author: WILLIAM E. DOYLE, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Richard MACKAY and Chester Brewer, Defendants-Appellants.
    Nos. 73-1328, 73-1329.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted Oct. 16, 1973.
    Decided Dec. 6, 1973.
    Rehearing Denied Feb. 4, 1974.
    Certiorari Denied April 29, 1974.
    See 94 S.Ct. 1996.

      Robert G. Mahony, Atty., Dept. of Justice (C. Nelson Day, U. S. Atty., D. Utah, on the brief), for plaintiff-appellee.
    Philip I. Palmer, Jr. of Palmer, Palmer & Coffee, Dallas, Tex. (Jimi Mitsunaga of Mitsunaga & Ross, Salt Lake City, Utah, on the brief), for defendant-appellant Richard Mackay.
    William F. Billings of Johnson, Guthrie & Billings, Dallas, Tex., for defendant-appellant Chester Brewer.
    Before PICKETT, SETH and DOYLE, Circuit Judges.
   WILLIAM E. DOYLE, Circuit Judge.

The cause before us is a criminal prosecution in which the defendants Mackay and Brewer were charged with and convicted of violation of the mail fraud and securities fraud statutes. They were charged in nine counts with violation of 18 U.S.C. § 1341, using the mails to defraud, and in six counts of violating 15 U.S.C. § 78j(b) and 15 U.S.C. § 78ff. The jury convicted on all counts. The judge sentenced each of the defendants to one year on each of the 15 counts, or a total of 15 years to run consecutively, and fined each of them $27,000.

There are numerous allegations in Count I, the definitive count of the indictment, but the basic facts which are relied on by the government to establish the fraud are those pertaining to the obtaining of control of Federated Security Insurance Company and Trans-Western Life Insurance Company and the stripping of Federated of its assets for the purpose of purchasing its stock. The defendants’ corporation, Kaymac Industries, Inc., was used for the purpose of negotiating and acquiring the mentioned interests. The indictment charged the defendants with conceiving a scheme to defraud the policyholders, claimants, creditors and minority shareholders of Federated by borrowing $3,-000,000 from Dorsey and Company, a New Orleans, Louisiana brokerage firm.

The basic facts surrounding the execution of the scheme are not disputed. Dorsey and Company advanced $3,000,-000 for a very short period of time to permit the purchase of 519,400 shares (93 percent) of Federated stock to be transferred to Kaymac corporation. Soon after the stock was transferred the assets of Federated were assigned to Dorsey and Company. This occurred during the latter part of July 1969. The total purchase price was $3,000,000. This sum was paid in cash to one H. Smith Hagan, President of Oregon National Life Insurance Company, the parent company of Transnational Service Corporation which owned the controlling stock of Federated. As part of the transaction, Hagan received an additional $790,000 in mortgages owned by Federated for his sale to Kaymac of the block of Transwestern stock he held.

Dorsey and Company had insisted that the assets of Federated which Mackay had authorized Dorsey to sell had to be replaced, and so in July 1969 an arrangement was made with a New York company, United Housing Corporation of New York, to purchase 4.5 million dollars in government mortgages. In turn, these mortgages were reassigned to United as security for the sale and Brewer and Mackay executed promissory notes for 4.5 million dollars and at the same time obligated Federated to repurchase the notes in the event of default by Kaymac, the primary obligor, in the purchase of the mortgages.

On July 30, 1969, the purchase of the Federated stock was completed for $3,-000,000 in cash which was advanced temporarily by Dorsey and Company. Following this closing Dorsey sold the portfolio of Federated and recouped the $3,000,000 plus interest. Federated received back $531,000 of the excess from the sale of the bonds. Dorsey and Company received a very substantial commission. Most of the $531,000 just mentioned was used by defendants to purchase Transwestern stock for Kaymac.

The defendants maintain that as a result of all these financial maneuvers Federated had not suffered; that its assets had actually increased. They also point to the fact that the exchange of assets was approved by the Insurance Commissioner for the State of Utah. The difficulty is that Federated was legally responsible to pay for the mortgages purchased, and Federated’s title was a naked legal title which was wholly lacking in equity and in substance.

Apart from this alleged scheme to defraud there are many further allegations in the indictment showing specific dispositions of cash of Federated to pay obligations of Kaymac and of the defendants personally.

The briefs contain numerous contentions. These contentions include 1) the question of sufficiency of the evidence to support the various allegations in the indictment; 2) the alleged denial of a speedy trial; 3) the alleged errors in giving and failing to give instructions; 4) it is also argued that the remarks of the trial judge during the trial constituted reversible error; and, finally, it is argued that the sentences were improper.

I.

SUFFICIENCY OF THE EVIDENCE

In considering whether the evidence is legally sufficient, it must be viewed in a light most favorable to the prosecution. The evidence is not to be weighed nor is it permissible for this court to consider the credibility of the witnesses. The essentials of mail fraud are proof of a scheme to defraud plus the use of the mails to execute or further this scheme or design. The offense of securities fraud is quite similar in that it also calls for proof of a scheme or design to defraud incident to the purchase or sale of a security. Here again, there must be the use of an instrumentality of interstate commerce or of the mails in furtherance of that scheme or design. The jurisdictional basis is, of course, the use of the mails or an instrumentality of commerce and as such each mailing is regarded as a separate crime even though it relates to essentially the same fraudulent scheme. It is also fundamental that an accused need not carry out the mailing or use of an instrumentality of commerce. If he causes it to be carried out by setting forces in motion which foreseeably result in use of the riiails, his action is sufficient. See Marvin v. United States, 279 F.2d 451 (10th Cir. 1960).

From a consideration of the evidence briefly sketched above, it is amply clear to us that Mackay, acting through Kaymac Industries, conceived a scheme to gain control of Federated by using its own assets for the purpose of purchasing its stock and for the purpose of purchasing for Kaymac stock in Transwestern. It is also clear that he used the assets of Federated to pay debts of Kaymac and to pay his own debts.

There is other fraudulent activity. It was represented to the broker who sold the Federated assets that these assets were being replaced when in fact the replacement was an insubstantial transaetion since Federated was required to somehow repay Kaymac for the purchase of the replacement assets of the mortgages.

The evidence also establishes that Brewer was a participant. He was present during the time period alleged in the indictment, either performing some steps himself or participating with Mackay. Although the evidence at trial was circumstantial, the inferences to be drawn from the basic facts strongly supported the existence of a design to obtain Federated assets for the purpose of making available cash to Mackay to the detriment and prejudice of the minority shareholders and the claimants and shareholders of Federated. The use of misrepresentation and the withholding of information to carry out the fraudulent purposes were adequáte. The hope or even the belief that these manipulations would ultimately succeed is, of course, not a defense. Sparrow v. United States, 402 F.2d 826 (10th Cir. 1968). Furthermore, the evidence establishes the uses of the mails or instrumentalities of commerce incident to the carrying out of the scheme.

II.

THE ALLEGED SPEEDY TRIAL DEPRIVATION

The indictment was returnéd on July 23, 1971, and the trial took place in December 1972. The defendants did not demand a trial. However, the defendant Mackay moved to dismiss the indictment just prior to the trial on December 1, 1972. In that motion he alleged prejudice growing out of the delay between the time that the offense was alleged to have been committed and the time of trial. He stated that the period was two years. He also alleged prejudice due to delay in bringing the case to trial for a period of 18 months. He now maintains that some witnesses who would have purchased the Federated and Transwestern corporations had been lost. This fact does not appear anywhere in the record and therefore is not entitled to any consideration.

