author: COFFIN, Chief Judge. ALDRICH, Senior Judge

text:
    UNITED STATES of America, Appellee, v. Richard M. PENTA, Defendant, Appellant.
    No. 72-1331.
    United States Court of Appeals, First Circuit.
    Argued Jan. 5, 1973.
    Decided March 7, 1973.
    Paul F. Sweeney, Boston, Mass., for defendant, appellant.
    Richard E. Bachman, Asst. U. S. Atty., with whom James N. Gabriel, U. S. Atty., was on brief, for appellee.
    Before COFFIN, Chief Judge, ALD-RICH and CAMPBELL, Circuit Judges.
   COFFIN, Chief Judge.

In June, 1970, appellant Penta was convicted of fraudulently possessing and transferring counterfeit Federal Reserve Notes in violation of 18 U.S.C. §§ 472 and 473. His sole defense was that he was entrapped by an alleged government agent. We affirmed the conviction in December, 1970, in an unpublished memorandum and order. Subsequently, in May, 1972, in a post-conviction collateral proceeding, the Massachusetts Supreme Judicial Court reversed earlier state court convictions of appellant in the mid-1960’s for concealing stolen motor vehicles, on the basis that some of the evidence introduced resulted from an illegal search and seizure. Commonwealth v. Penta, 1972 Mass.Adv.Sh. 1015, 282 N.E.2d 674. Since these convictions had been used in the 1970 federal trial to impeach appellant’s credibility, he moved for a new trial and appeals from the denial thereof.

Initially we are met with the government’s contention, superficially appealing, that appellant may not be heard to complain about the use of the state convictions by the prosecutor on cross-examination since his own trial counsel elicited admissions of these convictions from him on direct examination. While there is some authority for the view that a defendant who first raises the issue of his prior convictions cannot complain of prosecutorial reference thereto, that rule is based upon the premise that the convictions were properly admissible in the first place to impeach the defendant’s credibility and might have been inquired into by the prosecutor in the face of a defendant’s silence on direct examination. Bohol v. United States, 227 F.2d 330 (9th Cir. 1955); United States v. Menk, 406 F.2d 124 (7th Cir. 1968) cert. denied, 395 U.S. 946, 89 S.Ct. 2019, 23 L.Ed.2d 464 (1969). That is a far cry from what we take to be the claim here: that while the state convictions may have been properly admissible at the time of the federal trial, their subsequent reversal requires a new federal trial. Moreover, we cannot fault appellant’s trial counsel who, apparently acting in good faith, introduced into evidence appellant’s prior state convictions, so as to prevent the prosecutor, on cross-examination, from stunning the jury by being first to bring these skeletons out of what otherwise might have been viewed as the defendant’s deceptively clean closet. We thus address appellant’s argument.

Appellant does not deny that he committed the act in question, but rather argues that he was entrapped by one O’Connell, a former business associate acting as a government agent. His story is that O’Connell owed him several thousand dollars, which O’Connell said could be paid only if appellant helped him, as a middleman, to sell counterfeit money. O’Connell supposedly approached appellant on December 3, 1969, with this request which was allegedly consistently refused until December 10, the morning of the sale. From the testimony of government agent Hurley it appears that O’Connell first told Hurley on December 9 that an unnamed friend of his wished to sell counterfeit money. At that time Hurley told O’Connell that he “would see what [he] could do for [O’Connell]” on account of his help. Late at night, after viewing samples of the counterfeit money, Hurley instructed O’Connell how to continue dealing with appellant and set up a meeting preceding the sale. Appellant’s name was never revealed to Hurley, despite his continual questioning, until one hour before the meeting on December 10.

At the conclusion of appellant’s testimony his trial counsel asked him about his prior convictions and parole status, all of which he openly admitted. Assuming arguendo that after O’Connell’s December 9 visits with Hurley he could be said to have become a government agent — an issue sent to the jury — only then would appellant’s credibility be crucial to his defense-of entrapment. See generally Kadis v. United States, 373 F.2d 370 (1st Cir. 1967). In that situation, appellant alleges — and we will assume so at this juncture — that the evidence of prior convictions must have affected the jury’s view of his veracity. Consequently we must determine if the subsequent reversal of those convictions requires a new trial on the counterfeiting charge.

It has recently been decided that if a conviction is based in part, on the use of prior convictions which are constitutionally invalid due to lack of counsel and which were introduced to impeach a defendant’s credibility, it must be set aside if there is no harmless error. Loper v. Beto, 405 U.S. 473, 92 S.Ct. 1014, 31 L.Ed.2d 374 (1972). See also Burgett v. Texas, 389 U.S. 109, 88 S.Ct. 258, 19 L.Ed.2d 319 (1967); United States v. Tucker, 404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592 (1972). While the Supreme Court had before it in Loper the broad question “Does the use of prior, void convictions for impeachment purposes deprive a criminal defendant of due process of law where their use might well have influenced the outcome of the case”, in its resolution of that issue in the particular fact situation before it, the Court drew exclusively upon the rationale behind the rule in Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963), which “goes to ‘the very integrity of the fact-finding process’ in criminal trials” and recognizes that convictions of uncounseled defendant lack reliability. Loper, supra, 405 U.S. at 484, 92 S.Ct. at 1019. Beto v. Stacks, 408 F.2d 313 (5th Cir. 1969), involving a factual situation virtually identical to the one before us now, addressed the problem of prior convictions subsequently found invalid because of an illegal search or seizure and could find no controlling distinction between Fourth and Sixth Amendment rights which would support a conclusion different from Burgett, the predecessor to Lo-per. It said that “while it is true that the use of evidence resulting from an unlawful search and seizure is less likely to affect the integrity of the fact-finding process than the denial of counsel at trial . . . the creation of such a constitutional hierarchy is not part of the rationale of Burgett.” Id. at 316.

In light of subsequent developments involving the exclusionary rule and Stacks’ omission of any discussion of Walder v. United States, 347 U.S. 62, 74 S.Ct. 354, 98 L.Ed. 503 (1954), see infra, we feel compelled to examine anew the issue in Stacks. We agree that the use of evidence obtained from an unlawful search and seizure has a definite influence on the fact-finding process, but in a very different way from deprivation of counsel. Such evidence tends to make the resulting conviction more, not less trustworthy. There is no lack of reliability as there was in Loper.

If the use of appellant’s prior state convictions, subsequently found to suffer from a constitutional defect, require that his federal conviction be vacated absent harmless error, it is only because the fruits of the poisonous tree now contain this additional genus. But an'examination of the roots of that tree and recent actions to limit its growth require rejection of appellant’s claim. The exclusionary rule has been called a deterrent against future illegal police conduct. “Its purpose is to deter — to compel respect for the constitutional guaranty in the only effectively available way — by removing the incentive to disregard it.” Elkins v. United States, 364 U.S. 206, 217, 80 S.Ct. 1437, 1444, 4 L.Ed.2d 1669 (1960). And long ago, Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652 (1914), established the rule as a remedy for violations of the offender’s Fourth Amendment rights.

When these principles are examined in an effort to apply the exclusionary rule here, they give little support to appellant. Harris v. New York, 401 U.S. 222, 91 S.Ct. 643, 28 L.Ed.2d 1 (1971) permitted the introduction into evidence of a confession relating to the offenses charged which was uncoerced, hence apparently trustworthy, but otherwise inadmissible under Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). The confession was used as a means of impeaching a defendant who had testified falsely on direct examination as to matters bearing quite directly on those offenses. But cf. Agnello v. United States, 269 U.S. 20, 46 S.Ct. 4, 70 L.Ed. 145 (1925). And earlier Walder allowed the admission of evidence which was illegally seized in a prior unrelated action to impeach a defendant who had testified falsely on direct examination as to matters collateral to the trial at which the evidence was admitted. Concededly, the otherwise inadmissible but trustworthy confessions and physical evidence in Harris and Walder were used to directly contradict specific false statements made on direct examination, and not to attack the defendant’s credibility in a more general manner. Yet it appears that the controlling rationale was that the valuable aid to assessing the defendant’s credibility should not be lost “because of the speculative possibility that impermissible police conduct will be encouraged thereby . . . . [Sufficient deterrence flows when the evidence in question is made unavailable to the prosecution in its case in chief.” Harris, supra, 401 U.S. at 225, 91 S.Ct. at 645. We think that the deterrent effect in instances like the one before us is similarly speculative.

If the exclusionary rule’s application in these circumstances is sought to be justified as a remedy for violation of appellant’s Fourth Amendment rights many years ago by Massachusetts police, we think that the suggested cure is worse than the disease. First, appellant has already received a remedy which is the most appropriate — his prior convictions were reversed. But more fundamentally, at the time of the federal trial the Massachusetts Supreme Judicial Court had already affirmed appellant’s state convictions. Commonwealth v. Penta, 352 Mass. 271, 225 N.E.2d 58. (1967). There was not the least hint or suggestion that those convictions were invalid. The situation is far different from cases like Loper where a trial judge could rather easily resolve a deprivation of counsel claim by reference to a defendant’s sworn statements and trial court records of prior convictions. It would play havoc with our court system to require a judge to conduct side-trials into the allegedly invalid prior convictions to determine the legality of a search or seizure. See United States v. Wendt, 347 F.Supp. 647 (N.D.Ga.1972) (dictum). We do not think that the theoretical possibilities regarding additional police deterrence or the need to effectively remedy violations of Fourth Amendment rights can serve as the justification for imposing such heavy burdens on our courts.

Nothing we have said so far is meant to suggest that we would condone introduction of the state convictions had they been overturned, on the basis of the illegal search, prior to the time of the federal trial. We note that appellant did not testify falsely on direct examination as to matters which could be specifically contradicted by reference to the prior convictions or acts as was done in Walder and Harris where the Court desired to prevent the affirmative use of perjured testimony by a defendant. No case has gone so far to suggest that the prosecution might introduce what has already been determined to be illegally obtained evidence from prior unrelated acts or convictions to impeach generally a defendant’s credibility and this contention appears to have been rejected in People v. Taylor, 104 Cal.Rptr. 350, 501 P.2d 918 (1972). In that situation the exclusionary rule does not interfere with the orderly functioning of the judicial system. Additionally, a contrary holding might otherwise affect the defendant’s choice of whether to testify in his own behalf. Harris, supra, 401 U.S. at 230, 91 S.Ct. 643, 28 L.Ed.2d 1 (Brennan, J., dissenting). We only go so far as to hold that a conviction which may have been influenced by the use, for general impeachment purposes, of prior convictions, which have been subsequently overturned on constitutional ’ grounds . relating to an illegal search or seizure, may properly stand.

