husband. More educated than her husband, she had been responsible for maintaining their personal and business insurance for a number of years. On May 27, 1970 she applied for a $100,000.00 insurance policy #2088313 on her husband’s life from W. F. Cock-rell, agent for Insurer.

The premiums were paid until early 1971 when the policy lapsed for the first time. In May of that year she asked agent Cockrell to reinstate the policy, paid the full delinquent premium, $625.-00, and signed the Insurer’s reinstatement application form that included questions relating to Assured’s health. These materials were forwarded by Agent Cockrell to Insurer and the policy was reinstated.

Business in the Twitty trucking operation was seasonal and the policy lapsed again on January 17, 1972. Five months later when Mrs. Twitty went to see Cockrell to make other insurance payments, she spoke to him concerning the life insurance. The conversation as recounted by Agent Cockrell in his deposition (readopted in his trial testimony) is the heart of the case. He said: “ ‘Mrs. Twitty, while you’re here, we need to get this life insurance back in force.’ And she said, ‘Okay,’ she said, ‘How much money do you need?’ And I said, “Two hundred dollars ($200.00),’ and she wrote me a check for two hundred dollars.”

During this “second reinstatement” Bettye Twitty signed only the $200.00 check and a blank application,' one similar in physical appearance, color and content to the application for reinstatement she had signed before in May 1970. But, instead of a form described as a Reinstatement Application, this was described on its face as a Life Application. Cockrell again, however, appears to have completed by hand himself the part of the application pertaining to the health of the insured. Cockrell contends that at this time she was given a binding receipt and forms to be completed by the family physician, the sort that usually accompany the issuance of a new policy.

James E. Twitty died two weeks later on June 29, 1972. The following morning Cockrell sent the application and check to the company. The binding receipt on the second life insurance policy did not authorize recovery for the type of occurrence that caused Twitty’s death. The parties are now before this Court disputing whether me “second reinstatement” transaction reactivated the $100,000.00 life insurance policy # 2088313.

“In view of the fact that she paid only $200.00, $1,400.00 less than needed under the reinstatement clause of the policy, the question is whether the Agent had the power to waive or alter that premium in the face of the policy provision that forebade anyone other than special officials of the insurer to change, make or waive any rights of the company. In addition to these waiver limitations in the contract, plaintiff must surmount the statutory limitation in the Texas Insurance Code § 21.04, V.A.T.S. denying to soliciting life insurance agents the authority to waive policy conditions. These statutory and contractual limitations on the powers of the agent were clearly the substance of Insurer’s case. In order to reverse the judgment, we must find that agent Cockrell had the authority, despite these provisions, to waive the rights of the company to the full back premium— whether he intended to do so or not— and to revive the original insurance coverage.

Appellant argues that Cockrell had this legal capability because he was a local recording agent rather than an insurance solicitor. This difference is important in Texas insurance law because it distinguishes agents with more plenary powers to write, execute and bind the companies to a risk — -local recording agents — from agents who are only empowered to forward proposed risks to the company for acceptance — soliciting agents. These broad statutory powers of the recording agent have led the Texas courts to impute to such agents the additional power to waive policy terms despite express policy provisions denying such apparent authority. Appellant builds her case directly on these Texas decisions, and without a doubt, were those cases applicable, they would compel a reversal of this case.

But the trouble with her reliance on these cases is that by their reasoning, they are confined under the Texas Insurance Code only to casualty and fire insurance underwriting and not to the life insurance business. The Texas Insurance Code clearly demarks the scope of authorized activities of the individual insurance specialties permitted by the state legislature. Texas law distinguishes carefully between life insurance and casualty and fire underwriters. It has an elaborate system for the licensing of those people engaged in each of the two activities but these licensing provisions are separate. Under that for fire and casualty — and these may be written by companies that may be affiliated with life insurance companies but remain separate underwriters — the two previously noted classes of agents exist for casualty underwriting. However, the life insurance business is expressly excluded from this provision. The provisions of the Texas Insurance Code relating to life insurance agents make no such distinctions in the scope of the individual agent’s powers. A class of soliciters is the only one mentioned and, in addition, their authority to waive policy provisions is circumscribed by statute.

This difference in statutory treatment appears to reflect a real-life distinction in the operations of the casualty and life insurance industries in Texas. Thus, a general life insurance agent does indeed act in a more restricted capacity than a local recording agent underwriting casualty insurance, although they both apparently have the power to initially bind the company to insurance risks.

In the absence of such broad recording agent powers, it remains to appellant to prove that Agent Cockrell had the apparent or implied agency authority to waive the full-premium reinstatement requirement. Alternatively, she could show some direct action by the Insurer itself indicating such a waiver. But looking at the total circumstances of the periodic insúranee transactions between appellant, Agent and Insurer, we find nothing to indicate that Agent had any such waiver authority. Nor do we discern that the company itself directly waived the requirement. In the first reinstatement, Agent required appellant to pay the full arrearage due under policy # 2088313. The proper form was completed and the Insurer responded subsequently in accordance with contract provisions. The transaction at issue here was different — a far less substantial sum than the total arrearage was paid and a different form used.

It may well be that Mrs. Twitty reasonably relied on the statements of the agent that he “could get this policy back in force for her for $200.00,” but we find no basis for her theory of promissory estoppel as against the Insurer.

Affirmed.

      . This sum was substantially less than the approximately $1,601.56 back premium owed on the policy. This sum, not supplied by either counsel, was computed by multiplying the monthly premium $312.50 by the five months between the lapse date, January 17, and the date of her attempted reinstatement, June 15, plus a pro rata portion of the interest (6% per annum) as represented by the lapse. We have computed this sum to illustrate the substantial difference in the amount actually paid by Mrs. Twitty and the amount actually owed.

      . The questions concerning the health of the insured contained in both forms are almost identically worded, comprising questions 2-e to 7 (Reinstatement Application) and 8(a-j)-10 (Life Application).

      . The litigants have agreed that this second policy is not in any way at issue in this case.

      . Reinstatement. This policy may be reinstated within five years after the date of lapse if it has not been surrendered for its cash surrender value. Reinstatement is subject to (1) the payment of all overdue premiums with compound interest at the rate of six per cent per annum on such overdue premiums; (2) the payment or re-establishment of any indebtedness existing at the date of lapse together with compound interest at the rate of six per cent per annum on such indebtedness; and (3) receipt of evidence of insurability of the Insured satisfactory to the company.

      . The policy provided :
      Only an endorsement signed by the president, a vice-president, the secretary, or an assistant secretary of the company can waive or modify the conditions or provisions of this policy. No other person has the authority to make or modify this contract, to extend the time for paying a premium, to waive any forfeiture, or to bind the company by making any promise or representation or by giving or receiving any information.
      Similar limitations were also included in the application for reinstatement.
      To the best of my knowledge and belief all statements, answers, representations and agreements in this reinstatement application, and in the original application for the policy, are represented to be true, complete, and correctly recorded. No material circumstance or information has been withheld or omitted concerning the past and present state of health, habits of life and occupation of the Proposed Insured or any other person insured under this policy. On behalf of the Proposed Insured, the Applicant, if other than the Proposed Insured, and any person who shall have any interest in a policy which may be reinstated pursuant hereto, it is agreed: (1) That this reinstatement application, any action hereon, or any lapse of time, shall not be considered to effect a reinstatement by waiver or estoppel, and that the company shall not be deemed to have approved reinstatement unless an official company Notice of Reinstatement is issued; and (2) that no one except the president, a vice-president, the secretary, or an assistant secretary has the power on behalf of the company to make, modify, or discharge contracts or to waive any of the company’s rights or requirements (and in writing only), and these powers will not be delegated. The soliciting agent is not authorized to accept risks or to pass upon insurability. Notice to or knowledge of the soliciting agent is not notice to or knowledge of the company.
      So far as may be lawful, all provisions of law forbidding any physician or other person who has attended or examined or who may attend or examine the Proposed Insured and any other person insured under this policy from disclosing any knowledge or information which he thereby acquired are expressly waived.