The cause was set for trial on two occasions and the second time neither the government nor the defendant was ready and both joined in the motion for a continuance.

The standards prescribed by the Supreme Court in Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972), are 1) the length of the delay; 2) reasons for the delay; 3) whether the defendant asserted his right; and 4) whether there was actual prejudice. These, of course, are not exclusive but are to be considered in relationship to any other evidence that might be relevant.

The length of time is not great in view of the fact that the cause is a complex mail fraud-securities fraud prosecution which calls for extensive and careful organization and preparation. The defendant, as noted above, did not assert his right until it came time to go to trial. In view of this, the inference to be drawn is that his main purpose was to make a record. In short, there are manifest reasons for the delay in terms of the difficulty of the task involved.

Finally, we see no prejudice to the defendants. Accordingly, it is not a case in which there has been a violation of the Fifth or Sixth Amendments. Cf. United States v. Wilson, No. 73-1247 (10th Cir., October 4, 1973). See also Basker v. Crouse, 426 F.2d 531 (10th Cir. 1970); Dickey v. Florida, 398 U.S. 30, 90 S.Ct. 1564, 26 L.Ed.2d 26 (1970), and see the concurring opinion of Mr. Justice Brennan in this latter case.

III.

THE FAILURE TO INSTRUCT ON VIEWING THE TESTIMONY OF AN ACCOMPLICE WITH CAUTION

Defendants’ objection to the failure of the court to instruct on accessory testimony was very general in form. In fact, no specific mention was made of failure to instruct on this subject. Ordinarily this would rule out consideration of the contention (in accordance with Rule 30). In this instance, however, there was little opportunity to object. The judge at the completion of the charge asked counsel to stipulate that the exceptions could be taken after the jury retired and to further stipulate that those exceptions were deemed to be taken in “conformity to the rule.” In view of this questionable action on the part of the trial court, it would be unfair to hold defendants to a strict observance of Rule 30. Hence if the failure to give the instruction were to be regarded as prejudicial, the procedural deficiency should not and would not enter into this court’s decision. Furthermore, the fact that the instruction was an inadequate one which did not fully state the law (and it was) should not furnish a justification for the trial court’s failure to charge on this subject. Nevertheless, we are of the opinion that the failure to instruct was not reversible error. True, the witnesses in question, Dorsey and Hagan, were not directly involved in the formulation and engineering of the scheme to defraud. They did, however, have a participation whereby it was arguable that they were accomplices. Cf. Beatty v. United States, 357 F.2d 19 (10th Cir. 1966) and Hull v. United States, 324 F.2d 817 (5th Cir. 1963).

The main reason for our conclusion that the failure to give the instruction does not call for reversal is that the testimony furnished by the witnesses in question made little contribution to the case because the central scheme, that of purchasing the stock of Federated with Federated’s funds, was the heart of the scheme and an adequate basis for the charge and the conviction, and this was established with documents and other evidence. So, therefore, the case was not dependent on the so-called accomplice testimony. See United States v. Owens, 460 F.2d 268 (10th Cir.. 1972); United States v. Birmingham, 447 F.2d 1313 (10th Cir. 1971); and compare United States v. Plemons, 455 F.2d 243 (10th Cir. 1972). There we upheld the conviction, notwithstanding that there was no accomplice instruction and we did so because of strong corroborative evidence (there also, however, the defendant had not requested the instruction.)

One further factor is that the defendants do not dispute the basic facts in the case. There is no question about Mackay having promoted and carried out the transaction with the help of Brewer.

From a study of the entire record it clearly appears that the conviction, is based upon the whole scheme and not any incidental misrepresentations made to Dorsey or Hagan, which testimony strikes us as being superfluous.

Considering, then, the magnitude of the fraudulent scheme, we find it impossible to conclude that the trial court’s failure to compose and give an instruction on accomplice testimony justifies a reversal of the convictions.

IV.

THE ALLEGED PREJUDICE STEMMING FROM REMARKS OF THE TRIAL COURT

Although an extensive appendix of remarks of the trial court during the trial appears in the brief, only one of these was objected to. Thus, as to the others, it would have to appear that the particular remark or the remarks considered together constitute plain error. Rule 52(b). United States v. Wheeler, 444 F.2d 385 (10th Cir. 1971); Warden v. United States, 391 F.2d 747 (10th Cir. 1968).

The comment of the court which is shown above was directed not only to the examination of counsel for the defendant, but also to the examination of government counsel. While this comment did not serve any purpose and was undoubtedly intended to be humorous, we fail to see it as being prejudicial to the rights of the accused. If, of course, the judge had evidenced hostility or bias the question would assume different proportions. See Lowther v. United States, 455 F.2d 657 (10th Cir. 1972); cf. United States v. Wheeler, supra. We fail to see plain error in the trial court's admonition to the defendant Mackay to “answer that question without beating around the bush.” This is within the court’s province. Deschenes v. United States, 224 F.2d 688 (10th Cir. 1955).

Indeed, the trial court may even reprimand or rebuff counsel when necessary to maintain control of the proceedings. Whitlock v. United States, 429 F.2d 942 (10th Cir. 1970); United States v. Gleeson, 411 F.2d 1091 (10th Cir. 1969).

Finally, the judge’s comments on the evidence were not plain error when read in proper context, since the charge as a whole defines the jury’s role as the finder of facts.

V.

OTHER OBJECTIONS TO INSTRUCTIONS

In addition to the accessory instruction the defendants raise a number of other objections to instructions.

First, they complain that the trial judge in explaining the nature of the grand jury indictment suggested that the defendants had already been convicted by the grand jury. We disagree with this interpretation. The court explained that the indictment was merely a charge or accusation, was not evidence and was not to be considered as evidence in the case.

Second, it is contended that the judge’s comment in the charge as to reassignment of the mortgages originally assigned to Federated invaded the province of the jury. The important factor here is that the documents in the record support the judge’s comment as to reassignment. The defendants do not deny the effect of these documents but say that the reassignments were merely formal. No prejudice is shown.

We have also considered the numerous other objections including defendant Brewer’s exception to the trial court’s description of the indictment charging “failing to disclose to the broker in New Orleans, Transnational Service Corporation and Oregon National Insurance Company, as well as the District Court of the Third Judicial District, Salt Lake City, Utah, that there were no free, clear and unencumbered mortgages assigned to Federated.” The mention of the district court as one of the victims is, it is true, unsupported by evidence ; the reference, however, was a passing one which does not appear to us to be harmful.

Defendants have also taken exception to that part of the instruction stating that the jury could infer intent from circumstantial evidence. This type of instruction, or instructions similar to it, have been criticized as improperly shifting the burden of proving intent from the government to the defendant. Our court has been critical of the instruction, but has not held it to be prejudicial when the charge as a whole sufficiently emphasizes that the burden of proof is on the prosecution, and that the jury must actually conclude that defendant had the requisite intent, even though established by eircumstantiál evidence. United States v. Parker, 469 F.2d 884, 895 (10th Cir. 1972); McCarty v. United States, 409 F.2d 793, 800 (10th Cir.), cert. denied, 396 U.S. 836, 90 S.Ct. 95, 24 L.Ed.2d 87 (1969). See also United States v. Woodring, 464 F.2d 1248, 1251 (10th Cir. 1972); United States v. Tijerina, 407 F.2d 349, 355 (10th Cir. 1969). Since the judge gave clear instructions on presumption of innocence, burden of proof, use of circumstantial evidence, exculpatory nature of good faith, meaning of “knowingly” and “wilfully,” and what constitutes the requisite intent in fraud cases, it cannot be said that the embattled portion was prejudicial to defendants.