To the extent that we may be incorrect in reading the recent Supreme Court holdings as requiring rejection of appellant’s claim, we still believe that the use of the prior convictions constituted harmless error beyond a reasonable doubt. Schneble v. Florida, 405 U.S. 427, 92 S.Ct. 1056, 31 L.Ed.2d 258 (1972). First, appellant’s credibility on his entrapment defense was greatly harmed by evidence relevant to predisposition that he had been charged with possession of burglar tools in the past. Second, his story was contradicted directly in part by government agents who testified to appellant’s suede coat being dry — though he alleged having walked some three blocks in a rainstorm to the place of the sale — and to his having stated, after being warned of his right to remain silent, that he had been sent out with some money to obtain some bread and had returned with neither money nor bread — a fact appellant denied at trial. Though appellant may have been incorrect in his testimony on these points and still may have been capable of being believed as to his story of entrapment in the main, we think that the use of the convictions when considered in this context added no more than minimally to the enormous damage already done to his credibility.

Affirmed.

ALDRICH, Senior Judge

(concurring).

I am happy to go along with the court’s opinion, but I believe there is a shorter approach. The close decision in Loper seems clearly to have turned on the lack of integrity, or reliability, of the prior fact finding process. Since the Court has given retroactive effect to Gideon v. Wainwright, 1963, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799; Doughty v. Maxwell, 1964, 376 U.S. 202, 84 S.Ct. 702, 11 L.Ed.2d 650, reversing Doughty v. Sacks, 1963, 175 Ohio St. 46, 191 N.E.2d 727; see Pickelsimer v. Wainwright, 1963, 375 U.S. 2, 3-4, 84 S.Ct. 80, 11 L.Ed.2d 41 (Harlan, J., dissenting), the Loper holding is a logical extension of that case. The Court, however, has not given retroactive effect to Mapp v. Ohio, 1961, 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed.2d 1081; see Linkletter v. Walker, 1965, 381 U.S. 618, 85 S.Ct. 1731, 14 L.Ed.2d 601; Desist v. United States, 1969, 394 U.S. 244, 89 S.Ct. 1030, 22 L.Ed.2d 248, and the reasons given by the Court for distinguishing Gideon from Mapp convince me that, with due respect to Beto v. Stacks, 5 Cir., 1969, 408 F.2d 313, the nature of the constitutional defect does make a difference in this kind of case. Basically the Mapp rule was of constitutional proportions because of its prophylactic importance, rather than because of its prejudicial effect on the defendant’s trial. See 367 U.S. at 652, and at 656, 81 S.Ct. 1684, quoting from Elkins v. United States, 364 U.S. 206 at 217, 80 S.Ct. 1437, 4 L.Ed.2d 1669. Even though in the case at bar the vulnerable prior conviction was post Mapp, I cannot believe the Court would apply the Loper rule in a Fourth Amendment case. Indeed, we may be said to have foreshadowed this distinction in Gilday v. Scafati, 1 Cir., 1970, 428 F.2d 1027.

      . The search warrants involved did not comply with Mass.Gen.Laws ch. 276, § 2B, which, as it has not been contended otherwise, we take to furnish constitutional minima.

      . Of course, where a defendant’s counsel introduces prior convictions which ho knows to be illegal or which so appear on their face — e. g., those resulting from deprivation of counsel — then there is a far greater reason to accept the government’s estoppel argument. While there might be the possibility that a defense lawyer could, where the legality of the prior convictions is less clear, seed the record with anticipated errors relating to the prior convictions, and upon his client’s couviction seek to attack the prior convictions in (be hope that if successful, the subsequent conviction would also fall, that game of Russian roulette seems improbable, and, in any event, our disposition here removes that concern.

      . O’Connell, who did not testify in this case, subsequently received a reward of $2000.

      . The Court in Loper, supra, 405 U.S. at 482 n. 11, 92 S.Ct. 1014, 31 L.Ed.2d 374, noted this distinction in contrasting the use of uncounseled convictions to impeach general credibility in the case before it with the more specific contradictions in Harris and Walder. While an argument can be made to the contrary, we do not think, because of the policies underlying application of the rule of exclusion for illegal search, that this footnote should be considered as requiring a finding of error where prior convictions, used only for general impeachment purposes, are subsequently reversed ; nor because of the entire thrust of the text in Loper, do we think that the footnote should be read as indicating that Loper applies in a Fourth Amendment as well as a Sixth Amendment context.

      . Appellant waited until November, 1970, to challenge these convictions in a federal habeas corpus suit winch was dismissed without prejudice in March, 1971, for failure to exhaust state remedies. We need not reach the question whether the exclusionary rule might have some application where an appeal or some other proceeding which challenges the legality of the prior convictions on search and seizure grounds is pending. Cf. F.R.Evid. 609 (e).

      . If Taylor is correct, there would seem to be a prohibition on prosecutorial reference to either the voided prior convictions or evidence discovered as the result of an illegal search or seizure in an effort to impeach generally.


source: Caselaw Access Project

author: CRARY, District Judge: GOODWIN, Circuit Judge

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Lloyd Vincent ROLLINS, Defendant-Appellant.
    No. 72-1532.
    United States Court of Appeals, Ninth Circuit.
    March 2, 1973.
    Rehearing Denied May 4, 1973.
    Douglas J. Sorensen (argued), of Romines, Wolfman, Tooby, Eiehner, Sorensen, Constantinides & Cohen, Menlo Park, Cal., for defendant-appellant.
    Robert E. Carey, Jr., Asst. U. S. Atty. (argued), James L. Browning, Jr., U. S. Atty., San Francisco, Cal., for plaintiffappellee.
    Before HAMLIN and GOODWIN, Circuit Judges, and CRARY, District Judge.

       Honorable E. Avery Crary, United States District Judge, Central District of California, sitting by designation.

   CRARY, District Judge:

This appeal is from conviction, after non-jury trial, for violation of 50 U.S.C. App. § 462(a), refusal to submit to induction. The appellant alleges error as follows:

(1) The induction order was invalid because his local board failed to refer him to a medical advisor for interview after the board was notified of appellant’s claim he was suffering from diabetes mellitus as set forth in his classification questionnaire, Selective Service Regulation, Section 1628.-2(b).
(2) Appellant was prejudiced by the failure of his local board to provide an interview with the board’s medical advisor.

Appellant registered with his local board on November 13, 1967. On February 8, 1968, he filed his classification questionnaire wherein he stated that he had a physical condition which, in his opinion, would disqualify him for service in the Armed Forces, “Diebeitis melitus (physician’s statement sent 1/10/68.” The Selective Service file evidences five reports on consultations between appellant or his parent and Doctors Dewey and Felsovanyi. The dates of these consultations appear to have been on April 1, April 3, April 13, June 5 and September 9, all in 1967. These reports were received by the local board on January 12, 1968. The first reference to the possibility of appellant suffering from diabetes appears in the third report where the doctor states: “probable pre-diabetes with hypoglycemic type of sugar tolerance curve and orthostatic hypotension.” That report states the patient was placed on a modified protein diet and that he was to be rechecked in a few months. The last physician’s report, dated September 9, 1967, being a report of Dr. Felsovanyi, states: “Seems to be feeling all right. He is very rude and hostile. Need not return.”

On June 12, 1968, the appellant was classified I-A and ordered for pre-induction physical examination on June 30, 1969.

It appears from the doctor’s report of September 9, 1967, supra, that there was no basis for determining that the appellant, when classified I-A on June 12, 1968, was suffering from a disqualifying ailment.

After appellant was ordered for preinduction physical examination he was sent to the Armed Forces Examining and Entrance Station (AFEES) for further processing on August 19, 1969. On August 22, 1969, he underwent examination and a special series of tests at Letterman General Hospital, San Francisco, California, and was found acceptable for induction. The medical report and clinical record, dated August 26, 1969, in appellant’s Selective Service file, contains the following entries: “ * * * No evidence of diabetes mellitus, reactive hypoglycemia or postural hypotension * * * Fit for induction.” The report of 26 August 1969 also states the appellant had been told by a physician that “ * * * he had diabetes although not confirmed by lab. tests; * * G. mother reportedly diabetic req. insulin for control.”

The exhaustive tests made at Letterman General Hospital and the results of such tests and examination are set forth in detail in the Selective Service file and confirm the diagnosis that there was no evidence the appellant suffered from diabetes mellitus, reactive hypoglycemia or postural hypotension. He was first ordered to be inducted in April, 1970.

The record contains no basis in fact to support appellant’s claim that he might have been classified I-Y if he had been referred to a medical advisor in June or July, 1968. The required significant possibility of classification I-Y is not present. United States v. Pace, 454 F.2d 351, 356 (9th Cir. 1972).

The filing of the within opinion has awaited the en banc opinion of this Court in the case of United States of America v. D’Arcey, 471 F.2d 880 (9th Cir. 1972).

In the D’Arcey ease, the AFEES, on July 18, 1967, reported the appellant, who had registered on March 18, 1967, “physically disqualified — re-examination believed justified.” That examination was for voluntary enlistment in the Marine Corps. The record of the examination indicated that a question was raised concerning a claimed condition of hypoglycemia or hyperinsulinism. A statement of the registrant’s physician, filed with the board about May 1, 1968, confirmed his claimed condition. The board did not order him to present himself for a medical interview but directed him to report for preinduction physical examination on June 27, 1968.

In ruling that the board’s failure to order the registrant to present himself for interview with the medical advisor to the local board constituted a denial of due process, it is stated in the opinion:

“To the extent that any of them (cases cited) can be read as indicating that a local board, acting under form 32 C.F.R. § 1628.2(b) and related regulations, can deny a medical interview to a registrant who has presented evidence of disqualification before an examination by AFEES, we overrule them. We hold that a registrant is entitled to a medical interview prior to being ordered for a physical examination when there is evidence of a recognized disqualifying medical condition or physical defect that has not been the subject of a previous examination or evaluation by AFEES.” [Emphasis added.]

In the case at bench, it appears the appellant had not “ * * * presented evidence of disqualification before examination by AFEES * * * ” nor was there “ * * * evidence of a recognized disqualifying medical condition or physical defect * * * ” presented to the board before examination by AFEES.

Assuming Rollins was entitled to a medical interview under the rule in D’Arcey, we conclude that the omission was harmless in view of the comprehensive examination given him in lieu of an interview and in view of the fact that an interview in the circumstances of this case could not have changed the result of the administrative proceedings.

We further conclude that the medical advisor could not have better protected the appellant’s rights than to request the study and testing which he underwent, as noted above. It follows that the appellant was not prejudiced by not having a medical interview prior to being ordered for physical examination, as he received all the consideration and benefits that could have been afforded to him by any medical advisor.

Viewing the evidence most favorable to the Government, as we are required to do, the conviction of the appellant by the District Court is affirmed.

