text:
    In the matter of CYBERN EDUCATION, INC., Debtor. UNITED STATES of America, Appellant, v. Harry A. ASH et al., Appellees.
    No. 72-1131.
    United States Court of Appeals, Seventh Circuit.
    Argued April 6, 1973.
    Decided April 27, 1973.
    As Amended on Denial of Rehearing June 13, 1973.

      David Ferber, Sol., S. E. C., Washington, D. C., John I. Mayer, S. E. C., Chicago, 111., Scott P. Crampton, Asst. Atty. Gen., Tax Div., Thomas Boerschinger, Atty., Dept, of Justice, Washington, D. C., James R. Thompson, U. S. Atty., William T. Huyek, Asst. U. S. Atty., Chicago, 111., for appellant.
    Mark A. Greenhouse, Kevin J. Gillogly, Chicago, 111., for appellees.
    Before FAIRCHILD, STEVENS and SPRECHER, Circuit Judges.
   PER CURIAM.

In appealing the allowance of interim fees to a trustee in bankruptcy and his attorneys of $45,000 in a $45,000 estate, the United States and the Securities and Exchange Commission have urged that we enforce several standards and guidelines of compensation in order to retain “close judicial control” over bankruptcy costs.

I

On August 31, 1970, Cybern Education, Inc., petitioned for an arrangement under Chapter XI of the Bankruptcy Act. Ten days later the corporation amended its petition to transfer the proceedings to Chapter X. On September 15, 1970, the district judge appointed Harry A. Ash trustee for the debtor. On September 17, on Ash’s petition, the cqurt authorized him to employ Louis I. Kessler and Kevin J. Gillogly “in all matters pertaining to the above entitled estate under a general retainer, and to pay said attorneys a reasonable compensation for their services out of the funds of the within estate, the amount thereof subject to the determination of this Court.”

On September 22, the trustee was authorized and directed to operate the debtor’s business, open new books of account, file monthly reports, investigate the debtor’s financial condition and report thereon in 60 days, and on or before November 27, 1970 to prepare and file a plan of reorganization or a report of his reasons why a plan could not be effected. On September 25, the debtor turned over to the trustee some $4,000 in cash. Within a short time thereafter over $10,000 in accounts receivable were collected in the debtor’s estate.

On September 25, 1970, the Securities and Exchange Commission filed its appearance in accordance with Section 208 and requested notice of “all steps taken in this proceeding” pursuant to Section 265a of the Bankruptcy Act (11 U.S.C. §§ 608 and 665).

On October 13 on the application of the trustee, the district court authorized and directed the trustee to employ the president of the debtor corporation at an annual salary of $38,500 and the secretary at an annual salary of $15,000, both salaries being the same as those previously paid by the corporation. On October 20, the corporation borrowed $15,000 from one of its shareholders for operating expenses. The trustee collected over $50,000 additional accounts receivable, more than half of the total amount coming from the United States government and the University of Illinois.

The trustee ceased the day-to-day operation of the debtor’s business on February 28, 1971.

On April 23, 1971, the trustee sold the assets and good will of a division of the debtor known as Cine-Probst, Inc. to Charles O. Probst, the manager of tfie division, for $4,500. On April 27, he sold the New York office furnishings of the debtor for $1,350. On June 17, he sold the debtor’s Washington, D. C. office furniture and equipment to the sub-tenant of debtor’s District of Columbia lease. On July 30, he sold certain of the debtor’s intangibles (contracts, educational systems, copyrights) for $30,000 through the efforts of Dr. Joseph A. Tucker who was paid a $6,000 commission on the sale.

On October 15, 1971, the trustee filed his petition for interim fees of $22,500 for himself and $22,500 for his two attorneys. Copies were served on counsel for SEC on the previous day. Neither the petition for fees nor notice was served on the Internal Revenue Service, which had a claim against debtor of $56,566.48, nor otherwise upon the United States nor upon other creditors or shareholders of the debtor. The trustee represented in his fee petition that he was holding $61,000 subject to $16,000 in obligations or a net estate of $45,000. On October 15, the court heard arguments on the fees and on October 19, the court approved the fees and this appeal followed.

II

The Advisory Committee on Bankruptcy Rules of the Judicial Conference of the United States, in its note to the proposed new rule on compensation for services in Chapter X cases, stated:

“The premise for including in these rules provisions governing the allowance of compensation to officers, attorneys and accountants is that it is peculiarly a judicial responsibility to supervise the administration of estates and in particular to assure that allowances for compensation to those rendering services in connection therewith are fair but not excessive. 3A Collier jf 62.05.[3] (1961). The costs of bankruptcy administration have been a matter of continuing concern in the history of American bankruptcy law. Id. |f 62.02. This concern has led to an increasing recognition of the necessity for close judicial control of these costs.”

What we have recited above constitutes a summary of the entire Chapter X proceedings. The debtor corporation was operated under the trustee’s supervision for only five months. The well-paid president and secretary of the corporation were kept on at their prior salaries and presumably performed all of the day-to-day business operations.

The services rendered by the trustee and his attorneys consisted of (1) borrowing $15,000 from an obvious lender, one of the debtor’s shareholders; (2) collecting some $60,000 in accounts receivable from financially responsible persons, about half of the total being paid by the United States and the University of Illinois; (3) selling a division of the debtor corporation to an obvious purchaser, its former manager; (4) selling furniture and equipment to a sub-tenant who was already leasing them; (5) disposing of certain intangible assets through Dr. Joseph A. Tucker who received a 20% commission; and (6) determining that it was useless to continue under Chapter X. The trustee submitted to the court 26 reports, 22 of which were one-page summaries of receipts and disbursements for a weekly or monthly period. These reports and the trustee’s petition for fees showed that there was about $61,000 left in the estate subject to some $16,000 in trustee obligations, or a net estate of about $45,000, all of which the trustee claimed for himself and his attorneys. The court promptly awarded all of the net estate to them as “interim allowance” without terminating the long-dormant estate and presumably leaving the door open for additional fees if any more assets materialized in the debtor’s estate.

The fee petition included a detailed statement of services of the attorneys, mainly devoted to “conferences,” total-ling 439% hours, or $51 per hour. Inasmuch as there were no hours scheduled for the trustee and in view of the great number of hours spent by his attorneys in a routine proceeding, it is apparent that the charge is closer to $102 per hour. The petition, verified by the trustee, also contained a five-page general “summary of services rendered,” indicating those services heretofore outlined. Each of the three applicants for allowance executed an affidavit swearing (1) that there was no agreement or understanding for a division of compensation and (2) that there was no agreement with any other parties or attorneys in the proceeding to fix fees contrary to 18 U.S.C. § 155.

Rule X-18 of the Bankruptcy Rules of the United States District Court for the Northern District provides as follows:

“Every application for compensation or allowance shall be verified and shall include (a) a detailed statement of the services rendered and expenses incurred; (b) the amounts separately stated, for which an allowance is sought as compensation and as reimbursement; (c) a copy of the statement, if any, filed pursuant to Section 211 of the Act; (d) a detailed statement bringing the facts in the statement filed pursuant to Section 211, if any up to date; (e) a detailed statement of the facts required to be stated under Section 249 of the Act; (f) a statement by the applicant that he has not entered into any agreement, written or oral, express or implied, with the debtor, receiver, trustee, or any other party in interest, or any attorney of any such persons, for the purpose of fixing the amount of any of the fees or other compensation to be allowed out of or paid from the assets of the debtor; and (g) such other facts as may be necessary to reveal fully the applicant’s connection with the proceeding and with the debtor, receiver or trustee and the parties in interest.
“Unless otherwise ordered, notice of hearing on such applications shall state the names of the applicants, the several capacities in which they have acted, and the amounts, separately stated, sought by each for compensation and for reimbursement.”

The fee petition stated that the three applicants did not file statements under oath pursuant to 11 U.S.C. §§ 611 and 649, because the provisions of those sections “do not apply to any of them in this case.” It is true that Section 211 applies only to “every person or committee, representing more than twelve creditors or stockholders, and every indenture trustee” but Section 249 applies to “[a]ny persons seeking compensation for services rendered or reimbursement for costs and expenses” incurred in a Chapter X proceeding. That section requires a statement under oath showing claims against, or stock of, the debtor, if any, acquired or transferred after the commencement of the proceeding. The section provides that applicants for compensation or reimbursement “shall file” the statement. It is a mandatory prerequisite and cannot be avoided by stating that it does not apply.

Thus the. applicants here did not comply with Section 249 nor with paragraphs (a) and (e) of Rule X-18.

Section 247 (11 U.S.C. § 647) provides in part:

“The judge shall fix a time of hearing for the consideration of applications for allowances, of which hearing notice shall be given to the applicants, the trustee, the debtor, the creditors, stockholders, indenture trustees, the Securities and Exchange Commission and such other persons as the judge may designate, except that notice need not be given to any class of creditors or stockholders which does not participate under the plan as confirmed by the court from which no appeal is pending and the time allowed for appeal has expired.”

The notice in the present case was given only to the attorneys for the debt- or, the attorney for a stockholders’ committee, and the Securities and Exchange Commission. Not only was the notice not sent to any creditor (nor did the exception of Section 247 apply since no plan has been confirmed by the court), but inasmuch as the notice stated that the petition was to be presented to the court on October 15 and the three notices sent were not mailed until 5:00 P. M. on October 12, 1971, there was virtually no opportunity for any creditor to learn of the presentment in sufficient time to contest the fees. On October 15, the attorney for the SEC appeared in court, stated that the Commission had received notice only the day before, and objected to the failure to comply with Section 247, as well as to the amount of the fees requested. Nevertheless, the “hearing,” which consisted of argument by one of the applicant-attorneys, took place immediately. The court approved the fees as requested in full without any further hearing or argument on October 19.

The notice was clearly in violation of the mandatory requirements of Section 247 even as the petition violated Section 249 and Rule X-18. But our concern here runs deeper than the statutory derelictions. It goes to the applicants’ paramount interest in their own fees and to the court’s purporting to permit the entire estate to be wiped out by the fees in a Chapter X proceeding which was improvidently commenced and should have been quickly terminated with little or no expense. The fact that it was not does not tend to reflect favorably upon the fee applicants nor upon the court’s supervision of them.

As we noted in the corporate reorganization proceedings of In re A. Herz, Inc., 81 F.2d 511, 512 (7th Cir. 1936):

“[T]he chancellor in the allowance and fixing of fees . . . must ever be alert lest a reorganization inure to the benefit, not of the distressed debtor and its creditors, but only to those engaged in saving it.” We vacate the order of October 19,

1971, allowing interim allowances of $45,000 and remand with the following directions:

(1) This proceeding shall be reassigned by the executive committee of the district court to another judge.

(2) No applications for compensation and reimbursement shall be considered until the proceeding is ready to be closed and then only as full and final compensation.

