text:
    The FIRST NATIONAL BANK OF OMAHA et al., Plaintiffs-Appellees, v. The UNITED STATES of America, Defendant-Appellant.
    No. 73-1464.
    United States Court of Appeals, Eighth Circuit.
    Submitted Nov. 15, 1973.
    Decided Jan. 30, 1974.

      Michael L. Paup, Atty., Tax Div., Dept, of Justice, Washington, D. C., for defendant-appellant.
    Tylei* B. Gaines, Omaha, Neb., for plaintiffs-appellees.
    Before VAN OOSTERHOUT and MOORE , Senior Circuit Judges, and WEBSTER, Circuit Judge.

       LEONARD P. MOORE, Senior Circuit Judge, Second Circuit, sitting by designation.

   PER CURIAM.

In this tax refund case we are asked to review the holding of the District Court that, for purposes of the federal estate tax of Martha H. Hitchcock, the deductible amount of certain charitable bequests should not be reduced by a proportionate share of federal estate taxes. The District Court granted partial summary judgment in favor of plaintiffs-ap-pellees, the decedent’s co-executors. We affirm on the basis of Judge Denney’s well written and soundly reasoned opinion, 340 F.Supp. 232 (D.Neb.1972).

Martha H. Hitchcock died testate oír December 15, 1962. Her co-executors timely filed a federal estate tax return and paid the estate tax shown to be due, $9,469,302.00. The Commissioner of Internal Revenue assessed a deficiency in the amount of $992,234.10, less credit for state death taxes in the amount of $206,178.40. Plaintiffs paid the assessment together with interest of $143,557.-46, and thereafter timely filed claims for refunds of the estate taxes and interest paid. When these refund claims were disallowed by the Internal Revenue Service, this tax refund suit was instituted. Jurisdiction is found in 28 U.S. C. § 1346(a)(1).

In assessing the deficiency, the Commissioner determined that the residue of the testatrix’s estate — that portion remaining after the satisfaction of the decedent’s general and specific bequests and devises, debts and administrative expenses — was insufficient to pay the federal estate tax and state death taxes. The Commissioner originally computed the total deficiency to exceed two million dollars, and determined that the excess taxes due should be apportioned pro-rata among all the general and specific bequests listed in the will. Because the decedent had made several general and specific bequests to certain charities, this pro-rata allocation reduced the total charitable deduction allowable against the gross estate. The tax deficiency resulted from the larger taxable estate produced by the Commissioner’s method of determination.

As the District Court correctly recognized, state law governs the question herein involved. Riggs v. Del Drago, 317 U.S. 95, 63 S.Ct. 109, 87 L. Ed. 106 (1942). With respect to payment of state and federal estate taxes, Nebraska law follows an apportionment procedure which provides (1) that the burden of these taxes shall be equitably prorated among the persons interested in the estate based on the value of the interest each person is to receive and (2) that, in the apportionment, allowances shall be made for any deductions permitted by the law imposing the tax in computing the value of the net estate. Neb.Rev.Stat. § 77-2108 (1971). Where a testator has clearly demonstrated a contrary intent, however, and has designated in his will that estate or inheritance taxes be paid in a manner different than that provided by the statute, his directions will control. Naffziger v. Cook, 179 Neb. 264, 137 N.W.2d 804 (1965). Thus, the initial question before Judge Denney was whether “the decedent [had made] an effective direction that the inheritance and estate taxes be paid out of a particular portion of the estate and, if so, what was that direction.” 340 F.Supp. at 234.

The two pertinent clauses of the decedent’s will provide as follows:

ITEM II: * * * I further direct that all estate, inheritance, transfer and succession taxes lawfully levied against my estate and the shares of the beneficiaries therein shall be paid by my executors from the body of my estate and not deducted from the devises or legacies.
ITEM XIV: * * * [T]he income from my estate may be accumulated, if necessary, for any reasonable period not to exceed two (2) years in order to assist in providing funds for payment of taxes. * * *

Regarding ITEM II, Judge Denney found that even if the term “body” is interpreted in the broadest possible sense,® the decedent’s attempt to protect the devises and legacies enumerated in her will must fail because of the insufficiency of the remaining funds in the estate to meet the assessed tax burden. Moreover, even if the decedent had intended “body” to include post-mortem income, as suggested by ITEM XIV, post-mortem income may not be used to increase a tax deduction, which is fixed by reference to date of death values. Alston v. United States, 349 F.2d 87 (5th Cir. 1965).