      . Tex.Ins.Code Ann. art. 21.14, § 2 (1963).

      . Tins additional statutory authority has been explained on the basis that “an insurance corporation cannot thus limit its power subsequently to contract in any lawful manner by and through its authorized agents acting within the scope of their authority.” Home Ins. Co. of N. Y. v. Roberts, 129 Tex. 178, 100 S.W.2d 91, 93 (Tex. Comm’n App. 1937, opinion adopted).

      . Morrison v. Insurance Company of North America, 69 Tex. 353, 6 S.W. 605, 608 (1887), Home Ins. Co. v. Roberts, 129 Tex. 178, 100 S.W.2d 92, 93 (Tex.Comm’n App. 1937, opinion adopted).

      . This issue — whether Texas life insurance agents have recording agent characteristics and powers — was not closely argued in the original briefs or on oral argument. Not wanting to trust solely to our own research on an unargued point, we requested supplemental briefs from counsel on the issue. While appellant was not able to cite statutory waiver powers for life agents, she suggested several Texas cases as support for her argument. We disagree. Provident Life & Accident Ins. Co. v. Flowers, 91 S.W.2d 847 (Tex.Civ.App. El Paso, 1936, writ dism’d) and Adams v. LaSalle Life Ins. Co., 99 S.W.2d 386 (Tex.Civ.App. Waco, 1936, no writ) both involve the imputation of a life agent’s knowledge to the Insurer, not a waiver. Similarly inapplicable is Security Ben. Ass’n v. Woods, 45 S.W.2d 409 (Tex. Civ.App. El Paso, 1932, no writ). There the Court found waiver from actions of the Insurer itself, not the Agent alone.

      . Tex.Ins.Code Ann. art. 21.14, § 2 (1963) defines their powers.

        Definitions; Certain Orders, Societies or Associations Kot Affected. — By the term “Local Recording Agent” is meant a person or firm engaged in soliciting and writing insurance, being authorized by an insurance company or insurance carrier, including fidelity and surety companies, to solicit business and to write, sign, execute, and deliver policies of insurance, and to bind companies on insurance risks, and who maintain an office and a record of such business and the transactions which are involved, wlio collect premiums on such business and otherwise perform the customary duties of a local recording agent representing an insurance carrier in its relation with the public; or a person or firm engaged in soliciting and writing insurance, being authorized b.v an insurance company or insurance carrier, including fidelity and surety companies, to solicit business, and to forward applications for insurance to the home office of the insurance companies and insurance carriers, where the insurance company’s and insurance carrier’s general plan of operation in this State provides for the appointment and compensation of agents for insurance and for the execution of policies of insurance by the home office of the insurance company or insurance carrier, or by a supervisory office of such insurance company or insurance carrier, and who maintain an office and a record of such business and the transactions which are involved, and who collect premiums on such business and otherwise qualify and perform the customary duties of a local recording agent representing an insurance carrier in its relation with the public.
      By the term “Solicitor” is meant a person who is a bona fide solicitor in the office of, and engaged in the business of soliciting insurance on behalf of a local recording agent, and who offices with such local recording agent, and who does not sign and execute policies of insurance, and who does not maintain company records of such transactions. This shall not be construed to make a solicitor of a local recording agent, who places business of a class which the rules of the company or carrier require to be placed on application or to be written in a supervisory office.

      . Tex.Ins. Code Ann. art. 21.14, § 20 (1963) reads as follows:

        Life, Health and Accident Insurance, Inapplicable to; Other Exceptions. — Xo provisions of this article shall apply to the Life, Health and Accident Insurance business or the Life, Health and Accident Department of the companies engaged there- ^ -t*

      . Tex.Ins.Code Ann. art. 21.02 (1963).

        Who Are Agents

      Any person who solicits insurance on behalf of any insurance company, whether incorporated under the laws of this or any other state or foreign government, or who takes or transmits other than for himself any application for insurance or any jiolicy of insurance to or from such company, or who advertises or otherwise gives notice that he will receive or transmit the same, or who shall receive or deliver a policy of insurance of any such company, or who shall examine or inspect any risk, or receive, or collect, or transmit any premium of insurance, or make or forward any diagram of any building or buildings, or do or perform any other act or thing in the making or consummating of any contract of insurance for or with any such insurance company other than for himself, or who shall examine into, or adjust, or aid in adjusting, any loss for or on behalf of any such insurance company, whether any of such acts shall be done at the instance or request, or by the employment of such insurance company, or of, or by, any broker or other person, shall be held to be the agent of the company for which the act is done, or the risk is taken, as far as relates to all the liabilities, duties, requirements and penalties set forth in this chapter. The provisions of this subchap-ter shall not apply to citizens of this State who arbitrate in the adjustment of losses between the insurers and insured, nor to the adjustment of particular or general average losses of vessels or cargoes by marine adjusters who have paid an occupation tax of Two Hundred ($200.-00) Dollars for the year in which the adjustment is made, nor to practicing attorneys at law in the State of Texas, acting in the regular transaction of their business as such attorneys at law, and who are not local agents, nor acting as adjusters for any insurance company. Any person who shall do any of the acts mentioned in this article for or on behalf of any insurance company without such company having first complied with the requirements of the laws of this State, shall be personally liable to the holder of any policy of insurance in respect of which such act was done for any loss covered by the same. Acts 1951, 52nd Leg., ch. 491.

      . Tex.Ins.Code Ann. art. 21.04 (1963).

        Holicitor Deemed Company’s Agents

      Any person who shall solicit an application for insurance upon the life of another shall in any controversy between the assured and his beneficiary and the company issuing any policy upon such application be regarded as the agent of the company, and not the agent of the insured, but such agent shall not have the power to waive, change or alter any of the terms or conditions of the application or policy. Acts 1951, 52nd Leg., eh. 491.

      . For the purposes of this opinion, we consider it immaterial that the form actually used was the so-called Life Application. We treat it as though a Reinstatement Application had been signed.


author: PER CURIAM:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. José Rafael ROJAS, Defendant-Appellant.
    No. 74-1641
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Oct. 17, 1974.

      Robert H. Burns, Miami Beach, Fla. (Court-appointed), for defendant-appellant.
    Robert W. Rust, U. S. Atty., Samuel A. Alter, Jr., Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee.
    Before BELL, SIMPSON and MORGAN, Circuit Judges.

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

   PER CURIAM:

Found guilty by a jury, José Rafael Rojas appeals his conviction and sentence for three felony offenses. The convictions were for: (1) possession with intent to distribute, (Count V) and (2) distribution of cocaine, (Count VI) 21 U.S.C. Sec. 841(a)(1) and 18 U.S.C. Sec. 2, and (3) unlawfully carrying a firearm during the commission of a felony (Count VII) 18 U.S.C. Sec. 924(c)(2). The appellant assigns four claims of prejudicial error. We fail to find merit in the grounds advanced and affirm.

Error is asserted in the following respects :

(1) Refusal by the trial court to permit appellant’s counsel to conduct a separate voir dire examination of prospective jurors, or to propound questions requested by counsel;

(2) Denial of appellant’s motion to dismiss based on the government’s non-preservation of evidence;

(3) Adjudging appellant guilty of both possession with intent to distribute, and distribution of cocaine, asserting that the former is a lesser offense included in the latter charges; and

(4) Failure by the trial court to instruct the jury as to the meaning of “unlawfully” as used in Count VII, the charge under Title 18, U.S.C. Sec. 924 (c)(2).