(3) Compensation and reimbursement shall be justified by a record showing the specific services performed and such other factors which bear upon the reasonableness of the awards.

(4) Petitions for compensation and reimbursement shall comply with Section 249 of the Bankruptcy Act and with district court Rule X-18.

(5) Notices of presentment of petitions shall be given to all persons specified in Section 247 of the Bankruptcy Act.

(6) Notices of presentment of petitions shall in particular be served upon the Secretary of the Treasury and the Securities and Exchange Commission sufficiently in advance of hearing to permit their staffs to formulate recommendations to their superiors and to obtain authorization for positions to be taken upon such petitions in the district court.

(7) Costs of this appeal shall be charged against the appellees and shall not be paid from the debtor’s estate nor shall any attorney’s fees relating to this appeal be charged to the debtor’s estate.

Vacated and remanded for further proceedings.

      . Committee on Rules of Practice and Procedure of the Judicial Conference of the United States, Preliminary Draft of Proposed Bankruptcy Rules . and Official Forms Under Chapter X of the Bankruptcy Act (December, 1972), Advisory Committee Note to Rule 10-215, p. 60.


source: Caselaw Access Project

author: CRAVEN, Circuit Judge:

license: Public Domain

text:
    Fred BAUGHMAN as parent and on behalf of Lynne Baughman and Beth Baughman, minors et al., Appellants, v. William FREIENMUTH, President, Montgomery County Board of Education et al., Appellees.
    No. 72-1892.
    United States Court of Appeals, Fourth Circuit.
    Argued Feb. 6, 1973.
    Decided May 17, 1973.

      Edward L. Genn, Washington, D. C. (Arnold Hammer, on brief), for appellants.
    Robert S. Bourbon, Rockville, Md., for appellees.
    Before WINTER and CRAVEN, Circuit Judges, and ALBERT V. BRYAN, Jr., District Judge.
   CRAVEN, Circuit Judge:

This is another freedom of speech case in the high school context. We are asked to extend our decision in Quarter-man v. Byrd, 453 F.2d 54 (4th Cir. 1971) to prohibit any prior restraint based on content from being exercised by school officials over written material to be distributed on school grounds. We decline to do so. However, the application of Quarterman to this case requires that the decision of the district court be vacated insofar as it fails to grant the plaintiffs the complete relief to which they are entitled.

I.

The plaintiffs, parents on behalf of their children in the Montgomery County school system, brought this action seeking injunctive and declaratory relief against the Montgomery County Board of Education, its members and officers, and against the Maryland State Board of Education. The complaint attacked certain regulations (contained in a policy statement re-issued September 20, 1971) as an unlawful prior restraint on the distribution of non-school sponsored literature in violation of the first amendment.

Distribution of a pamphlet criticizing the prior restraint regulations resulted in a warning letter from the principal and subsequently the commencement of this litigation. As in Quarterman, we need not assess the content of the pamphlet; we are concerned only with the consitutional validity of the September 20, 1971, regulations and the scope of further relief to which plaintiffs are entitled.

The challenged regulations of the board provide in relevant part:

Under the following procedures, student publications produced without school sponsorship may be distributed in schools:
4) A copy must be given to the principal for his review. (He may require that the copy be given him up to three school days prior to its general distribution.) If, in the opinion of the principal, the publication contains libelous or obscene language, advocates illegal actions, or is grossly insulting to any group or individual, the principal shall notify the sponsors of the publication that its distribution must stop forthwith or may not be initiated, and state his reasons therefor. The principal may wish to establish a publications review board composed of staff, students, and parents to advise him in such matters.
Students may distribute or display on designated bulletin boards materials from sources outside the school subject to the same procedures that govern student publications.

The district court 343 F.Supp. 487, held: (1) that the regulation was invalid in restraining material which “advocates illegal actions, or is grossly insulting,” and in failing to require the principal to act promptly; (2) that provisions for a review of the principal’s action were gratuitous and unnecessary; and (3) that the prior restraint of libelous and obscene material was valid even though those terms are not otherwise defined. We affirm in part and reverse in part."

II.

The regulation complained of reaches the activity of pamphleteering which has often been recognized by the Supreme Court as a form of communication protected by the first amendment. Organization for a Better Austin v. Keefe, 402 U.S. 415, 419, 91 S.Ct. 1575, 29 L.Ed.2d 1 (1971). It does not deal with such expression in neutral terms of time, place, and manner of distribution. Rather it is a rule imposing prior restraint on expression because of “its message, its ideas, its subject matter, or its content” — a power of restraint denied government by the first amendment in public areas including state college campuses. Police Dep’t of the City of Chicago v. Mosley, 408 U.S. 92, 95, 92 S.Ct. 2286, 33 L.Ed.2d 212 (1972).

In the secondary school setting first amendment rights are not coextensive with those of adults and while such rules of prior restraint may be valid, they nevertheless come to this court with a presumption against their constitutionality. Tinker v. Des Moines Community School Dist., 393 U.S. 503, 513, 89 S.Ct. 733, 21 L.Ed.2d 731 (1969); see University of So. Miss. Chapter of the Miss. Civil Liberties Union v. University of So. Miss., 452 F.2d 564, 566 (5th Cir. 1971). To overcome this presumption, school regulations must come within the constitutional limits defined in Quarterman.

It is generally held that the constitutional right to free speech of public secondary school students may be modified or curtailed by school regulations “reasonably designed to adjust these rights to the needs of the school environment.” . . . Specifically, school authorities may by appropriate regulation, exercise prior restraint upon publications distributed on school premises during school hours in those special circumstances where they can “reasonably ‘forecast substantial disruption of or material interference with school activities’ ” on account of the distribution of such printed material ....
What is lacking in the present regulation, and what renders its attempt at prior restraint invalid, is the absence both of any criteria to be followed by the school authorities in determining whether to grant or deny permission, and of any procedural safeguards in the form of “an expeditious review procedure” of the decision of the school authorities.

453 F.2d at 58-59.

The present regulation, like the one in Quarterman, is impermissible. It lacks the procedural safeguard of a specified and reasonably short period of time in which the principal must act. Moreover, the regulation fails to provide for the contingency of the principal’s failure to act within a specified brief time, i. e., whether upon such failure the material then could be distributed. See Freedman v. Maryland, 380 U.S. 51, 59, 85 S.Ct. 734, 13 L.Ed.2d 649 (1965). It is not our province to suggest a time limit, but we caution that whatever period is allowed, the regulation may not lawfully be used to choke off spontaneous expression in reaction to events of great public importance and impact. See Wright, at 1044. Furthermore, as pointed out <in Quarterman, “ ‘an expeditious review procedure’ of the decision of the school authorities” is required. 453 F.2d at 59. The present regulation lacks these procedural safeguards and is, therefore, an unreasonable restriction on the first amendment rights of school children. See Burnside v. Byars, 363 F.2d 744, 747-748 (5th Cir. 1966).

Moreover, the proscription against “distribution” is unconstitutionally vague. With respect to some communicative material there may be no prior restraint unless there is “a substantial distribution of written material, so that it can reasonably be anticipated that in a significant number of instances there would be a likelihood that the distribution would disrupt school operations.” Eisner v. Stamford Bd. of Education, 440 F.2d at 803, 811. With respect to other types of material, e. g., pornography, one copy, indeed, the only copy may be the subject of what is legitimate prior restraint if what is forbidden is precisely defined. The prohibition of material which “advocates illegal actions, or is grossly insulting to any group or individual” seems to belong in the first category and thus goes beyond the permissible standard (for that type of material) of forecasting substantial disruption. See Tinker v. Des Moines Community School Dist., 393 U.S. 503, 514, 89 S.Ct. 733, 21 L.Ed.2d 731 (1969).

III.

While the district court found the regulation invalid, the court nevertheless found “that the Montgomery County Rule, insofar as it allows the imposition of a prior restraint upon obscene or libelous material, is valid.” We agree that material which is, in the constitutional sense, unprivileged libel or obscenity if read by children can be banned from school property by school authorities. See Eisner v. Stamford Bd. of Educ., 440 F.2d 803, 809 n. 6 (2d Cir. 1971). If there were no contemplated prior restraint but instead merely post-publication sanction, the problem of vagueness would not be intolerable. Put affirmatively, we think that a regulation imposing prior restraint must be much more precise than a regulation imposing post-publication sanctions. As Mr. Justice Marshall said in Interstate Circuit, Inc. v. Dallas, 390 U.S. 676, 88 S.Ct. 1298, 20 L.Ed.2d 225 (1968): “The vice of vagueness is particularly pronounced where expression is sought to be subjected to licensing.” 390 U.S. at 683, 88 S.Ct. at 1303. He quoted Chief Judge Fuld with approval: “It is essential that legislation aimed at protecting children from allegedly harmful expression — no less than legislation enacted with respect to adults — be clearly drawn and that the standards adopted be reasonably precise so that those who are governed by the law and those that administer it will understand its meaning and application.” 390 U.S. at 689, 88 S.Ct. at 1306.

To do otherwise is to leave administrators “adrift upon a boundless sea .” Joseph Burstyn, Inc. v. Wilson, 343 U.S. 495, 504, 72 S.Ct. 777, 96 L.Ed. 1098 (1952).

In Bantam Books, Inc. v. Sullivan, 372 U.S. 58, 83 S.Ct. 631, 9 L.Ed.2d 584 (1963), the Court spoke critically of a system of prior restraint comparing it unfavorably with post-publication criminal sanctions:

In thus obviating the need to employ criminal sanctions, the State has at the same time eliminated the safeguards of the criminal process. Criminal sanctions may be applied only after a determination of obscenity has been made in a criminal trial hedged about with the procedural safeguards of the criminal process. The Commission’s practice is in striking contrast, in that it provides no safeguards whatever against the suppression of nonobscene, and therefore constitutionally protected, matter. It is a form of regulation that creates hazards to protected freedoms markedly greater than those that attend reliance upon the criminal law.
What Rhode Island has done, in fact, has been to subject the distribution of publications to a system of prior administrative restraints, since the Commission is not a judicial body and its decisions to list particular publications as objectionable do not follow judicial determinations that such publications may lawfully be banned. Any system of prior restraints of expression comes to this Court bearing a heavy presumption against its constitutional validity. See Near v. Minnesota, 283 U.S. 697 [, 51 S.Ct. 625, 75 L.Ed. 1357] (1931); Lovell v. Griffin, 303 U.S. 444, 451 [, 58 S.Ct. 666, 668, 82 L.Ed. 949] (1938); Schneider v. State, 308 U.S. 147, 164 [, 60 S.Ct. 146, 152, 84 L.Ed. 155] (1939); Cantwell v. Connecticut, 310 U.S. 296, 306 [, 60 S.Ct. 900, 904, 84 L.Ed. 1213] (1940); Niemotko v. Maryland, 340 U.S. 268, 273 [, 71 S.Ct. 325, 328, 95 L.Ed. 267] (1951); Kunz v. New York, 340 U.S. 290, 293 [, 71 S.Ct. 312, 314, 95 L.Ed. 280] (1951) ; Staub v. Baxley, 355 U.S. 313, 321 [, 78 S.Ct. 277, 281, 2 L.Ed.2d 302] (1958). We have tolerated such a system only where it operated under judicial superintendance and assured an almost immediate judicial determination of the validity of the restraint. Kingsley Books, Inc. v. Brown, 354 U. S. 436 [, 77 S.Ct. 1325, 1 L.Ed.2d 1469] (1957).