GOODWIN, Circuit Judge

(specially concurring).

I concur in the affirmance.

I cannot agree, however, that Rollins forfeited his right to a medical interview for failure to present “evidence” of a disqualifying condition. The local board “shall” order a registrant to report for a medical interview if he “claims” a disqualifying defect. 32 C. F.R. § 1628.2(b). While United States v. D’Arcey, 471 F.2d 880 (9 Cir., 1972) (en banc), held that the registrant is entitled to a medical interview if he presents “evidence” of a defect, the purpose of D’Arcey was to implement rather than to narrow Reg. 1628.2(b). In using the word “evidence,” D’Arcey was merely stating the rule in light of the situation presented in that case.

Moreover, assuming that Rollins was required to submit some evidence of his claimed defect, I am not persuaded that he failed' to do so. The initial reports of the doctor indicated that Rollins may have had the claimed condition. The final report may be interpreted to mean that the claimed condition has been determined not to exist, but an equally reasonable interpretation is that Rollins was asymptomatic under the diet prescribed and that he need not have returned unless his symptoms reappeared.

Nevertheless, I am in full accord with the result reached by my brethren. Normally, the fact that a registrant is subsequently found physically acceptable at the' Armed Forces Entrance and Examination Station does not mean that he was not prejudiced by the denial of medical interview. As we stated in United States v. Baray, 445 F.2d 949 (9th Cir. 1971), and reiterated in D’Arcey.

x * x Unlike the preinduction physical examination in which hundreds of registrants may be examined by several doctors in a day’s processing, the medical interview gives the registrant the opportunity to have a single doctor focus his attention on the registrant’s condition and make a specific finding thereon * * 445 F.2d at 954.

Here, however, Rollins received an in-depth examination of his specific condition at Letterman General Hospital. This examination far exceeded any that could have been conducted in connection with a medical interview. See 32 C.F.R. § 1628.3(a) (1969). For this reason I believe that we would be elevating form over substance to treat the omission of the interview as a denial of due process.

      . Whenever a registrant who is in class I-A, class I-A-O, or class 1-0 claims that he has one or more of the disqualifying medical conditions or physical defects which appear on the list described in Section 1628.1, the local board shall order him to present himself for interview with the medical advisor to the local board at the time and place specified by the local board by mailing to such registrant a Notice to Registrant to Appear for Medical Interview (SSS Form 219). 32 C.F.R. 1628.2(b). [Rescinded Aug. 20, 1970.]


author: LEVIN H. CAMPBELL, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. DIANOVIN PHARMACEUTICALS, INC., et al., Defendants-Appellants.
    No. 72-1326.
    United States Court of Appeals, First Circuit.
    Heard Feb. 8, 1973.
    Decided March 16, 1973.

      Frank Carbo, Santurce, P. R., for appellants.
    Howard S. Epstein, Atty., Antitrust Div., Dept, of Justice, with whom Thomas E. Kauper, Asst. Atty. Gen., Antitrust Div., Julio Morales Sanchez, U. S. Atty., Gregory B. Hovendon, Chief, Consumer Affairs Section, Alvin L. Gottlieb, Deputy Asst. Gen. Counsel, Joanne S. Sisk, Chief, Appellate and Special Proceedings Branch, and Jeffrey B. Springer, Atty., Food, Drugs, and Product Safety Division, United States Department of Health, Education, and Welfare, were on brief, for appellee.
    Before COFFIN, Chief Judge, Mc-ENTEE and CAMPBELL, Circuit Judges.
   LEVIN H. CAMPBELL, Circuit Judge.

This is an appeal by a Puerto Rico drug manufacturer, Dianovin, and its president, from an order of the district court reinstating its earlier permanent injunction restraining them from activities violative of the Federal Food, Drug and Cosmetic Act (the “Act”).

Appellants’ principal contention is that the district court lacked jurisdiction, there having been no showing at the hearing on reinstatement of the injunction that the drug there in issue (vitamin K for injection) entered interstate commerce after its manufacture by Dianovin. They assert further that Congress may not regulate what they describe as a local manufacturer solely manufacturing for local consumption, and that the drugs manufactured were “new drugs”. Finally, assuming jurisdiction, they say the evidence was insufficient to warrant the injunction. We affirm.

This is not an appeal from an original injunction. The proceeding and order before us were upon a motion of the United States Attorney, made on February 5, 1971, to reinstate a permanent injunction which originally was entered against the appellants on February 17, 1969. The earlier injunction had been entered after hearing and was with the consent of the defendants. Thereafter, on June 29, 1970, in an order entered by the district court (reciting the consent of all parties including the appellants, who appeared through counsel), the original injunction was suspended until further order of the court, its terms to “revert to their full force and effect at such time as the government presents evidence to this court:

“a. that the methods used in and the facilities and controls used by the defendants for the manufacture, processing, packing and holding of drugs do not conform to and are not operated in conformity with current good manufacturing practices, or
b. that any drug manufactured by the defendants is found by the government to be adulterated or misbranded within the meaning of the law, provided that all administrative proceedings be exhausted

It seems obvious, if there is ever to be progress in litigation, that the issue before the court on the motion to reinstate was a narrow one: whether there were present any of the conditions provided in the June 29, 1970, order as causing a reversion of the injunction. That was all. The government did not have to retry its earlier case, nor reprove jurisdiction.

At the hearing the government more than met its burden. We have reviewed the complete and careful findings of the district court; they are supported by substantial evidence. They establish that the appellants’ methods, facilities and controls used for the manufacture, processing, packing and holding of vitamin K (Menadione Sodium Bisulfite) injection, a drug within the meaning of 21 U.S.C. § 321(g), did not conform to current good manufacturing practices. They further establish misbranding and adulteration of the same drug within the meaning of the Act. As provided in the consent order of June 29, 1970, any of these findings justified reinstatement of the earlier injunction.

Only after the hearing did appellants raise “jurisdictional” objections, based primarily upon the government’s failure to show that the vitamin K for injection entered interstate commerce after manufacture. The short answer is that the government had no reason at the hearing to try to do so. Jurisdiction had long before been settled — by the district court’s 1969 findings that drugs were distributed, and components received, in interstate commerce, from which the appellants did not appeal, and by the consented-to order of permanent injunction which recited that the court “has jurisdiction of the subject matter herein and of all persons or parties hereto.” We do not say that the injunction could be reinstated by showing the mishandling of some previously unmentioned drug over which the court clearly lacked jurisdiction. But Menadione Sodium Bisulfite injection was one of the drugs complained of in the original 1969 proceeding, where jurisdiction was conceded. The government, on its reinstatement motion, had no duty whatever to reestablish the interstate connections of the drug; at very most, if appellants, at this late date, had wished to raise a jurisdictional defense, the burden of proving the necessary facts was theirs.

Even, however, on the conceded facts relating to the interstate connections of vitamin K for injection, appellants’ jurisdictional argument fails. It is undisputed that the raw material vitamin K utilized in the production of vitamin K injectible was received in interstate commerce. Following a commonly-known formula, appellants would mix the ingredients with liquid and place the resulting solution in ampules for sale. Adulteration or misbranding resulting from the doing of an act “with respect to, a . . . drug . . ., if such act is done while such article is held for sale (whether or not the first sale) after shipment in interstate commerce” is a prohibited act. 21 U.S.C. § 331 (k). Apart from the fact that the end product — vitamin K for injection — was a drug, as defined in 21 U.S.C. § 321(g)(1), being in the National Formulary, its component raw materials were likewise drugs, being “articles intended for use as a component” of such a drug. 21 U.S.C. § 321(g)(1)(D). We see no point in restating the principles we recently set forth in United States v. Cassaro, Inc., 443 F.2d 153 (1st Cir. 1971). Although dealing with flour held after interstate shipment (which the defendant made into bread and rolls for local sale), the case is controlling. The appellants’ use of components shipped in interstate commerce to make vitamin K for injection brought their activities within § 331(k), and conferred jurisdiction to restrain violations thereof upon the district court. 21 U.S.C. § 332. As in Cassaro, we see nothing in § 331 (k) or the district court’s action transgressing the proper limits of authority conferred by the Commerce Clause.

The district court already having subject matter jurisdiction under the prior proceeding, and the appellants’ most recent improper activities being related to a drug within the court’s jurisdiction, it could plainly reinstate the original injunction for breach of the conditions of its suspension.

Appellants’ “new drug” argument is of no help to them. See 21 U. S.C. § 321 (p). All drugs whether old or new are subject to the prohibition against adulteration or misbranding. See 21 CFR 1.106(b) (3) (ii) for special labelling requirements applicable to prescription new drugs. The issue is irrelevant to reinstatement of the injunction. The same may be said of appellants’ last-minute attempt to attack the terms of the injunction. It is the same injunction entered without appeal and with their consent in 1969. Through counsel they agreed in 1970 that it could be reinstated upon a showing of the activities which were here abundantly demonstrated. The evidence of seriously deficient conditions and practices at appellants’ plant, coupled with a history of unsuccessful efforts to obtain compliance by appellants with laws designed to protect the health and lives of the public, more than warranted injunctive relief. See United States v. Diapulse Corporation of America, 457 F.2d 25, 28-29 (2nd Cir. 1972). We find no attempt to impose “colonial rule” upon Puerto Rico, as appellants suggest. To the contrary, were the citizens of Puerto Rico to be denied the protection of food and drug laws, enacted for the safety of all United States citizens, wherever residing, they could quite properly complain.

Affirmed. Costs to appellee.

      . United States v. Dianovin Pharmaceuticals, Inc., 342 F.Supp. 724 (D.P.R.1972).

      . 21 U.S.C. § 301 et seq.

      . The court recited in its 1969 Order of Permanent Injunction that both defendants had appeared; that the court had heard testimony and received evidence; that it had issued Findings of Fact and Conclusions of Law ; and that the defendants had consented to the entry of a Permanent Injunction. No appeal was taken.

      . The June 29, 1970 order followed a hearing on June 11, 1970 at which counsel for appellants stated, in part, that “we [the Assistant United States Attorney and himself] have been conferring about the case and we have come to the stipulation as pointed out to the effect there would be a reinstatement of the injunction if in the future it is found that the operation of Dianovin Pharmaceuticals did not comply with the law as he has pointed out.”