Detective Barreto of the Miami Beach, Florida Police Department, on assignment to the Drug Enforcement Administration, made an undercover purchase of three ounces of cocaine for $2250 from appellant’s co-defendant, Michael Lemus, on December 7, 1973. Later that day Barreto met appellant in Lemus’s apartment located at 601 Northwest 97th Street, Miami. That evening at 9:00 p. m. appellant was observed stopping his car in front of Lemus’s home. He was seen handing a clear cellophane package to Lemus, who placed it under his shirt and returned to his apartment. The package was removed by Lemus and sold to Detective Barreto, who was waiting inside the apartment. It contained 859 grams of cocaine.

Appellant was stopped in his car by William Bergen, an agent of the Drug Enforcement Administration, as he drove away from the scene. The agent displayed identification and told appellant to get out of his car. When Rojas did not obey, Bergen approached the car and saw a holstered .38 Colt Cobra between appellant’s legs. The firearm was later found to be loaded. Both Lemus and Rojas were arrested. Rojas was tried alone on the three counts under which he was charged, Count V, VI and VII, Lemus having previously entered a guilty plea. The sentences imposed on Rojas were to 5 years confinement, followed by a special parole term of 3 years, to be served concurrently under Counts V and VI, and to a concurrent 7 year confinement term under Count VII.

Under F.R.Cr.P. Rule 24(a) the trial court may allow counsel to participate in the voir dire examination of jurors or may itself conduct the examination. In the latter event counsel are allowed to submit proper questions. Below the court alone conducted the voir dire. The questions requested by appellant were denied, without any objection by defense counsel. The requested questions were not made a part of either the original record or a supplemental record covering the voir dire examination. The court conducted an extensive voir dire as to relationship or acquaintance with witnesses and parties, and as to possible juror prejudices regarding the government, courts, police, drugs, drug related offenses and offenders. Plain error does not appear on this record, F.R.Cr.P. Rule 52(b). We have no reason to believe that the trial court exceeded its broad discretion in conducting voir dire. See United States v. Fruge, 5 Cir., 1974, 492 F.2d 1163.

Just prior to the acts covered by Counts 5 & 6 of the indictment, the possession and distribution counts, a tape recorder and a transmitter were placed by agents under the dashboard of Barre-to’s car. A recording was made of a conversation between the undercover agent Barreto and the co-defendant Le-mus. The existence of the tape was disclosed in pretrial discovery proceedings and appellant was granted permission to audit the tape. It was then discovered that the cassette tape was broken, could not be fixed, and was impossible to listen to. At trial, a government witness who removed it from the car testified that in some way the tape had wound around the recorder and become badly stretched. He placed it in an envelope to preserve it. Rojas moved to dismiss the indictment, alleging that the content of the recording was essential for preparation of his defense. This motion was denied.

Attempts to repair or splice the tape by the government prior to trial were unsuccessful. Appellant was given the opportunity to have the tape repaired by his own expert, but did not do so. The trial judge indicated that if the tape could be repaired he would declare a mistrial so that its contents would be available to Rojas upon a re-trial.

Both sides cite United States v. Bryant, 1971, 142 U.S.App.D.C. 132, 439 F.2d 642, for their respective positions. Bryant dealt with a tape recording made by the government that was lost prior to trial. The government’s entire case rested on the testimony of an undercover agent; it was his conversations that were taped but not preserved. Accordingly, the case was remanded for determination by the trial court of the government’s good faith efforts to preserve the tape, and its negligence in failing to do so, with the decision whether to order a new trial delegated to the trial judge.

Here the tape was available to appellant, though damaged. It was damaged when it was removed from the recorder. There was no indication of negligence in handling the tapes. The government attempted to comply with the discovery procedures of F.R.Cr.P. Rule 16. There was other sufficient evidence to sustain the convictions. Bryant recognizes and supports such a good faith explanation. This assignment lacks merit.

Appellant alleges the charges of possession with intent to distribute and distribution are multiplicitous and should merge. Appellant was sentenced to 5 year sentences on each of these counts to run concurrently. Under the concurrent sentence doctrine, we need not reach the issue of multiplicity. See United States v. Workopich, 5 Cir. 1973, 479 F.2d 1142, which dealt with the same charges and issue.

Finally, appellant alleges that in instructing the jury on the offense of unlawfully carrying a firearm during the commission of a felony, 18 U.S.C. Sec. 924(c)(2), the court erred in not instructing that the possession of the firearm must be unlawful. Appellant raised no objection at trial, thus this issue is governed by the plain error rule. He must show that his substantial rights were affected and that a manifest miscarriage of justice occurred. See United States v. Resnick, 5 Cir., 1974, 488 F.2d 1165.

Here the court read to the jury the indictment, the applicable statute, and enumerated the essential elements of the crime. While the meaning of “unlawfully” was not explained further, the jury was made aware of the element of unlawfulness at least three times in the course of the court’s instruction. Read as a whole, the jury charge was adequate.

Affirmed.

      . Either as charged in Count V or Count VI, or both.


author: AINSWORTH, Circuit Judge:

text:
    GEORGE W. BENNETT BRYSON & COMPANY, LTD., Plaintiff-Appellee, v. NORTON LILLY & COMPANY, INC., Defendant-Appellant.
    No. 74-1357.
    United States Court of Appeals, Fifth Circuit.
    Oct. 23, 1974.

      Richard F. Ralph, Donald F. Geffner, Miami, Fla., Cicero C. Sessions, Robert E. Barkley, Jr., New Orleans, La., for defendant-appellant.
    Douglas D. Batchelor, Samuel A. Brodnax, Jr., Rex B. Guthrie, Kermit G. Kindred, Timothy J. Armstrong, Miami, Fla., for plaintiff-appellee.
    ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, Circuit Judges.
   AINSWORTH, Circuit Judge:

This Florida diversity suit, in which plaintiff was awarded judgment for $17,795.30, came to this Court in a fairly common posture — the losing party contesting the district court’s findings of fact after a bench trial. After a careful examination of adequate briefs filed in this case, and a close scrutiny of the relatively small record, we concluded that the district court’s findings were not clearly erroneous under Fed.R.Civ.P. 52(a), and affirmed with a per curiam opinion. 498 F.2d 328. Appellant’s counsel has now petitioned for an en banc rehearing, or, in the alternative, rehearing by the assigned panel. This, too, is not uncommon, but counsel’s petition is remarkable for its intemperate and excessive averments that (1) our af-firmance is “inconceivable” because the record “firmly and unequivocally establishes the correctness of Norton Lilly’s position”; (2) our denial of oral argument impaired “full and fair determination” of this matter; and (3) our decision necessarily indicates a “patent” lack of careful consideration and scrutiny of this cause by the judges on the panel. We are reluctant to dignify these assertions with a response, but we do so to reassure litigants of the solicitude with which we handle summary cases under Local Rule 18.

I. THE MERITS OF THE APPEAL

Prior to January 27, 1972, plaintiff Bryson had acted as an out-port agent for Sea Way Lines, Inc., a wholly-owned subsidiary of Trans-Caribbean Shipping, Ltd. Trans-Caribbean was also the sole stockholder of Sea Hawk, Inc., Sea Saga, Inc., and Sea Challenge, Inc., three Liberian corporations each owning a single vessel; Sea Way had operated the 'three vessels pursuant to an unwritten charter agreement. On January 27, 1972, Norton Lilly acquired all of the capital stock in Sea Way Lines, Inc., and the three Liberian corporations, thus gaining sole possession of Sea Way Lines and the ships it operated. On February 28, 1972, representatives of Norton Lilly met with representatives of Bryson in St. John’s, Antigua, “for the purpose of reviewing the present status of our business and establishing future procedures.” After the conversations between the representatives but still on February 28, the discussions were “confirmed” by a letter dated February 28, 1972, from Norton Lilly to Bryson.