372 U.S. at 69-71, 83 S.Ct. at 639.

In short, we think letting students write first and be judged later is far less inhibiting than vice versa. For that reason vagueness that is intolerable in a prior restraint context may be permissible as part of a post-publication sanction. As stated by Justice Harlan:

One danger of a censorship system is that the public may never be aware of what an administrative agent refuses to permit to be published or distributed. A penal sanction assures both that some overt thing has been done by the accused and that the penalty is imposed for an activity that is not concealed from the public.

A Quantity of Books v. Kansas, 378 U.S. 205, 223, 84 S.Ct. 1723, 1732, 12 L.Ed.2d 809 (1964) (dissenting opinion).

Thus a regulation requiring prior submission of material for approval before distribution must contain narrow, objective, and reasonable standards by which the material will be judged. See Quarterman, 453 F.2d at 59. Such a standard is required in order that those charged with enforcing the regulation are not given impermissible power to judge the material on an ad hoc and subjective basis and that forbidden activity be clearly delineated so as not to inhibit basic first amendment freedoms. See Grayned v. City of Rockford, 408 U.S. 104, 109, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972).

The use of terms of art such as “libelous” and “obscene” are not sufficiently precise and understandable by high school students and administrators untutored in the law to be acceptable criteria. Indeed, such terms are troublesome to lawyers and judges. None other than a Justice of the Supreme Court has confessed that obscenity “may be indefinable.” Jacobellis v. Ohio, 378 U.S. 184, 197, 84 S.Ct. 1676, 12 L.Ed.2d 793 (1964) (Stewart, J., concurring). “Libelous” is another legal term of art which is quite difficult to apply to a given set of words. Moreover, that words are libelous is not the end of the inquiry: libel is often privileged. New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964).

Thus, while school authorities may ban obscenity and unprivileged libelous material there is an intolerable danger, in the context of prior restraint, that under the guise of such vague labels they may unconstitutionally choke .off criticism, either of themselves, or of school policies, which they find disrespectful, tasteless, or offensive. That they may not do.

By way of summary, we hold that the Montgomery County prior restraint regulation is unconstitutional and that its enforcement must be enjoined. Our decision rests upon these propositions of law:

(a) Secondary school children are within the protection of the first amendment, although their rights are not coextensive with those of adults.

(b) Secondary school authorities may exercise reasonable prior restraint upon the exercise of students’ first amendment rights.

(e) Such prior restraints must contain precise criteria sufficiently spelling out what is forbidden so that a reasonably intelligent student will know what he may write and what he may not write.

(d) A prior restraint system, even though precisely defining what may not be written, is'nevertheless invalid unless it provides for:

(1) A definition of “Distribution” and its application to different kinds of material;
(2) Prompt approval or disapproval of what is submitted;
(3) Specification of the effect of failure to act promptly; and,
(4) An adequate and prompt appeals procedure.

For the reasons stated, we reverse with regard to the denial of declaratory and injunctive relief and remand for further proceedings.

Reversed in part.

Affirmed in part.

Remanded.

      . To the extent that a prior submission rulo is to control the time, place, and manner of distribution, it is valid. “Just as in the community at large, reasonable regulations with respect to the time, the place, and the manner in which student groups conduct their speech-related activities must be respected.” Healy v. James, 408 U.S. 169, 192-193, 92 S.Ct. 2338, 2352, 33 L.Ed.2d 266 (1972) ; Jones v. Board of Regents, 436 F.2d 618, 620 (9th Cir. 1970). See Wright, The Constitution on the Campus, 22 Vand.L.Rev. 1027, 1044 (1969).

      . Healy v. James, 408 U.S. 169, 180, 92 S.Ct. 2338, 33 L.Ed.2d 266 (1972) ; Papish v. University of Mo. Bd. of Curators, 410 U.S. 667, 93 S.Ct. 1197, 35 L.Ed.2d 618 (1973).

      . The illustrations in Sec. 1851 of the proposed revisions of the federal criminal code seem to be a careful attempt to describe what is meant by Mr. Justice Stewart’s phrase “hard core pornography”. Selections from President’s Version of Revised Federal Criminal Code § 1851, 13 Crim.L.W. 3005, 3016 (April 11, 1973).

      . See Ginsberg v. New York, 390 U.S. 629, 88 S.Ct. 1274, 20 L.Ed.2d 195 (1968).

      . It is instructive that the President’s current proposed revision of the federal criminal code undertakes detailed explicit illustrations of “obscene material”. Section 1851, supra, note 4.

      . Scoville v. Board of Educ., 425 F.2d 10, 14 (7th Cir.), cert. denied, 400 U.S. 826, 91 S.Ct. 51, 27 L.Ed.2d 55 (1970). See also Pickering v. Board of Educ., 391 U.S. 563, 573-574, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968) ; Eisner, 440 F.2d at 809.


author: SEITZ, Chief Judge.

text:
    UNITED STATES of America v. Alan WEINBERG et al., Appellant in No. 72-1784. Appeal of Nathan BLANK, in No. 72-1782. Appeal of Edward GORNISH, in No. 72-1783. Appeal of George KASPARIAN, in No. 72-1785.
    Nos. 72-1782-72-1785.
    United States Court of Appeals, Third Circuit.
    Argued March 20, 1973.
    Decided May 22, 1973.

      Joseph A. Torregrossa, Morgan, Lewis & Bockius, Philadelphia, Pa., for appellant in No. 72-1782.
    Harry S. Tischler, Defender Assoc, of Phila., Philadelphia, Pa., for appellant in No. 72-1783.
    Malcolm H. Waldron, Jr., Philadelphia, Pa., for appellant in No. 72-1784.
    Mitchell S. Lipschutz, Philadelphia, Pa., for appellant in No. 72-1785.
    Carl J. Melone, U. S. Atty., George S. Kopp, Criminal Division, Appellate Section, U. S. Dept, of Justice, Washington, D. C., for appellee.
    Before SEITZ, Chief Judge and AL-DISERT and ADAMS, Circuit Judges.
   OPINION OF THE COURT

SEITZ, Chief Judge.

The defendants appeal their sentences entered upon their conviction by a jury for conspiring to violate 18 U.S.C. § 2315 (1971). The alleged conspiracy was a plan to receive stolen securities and pledge them as collateral for a loan from a bank.

I. SUFFICIENCY OF THE EVIDENCE — THE JURISDICTIONAL AMOUNT ELEMENT OF AN 18 U.S.C. § 2315 OFFENSE

18 U.S.C. § 2315 (1971) contains a jurisdictional amount element which requires the securities allegedly “received or disposed of” to have “the value of $5,000 or more.” The defendants maintain the Government failed to produce sufficient evidence that the securities, (two certificates representing 3,745 shares of common stock of Chrysler Corporation) were in excess of the jurisdictional amount requirement.

The evidence, viewed most favorably to the Government, established that the brokerage firm, upon discovery of the theft, placed a “stop” on the two certificates ; the defendants at the time of the conspiracy did not know the certificates had been “stopped” nor could knowledge of the stop be imputed to the bank since the federal agent who was posing as the bank’s loan officer did not know of the stop; all parties stipulated that during the year of the theft the market value of 3,745 shares of common stock of Chrysler Corporation on the New York Stock Exchange was at least $60,000; and the defendants negotiated for a loan of $40,000 for the pledge of the securities.

The district court instructed the jury that the value of the shares at the date of receipt or disposition was controlling and the jury should determine whether the stock then was worth $5,000 or more.

Defendants contend there was insufficient evidence to establish that the value of the Chrysler stock in question exceeded the jurisdictional amount of $5,000 at the time of the securities’ receipt or disposition by the defendants. They recognize the parties stipulated as to the market value of Chrysler stock generally but point out there was no evidence before the jury as to the effect of the stop order on the value of the stolen stock at the critical date as charged by the court.

We need not decide the legal correctness of the district court’s instruction to the jury that “value” is to be determined as of the time of the receipt or disposition of the property. Defendants did not challenge the charge on this point either in the district court or here. Nor need we decide whether the Government’s proof of market value was deficient for failure to show the effect of the stop order on such shares. We say this because, at the Government’s behest, the stock certificates in question were admitted in evidence. Those certificates, representing 3,745 shares, recite that the shares are of the par value of Six Dollars and Twenty-five Cents each. Thus, their par value far exceeded $5,000 and fulfilled one of the permissible statutory definitions of “value” found in 18 U.S.C. § 2311 (1971). Because the par value was an indisputable fact of record which fulfilled the jurisdictional amount requirement, under the circumstances, we do not regard it as significant that there was no reference to it in the instructions to the jury.

II. HEARING AND DETERMINATION DURING TRIAL ON A MOTION TO SUPPRESS MADE BEFORE TRIAL

Well before trial, the defendants filed motions to suppress various evidence on the grounds that their arrests and subsequent searches were improper pursuant to Fed.R.Crim.P. 41(e) (1971). However, no suppression hearing was held, nor, consequently, was any deter-ruination made on these motions prior to trial. In fact, a fair amount of testimony was taken before the court heard and disposed of the motions. Although the challenged evidence was not “admitted” in evidence until after the suppression nesses were questioned concerning it in hearing and determination, some wit-the presence of the jury, prior to the hearing. Later in the Government’s case, the district court did conduct a suppression hearing out of the presence of the jury. It then decided that there were no infirmities in the arrests and subsequent searches and that the challenged evidence would be properly admissible in evidence.

The defendants contend the suppression hearing and determination during trial could not have resulted in a fair determination on their pretrial motions to suppress. We think the rulings on these motions could and should have been made before evidence was taken. However, we believe the error was harmless because all the evidence challenged in the defendants’ motions was properly admissible. We are unwilling to assume that the court’s determination was influenced by the posture of the case at the time he ruled. We emphasize that a pretrial determination avoids the creation of such an impression and should be the general rule absent unusual circumstances.

III. DISCLOSURE OF THE INFORMANT’S NAME AND WHEREABOUTS

The defendants contend the Government failed to properly discharge its obligation under the facts presented to disclose the name and whereabouts of the informant.