We at last consider Brewer’s objection to the instruction covering statements made recklessly being tantamount to fraudulent ones. This lengthy instruction discusses statements made without regard to whether they are true or false; statements put forth without a reasonable basis; statements of fact implying knowledge where there is no knowledge; expressions of opinion where the speaker has no opinion in fact; and promises made recklessly without reasonable basis for belief that they can be fulfilled. Insertion of the word careless does not, in our view, render the instruction erroneous because its whole thrust is conduct and activity which are tantamount to fraud. Defendant says that the law requires that a statement made recklessly must also be patently false. We disagree. The law is that a statement made which is either patently false or made with reckless indifference to its truth or falsity can be equivalent to intent to defraud. Elbel v. United States, 364 F.2d 127, 134 (10th Cir. 1966); Gusow v. United States, 347 F.2d 755, 756 (10th Cir. 1965).

VI.

THE ALLEGED EXCESSIVENESS OF THE SENTENCE

Defendants finally contend that the sentence is so patently excessive as to require relief.

At the time of sentence the judge noted the prevalence of fraud cases within the Utah district and cited this as a reason for imposing 15 consecutive one-year sentences plus substantial fines. The defendants maintain that there was essentially one offense and a number of mailings or uses of the instrumentalities of interstate commerce and that the cause should be treated as a single offense.

In an early decision in this Circuit, Mitchell v. United States, 142 F.2d 480 (10th Cir. 1944), this identical question was before our court. A mail fraud indictment had eight counts which charged a continuing scheme to defraud. The court held that this did not constitute one continuing crime but that each and every mailing was a distinct execution of the central scheme. So also in our cause each separate use of the mails is a separate offense. Similarly, the repeated violation of the Securities Act is subject to the same doctrine. See Palmer v. United States, 229 F.2d 861 (10th Cir. 1955), cert. denied, 350 U.S. 996, 76 S.Ct. 546, 100 L.Ed. 861 (1956). The constitutionality of the multiple count approach in mail fraud cases has been upheld by the Supreme Court. Badders v. United States, supra.

We have repeatedly held that so long as the sentence is valid, that is, does not exceed maximum limits, it is not illegally excessive. Smith v. United States, 273 F.2d 462 (10th Cir. 1959); Edwards v. United States, 206 F.2d 855 (10th Cir. 1953).

Federal appellate courts do not have the authority to review sentences, although there have been instances in which this power has been undertaken. See, for example, United States v. Wilson, 450 F.2d 495 (4th Cir. 1971); Marano v. United States, 374 F.2d 583 (1st Cir. 1967); United States v. West Coast News Co., 357 F.2d 855 (6th Cir. 1966); United States v. Wiley, 278 F.2d 500 (7th Cir. 1960).

There is an avenue open to the defendant and that is to move pursuant to Rule 35 of the Federal Rules of Criminal Procedure for a reconsideration of the sentence. The trial court may take a different view at this later stage in the proceedings. We, however, lack legal authority to interfere with the sentences imposed and we are not disposed to employ fiction to achieve a result.

We deem it unnecessary to discuss the many other points raised in the briefs. All matters having a semblance of merit have been examined and listed.

The judgment of the district court is affirmed.

COMMENTS ON THE MOTIONS FOR REHEARING

The motions for rehearing of both defendants advance several contentions. We consider several but not all of these contentions. The defendant Brewer objects to several statements in the opinion such as the reference to “defendants’ corporation.” Brewer was secretary-treasurer of Kaymac and he had signed on its behalf. See, for example, the Government’s Exhibit 25-C, dated August 27, 1969, an assignment on behalf of Kaymac Industries.

Brewer claims that he did not execute promissory notes to United Housing. He did, however, on August 12, 1969, execute an assignment to Peoples Bond and Mortgage Company incorporating a letter from Kaymac to United Housing. That letter stated that “Kaymac Industries', Inc. shall cause Federated Security Insurance Company to execute and deliver reassignments of the mortgages assigned under the letter agreement executed this date and referred to herein.” Although Brewer may not have actually executed the promissory notes reassigning the mortgages to United Housing, he was active and directly a participant in fact in the reassignment.

Both Mackay and Brewer object to the charge involving 15 counts in a transaction which is essentially one big continuing transaction. We have been referred to United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974), wherein it was held that the mailings were remote from the transactions described in the indictment. The Maze decision does not rule this case.

We have considered all the other contentions pertaining to liability and feel that they are lacking in substance. If we were able to pursue form and ignore substance, they might have some persuasive force. This, of course, we cannot do, and from a consideration of the record we are unable to agree that Brewer was in effect an uninformed bookkeeper.

The defendants argue that the consecutive sentences on 15 counts are excessive in view of the fact that the essential fraud, although large in scope, was, in the final analysis, one transaction. As noted in our opinion, we are unauthorized to change or reduce the sentences. We do, however, deem the 15 consecutive sentences as to each of the defendants to be unconscionably excessive, so much so that we consider it necessary to partially remand the case for the purpose of giving the court an opportunity to reconsider the sentences. Neither defendant had any prior convictions, and in other respects their records appear to be free of any involvement. The cause, with the exception of the matter remanded, will be retained in this court pending further proceedings.

Both motions for rehearing on liability are denied. The Clerk is directed to recall the mandate pending further proceedings in the trial court.

      . Badders v. United States, 240 U.S. 391, 36 S.Ct. 367, 60 L.Ed. 706 (1916) ; Mitchell v. United States, 142 F.2d 480 (10th Cir.), cert. denied, 323 U.S. 747, 65 S.Ct. 49, 89 L.Ed. 598 (1944).

      . Counts I through IV involved mailings of the control stock of Federated or the assets of Federated. Counts V and VI involved mailing of “lulling letters” by defendants to minority shareholders of Federated, informing them of a change in ownership and painting a rosy picture of the future of the company. Count VII involved an interoffice memo mailed by an outside consultant or assistant who was temporarily brought to Federated to “square away” the take-over which defendants were still in the process of completing. Counts VIII and IX alleged mailings of the control stock certificates of Federated from Kaymac in Dallas to Federated’s headquarters for final transfer of the stock shares into Mackay’s name.
      Counts X, XI and XV were based on use of aircraft flights in furtherance of the scheme. X and XI involved flights to Salt Lake City by participants in the contemplated transaction which would consummate the sale of the Federated and Transwestern stock to Mackay and/or Kaymac. Count XV involved a flight transferring the purported mortgage assignments to Federated from Dallas to Salt Lake. Counts XII and XIII involved mailings of Federated’s assets to brokers for resale, and count XIV involved a telegraphic transmission of $90,000 of Federated money to United Housing to facilitate the mortgage assignment facet of the overall scheme.

      . The particular remark as it appears in context reads as follows:
      BY MR. PALMER:
      Q. Mr. Kelly, I have forgotten what I was asking you when we broke for lunch, so I am going to forget that this—
      THE COURT: I want to forget the whole examination.

      MR. PALMER: Beg pardon ?
      Your Honor, I would like for the record at this time to move for a mistrial upon the grounds that the judge’s comments on the weight of the evidence is prejudicial to my client.