As a result, Judge Denney concluded that “[w]here the will directs that the taxes are to be paid out of a particular fund and the fund is insufficient to do so, the ordinary result is that the direction must fail. 37 A.L.R.2d 127.” 340 F.Supp. at 235. And because the decedent’s attempted direction has failed, the Nebraska apportionment statute must control the distribution of the excess tax burden remaining after exhaustion of the fund designated by the testatrix.

Judge Denney then turned to the specific question whether, under Nebraska’s apportionment statute, charitable legacies and devises abate pro-rata along with all other legacies and devises. Finding no Nebraska cases in point, he invoked the general rule followed in other states that no pro tanto abatement of the charitable bequests is required. That rule is based on the rationale that since gifts to charities do not ordinarily generate any estate taxes but rather benefit other recipients of the estate by lowering the total taxable amount, equity as well as state and federal legislative intent require that such charitable gifts be relieved from sharing the burden of estate taxes assessed against the estate. See In re Wahr’s Estate, 370 Pa. 382, 88 A.2d 417 (1952); see also 37 A.L.R.2d 218.

We approve Judge Denney’s analysis and affirm his conclusion that the decedent’s bequests to charity should not be reduced by payment of federal estate and state death taxes.

Affirmed.

      . United States District Court for the District of Nebraska, Honorable Robert V. Denney, District Judge.

      . An additional issue confronting the court below concerned the proper manner of distributing the burden of Nebraska’s state inheritance taxes. Judge Denney found that, under Nebraska law, that fax is directly imposed upon each taxable gift, with the exception of charitable legacies and devises. Neb.Rev.Stat. § 77-2003, § 77-2007.04 (1971). While the issue was raised whether charitable bequests should be reduced by the amount of state inheritance tax imposed on other non-charitable bequests, Judge Den-ney’s decision with respect to the apportionment of federal death taxes made the resolution of this other issue unnecessary.

      . The plaintiffs’ first claim for a refund, filed on March 13, 1967, was for estate taxes paid in the amount of $242,986.82. On June 6, 1968, plaintiffs timely filed a supplemental refund claim for estate taxes paid in the amount of $786,055.70 and for the $143,557.46 in interest.

      . The co-executors accumulated sufficient income to satisfy the balance of taxes without actual diminution of any of the non-residual bequests.

      . “The Court is not persuaded that a definite construction of the term ‘body’ in this context is needed. . . . Taking the entire phrase into account, the broadest possible definition of ‘body’ must be all of the estate except the devises and legacies, since those are the items that the ‘body of the estate’ direction is to protect.” 340 F.Supp. at 235.

      . Judge Denney was careful to distinguish his conclusion in this case from tiie result lie would reach where a charity was designated to take as a residuary legatee; there, the charitable bequest would abate since, “by definition, no residuary exists until all the debts, taxes, general and specific legacies have been paid.” 340 F.Supp. at 236.


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    Alexis I. duPONT de-BIE, Appellee, v. John F. VREDENBURGH and Faith S. Vredenburgh, Appellants.
    No. 72-2404.
    United States Court of Appeals, Fourth Circuit.
    Argued Oct. 3, 1973.
    Decided Jan. 9, 1974.
    As Amended Feb. 4, 1974.

      Robert M. Wright, Baltimore, Md. (Whiteford, Taylor, Preston, Trimble & Johnston, Baltimore, Md., on brief), for appellants.
    J. Frederick Motz, Baltimore, Md. (Benjamin R. Civiletti and Venable, Ba-etjer & Howard, Baltimore, Md., on brief), for appellee.
    Before HAYNSWORTH, Chief Judge BOREMAN, Senior Circuit Judge, and RUSSELL, Circuit Judge.
   PER CURIAM:

In this intra-family dispute, appellee Alexis I. duPont de-Bie filed suit against appellants John F. Vredenburgh and his wife Faith S. Vredenburgh on six promissory notes in the total face amount of Two Hundred, Sixty Five Thousand ($265,000) Dollars. Appellant John F. Vredenburgh counterclaimed on the basis of a promissory note in the face amount of One Hundred, Fifty Thousand $150,000) Dollars, executed by appellee in favor of John F. Vredenburgh; and both appellants filed a supplemental counterclaim for sums due under a “separation agreement” between appellee and his former wife, the right to collect which had been assigned the appellant John F. Vredenburgh.