Norton Lilly has contended throughout that it acted only as agent for a disclosed principal (Sea Way Lines, Inc.), and as such is not directly liable for Bryson’s costs and expenditures for Sea Way’s ships (which were actually ships owned by three Liberian corporations, each of whose stock was wholly owned by Norton Lilly). Norton Lilly’s argument is that Sea Way is responsible for the debt in question, notwithstanding that Sea Way Lines, Inc., its wholly-owned subsidiary, is inoperative and, presumably, financially embarrassed. The district court found as fact, however, that pursuant to the meeting held February 28, 1972, at plaintiff Bryson’s office in St. John’s, Antigua, Norton Lilly’s representatives agreed to place Bryson “in funds” if Bryson’s disbursements on behalf of the vessels exceeded freight collections. On Norton Lilly’s request, Bryson began to defray such costs, and billed Norton Lilly directly. It is undisputed that Bryson financed the vessels’ costs out of its own funds at Norton Lilly’s request, that invoices for such expenses were billed directly to Norton Lilly, and that Norton Lilly accepted both the disbursements and the statements of account for services rendered without objection or comment of any kind.

Under Florida law, which we are Erie-bound to apply, Norton Lilly’s acceptance of Bryson’s services together with its failure to object to the form or content of the statements billed directly to it, created a prima facie case against Norton Lilly itself, a presumption that it had acquiesced in the debt.

An account stated is prima facie evidence of the correctness of the items and the liability of a party therefor. This presumed correctness may be overcome by proof of fraud, mistake or error. However, the burden of establishing fraud, mistake or error is upon the party asserting it and unless he disposes of this burden, the presumptive correctness of the stated account becomes conclusive.

Gendzier v. Bielecki, Fla., 97 So.2d 604, 608 (citations omitted). The district court properly recognized that the facts and circumstances in the case created a prima facie case for plaintiff Bryson, a case which defendant-appellant was obligated to overcome.

Thus, Norton Lilly entered the courtroom disadvantaged. How did it purport to meet this problem? By calling one — and only one — witness, Mr. Franco, Treasurer of Norton Lilly & Company. Franco stated that in the February 28, 1972 meeting, the Norton Lilly representatives explained “very carefully” that Norton Lilly had acquired all of the stock of Sea Way Lines, Inc. and was acting as managing agent for the line. He testified that “very clear” instrue-tions were given that Norton Lilly was to be billed as agent for Sea Way.

Plaintiff Bryson, however, called three witnesses whose understanding of the meeting and the business relationship was quite different from that related by Mr. Franco of Norton Lilly. Mr. Roth-stein, Managing Director of Bryson, was in attendance at the February 28 meeting. He testified, “[T]he clear understanding was that we were dealing with Norton Lilly . . . .” This impression was apparently bolstered by the fact that only representatives of Norton Lilly met with Bryson’s people; no Sea Way officers or employees were in attendance at the meeting. Mr. Hill, Manager of Bryson’s Shipping Department, also attended the February 28 meeting. He stated that Mr. Carl, Norton Lilly’s Miami Manager and Vice President of Sea Way, who was present at the February 28 meeting, indicated that Bryson would be dealing with Norton Lilly now that it had purchased Sea Way Lines. Hill also testified that, according to the directions of Norton Lilly employees, the old account in Sea Way’s name was closed out and a new account in the name of Norton Lilly was opened. The final witness for plaintiff was Mr. Duarte, the President of Sea Way Lines, Inc., who testified that Sea Way’s policies were made directly by Norton Lilly, that he had nothing to do with any funds of Sea Way Lines, and • that he was Sea Way’s sole employee.

In view of the initial assumption that Norton Lilly was directly liable, together with the foregoing testimony, was the district court clearly erroneous in concluding that Norton Lilly was itself liable? It must be remembered that a trial court’s findings of fact are clearly erroneous only when “the reviewing court on the entire evidence is left with the definite and firm conviction that a'mistake has been committed.” United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948). As Judge Morgan, writing for the Court, recently stated in United States v. State of Florida, 5 Cir., 1973, 482 F.2d 205:

Rule 52(a) of the Federal Rules of Civil Procedure provides that the findings of fact by a district court in actions tried without a jury shall not be set aside unless “clearly erroneous”. . . . Under this rule the determination of the factual content of ambiguous testimony is for a trial court, and such determination can be set aside on review if “clearly erroneous” .... The rule is also applicable insofar as the district court’s conclusion is based on inference drawn from documents or undisputed facts.
Furthermore, since the jurisdiction of this court is appellate, we have no right to re-try the issues of fact de novo or substitute our judgment with respect to such issues. . . . The function of this court is to determine whether, as a matter of law, the findings sustained the judgment. If, however, the findings of the district court are unsupported by substantial evidence, then the lower court’s decision may be set aside.

Id. 482 F.2d at 207-208 (citations omitted).

Moreover, the version of the February 28 meeting most credible and reasonable under the circumstances was for the district judge to decide. Cf. Dillon v. M. S. Oriental Inventor, 5 Cir., 1970, 426 F.2d 977, 978; Chaney v. City of Galveston, 5 Cir., 1966, 368 F.2d 774, 776. Given our limited scope of review, we could not say we had a “definite and firm conviction” that the district court erred in deciding the case as it did. Reasonable minds could possibly differ with the court’s conclusion, but the district court was not clearly wrong.

Norton Lilly makes much of the fact it addressed its mail and signed the February 28 letter “as agents” for Sea Way. This of course ignores the Florida account stated presumption, but the argument is in any case superfluous. Even if Norton Lilly was Sea Way’s agent, and only that, this does not of itself preclude a finding of direct liability. It is hornbook law that an agent can become personally liable for his principal’s debt by express promise or agreement. It is also Florida law. Blount v. Tomlinson, 1909, 57 Fla. 35, 48 So. 751, 754. As stated by the Restatement of Agency 2d, § 302, comment c: “The inference that the agent is not a party to a contract may be overcome by proving other facts connected with the transaction.

In such cases, it is for the triers of fact to determine what the parties intended.” The prima facie case for direct liability, combined with the testimony above, is certainly sufficient to prove that, even if Norton Lilly was Sea Way’s managing agent only and signed the contract as such, it was nonetheless obligated directly by its express promises to Bryson.

With one fully satisfactory reason for affirming the district court’s finding of liability, we need not search for another. But we would note that there is no equitable reason whatever for Norton Lilly’s denial of liability. Norton Lilly owned all of the stock in the three Liberian corporations holding legal title to the “Sea Way vessels.” Norton Lilly was formally empowered to man, operate and supply the vessels. All employees associated with Sea Way Lines, Inc. became employees of Norton Lilly except the President of Sea Way, Mr. Duarte — but Norton Lilly’s Treasurer, Mr. Carl, supervised even Duarte’s activities. All members of Sea Way’s board of directors were Norton Lilly employees. All-cash receipts from Sea Way activities were ordered to be sent directly to Norton Lilly. Norton Lilly requested Bry-son to make disbursements for the vessels out of Bryson’s own funds. Notwithstanding all this, Norton Lilly continues to assert that Sea Way Lines, Inc., and not itself, is the party liable for these expenses, apparently oblivious to the fact that Sea Way, its wholly-owned subsidiary, is in financial straits. We need not and do not decide whether Florida law would find such a unity of interest as to justify ignoring the separation of corporate entities. But surely we may properly look askance at Norton Lilly’s claim that we are dealing here with a standard principal-agent relationship, and that it was acting in accordance with customary business procedures.

II. THE DENIAL OF ORAL ARGUMENT

As the foregoing points out, this case turned almost entirely on factual matters and inferences therefrom. We were given the benefit of good briefs, and appellant, in its Reply brief, was given the opportunity to reiterate its contentions and to challenge appel-lee’s analysis of the case. This was not a case turning on unique or largely legal issues. No voluminous records prevented us from reading the entire trial transcript and exhibits. This case did not involve issues of broad social policy, new questions of governmental prerogatives and personal freedoms, or matters of important precedential value. Rather, this controversy was determined by factual issues which we were not entitled to assess anew.

