author: PER CURIAM: BARNES, Circuit Judge:

text:
    Peter CUMMINGS, M.D., and Peter Rudd, M.D., Individually and on behalf of all persons similarly situated, Plaintiffs-Appellees, v. Robert E. HAMPTON, Chairman of United States Civil Service Commission, et al., Defendants-Appellants.
    Nos. 72-2559, 72-3059.
    United States Court of Appeals, Ninth Circuit.
    Sept. 27, 1973.
    Garvin Lee Oliver (argued), A. William Olson, Asst. Atty. Gen., Dept. of Justice, Washington, D. C., James L. Browning, Jr., U. S. Atty., Richard F. Locke, Asst. U. S. Atty., San Francisco, Cal., Robert L. Keuch, Dept. of Justice, Washington, D. C., for defendants-appellants.
    Malcolm Burstein (argued), Berkeley, Cal., for plaintiffs-appellees.
    Charles C. Marson, Joseph Remcho, Peter E. Sheehan, ACLU, San Francisco, Cal., for amicus curiae.
    Before BARNES, BROWNING and DUNIWAY, Circuit Judges.
   PER CURIAM:

Physicians in residence at University Medical Center, Stanford, California, must serve several months of their residency at the Veterans Administration Hospital, Palo Alto, California. To qualify for the latter, they were required to complete Veterans Administration Form 10-2850-2, consisting of two questions:

1. Are you now or within the past ten years have you been a member of the Communist Party U.S.A., or any subdivision of the Communist Party U.S. A.?

2. Have you ever organized or helped to organize or become a member of any organization or group of persons which, during the period of your membership or association, you knew was advocating or teaching that the Government of the United States or of any State or political subdivision thereof should be overthrown or overturned by force, violence, or any other unlawful means?

The district court enjoined defendants-appellants from asking these questions of plaintiffs-appellees and other residency applicants, from requiring that they be answered as a condition of employment, and from refusing to employ a member of the plaintiff-appellee class because he failed to answer them.

The state may not subject a person to a civil disability for mere membership in a particular organization; at most, it may do so for membership in a subversive organization with knowledge of its unlawful purposes and specific intent to further those purposes. Baird v. State Bar of Arizona, 401 U.S. 1, 6, 91 S.Ct. 702, 27 L.Ed.2d 639 (1971); In re Stolar, 401 U.S. 23, 28, 91 S.Ct. 713, 27 L.Ed.2d 657 (1971); Law Students Research Council v. Wadmond, 401 U.S. 154, 165, 91 S.Ct. 720, 27 L.Ed.2d 749 (1971). “When a State seeks to inquire about an individual’s beliefs and associations a heavy burden lies upon it to show that the inquiry is necessary to protect a legitimate state interest.” Baird v. State Bar of Arizona, supra, 401 U.S. at 6-7, 91 S.Ct. at 706; Gibson v. Florida Legislative Committee, 372 U.S. 539, 546, 83 S.Ct. 889, 9 L.Ed.2d 929 (1963). However, “The Court has held that under some circumstances simple inquiry into present or past Communist Party membership of an applicant for admission' to the Bar is not as such unconstitutional. Konigsberg v. State Bar, 366 U.S. 36 [81 S.Ct. 997, 6 L.Ed.2d 105]; In re Anastaplo, 366 U.S. 82 [81 S.Ct. 978, 6 L.Ed.2d 135].” Baird v. State Bar of Arizona, supra, 401 U.S. at 9, 91 S.Ct. at 707. (Justice Stewart concurring).

Hence, though broad inquiries into a person’s beliefs or associations are disfavored because they discourage the exercise of First Amendment rights (Baird v. State Bar of Arizona, supra, 401 U.S. at 6, 91 S.Ct. 702; In re Stolar, supra, 401 U.S. at 30, 91 S.Ct. 713) limited inquiries concerning Communist affiliation may be justifiable on the grounds of a legitimate state interest. Konigsberg v. State Bar, 366 U.S. 36, 46-47, 49-51, 81 S.Ct. 997, 6 L.Ed.2d 105 (1961).

The government in this case has shown no such legitimate state interest. Therefore, no inquiry not precisely tailored to ascertain whether prospective physicians have held knowing membership in an organization advocating the overthrow of the government by force or violence, and have shared the specific intent to further the organization’s illegal goals, is warranted.

In the predecessor case to this one, Judge Peckham observed that “the Government has not suggested any significant federal interest which would necessitate the inquiry undertaken by the Veterans Administration; and the record herein discloses no evidence to support such a governmental interest.” Cummings v. Hampton, No. C-70 2130 (N.D.Cal. October 14, 1971). is true of the present record. The same

In Wadmond and Konigsberg the government relied upon an interest in limiting admission to the bar to persons who would be dedicated to the maintenance of the law and the peaceful resolution of disputes. Law Students Civil Rights Research Council v. Wadmond, supra, 401 U.S. at 166, 91 S.Ct. 720; Konigsberg v. State Bar, supra, 366 U.S. at 52, 81 S.Ct. 997. We can find no comparable government interest in physicians who will serve only a few months at a veterans’ hospital to learn about the diseases of the medically poor as a part of their one-year residency or internship at a university medical center.

Such minimal interest as the government may have concerning these physicians’ beliefs and associations must be balanced against the intrusion upon First Amendment rights engendered by the inquiries. Konigsberg v. State Bar, supra, 366 U.S. at 49-51, 81 S.Ct. 997. In Wadmond an applicant for admission to the bar faced a single, two-part inquiry. The applicant would know at once that the state’s interest was not directed merely to membership, but to membership accompanied by a knowledge of illegal purpose and specific intent to further that purpose. In the present case, however, an applicant for residency faced with VA Form 10-2850-2 would know only that the questions were “preliminary.” The nature of the inquiry that would follow an affirmative answer was not disclosed. If the applicant answered the two questions in Form 10-2850-2 in the negative, he would never see the assertedly limiting supplemental questions in Form 10-2850-1. Those questions could not ameliorate the “chilling” effect of the overly broad inquiries into his associations in Form 10-2850-2.

Justice Stewart’s comment in Wadmond, supra, 401 U.S. at 165-166, 91 S.Ct. 720, that membership in the Communist Party is a proper subject of preliminary inquiry assumes that the applicant is made aware that no adverse consequences will be predicated upon membership without the requisite knowledge and intent. Thus, in Konigsberg, which Justice Stewart cites for the proposition, it was clear from colloquy between Konigsberg (and his counsel) and the chairman and a member of the committee of bar examiners, set out at 366 U.S. 46-47, 81 S.Ct. 997, the pages of Konigsberg cited by Justice Stewart, not only that the committee’s question as to Communist Party membership was preliminary, but also that the committee would not base adverse action upon membership alone but only upon Konigsberg’s knowledge of the purposes of the Party and activities he had undertaken to accomplish those purposes. The instructions accompanying VA Form 10-2850-2 are not so reassuring. They strongly suggest that knowing membership without specific intent to further the aims of the organization will be a factor considered; and they imply that membership alone may be an adverse factor in the employment decision.

Here is what the instructions say:

An affirmative answer (YES) to either question does not in and of itself disqualify you for Government employment. These questions are only a preliminary inquiry, and if your answer to either question is “YES,” you must obtain and complete VA Form 10-2850-1, Supplement to Application for Employment. Consideration will then be given to the nature of the organization, your knowledge of its aims and policy, the extent of your participation in the organization’s activities, and any other relevant facts and circumstances. In any event, knowing membership in an organization of the type to which this question refers, along with the information furnished in VA Form 10-2850-1, will be only one of several factors considered in assessing your suitability for employment. (Emphasis added.)

Because the government has shown no legitimate interest which outweighs the chilling effect on the exercise of First Amendment rights caused by the questions in VA Form 10-2850-2, or which warrants inquiries beyond the scope of ascertaining the existence of constitutionally proscribable behavior, we find the questions in VA Form 10-2850-2 to be unconstitutionally broad. We do not reach any of the many other grounds upon which plaintiffs-appellees challenge the use of this form and Form 10-2850-1.

Affirmed.

BARNES, Circuit Judge:

I respectfully dissent.

While the general statement of the law appearing in the third paragraph of the per curiam opinion is appropriate for the second question on Veterans Administration Form 10-2850-2, I cannot agree that it is appropriate for the first question. Question one is direct and precise. The government asks if the applicant is, or has recently been, a member of the Communist Party of the United States, or a subdivision thereof. It asks only if the applicant was a member of such Party, and not as to membership in any “other organization.”

There is no threat of punishment for mere membership in the Communist Party.