After a review of the record, we find the district court correctly stated: “It is clear [that the defendants] knew the informer’s identity at the time of trial.” 345 F.Supp. a,t 835. Thus, the defendants’ contention that the Government failed to satisfy the requirement to disclose the informant’s name is without support.

As to the informant’s whereabouts, the defendants argue that although they had two addresses of the informant, a private investigator employed by the defendants had discovered that the informer had moved from those addresses and no forwarding address was known. However, the investigator made this discovery over a month before the trial; yet as the district court noted, the defendants did not bring the matter to the attention of the district court until after trial.

We conclude that the Government fully complied with the “whereabouts” disclosure requirement.

IV. THE TESTIMONY OF THE AGENT-LOAN OFFICER BASED ON HIS REPORTS

The investigation of the conspiracy commenced around November 24, 1970 and culminated with the arrest of the defendants on December 14, 1970. During the period of the investigation, the agent made no written notes concerning the investigation. Thereafter, he prepared three investigative reports; one was written on December 22, 1970 and the other two on January 14, 1971. On February 25, 1971, the agent distilled the three investigative reports into a summary report. The three investigative reports and the summary report were made available to the defendants at trial.

In testifying at trial, the agent relied heavily on the summary report “to refresh his recollection.” The district court stated: “The agent . . . was permitted to examine his notes repeatedly before testifying as to the precise meetings and details of the meetings with certain of the defendants.” 345 F.Supp. at 834. The defendants argue that the summary report was not made contemporaneously with the events in question, and thus the agent should not have been permitted to use the summary report to refresh his recollection.

We find the three investigative reports prepared within one month of the end of the investigation were made roughly contemporaneously with the events. Id Since the summary report was a distillation of the three “contemporaneous” investigative reports which were available to defendants, we fail to see how defendants were prejudiced by the witness’ use of this document to refresh his recollection.

Alternatively, the defendants maintain that the agent, in effect, “read” the summary report into the record through his testimony and that the agent had no recollection independent of the written report. However, the district court stated that it was “satisfied from all of the testimony presented by the agent that he was refreshing his recollection for the purpose of being entirely accurate in the details of his testimony.” Id. After a review of the record, wé find that the district court did not abuse its discretion in permitting the agent to examine the summary report to refresh his recollection and that the report was referred to by the agent solely for that purpose.

Y. RASPARIAN — SUFFICIENCY OF THE EVIDENCE

In considering the question of the sufficiency of the evidence concerning Rasparían, the district court stated that Rasparían had the following three contacts with the conspiracy transaction:

[1] Rasparían originally contacted Chilengarian about the possibility of Chilengarian’s ‘going into a new car agency’ through a contact of Kasparian’s. ... [2] Kasparian telephoned to Chilengarian that he had been asked to advise him that the final arrangements could not be made until the next week. [3] Kasparian was present during the final drive to the bank and was present when the securities were transferred by Blank to Chilengarian and he looked at them.

345 F.Supp. at 830.

The district court concluded these three contacts were sufficient evidence to uphold the conviction of Kasparian:

[T]he numerous contacts that Kas-parian had in the transaction which furthered the conspiracy and the actual transfer of the securities were such that a jury could reasonably find from all the surrounding circumstances that Kasparian was an active participant and an integral part of the conspiracy beyond a reasonable doubt.

Id.

After reviewing the testimony concerning Kasparian’s participation, we find no evidence to support a conclusion that Kasparian had knowledge he was part of a conspiracy to receive and pledge stolen securities. All of Kaspari-an’s conduct was consistent with his innocence and his defense that he was simply attempting to assist Chilengarian to open a new car agency.

First, Chilengarian had previously told Kasparian that he was interested in going into a new car agency. He asked that if Kasparian knew of any person similarly interested who had funds available that Kasparian should put that individual in contact with him. Later, defendant Gornish allegedly asked defendant Blank if he knew of someone in the automobile business who wanted to start an agency. Blank mentioned to Kasparian the inquiry of Gornish. Thereafter, Kasparian contacted Chilen-garian and introduced him to Blank; this conduct of Kasparian was not inconsistent with his assertion that he believed he was just aiding in a legitimate business transaction.

Secondly, Kasparian’s telephone call to Chilengarian, in which Kasparian allegedly stated it would be perhaps the following week when the final transaction would be made at the bank, provided no evidence concerning Kasparian inconsistent with a legitimate loan transaction for Chilengarian’s business.

The final contact was Kasparian’s presence in Blank’s car during the drive to the bank, his witnessing Blank’s transfer of the securities to Chilengari-an, and Kasparian’s observation of these certificates. Again, Kasparian’s conduct was consistent with a car ride with his friend Blank to finalize a legitimate business transaction; nothing in the testimony concerning the drive to the bank could be interpreted as indicating that Kasparian knew this loan transaction was not legitimate. It is undisputed that Kasparian remained in the car while Chilengarian and the informant entered the bank to pledge the securities.

Given the obligation of the Government to prove guilt beyond a reasonable doubt, we find as a matter of law that the evidence as to Kasparian was insufficient to sustain the conviction.

We have considered the other contentions raised by the defendants and find them without merit.

The judgment of the district court as to defendant-appellant Kasparian will be reversed and its judgments as to the other defendants-appellants will be affirmed.

      . For an excellent discussion of tlie facts in detail, see United States v. Weinberg, 345 F.Supp. 824 (E.D.Pa.1972).
      Several of the defendants were also charged with a substantive violation of 18 U.S.C. § 2315, but the jury found them not guilty of this offense.

      . 18 U.S.C. § 2315(H 1) (1971) : “Whoever receives, conceals, stores, barters, sells, or disposes of any goods, wares, or merchandise, securities, or money of the value of $5,000 or more, or pledges or accepts as security for a loan any goods, wares, or merchandise, or securities, of the value of $500 or more, moving as, or which are a part of, or which constitute interstate or foreign commerce, knowing the same to have been stolen, unlawfully converted, or taken [shall ‘be fined not more than $10,000 or imprisoned not more than ten years, or both’].”

      . In its opinion denying posttrial motions, the district court shifted its position from that taken in its charge and held that the date of the original theft controlled and that there was undisputed evidence of value in excess of the jurisdictional amount at that time. United States v. Weinberg, 345 F.Supp. 824, 833 (E.D.Pa.1972). Since this was not the district court’s position in the jury instruction, we need not decide whether the court’s later version of the law is correct.

      . In 1972, Fed.R.Crim.P. 41(e) (1971) (Motion for Return of Property and To Suppress Evidence) was amended and now comprises Fed.R.Crim.P. 41(e) (Motion for Return of Property) and 41(f) (Motion To Suppress). Fed.R.Crim.P. 41(f) (1972) states: “A motion to suppress evidence may be made in the court of the district of trial as provided in Rule 12.” Our holding is equally applicable to a motion to suppress made pursuant to the 1972 Rule 41(f).

      . We think, -yhen feasible, such reports should be prepared immediately after the events they purport to reflect.

      . The district court also mentioned a fourth contact: “Kasparian introduced Chilen-garian to the informer.” 345 F.Supp. at 830. The testimony indicated Kasparian introduced Chilengarian to Blank and then Blank introduced Chilengarian to the informer, but we find no testimony that Kasparian introduced Chilengarian to the informer nor does the Government refer us to any such testimony.


author: MANSFIELD, Circuit Judge:

text:
    Complaint of CHINESE MARITIME TRUST, LTD., Plaintiff-Appellant, as Owner of the STEAMSHIP SIAN YUNG, for Exoneration from or Limitation of Liability. REPUBLIC OF VIETNAM and Tong Cuoc Tiep Te (General Supply Agency) and Union Textile Corp., et al., Cargo Claimants, v. PANAMA CANAL COMPANY, Appellee.
    No. 747, Docket 72-1968.
    United States Court of Appeals, Second Circuit.
    Argued April 23, 1973.
    Decided April 30, 1973.

      David C. Wood, New York City, (Daniel K. Read, Hill, Betts & Nash, New York City, of counsel), for plaintiff-appellant.
    Philip A. Berns, Atty., Admiralty and Shipping Section, Dept, of Justice (Harlington Wood, Jr., Asst. Atty. Gen., Whitney North Seymour, Jr., U. S. Atty., S. D. New York, Gilbert S. Fleischer, Atty. in Charge, and Warren A. Schneider, Atty., Admiralty and Shipping Section, New York, Dept, of Justice, New York City, of counsel), for Panama Canal Co.
    Before BREITENSTEIN, KAUFMAN and MANSFIELD, Circuit Judges.

       Of the United States Court of Appeals for the Tenth Circuit, sitting by designation.

   MANSFIELD, Circuit Judge:

On December 6, 1970, the S.S. Sian Yung, owned by Chinese Maritime Trust Ltd., sank in the Panama Canal. Since the sunken hull obstructed travel by vessels in this heavily traversed navigable waterway, removal efforts were commenced by the Panama Canal Company (“Canal Co.”), an agency of the United States, after the latter had been advised by the owner that it had abandoned the vessel to its insurance underwriter and that the underwriter did not intend to undertake removal of the vessel. Meanwhile the owner, faced with cargo claims of at least $1.6 million and a claim by the Canal Co. for wreck removal expenses, which were then estimated at $800,000 by the owner and later at $2 million by the Canal Co., commenced a proceeding in the Southern District of New York for limitation of the owner’s liability to its interest in the vessel and her then pending freight, pursuant to the Shipowners’ Limited Liability Act, 46 U.S.C. §§ 183-185, 188 (“Limitation Act”), and Rule F of the Admiralty Rules. An ad interim stipulation of value for the wreck and its pending freight in the amount of $16,246.57 was approved, and the usual monition and restraining order enjoining the commencement of other proceedings in any jurisdiction for damages resulting from the casualty pending a determination in the limitation proceeding were given.

From an order of the district court declaring that the Canal Co.’s claim for wreck removal costs is not subject to limitation or the restraining order, the owner appeals. Subject to the conditions noted below, we affirm, substantially for the reasons stated in Judge Motley’s opinion, 361 F.Supp. 1175 (S.D.N.Y.1972).

The Limitation Act was enacted in 1851 as a measure designed to promote investment in American shipping in competition for world trade. It permits a shipowner to limit his liability to the amount of his interest in a ship and her pending freight “for any loss, damage, or injury by collision, or for any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred without the privity or knowledge of such owner or owners. . . .”46 U.S.C. § 183(a). The Act must be construed, however, in the light of subsequently-enacted legislation and regulations designed to insure that our country’s navigable waterways will be kept free of obstructions. Section 15 of the Rivers and Harbors Act of 1899, 33 U.S.C. § 409, sometimes called the Wreck Removal Act, for instance, provides that

“whenever a vessel, raft, or other craft is wrecked and sunk in a navigable channel, accidentally or otherwise, . it shall be the duty of the owner of such sunken craft to commence the immediate removal of the same, and prosecute such removal diligently, and failure to do so shall be considered as an abandonment of such craft, and subject the same to removal by the United States as provided for in sections 411 to 416, 418, and 502 of this title.”