For these reasons and others, the three judges on the panel unanimously agreed that oral argument was not necessary for a full and fair resolution. It should be emphasized that this decision was reached only after all three panel members had closely scrutinized the briefs and appendix. Moreover, as the Supreme Court has stated, “[D]ue process of law has never been a term of fixed and invariable content. This is as true with reference to oral argument as with respect to other elements of procedural due process.” F.C.C. v. WJR, The Goodwill Station, Inc., 337 U.S. 265, 275, 69 S.Ct. 1097, 1103, 93 L.Ed. 1353 (1949) (citations omitted). See also Huth v. Southern Pacific Co., 5 Cir., 1969, 417 F.2d 526, 529-530. Indeed, the Third Circuit, in a recent en banc decision, rejected a contention that denial of oral argument and disposition by summary decision pursuant to Third Circuit Local Rule 12(6) constitute a violation of due process as guaranteed by the Fifth Amendment. N.L.R.B. v. Local No. 42, Int. Ass’n of Heat & F.I. & A. Workers, 3 Cir., 1973, 476 F.2d 275. We agree with the Third Circuit on the constitutional issue. Oral argument is not always helpful, nor is it the sine qua, non of fair dispositions. In many cases, oral argument is merited and may be essential, but this certainly is not one of those cases.

III. THE PROCEDURE OF THE PANEL

Part I of this opinion illustrates not only that the record supports the decision of the panel, but also that we did indeed carefully consider and scrutinize the record in making our determination. Full and meticulous consideration is given to all cases, whether summarily decided or orally argued. In Murphy v. Houma Well Service, 5 Cir., 1969, 409 F.2d 804, Chief Judge Brown, as spokesman for this Court, outlined our screening procedures and emphasized the precautions taken to assure fairness and full scrutiny.

The important thing is that this screening is a judicial one performed by Judges, not the Clerk or other non-judicial staff. It is done through a series of standing panels of three Judges, made up of Active Fifth Circuit Judges only. Cases are not submitted to a screening panel until all briefs are in or the allowable FRAP time has expired. When eases are ripe for screening they are submitted to the screening panels at random, without reference to subject matter, state of origin, or any other criteria.
As an added safeguard against even the remote possibility of oral argument being denied by a single Judge, the procedure calls for unanimous panel action to put the case on the Summary Calendar. Carrying it a step further, if after placing it on the Summary Calendar, any member of the panel has doubts or unresolved differences with the proposed opinion, the ease is automatically removed and reclassified for full or limited argument. In other words, the classification of the case and its disposition must be unanimous. This demands informed, individual action by each panel member which will always equal, if it does not exceed, that required for an orally argued case. .

Id. at 806. The system thus requires double unanimity — three active judges must agree both to the decision on the merits of the case and to the lack of warrant for oral argument, otherwise oral argument is ordered.

The reasons assigned by appellant to justify a rehearing are meritless, and are dismissed as such. The Petition for Rehearing is denied, and no member of this panel nor judge in regular active service on the Court having requested that the Court be polled on rehearing en banc (Rule 35, Federal Rules of Appellate Procedure; Local Fifth Circuit Rule 12), the Petition for Rehearing En Banc is denied.

      . Petition for Rehearing at 3, 5.

      . Id. at 4-5.

      . Id. at 2, 3, 13, 14 (emphasis in original).

      . See App. 202 (letter from Norton Lilly to Bryson).

      . See App. 71-72; the text of the letter is at App. 203-204.

      . Findings of Fact 7-9, App. 154-155.

      . The invoices and other correspondence of Bryson were addressed:
      Messrs. Norton, Lilly & Co., Inc.
      c/o Messrs. Seaway Lines, Inc.
      530 Biscayne Blvd.
      Miami, Florida 33132
      530 Biscayne Blvd. was the address of Norton Lilly’s Miami office.

      . See also 1 Fla.Jur., Accounts & Accounting §§ 5, 7. Of course, there is no such presumption of acquiescence to a debt by a person who has had no dealings whatever with the sender of the account. Braun v. Noel, 188 So.2d 564, 565 (3d D.C.A.Fla.1966); C & H Contractors, Inc. v. McKee, 177 So.2d 851 (2d D.C.A.Fla.1965). Appellant concedes, however, that it was engaged in a regular course of business with Bryson — it merely contends such business was transacted only as an agent.

      . App. 30-32.

      . Id. at 72.

      . Id. at 78-79.

      . Id. at 52.

      . Id. at 62-63. The absence of Sea Way officers or employees is understandable, however, in that all Sea Way Lines employees, save one, the President of Sea Way, became Norton Lilly employees. The members of Sea Way’s board of directors resigned and were replaced by Norton Lilly personnel.

      . Q. Were there any representations made to you about who you would be dealing with in the future?
      A. Yes. AVe were told that we would be . dealing with Norton Lilly.
      App. at 119.

      . Id. at 125-126.

      . Id. at 144.

      . Appellant takes issue with the district court’s adoption of plaintiff’s proposed Findings of Fact and Conclusions of Law. The clearly erroneous test is to be applied whether the lower court personally prepares such findings and conclusions or adopts those submitted by counsel. Railex Corp. v. Speed Check Co., 5 Cir. 1972, 457 F.2d 1040, 1042, cert. denied, 409 U.S. 876, 93 S.Ct. 125, 34 L.Ed.2d 128 (1972); United States v. El Paso Natural Gas Co., 376 U.S. 651, 656, 84 S.Ct. 1044, 1047, 12 L.Ed.2d 12 (1964); Louis Dreyfus et Cie. v. Panama Canal Co., 5 Cir., 1962, 298 F.2d 733, 737-739; Edward Valves v. Cameron Iron Works, 5 Cir., 1961, 289 F.2d 355, 356. We nonetheless reiterate our disfavor of the occasional use of this practice by district judges.

      . As to the issue of whether any direct representations were made by Norton Lilly to Bryson, we note that the February 28 letter contained the following provision: “It is understood that if disbursements exceed freight collections, Norton Lilly then will replace Agents [Bryson] in funds.” App. 203. This statement, in its context, is ambiguous, but it could, and probably did, reinforce Bry-son’s understanding that it might look directly to Norton Lilly if Bryson were forced to defray costs out of its own funds.

      . See App. at 202 (letter from Norton Lilly to Bryson).


author: WILLIAM E. DOYLE, Circuit Judge.

text:
    William Harrison RICHINS and Amelda S. Richins, his wife, Plaintiffs-Appellees, v. INDUSTRIAL CONSTRUCTION, INC., a corporation, Defendant-Appellant. INDUSTRIAL CONSTRUCTION, INC., a corporation, Third-Party Plaintiff, v. STATE ROAD COMMISSION OF UTAH, Third-Party Defendant and Appellant.
    Nos. 73-1957, 73-1958.
    United States Court of Appeals, Tenth Circuit.
    Argued July 11, 1974.
    Decided Sept. 3, 1974.

      Robert F. Orton of Nielsen, Conder, Hansen & Henriod, Salt Lake City, Utah, for plaintiffs-appellees.
    John G. Marshall, Salt Lake City, Utah, for defendant-appellant.

      Leland D. Ford, Asst. Atty. Gen. (Vernon B. Romney, Atty. Gen., on the brief), for third-party defendant and appellant.
    Before LEWIS, Chief Judge, and HOLLOWAY and DOYLE,' Circuit Judges.
   WILLIAM E. DOYLE, Circuit Judge.

The primary issue before us on this appeal is whether the defendant-appellant road contractor converted a diesel powered water pump, the property of the plaintiffs-appellees, during the course of building a highway for the State Road Commission of Utah. A segment of the highway crossed the plaintiffs-appellees’ land.

Assuming the District Court correctly decided in favor of plaintiffs-appellees, was the defendant-appellant contractor entitled to maintain an action over against the State of Utah to obtain indemnity for the conversion liability imposed?