In Baird v. State Bar of Arizona, 401 U.S. 1, 91 S.Ct. 702, 27 L.Ed.2d 639 (1971), the Supreme Court required that questions directed to a state bar applicant concerning “expressive or associational activities” must ask more than mere membership. I cannot consider Baird, however, as applicable to an inquiry that goes no further than “the Communist Party, or a subdivision of the Communist Party,” for that is controlled by Konigsberg v. State Bar, infra. Baird only applies to questions which go beyond question one, and which may suffer from over-breadth or vagueness. Similarly, question number 12 posted on the application for the Ohio bar was held to be invalid for the reasons stated in Baird. (In re Stolar, 401 U.S. 23, 30, 91 S.Ct. 713, 27 L.Ed.2d 657 (1971)).

In Konigsberg v. State Bar, 366 U.S. 36, 81 S.Ct. 997, 6 L.Ed.2d 105 (1961) the Supreme Court held that a State may inquire into a bar applicant’s membership in the Communist Party under certain circumstances.

“As regards the questioning of public employees relative to Communist Party membership it has already been held that the interest in not subjecting speech and association to the deterrence of subsequent disclosure is outweighed by the State’s interest in ascertaining the fitness of the employee for the post he holds, and hence that such questioning does not infringe constitutional protections. (Citations.)” Konigsberg, supra, 366 U.S. at 52, 81 S.Ct. at 1007. Accord, Baird, supra, 401 U.S. at 9, 91 S.Ct. 702 (Stewart, J., concurring); In re Anastaplo, 366 U.S. 82, 81 S.Ct. 978, 6 L.Ed.2d 135 (1961).

To be appropriate, the inquiry into Communist Party membership, as in question one, must be for a legitimate government purpose. In view of the position of trust and confidence which develops between patient and doctor, and in view of the position of authority which these doctors would have over government property, I conclude that the government has the requisite legitimate purpose necessary to pose question one.

If we assume that a requisite legitimate purpose exists for the government to determine if more than mere membership exists in a subversive organization, with knowledge of its unlawful purposes and a specific intent to further those purposes, how could there be any simpler or better method devised than to ask question one preliminarily to question two? There must be an acknowledgment, or proof, .of membership as a sine qua non to any further questioning. Because a heavy burden may exist upon the state (in inquiring into and proving an individual’s beliefs and associations), cannot mean question one is unnecessary ; for if that be so, no question as to membership could be asked.

It does not satisfy me that the law as enunciated by the Supreme Court in Konigsberg, supra, Baird, supra, and Anastaplo, supra, has been followed, if this Court says that “a heavy burden lies upon the state”, or that “broad inquiries are disfavored”, and because of that, the one essential question cannot be asked.

With respect to question two, admittedly there is no reference to the applicant’s intent. Standing alone, Law Students Research Council v. Wadmond, 401 U.S. 154, 91 S.Ct. 720, 27 L.Ed.2d 749 (1971), would require a decision that the question is in violation of the First Amendment. The question, however, does not stand alone: it is prefaced with instructions which appear at the top of the form. The proposed per curiam mentions this, but omits the thrust of the entire instructions. This is particularly evident by the statements appearing [in the eighth paragraph at page 4, lines 8-14]: “In the present ease, however, an applicant for residency faced with YA Form 10-2850-2 would know only that the questions were ‘preliminary.’ The nature of the inquiry that would follow an affirmative answer was not disclosed.” (Emphasis added.) My reading of the instructions contradicts such statements. After instructing an applicant (who answers affirmatively to either of the first two questions) (to obtain and complete the supplementary form, the instructions state: “Consideration will then be given to the nature of the organization, your knowledge of its aim and policy, the extent of your participation in the organization’s activities, and any other relevant facts and circumstances.” Therefore, the conclusion in the last sentences of paragraph eight that the “questions (in the supplemental form) could not ameliorate the ‘chilling’ effect of the overly broad inquiries into (the applicant’s) associations,” in questions one and two, does not, absent other grounds, convince me it is correct.

It is for these reasons that I dissent.

       This case is a sequel to Cummings v. Hampton, No. C — 70 2130 (N.D.Cal. October 14, 1971), in which the same plaintiffs successfully challenged the constitutionality of similar questions which they were required to answer as interns.


source: Caselaw Access Project

author: WEIS, Circuit Judge. GIBBONS, Circuit Judge

license: Public Domain

text:
    UNITED STATES of America v. Jeffrey Lynn ROBINSON, Appellant.
    No. 73-1124.
    United States Court of Appeals, Third Circuit.
    Argued June 12, 1973.
    Decided Sept. 26, 1973.

      Edward H. Weis, Defender Assn, of Philadelphia, Philadelphia, Pa., for appellant.
    Robert E. J. Curran, U. S. Atty., Carmen C. Nasuti, Asst. U. S. Atty., Philadelphia, Pa., for appellee.
    Before GIBBONS, ROSENN, and WEIS, Circuit Judges.
   OPINION OF THE COURT

WEIS, Circuit Judge.

Appellant Robinson was indicted on two counts of failing to perform duties required by the Selective Service Act of 1967, 50 App. U.S.C. § 451 et seq. The first count alleges that he failed to keep his local board informed as to his current address; the second charges him with refusing to report for induction on November 6, 1968 and “continuing from day to day thereafter . . . ”

A jury returned verdicts of guilty on both counts and post trial motions for judgment of acquittal and for a new trial were denied.

On appeal Robinson contends:

1. With respect to both counts, that a new trial is required because the trial court refused to permit voir dire examination of the jury panel as to racial prejudice; and

2. As to the second count:

a. a judgment of acquittal was required, or

b. that a new trial is required because of errors in the charge to the jury.

THE VOIR DIRE EXAMINATION

Robinson is black as were some of the key witnesses, both for prosecution and defense. Defense counsel asked that the jury panel be asked:

“Would you take into consideration a witnsess’s race in determining his credibility?”

The trial judge denied the request, saying:

“You have little faith in our system. I’m not impressed.”

Aldridge v. United States, 283 U.S. 308, 51 S.Ct. 470, 75 L.Ed. 1054 (1931), held that in trials in the federal courts upon a timely request, the judge must permit voir dire examination as to possible racial prejudice. While many would agree with the reaction of the distinguished trial judge that such interrogation in itself is a reflection upon the integrity of the jury panel, nevertheless the Supreme Court has taken a contrary view. Thus, in Aldridge, supra, Chief Justice Hughes wrote:

“The argument is advanced on behalf of the government that it would be detrimental to the administration of the law in the courts of the United States to allow questions to jurors as to racial or religious prejudices. We think that it would be far more injurious to permit it to be thought that persons entertaining a disqualifying prejudice were allowed to serve as jurors and that inquiries designed to elicit the fact of disqualification were barred. No surer way could be devised to bring the processes of justice into disrepute.” (pages 314-315, 51 S.Ct. page 473)

In United States v. Bamberger, 456 F.2d 1119 (3rd Cir. 1972), this court recognized the Aldridge rule, although leaving to the trial judge wide discretion in determining what particular questions should be asked. No error was found in that case when defense counsel was permitted to ask questions dealing with racial prejudice. Any doubts as to the mandatory requirements of the Aldridge rule were dispelled by the ease of Ham v. South Carolina, 409 U.S. 524, 93 S.Ct. 848, 35 L.Ed.2d 46 (1973), decided after the opinion of the district court had been handed down. The Supreme Court emphasized that the right to have the judge make inquiry on voir dire as to racial prejudice was one of constitutional dimensions. In that case general questions dealing with bias or prejudice not specifically referring to race were held inadequate to cure the defect, and reversal was ordered.

The government contends that Aldridge and Ham are not controlling in this case because the specific question suggested by counsel dealt with credibility of witnesses based upon their race rather than with prejudice against the defendant as such based upon his race. Aside from the. fact that the district court’s reaction to the question effectively put an end to any exploration of the area of racial prejudice, we think any such fine distinction between prejudice against witnesses based upon race and prejudice against the defendant based upon race would be pettifogging.

Both sides in a jury trial are entitled to have the credibility of witnesses judged by relevant standards. Both sides — but especially defendants— are entitled to remove for cause prospective jurors who would judge the credibility of witnesses by improper standards. Both sides should be free to exercise peremptory challenges in the light of their informed judgment as to the likely receptivity of the jurors to the testimony which will be presented. Cf. Swain v. Alabama, 380 U.S. 202, 220, 85 S.Ct. 824, 13 L.Ed.2d 759 (1965).

The government also urges that if there was error here, it was harmless beyond a reasonable doubt, Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967). Because at least one of the witnesses against Robinson was black, the government contends that any racial prejudice against black witnesses must have been neutralized. We cannot make such a finding.