In Wyandotte Transportation Co. v. United States, 389 U.S. 191, 205, 88 S.Ct. 379, 19 L.Ed.2d 407 (1967), the Supreme Court, holding that where a ship was negligently sunk in navigable waters and thereafter abandoned, the Government could recover wreck removal costs from the shipowner, indicated that the recovery would not be subject to limitation under the Limitation Act, since the owner would have had “privity or knowledge” within 46 U.S.C. § 183(a). Speaking for a unanimous court, Justice Fortas noted that “the duty imposed by and the remedy provided in the final clause of § 15 [are] not prescribed only for owners of negligently sunk vessels. Those provisions apply ‘whenever a vessel . . is wrecked and sunk in a navigable channel, acciclentally or otherwise. We believe the sections noted by petitioners are intended to protect the United States against liability for removing a sunken vessel if it chooses to do so.” (Emphasis supplied). 389 U.S. at 206-207, 88 S.Ct. at 388.

Pursuant to the Canal Zone Code, ch. 81, Shipping and Navigation § 1331 (which authorizes the President to prescribe regulations governing the passage and control of vessels through the Panama Canal) and 3 U.S.C. § 301, in turn, President Johnson, by Executive Order 11305, delegated to the Secretary of the Army the power to adopt regulations pertaining to the removal of wrecked vessels from the Canal. Thereafter Title 35, ch. 1, of the Code of Federal Regulations was adopted, which provides in § 117.5 that when a vessel becomes an obstruction in the Panama Canal the Canal authorities may remove it without awaiting permission of the owner and that unless the Canal Co. is subsequently found responsible for the accident or condition necessitating the removal of the wreck, the necessary expenses incurred by it shall be a proper charge against the owner.

Thus, although responsibility for expenses incurred in removing a wreck from the Panama Canal may ultimately be laid at the door of the negligent party or parties, the immediate obligation to remove the obstruction has been imposed, both by statute and by regulation, upon the shipowner, regardless whether the sinking was caused by his negligence. Confronted with this duty the owner cannot contend that its failure to remove the vessel and the consequent expense of removal incurred by the Canal Co. is “without [its] privity or knowledge,” which is a condition precedent to its invocation of the Limitation Act. To hold otherwise would be to permit the owner, by limiting its liability to the value of the sunken hull, to thwart the strong public policy in favor of creating an incentive on the part of the owner promptly to remove its obstructing ship from navigable waterways. See Wyandotte Transportation Co. v. United States, 398 U.S. 191, 88 S.Ct. 379, 19 L.Ed.2d 407 (1967); In re Pacific Far East Line, Inc., 314 F.Supp. 1339, 1349 (N.D.Cal.1970). We therefore hold that the Canal Co.’s claim is not limitable. Accordingly it may be the subject of an in personam suit by the Canal Co. against the shipowner. In so holding we intimate no view as to the merits of the Canal Co.’s claim or the defenses or counterclaims that may be asserted by the owner against it.

More troublesome is the owner’s contention that, regardless whether the Canal Co.’s claim is not limitable, all claims arising out of the sinking of the Sian Yung should as a matter of equity be prosecuted solely in the pending limitation proceeding rather than become the subject of litigation in other districts, with possible multiple trials of the same issues and duplicative proliferation, waste and inconvenience for all concerned. In support of this position the owner relies principally upon Justice Frankfurter’s espousal in Maryland Casualty Co. v. Cushing, 347 U.S. 409, 415, 74 S.Ct. 608, 98 L.Ed. 806 (1954), of the limitation proceeding as providing the “benefit of a concursus” in which all claims would be disposed of in one action.

Although the “concursus” theory has not' been looked upon with favor by this circuit, at least in cases where the fund may be adequate to satisfy all claims, see In re Lake Tankers Corp., 232 F.2d 573, reaffirmed en banc, 235 F.2d 783 (2d Cir. 1956), affd. sub nom. Lake Tankers Corp. v. Henn, 354 U.S. 147, 77 S.Ct. 1269, 1 L.Ed.2d 1246 (1957); Petition of Trinidad Corp., 229 F.2d 423, 428 (2d Cir. 1955); Petition of Texas Co., 213 F.2d 479 (2d Cir.), cert. denied, 348 U.S. 829, 75 S.Ct. 52, 99 L.Ed. 653 (1954); Gilmore & Black, The Law of Admiralty § 10-41 at 728-32 (1957), it is unquestionably true that if the Canal Co. pursued its claim for expenses of wreckage removal in a separate action in the Canal Zone, as it originally intended, the owner and perhaps some of the cargo claimants would be forced to engage in duplicative litigation of identical issues in these two widely separated districts. When we pointed this out upon oral argument counsel for the Government, recognizing that such a course would be wasteful and inconvenient not only for the parties but for the courts involved, commendably stated that he would recommend that the Canal Co. institute its suit against the owner in the United States District Court for the Southern District of New York. That course will permit litigation of all claims before one judge under that district’s individual calendar system, thus minimizing expense and delay. Accordingly, we affirm the decision of the district court on condition that all parties consent to litigation in the United States District Court for the Southern District-of New York of all claims arising out of the sinking of the S.S. Sian Yung.

      . On appeal the Canal Co. urges that expenditures it has made to clean up oil pollution resulting from leakage from the sunken vessel give rise to a claim under relevant portions of the Oil Pollution Act, 33 U.S.C. § 1161(a)(5), (b)(1), (f)(1), (n), which it argues is also not subject to limitation. As that contention was not presented to or considered by the district court, however, it is not properly before us on appeal and we do not pass on its validity.

      . Recently, moreover, the Supreme Court, in unanimously upholding Florida’s Oil ■Spill Prevention and Pollution Control Act over the proffered objection that the federal Water Quality Improvement Act of 1970, 33 U.S.C. § 1161 et seq., precluded state regulation, observed:
      “If Florida wants to take the lead in cleaning up oil spillage in her waters, she can use § 12 of the Florida Act and recoup her costs from those who did the damage. Whether the amount of costs she could recover from a wrongdoer are limited to those specified in the Federal Act and whether in turn this new Federal Act removes the pre-existing limitations of liability in the Limitation of Liability Act are questions we need not reach here. Any opinion on them is premature. It is sufficient for this day to hold that there is room for state action in cleaning up the waters of a State and recouping, at least within federal limits so far as vessels are concerned, her costs.” Askew v. American Waterways Operators, Inc., 411 U.S. 325, 332, 93 S.Ct. 1590, 1595, 36 L.Ed.2d 280 (1973).
      While the question of the effect of later statutes of Congress on the Limitation Act is thus left open, the policy of allowing recoupment of wreck removal or cleanup expenses incurred by government agencies which have undertaken these tasks is evident.

      . “§ 117.5 Control of wrecked, injured, or burning vessels.
      “When a vessel in Canal Zone waters goes aground, or is wrecked, or is so injured that it is liable to become obstruction in such waters, or is on fire, the Canal authorities shall have the right to supervise and direct, or to take complete charge of and conduct, all operations which may be necessary to float the vessel, to clear the wreckage, to remove the injured vessel to a safe location, or to extinguish the fire, as the case may be. The Canal authorities may, when neees-sary, take such action without awaiting the permission of the owner or agent of the vessel, and may require the master of the vessel and all persons under his supervision and control to place the vessel, and all equipment on board, at the disposal of the Canal authorities without cost to the Canal. Unless the Panama Canal Company is subsequently found and determined to be responsible for the accident or the condition necessitating action by the Canal authorities, the necessary expenses incurred by the Canal in carrying out the provisions of this section shall be a proper charge against such vessel, her owners and/or her operators.”

      . It is true that the owner may fail to perform its “duty to commence the immediate removal” of the wreck, 33 U.S.C. § 409, and that its “failure to do so shall be considered as an abandonment of such craft,” id. However, § 409 does not provide the limits of the owner’s responsibility in the matter. Upon abandonment the owner risks exposure to heavy personal liability for wreck removal expenses incurred by the Government if the latter proves that the sinking was due to the owner’s negligence. See Wyandotte Transportation Go., supra.

      In In re Highland Nav. Corporation, 24 F.2d 582, 584 (S.D.N.Y.1927), affd, 29 F.2d 37 (2d Cir. 1928), the district court stated that “a shipowner whose vessel has been wrecked and sunk without his fault has a right to abandon it and . is not under any obligation ... to remove it” in view of § 20 of the Rivers and Harbors Act, 33 U.S.C. § 415, which provides that wreck removal expenses incurred by the Government “shall be a charge against such craft and cargo.” However, that conclusion has been superseded by the Supreme Court’s later statement in Wyandotte that the quoted language of § 20 “does not lead to the conclusion that the Government possesses no other right to recover. The phrase merely describes the lien interest of the United States.” 389 U.S. 191, 208 n. 20, 88 S.Ct. 379, 389, 19 L.Ed.2d 407.

      . The shipowner’s performance of its duty to remove does not preclude it from seeking recovery of its wreck removal expenses from others to the extent that their negligence caused the wreck, just as the Canal Co. may recover such expenses from the shipowner to the extent that its negligence was a cause of the sinking. See United States v. Moran Towing & Transportation Co., 409 F.2d 961 (4th Cir. 1969) ; In re Marine Leasing Services, Inc., 471 F.2d 255 (5th Cir. 1973).


author: SWYGERT, Chief Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Chris CARDI and Virgil Cimmino, Defendants-Appellants.
    Nos. 72-1005, 72-1167 and 72-1159.
    United States Court of Appeals, Seventh Circuit.
    Argued Nov. 1, 1972.
    Decided April 16, 1973.
    Rehearing Denied No. 72-1005. July 2, 1973.

      Albert E. Jenner, Jr., Thomas P. Sul-ívan, Alan L. Metz, Robert S. Bailey, Chicago, 111., for defendants-appellants.
    James R. Thompson, U. S. Atty., William T. Huyck, Asst. U. S. Atty., Chicago, 111., Sidney M. Glazer, Kirby W. Patterson, Criminal Division, U. S. Department of Justice, Washington, D. C., for plaintiff-appellee.
    Before SWYGERT, Chief Judge, CASTLE, Senior Circuit Judge, and PELL, Circuit Judge.
   SWYGERT, Chief Judge.

Appellants .Cardi and Cimmino appeal their convictions of conspiracy to conceal, buy and sell narcotic drugs known to have been unlawfully imported and of three substantive counts charging the unlawful • sale of such drugs. Although separate appeals were filed by each defendant, on motion of the Government they were consolidated for purposes of oral argument and will be treated together for purposes of this opinion.