      . The discussion in Mitchell is as follows:
      It is of course true that an offense of a continuing duration cannot be arbitrarily divided into separate and distinct offenses by the disposition of the prosecutor and the grand jury to divide it into separate elements of time . . . But we have quite a different situation. The crimes charged in each count constitute one continuous scheme to defraud ; the same scheme is alleged in each count of the indictment, and the offense charged in each count has its genesis in the continuing scheme to defraud. But the gist and crux of the offense is the use of the mails in the execution of the scheme; it is the use of the mails for the purpose of executing the scheme which gives the federal courts jurisdiction over the offense . . . The plain distinction lies in the difference between one continuing offense which may be consummated by a single or plural acts over a period of time . . . and an indictment which alleges a continuing scheme and artifice to defraud, which is made criminal under the law each and every time the mail is used in execution thereof, and only when and if the mails are used.
      142 F.2d at 481.

      . On infrequent occasions there have been decisions which, although affirming convictions, have nevertheless remanded the case to the trial court with directions to reconsider or impose a less severe sentence. See, for example, United States v. Wilson, 450 F.2d 495 (4th Cir. 1971) (trial court’s failure to sentence under Youth Corrections Act may have been due to inadvertence) ; Marano v. United States, 374 F.2d 583 (1st Cir. 1967) (district court gave substantial consideration to legally impermissible factors) ; United States v. West Coast News Co., 357 F.2d 855 (6th Cir. 1966) (sentence of 25 years’ imprisonment plus $25,000 fine for violation of federal obscenity statutes) ; United States v. Wiley, 278 F.2d 500 (7th Cir. 1960) (The record shows that the trial judge imposed a heavier sentence on defendant who stood trial than on the codefendant who pleaded guilty).


source: Caselaw Access Project

author: GOLDBERG, Circuit Judge:

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Cassius CARTER, Defendant-Appellant.
    No. 72-3732.
    United States Court of Appeals, Fifth Circuit.
    March 22, 1974.

      Fred C. DeLong, Jr., (Court-appointed), L. Carl Hagwood, Greenville, Miss., for defendant-appellant.
    H. M. Ray, U. S. Atty., Norman L. Gillespie, Asst. U. S. Atty., Oxford, Miss., for plaintiff-appellee.
    Before TUTTLE, BELL and GOLDBERG, Circuit Judges.
   GOLDBERG, Circuit Judge:

Defendant Cassius Carter was convicted in federal district court on two counts of violating the Dyer Act by receiving and concealing two stolen automobiles which had moved in interstate commerce from Chicago, Illinois to Washington County, Mississippi. On this appeal defendant alleges that the trial court erred: 1) in excluding as hearsay defendant’s testimony regarding a conversation with the party from whom he claims to have received one of the stolen automobiles; and 2) in delivering a prejudicial supplementary charge to the jury on circumstantial evidence. We find merit in both of these contentions and hold that the district court’s supplemental instructions so prejudiced defendant’s right to a fair trial as to require a remand for a new trial on both counts of the indictment. We therefore reverse.

THE FACTS

A. Count I, 1968 Pontiac Catalina. Count I of the indictment charged that on or about May 18, 1972, Cassius Carter received and concealed a stolen 1968 Pontiac Catalina automobile, which had moved in interstate commerce from in or near Chicago, Illinois to Washington County, Mississippi, knowing the automobile to have been stolen. The government established that the Catalina had been stolen from a Chicago street in February 1972. Defendant was stopped and arrested while driving the automobile in Washington County, Mississippi in May 1972. He presented an Illinois drivers license in the name of “Earl W. Bratcher.” At the time of the arrest the stolen automobile bore a stolen Mississippi license plate, which had been taken from another car in March 1972.

Defendant claimed that he had secured the Catalina from his cousin, David Carter, who had given defendant permission to use the automobile in return for making needed repairs until David returned from a trip to California. Defendant denied having any knowledge that either the automobile or the license plates were stolen.

B. Count 11, 1971 Pontiac GTO. Count II of the indictment charged that on or about August 7, 1971, defendant received and concealed a stolen 1971 Pontiac GTO, which had moved in interstate commerce from in or near Chicago, Illinois to Washington County, Mississippi, knowing the automobile to have been stolen. The stolen automobile belonged to one Earl W. Bratcher, who testified that his Illinois driver’s license and title certificate were in the glove compartment of the car at the time of the theft. During the summer of 1971 defendant was employed as a dump truck operator under the name of Earl W. Bratcher, and he used the Earl W. Bratcher driver’s license during the course of his employment. Defendant was arrested in August 1971 in Green-ville, Mississippi in possession of the stolen GTO.

Defendant testified that he had obtained the car from a friend whom he knew by the name of Earl Bratcher. He described this Bratcher as a Negro male, approximately 27 years old—not the Earl W. Bratcher who testified at the trial and identified himself as the owner of the stolen GTO. Defendant claimed to have lent money to his acquaintance Bratcher on two or three occasions, which he assumed was the reason Bratcher had lent him the car. According to defendant’s testimony, Bratcher had informed him that he was unable to get his car out of the repair shop because he was out of money, and that if defendant would get the car and repair it, he could use it while Bratcher was out of town. Because defendant did not have a driver’s license, Bratcher gave him permission to use his license as well as the title to the GTO.

To summarize the evidence on both counts of the indictment, the government demonstrated clearly that defendant had received the two automobiles, both of which had been stolen and both of which had moved in interstate commerce. The only element of either offense subject to dispute was whether defendant knew the automobiles to have been stolen. The jury had primary responsibility for making that critical determination and thus for weighing the evidence and making credibility choices. Therefore, the evidence the jury was permitted to hear and the instructions as to how the jury should evaluate that evidence were critical to the fairness of the trial.

THE HEARSAY EXCLUSION

Defendant first argues that the trial court erred in excluding testimony offered by defendant regarding conversations with his cousin, David Carter, about the 1968 Pontiac Catalina, the subject of Count I of the indictment. After his arrest defendant was interviewed at the Greenville, Mississippi city jail by FBI Agent John Neeley. Agent Neeley obtained an oral statement from defendant concerning his possession of the stolen Catalina, including his alleged receipt of the car from cousin David Carter. At trial Agent Neeleytestified from his typewritten report of the statement.

When defendant took the stand later in the trial, he sought to give his own account of his receipt of the car from David Carter. The district court permitted defendant to testify about “what happened,” but refused to allow him to testify about his conversations with David Carter at the time of the transaction on the ground that such testimony would be “hearsay evidence.” The excluded testimony, however, did not fall within the hearsay rule at all, and the district court erred in sustaining the government’s objection to the testimony on that basis.

Application of the hearsay rule and its various exceptions presents one of the most treacherous tasks in the law of evidence; but the most fundamental element of the hearsay rule is the critical distinction between the testimonial or assertive use of human utterances and their non-testimonial use:

The theory of the Hearsay rule is that, when a human utterance is offered as evidence of the truth of the fact asserted in it, the credit of the assertor becomes the basis of our inference, and therefore the assertion can be received only when made upon the stand, subject to the test of cross-examination. If, therefore, an extrajudicial utterance is offered, not as an assertion to evidence the matter asserted, but without reference to the truth of the matter asserted, the Hearsay rule does not apply.

6 Wigmore, Evidence (3d ed.) § 1766 (emphasis in original). The bases for the distinction are the very reasons for the hearsay rule itself: 1) the out-of court declarant generally speaks without the solemn oath administered to in-court witnesses; 2) the trier- of fact has no opportunity to observe the demeanor of the out-of-court declarant; and 3) the adversary has no opportunity to cross-examine the absent declarant whose statement is reported by the witness. All of these reasons for the rule vanish when the credibility of the out-of-court asserter and the veracity of his statements are not at issue.