Assuming that a given juror believed all black witnesses to be less credible than white witnesses, that prejudice operated in the juror’s evaluation of Robinson’s testimony. The fact that it may also have operated in the evaluation of the testimony of other witnesses is irrelevant, for Robinson was entitled to have his testimony evaluated free from the taint of such prejudice. There is no doctrine of equality of prejudicial error.

Moreover, a black witness who testified in favor of the government would be clothed with whatever additional mantle of credibility his status as a government witness afforded him, whereas Robinson was a defendant and obviously interested in the outcome. If a juror entertained a prejudice against black witnesses, that prejudice would have had a far greater effect on the testimony of the defendant than upon that of a government witness. Thus, there is no such neutral prejudice as the government suggests.

It was reversible error to decline the request for a voir dire inquiry into the possible racial bias of jurors, and we cannot hold that this ruling was harmless. See also United States v. Booker, 480 F.2d 1310 (7th Cir. 1973).

THE CHARGE ON DUTY TO REPORT FOR INDUCTION

The Selective Service file established that a letter dated October 22, 1968, ordering Robinson to report for induction on November 6, 1968, was addressed to him at 3519 N. 21st Street, Philadelphia, Pennsylvania (his mother’s address), with a copy, c/o Mrs. Pamela J. Robinson, 1134 S. 47th Street, Philadelphia, Pennsylvania.

The envelope addressed to 3519 N. 21st Street was returned to the local board on October 28, 1968, marked, apparently by the Post Office, “Address Unknown”, “Moved, left no Address”, “Moved, not forwardable”. The copy addressed to 1134 S. 47th Street was returned to the local board, which stamped both the letter and the envelope with a date stamp “November 6, 1968”. The secretary of the local board testified that the envelope was open when it was returned.

Robinson’s mother, who was called by the government, gave her address as 3519 N. 21st Street and said that the defendant had not lived there after he married Pamela Robinson in 1967. The defendant’s mother also testified that she did not know his whereabouts but had told him on one occasion that the Selective Service people and the FBI had been looking for him. Her testimony also established that Pamela Robinson had given her the envelope addressed to the defendant at 1134 S. 47th Street and that it was then mailed back to the local board.

The defendant’s estranged wife, Pamela, testified that she had received the letter and turned it over to his mother. Pamela said, further, that at some time, not specified in the record, she was contacted by the FBI and was advised that Robinson was delinquent. She saw the defendant on one occasion thereafter, told him that he was under orders to report for induction, and that he was to contact the board and the FBI.

Robinson testified in his own behalf and alleged that he had not received either copy of the October 22, 1968 letter.

The court charged the jury in part as follows:

“The defendant claims that he did not receive any notice for induction. The truth of this claim is for you to determine. In order to find the defendant guilty, however, you must find, beyond a reasonable doubt, that he received the notice to report for induction prior to the time when, according to the notice, he was required to report, which was November 6, 1968 at 7:30 A.M., and that the defendant, willfully and knowingly, failed to report for and submit to induction as ordered. (N.T. 126) . . . The failure to report was willful if — and only if — the defendant was fully aware of his obligation to comply with the order to report for induction, but failed to do so with the intent to avoid his obligation under the Seléctive Service Act.”

Some two hours after the jury retired to deliberate, the foreman sent the following question to the trial judge:

“In reference to the letter for induction delivered to Mrs. Pamela Robinson, addressed to Jeffrey Robinson, does the evidence show if she conveyed this information to her husband, Jeffrey, when she spoke to him and told him the FBI was looking for him?
“Does verbal discussion with his wife constitute legal proof that he did ‘knowingly’ refuse to perform a duty required of him as stated in Count II of the indictment?”

Counsel were summoned to the courtroom, and the trial court made the following reply, in part:

“If you believe the testimony of his wife that she told him that the FBI was looking for him, and that he was supposed to report for induction, ‘knowingly’ means done voluntarily and intentionally and not because of mistake, accident, or other innocent reason.
“In effect, if he knew from hér that the FBI was looking for him, and that the FBI said he was supposed to report, that would be knowledge on his part.
“It is not necessary that he saw or read the letter or that the letter was read to him.” (N.T. 141)

Defense counsel requested a repetition of a portion of the original charge that the defendant had to have notice of the date and time he was to report. The court refused this as not encompassed in the jury’s request.

It will be noted that there is a variation between the original charge of the court which required the defendant to have notice of the date of the time before he was to report and the supplemental instruction which might fairly be said to permit an inference to the contrary.

In its opinion refusing a new trial, the district court said:

“The law is clear, however, that the Selective Service Act imposes a continuing duty upon a registrant to report for induction upon receiving notice of the order even though such notice is received after the date on which the registrant is ordered to report.”

Since this proposition was not explained to the jury and it is inconsistent with the original charge of the court, the discrepancy should be remedied upon the retrial.

The indictment clearly specified a continuing duty. The second count reads in part:

“That on or about November 6, 1968, and continuing from day to day thereafter in Philadelphia, Pennsylvania, in the Eastern District of Philadelphia, JEFFREY LYNN ROBINSON, being a male person and subject to the rules and regulations of the Military Selective Service Act of 1967, did knowingly and unlawfully fail, neglect and refuse to perform a duty required of him by the provisions of the said Act, in that he did knowingly fail, neglect and refuse to comply with a valid and lawful order of Local Board 140, Federal Building, 1421 Cherry Street, Philadelphia, Pennsylvania, dated November 17, 1967, amended by letter of October 22, 1968, directing him to report for and submit for induction into the Armed Forces of the United States, that is to report to 401 North Broad Street, Philadelphia, Pennsylvania on November 6, 1968 at 7:30 A.M. for induction.”

While there is opposition to the theory that failing to report for induction is a continuing offense, we follow the weight of authority which sustains that interpretation.

50 U.S.C.App. § 454(a) sets forth the amendment of 1967 and reads in part:

“Provided further, That, notwithstanding any other provision of law, any registrant who has failed or refused to report for induction shall continue to remain liable for induction and when available shall be immediately inducted . . . ”

In reporting on this part of the Military Selective Service Act, the committee said:

“(a) When the local board orders the registrant for induction it shall be the duty of the registrant to report for induction at the time and place ordered by the local board. If the time when the registrant is ordered to report for induction is postponed, it shall be the continuing duty of the registrant to report for induction at such time and place as may be ordered by the local board. Regardless of the time when or the circumstances under which a registrant fails to report for induction when it is his duty to do so, it shall thereafter be his continuing duty from day to day to report for induction to his local board.”
“The first change insures that a registrant who prolongs the litigation of his draft classification beyond the age of 26 would nontheless remain liable for induction if he is later found qualified for induction. This provision further clarifies the congressional intent that prosecution for one offense under this law will not bar prosecution for a subsequent offense even though it is an identical offense.” (1 U.S.Code Congressional and Administrative News, 1346 (1967)).

In United States v. Winer, 456 F.2d 566, 568, fn. 5 (3rd Cir. 1972), this court said:

“Although defendant had failed to report for induction on June 14, 1965, after the issuance of a valid induction order, he was under a continuing duty to report from that date until the order of May 8, 1967, postponing his induction date for the future.”

In United States v. Clark, supra, the majority found a continuing duty to report for induction but said:

' “This opinion holds only that where a registrant has failed to report for induction on the date set, his draft board may set a new date for his induction pursuant to the original order, and that he may be informed of a new date by a ‘letter order’ such as that used here, without the necessity of a new Form 252.”

We do not read Toussie v. United States, 397 U.S. 112, 90 S.Ct. 858, 25 L.Ed.2d 156 (1970), as militating against a conviction based on a continuing duty to report for induction. Toussie was concerned only with the statute of limitations as it applied to the duty to register, and as to that obligation there is no comparable provision in the statute as does exist with respect to the duty to report for induction. Furthermore, the congressional action in amending the statute to reverse the effect of Toussie, see 50 U.S.C.App. § 462(d) (Supp. 1973), is a strong indication that the legislative intent was indeed to impose a continuing duty.

The majority in the Toussie decision noted the tension between a statute of limitations and the continuing offense doctrine but stated at page 115, 90 S.Ct. at page 860:

“These considerations do not mean that a particular offense should never be construed as a continuing one. They do, however, require that such a result should not be reached unless the explicit language of the substantive criminal statute compels such a conclusion, or the nature of the crime involved is such that Congress must assuredly have intended that it be treated as a continuing one.”

L7] Toussie is not adverse to the result we reach in this case, nor do we disagree with the philosophy of that deci-' sion that a continuing offense should not be implied except in limited circumstances. The doctrine of continuing offense is not one foreign to our law and is not one we should hesitate to apply when congressional policy and the obvious necessity of making men available for military service on a continuing basis are fully consistent with such an interpretation.