A secondary issue in the ease is whether plaintiffs-appellees were entitled to recover damages from defendant-appellant contractor for crop loss caused by interference with irrigation facilities incident to the building of the mentioned highway and, assuming that plaintiffs-appellees were entitled to this recovery, whether defendant-appellant was entitled to be indemnified for this amount also.

This problem had its inception with the Utah State Road Commission’s filing of eminent domain proceedings on November 21, 1967, seeking to acquire 21 acres of irrigated land for the purpose of constructing and maintaining a portion of Interstate Highway 80 North. Pursuant to this, on December 18, 1968, an order of immediate occupancy was entered by the Utah State District Court.

The defendant-appellant contractor had on October 24, 1968, entered into a written contract with Utah in which it agreed to act as general contractor to construct the mentioned highway through plaintiffs’ property and other lands.

During October 1968, the contractor, in building the road, removed certain irrigation ditches which had served not only the property taken but also the adjacent property of plaintiffs-appellees. These facilities were not restored until the summer of 1970, and as a consequence the crops could not be irrigated on some 42 acres.

The irrigation pump was located on land which was being acquired by the state. At the time here in question, this pump was on the bank of the Weber River. The contractor took possession of the pump and removed it to its property in Grantsville, Utah and later to its yard in Fillmore, Utah. Plaintiffs were advised that they could remove the pump from the contractor’s property if they were willing to pay the sum of $8,000 which, according to the contractor, equaled the expense of removal and transportation.

The evidence showed that both the plaintiffs and the defendant pursued their activities on the assumption that the State of Utah would condemn the pump as a fixture. As it turned out, however, this claim and plaintiffs’ claim for crop loss were excluded from the state condemnation award. Inasmuch as plaintiffs had not been compensated for the pump and the crops, the present action was filed.

The District Court awarded judgment to the plaintiffs in the amount of $10,000 based on its finding that there had been a conversion of the water pump. The trial court found that the defendant company, by taking possession of and retaining the pump, had been guilty of a conversion. The court reasoned that defendant knew that this was not abandoned property since the plaintiffs had claimed compensation for it in the eminent domain action. The court rejected the contractor’s arguments that the pump had been abandoned and that the contractor was justified, therefore, in removing it to his land. It finally held that the contractor had exercised dominion over the pump by taking possession of it, by removing it to its own land, by taking it to Fillmore, Utah which was some distance away and finally by demanding that the plaintiffs-appellees pay $8,000 in order to secure its return. This sum was represented to be the expenses incurred by the contractor in moving the equipment.

The contractor maintains that Richins had abandoned the pump and that he neglected to demand that it be delivered to him. Had he done so, the contractor would have consented to deliver it to him.

The decision of the Utah Supreme Court in Allred v. Hinkley, 8 Utah 2d 73, 328 P.2d 726 (1958), is cited for the proposition that the elements of a conversion are not here established. In Allred an agent was engaged in purchasing seed for the defendant. The agent customarily paid for the seed with his own check and then forwarded a draft to the company payable to himself. The agent, however, changed the procedure, whereby he would pay the grower after the draft was accepted by his principal. In the case litigated he had failed to remit the sums realized from the drafts to the growers. Thereupon a conversion suit was brought against the company by the growers. The Utah court set forth the elements of a conversion action saying that:

A conversion is an act of wilful interference with a chattel, done without lawful justification by which the person entitled thereto is deprived of its use and possession. The measure of damages of conversion is the full value of the property. It requires such a serious interference with the owner’s right that the person interfering therewith may reasonably be required to buy the goods. Although conversion results only from intentional conduct it does not however require a conscious wrongdoing, but only an intent to exercise dominion or control over the goods inconsistent with the owner’s right. * * *

328 P.2d at 728.

The court concluded that, by taking possession of the seed, the company committed a conversion against the grower in that it interfered without legal justification with the latter’s right to possess. The fact that the company did not act knowingly and with intent to invade the rights of the grower was considered inconsequential since there was intent to assume dominion over the property. We fail to see that this decision supports the contractor’s position. The indications from the opinion are that Utah follows orthodox criteria in applying the doctrine of conversion.

In the case at bar the facts are, to be sure, complex and somewhat ambivalent. Thus, the conduct of plaintiffs up until the time of the removal of the pump might well have furnished a complete defense to the charge of conversion because it showed a willingness to allow the pump to remain on the land in the hope that there could be some manner of forced sale to Utah. However, there is more to the case than the conduct which occurred at the scene. The contractor removed the pump and did so with knowledge of plaintiffs’ property claim in it and, finally, the pump was removed to a distant place. The distance itself may constitute a conversion. See Prosser on Torts (3rd ed.), p. 87. The author states that an unauthorized change of location may amount to a conversion. For example, if a person taking possession of property removes it to a distant location and fails to notify the owner, thereby putting the owner to unnecessary inconvenience and expense, there is a conversion.

In addition to the removal of the pump, the contractor here demanded the sum of $8,000 as a prerequisite to the return of the property and this also constitutes an exercise of dominion over it.

Defendant also argues that there was an abandonment or an estoppel. In support of the abandonment theory the ease of Utah Road Commission v. Hansen, 14 Utah 2d 305, 383 P.2d 917 (1963) is cited. The holding in that case was that one whose land is condemned must bear the burden and expense of removing his property from the land and cannot charge it to the State of Utah. The Supreme Court held that if the plaintiff wished to assert ownership of salvage automobiles and a quantity of parts, it must bear the cost of removing such property. The problem here is not a simple contest between the landowner and the state as to the cost of removal. There is evidence establishing that the contractor actually assumed possession and exercised dominion over the property. Apparently the contractor did this in the hope that it would acquire ownership as salvage if and when the plaintiffs obtained an award in the state court proceedings. But this fact does not mitigate the conversion or furnish a basis for application of the doctrine of abandonment or estoppel.

In summary, we must conclude that the trial court’s holding that defendant-appellant contractor converted the pump was not erroneous.

A final contention of the contractor is that the award of $10,000 was excessive. It is true that plaintiffs' expert stated that the pump together with the engine was worth approximately $6,000. The only evidence in support of the judgment was that of the plaintiffs to the effect that the reasonable market value was $10,000 or $11,000. The amount awarded does seem on the high side. However, since there is some evidence to support this (the owner’s opinion), and since the award does not greatly exceed either the opinion of the expert or the demand of $8,000 which was made by the contractor, we are not inclined to order a remittitur.

We have examined the other contentions raised with respect to the interference with the plaintiffs’ irrigation ditches and facilities and the resultant crop damage. We find no merit in the arguments advanced either by the contractor or by the State of Utah.

The final matter presented is the contention of the State Road Commission of Utah representing the State of Utah that the Eleventh Amendment to the Constitution of the United States precludes an indemnity action against it by the defendant-third-party plaintiff. The language of the Eleventh Amendment is plain. It provides :

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

The State of Utah has enacted a statute in which it consents to a limited degree to being sued. See 7A Utah Code Annotated 63-30-1 et seq (1953). The title of 63-30-16 is Jurisdiction of district courts over actions — Application of Rules of Civil Procedure. It provides:

The district courts shall have exclusive original jurisdiction over any action brought under this act and such actions shall be governed by the Utah Rules of Civil Procedure in so far as they are consistent with this act. (Emphasis supplied.)

The cases hold that a state’s consent to be sued in the state’s own courts does not serve to waive its Eleventh Amendment immunity. Kennecott Copper Corp. v. State Tax Comm., 327 U.S. 573, 66 S.Ct. 745, 90 L.Ed. 862 (1946); Ford Motor Co. v. Department of Treasury of Indiana, 323 U.S. 459, 65 S.Ct. 347, 89 L.Ed. 389 (1945); Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 64 S.Ct. 873, 88 L.Ed. 1121 (1944); Smith v. Reeves, 178 U.S. 436, 20 S.Ct. 919, 44 L.Ed. 1140 (1900).