In the conversations about which defendant sought to testify, neither the credibility of the absent declarant, David Carter, nor the truth of the matters he asserted was relevant to the proceeding. Defendant wanted to relate the conversations in order to bolster his claim that he had no knowledge that the Pontiac Catalina allegedly obtained from his cousin was stolen. Whether or not defendant knew the automobile was stolen might have depended on what his cousin told him; it could not have depended on whether his cousin was telling him the truth. If defendant had been allowed to tell his story as he wished, the jury would have been faced, not with the issue of David Carter’s credibility, but with assessing the credibility of Cassius Carter, who was under oath and subject to cross-examination.

The government does not argue on this appeal that defendant’s testimony fell within the hearsay exclusion. Rather the government takes the position that the trial court’s error, if any, was harmless, because defendant was not prevented from submitting his explanatory evidence in the presence and hearing of the jury. The trial transcript reveals that defendant was able to testify about the substance of the transaction with his cousin. In response to questions on direct and cross-examination, defendant explained: that David Carter had towed the car to Mississippi from Illinois; that David left the car with defendant, and went on to Jackson and then to California; that the car had some dents in it and did not run very well; that David and Cassius agreed that Cassius would repair the car and keep it until David could get back from California; and that David returned to Hollandale, Mississippi to pick up the car, but left when he learned that Cassius was in jail because of the ear. In view of this testimony the government argues that the trial court’s evidentiary ruling did not impair defendant’s substantial rights and thus did not constitute reversible error. Fed.R.Crim.P., Rule 52(a).

Defendant responds that, although questioning revealed certain elements of the transaction, he was nevertheless prevented from explaining to the jury in his own words what his cousin told him when he turned over possession of the stolen Pontiac Catalina. It is clear that defendant’s responses to questions, some by his own counsel and some by the prosecutor, spread intermittently over some thirty pages of transcript, lacked the coherence and continuity that would have been possible in a straightforward recitation of his story. It is equally clear that defendant’s explanation of his possession of the stolen automobile was a critical element in his defense. The government had proved that the 1968 Catalina and the 1971 GTO had been stolen, that both cars had moved in interstate commerce, and that both were in Cassius Carter’s possession. To obtain a conviction the government needed only to establish that, at the time he took possession of the automobiles, defendant knew that they had been stolen. See United States v. Brady, 8 Cir. 1970, 425 F.2d 309; Powell v. United States, 5 Cir. 1969, 410 F.2d 710. This Court has held that the requisite knowledge that a vehicle has been stolen “may be established by circumstantial evidence and that possession of a stolen vehicle recently after its theft justifies the inference that the possession is guilty possession. This evidence may be of controlling weight unless it can be explained in some way consistent with innocence.” Welch v. United States, 5 Cir. 1967, 386 F.2d 189. Defendant argues that the trial court’s exclusion of his testimony regarding his conversations with David Carter could not be considered harmless, because it deprived him of his only defense by impairing his opportunity to explain his possession of the stolen Pontiac Catalina “in some way consistent with innocence.”

On the basis of this Court’s recent decision in United States v. Paquet, 5 Cir. 1973, 484 F.2d 208, we conclude that the trial court’s error in excluding Cassius Carter’s proposed testimony as hearsay cannot be considered harmless. In Paquet the Court determined that the district court had erroneously excluded as hearsay defendant Paquet’s testimony as to the content of certain conversations between himself and the government informer, Lewis Christian, from which he hoped to demonstrate entrapment. Writing for the panel majority Judge Coleman held, without discussion of harmless or prejudicial error, that the district court’s refusal to accept the testimony required reversal. 484 F.2d at 212. In a special concurring opinion Judge Gewin noted two particular features of Paquet’s trial that highlight its similarity to the trial of Cassius Carter: 1) the exchange about which Paquet sought to testify constituted the exclusive basis for his entrapment defense; and 2) Paquet had an opportunity in another context (examining Christian) to expose those aspects of their exchange that supported his entrapment defense. Judge Gewin concurred in the finding of reversible error, emphasizing that:

Courts are particularly reluctant to deem error harmless where, as here, the error precludes or impairs the presentation of an accused’s sole means of defense. Nor can the errors be considered harmless under the putative theory that by availing himself of the opportunity to elicit testimony from Christian concerning those aspects of the conversation most favorable to his defense, Paquet could have fully exposed his position to the jury. In my view, a surrogate explanation by Christian, a government witness, would be an inadequate substitute for Paquet’s own testimony, where Paquet’s own testimony was curtailed without explanation to the jury as to the reasons therefor while the government’s evidence on the same matter was permitted.

484 F.2d at 214 (concurring opinion). We are satisfied that Cassius Carter’s “surrogate explanation,” coming as it did in piecemeal answers to intermittent questions, was an “inadequate substitute” for the uninterrupted account of the conversations he sought to present. The trial court’s exclusion of that account was reversible error.

Of course, defendant Carter’s assignment of error on the exclusion of testimony as hearsay relates only to Count I of his two count indictment. Defendant received concurrent sentences of two years on each count. Because defendant’s second assignment of error— that the trial court’s supplemental instruction to the jury on circumstantial evidence was prejudicial—involves the validity of his conviction on both counts of the indictment, its resolution ordinarily would render consideration of the narrower objection unnecessary. We have given extensive consideration to the hearsay error in this case, however, because of the likelihood that the issue might arise once again if the government elects to reprosecute defendant. In any subsequent trial under the first count of this indictment, Cassius Carter should be permitted to testify in full and in his own words as to what David Carter told him about the 1968 Pontiac Catalina, so long as such testimony is offered without reference to the truth of the matter asserted.

THE SUPPLEMENTAL CHARGE

Defendant’s second argument on this appeal is that the trial court erred in its supplemental charge given in response to the jury’s written request for a definition of “circumstantial evidence.” In its initial charge to the jury, covering some 28 pages of transcript, the court gave the following instructions regarding circumstantial evidence:

There are two types of evidence from which a jury may properly find a defendant guilty of a crime. One is direct evidence—such as the testimony of an eyewitness. The other is circumstantial evidence—the proof of a chain of circumstances pointing to the commission of the offense.
As a general rule, the law makes no distinction between direct and circumstantial evidence, but simply requires that, before convicting a defendant, the jury be satisfied of the defendant’s guilt beyond a reasonable doubt from all the evidence in the case. (Transcript, pp. 294-95)

In addition, the court commented fairly and properly on the evidence that the only question that remained for the jury to decide was “whether or not this defendant knew or had knowledge of the fact that these automobiles were stolen when he received or concealed them . . . (Transcript, p. 311). As to the inferences that the jury might draw, the court charged:

Possession of property, recently stolen, if not satisfactorily explained, is a circumstance from which the jury may reasonably draw the inference and find that the person in possession knew the property had been stolen.
Possession in one state of property recently stolen in another state, if not satisfactorily explained, is a circumstance from which the jury might reasonably infer and find in the light of surrounding circumstances that a person in possession not only knew it to be stolen property, but also that such person received or concealed the property while moving in interstate commerce. The same inferences may be reasonably drawn from a false explanation of possession of recently stolen property. (Transcript, pp. 307-08)
******
Now, it is the exclusive province of the jury to determine whether the facts and circumstances shown by the evidence warrant any inference which the law permits the jury to draw from possession of recently stolen property. If any possession the accused may have had of recently stolen property is consistent with innocence or if you entertain reasonable doubt of guilt, then the jury should acquit the accused. (Transcript, p. 309)

Of course, the court also gave the standard series of general instructions to the jury, and several other special instructions called for under the circumstances of this case.