We hold that on the retrial of this case, under the form of the indictment presented, if there is an adequate factual basis to support the charge, the jury should be instructed on the nature of a continuing offense.

The judgment of the district court will be reversed, and a new trial granted as to both counts of the indictment.

GIBBONS, Circuit Judge

(concurring and dissenting).

I concur in Judge Weis’ opinion except to the extent that it remands for a new trial on the second count. On that count I would remand for the entry of a judgment of acquittal. The majority opinion resolves the issue left open by the majority opinion in United States v. Clark, 468 F.2d 708 (3d Cir. 1972). As I indicated, in dissenting in Clark, I believe the Supreme Court’s interpretation in Toussie v. United States, 397 U.S. 112, 90 S.Ct. 858, 25 L.Ed.2d 156 (1970) of 50 U.S.C.App. § 453, prohibits a construction of that statute which would make failure to 'report for induction pursuant to an order to report on a designated date a continuing rather than a single offense.

Although the Government proceeded in the district court on the theory that it had to bring home notice to Robinson prior to November 6, 1968, it now espouses and the majority accepts the district court’s continuing duty theory. It points to the language of the indictment:

“That on or about November 6, 1968, and continuing from day to day thereafter . . . Robinson did knowingly and unlawfully fail to comply with a valid and lawful order ... to report for and submit to induction into the Armed Forces of the United States, that is, to report to 401 North Broad Street, Philadelphia, Pennsylvania on November 6, 1968 at 7:30 A.M. for induction.” (emphasis added).

Putting aside the question whether the United States should be estopped on appeal from adopting a construction of an indictment different from that advanced at trial, I cannot in view of the Supreme Court’s decision in Toussie sustain this conviction on a continuing duty theory. In Toussie the Court was urged to accept the argument that the duty to register was a continuing one. It noted that applicable regulations described the violation as a continuing one, but that the statute, 50 U.S.C.App. § 453, was unclear. It observed that the policy behind the statute of limitations conflicted with any continuing offense doctrine, and said:

“These considerations do not mean that a particular offense should never be construed as a continuing one. They do, however, require that such a result should not be reached unless the explicit language of the substantive criminal statute compels such a conclusion, or the nature of the crime involved is such that Congress must assuredly have intended that it be treated as a continuing one.” Id. at 115, 90 S.Ct. at 860.

The Court found no such explicit language in the Selective Service Act of 1967. In United States v. Figurell, 462 F.2d 1080, 1082-1083, n.5 (3d Cir. 1972), this court applied the Toussie construction of the Act to another selective service duty, noting that failure to report a change in status is not a continuing offense. In United States v. Clark, 468 F.2d 708 (3d Cir. 1972), we considered Toussie in the context of the duty to report for induction. The majority opinion sustained the validity of an indictment for failing to obey a letter order to report on a specific date supplementing a prior Form 252 order to report for induction. But the majority, while sustaining an indictment for failing to obey what might otherwise have been an insufficient order to report for induction, carefully distinguished between a continuing duty, which could be implemented by a letter from the local board and a continuing offense. The offense was the failure to report at the time and place specified in the letter. I had trouble with the majority opinion in Clark. My dissenting opinion and the majority opinion, however, found common ground in the Toussie single offense construction of the Selective Service Act of 1967. As the majority opinion put it, “[s] imply because appellant was under a continuing duty to report for induction . . . does not necessarily mean that by violating that duty he has committed a continuing offense.” 468 F.2d at 711.

There is a greater justification for declining to make failure to report for induction a continuing offense than for a declining to make failing to register, Toussie v. United States, supra, or failing to report a change in status, United States v. Figurell, supra, continuing offenses. In the latter cases the board lacks information about the existence or status of the registrant. Thus, there is considerable possibility of a registrant avoiding detection. In the induction order case the local board well knows that its order has been violated, and it remains free to issue another order. Toussie and Figurell, therefore, are a fortiori cases. Indeed, Congress recognized as much, when, in reaction to the Toussie decision it revised the Selective Service Act to make failure to register a continuing offense. See 50 U.S.C.App. § 462(d) (Supp. 1973). It did not, however, in that revision make failing to report for induction a continuing offense. The majority opinion on the second count is clearly inconsistent with our prior decision in Figurell. The second count of the indictment as construed by the district court after the verdict, does not state an offense under the Act. The motion for a judgment of acquittal on that count should have been granted since knowledge of the date on which the registrant was to report was not brought home to him until after that date had passed.

      . The jurors had previously been asked, inter alia:

      “Do you know of any reason why you may be prejudiced for or against the government or the defendant because of the nature of the charges or otherwise?”
      * * :J: *
      “Have you an opinion as to the guilt or innocence of the defendant or any of the charges contained in the indictment at this time or have you ever expressed an opinion as to the guilt or innocence of the defendant?”
      “If you were the United States Attorney charged with the responsibility for prosecuting this case, or if you were the defendant on trial here today, charged with the same offense, or his counsel, do you know of any reason why you would not be content to have your case tried by someone in your frame of mind?”
      :¡: * * * *
      “Can you think of any other matter which you should call to the court’s attention which may have some bearing on your qualifications as a juror or which may prevent your rendering a fair and impartial verdict based solely on the evidence and my instructions as to the law?”

      . United States v. Leftwich, 461 F.2d 586 (3rd Cir. 1972), held that even though a timely request had been made for voir dire questioning on the racial issue, the point had not been pressed on the day that the jury was being empaneled and objection was not made on the record until after the selected jurors had been sworn and the other prospective members had been excused,

      . We need not in this case decide whether, in view of the general prohibition against post trial exploration of the jury’s deliberations, there is any room for the operation of a harmless error finding in connection with those rules designed to insulate those deliberations from improper extrajudicial influences. But see Sheppard v. Maxwell, 384 U.S. 333, 352, 80 S.Ct. 1507, 16 L.Ed.2d 600 (1966); Rideau v. Louisiana, 373 U.S. 723, 727, 83 S.Ct. 1417, 10 L.Ed.2d 663 (1963), which suggest that the inquiry stops with a mere possibility of such taint.

      . A Form 252, as required by 32 CFR 1632.1 had been issued in November, 1967. At that time the defendant had been ordered to report for induction on December 5, 1967 but the notice was returned to the board with a notation, “Whereabouts Unknown”. He did report to the board on September 23, 1968 and gave the address as 3519 N. 21st Street. As to the adequacy of the letter of October 22, 1968, see United States v. Clark, 468 F.2d 708 (3rd Cir. 1972).

      . United States v. Prince, 398 F.2d 686 (2d Cir. 1968), United States v. Preston, 420 F.2d 60 (5th Cir. 1969), White v. United States, 403 F.2d 1005 (8th Cir. 1968), all hold that there is a continuing duty to report for induction.
      United States v. Newlon, 460 F.2d 1268 (9th Cir. 1972), found no continuing offense when the indictment only charged a failure to report on a specified date, but in United States v. Williams, 433 F.2d 1305 (9th Cir. 1970), the same court clearly found a continuing duty to report.

      . 32 CFR § 1632.14:

      . The indictment in the Clark case did not charge that the offense was a continuing one. Similarly the indictment in United States v. Figurell, 462 F.2d 1080 (3rd Cir. 1972), alleged that the defendant failed to report a change in circumstances on a specified date. The underlying regulation in Figivrell, supra, did not purport to impose a continuing duty.


author: ALDRICH, Senior Circuit Judge:

text:
    UNITED STATES of America et al., Petitioners-Appellees, v. Taylor MOORE and John Browne, Respondents-Appellants, Sebastian J. Mirelez, Intervenor-Appellant. UNITED STATES of America and Jack Hollenshead, Jr., Special Agent, Internal Revenue Service, Petitioners-Appellees, v. Dougal C. POPE and Sebastian J. Mirelez, Respondents-Appellants.
    Nos. 72-2468, 72-2469.
    United States Court of Appeals, Fifth Circuit.
    Nov. 2, 1973.

      Taylor Moore, Charles E. Orr, John J. Browne, Houston, Tex., for respondents-appellants.
    Theo W. Pinson, III, Mary L. Sinderson, James R. Gough, Asst. U. S. Attys., Anthony J. P. Farris, U. S. Atty., Houston, Tex., John M. Dowd, Atty., Scott P. Crampton, Asst. Atty. Gen., Tax Div., Meyer Rothwacks, Chief, Appellate Section, 'Robert E. Lindsay, Atty., Dept. of Justice, Washington, D. C., for petitioners-appellees.
    Before ALDRICH, SIMPSON and CLARK, Circuit Judges.