      . See, also United States v. 39 Cases Mich. Brand Korleen Tablets, 192 F.Supp. 51 (E.D.Mich.1961), aff’d sub nom. United States v. Detroit Vital Foods, Inc., 330 F.2d 78 (6th Cir. 1964), cert. den. 379 U.S. 832, 85 S.Ct. 63, 13 L.Ed.2d 40 (1964); United States v. 40 Cases . . . Pinocchio Brand 75% Corn . . . Oil, 289 F.2d 343 (2nd Cir. 1961), cert. den. 368 U.S. 831, 82 S.Ct. 54, 7 L.Ed.2d 34 (1961); Palmer v. United States, 340 F.2d 48 (5th Cir. 1964), cert. den. 382 U.S. 903, 86 S.Ct. 238, 15 L.Ed.2d 156 (1965); United States v. Allbrook Freezing & Cold Storage, Inc., 194 F.2d 937 (5th Cir. 1952).


author: GROOMS, District Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Wayne Hunter CARLTON and William Thomas Roberts, Defendants-Appellants.
    No. 72-2455.
    United States Court of Appeals, Fifth Circuit.
    March 19, 1973.
    Brenda M. Abrams, Miami, Fla. (Court appointed), for Carlton.
    J. V. Eskenazi, Federal Public Defender, Miami, Fla. (Court appointed, but not under act), for Roberts.
    Theodore J. Sakowitz, Asst. Federal Public Defender, Miami, Fla., for defendants-appellants.
    Robert W. Rust, U. S. Atty., Bruce E. Wagner, Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee.
    Before BELL and THORNBERRY, Circuit Judges, and GROOMS, District Judge.
   GROOMS, District Judge:

Appellants Carlton and Roberts were jointly indicted and tried in the Southern District of Florida on a two-count indictment which charged them with the possession of counterfeit money in violation of 18 U.S.C.A. § 472 and with conspiracy to violate that section in violation of 18 U.S.C.A. § 371. Carlton was convicted on both counts, Roberts on the conspiracy count only. Each was sentenced to four years on the conspiracy count. Carlton was sentenced to twelve years on the possession count to run concurrently with his sentence for conspiracy. Shortly thereafter Carlton was indicted in the Middle District of Florida for the possession of counterfeit money.

The events upon which the possession in this case was based occurred in the latter part of January and the first part of February 1971, and involved certain counterfeit ten, twenty and fifty-dollar bills. The events upon which the prosecution in the Middle District was based occurred in the latter part of February 1971, and involved counterfeit twenty and fifty-dollar notes, with Serial Nos. F4142467A and G03979195A, respectively. The counterfeit money which is the subject of both indictments was from the same issue.

Carlton was also indicted in the Middle District for the violation of Title 18 U.S.C.A. § 474 involving the possession of an obligation made in part after the similitude of an obligation of the United States, being the reverse side of a ten-dollar U. S. Treasury obligation. He entered pleas of not guilty in both Middle District cases, but later moved to withdraw his plea in the former case. While his motion was pending he was tried and convicted in this case, following which he was permitted to withdraw his plea of not guilty. The indictment in that case was then dismissed. Sentence was imposed on his plea in the other case.

Both appellants challenge the legal sufficiency of the evidence to sustain their convictions. Carlton asserts double jeopardy as to the possession count by the trial of this case pending his plea of guilty on the possession count in the Middle District.

During late January or early February Carlton rented a house trailer which was parked on Hialeah Speedway property in Hialeah, Florida, in the Southern District of Florida. Shortly after he vacated the trailer items used in the process of printing were discovered in the trailer. Green ink stains, one of the two basic colors used in counterfeiting, were found on certain of the items. During the occupancy of the trailer by Carlton, Roberts was present at the trailer and was observed in the company of Carlton. Some sixty days later when the trailer was moved, a fifty-dollar counterfeit and parts of counterfeit bills were found on the ground beneath the area where the bathroom of the trailer formerly stood. The pipe from the bathroom emptied on the ground at that point. Roberts admitted to the agent that he had assisted Carlton in setting up a printing press in the trailer and furnishing him with printing supplies, but denied any knowledge of the counterfeiting operation and claimed that he thought Carlton was setting up a legitimate print shop. Two of Roberts’ fingerprints in green ink were found on an A. B. Dick Blanket Wash can in the trailer. The counterfeit bills, negatives and plates found in the suitcase seized in the Middle District, the pieces of the bills found on the ground at the trailer site, and a bill which was passed in Hialeah were from a common source.

A Kodak filter selector envelope and two sheets of A. B. Dick yellow masking paper containing negatives of counterfeit notes were found in the suitcase. The former contained a fingerprint of Carlton, and the latter two fingerprints and a thumbprint of Roberts.

As stated by this court in United States v. Warner, 441 F.2d 821, 825 (5 Cir.), the test for the sufficiency of the evidence is:

“. . . whether, taking the view most favorable to the Government, a reasonably-minded jury eould accept the relevant evidence as adequate and sufficient to support the conclusion of the defendant’s guilt beyond a reasonable doubt. Sanders v. United States, 5 Cir. 1969, 416 F.2d 194, 196; Jones v. United States, 5 Cir. 1968, 391 F.2d 273, 274; Weaver v. United States, 5 Cir. 1967, 374 F.2d 878, 881.”

The procedure for the appellate review of the sufficiency of the evidence was set out in Odom v. United States, 377 F.2d 853, 855 (5 Cir. 1967), as follows:

“ ‘The verdict of a jury must be sustained if there is substantial evidence, taking the view most favorable to the Government, to support it.’ Glasser v. United States, 1941, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680, 704. Our obligation, therefore, is to examine the record to determine whether there is any theory of the evidence from which the jury might have excluded every hypothesis except guilt beyond a reasonable doubt. Rua v. United States, 5 Cir. 1963, 321 F.2d 140; Riggs v. United States, 5 Cir. 1960, 280 F.2d 949. In Judge Thorn-berry’s words, ‘. . . the standard utilized by this Court is not whether in our opinion the evidence and all reasonable inferences therefrom failed to exclude every hypothesis other than guilt, but rather whether there was evidence from which the jury might reasonably so conclude.’ Williamson v. United States, 5 Cir. 1966, 365 F.2d 12, 14.”

And as we announced in United States v. Sidan-Azzam, 457 F.2d 1309 (5 Cir. 1972):

“We recognize the well established rule'that there the evidence relied on to sustain a verdict is circumstantial it must be such that the trier of fact could reasonably find that the evidence excludes every reasonable hypothesis, except that of guilt. Surrett v. United States, 421 F.2d 403 (5th Cir. 1970); Riggs v. United States, 280 F.2d 949 (5th Cir. 1960).”

Applying these tests we conclude that the evidence was sufficient to sustain the jury’s verdict as to each of the appellants on the conspiracy count.

Roberts contends that since he was acquitted on the substantive count of possession he could not be guilty of conspiracy to possess the counterfeits. This contention cannot be sustained. An acquittal on a substantive offense does not preclude a verdict of guilty on a count charging a conspiracy to commit such substantive offense. Castro v. United States, 296 F.2d 540 (5th Cir.); United States v. Vastine, 363 F.2d 853 (3rd Cir.); United States v. Marcone, 275 F.2d 205 (2nd Cir.), cert. denied 362 U.S. 963, 80 S.Ct. 879, 4 L.Ed.2d 877; Coy v. United States, 5 F.2d 309 (9th Cir.); United States v. Waldin, (D.C.Pa.) 149 F.Supp. 912, aff’d 253 F.2d 551 (3 Cir.), cert. denied 356 U.S. 973, 78 S.Ct. 1136, 2 L.Ed.2d 1147.

The essence of the crime of conspiracy is the agreement and not the commission of the crime which is the object of the conspiracy. United States v. Rabinowich, 238 U.S. 78, 35 S.Ct. 682, 59 L.Ed. 1211. It is immaterial to the commission of the crime of conspiracy whether the object of the conspiracy is achieved. Rabinowich, supra ; Castro v. United States, supra; and Williams v. United States, 179 F.2d 644 (5th Cir.). There must of course be an overt act done in pursuance of the conspiracy, but such act need not constitute the very crime which is the object of the conspiracy, Rabinowich, supra.

As regards the sufficiency of the evidence to sustain his conviction on Count 2 for the possession of counterfeits, Carlton is confronted with the facts that a fifty-dollar counterfeit, and many pieces of counterfeit tens, twenties and fifties were found on the ground at the point where the toilet in the trailer at Hialeah emptied; that the pieces were matted with the residue of sewage; and that the counterfeit bill and pieces bore sundry printing defects identical to those on the bills of like denominations and plates contained in the suitcase seized in the Middle District. The defects were attributable to the fact that all the bills of the same denomination were made from the same negative or photograph. All of the notes were printed on Crane’s Crest, a wool finished paper.

Carlton’s stay in Hialeah preceded his stay in the Tampa area. The evidence as to the existence of the counterfeits, the photographs, negatives, and plates, Carlton’s connection with them, and the common genesis of all the counterfeits, including those found at the location of the trailer in Hialeah, when weighed with all the other evidence, if believed by the jury, was sufficient to establish Carlton’s prior' possession within the Southern District. The jury’s verdict on Count 2 attested that belief. It will not be disturbed.

This brings us to the final question — the plea of double jeopardy. The test of double jeopardy was pronounced in Bacom v. Sullivan, 200 F.2d 70 (5th Cir.):

“To constitute double jeopardy, it is not enough that the second prosecution arise out of the same facts as the first. It must be for the same ‘offense.’ The same act may constitute an offense against two separate statutes. The recognized test for determining the identity or separateness of offenses charged in two indictments is whether or not the same proof will sustain a conviction under both, or whether one requires proof of facts not required by the other. Chrysler v. Zerbst, 10 Cir., 81 F.2d 975; Mc-Ginley v. Hudspeth, 10 Cir., 120 F.2d 523.”

It must be shown that the two offenses are in law and fact the same. Hattaway v. United States, 399 F.2d 431 (5 Cir.).

The fifty-dollar note found at the trailer site bore Serial Number G03979195A. There were a great many fifties bearing this serial number. One of the pieces of a twenty bore Serial Number F1414246 . Hundreds of the twenties bore the number F14142467A. There were many tens bearing the Serial Number C02227833A. None of the tens were included in the Middle District possession indictment. Different times and locations were charged in the two indictments.

In Riadon v. United States, 274 F.2d 304 (6th Cir.), the court expressed the view that where the two indictments, or trials, were for the same offense a plea of guilty puts the accused in jeopardy. The court added gratuitously that as long as the plea was permitted to stand that jeopardy would result even though the plea be withdrawn. However, the court affirmed the conviction, pointing out that the acts of possessing and passing the counterfeit bills were neither on the same day nor at the same place, although the notes were probably printed from the same plate. In conclusion the court aptly observed that:

“It would be an unwelcome result and do great injury to the public interest if it were made possible in the application of the double jeopardy provision of the Fifth Amendment for a counterfeiter to plead guilty of possession or transfer of one, or a small number of illicit securities, and thereby secure immunity from prosecution in a subsequent passing or possession of an unlimited number of counterfeited obligations of the United States. This would indeed be what Mr. Justice Black in a different setting in Wade v. Hunter, 336 U.S. 684, 691, 69 S.Ct. 834, 838, 93 L.Ed. 974, denominated as ‘the mechanical application of an abstract formula.’ ”

The case of United States v. Nickerson, 211 F.2d 909 (7th Cir.), involved two indictments charging violations of Title 18 U.S.C.A. § 659. The first indictment, in the Northern District of Illinois, charged the possession of 300 bottles of whiskey on November 19, 1952. The second charged the possession of 23 Yz cases of whiskey in the Eastern District of Illinois on November 18, 1952. The accused claimed that the offenses charged arose out of the same act and constituted double jeopardy. The court did not agree with the claim, and refused to vacate the convictions.