At 4:35 p. m. the jury retired to commence their deliberations. At 6:15 p. m. the jury returned to the courtroom and submitted the following written request to the court: “We would like circumstantial evidence clarified for us.”

The trial judge discussed the request in chambers with counsel for defendant and with counsel for the government. The judge expressed his intention to repeat that portion of his original charge relating to circumstantial evidence and noted that he “might ad-lib on it.” Then, in open court, the judge delivered the following supplemental instruction to the jury in response to its inquiry:

“I am going to give you another instruction on this, which is similar to the one that I gave you in my charge, and then I am going to try to give you an illustration or two which might further clarify it for you; to explain to you the difference between direct evidence and circumstantial evidence, which may help you in determining the law and clarifying the law for you.

“A defendant may be proven guilty by either direct or circumstantial evidence. Direct evidence is the testimony of one who asserts actual knowledge of a fact, such as an eyewitness; circumstantial evidence is proof of a chain of facts and circumstances indicating the guilt or innocence of a defendant.

“The law makes no distinction between the weight to be given to either direct or circumstantial evidence; it re-' quires only that the jury, after weighing all the evidence, must be convinced of the guilt of the defendant beyond a reasonable doubt before he can be convicted.

“Now, by these illustrations, I want you to take what I say as an illustration between direct and circumstantial evidence. We will take a ease of unlawful homicide, or a charge of unlawful homicide. We have a direct witness who is in a room with two people, and while that witness is in the room there becomes a controversy or conflict between the two persons. That witness then leaves the room.

“While that witness was in the room and has actually been in contact with these two people, can testify from actual knowledge, from eyewitness testimony, that the two people were in the room at the time and that they were engaged in a controversy.

“After that witness leaves the room, goes to another part of the building, or goes out in the yard, we will say, then that person hears a gun fire, and from the building emerges one of the people whom he or she saw in this room.

“Now, of course that witness would not be able to testify that the gun was actually fired, or that the person was actually killed by the gun. But, if she goes into the room and sees the person that she saw in the room to start with on the floor, dead, with blood on him, and the other person running with the gun from the building, those would be circumstances which would justify the jury in finding, from circumstantial evidence that the person with the gun actually fired and killed the person that was dead in the room.

“That would be one illustration of circumstantial evidence.

“Another instance of circumstantial evidence will take into consideration the crime of burglary and larceny. For instance, if you had a radio in your home, at night, and someone broke in the front door and entered the room and stole the radio and left with it, all unbeknownst to you, and the next morning you found that the door was broken down, and that the radio was gone, and then later on that day, or some time within recent time, that radio was found in the possession of another person.

“Then those are circumstances which .might justify you in believing, beyond a reasonable doubt, and to a moral certainty that the person who had possession of the radio was the person who broke into the house and stole it, unless that person made a satisfactory explanation of the manner in which he came into possession of the radio, or your radio, which was in his possession after the radio had been stolen.

“Now, if you would have had somebody there present that actually could see the person breaking into the house, and actually see them pick up the radio, and actually see them leaving with the radio from the house, that would be an actual eyewitness, direct testimony. But, if no one was there present, the fact that the radio was in the home and the door was locked on the night before, the next morning the door was broken in, the radio was gone, and later on, within a reasonable period of time, the radio was found in the possession of a person, then in the absence of some satisfactory explanation of how he came into possession of it, then you might find from that circumstantial evidence, just as you could on direct evidence, that the person actually broke into your home and stole your radio.

“Now, those are illustrations of the difference between direct evidence and circumstantial evidence.

“And, as I have said, leaving aside the explanations that I have given, and reading to you again the instruction with reference to direct and circumstantial evidence; direct evidence is the testimony of one who actually asserts—asserts actual knowledge of a fact, such as an eyewitness; circumstantial evidence is proof of a chain of facts and circumstances indicating the guilt or innocence of a defendant.

“And, as I have said, the law makes no distinction between the weight to be given to either direct or circumstantial evidence; the law only requires that the jury, after weighing all the evidence, must be convinced of the guilt of the defendant beyond a reasonable doubt before he can be convicted.” (Transcript, pp. 330-33)

Immediately after this new charge was given, the jury was escorted to dinner at 6:55 p. m. The record does not indicate what time the jurors returned from dinner to continue their deliberations, but at 9:07 p. m. they reentered the courtroom and presented verdicts of “guilty” on both counts.

Defendant’s claim that the supplemental charge unduly prejudiced the jury rests on the alleged impact of the two illustrations offered by the court to demonstrate the difference between direct evidence and circumstantial evidence. Defendant argues that these examples, which constituted approximately two-thirds of the charge, were defective: 1) because both pointed toward guilt of the accused, and no examples were offered that would be consistent with innocence of the accused; 2) because the second example incorporated an instruction on the inferences that can be drawn from unexplained possession of recently stolen property, without a corresponding instruction on the defenses available to one who is found in possession of such property; and 3) because the second example—regarding burglary and larceny —may have confused the jury as to the nature of the charges against the defendant, leading them to believe that he was on trial for theft of the automobiles in question.

In evaluating supplemental instructions to a jury, appellate courts are guided largely by lofty, but very general, propositions and admonitions. We know, for example, that when a jury expresses confusion and difficulty over an issue the trial court has an obligation to “clear them away with concrete accuracy.” Bollenbach v. United States, 1946, 326 U.S. 607, 613, 66 S.Ct. 402, 405, 90 L.Ed. 350, 354. Supplemental instructions, as well as instructions given prior to commencement of jury deliberations, must be considered as a whole, and not word-by-word or phrase-by-phrase. United States v. Jackson, 5 Cir. 1972, 470 F.2d 684, 688. Moreover, a supplemental charge ordinarily must be viewed in the light of other instructions already given. Perez v. United States, 5 Cir. 1961, 297 F.2d 12, 16.

However, the words, phrases, and paragraphs of a judge’s response to a question raised by the jury after a period of deliberation cannot reasonably be considered as merely additional language in the basic charge. As Mr. Justice Frankfurter wrote for the Supreme Court in Bollenbach:

Particularly in a criminal trial, the judge’s last word is apt to be the decisive word. If it is a specific ruling on a vital issue and misleading, the error is not cured by a prior unexceptional and unilluminating abstract charge.

326 U.S. at 612, 66 S.Ct. at 405. When after an hour and 40 minutes of deliberation a jury returns, not with a verdict, but with a request for clarification of a particular point of law, it must be recognized that the jury has been unable to reach a decision on the basis of all it has heard up until that time. Under those circumstances a trial judge must be acutely sensitive to the probability that the jurors will listen to his additional instructions with particular interest and will rely more heavily on such instructions than on any single portion of the original charge. Thus, the court must exercise special care to see that inaccuracy or imbalance in supplemental instructions do not poison an otherwise healthy trial.