The Government’s evidence consisted primarily of testimony by two witnesses, Paul Moore, a law school student and paid informer for the Bureau of Narcotics, and Federal Narcotics Agent Saul Weinstein. According to their testimony, Moore and Weinstein conceived the idea that they might infiltrate certain groups which they believed to be dealing in the Chicago area narcotics traffic by posing as partners trying to establish a narcotics business in the various college communities. Pursuant to that plan on September 13, 1970 Moore asked Micelli, a fellow employee at a restaurant where Moore worked part-time, if Micelli could provide a source for the sale of hard drugs to Moore and an unnamed partner who wanted to get in the campus drug business. Micelli referred Moore to his nephew, Virgil Cimmino, who he said could take care of him.

Subsequently on September 14, 1970 Moore went to Chris Cardi’s house where he explained his plans to Cimmino and requested that Cimmino get certain prices on heroin and cocaine from his sources. A meeting between Cimmino, Moore and Weinstein was set for September 16. Cimmino failed to keep the appointment. Moore located Cimmino at Cardi’s home on September 19 and asked him why he had not met them. Cimmi-no responded by saying that his sources had been out of town. Another meeting was arranged for the following evening. Weinstein failed to make that meeting, and Moore and Cimmino arranged another for the following evening. Cim-mino again failed to appear and this time both Moore and Weinstein went to Cardi’s house to find Cimmino. When they arrived they found Cimmino and Cardi standing beside Cimmino’s car talking together. Moore introduced Weinstein to Cimmino and the three discussed the plan to enter the narcotics business with Cimmino as the supplier. During this conversation, Cardi was leaning against Cimmino’s car and also walking on the lawn. There is no evidence, however, that he took part in the discussion.

Moore and Weinstein next met Cimmi-no in Elmwood Park, Illinois, where Cim-mino gave them a bag which he said contained four ounces of heroin. In exchange Moore gave him $4400. Upon testing the substance at a later time, Weinstein discovered that it was flour instead of heroin. Moore and Weinstein immediately began searching for Cimmi-no, but were unable to locate him. The next day they drove to Cardi’s house where Moore told Cardi about the bogus sale. Moore and Weinstein both testified that Cardi responded, “If it was anybody but you, I wouldn’t talk about the stuff. But I will check into it and do whatever can be done. You’ll get it.”

Two hours later Cimmino reached Moore by phone, saying: “Are you trying to get me killed ? . . . You’re going to get your stuff. Dickie [Cardi’s nickname] is on my back. He slapped me around and I lost my job collecting. I had five or six stops and I was making $150 a week.” Weinstein demanded that Cimmino produce real heroin or return the money. The next day Cimmino met Moore and Weinstein and gave them four ounces of heroin. This sale was the basis of Count III of the indictment.

On September 30 Cimmino agreed to procure an additional eight ounces of heroin for Moore. The following day, October 1, he delivered a sock containing the heroin to Moore and Weinstein at a restaurant in Chicago. Moore paid Cim-mino $8800 for the heroin and asked Cimmino to arrange for a fürther sale of eight ounces of cocaine for $8000. This order was confirmed by a telephone conversation between Cimmino and Moore on October 13. The delivery was made on October 15 when Cimmino delivered the drugs in a black sock and received the $8000. The October 1 sale was charged in Count V of the indictment and the October 15 sale in Count VII. Both Cardi and Cimmino were found guilty of Counts III, V and VII.

Although the October 15 sale was the last actual sale, Moore and Cimmino continued to have telephone conversations concerning possible future sales. Moore’s attempt to arrange a meeting with Cimmino’s source was unsuccessful, but he did manage to tape a phone conversation in which Cimmino made numerous references to Cardi. Over the defendants’ objection, that recording was played for the jury and they were given written copies to follow while it was being played.

The remaining Government evidence consisted of testimony by two narcotics agents that on November 25 they observed Cimmino and Micelli drive to Cardi’s house and go inside. Shortly thereafter Cardi and Cimmino left the house and returned half an hour later accompanied by Micelli. The three defendants remained in the house for approximately thirty minutes before Cim-mino and Micelli left and drove home.

Cimmino, testifying in his own behalf, related a different version of the facts. Cardi, who did not testify, relies heavily on Cimmino’s testimony. According to Cimmino, the plan to sell narcotics was conceived by Moore and forced upon him. Cimmino stated that he owed Moore money and that he had feared Moore because he believed that Moore had been responsible for a gunshot wound he had received from a passing car in 1968. Nevertheless, Cimmino admitted that in 1970 he had been spending considerable time with Moore on a social basis. It was during this time, according to Cimmino, Moore proposed that they “screw” a rich person that he knew. Moore suggested that they do this by selling him flour instead of heroin. Cimmino told Moore that he wanted no part of it and he intentionally failed to show up for several meetings which Moore arranged. Under mounting pressure from Moore, Cimmino finally agreed and did in fact give Wein-stein four ounces of flour in exchange for $4400 which he was to split with Moore. Cimmino stated that he was puzzled when Moore and Weinstein came looking for him and that he tried to call Moore to find out what was wrong. When Cimmino finally reached Moore, after Moore and Weinstein had talked to Cardi, Moore gave the phone to Wein-stein who threatened to kill Cimmino if he failed to deliver the real heroin. Cimmino testified that he later called Moore and complained to him about Weinstein’s threat and that Moore apologized, but said that the phony heroin deal hadn’t worked, and that he should produce real heroin. Cimmino admitted that, out of fear for his life and the lives of his family, he had sold heroin to Moore and Weinstein.

I

Cimmino, who was convicted on all seven counts of the indictment, raises two questions in his appeal. The defense of entrapment as a matter of law was urged upon the trial court and is reasserted here. Cimmino also argues that he was sentenced under the wrong statute. Because appellant Cardi raises the same issue, we reserve the sentencing question for discussion at the end of this opinion.

Concerning the entrapment defense, we hold that the trial judge properly submitted the question to the jury. The Supreme Court ruled in Sherman v. United States, 356 U.S. 369, 78 S.Ct. 819, 2 L.Ed.2d 848 (1958), that where the evidence of entrapment is controverted “the issue of whether a defendant has been entrapped is for the jury as part of its function of determining the guilt or innocence of the accused.” Sherman, 356 U.S. at 377, 78 S.Ct. at 823.

Cimmino argues that although the “issue of entrapment is generally a question of fact for the jury,” the evidence in this ease was of such a nature as to require a court determination that Cim-mino was entrapped as a matter of law. Relying on Sherman, where the Supreme Court did find the entrapment as a matter of law existed, Cimmino argues that it was error to give the issue to the jury. We do not agree.

In Sorrells v. United States, 287 U.S. 435, 53 S.Ct. 210, 77 L.Ed. 413 (1932), the Supreme Court drew the crucial distinction in entrapment cases between ensnaring an innocent citizen in a government conceived and instigated plan for the perpetration of an illegal act and “merely afford [ing] opportunities and facilities” for the criminally predisposed to act. Sorrells, 287 U.S. at 441, 53 S.Ct. 210. See also United States v. Haden, 397 F.2d 460, 466 (7th Cir.1968). Predisposition is the determinative factor where, as here, it is conceded by the Government that the criminal scheme originated with its agents. As is often the ease, proof relative to the predisposition question was contradictory and in the final analysis reduced itself to a question of witness credibility. That in turn must be weighed and resolved by the jury.

Appellant’s reliance on Sherman for the proposition that the trial court committed error in not finding entrapment as a matter of law is clearly misplaced. The Court carefully pointed out in Sherman:

In so holding, we are not choosing between conflicting witnesses, nor judging credibility. . . . We reach our conclusion from the undisputed testimony of the prosecution’s witnesses. Sherman, 356 U.S. at 373, 78 S.Ct. at 821.

Therein lies the difference between this case and Sherman, for here the evidence that Cimmino readily agreed to engage in the criminal enterprise and later sought to increase its volume was sufficient to justify giving the case to the jury. The fact that Cimmino’s testimony disputed the Government’s evidence of willingness or predisposition merely makes it a credibility question.

II

Appellant Cardi urges numerous grounds for reversal. First, he contends that the only evidence which connects him with Cimmino in the alleged conspiracy is the September 23, 1970 conversation in which Moore related how Cimmino had “burned” them with flour instead of heroin. It is contended that Cardi’s response, “If it was anybody but you, I wouldn’t talk to you about the stuff. But I will check into it and do whatever can be done. You’ll get it,” was not sufficient to support a finding that Cardi knowingly and willfully joined a conspiracy to violate the narcotics laws. We think differently.

In resolving the question we must determine whether all the evidence when viewed in the light most favorable to the Government and considering the jury’s right to weigh the evidence, determine credibility, and draw justifiable inferences, could fairly support a verdict of guilt beyond a reasonable doubt. Applying this standard, we find sufficient evidence in the record upon which the jury could reasonably have inferred a conspiracy between Cardi and Cimmino. Both Government agents testified that during their September 23 conversation with Cardi, in which they complained about the flour Cimmino had given them instead of heroin, they told him of their dealings with Cimmino and that he responded:

I said, “Dickie, I want to talk to you about Virgil.” He said, “Sure, what is it?” I said, “Well, you know we are doing business with him buying stuff.” He said, “Stuff?” I said, “Yes, heroin. He burned us. He gave us four ounces of flour or something and took $4,400 last night for it.”
Q. Did he respond to that?
A. Yes, sir. Cardi said, “If it was anybody but you, I wouldn’t talk to you about the stuff.” He said, “But I will check into it and do whatever can be done.” I said “Thanks, I really need the stuff.” He said, “You’ll get it.” I left. .

Immediately following this conversation, Cimmino phoned Moore and Weinstein and told them “you’re going to get your stuff, Dickie is on my back.” The heroin was in fact delivered shortly thereafter.

Such evidence also satisfied the requirement that the government prove an individual defendant’s participation in an unlawful conspiracy by his own words and actions and not those of other participants. United States v. Fella-baum, 408 F.2d 220, 226 (7th Cir.1969); United States v. Corallo, 413 F.2d 1306, 1324 (2d Cir.1969). We noted in United States v. Hickey, 360 F.2d 127, 138 (7th Cir.1966), “A conspirator need not participate in all the activities of the conspiracy, nor is it necessary that he become a member of the conspiracy at its inception . . : it is only necessary that he knowingly contribute his efforts in furtherance of it.” The evidence was, therefore, legally sufficient, if believed by the jury, to support a finding of guilty on the conspiracy count.