We cannot agree with the appellant that he was placed in double jeopardy by virtue of his pleas of guilty in either of the Middle District cases. In view of this conclusion we withhold comment respecting the prosecution’s contention of waiver of the plea in the possession case.

The convictions as to both appellants are

Affirmed.

      . “The conspiracy, however fully formed, may fail of its object, however earnestly pursued; the contemplated crime may never be consummated; yet the conspiracy is none the less punishable.” Id.

      . The offset process employed in printing all the notes was to take a photograph of a genuine note and from the negative make one or more plates from which the bills were printed.

      . The “A” is indiscernible from the Exhibit.

      . The “7A” is missing from the Exhibit.

      . Possession of goods, stolen from an interstate shipment.


author: PER CURIAM: BARNES, Circuit Judge

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Johnnie WILSON, Defendant-Appellant.
    No. 72-1213.
    United States Court of Appeals, Ninth Circuit.
    Feb. 13, 1973.
    Rehearing Denied March 13, 1973.
    Joseph P. Hennessey (argued), Billings, Mont., for defendant-appellant.
    Keith L. Burrowes, Asst. U. S. Atty. (argued), Otis L. Packwood, U. S. Atty., Billings, Mont., for plaintiff-appellee.

      Before BARNES and BROWNING, Circuit Judges, and WOLLENBERG, District Judge.

       Honorable Albert C. Wollenberg, United States District Judge, Northern District of California, sitting by designation.

   PER CURIAM:

Appellant was convicted of transporting two “gambling devices” (coin-operated “Bonanza” and “bead ball” machines) in interstate commerce in violation of 15 U.S.C. § 1172. The judgment is affirmed for the reasons stated in the district court’s findings of fact, conclusions of law, and memorandum opinion reported at 355 F.Supp. 1394.

Dissenting in part, Judge Barnes concludes that the “Bonanza” machine, equipped with the set of coupons constituting Government Exhibit 1, is not a “gambling device” as defined in 15 U.S. C. § 1171. This conclusion rests entirely on the premises that no “element of chance” is involved because the player sees exactly what he is going to get before he invests his 25 cents.

Exhibit 1 consists of 1500 coupons. Of these, 1386 are “merchandise” coupons good for 50 cents credit on a purchase of $10.00 or more at a store other than that in which the “Bonanza” machine was placed. The remaining 114 are “dollar value” coupons redeemable immediately for from 50 cents to $31.00 in cash.

Since the minimum “dollar value” coupon could be exchanged immediately for 50 cents cash, it can be safely assumed that when a player began to play, the coupon he saw, and would receive for his 25 cents, was a “merchandise” coupon good for 50 cents credit on a purchase of $10.00 or more in some other store. However, he would also get a look at the next coupon, which, for another 25 cents, might entitle him to as much as $31.00 cash. The district court could reasonably conclude that most players put their first 25 cents in the “Bonanza” machine because of the “element of chance” that thé next coupon, thus exposed, would entitle them, for another 25 cents, to a guaranteed payment of 50 cents to $31.00.

The ordinary “slot machine” could be readily converted to pay off only if the player dropped in a second coin after the rollers stopped. Since no one would leave a winning combination on the machine in such circumstances, the player would always know exactly what he was going to get when he put in each of the two coins: nothing the first time; and whatever the showing combination entitled him to the second time. Yet clearly playing such a “slot machine” would involve an “element of chance.” This would be so even though the non-paying combinations on such a quarter slot machine gave the player a coupon entitling him to 50 cents credit on a $10.00 purchase from some other local merchant.

Judge Barnes agrees that Marvin v. Sloan, 77 Mont. 174, 250 P. 443 (1926), and Ferguson v. State, 178 Ind. 568, 99 N.E. 806 (1912), “require the result expressed by the district court,” but finds these decisions inapplicable because of a difference in the definition of “gambling devices” in the state statutes involved in these eases. The cases cannot be distinguished on this ground. Both turned on whether playing a device that allowed the player to see what he was going to get before he deposited his money involved an “element of chance” —exactly the question presented here. Both courts answered in the affirmative. As the Supreme Court of Indiana said in Ferguson v. State, 99 N.E. at 807:

“. . . the fact that the machine would indicate the reward before it was played makes no difference. The inducement for each play was the chance that by that play the machine would be set to indicate that it would pay checks on the following play. The thing that attracted the player was the chance that ultimately he would receive something for nothing.”

This is the overwhelming weight of authority. Appellant cites no cases to the contrary. Judge Barnes cites none.

United States v. Five Gambling Devices, 252 F.2d 210 (7th Cir. 1958), and Hannifin v. United States, 248 F.2d 173 (9th Cir. 1957), concern the meaning of the term “insignia,” not “element of chance.”

Affirmed.

BARNES, Circuit Judge

(concurring and dissenting):

Appellant was prosecuted in eleven substantive counts of a violation of 15 U.S.C. § 1172. All counts were dismissed during the trial on motion of the government except one and nine. Jury was waived and appellant was convicted on each count. He appeals.

Count One charged the transportation in interstate commerce “of four bead-ball machines.” (Ex. 7). Count Nine charged the transportation in interstate commerce “of two Bonanza machines.” (Ex. 8).

I

Briefly, the “bead-balls” are dispensed by the Victor Vendor (Ex. 7) when the Victor machine is played by the insertion of a coin (quarter). Each bead-ball contains a “number” on a paper slip in its center, which is compared with the numbers on a placard inside the glass front of the machine to determine if the person receiving the number has won. If he does, he is paid the amount listed on the placard. (Findings IV and V, Ct.Tr., p. 57)

Thus, the element of chance is clearly present in the Victor machine. It is nothing more than a sophisticated mechanical punch board. I would affirm the conviction holding that its shipment across the particular states herein involved constituted a violation of 15 U.S. C. § 1172. United States v. Brown, 156 F.Supp. 121 (N.D.Iowa 1957).

II

I come to the contrary conclusion with respect to Exhibit 8 — the Bonanza machine.

The trial court’s Findings of Fact XIII is as follows:

“Government Exhibit 8, the ‘Bonanza’ machine, was operated by placing a quarter in the machine, which activated a mechanism to dispense a coupon. If properly placed in the machine, this coupon was visible through a glass viewer in the top of the machine prior to the insertion of the quarter. After the ticket has been dispensed, the next ticket to be dispensed (upon the insertion of another quarter into the machine), is then in view behind the glass viewer on the top of the machine cabinet.” (Ct.Tr., p. 58).

I accept that finding as accurate. I likewise accept Findings of Fact XIV and XV. Yet I find therein no support for the District Court’s Conclusions of Law 4, that an untestified to “intent” changed a non-gambling device into a prohibited gambling device.

The key language of the definition of what constitutes a “gambling device” under 15 U.S.C. § 1172 is the delivery when operated, of money or property “as the result of the application of an element of chance.” 15 U.S.C. § 1171(a).

When the player can look into the Bonanza machine, and see before he deposits his quarter what he will receive, i. e., 50 cents or more credit on a purchase of $10.00 worth of goods, he does not get anything by an element of chance, when he operates it. It is undisputed a player receives exactly what he pays his quarter for.

Not all the exhibits in this case were originally forwarded to this court. By stipulation between the parties in open court it was agreed that Exhibit 1 (the tickets shipped by the defendant across state line) should be forwarded to this court. I have examined them, and their format is described in the margin.

Despite the failure of proof of any element of chance in the Bonanza machine, the trial court relied (in its written opinion) on two cases, Marvin v. Sloan, 77 Mont. 174, 250 P. 443 (1926) and Ferguson v. State, 178 Ind. 568, 99 N.E. 806 (1912); stating that in those cases “the courts found that similar machines were gambling devices.” They were, however, decided under the respective states’ definition of gambling devices. We agree with the trial judge that the two cases cited support, and would here, require the result expressed by the district court, provided the definition of “gambling devices” was the same in those states as in the federal statute. But they were not.

I agree each play is a complete act, and that it may be only preliminary to a future play. It also may not. If it is not, can the machine, without a second play, be classified as a gambling device, when no “application of an element of chance” exists, either as to the first player, or any possible next or second player ?

If a machine is so constructed as to eliminate “an application of an element of chance”, then it does not and cannot violate the federal statute upon which this prosecution is based. If the statute so fails, it is not our duty to enlarge its meaning by judicial fiat, nor to strain an interpretation of plain language on moral grounds; that is a matter for Congress to consider.

To say that the machine “allures” the player into continuing to play as does the court in City of Moberly v. Deskin, 169 Mo.App. 672, 155 S.W. 842 (Kan.City App.1913), seems to me to beg the point at issue. Obviously most humans would be pleased to receive “something for nothing”. This one cannot do with certainty at the Bonanza machine. If one plays long enough, he loses. And each time he plays he knows precisely what he is paying and what he is getting. There is no illegality in a machine selling $10.00 worth of merchandise or $100 cash for 25 cents; provided both parties are willing and the price to be paid and the amount of value to be delivered are plainly and unequivocally designated and described before the contract is consummated by the “play” of the machine.

III—Intent

I do not here decide whether the Bonanza machine could be operated as a gambling device, with the use of different equipment than that here furnished, or if used in a different manner. Such different operation might well be a violation of Arizona State, County, or City law. But it does not, of necessity, or beyond a reasonable doubt, establish that the Bonanza machine, as herein played, violated § 1172 of 15 U.S.C:

Appellee urges that:

“The fact that either the Victor Vendor or the ‘Bonanza’ could have been used in a legal manner does not change their character, determined by intent on the date of shipment. United States v. Three (3) Trade Boosters, M.D.Pa. (1955) 135 F.Supp. 24.” (Appellee’s Brief, p. 8)

Apparently the trial court approved this theory, and rested its decision thereon, holding in its opinion that the shipping of the Victor machines took place “with the intent that they be used as gambling devices.” (Ct.Tr., p. 65). I do not believe my brothers can find such an intent on a bare record. No such intent is mentioned as to the “Bonanza” machine in the Opinion (Ct.Tr., p. 65) dated October 18, 1971, but reference is made to both machines in the Court’s Conclusions of Law 2 and 4 (Ct. Tr., p. 59). And I recognize such latter conclusions are binding; if supported by the evidence.