       Hon. Bailey Aldrich, Senior Circuit Judge of the First Circuit, sitting by designation.

   ALDRICH, Senior Circuit Judge:

These appeals from orders enforcing summonses issued under 26 U.S.C. § 7602, although briefed by appellants in documents well-fitting the name, are not without some superficial difficulties.

In April 1972, Nettle, a special agent of the Intelligence Division of the Internal Revenue Service, filed a petition in the district court naming Moore and Browne, (hereafter, for convenience, simply Moore) as respondent to enforce compliance with a subpoena duces tecum, served and returnable, but not complied with, some weeks before, for the purpose of determining the tax liabilities of Sebastian and Conception Mirelez (Mirelez) for the years 1967-70. The documents specified in the subpoena were records in Moore’s possession showing payments by or for Mirelez to Moore for services or otherwise and payments by Moore to or for Mirelez; also all documents showing or relating to the acquisition, and the disposition, of interests in property, real, personal or mixed by Mirelez. Moore answered the petition by admitting the possession of documents called for, but moved to quash on five grounds. (1) the sole purpose of the subpoena was to prosecute a criminal matter; (2) respondent was an attorney, and some of the papers were “work products;” (3) all were covered by the attorney-client privilege; (4) some were owned by Mirelez, and subject to his Fifth Amendment claim; (5) the subpoena was too broad.

In addition, Mirelez sought to intervene “to claim the benefit of certain constitutional provisions which inure to his benefit.” He sought to advance precisely claims (l)-(4) asserted by Moore, and two others of no conceivable import. The court denied this motion. An evidentiary hearing was then had on the petition.

At the hearing Nettle testified that his purpose was to determine the correctness of Mirelez’s tax returns, and that the papers sought would be of assistance in this regard; that he had made no determinations as to deficiencies, nor any recommendations for prosecution, and had been in touch with no other department of the government, but that if a basis for criminal prosecution for unpaid taxes or any other matter should come up, he would report it to the appropriate authorities.

On cross-examination Moore, (represented by the same attorneys who had sought intervention on behalf of Mirelez) , after showing that the Intelligence, rather than the Audit, division of the Internal Revenue Service initiated the investigation, embarked on a course of questioning cut short by the court quite apparently on the. ground that the answers, no matter how favorable to the respondent, would have been irrelevant. Respondent was thus prevented from showing who alerted the Intelligence Division; whether it was someone handling narcotic cases; whether Mirelez was suspected, and there was a purpose to procure evidence of narcotic violations, and whether there was a writing in the file that disclosed that this was “a criminal case.” To this last respondent made an offer of proof that “the file would show this is a criminal case,” adding as an afterthought, “purely criminal case.”

In the course of the cross-examination respondent was permitted to ask whether “there has already been a decision made to obtain a criminal prosecution,” in context embracing narcotics as well as tax prosecutions. The witness’ negative answer to this question was neither contradicted nor prospectively weakened by the excluded questions, unless by the offer of proof just quoted.

No evidence was offered supportive of the claim that the papers in respondent’s possession were “work products” of counsel as alleged in the answer, or matters covered by the attorney-client privilege. Even the court’s offer to inspect in camera was declined. Nor, except for a bare assertion, are these points made in appellants’ brief. In the light of this, and the descriptions contained in the summons themselves, which seem quite unsupportive of respondent’s claims, not only is the appeal on these issues frivolous, but, with the burden on respondent, so was the defense ab initio. United States v. Johnson, 5 Cir., 1972, 465 F.2d 793. The Fifth Amendment defense, if not frivolous ab initio, disappears in the light of Couch v. United States, 1/9/73, 409 U.S. 322, 93 S.Ct. 611, 34 L.Ed.2d 548 and is not pressed in appellants’ brief.

The court issued an order enforcing the summons, but stayed it during respondent’s and Mirelez’s appeals. We consider first the allegedly unlawful purpose of the summons.

The extended controversy over the right of the Internal Revenue Service to pursue a taxpayer’s records when they might be in aid of a criminal prosecution reached the Supreme Court recently in Donaldson v. United States, 1971, 400 U.S. 517, 91 S.Ct. 534, 27 L.Ed.2d 580, as a result of varying interpretations of the Court’s opinion in Reisman v. Caplin, 1964, 375 U.S. 440, 84 S.Ct. 508, 11 L.Ed.2d 459. The Donaldson court rejected, as an objection to the subpoena, the circumstance that the “investigation . has the potentiality of resulting in a recommendation that a criminal prosecution be instituted against the taxpayer.” (400 U.S. at 532, 91 S.Ct. at 543). It held that the fact that there were “combined efforts ... directed to both civil and criminal infractions; and that any decision to recommend prosecution comes only after the investigation is complete or is sufficiently far along to support appropriate conclusions,” (535, 91 S.Ct. at 544) was permissible. “We hold that under § 7602 an internal revenue summons may be issued in aid of an investigation if it is issued in good faith and prior to a recommendation for criminal prosecution.” (536, 91 S.Ct. at 545).

We must take this to mean that the fact that a taxpayer may be on a list of suspected narcotic violators is no more significant than if he is suspected of possible criminal tax violations. The question in both instances is, was there a coneommitant purpose of a civil audit of income. The extensive attempts to cross-examine the agent, with the possible exception of the afterthought in the offer of proof, as well as such argument as we can find in appellants’ brief, ignore Donaldson’s rationale, but suggest no other.

Nor do we think a turnaround is to be effected by respondent’s offer of proof. Passing the fact that the added afterthought went beyond the question, cf. Coral Gables, Inc. v. Beerman, 1936, 296 Mass. 267, 269, 5 N.E.2d 554, 555, not having seen the file, respondent could but guess what was in it. While a substantial amount of hope must be permitted, it is impossible to conceive that the government file would have shown that the sole purpose of a tax investigation was to supply evidence of narcotics violations. As the government properly observes, if narcotics transactions were revealed in the sought-after records of payments, it is almost inevitable that tax non-disclosures would equally be involved. Cf. United States v. Troupe, 8 Cir., 1971, 438 F.2d 117. We find nothing to take the case out of Donaldson.

We may assume, with respect to intervention, that the claims asserted in the petition here were, on their face, of the sort for which intervention could properly be sought. Whether the court had discretion to deny the petition is another question. As a general principle language could be found both ways. See Couch v. United States, ante; United states v. White, S.D.Tex.1971, 326 F.Supp. 459, 461-462. Compare Donaldson, ante, 400 U.S. at 527-531, 91 S.Ct. 534; cf. United States v. Newman, ante. In this case, however, we are not faced with mere pleadings, but a record clearly indicating that any error was nonprejudicial, since taxpayer proved to be “adequately represented by existing parties.” F.R.Civ.P. 24(a)(2). Martin v. Kalvar Corp., 5 Cir., 1969, 411 F.2d 552. The third party respondent was anything but indifferent to taxpayer’s interest. He sought to assert precisely the grounds that taxpayer sought to raise, and not only was he taxpayer’s own attorney, but he was represented by the same attorney that taxpayer employed to represent himself. So active was respondent in the prosecution of the defense that he had to be admonished by the court for interfering with counsel. In the light of all this it is not surprising that we find in the brief no suggestion of what Mirelez lost by not being allowed to conduct his own attack upon the summons.

One or two other matters touched upon in the district court but not briefed at all, even by the most charitable view, must be taken as waived.

Affirmed.

      . No separate question is raised in case No. 72-2469, United States v. Pope, jointly briefed and argued herewith.

      . Strictly, there was cross-representation in this case and No. 2469, n. 1, ante. On the appeals one attorney represented everyone.

      . To tlie extent that more is sought to be read Into the opinion in United States v. Salter, 1 Cir., 1970, 432 F.2d 097, in which the writer of the present opinion participated, it is to be noted that Salter was pre-Donaldson. Donaldson had a number of consequences. See United States v. Newman, 5 Cir., 1971, 441 F.2d 165.