In so holding we expressly reject the argument that it was improper to infer Cardi’s participation in a conspiracy from the single transaction proved here. Citing United States v. Stromberg, 268 F.2d 256, 267 (2d Cir.1959), and United States v. Reina, 242 F.2d 302 (2d Cir.1957), Cardi argues that the single isolated transaction whereby he facilitated the first sale is insufficient to justify the inference of participation in a conspiracy. Stromberg and Reina both reversed conspiracy convictions where the defendant’s involvement with an established conspiracy was limited to a single transaction. Superficially these eases would seem to control here; they are, however, distinctly different. In both cases, the evidence failed to establish that the defendants who engaged in a single illegal transaction with an established conspiracy “knew or accepted the conspiratorial aims.” That is not the situation here where the testimony of both agents indicates that Cardi was told about the narcotics transactions among Cimmino, Moore and Weinstein and voluntarily offered to intervene and facilitate one such transaction. It is Cardi’s knowledge of the transaction between Moore and Cimmino and his'willingness to facilitate it that distinguishes this case from Stromberg and Reina. A single act may be sufficient “to draw a defendant within the ambit of a conspiracy” where the act is such “that one may infer from it such an intent (to participate in an unlawful enterprise) or the Government submit[s] independent evidence that the defendant knew of the conspiracy and associated himself with it.” United States v. Bentvena, 319 F.2d 916, 927-928 (2d Cir.1963); Ingram v. United States, 360 U.S. 672, 680, 79 S.Ct. 1314, 3 L.Ed.2d 1503 (1959); United States v. Aviles, 274 F.2d 179, 189 (2d Cir.1960).

Further, it is not necessary that a defendant have knowledge of each and every detail of a plan or conspiracy; it is enough when he knows its essential nature. United States v. Fellabaum, 408 F.2d at 224. The jury could legitimately infer from Cardi’s statement that he knew of the plan between Cimmino, Moore and Weinstein to sell narcotics and voluntarily assisted and facilitated its accomplishment to the extent of the September 25 sale.

III

With respect to Count III, charging the unlawful sale of narcotics on September 25, 1970, Cardi argues in the alternative that it was error to permit various. hearsay declarations by Cardi and his coconspirators to be used against defendant Cardi, and that, even if admissible, the evidence was insufficient to establish guilt beyond a reasonable doubt. We disagree with both contentions.

Our holding that the evidence established a prima facie conspiracy in which Cardi knowingly partook, at least so far as the September 25 sale charged in Count III is concerned, disposes of appellant’s arguments relating to the admissibility of Cardi’s own statement and the Cimmino-Moore phone conversation. Once the conspiracy was established these statements were properly received against Cardi. Krulewitch v. United States, 336 U.S. 440, 453, 69 S.Ct. 716, 93 L.Ed. 790 (1949).

As to Cardi’s challenge to the sufficiency of the evidence relating to Count III, we find that his statement to Moore that he would check into Cimmino’s deception and that Moore would get his “stuff,” coupled with Cimmino’s uncontradicted statement that “Dickie is on my back,” and the fact that Cimmino immediately thereafter delivered the heroin is sufficient evidence to support a conviction for the substantive offense.

IV

Counts V and VII charge Cardi with substantive violations of 21 U.S.C. § 174 for the October 1 and 15 heroin sales. Cardi challenges the sufficiency of the evidence supporting his conviction on these counts asserting that even if the hearsay declarations discussed above were properly admitted there was no evidence to connect him with the sales. We agree.

As we have noted above, Cardi’s participation in the conspiracy to sell drugs was established only so far as the September 25 sale was concerned. The conspiracy, so far as Cardi was concerned, ended at that time. The evidence of the conspiracy could not properly be used to support a conviction on the later sales. In addition, none of the evidence relating to the October 1 and 15 sales implicated Cardi in any manner. The government’s proof established that Cimmino and Moore arranged for these sales and that Cimmino’s source was a man named Carioscia, not Cardi. The record is barren of any evidence showing that Cardi participated in or facilitated these sales as he did the September 25 sale. Indeed, there is no evidence that Cardi even had knowledge of these sales. The Government’s attempt to prove Cardi’s participation and knowledge by the recorded telephone conversation between Cimmino and Moore (footnote 2) is unconvincing. A fair reading of that confusing statement renders it more exculpatory than inculpatory so far as Cardi is concerned. It would appear from Cimmino’s statements that Cardi, while not objecting to Cimmino’s involvement with drugs, did not want to be associated with it. The only other evidence which conceivably could have been used to support conviction on these counts is testimony by Government surveillance agents that Cimmino and Micelli visited Cardi at his home on November 25, 1970. Such evidence, without some fact upon which the jury could legitimately infer that the sales in question were discussed, is completely insufficient to justify the guilty verdict. Accordingly, we hold that the trial judge erred in not directing a verdict of acquittal on Counts Y and YII.

Cardi contends that the indictment charging both conspiracy and substantive offenses based upon the same evidence represented an abuse of prosecutorial discretion because it was intended to impress the jury with multiple charges. While we agree that in certain instances multiple charges based upon the same conduct may be prejudicial to a defendant’s right to a fair trial, we do not believe such was the case here. It was proper for the Government to charge Cardi with conspiracy while at the same time charging him with substantive crimes arising out of the overt acts. The substantive offenses did not merge into the conspiracy, Pinkerton v. United States, 328 U.S. 640, 643, 66 S.Ct. 1180, 9 L.Ed. 1489 (1946), and the number and nature of the charges here cannot be said to have been designed to overwhelm the jury.

V

Both Cardi and Cimmino were convicted and sentenced under 21 U.S.C. § 174 and 26 U.S.C. § 7237. Cardi was sentenced on October 29, 1971 to serve a total of ten years in prison: five years on the conspiracy count and, consecutive thereto, three concurrent five year sentences on each of' the substantive counts. Cimmino was sentenced on the same day to a similar séntence with his six five year sentences on'the substantive counts to run concurrently but consecutively to the sentence on the conspiracy count. Under 26 U.S.C. § 7237(d) neither appellant was eligible for suspension of sentence, probation, or parole.

In October 1970 Congress repealed sections 174 and 7237(d) and replaced them with the Comprehensive Drug Abuse Prevention and Control Act of 1970. This Act, which took effect six months before appellants’ trial, contains no provision for a mandatory minimum sentence or exemption from the suspension of sentence, parole and probation provisions of 18 U.S.C. § 4208 as did section 7237(d).

Relying on the new provisions both Cardi and Cimmino filed motions to be resentenced under the new Act. The motions were denied and appeals were taken. Those appeals have been consolidated with the appeals from the original convictions and are therefore considered here.

It is appellants’ contention that neither the “savings clause” of the new Act, section 1103(a) nor the general “savings clause” of the Federal Statutes, 1 U.S.C. § 109, mandate sentencing under the old Act because they refer only to “prosecutions” for violations occurring prior to the effective date of the new Act. It is their theory that the word “prosecutions” refers only to the proceedings up to and including the verdict and judgment thereon. Sentencing would, therefore, be outside the savings clause allowing defendant charged under the old Act but not sentenced until after the adoption of the new to be sentenced under the new Act.

At the time the parties filed their briefs in this appeal, a conflict existed between this circuit and the First Circuit as to the availability of suspended sentences, paroles or probations under section 4208. This court held in United States v. McGarr, 461 F.2d 1 (7th Cir.1972), that although the penalty provisions of the old Act requiring a five-year minimum sentence was “saved,” the prohibition against suspended sentences, parole and probation was not. The First Circuit took the opposite position in Bradley v. United States, 455 F.2d 1181 (1st Cir.1971). The Supreme Court granted certiorari in Bradley and has recently resolved the question of the availability of the sentencing alternatives of section 4208 adversely to appellants. Bradley v. United States, 410 U.S. 605, 93 S.Ct. 1151, 35 L.Ed.2d 528 (1973).

In Bradley, the Court held:

Section 1103(a) clearly makes parole unavailable under the latter provision. [18 U.S.C. § 4208(a).] As we have said, sentencing is part of the prosecution. The mandatory minimum sentence of five years must therefore be imposed on offenders who violated the law before May 1, 1971. And Congress specifically provided that § 4208(a) does not apply to any offense “for which there is provided a mandatory penalty.” Pub.L. 85-752, § 7, 72 Stat. 847 (1958). In any event, the decision to make early parole available under § 4208(a) must be made “[u]pon entering a judgment of conviction,” which occurs before the pros-ecutioh has ended. Section 1103(a) thus means that the District Judge cannot specify at the time of sentencing that the offender may be eligible for early parole.

We therefore reject appellants’ contention that they were improperly sentenced.

For the reasons stated, the convictions of appellant Cimmino are affirmed on all counts. As to appellant Cardi, they are affirmed on Counts I and III and reversed on Counts V and VII.

      . Appellants Cardi and Cimmino, together with a codefendant, Frank Micelli, were charged in a seven count indictment w.hich, in addition to the conspiracy and substantive counts mentioned above, contained three counts charging sales of narcotics without the required order form in violation of 26 U.S.C. § 4705 (a). Appellant Cardi was acquitted of the section 4705(a) counts, but was found guilty on the conspiracy count and the three substantive counts charging individual sales. Cimmino was convicted on all seven counts including the conspiracy, substantive sales, and section 4705(a) transactions. Micelli was found not guilty of all counts.

      . The pertinent parts of that conversation are:
      Cimmino: Yea, ya know I told, I told Dick.
      Moore: Ya.
      Cimmino: I told him that you checked it out and everything.
      Moore: Ya.
      Cimmino: I told him I said, I called Paul and he checked it out. I said, he says, ya know, wa how does he know its IRS; ya know, what I mean ? I says he cheeked it out!
      Moore: Ya.
      Cimmino: Ya know.
      sk ?k :k sk * ik
      Moore: It’s not IRS, its all, IRS is federal.
      Cimmino: Ya that the little FBI ah?
      Moore: Na its a, the little FBI is the IBI, the state.
      Cimmino: But this guy is internal revenue he’s gotta be watchin ah my uncle, right?
      Moore: Ya it looks like he’s
      Cimmino: I’m right here, that why I’m talking like this. I’m on Grand and Harlem.
      Moore: Oh, yea ?
      Cimmino: Yea.
      Moore: Oh, I thought you were in that tavern.