I asked counsel at oral argument what proof of intent there was in the record. I received no answer from the government. I have, therefore, gone carefully over the record. I find a lack of proof of intent to violate § 1172 in anything defendant or any witness, said or did.

I do not find in the record any direct or circumstantial factual indication of an intent on the defendant’s part to ship the Bonanza for use as a gambling machine or that it was to be used with other or different equipment so as to result in a gambling device.

I find no evidence in the record from which such intent may be inferred, so as to transmute a non-gambling device into a gambling device, within the statutory definition. There is not the slightest evidence that the defendant had knowledge that the Bonanza had been or was being used with its tickets inserted “upside down”. In this criminal case, there is simply not enough evidence to support beyond a reasonable doubt, the theory of an inferred intent. The malefactor in this case, if he exists, is the operator who placed the tickets in the machine upside down, so the player could not see what he was to receive.

IV

I have thus far discussed state cases.

I have found no federal cases, interpreting, as have the majority, the precise language with which we are here concerned. The Slot Machine Act of 1951 contained several loopholes, caused by the failure of Congress to achieve its purpose when it failed to accurately define what constituted “a gambling device”. Congress did not seek to eliminate gambling per se. For example, it sought to write the statute around the pari-mutuel machine. This concern is vividly portrayed in the House Committee Report, H.R.Rep.No.1828, 87th Cong., 2d Sess. 6 (1962), which appears at 1962 U.S.Code Cong. & Admin.News 3809. (See Lion Manufacturing Corp. v. Kennedy, 117 U.S.App.D.C. 367, 330 F.2d 833, 835 (1964), and particularly Note 5, p. 837, with its reference to the heavy burden of proof placed on the government by the looseness of the statutory language, with its resulting “protection for the individual”.)

The case of United States v. Branson Distributing Company, 398 F.2d 929 (6th Cir. 1968) at p. 943, supplies us with advice as to how intent is to be determined, but deals with machines clearly depending mostly on chance and a little on skill. The federal case closest to ours (but still different) seems to be United States v. 11 Star-Pack Cigarette Merchandiser Machines, 248 F.Supp. 933 (E.D.Penn.1966). It dealt with 15 U.S. C. § 1171, et seq., but with a differently operated machine, which was “activated) by [the] element of chance” whether an additional free package of cigarettes was delivered. See also United States v. Two Coin-Operated Pinball Machines, 241 F.Supp. 57 (W.D.Kentucky 1965).

In United States v. Five Gambling Devices, 252 F.2d 210 (7th Cir. 1958) (one of the few cases of this type reaching the Circuit Courts), the Seventh Circuit reversed the District Court’s decision that the machine therein described was “a gambling device” and hence subject to forfeiture. It was not (said Judge Hastings) under 15 U.S.C. § 1171(a)(1), because the machine did not come within the specific language of that statute; i. e., it did not have “a drum or reel with insignia, thereon” (emphasis is the court’s) as required by the statute, (id., p. 211) It had been conceded that “the person who operates the machine may become entitled to receive money or property as the result of the application of chance.” (id., p. 212) Yet the court held “with regret” (id., p. 213) that the animals shown (monkey, cat, etc.), were not “insignia”. — hence “the trial court erred in holding that the five machines in question are gambling devices within the meaning of 15 U.S.C. § 1171(a)(1).” (id., p. 213)

“The Johnson. Act” (along with its successor now constituting § 1171, et seq. of 15 U.S.C.) being penal in character must be strictly construed. United States v. One Electronic Pointmaker, 149 F.Supp. 427, 429 (N.D.Ind.1957) and cited with approval, United States v. Five Gambling Devices, supra.

The only case we have found in this Circuit dealing with §§ 1171 and 1172 is cited with approval in United States v. Five Gambling Devices, supra, 252 F.2d at 213. Both cases espouse the strict rule:

“[A] statute whereby a man may be deprived of his personal property by way of a punishment should be construed with strictness; hence those who assume authority to take possession of such property should have clear warrant for [this] action.”

Hannifin v. United States, 248 F.2d 173, 175 (9th Cir. 1957). In Hannifin, it was also stated:

“Nothing could be clearer than that the machine with its two mechanisms is a device primarily to be used as it was used for gambling, the results admittedly being so arranged that the owner will always have more points than the player. Being a very costly and intricate device, giving such profit to the one party over the other, and consisting of over 100 interlocking parts it obviously would not be purchased for family entertainment. Likewise it is clear that the numbers attached to the revolving reels are an essential part of the gambling device for without them there would be no profitable gain to the owner from its operation by the player.”

Despite this, this Court held in Hannifin, that a device “primarily to be used for gambling”, does not fall within the prohibition of the statute because “Congress has so overparticularized the requirement for forfeiture” that the machine there involved “is outside its (the statute’s) terms.” {id., p. 175).

I would hold that same situation here exists. The judgment should be reversed as to Count Nine, with the Bonanza machine and equipment ordered returned to its owner.

      . 15 U.S.C. § 1172 prohibits (with exceptions) the transportation of gambling devices across state lines. 15 U.S.C. § 1171 defines “gambling device” as any slot or other machine, which entitles or delivers to a player “money or property”, “as the result of the application of an element of chance.” (Emphasis added)

      . “A person obtaining a dollar value coupon from Government Exhibit 8 was paid in cash in the amount listed on the particular coupon by the establishment where the machine was located.”
      (Findings of Fact XIV, Ct., p. 58)
      “The coupons contained in Government Exhibit 1 were printed by employees of the defendant, under the direction of the defendant, contained dollar value coupons at periodic intervals throughout each bundle of 1,500 coupons, which totalled $238.00 for each bundle of 1,500 coupons and were designed, printed, and intended to be used in a ‘Bonanza’ machine exactly like Government Exhibit 8.”
      (Findings of Fact XV, Ct. Tr., p. 59)

      . “The ‘Bonanza’ machine, as designed and intended to he used, constituted a gambling device when shipped in violation of Title 15 U.S.C. § 1172.” (Emphasis added.)
      (Conclusion of Law No. 4, Ct. Tr., p. 59)

      . Plaintiff’s Exhibit 1 consisted of one package of five flat “rolls” of printed tickets, each ticket in each “roll” joined to another in continuous sequence. Each flat roll was numbered differently, as follows : A 2562 to A 2567, inclusive, and each contained approximately 1,000 tickets.
      Each 1,000 (N 1500) coupons carried the same number (shown above) on its right side; and on the left: “Void for other than purposes intended or where prohibited, taxed or restricted.”
      Most coupons have on the printed legend on their face at the top, “This coupon good for”, and at the bottom there was printed: “Good on regular price only; sale merchandise excluded — One coupon per purchase.” Most coupons then had mimeographed on their face in the center below the top printing the following: “Fifty Cents to apply on purchase of Ten Dollars or More. Valid in listed stores.” Some coupons had mimeographed on their faces, in the center “$1.00 value”, or some larger sum.
      None of the five flat “rolls in Ex. 1 had printing on the back of the tickets.” They could not have been placed upside down without either placing all that way, or breaking the continuous line of tickets.

      . In some states the statutes are similar; but most state statutes, particularly in the earlier cases, differ markedly from the Federal statute. Many states have no definition of what constitutes a gambling device. Several prohibit “gambling” or “lotteries” or “gambling devices”.
      In Marvin v. Sloan, supra, the court said, “Undoubtedly the machine in question is a gambling device within the contemplation of section 11159, supra.”

      The statute involved was Montana R.C. 1921, § 11159-60, which prohibited “any slot machine, punch board or other similar machine or device.” In Ferguson v. State, supra, the statute was Indiana’s § 2474 of Burns Ann.St. of 1908. That statute prohibited “the keeping of devices for gaming.” (99 N.E. p. 806). 8ee also State v. McTeer, 129 Tenn. 535, 167 S.W. 121 (1914); Painter v. State, 163 Tenn. 627, 45 S.W.2d 46 (1932); Lang v. Merwin, 99 Me. 486, 59 A. 1021 (1905); City of Moberly v. Deskin, 169 Mo.App. 672, 155 S.W. 842 (Kan.City App.1913); Comm. v. Gritten, 180 Ky. 446, 202 S.W. 884 (1918); State v. Johnson, 15 Okl. Cr. 460, 177 P. 926 (1919); State v. Ellis, 200 Iowa 1228, 206 N.W. 105 (1925); Zaft v. Milton, 96 N.J.Eq. 576, 126 A. 29 (Ch.1924); Cagle v. State, 18 Ala.App. 553, 93 So. 206 (1922); Sheetz v. State, 156 Ark. 255, 245 S.W. 815 (1922); Brockett v. State, 33 Ga.App. 57, 125 S.E. 513 (1924); Tonahill v. Molony, 156 La. 753, 101 So. 130 (1924); People ex rel. Verchereau v. Jenkins, 153 App.Div. 512, 138 N.Y.S. 449 (N.Y.A.D.1912).
      The basic theory of these cases is well expressed in State v. Googin, 117 Me. 102, 102 A. 970, 971 (1918).

        “But respondent says the gum machine involves no element of chance; that each play of the machine is a completed transaction, and shows precisely what the player is to receive, and what the machine is to give; that there is no contract, expressed or implied, that the player shall have a second or third play to avail himself of the opportunity of obtaining the trade checks; that, this being so, there is no element of chance. But the fallacy of this contention is found in the assumption that the machine deals with the individual, whereas by its method of operation, of necessity, it deals with the public. . . . If the player does not win the first time, he knows he can repeat till he does win. It is therefore quite apparent that it is the prize, and not the gum, that invites the public. Accordingly, while each play is a completed act, it may be only preliminary to the future play, by the same person, which will bring forth the coveted prize, the chance in this operation being, not in the visible play . . . but in the invisible play by which the machine may turn up a visible prize to be captured on the next play. , If a play turns up no premium, neither party loses. If it does turn up a premium, then the machine loses on that particular play.” (Emphasis added.)
      This presents an interesting study in human psychology, and perhaps, semantics, but does it establish a violation of the Federal Criminal Statute “as the result of the application of an element of chance?”

        First, we fail to see why the person first using the machine is an “individual”, as opposed to a member of “the public.” Secondly, the statement asserts, “If the player does not win the first time, he knows he can repeat until he does win.” This is simply not true here. If he “played” every ticket in this particular machine he would “invest” (if 1,500 tickets were in the machine) $375.00, and would receive a certain “pay off” of $238.00 (Plaintiff’s Ex. 1 and R.T. 64, 11. 10-19), and no more. (From 1,000 tickets in a machine, the play would cost $250.00, and the payoff be $176.00 (R.T. 65)).