      . At oral argument, our attention was directed to the fact that subsequent to the proceedings below, the IRS made a jeopardy assessment and recommended criminal tax prosecution of Mirelez, and a narcotics indictment was returned against him. Even if sucli actions taken against a non-party taxpayer prior to the entry of an enforcement order were relevant to the propriety of entering the order, we hold that such actions taken during the pend-ency of an appeal are not relevant to enforcibility. Cf. In re Magnus, Mabee & Reynard, Inc., 2 Cir., 1962, 311 F.2d 12, 16, cert. denied 373 U.S. 902, 83 S.Ct. 1289, 10 L.Ed.2d 198. To hold otherwise would provide an added incentive to taxpayers to file appeals merely for delay, and would needlessly stultify the enforcement of federal law. We do not hereby subject taxayers to irremediable harm, since he may “to the extent he may claim abuse of process, . . . always assert that claim in due course at its proper place in any subsequent trial.” Donaldson, ante, 400 U.S. at 531, 91 S.Ct. at 542. A judicial decision that enforcement of the summons is proper is not a predetermination of the admissibility of evidence gained by it in a subsequent criminal proceeding. United States v. Roundtree, 5 Cir., 1969, 420 F.2d 845, 852 n. 16.


author: INGRAHAM, Circuit Judge:

text:
    PACIFIC INDEMNITY COMPANY, Plaintiff-Appellant, v. ACEL DELIVERY SERVICE, INC., et al., Defendants-Appellees.
    No. 72-2118.
    United States Court of Appeals, Fifth Circuit.
    Oct. 12, 1973.
    As Modified on Denial of Rehearing Nov. 23, 1973.

      Spencer C. Relyea, Logan Ford, Dallas, Tex., for plaintiff-appellant.
    Sam S. Stollenwerck, Dallas, Tex., for Acel.

      William C. Manning, Mabank, Tex., for Santos.
    Tom H. Davis, Austin, Tex., for Talley.
    Norman W. Darwin, Fort Worth, Tex., for Singe,
    Henry W. Simon, Jr., Fort Worth, Tex., for Baker.
    Before GOLDBERG, AINSWORTH and INGRAHAM, Circuit Judges.
   INGRAHAM, Circuit Judge:

This is a Texas diversity case initiated by Pacific Indemnity Company, seeking a declaratory judgment pursuant to 28 U.S.C. § 2201, as to whether a policy issued by Pacific to Acel Delivery Service, Inc., covering a Piper Comanche aircraft imposes liability upon Pacific for an accident occurring near Raton, New Mexico. There are essentially two issues that must be resolved: (1) whether the policy provides coverage for the risk involved in the accident, and (2) whether Pacific has waived or is es-topped from asserting a defense of non-coverage under the policy because Pacific assumed the defense of a lawsuit initiated in a Texas state court against one claiming coverage under the policy. The district court found that there was no coverage under the policy, but that Pacific was estopped to raise the defense of noncoverage because the insurer had assumed the defense of one claiming policy coverage. We agree with the district court’s disposition of this case and therefore Affirm.

The events that give rise to this controversy commenced on May 27, 1967. An aircraft owned by Acel Delivery Servive, Inc., and insured by Pacific Indemnity Company crashed, killing the pilot, Wendell Williams, a passenger, Joe Mack Talley, and seriously injuring the father of the deceased passenger, Walter C. Talley. This action was initiated on March 26, 1969, when Pacific filed suit against Acel seeking a declaratory judgment and an injunction to stay further Texas state court proceedings until Pacific’s liability under its policy issued to Acel was determined. The district court granted an injunction on July 18, 1969, but this court subsequently vacated the injunction. Pacific Indem. Co. v. Acel Delivery Service, Inc., 432 F.2d 952 (5th Cir., 1970).

Three lawsuits were pending in Texas district courts when this declaratory judgment action was filed. The first suit was brought by the estate of Joe Mack Talley and Walter C. Talley against the estate of Wendell Williams. While Pacific attempted to obtain a non-waiver agreement to preserve its rights on behalf of the estate of Wendell Williams before assuming a defense, it failed to do so. Pacific directed that an answer be filed on behalf of the Williams estate, and consequently the defense was assumed until October 9, 1970, at which time Pacific decided to withdraw. On Pacific’s withdrawal another attorney appeared on behalf of the Williams estate. Less than a month after Pacific’s withdrawal the case was tried and judgments were rendered against the estate of Wendell Williams in favor of Walter C. Talley for $94,979.45, in favor of Sandra Talley for $600,000, and in favor of the minor daughter of Joe Mack Talley for $150,000.

A second suit was filed by Edward A. Baker,' the owner of racehorses injured in the accident, against the estate of Wendell Williams and against Acel Delivery Service. Pacific answered this complaint only on behalf of its named insured, Acel Delivery, after obtaining a non-waiver agreement from Mr. Santos, the president of Acel, but not in regard to the estate of Wendell Williams.

A third suit was filed by Acel Delivery against Mrs. Williams as the representative of the estate of Wendell Williams. The state court, however, dismissed this action, and it therefore is not involved in this appeal.

This court must now determine Pacific’s liability in these lawsuits based upon the policy issued to Acel covering the aircraft.

I.

The first issue that we must resolve is whether there was coverage of the accident under the insurance policy issued by Pacific to Acel. As an elementary observation, we acknowledge that the coverage provided by the insurance is governed by the policy provisions. The policy states that the aircraft was insured only when used for “pleasure and business,” defined as “ [p]ersonal, pleasure, family and business uses excluding an operation for which a charge is made” (emphasis added).

The appellees contend that the term “charge” is synonymous with the term “profit.” Relying primarily on Houston Fire and Cas. Co. v. Ivens, 388 F.2d 452 (5th Cir., 1964), the appellees contend that the mere reimbursement for expenses does not constitute a charge within the meaning of the policy. See also Fidelity & Cas. Co. v. Crist, 248 Ark. 1010, 455 S.W.2d 904 (1970); Thompson v. Ezzell, 61 Wash.2d 790, 379 P.2d 983 (1963). Appellees introduced testimony to the effect that the $10 an hour assessment would barely cover the aircraft’s maintenance and overhead expenses. There was additional testimony that the average rental of a similar Comanche aircraft is $25 to $30 an hour and that a rental for $10 an hour would not be profitable. The appellees’ reliance upon these cases is misplaced. The appropriate standard for determining whether a charge was made depends upon the motivating reasons for making the flight. The facts in the Ivens case, supra, show that the pilot of the aircraft, Ivens, was an equipment salesman for N. M. Ulsch & Son, working strictly on a commission basis. Ivens agreed to fly a customer, Fletcher, from Jacksonville, Florida, to Knoxville, Tennessee, to procure a piece of equipment. Ivens requested that his passenger contribute toward the cost of the gasoline, and Fletcher agreed to do so because Ivens was not going to receive a commission on this particular sale. Fletcher paid $60 to help pay for the flight expenses. The Ivens court held that Fletcher’s contribution was not a charge as prescribed in the policy. The court made clear that “when a charge is made for something, there is the distinct connotation that there is a quid pro quo. A charge may thus be considered as the price demanded for a thing or service. The agreement of Ulsch was merely the offer of a contribution made to help Ivens defray the cost of the gasoline.” Id. 338 F.2d at 455. Fletcher’s contribution toward the cost of the gasoline was a purely voluntary gesture. This contribution was not the motivating factor for the flight.

The facts as found by the trial court, compel a different result in the case at bar. The trial court found that the pilot of the aircraft, Williams, gave an $84 check to L. E. Clark, the owner and operator of Clark’s Flying Service, where the aircraft was hangared, for the use of the aircraft. Clark testified that he expressly discussed with Santos, the president of Acel Delivery, the amount which was to be assessed Williams for the use of the aircraft, fixing the rate at $10 per hour flying time in addition to Williams furnishing all the necessary gasoline and oil. The district court also found that on two prior occasions the aircraft had been used by other pilots for $10 an hour in addition to the gasoline and oil. On the basis of these factual findings the court held that there was a charge within the meaning of the policy because the payment of the $84 was not a voluntary gesture, but was a motivating factor and a prerequisite to the flight taking place. Accordingly, the flight was not covered by the policy.

We find additional support for this conclusion included within the policy itself. The policy excludes as a charge the sharing of expenses, as in Ivens, but narrowly defines the expenses that may be shared as limited to fuel costs and storage fees pertaining to a particular flight. In the case at bar, however, the $10 an hour cost was assessed in addition to the fuel and storage of the aircraft. This excess over and above the cost of fuel and storage can only be regarded as a charge. Based upon these facts we hold that there was a charge made, within the meaning of the policy, for the flight.

II.

Finding that the flight resulting in the accident was not within the coverage of the policy, we must now determine whether Pacific is precluded from raising this defense by the doctrines of waiver or estoppel. It is well settled in Texas that these doctrines will not operate to create coverage in an insurance policy where none originally existed. The reason underlying this rule is that the insurer should not be held 'liable for a risk which goes beyond the contractual agreement and for which no premium was collected. While waiver or estoppel may preclude an insurer’s policy defense arising out of a condition or forfeiture provision, these doctrines do not normally operate to prevent the assertion of a defense of noncoverage. Employers Cas. Co. v. Tilley, 496 S.W.2d 552, 560 (Tex.1973); Minnesota Mutual Life Ins. Co. v. Morse, 487 S.W.2d 317, 320 (Tex.1972); see Beck v. Connecticut General Life Ins. Co., 456 F.2d 1040, 1041 (5th Cir., 1971); Travelers Indem. Co. v. Holman, 330 F.2d 142, 144 (5th Cir., 1964); Washington Nat’l Ins. Co. v. Craddock, 130 Tex. 251, 109 S.W.2d 165, 166-167 (1937); Great American Reserve Ins. Co. v. Mitchell, 335 S.W.2d 707, 708 (Tex.Civ.App., San Antonio 1960, writ ref’d).