The Utah statute goes beyond mere consent to be sued in its own courts in that it expressly declares that its own courts are the exclusive tribunals for suits against it. This is a positive expression of policy against suits against Utah in United States courts.

Can the Eleventh Amendment be waived by the attorney general of the state entering an appearance and litigating in the case in the face of the mentioned statutory language? We are of the opinion that it cannot be so waived. Some discretion in finding an implied waiver is suggested by the Supreme Court in Petty v. Tennessee-Missouri Bridge Commission, 359 U.S. 275, 79 S.Ct. 785, 3 L.Ed.2d 804 (1959). The decision, however, of our court in Williams v. Eaton, 443 F.2d 422 (10th Cir. 1971), shows a preference for an approach giving full effect to the Eleventh Amendment absent some extraordinarily effective waiver. Neither decision would justify a finding of waiver here.

In view of the language of this statute, and the seeming reluctance of most decisions to imply a waiver, we must conclude that Utah has not effectively waived the Eleventh Amendment at bar. See also MacDonald v. Board of Regents, 371 F.2d 818 (6th Cir. 1967). Therefore, the judgment rendered against the State Road Commission of Utah and thus against the State of Utah in the amount of $10,000 in favor of the defendant-third-party plaintiff on account of the conversion of the water pump, and the judgment entered against it indemnifying the defendant-third-party plaintiff for the plaintiff’s judgment for damaged irrigation ditches and resultant crop damage cannot stand.

We also feel constrained to add that there is no waiver arising from the fact that this issue has been raised by the State of Utah for the first time on appeal since it has been held to be an available question at the appeal stage. See Ford Motor Co. v. Department of Treasury of Indiana, supra.

In view of our ruling as to the applicability of the Eleventh Amendment as a bar to liability of the Utah State Road Commission, we need not consider the merits of the third-party indemnity action arising from the conversion of the pump. Nor do we need to consider the action seeking indemnity for irrigation ditches and crop damages.

The judgment of the district court is affirmed in part and reversed in part. It is remanded with directions to the District Court to enter judgments in accordance with the rulings contained herein.


author: FAIRCHILD, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Earl KNIPPENBERG, Defendant-Appellant.
    No. 73-2031.
    United States Court of Appeals, Seventh Circuit.
    Argued March 1, 1974.
    Decided Aug. 15, 1974.
    Rehearing Denied Dec. 30, 1974.

      Sherman C. Magidson, Chicago, 111., for defendant-appellant.
    James R. Thompson, U. S. Atty., Ann C. Tighe, Asst. U. S. Atty., Chicago, 111., for plaintiff-appellee.
    Before FAIRCHILD, CUMMINGS and PELL, Circuit Judges.
   FAIRCHILD, Circuit Judge.

Earl Knippenberg appeals from a judgment upon conviction of seven counts of mail fraud, 18 U.S.C. § 1341, and of one count of transporting stolen securities in interstate commerce. 18 U.S.C. § 2314.

Defendant’s principal argument is that the evidence was insufficient to establish guilt. We agree with him as to the seven mail fraud counts, but disagree as to the eighth, transportation count.

1. The seven mail fraud counts.

The indictment charged in the first seven counts that Jack R. Walsh, George Witchek, and defendant Knippenberg devised a scheme to defraud, and that in order to execute the scheme, they caused matter to be mailed on six occasions in July, 1972, and on August 3, 1972. Walsh pleaded guilty, and was a witness at Knippenberg’s trial. Witcheck was a fugitive.

David Valente owned parcels of real estate near Bethlehem, Pennsylvania. The scheme, according to the indictment, was that Walsh would falsely represent to Valente, the Northampton National Bank, Easton, Pennsylvania, and others, that Walsh was a vice president of Seay & Thomas Inc., a well known Chicago company and that Seay & Thomas would provide mortgage financing on Valente properties in the amount of $1,000,000; that defendants would induce Northampton Bank to provide interim financing; that defendants would induce Northampton Bank on August 18, 1972 to issue four cashier’s checks, totalling $25,200, payable to creditors of Valente, and falsely represent they would deliver these checks to Valente’s attorney, O’Hare, for delivery to the payees, but that defendants would transport these cheeks to Chicago, provide forged endorsements, and convert the proceeds; that defendants would induce Northampton Bank to issue a cashier’s check August 18 for $2,500 to Knippenberg; that defendants would falsely represent to Northampton Bank that Seay & Thomas would deposit funds in an account in the bank, out of which the bank would be reimbursed the $27,700.

There was ample evidence tending to show that Walsh, a resident of Chicago, went to Pennsylvania, and devised and carried out a scheme as alleged; that although the mailings which were the subject of the first seven counts were accomplished by others, presumably innocent of the fraud, the mailings were reasonably foreseeable in the ordinary course of business in execution of the scheme; that Knippenberg who had had business associations with Walsh in Chicago, went to Pennsylvania; performed ostensibly legitimate tasks in connection with the Valente project; was with Walsh and those being duped by Walsh on one or more occasions as early as July 7; and that as early as about two weeks before August 18 he joined in misrepresentations which advanced the scheme or at least stayed silent while Walsh made representations which Knip-penberg must have known were false. The problem is that all the mailings which form the substantive offenses in the first seven counts occurred in July or on August 3. Only the last date even approximates the time when the evidence tends to show Knippenberg’s first participation in conduct furthering the scheme with knowledge that fraud was involved. Was the evidence consistent with Knippenberg being a dupe, like Teeman, until about August 4, or would it suffice to prove that Knippenberg was a knowing participant in the fraud from July 7 on?

Valente owned a number of valuable, but heavily encumbered parcels of real estate. He had retained Attorney O’Hare, and was a customer of Northampton Bank. In spring, 1972, Walsh falsely told Valente Walsh was associated with Seay & Thomas. He obtained the apparently innocent assistance of Louis Teeman who was actually an employee of Seay & Thomas and by his presence on several occasions and interest in the development of Valente’s properties unwittingly lent some color to Walsh’s claim.

When Walsh contacted Knippenberg in June about the Valente project, Knip-penberg had been operating a small construction business, apparently in financial difficulty. He had worked for Walsh before on seemingly legitimate projects and testified that he accepted Walsh’s offer of work on a construction job in Pennsylvania. Knippenberg was present, as was Teeman, on July 7 at the Northampton Bank, with Walsh and Sechler, the bank vice president. There was testimony that Knippenberg was doing some preliminary tasks in preparation for construction work on Val-ente’s properties, and no proof that his efforts in the early weeks were not genuine. On or after July 27, Walsh introduced Knippenberg to O’Hare as one who was in the area to work on the Val-ente project. There is testimony that Walsh said that Knippenberg and another were “the people who will be working from the extra office that you gave us on the Valente project on behalf of World Wide Builders and Seay & Thomas.” Since Knippenberg ordinarily did business under the name of World Wide Builders, and another person was also referred to, his failure to protest that he had no connection with Seay & Thomas could not establish beyond a reasonable doubt that he was a knowledgeable participant in the fraud as early as July 27.

The testimony which described the earliest activity on the part of Knippen-berg which could be found beyond a reasonable doubt to be fraudulent was that about two weeks before August 18, Sechler, Walsh, and Knippenberg had a conversation during which Walsh said that World Wide Builders had a standing relationship with Seay & Thomas and often worked for that firm. The statement was false and known to Knip-penberg to be so, yet he did not correct it. Up to this time Knippenberg’s conduct, like Teeman’s, may as well, from the evidence, have been legitimately as fraudulently motivated. Exactly two weeks before August 18 would have been August 4, one day after the last mailing, charged in Count 7. This and other testimony to be referred to in discussing count 8, form an adequate basis for a finding that by approximately August 4, Knippenberg joined Walsh in a conspiracy to carry out the scheme described in the indictment, but that proof is not a sufficient predicate for a finding that he caused the mailings on earlier dates.