      . The stipulation (01. Tr. pp. 34 and 35) does not refer to intent. Messrs. Donkel, Salazar, Bingham and Larson testified only as to the Victor Vendor.
      Witness Florian testified he “played” the “Bonanza” machine (then known to him as the Desert Showcase Merchant Machine), at the Talk of the Town Tavern, without seeing what he was getting, because “the tickets are upside down. All I seen is a blank piece of paper.” He then arrested the local operator under a City of Phoenix ordinance.

      Witness Bratcher had several Bonanza machines, but never put the tickets in upside down. (R.T. 44). Without objection, this witness testified the Department of Public Safety of the State of Arizona had ruled the Bonanza legal to operate.
      Mr. Estes testified only with respect to the Victor Vendor (Ex. 7).
      Mr. Raszler, the addressograph operator, told how he handled the printed tickets, placing on them the redeemable amounts. He had never seen tickets placed in the Bonanza upside down. (R.T. 68, 11. 14-17).
      This was the government’s case. Nowhere appears a single word as to defendant’s intent to use the machines for gambling purposes.
      The defendant called Officer Florian as a hostile witness. He did not touch upon intent. The defendant also testified. He denied any intent to use, or to have the machines be used, for gambling. (R.T., p. 85, 11. 1 to 19; p. 87, 11. 15-16). Mr. Wilson also testified he had sought and received an opinion on January 20, 1965, from the United States Treasury Department that the Bonanza machine was not taxable as a gambling machine. That opinion was later revoked.

      . Compare the facts in United States v. Kokin, 365 F.2d 595 (3rd Cir. 1966), cert. den. 385 U.S. 987, 87 S.Ct. 597, 17 L.Ed.2d 448.


author: BRATTON, District Judge.

text:
    UNITED STATES of America, Appellee, v. Gary Lamont THOMAS, Appellant.
    No. 72-1663.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted Feb. 22, 1973.
    Decided March 23, 1973.

      Thomas W. Brooks, Overland Park, Kan. (Jon S. Willard, Overland Park, Kan., with him on the brief), for appellant.
    Edward H. Funston, Asst. U. S. Atty., Topeka, Kan. (Robert J. Roth, U. S. Atty., and Glen S. Kelly, Asst. U. S. Atty., with him on the brief), for appellee.
    Before HILL and DOYLE, Circuit Judges, and BRATTON, District Judge.
   BRATTON, District Judge.

The appellant was convicted upon an indictment charging him with armed robbery of a bank in violation of 18 U. S.C.A. § 2113(a), (d) and 18 U.S.C.A. § 2.

On this appeal, he first argues that the receipt into evidence of a conversation had between the appellant and a Deputy United States Marshal, while he had appointed counsel and in the absence of such counsel, was reversible error.

This issue arose as a result of the transportation of Thomas by two Deputy Marshals from the United States Magistrate’s court in Belleville, Illinois, , to the St. Clair County Jail in that city, ' following a removal hearing on the charge of which he now stands convicted. The Marshals had previously arrested Thomas on the charge here involved and had brought him to the jail from an Illinois penal farm. After the removal hearing, and while the appellant was being taken back to jail, he said he couldn’t understand how he could be tried for the bank robbery case, since the charge had earlier been dismissed, unless one of his partners on the job was going to testify against him.

Appellant had been advised of his rights when he was picked up at the jail to go to the Magistrate’s office and again at the removal hearing. A lawyer was appointed to represent him at the removal hearing.

During the course of the trip back to jail, neither Marshal asked appellant any question, and, indeed, one of the Marshals said nothing at all. The other Marshal’s only comment was his response, “I don’t know,” to appellant’s question concerning the ability of the United States Attorney to prosecute him for the offense when the charge had previously been dismissed.

The court below held a full hearing on the issue and correctly found that appellant had freely and voluntarily made the statements with full knowledge of his Miranda rights and without any interrogation by the officers. Hence, there is lacking any deliberateness on the part of the federal officers, and Massiah v. United States, 377 U.S. 201, 84 S.Ct. 1199, 12 L.Ed.2d 246 (1963), is not applicable.

The set of circumstances here presented does not raise the issue decided in United States v. Thomas, 474 F.2d 110 (10th Cir. 1973). What transpired on the return trip to jail cannot be characterized as an in-custody interview of appellant conducted by agents of the prosecuting party in the absence of and without the knowledge of his counsel. Hence, the ethical question raised in Thomas is not present in this appeal.

Appellant next argues that the Government should have made both Marshals available at trial. Only the Marshal who had made a comment during the trip back to the jail was called as a witness by the prosecution.

The record reflects that the defense made no motion under Fed.R.Crim.P. 17(b) or (f) either to subpoena the second Marshal or to depose him. Further, no motion was made at trial for a continuance so that the attendance of the second Marshal could be secured. The assertion that the defense was assured that both Marshals would be made available at trial is not supported by the record.

The defendant testified in his own behalf and controverted what the Marshal who testified had said. To assert, as is here being done, that examination of the second Marshal might furnish further evidence as to what actually transpired is to indulge in speculation. This claim raises no meritorious issue.

Appellant next advances the argument that certain exculpatory evidence was included in F.B.I. laboratory reports that was not made available for defense purposes. The specific allegation is that the clothing examined in the F.B.I. laboratory contained Caucasian hair, as well as Negro hair. Appellant is Negro.

Under the Omnibus Hearing Report, the Government’s file was continuously available for inspection. The defense was never refused anything that was requested. There was simply no request for the information that now is thought to be important.

Appellant’s next charge of error is that there was a break in the chain of custody with regard to certain real evidence offered at trial. Suffice it to say that the record below reflects that this contention is unfounded.

Nor is there any merit to his contention that the prosecution failed to establish that more than $100.00 was taken away from the bank during the robbery. The bank sustained a loss of more than $12,000.00 in the robbery, $3,000.00 of which was recovered outside the bank immediately after the robbers fled from the bank.

Finally, appellant asserts that the court erred in refusing to give its requested instruction dealing with the Miranda warning in connection with the admissions made to the Deputy Marshal.

The court gave an instruction which advised the jury that the circumstances surrounding such an admission must be carefully scrutinized to determine whether the statement was voluntarily made. The jury was also instructed that, if the evidence did not convince its members beyond a reasonable doubt that the admission was made voluntarily, the admission should be entirely disregarded.

The court’s instructions were proper and fully protected appellant’s interest.

Affirmed.


author: PER CURIAM:

text:
    James W. GALLAGHER and Claude M. Gallagher d/b/a Better Foods, Plaintiffs-Appellees, v. The UNENROLLED MOTOR VESSEL RIVER QUEEN (HULL NO. A-68184) et al., Defendants. Glens Falls Insurance Company, Appellant.
    No. 72-2193.
    United States Court of Appeals, Fifth Circuit.
    March 9, 1973.

      William A. Harrison, Houston, Tex., for appellant.
    John P. Forney, Houston, Tex., for Gallagher and others.
    James H. Garst, Houston, Tex., for Courtesy Ford.
    B. Buck Pettitt, Houston, Tex., for Smith and River Queen.
    Before COLEMAN, MORGAN and RONEY, Circuit Judges.
   PER CURIAM:

Plaintiffs sued to recover possession of their 38-foot pleasure motor boat, RIVER QUEEN, which one defendant, a marina operator, had sold to the other defendants. Judgment was entered for plaintiff against the purchasers on the finding that the marina operator had no right to sell the plaintiff’s vessel, and against the marina operator in favor of the purchasers who had paid for the boat which they could not keep.

The purchasers appeal on the ground that they acquired all rights to RIVER QUEEN under Section 2.403(b) of the Uniform Commercial Code (adopted in Texas as Texas Business and Commerce Code, Title 1, § 2.403(b)) which provides:

“(b) Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business.”

We find no error in the District Court’s conclusion that

“. . . Plaintiffs did not entrust the vessel River Queen to Defendant Smith as a merchant within the meaning of Section 2.403 of the Uniform Commercial Code. Plaintiffs rented a stall at Defendant Smith’s marina to keep this vessel. This defendant operated several businesses at this one location. His business of renting stalls for vessels was separate and apart from his business as a boat repair. [By inference, the Court concluded that the renting of stalls was also separate and apart from his business as a boat merchant.] The River Queen was kept at this marina pursuant to a verbal rental contract.”

We affirm the judgment on the findings of fact and conclusions of law entered by District Judge Carl O. Bue, Jr.

The Court also properly denied the defendant’s motion to set aside the judgment for lack of admiralty jurisdiction. As Judge Bue ruled,

“[i]t is a fundamental principle that admiralty has jurisdiction in a possessory suit by the legal owner of a vessel who has been wrongfully deprived of possession. Ward v. Peck, 59 U.S. (18 How.) 267 [15 L.Ed. 383] (1856); Rea v. The Steamer ECLIPSE, 135 U.S. 599 [10 S.Ct. 873, 34 L.Ed. 269] (1890); 1 Benedict on Admiralty § 73, at 154-56 (6th ed. 1940). This is the situation here. The legal principles contained in the cases cited by defendant in support of its motion are readily distinguishable from the circumstances of this case. In this lawsuit plaintiffs alleged and the Court so found, that legal title to the vessel was in the plaintiffs at all times without limitation. The determining factor which rules out the applicability of defendant’s authorities to the present factual situation is that in a true possessory libel action, as here, the force which comes into play to divest the legal owner of possession of the vessel comes from an extrinsic source. Here this force which wrongfully deprived or divested plaintiffs of possession was the act of a thief — the defendant, Robert E. Smith. See Atamanchuck v. Atamanchuck, 61 F.Supp. 459 (D.N.J.1945); The Tietjen & Lang No. 2, 53 F.Supp. 459 (D.N.J.1944). Compare Ryan v. Spaniol, 193 F.2d 551 (10th Cir. 1951); Silver v. The Sloop Silver Cloud, 259 F.Supp. 187 (S.D.N.Y.1966); The Captain Johnson, 64 F.Supp. 559 (D.N.J.1946); The Managua, 42 F.Supp. 381 (S.D.N.Y.1941). Additionally, this Court is not divested of admiralty jurisdiction by defendant’s allegations of equitable title to the vessel urged in defense of plaintiffs’ claim of legal title. Chirurg v. Knickerbocker Steam Towage Co., 174 F. 188 (D.Me.1909). See Swift & Company Packers v. Compania Colombiana Del Caribe, S.A., 339 U.S. 684, 692 [70 S.Ct. 861, 94 L.Ed. 1206] (1950).”