There is an exception to this general rule. If an insurer assumes the insured’s defense without obtaining a non-waiver agreement or a reservation of rights and with knowledge of the facts indicating noncoverage, all policy defenses, including those of noncoverage, are waived, or the insurer may be estopped from raising them. Ferris v. Southern Underwriters, 109 S.W.2d 223, 226 (Tex. Civ.App., Austin, 1937, writ ref’d); Automobile Underwriters Ins. Co. v. Murrah, 40 S.W.2d 233, 235 (Tex.Civ. App., Dallas, 1931, writ ref’d); 1 A.L.R. 3d 1143 n. 6 (1965); see Rowe v. United States Fidelity & Guaranty Co., 375 F.2d 215, 221 (4th Cir., 1967); Stuyvesant Ins. Co. v. R. Leloup Shrimp Co., 333 F.Supp. 233, 235 (S.D.Tex., 1971). The theory underlying this exception is based upon the apparent conflict of interest that might arise when the insurer represents the insured in a lawsuit against the insured and simultaneously formulates its defense against the insured for noncoverage. For estoppel to prevent the assertion of a defense of noncoverage in accordance with this exception, there must be a showing of prejudice. See Employers Cas. Co. v. Tilley, supra. See also Hartford Acc. & Indem. Co. v. Swilley, 304 F.2d 213, 216 (5th Cir., 1962); Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929, 932 (1952). As to the application of waiver, the proponent must demonstrate a voluntary relinquishment of a known right. E. g. Utilities Ins. Co. v. Montgomery, 134 Tex. 640, 138 S.W.2d 1062, 1064 (1940, opin. adopted). Because the district court disposed of this case on the basis of estoppel, we are not concerned with the application of waiver in this appeal.

We must now face the particular cases involved in this declaratory judgment action. In determining the applicability of the previously stated exception, we first turn to the circumstances surrounding the initiation and ultimate resolution of the lawsuit filed in the Texas district court by the estate of Joe Mack Talley and Walter C. Talley against the estate of Wendell Williams. For the exception to apply, we must analyze the facts in three respects: (1) whether the insurer obtained an effective non-waiver agreement or reservation of rights under the policy; (2) whether the insurer had sufficient knowledge of the facts upon which to predicate estoppel; and (3) whether there was prejudice to the insured.

First, we hold that Pacific did not obtain an effective reservation of rights or non-waiver agreement. The applicable rule is properly summarized by Appleman as follows:

“From a practical point of view, the result is as follows: If the insured refuses to sign an agreement of reservation of rights, the insurer must then send him a nonwaiver notice. If he does not dissent therefrom, but permits the insurer to proceed, it is deemed to be protected. But if he refuses to accept a defense under those conditions and so notifies the insurer, then it must elect whether to withdraw or to proceed with the defense, in which latter instance its defenses are waived.”

7 A. J. Appleman, Insurance Law and Practice § 4694 n. 32.5, at 547 (1962); see Great American Indem. Co. v. City of Corpus Christi, 192 S.W.2d 917, 919-920 (Tex.Civ.App., San Antonio, 1945, writ ref’d n. r. e.). The facts, as found by the district court, demonstrate that after Mrs. Williams was served with process, she consulted with her attorney. Her attorney forwarded his file to Pacific demanding an unqualified defense on behalf of the estate of Wendell Williams. Pacific responded to this letter, stating that it was its intention not to assume an unqualified defense and to reserve any rights under the policy in order that it might later deny liability. Mrs. Williams’s attorney responded to Pacific’s letter, stating that “[a]ny further action taken by you with respect to these cases will be with full knowledge of our demand and will be considered by us as an acceptance of these demands.” Accordingly, we hold that Pacific’s attempt to unilaterally reserve its right under the policy is ineffective because an objection was properly made on behalf of Mrs. Williams.

Second, appellant contends that, assuming estoppel may prevent the assertion of noncoverage as a defense, there is no factual basis upon which to predicate an estoppel. During Pacific’s preliminary investigation of the Talley suit, it discovered conflicting reports as to whether a charge was made. Clark and Santos said that no charge was made for the use of the aircraft. To the contrary, Mr. Santos’s ex-wife stated that a check was received for the flight in question, although she did not know for what purpose the check was given. While Mr. Clark subsequently testified under oath that a check was received from Williams, this information was first revealed in a deposition after Pacific had withdrawn from the defense of the Talley suit. This was one and one-half years after Pacific intially assumed the defense by answering the complaint. Additionally, Santos consistently maintains that no charge was made for the use of the aircraft, but was merely loaned to Williams.

Although the appellant was met with conflicting information, this information was sufficient to require Pacific to make further inquiry into the facts in order to make a more informed decision as to coverage. Alternately, Pacific could rely on the facts as it knew them and make the decision whether or not it would assume the defense. We find no Texas cases holding the insurer liable when it assumes a defense based on conflicting reports discovered during its preliminary investigation, but failed to make further inquiry in an attempt to establish the truth. We feel, however, that such a holding would be consistent with Texas law and the law of this circuit because it' is founded upon sound policy considerations. Jefferson Amusement Co. v. Lincoln Nat’l. Life Ins. Co., 409 F.2d 644, 650 (5th Cir., 1969); Apperson v. United States Fidelity & Guaranty Co., 318 F.2d 438, 441 (5th Cir., 1963). For example, Federal Ins. Co. v. Forristall, 401 S.W.2d 285 (Tex.Civ. App., Beaumont 1966, writ ref’d n. r. e.), illustrates the proper conduct of the insurer. In Forristall, the insurer conducted an investigation, discovered facts sufficient to support noneoverage, and denied coverage without filing an answer for its insured or otherwise assuming the defense of the insured. Had Pacific, after filing the answer, made further inquiry in an attempt to determine whether there was coverage and withdrawn within a reasonable time thereafter, wé would perhaps draw different conclusions. Under the facts of this case, however, Pacific made the decision to represent the Williams estate when it filed an answer on the estate’s behalf and failed to withdraw for one and a half years.

Incredibly, Pacific attempts to justify its withdrawal based upon the statements made by Clark when he was deposed after Pacific had withdrawn from the Talley suit. Clark, however, was a crucial witness, being one of no more than three living persons who had direct knowledge of the events that occurred prior to the accident. Yet there is no evidence in the record of any justification for Pacific’s not deposing Clark prior to its withdrawal. Significantly, it was the investigator’s suspicion from the outset that this flight might have been a flight for which a charge was made and thus in violation of the policy provisions.

Pacific also contends on appeal, as it did in the district court, that Santos and Clark were actively engaged in a conspiracy to conceal material facts. The trial court found that Pacific failed to establish the existence of a conspiracy. These findings of fact find sanction in the “clearly erroneous” rule. F.R.Civ.P. 52(a); McAllister v. United States, 348 U.S. 19, 20, 75 S.Ct. 6, 99 L.Ed. 20 (1954); Chaney v. City of Galveston, 368 F.2d 774, 776 (5th Cir., 1966).

Consequently, we hold that because Pacific had knowledge of facts to indicate the possible lack of coverage, but through its own lack of diligence failed to make further inquiry to verify these doubts either for or against coverage, such a factual basis is sufficient to support an estoppel. Pacific cannot be allowed to benefit from its own inattentiveness and failure to more fully ascertain the facts over a one and a half year period.

Third, for estoppel to be effective against a defense of noncoverage even where the insurer has assumed the defense, prejudice must be shown to have been suffered by the party contending estoppel. See Employers Cas. Co. v. Tilley, supra, 496 S.W.2d at 560. We recognize that Pacific did not pursue the Talley suit to its conclusion, but withdrew from the defense on October 9, 1970, over one and a half years after filing the answer to the complaint. Pacific’s untimely withdrawal less than one month prior to trial of the Talley suit, however, certainly does not preclude a finding of prejudice, but compels it. While we do not delineate all the possible prejudices that might have arisen as a result of Pacific’s conducting the defense, we point out several obvious instances of prejudice. First, as stated by the district court, Pacific failed to adequately answer plaintiff’s interrogatories. The state district court therefore imposed sanctions constituting a $300 fine to cover attorney’s expenses incurred to compel further answers. Subsequently, the district court imposed an additional sanction and accepted as true the facts as alleged by plaintiff. Appellees' opportunity to investigate the facts while in close proximity to their occurrence has been forfeited. Moreover, the appellee has been deprived of the opportunity to conduct timely pretrial discovery such as propounding interrogatories or taking depositions. We do not speculate as to precisely how a defense might be pursued had Pacific refrained from assuming its control and management. We are convinced, however, that Pacific’s actions deprived the appellees of the opportunity to present a more forceful defense.