Although joining a conspiracy subjects the late joiner to some of the consequences of earlier activity by others in furtherance of the conspiracy, and conspiracy principles apply to a multimember mail fraud scheme, whether.or not conspiracy has been formally charged, it is our opinion that an individual “cannot be held criminally liable for substantive offenses committed by members of the conspiracy before that individual had joined or after he had withdrawn from the conspiracy. . ” In the context of use of the mails in execution of a scheme to defraud, it has been said that “The crime consists in the posting of the letters . . ., and if the defendant was not in the scheme when the letters were posted he was not a principal or an accessory to the crime then committed.” Van Riper v. United States, 13 F.2d 961, 967 (2d Cir., 1926). Language tending to support the opposite conclusion in Bogy v. United States, 96 F.2d 734, 741 (6th Cir., 1938), cert. denied, 305 U.S. 608, 59 S.Ct. 68, 83 L.Ed. 387, does not appear to have been followed. Cf., from the same circuit, Blue v.. United States, 138 F.2d 351, 362 (6th Cir., 1943), cert. denied 322 U.S. 736, 64 S.Ct. 1046, 88 L.Ed. 1570 citing and applying Van Riper.

In our opinion, conviction of Knippenberg on the first seven counts cannot be sustained on the theory that he ratified earlier activity by joining the conspiracy, nor is there evidence capable of supporting a finding, beyond a reasonable doubt, that he knowingly participated in the scheme before the times of mailing. There is no suggestion that additional proof would be available for a new trial.

2. The transportation count.

Count 8 charged that Walsh, Witchek and Knippenberg transported and caused to be transported in interstate commerce the four cashier’s checks, from Pennsylvania to Illinois, knowing them to have been stolen, converted, and taken by fraud.

The proof showed that on August 18, Walsh represented to O’Hare that claims by four creditors of Valente were delaying the final processing of the Seay & Thomas loan. O’Hare then authorized Sechler to issue the checks to cover those claims, deeming them an advance under the bank’s agreed loan to Valente. Walsh went to the bank, where he was joined by Knippenberg. Sechler gave Walsh the checks, for delivery to O’Hare. They induced Sechler to draw a check for $2,500 to Knippenberg for expenses. It was immediately cashed and the proceeds given to Knippenberg, although Knippenberg testified he kept only $250, giving the rest to Walsh. The three agreed that Walsh and Knip-penberg would go immediately to Chicago, and Knippenberg would bring back the first installment of the Seay & Thomas loan. Walsh later represented to Sechler by telephone that the checks had been delivered to O’Hare. Instead Walsh took them to Chicago.

In order to cash the checks (with forged endorsements) Walsh induced Mrs. Rost, a friend in the Chicago area, to deposit them in her bank account. Mrs. Rost testified that Walsh told her the checks were from Earl (Knippen-berg), and there was testimony that she later asked Knippenberg if it had been all right to deposit the checks and he assured her it was. She testified that Knippenberg was present when she signed and turned over several blank cheeks apparently for the purpose of withdrawal of the proceeds.

There was ample testimony that Knippenberg joined in some of the false representations by which the $25,200 in checks was obtained (as well as the $2,500 for expenses). It is not claimed that he personally transported the cheeks to Chicago. It has been held in this type of situation that the evidence need only show that the interstate transportation was reasonably foreseeable by defendant. United States v. Scandifia, 390 F.2d 244, 249 (2d Cir., 1968), vacated on other grounds, 394 U.S. 310, 89 S.Ct. 1163, 22 L.Ed.2d 297. This court has recently said in a relevant context that the government must show that a defendant was substantially involved in the chain of events leading to the unlawful transportation, or that he intended to aid in post-theft plans, or that he knew the details of the plans such as the specific destination of the goods. United States v. Greer, 467 F.2d 1064, 1069 (7th Cir., 1972). The evidence of Knippenberg’s knowledge, intent, and participation in the enterprise was sufficient under these tests to make him criminally liable for the transportation.

3. Absence of word “wilfully” in count 8.

Count 8 need only have charged that defendants “did transport” the checks in interstate commerce even if its proof was limited to aiding and abetting. See Latham v. United States, 407 F.2d 1, 4 (8th Cir., 1969); United States v. Washington, 287 F.2d 819, 820-821 (7th Cir., 1961), cert. denied, 366 U.S. 969, 81 S.Ct. 1933, 6 L.Ed.2d 1259; United States v. Adams, 454 F.2d 1357, 1358 (7th Cir., 1972), cert. denied, 405 U.S. 1072, 92 S.Ct. 1523, 31 L.Ed.2d 805. Count 8 went on to charge “and cause to be transported” without asserting, in the terms of 18 U.S.C. § 2(b), that they did wilfully cause the transportation.

The point is adequately disposed of by noting that the indictment was not challenged at or before trial. Where that is so, “the indictment will be upheld ‘unless it is so defective that it does not, by any reasonable construction, charge an offense for which the defendant is convicted.’ ” United States v. Santelises, 476 F.2d 787, 788 (2d Cir., 1973), quoting United States v. Trollinger, 415 F.2d 527, 528 (5th Cir., 1969).

4. Instructions to the jury.

In instructing the jury, the district court did not define “wilfully”, although instructing that one who wilfully participates in the commission of a crime may be found guilty. The defendant did not request instructions dealing more specifically with the nature of the intent required with respect to the actual transportation of the checks and did not object to those given. We discern no plain error, and defendant is foreclosed as a result of his failure to object. Rule 30 F.R.Cr.P.

The same disposition is appropriate for defendants’ belated challenge to the instruction that “Defendant has offered evidence of his good faith in making the representations alleged in the indictment.” Defendant denied making the false representations attributed to him, and the instruction was somewhat inaccurate. Defendant was claiming, however, that his presence in Pennsylvania and activity in behalf of the Valente project were in good faith. In these circumstances, we do not consider the instruction plain error.

5. Prosecutor’s argument concerning Walsh’s testimony.

Both parties called Walsh as a witness. As a government witness he testified to his request of Mrs. Rost to deposit certain checks; and to an admission by Knippenberg that he reassured Mrs. Rost about the checks. He did not testify to any details of the scheme to defraud. When called by defendant, he denied making certain false representations and that Knippenberg had knowledge of or made false representations.

In argument to the jury government counsel commented on Walsh's testimony and the various reasons (including his criminal record) why Walsh was unworthy of belief. Counsel ultimately said “I am not asking you to believe anything that he said, I think, on the other hand, that you should disbelieve what he said.” At the moment, the most potentially significant part of Walsh’s testimony was that which was elicited when he was called by the defense, and parts of his testimony were virtually incredible on their face. We do not view the comment of government counsel as reversible error.

6. Testimony in furtherance of conspiracy.

Mrs. Rost was permitted to testify that Walsh told her the checks were from Earl. Defendant argues that this statement does not qualify as a statement made in furtherance of the conspiracy between the declarant, Walsh, and Knippenberg, against whom it was received. The record very reasonably bears the interpretation that Walsh told Mrs. Rost the checks were from Knippenberg so as to reassure her and help induce her to deposit them. So viewed the conspiracy exception to the hearsay rule was applicable.'

The judgment of conviction and the sentence on the eighth count of the indictment are affirmed. The judgment of conviction and the sentence on each of the first seven counts are reversed and the cause remanded with directions to dismiss those counts.

      . The transportation of these checks was the subject of count 8.

      . United States v. Joyce, 499 F.2d 9, pp. 16-17 (7th Cir., 1974).

      . See concession of Solicitor General, Levine v. United States, 383 U.S. 265, 266, 86 S.Ct. 925, 926, 15 L.Ed.2d 737 (1966).