Affirmed.


author: INGRAHAM, Circuit Judge:

text:
    David KASNER and Joan Kasner, Plaintiffs-Appellants, v. H. HENTZ & CO. and Ralph Nernberg, Defendants-Appellees.
    No. 72-1575.
    United States Court of Appeals, Fifth Circuit.
    March 15, 1973.
    Rehearing Denied April 4,1973.

      Michael Nachwalter, Miami, Fla., for plaintiffs-appellants.
    Sidney M. Aronovitz, Miami, Fla., for defendants-appellees.
    Before BROWN, Chief Judge, and TUTTLE and INGRAHAM, Circuit Judges.
   INGRAHAM, Circuit Judge:

Plaintiffs-appellants, customers of H. Hentz & Co., a brokerage firm, brought suit against the firm and Ralph Nernberg, its registered agent, to recover damages allegedly occasioned by Nernberg’s false dealings and breach of trust in handling plaintiffs’ discretionary stock account. More particularly, plaintiffs sought damages from Nernberg and Hentz on three theories: (1) violations of 15 U.S.C. § 78 j, 15 U.S.C. § 78o(c) (1)-(2) and Securities Exchange Commission Rules 10b-5 and 15(c)(1)-(2) promulgated thereunder; (2) negligent failure to properly supervise and administer a discretionary account in violation of New York Stock Exchange Rules 401 and 405 and (3) violations of the applicable securities laws, Florida Statutes Annotated § 517.301.

Jurisdiction was asserted and is found under 28 U.S.C. §§ 1331 and 1337; § 22(a) of the Securities Act of 1933 [15 U.S.C. § 77v(a)], and § 27 of the Securities Exchange Act of 1934 [15 U.S.C. § 78aa], Pendent jurisdiction over plaintiffs’ counts alleging state securities law violations and common law negligence is also present. McCurnin v. Kohlmeyer & Co., 477 F.2d 113 (5th Cir., 1973).

The gravamen of plaintiffs’ complaint was that after suffering near disastrous losses in the stock market with a portfolio structured for a market decline, Dr. and Mrs. Kasner approached their broker Nernberg in September of 1969, intending to direct him to liquidate their holdings. Rather than lose an actively trading account and its attendant commissions, Nernberg, plaintiffs’ allege, induced the Kasners to give him trading authority over their stock portfolio and to restructure it for a rising market. Plaintiffs testified that when they approached Nernberg to liquidate their holdings, he said to them:

“And he said to me this would be [the] worst mistake you could make. Let me turn it around, and I’ll make your money back in two years; and that he would be the manager of the account. He would take it off my hands, I wouldn’t have to worry about it, I could go back to my doctoring, and I wouldn’t have to look at these statements — I couldn’t read anyway — No matter what they said, I couldn’t read these statements; I didn’t understand them. And so he offered me to take it over, he would manage it — he was an expert, a professional. I’d already learned that I could not handle the account any more; I was an amateur. I couldn’t learn enough to handle this stuff. So — And here he was offering me to take it off my hands, take it over, make money back in two years.
“I said, ‘Fine, then take it over,’ and that’s essentially how he got the account.”

In support of the Kasner’s allegations that Nernberg had induced them to remain in the market with a disastrous result, plaintiffs introduced the discretionary authorization they had executed in Nernberg’s favor in September of 1969. They also introduced evidence which showed that when signed over to Nernberg’s discretion plaintiffs’ portfolio, though below margin requirements, had a net equity in excess of $50,000. Less than nine months later, after active trading by Nernberg and maintenance calls, plaintiffs’ equity in the account had been reduced to about $3000. Plaintiffs further showed that all transactions occurring in this period of time were initiated solely by defendant Nernberg under the supervision of Hentz & Co. and that plaintiffs had continued the account only at Nernberg’s insistence.

In defense of the action Hentz relied on the testimony of Nernberg that he had not guaranteed results, nor that he had fraudulently or negligently managed the account. Defendants further relied on evidence that in the course of the decline in plaintiffs’ equity, they had sent plaintiffs numerous notifications that their account was declining. The defense contended that given such knowledge plaintiffs could not justifiably have relied on Nernberg’s management. At the close of the testimony on defendants’ motion, the district court granted a directed verdict for the defendants.

We reverse as jury questions on several controverted facts appear in this record. Boeing v. Shipman, 411 F.2d 865 (5th Cir., 1969), required that the case be submitted to the jury, the appropriate forum for determination of whether false statements were made, if so whether they were material, and if plaintiffs were justified in their reliance thereon. Evans & Co. v. McAlpine, 434 F.2d 100 (5th Cir., 1970); Radiation Dynamics, Inc. v. Goldmuntz, 464 F.2d 876 (2nd Cir., 1972); Robinson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 337 F.Supp. 107 (N.D.Ala., 1971); Hecht v. Harris, Upham & Co., 283 F.Supp. 417 (N.D.Cal., 1968); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bocock, 247 F.Supp. 373 (S.D.Tex., 1965).

In arguments over the motion for directed verdict, plaintiffs suggested that the case already tried be sent to the jury which had heard it, then should the verdict be against defendants the court could properly consider a defense motion for a judgment n. o. v., which, should the court grant it and later be reversed, would obviate the need for a retrial. This suggestion was not followed and we consequently must remand this cause for re-trial.

The order of the district court is reversed and the cause remanded.


author: MURRAH, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Louis WAGNER, Defendant-Appellant.
    No. 72-1512.
    United States Court of Appeals, Tenth Circuit.
    Submitted Jan. 12, 1973.
    Decided March 12, 1973.
    Rehearing Denied April 27, 1973.

      John C. Humpage, Topeka, Kan., for defendant-appellant.
    Kirby Patterson, Washington, D. C. (Robert J. Roth, U. S. Atty., D. Kan., George S. Kopp, Atty., and James Twitty, Sp. Atty., Dept, of Justice, on the brief), for plaintiff-appellee.
    Before MURRAH, SETH and BARRETT, Circuit Judges.
   MURRAH, Circuit Judge.

This is an appeal by Louis Wagner from judgments of conviction by a jury on two counts of attempting and conspiring to introduce, and of actually introducing, contraband amphetamine drugs into the United States Penitentiary at Leavenworth, Kansas, in violation of 18 U.S.C. §§ 2, 371, and 1791.

It is undisputed that a conspiracy existed, and that drugs were smuggled illegally into the penitentiary. The decisive question here is whether the evidence presented was sufficient to prove that Wagner was a party to the plot. The evidence consisted of the testimony of co-conspirators, and of Wagner’s name endorsed on a cheek from a co-conspirator. The sufficiency of this evidence turns on the admissibility of the co-conspirators’ implicating testimony, and this depends upon proof that Wagner did, indeed, cash the check. He denies doing so, hence, his complicity in the conspiracy hinges largely upon the identification of his endorsement on the co-conspirator’s check.

On trial; the court admitted records from other court cases bearing signatures of Wagner’s name, for use as comparisons with the endorsement on the check. Using these records and handwriting exemplars given by Wagner as standards for comparison, a qualified handwriting expert testified that the endorsement on the co-conspirator’s check was Wagner’s signature. Wagner contends the signatures on the records used for these comparisons were not properly authenticated, and, therefore, should not have been used for the comparison.

To be admissible and usable as a standard of comparison, for the purposes of opinion evidence on a questioned writing, the specimen must first be authenticated. Authentication means proof of authorship, and whether a writing has been properly authenticated is a matter for the court to decide, according to no precise formula, but based upon proof to its satisfaction. See, e.g., Withaup v. United States, 127 F. 530, 535 (8th Cir. 1903); and United States v. White, 444 F.2d 1274, 1280 (5th Cir. 1971).

The crucial question of authorship in our case is presented in these precise circumstances. When the documents were first offered, Wagner’s counsel objected to their admission, for lack of authentication. Pursuant to a colloquy between court and counsel, the documents were, however, finally admitted as public records, without any determination of the genuineness of the signatures thereon. Wagner’s counsel agreed to their admission as such, with the observation that he would “fight it out with the handwriting expert.” Several admittedly genuine exemplars of Wagner’s signature were also admitted, along with the check bearing the questioned endorsement.

When the expert was called, he stated that he had previously examined, for purposes of comparison, all of the exhibits, i.e. the endorsed check, the signature exemplars, and the public records. When the expert was asked if he had an opinion as a result of the examination, counsel objected, and was granted permission to ask a preliminary question. The witness was then asked if the opinion he would give was confined singularly to the exemplar, and whether he could state an opinion without utilizing the signature on the public records. When the expert answered that he would need the signatures on the public records to form an opinion, Wagner’s counsel objected to the expert’s opinion on grounds that the signatures on the public records had not been authenticated. The court thereupon observed that “[i]t was admitted by the court because it was a public document that showed what purported to be the signature .... The only relevance is the purported signature on a public document. And the document purports to have the signature of the defendant Wagner upon it.” The objection was overruled, and the expert witness proceeded to testify that he made a “side-by-side comparison” of the endorsement on the check “with the known material,” i.e. the public documents and the exemplar. At this point the court intervened to instruct the jury in conventional language concerning the weight to be given expert testimony. The expert witness was then permitted to express the opinion that the questioned endorsement on the check was prepared by the writer of the material found on the other exhibits. He further testified that the exemplars were in and of themselves reason to believe that Mr. Wagner endorsed the check, but because of Mr. Wagner’s “fluid handwriting style, ... it was necessary” to resort to the “undictated handwriting,” i.e. the public documents; considering the exemplars and the public documents together, he was able to determine that the questioned check was, indeed, signed by Mr. Wagner.

It is, thus, manifest that the handwriting expert’s opinion is based, in part, upon a comparison of signatures not proved to be genuine or admitted into evidence as such. The trial court’s ruling admitting Wagner’s “purported” signature as a standard of comparison clearly indicates that the court misconceived the established rule governing authentication in cases of this kind. Not having been proved to be genuine, the signatures on the public documents were inadmissible as standards of comparison. In these circumstances the foundation for the expert’s opinion cannot stand, and his opinion falls with it. The opinion evidence was erroneously admitted, it was prejudicial, and the ease must, accordingly, be reversed for a new trial.

      . Section 2 provides that whoever causes to be committed or commits an offense against the United States is punishable as a principal. Section 371 provides that if two or more persons conspire to commit any offense against the United States, or to defraud the United States or any agency thereof, and one or more of such persons act in furtherance of the conspiracy, each shall be fined a maximum of $10,000 or imprisoned not more than five years, or both, unless the offense is a misdemeanor. Section 1791 provides in presently material part that anyone who, in contravention of any rule or regulation promulgated by the Attorney General, introduces or attempts to introduce anything into or upon the grounds of any Federal penal or correctional institution shall be imprisoned not more than ten years.