In addition to the prejudice resulting from Pacific’s one and a half year assumption of the defense and subsequent untimely withdrawal, this case gives rise to a possible conflict of interest as a source of prejudice similar to the conflict so recently condemned by the Supreme Court of Texas. In Employers Casualty Co. v. Tilley, 496 S.W.2d 552, 560 (1973), the Supreme Court of Texas recognized the conflict of interest when an attorney, acting on behalf of the insurer in defending a claim against the insui’ed, simultaneously builds a defense against the insured on the part of the insurer. In Tilley, Employers Casualty Co. engaged an attorney to represent its insured, Tilley, in a personal injury suit. During the following eighteen’ months, the attorney not only performed services in defending Tilley, but also performed services for Employers concerning whether Tilley had coverage under the policy. Categorizing the conflict of interest as violative of public policy, the supreme court held that such an attorney-client relationship simply could not be condoned. The insurer is under an obligation to immediately notify the insured of the conflict of interests. Consequently, where there is a duty to speak, “an estoppel may arise from silence.” Id. at 560. The court continued and stated that the insurer’s failure to notify the insured of a possible conflict of interests “for nearly 18 months can be attributed only to Employers’ desire to strengthen its position in preparation for the filing of the instant suit.” Id. at 561.

As the Texas Supreme Court analyzed Tilley, we can only regard Pacific’s one and one-half year silence and delay as a period in which it could have strengthened its defense of noncoverage. Pacific was in complete control and management of the defense for this period of time and apparently failed to notify the insured of the possibility of its developing a defense. Obviously when such a conflict arises, there is the inherent possibility that in the course of the defense facts would be revealed to which the attorney could not close his eyes and that might later be used to assert noncoverage.

Consequently, there are two premises upon which we base an estoppel in this case. First, Pacific assumed the defense of its insured for one and one-half years and withdrew only a few weeks before trial of the case. By this extreme delay and absence of diligence, the insured has been denied the opportunity to fully investigate and conduct a defense. Second, this finding of prejudice is supported by the apparent conflict of interests that arose when the insurer assumed the defense with doubts concerning coverage and without notifying the insured of the conflict. Each of these premises illustrates Pacific’s flagrant disregard for the rights of the insured. Based on the facts of this case, we hold that the insured has clearly sustained prejudice as a result of the insurer assuming the defense. The exception to the general principle, that the doctrine of estoppel operates to prevent the assertion of noncoverage, is therefore applicable.

We turn now to Pacific’s liability in Baker’s suit filed against Acel Delivery and the estate of Wendell Williams. First, as to Acel, Pacific answered the complaint, but not before obtaining a non-waiver agreement. Non-waiver agreements in Texas are normally-recognized as valid and enforceable, New Amsterdam Cas. Co. v. Hamblen, 144 Tex. 306, 190 S.W.2d 56 (1945); Provident Ins. Co. v. Ashy, 139 Tex. 334, 162 S.W.2d 684, 686 (1942), and we find nothing to cast doubt upon the effectiveness of the non-waiver agreement here in question. The non-waiver agreement is valid and the insurer’s defense of non-coverage against Acel is preserved.

With regard to the Williams estate, Pacific did not assume its defense in the Baker suit and consequently there are no facts upon which to estop Pacific from asserting noncoverage.

We make clear, however, that the validity of the non-waiver agreement in the Baker suit has no effect on Pacific’s liability in the Talley suit. Generally, the right of any injured party to proceed against the insurer under the policy depends upon the insured’s right of action against the insurer. The claimant has no greater rights than the insured. Seguros Tepeyac, S.A., Compania Mexicana v. Bostrom, 347 F.2d 168, 178 (5th Cir., 1965); 8 J. Appleman, Insurance Law and Practice § 4811, at 164 (1962). The rights of the Williams estate in the Talley suit, however, vested under the insurance contract, American Indem. Co. v. Martin, 54 S.W.2d 542, 547 (Tex.Civ.App., El Paso, 1932), rev’d in part 126 Tex. 73, 84 S.W.2d 697 (1935); see J. G. Link & Co. v. Continental Cas. Co., 470 F.2d 1133, 1138-1139 (9th Cir., 1972), and as a result Santos’s signing the non-waiver agreement will not alter the rights of the Williams estate. While the insurer has preserved its rights against Acel in the Baker suit, Pacific is nonetheless precluded from asserting any defenses against the Williams estate in the Talley suit.

The judgment of the district court is affirmed.

      . The district court stated that there were three possible sources of prejudice :
      “(1) Mrs. Williams’ plea of privilege was waived by filing an answer in Fort Worth; (2) The Estate was precluded from asserting the New Mexico aviation guest statute as a defense because counsel for Pacific judicially admitted in answer to interrogatories that a ‘charge’ was made for the flight; and (3) Sanctions were imposed on the Estate because Pacific failed to sufficiently answer interrogatories after being warned by the Trial Court.”
      We specifically rely on the sanctions imposed on the failure to answer interrogatories in finding that the insured suffered prejudice.
      We therefore need not pass on the prejudicial effect of the other two grounds of prejudice stated by the district court.
      The appellants contend that no prejudice can be shown because the judgment of the Texas state court in the Talley suit was against a non-entity. Phillips v. Teinert, 493 S.W.2d 584 (Tex.Civ.App., Houston, 1973, no writ). As explained above, the insured has sustained prejudice from being denied the opportunity to conduct and fully develop his case. This prejudice has been sustained regardless of whether the judgment entered in the state court was against a non-entity.


author: DUNIWAY, Circuit Judge:

text:
    James Ronald SHELTON, Petitioner-Appellant, v. Raymond W. MEIER, RespondentAppellee.
    No. 71-2207.
    United States Court of Appeals, Ninth Circuit.
    Sept. 14, 1973.

      James Ronald Shelton, in pro. per.
    Stan Pitkin, U. S. Atty., Tacoma, Wash., for respondent-appellee.
    Before DUNIWAY, GOODWIN and WALLACE, Circuit Judges.
   OPINION

DUNIWAY, Circuit Judge:

Shelton is a federal prisoner, doing his time at McNeil Island, in the Western District of Washington. In his petition for a writ of habeas corpus he seeks to attack a previous California state conviction. He claims to have exhausted his remedies in California. Nowhere in his petition, however, is it alleged that his present federal custody is affected by the California conviction. Under these circumstances the writ does not tie in the Western District of Washington. At minimum he must show that his present detention is affected by the California conviction. All that he alleges is that “I am still suffering from the lingering effects of this invalid prior conviction.” This is not enough to confer jurisdiction to review his California conviction upon the United States District Court for the Western District of Washington. There is here nothing to suggest that Shelton is “in custody [in the Western District of Washington] pursuant to the judgment of a State court . . .” 28 U.S.C. § 2254(a). All that appears is that he is in custody pursuant to the judgment of a federal court and he does not attack that judgment.

Shelton does not suggest that he is subject to a California detainer which is being given effect by his federal custodian. Cf. Ashley v. Washington, 9 Cir., 1968, 394 F.2d 125. Similarly, in Braden v. 30 Judicial Circuit Court of Kentucky, 1973, 410 U.S. 484, 93 S.Ct. 1123, 35 L.Ed.2d 443, there was a detainer. Under Braden, Shelton could file his petition in the appropriate district court in California. It does not follow that he can also file it in the Western District of Washington, absent a showing that his custody in that district is somehow affected by his California conviction. If he had made such a showing, we do not think that Braden would stand in his way. Cf. Nelson v. George, 1970, 399 U.S. 224, 90 S.Ct. 1963, 26 L.Ed.2d 578. But he did not. We do not read Braden as requiring that the district court for the Western District of Washington must proceed when nothing in the petition shows that his custody in that District is in any way affected by the California conviction that he attacks. The rationale of Braden is that California is the appropriate venue. Washington would also be appropriate if Shelton’s custody there were affected by his California conviction. We hold that, when that is not the case, Washington is not an appropriate jurisdiction under Braden-, California is appropriate. If Shelton is “in custody pursuant to the judgment of a [California] State court,” under the current expanded concept of custody, he is in custody in California.

Affirmed.