In the present case, considering all instructions to the jury in their proper perspective, we cannot say that the supplemental charge met the high standard of balance and fairness necessary to assure defendant a fair trial. In its “ad-lib” remarks to the jury, after repeating the distinction between direct and circumstantial evidence, the court recited two illustrations, both of which pointed toward the guilt of the accused. In the course of posing the second illustration, the court twice informed the jury that it could infer guilt from possession of recently stolen property, unless such possession was satisfactorily explained. This went beyond a mere instruction on “circumstantial evidence”; the effect of that portion of the supplemental charge was to reemphasize to the jury the part of the instruction on “possession” and “inferences” that was favorable to the government, without mentioning the part favorable to the accused (i. e., that if any possession the accused may have had of recently stolen property is consistent with innocence, then the jury should acquit the accused).

This Court has clearly established the principle that

when the jury requests further instructions on points which are favorable to the Government, the trial judge should repeat instructions favorable to the defense where the requested instructions taken alone might leave an erroneous impression in the minds of the jury.

Bland v. United States, 5 Cir. 1962, 299 F.2d 105, 108. See also Perez v. United States, 5 Cir. 1961, 297 F.2d 12. In the present case the instructions requested by the jury were not inherently favorable to either side; but the trial court went beyond the request to provide additional instructions strongly emphasizing the theory of the prosecution. See United States v. Diamond, 5 Cir. 1970, 430 F.2d 688, 697. Upon proper objection by defense counsel, the court, either through additional illustrations or through repetition of earlier instructions, should have reminded the jury of the defenses available to one who is in possession of recently stolen property.

The error in the court’s supplemental charge is magnified by the unfortunate similarity between the example relating to “burglary and larceny” and the crime of receiving stolen property, with which Cassius Carter was accused. Both in the case before the jury and in the court’s hypothetical fact situation an accused was in possession of recently stolen property. Regarding the hypothetical situation, the court instructed the jurors that, absent a satisfactory explanation, they would be justified in believing “beyond a reasonable doubt, and to a moral certainty that the person who had possession of the radio was the person who broke into the house and stole it . . . . ” Cassius Carter’s alleged conduct conformed to the facts of the hypothetical, but he could not have been convicted of burglary and larceny under his indictment. While we are convinced that the court intended no prejudice to the accused in its choice of examples, we are equally certain that this particular illustration was confusing and misleading.

Although this is a close ease, we must reverse the judgment below and remand for further proceedings because we have been unable to assure ourselves that the trial judge did not inadvertently ad lib the defendant into a guilty status. We cannot sanction a conviction if there be a reasonable possibility that the robed judge by his words, no matter how innocent, implied guilt. We recognize that the trial judge’s duties, like those of the constabulary, are not easy ones; we also are aware of the limitations of our cloistered view. Nevertheless, having examined the evidentiary ruling and the supplemental charge, we believe that the jury might have convicted defendant— not out of conviction based on all proper and relevant testimony, and under the guidance of accurate, precise, and balanced instructions—but because of an honest misinterpretation of judicial words. An accused is entitled to more.

Reversed and remanded.

      . 18 U.S.C. § 2313. Sale or receipt of stolen vehicles.
      Whoever receives, conceals, stores, barters, sells, or disposes of any motor vehicle or aircraft, moving as, or which is a part of, or which constitutes interstate or foreign commerce, knowing the same to have been stolen, shall be fined not more than $5,000 or imprisoned not more than five years, or both.

      . Agent Neeley’s testimony was as follows:
      “Considering this particular matter and point, Carter advised that he was arrested by an officer of the Hollandale, Mississippi Police Department early on the morning of May the 18th, 1972, at which time he was in possession of a 1968 Pontiac, which did bear a Mississippi license plate and a current Mississippi inspection sticker.
      “He advised that this arrest occurred on Old Highway 61 North, within the City Limits of Hollandale.
      “He advised that he obtained this Pontiac automobile approximately two months before that time from a cousin, David Carter.
      “He stated that he could furnish no information as to how David Carter could be located, or anyone who would know his whereabouts, or the whereabouts of any of David Carter’s immediate family.
      “He stated that he paid no money for this car and did not agree to rent it or purchase it.
      “He stated that David Carter left it with him, claiming that he was going to California and did not want to tow this car to that State.
      “Carter advised that David Carter advised him that he could get the dents out of the car and could use it until he returned.
      “Cassius Carter advised that he was in Chicago, Illinois from the middle of December 1971 until the middle of January 1972.
      “He stated at that time he did not steal the 1968 Pontiac or transport it to the State of Mississippi, and did not have knowledge that the vehicle was stolen.” (Transcript, pp. 63-64).

      . Cf. Hirabayashi v. United States, 1943, 320 U.S. 81, 63 S.Ct. 1375, 87 L.Ed. 1774. For a discussion of the current applicability of the “concurrent sentence doctrine” see Benton v. Maryland, 1969, 395 U.S. 784, 787-791, 89 S.Ct. 2056, 23 L.Ed.2d 707.


author: FAIRCHILD, Circuit Judge.

text:
    Jerome SEATON and Gladys Seaton, his wife, Plaintiffs-Appellees, v. SKY REALTY COMPANY, INC., et al., Defendants-Appellants.
    No. 72-1230.
    United States Court of Appeals, Seventh Circuit.
    Argued April 2, 1973.
    Decided Feb. 20, 1974.

      Harold A. Liebenson, Dom J. Rizzi, Chicago, Ill., for defendants-appellants.
    Robert G. Schwemm, Ronald S. Samuels, Chicago, Ill., for plaintiffs-appellees; F. Willis Caruso, Chicago, Ill. of counsel.
    Before CLARK, Associate Justice, and FAIRCHILD and STEVENS, Circuit Judges.

       Associate Justice Tom C. Clark of the Supreme Court of the United States (Retired) is sitting by designation.

   FAIRCHILD, Circuit Judge.

Mr. and Mrs. Seaton, who are black, were awarded compensatory and punitive damages against defendants Sky Realty Company, a real estate broker, Jerry Carr, its manager, and Art Potocki, one of its salesmen, for racially motivated refusal to negotiate for the sale of a dwelling in a predominantly white area of Chicago. They and the owner, 'Mrs. Schmidt, were found, after a bench trial, to have violated 42 U.S.C. §§ 1982 and 3604. Mrs. Schmidt did not appeal. The other defendants challenge the sufficiency of the evidence. We affirm.

After a summary of the facts, the district court found as follows:

“Taken in its entirety, the plaintiffs have amply demonstrated through the evidence and the circumstances involved that Sky Realty Company, Inc., the defendant Jerry Carr, the defendant Art Potocki are systematically engaged in violation of both Sections 1982 and 3604, particularly as they relate to these plaintiffs.”

There was evidence, some undisputed and some showing, when credibility was resolved as the district judge did, that when Mrs. Seaton telephoned to inquire about the Schmidt home which had been advertised, Potocki assured her it was for sale, and made an appointment, but when she and her husband appeared, he told them it had been sold; that later, when investigators inquired, Carr and Potocki produced a written offer; that the purported offer had not been and never was accepted; that the usual course of business had not been followed in the receipt of the purported offer; that when Potocki was ultimately induced to show the Schmidt property to the Seatons, he did so in a grudging, uncooperative, and deliberately discouraging manner; that the house was eventually sold for substantially less than the figure quoted to the Seatons or specified in the purported offer; that it is a practice at Sky Realty for prospect sheets to contain notations of race or national origin where the prospect is of a minority race or ethnic group; and that the prospect sheet for the Seatons contained the notation “Col” as an abbreviation for colored.

There are other details, but we find ample evidence to support the finding made by the judge, and it approaches the frivolous to contend, as defendants do, that his finding was clearly erroneous.