        :¡; :¡: i>. &
      Cimmino: He ain’t just going to come up with a big one and say, “Well, here, here’s for your guys.” Because it is I don’t know. If he wants it tell him I’ll give it to him for nine, it amounts to the same fucking price.
      Moore: Yeah, lie’s a little afraid of the other guy too, I don’t think he’ll deal with ya anymore. But I’m going to try to find him. I saw him.
      Cimmino: What other guy? Don’t even mention it on the phone. The guy that you approached.
      Moore: No, D.C.
      Cimmino: Yeah, but what makes him' afraid of this other guy? You should tell him I’m not with him.
      Moore: I told him, but he says that guy controls Yirgil and he doesn’t want to be dealing with that stuff, and we’re going to get in trouble with him.
      Cimmino: He don’t have to know a mother fucking thing. He don’t have to know nothing, just tell him I’m not with the guy, that’s all. I’m on my own tell him that’s the only fucking thing you can tell him.
      Moore: What do I do when he calls me?
      Cimmino: What do you mean when he calls you?
      Moore: When Dick calis me. He says, “What is he doing with you, who are you?”
      Cimmino: Well, he knows that I go to the Bear and talk to you, what the fuck that’s no problem. 1-Ie knows that I’m out with somebody else fucking around do you understand what I’m talking about?
      Moore: Yeah.
      Cimmino: I mean, he knows where I’m running with the guys from 26tli Street. What the fuck you know what I mean, he knows what I’m doing. Yeah I gotta be here because I got a little money on me, are you nuts or what? He don’t know what I got every time he sees me I’m broke, do you understand?
      Moore: Yeah, yeah.
      Cimmino: He gives me money, do you understand that? What the fuck he don’t know what I’m doing. The only reason why he says that is because of the fucking uncle. Do you understand? He made a crack, you know my uncle, he makes a big thing out of things, and this is what happened. Do you what he told me right to my face? He says, if you want to do it go ahead you’ll make a ton of money. But you know what he said?
      Moore: What?
      Cimmino: He says I can’t afford the heat around me. You understand that? He says I can’t afford no heat like that around me . He says I got enough, this is the truth now. He says you ought to go do it he says you’d make a ton of fucking money.
      Moore: Well then he did tell you to do it.
      Cimmino: Yeah, he says go ahead, but you can’t come around me too much he says because, now this is between us Paul.
      Moore: Yeah, I would never tell anybody that Dickie told you to do it.
      Cimmino: This is between us.
      Moore: Yeah.
      Cimmino: He says go ahead make yourself a ton of money. But he says I can’t afford that kind of heat on me. You know.
      Moore: Yeah.
      Moore: Yea, well, I’m going to try to find the Jew I’m going to tell him first of all, that as far as Dickie is concerned, there’s no heat from him. He don’t care that you do it or not. He told you to go ahead and do it.
      Cimmino: Bight, but he just don’t want me, y.ou know.
      Moore: To bo around him when you do it.
      Cimmino: Bight.
      Moore: OK, ah, this will relieve a lot of his tension, you call me tomorrow, or see me tonight.
      Cimmino: Can I ask you one thing, this don’t make sense.
      Moore: Yea.
      Cimmino: If you tell this guy that Dick continued what I’m doing and there ain’t nothing said, what’s the difference if he deals with me? Does that make sense? What the fuck does he have to meet my guy, you understand? My guy says what the fuck does he gotta meet me for when I got you.

      . The “savings” clauses involved provide: Public Law 91-513, § 1103, “for any violation of law occurring prior to the effective date of Section 1101 shall not be affected by the repeals or amendments made by such section or abated by reasons thereof;” 1 U.S.C. § 109, “The repeal of any statute shall not have the effect to release or extinguish any penalty, forfeiture, or liability incurred under such statute, unless the repealing act shall so expressly provide, and such statute shall be treated ns still remaining in force for the purpose of sustaining any proper action or prosecution for the enforcement of such penalty, forfeiture, or liability. . . .”


author: DUNIWAY, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Clifford Paul COLEMAN, Defendant-Appellant.
    No. 72-1232.
    United States Court of Appeals, Ninth Circuit.
    May 7, 1973.

      Robert Rothman, San Francisco, Cal., for defendant-appellant.
    John Cooney, Asst. U. S. Atty., San Francisco, Cal., for plaintiff-appellee.
    Before DUNIWAY and CARTER, Circuit Judges, and WILLIAMS, District Judge.

       Honorable David Williams, United States District Judge, Central District of California, sitting by designation.

   OPINION

DUNIWAY, Circuit Judge:

Appellant was convicted in a trial without a jury and sentenced for refusal to submit to induction into the armed forces in violation of 50 U.S.C.App. § 462. We reverse. We state the facts appearing in Coleman’s selective service file to the extent that they are pertinent to our decision.

In Coleman’s classification questionnaire, which he filed with the Board on January 10, 1968, he answered question 2, in Series XI, which asked whether he had any physical condition which in his opinion would disqualify him, by stating: “Migraine headaches.” He also sent the Board a doctor’s letter to that effect which the Board received on January 10. On April 3 the Board directed him to report to the Board’s medical adviser for an interview, which he did on April 11, 1968. The report of the Board’s medical adviser was: “Neurological disorder Sec XV 2-31(2). Has frequent recurrences incapacitating for work.” The Board did not reclassify him on the basis of this information. We infer that it forwarded the file to the State Director of Selective Service, because, on April 24 the State Director wrote to the Board and instructed it to “Forward registrant for preinduction physical examination when reached for that purpose with his age group.”

On October 10, 1968 the Board classified Coleman I-A. On November 6, 1968, Coleman appealed on the ground that he was improperly classified because of his migraine headaches. So far as appears, nothing was ever done with this appeal. For all we know, it remains pending and undecided to this day. Be that as it may, the Board, on February 19, 1969, wrote to Coleman stating that the facts recited in the letter in which he appealed did not warrant reopening.

On May 21, 1969 Coleman was ordered to report for a physical examination, which he did on June 27. The examining doctor found “Physically disqualified — severe migraine headaches. Reexamination believed to be justified within one year.” On July 8, 1969, the Board classified Coleman I-Y. On May 20, 1970 Coleman was ordered to report for another physical examination on June 22, 1970, which he did. Thereafter the Board sent Coleman a statement of acceptability which recited that he had been found fit but also stated: “Registrant advised to present medical evidence to support unverified ailment.” Coleman did so, but nothing happened. On July 21, 1970, the Board reclassified Coleman I-A. Coleman did not appeal.

On September 22, the Board ordered him to report for induction on October 21. Coleman reported. A notation in his file states: “10-21-70 Pending Medical for INDUCTION.” On November 16, the Board ordered him to report again to AFEES on November 30, with the statement: “If you are found acceptable you will be INDUCTED, so please go prepared.” On November 30 Coleman was examined by an AFEES neurologist. The neurologist’s conclusions are as follows:

PT. [patient] has approx, [approximately] once per mth. [month] severe headaches unrelieved by Cafergot orally. Also has muscle contraction headaches more frequently. PT. has not been tried on the various anti-migraine preps, [preparations] available. Neg. [negative] family hx. [history] of migraine.
IMP. [impression] = Muscle Contraction Headaches (Tension) c [with] probable Migraine Variant Headaches as well.
Recommend = (1) Bellergol Space-tabs, ÍT [2 tabs] i" [1 tab] in A.M. & T [1 tab] in P.M.
2. Pt. should be tried on various anti-migraine meds. [medications] if Bel-lergol is ineffective before pt. should be regarded as unfit for active duty. Meanwhile pt. is fit for [active] duty.

It is doubtful that the Board ever saw this report until after Coleman refused induction. Be that as it may, Coleman appeared on December 8, 1970 for induction. His file does not contain any order to do so. He refused to be inducted.

We recite the foregoing record in part because it shows that, from January 10, 1968 on, Coleman continuously asserted that he was disqualified because of migraine headaches. There is ample evidence in .the record that he did have such disqualifying headaches, including letters from two doctors who had had him under treatment for 8 or 10 years and from an employer who was forced to discharge him because of the problem, the finding of the Board’s medical advisor, and the June 27, 1969 finding of the AFEES examiner. There is no contrary evidence.

We think that a fair construction of the AFEES neurologist’s November 30, 1970 report is that he, too, found that Coleman had such headaches, but that he felt that the condition might be relieved by medication. We also conclude that his recommendation — that Coleman be considered fit unless the medication proved ineffective, is directly contrary to applicable regulations.

The regulations are these: First, Selective Service Regulation, 32 C.F.R. § 1628, which refers, for classification purposes, to the Surgeon General’s list of physical disqualifications set forth in Army Regulations 40-501. Thus these are the concern of selective service boards as well as of the Army. See United States v. Baray, 9 Cir., 1971, 445 F.2d 949; United States v. Brown, 9 Cir., 1971, 438 F.2d 1115; Briggs v. United States, 9 Cir., 1968, 397 F.2d 370.

Second, Army Regulation 40-501 applies. A.R. 40-501, Ch. 2, See. XV, Neurological Disorders, 2-31b(2), lists as cause for rejection “Migraine when frequent and incapacitating.” The doctor’s finding was that Coleman has “probable Migraine Variant headaches.” However, it is apparent that he was not sure whether they are permanently “incapacitating.” That is why he recommended Bellergol, and, if that did not work, “various antimigraine meds.” It is apparent, however, that he was convinced that, unless the medication worked, Coleman’s condition was disqualifying.

This brings into play another section of A.R. 40-501 (Ch. 1, Sec. II, l-3a) which states:

“a. Medically Acceptable. No individuals will be accepted on a provisional basis subject to the successful treatment or correction of a disqualifying defect.”

In spite of this regulation, and of the recommended trial of Bellergol and various other “meds.,” Coleman was called tor induction just 8 days later. In the meantime, nothing had been done to ascertain whether the recommended treatment had been carried out at all, much less whether it had succeeded.

The attempt to induct Coleman was in direct violation of these regulations. To use a cliche, it stands the second A.R. that we have quoted on its head. The doctor’s diagnosis brings Coleman within the regulation, but the doctor’s recommendation that “meanwhile” he “is fit for active duty” violates the regulation. His premise is good, but his conclusion is upside down.

Nor can it be said that the regulation is solely for the benefit of the Army. We have no doubt that it benefits the Army: it avoids inducting people who are disqualified unless treated, which would place on the Army the burden of a recruit who is of no use to it unless treated, the burden of treating him, and the risk that the treatment will .fail so that he will have to be discharged. The regulation also benefits the registrant. It avoids the unnecessary disruption of his life that would result if he were to be inducted and the treatment were to fail. It permits him to go about his normal affairs while treatment is being assayed. These are no small benefits.

Both the local board and the Army violated these regulations. Under the general principle that an agency is to be held to the terms of its regulations, Service v. Dulles, 1957, 354 U.S. 363, 77 S.Ct. 1152, 1 L.Ed.2d 1403; Vitarelli v. Seaton, 1959, 359 U.S. 535, 79 S.Ct. 968, 3 L.Ed.2d 1012, the judgment cannot stand.

Reversed. When the mandate goes down, the indictment will be dismissed.

      . It is difficult to imagine a more flagrant breach of selective service regulations. We do not rely on it, however, because the board did later reclassify Coleman to I-Y.

      . In this appeal, Coleman makes no point of the lack of such an order.

      . It is no answer to say that Coleman did not appeal his July 21, 1970 classification of I-A. The operative facts — the November 30, 1970 examination, came later, and changed the situation. Nor is it an answer that Coleman simply refused induction without expressly relying on his physical disqualification. He was disqualified as a matter of law. He cannot be prosecuted for refusing an induction that the ' system had no right to order.