With respect to compensatory damages, defendants assert that “there is no evidence that the plaintiffs suffered any loss or damages.”

The finding of the district court was as follows:

“Although the record is sparse as to the actual damages suffered, testimony was introduced that the plaintiff Jerome Seaton suffered great embarrassment because of the action of the defendants during his attempt with his wife to visit the property . . . and further, the plaintiffs were forced, by virtue of the wrongful actions of the various defendants, to make several trips to and from the home site and the offices of the defendant Sky Realty Co. The Court therefore concludes that actual damages have been adequately shown and they are therefore assessed in the amount of $500.”

Mr. Seaton testified, apparently with reference to the visit to the Schmidt home with Mr. Potocki, when the Seaton children were present: “I was humiliated. I was intimidated, not only as a person but as a man. He stripped me of my right as a father to my kids.” It appears to be defendants’ position that unless there is evidence of economic or financial loss, or medical evidence of mental or emotional impairment, there can be no award of compensatory damages.

We conclude, to the contrary, that an award of compensatory damages under § 1982 or “actual damages” under § 3612 is appropriate for humiliation caused by the type of violations of rights established here. Humiliation can be inferred from the circumstances as well as established by the testimony. Mr. Seaton was subjected to a racial indignity which is one of the relics of slavery which 42 U.S.C. § 1982 was enacted to eradicate. Jones v. Mayer Co., 392 U.S. 409, 441-443, 88 S.Ct. 2186, 20 L.Ed.2d 1189 (1968).

Compensatory damages are an appropriate remedy for deprivation of a federal right, are governed by federal standards, and “both federal and state rules on damages may be utilized, whichever better serves the policies expressed in the federal statutes. . . . The rule of damages, whether drawn from federal or state sources, is a federal rule responsive to the need whenever a federal right is impaired.” Sullivan v. Little Hunting Park, 396 U.S. 229, 239-240, 90 S.Ct. 400, 406, 24 L.Ed.2d 386 (1969).

In 1919 where a voter was wrongfully-deprived of his right to vote for a member of Congress, the Circuit Court of Appeals for the Eighth Circuit said :

“In the eyes of the law this right is so valuable that damages are presumed from the wrongful deprivation of it without evidence of actual loss of money, property, or any other valuable thing, and the amount of the damages is a question peculiarly appropriate for the determination of the jury, because each member of the jury has personal knowledge of the value of the right.” Wayne v. Venable, 260 F. 64, 66 (8th Cir., 1919), quoted and held applicable in a § 1983 action where a claim of unreasonable and illegal arrest was before the court. Basista v. Weir, 340 F.2d 74, 88 (3d Cir., 1965).

In a § 1983 action for an illegal arrest, although the amount of compensatory damages found by the jury was held to be excessive, an award of $5,000 was approved and the court said: “Apart from special monetary damages it is open to the jury in a case such as this to make a determination as to the amount that plaintiff is entitled to be awarded for the deprivation. This, of course, would include his subjective pain and suffering and humiliation.” Rhoads v. Horvat, 270 F.Supp. 307, 310 (D. Colo.1967).

In a § 1983 action for unlawful arrest and unreasonable search, the district court noted the absence of “proof of actual damages of any specific amount.” The court said in awarding $500 against one defendant and $250 against another,

“However, there is no doubt that Plaintiff suffered humiliation, embarrassment and discomfort in addition to being deprived of his federally protected rights as set forth above.” Sexton v. Gibbs, 327 F.Supp. 134, 143 (N.D.Texas, 1970) , aff’d 446 F.2d 904 (5th Cir., 1971) .

In an action under 42 U.S.C. §§ 1982 and 3604, involved here, for racially motivated refusal to rent, this court reversed a judgment of dismissal and directed the district court to award plaintiff “such sum, not to exceed $1000, as the district court in its discretion may determine will fairly and properly compensate such plaintiff for the loss of her civil rights and any mental anguish suffered by her.” Smith v. Sol D. Adler Realty Company, 436 F.2d 344, 351 (7th Cir., 1970). See Steele v. Title Realty Company, 478 F.2d 380, 384 (10th Cir., 1973); Gonzales v. Fairfax-Brewster School, Inc., 363 F.Supp. 1200 (E.D.Va., 1973); Allen v. Gifford, D.C., 368 F.Supp. 317 (E.D.Va., 1973).

In a § 1983 action for causing plaintiff’s loss of public employment in retaliation for exercise of first amendment rights, the Ninth Circuit said: “Compensatory damages awardable in a Civil Rights Act case are not limited to the out-of-pocket pecuniary loss the complainant suffered. Damages can also be awarded for emotional and mental distress caused by the intentional tort.” (citing cases). Donovan v. Reinbold, 433 F.2d 738, 743 (9th Cir., 1970).

In a somewhat comparable situation, an action against a union for intentional discrimination, violating a federal right, the Eighth Circuit said, “The damage arising from invidious discrimination against an employee by reason of his nonunion membership may often times be measured only in terms of the mental distress, anguish and humiliation caused him.” Richardson v. Communications Workers of America, 443 F.2d 974, 983 (8th Cir., 1971).

We are satisfied that under decided federal cases among the circuits, compensatory damages may be awarded for the humiliation suffered by plaintiffs, whether inferred from the circumstances or established by testimony, and that $500 is well within the range of reasonable amounts.

Defendants also challenge the basis for any award of punitive damages.

The district court found that defendants were “systematically engaged” in the unlawful discrimination. The court also stated that “ample cause exists for the granting of punitive damages against them” and went on to make it clear that a $1,000 punitive damage award was made against each of the three defendants who are here on appeal, “not joint and several liabilities but individual liabilities and individual judgments.”

Thus the district court must have been satisfied that there was the degree of wilful and wanton disregard of plaintiffs’ right not to suffer this sort of discrimination to warrant punitive damages. The evidence supports the finding and it is not clearly erroneous. The degree of deliberateness, stubbornness, or recklessness in doing injury to others which is a prerequisite for punitive damages has been variously expressed: e. g., “intentionally fraudulent, malicious, wilful or wanton”, Aladdin Mfg. Co. v. Mantle Lamp Co. of America, 116 F.2d 708, 716 (7th Cir., 1941), in an action for trade-mark infringement and unfair competition; “wantonness, malice, oppression or circumstances of aggravation”, Hannigan v. Sears, Roebuck and Co., 410 F.2d 285, 293 (7th Cir., 1969), applying Illinois law; “wilfully and wantonly”, Wright v. Kaine Realty, 352 F.Supp. 222, 223 (N.D.Ill., 1972), applying the federal statutes involved here. See Rogers v. Loether, 467 F.2d 1110, 1112 (7th Cir., 1972) aff’d sub nom. Curtis v. Loether, __U.S.__, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974). A universally appropriate phrasing of the standard is not readily achieved, and we doubt that there is any measurable difference between the federal standard and that of Illinois. In any event we conclude that the standard was fulfilled in this case.

The judgment appealed from is affirmed.

      . “All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to . . purchase, . . . real . property.” See Jones v. Mayer Co., 392 U.S. 409, 88 S.Ct. 2186, 20 L.Ed.2d 1189 (1968).

      . “. . . , it shall be unlawful—
      “(a) To refuse to sell . . . after the making of a bona fide offer, or to refuse to negotiate for the sale ... or otherwise make unavailable or deny, a dwelling to any person because of race,
      “(d) To represent to any person because of race, . . .’ that any dwelling is not available for . . . , sale, . . . when such dwelling is in fact so available.”