After trial without a jury, the District Court entered judgment in favor of appellee on the six promissory notes and dismissed the counterclaim of the appellant John F. Vredenburgh based on the alleged $150,000 note given the appellant Vredenburgh by the appellee. However, the District Court rendered judgment in favor of appellant John F. Vredenburgh on the rights assigned to him by appel-lee’s former wife, but only for such sums as had accrued under the separation agreement on the date of the assignment. The court further concluded that pre-judgment interest on these sums was recoverable only to the extent of those unpaid installments due under the separation agreement which had previously been reduced to judgment by the wife in a Delaware proceeding. In accordance with these findings and conclusions, the District Court entered final judgment in favor of appellee in the amount of Three Hundred, Seventy Five Thousand, Eight Hundred, Twenty Seven and 50/100 ($375,827.50) Dollars, and in favor of John F. Vredenburgh on the counterclaim in the amount of Eighty Five Thousand, Eight Hundred, One and 23/100 ($85,801.23) Dollars. The Vredenburghs appealed. We affirm in part and reverse in part.

I.

Appellants’ defense to appellee’s cause of action based on the first of the six promissory notes, in the face amount of Fifty Thousand ($50,000) Dollars, rested on the statute of limitations. The District Court found that appellants had acknowledged their liability under such note at a meeting with appellee prior to the running of the statute and thus removed the bar of the statute. We conclude that such finding was not clearly erroneous and affirm on this issue.

II.

As a defense to appellants’ 'counterclaim based on the $150,000 promissory note, appellee claimed lack of consideration, non-performance of a condition precedent, non-delivery, and delivery for a special purpose. The District Court found that the note had never been delivered to the appellant and, alternatively, if it had been delivered such delivery was for a special purpose. This finding is not clearly erroneous and must stand.

III.

In regard to the assignment by appellee’s former wife of her rights under the separation agreement, the District Court held that such assignment conveyed rights to only those sums which had accrued at the date of the assignment. The Court suggested, as a basis for such finding, (a) that since the obligations of appellee’s wife under the separation agreement were personal in nature, installments to become due in the future under such agreement could not be assigned, and (b) that‘since installments under the separation agreement were payable to appellee’s wife only as long as she remained alive, appellant failed to meet his burden of proving that the wife was still alive as of the date of the judgment. We find unpersuasive these reasons for denial of appellant’s right to judgment for all sums accruing under the separation agreement up to the date of the judgment. The general rule, of course, is that executory contracts for personal services or involving a relationship of confidence are not assignable. It is equally well established, though, that the right to receive money due or to become due under an existing contract may be assigned, even though the contract, itself, may not be assignable because it involves personal services. The fact that an assignor has obligations as well as rights under a bilateral contract, and that the obligations cannot be assigned, does not prevent him from assigning his rights. Of course, if appellee’s former wife had failed to perform her obligations under the agreement, the proof of such failure would have been a valid defense to this part of appellant’s counterclaim.

The appellee contends, however, that the burden rested on the appellant to establish that the former wife met the conditions on which the continuance of payments rested, i. e., that the former wife was alive at the time the sums to be paid by the appellee accrued. The separation agreement did provide, in the relevant part, that payments to the wife “shall cease and terminate immediately upon the death of either Husband or Wife”. This, of course, did condition the continuation of the payments to the ex-wife on the latter’s continued existence. But the vice in appel-lee’s argument is with reference to the burden of proof in this connection. It is well settled in the great majority of jurisdictions, including Maryland, that there is a presumption of the continuation of life. Under this presumption, a person shown to have been alive at a given time is presumed to remain alive until the contrary is shown by some sufficient proof or, in the absence of such proof, until a different presumption arises. The existence of such presumption shifts the. burden of proving a person’s death to the party who relies on such death. In this case, appellee’s former wife was shown to be alive as recently as 1971 when she executed the amendment to the assignment, and thus must be presumed to be alive in the absence of any contrary showing by the appellee. Appellant is entitled to judgment on the assignment for all sums which had accrued at the date of the District Court’s final order.

IV.

Finally, we conclude the appellant was entitled to recover interest on the total amount of the accrued but unpaid installments under the separation agreement up to the date of the District Court’s final order. Appellee concedes that prejudgment interest is recoverable, as a matter of legal right, as part of the damages for nonpayment of a liquidated claim. Nevertheless, appellee argues such interest should not be recoverable in this case because it was not specifically mentioned in the assignment. We disagree. It is arguable that if the separation agreement itself had specifically stipulated the payment of interest as separate from and in addition to the principal amount of such installment, and the assignment omitted any such stipulation of interest, then appellant may not have been entitled to recover such interest since the assignment contained a specific limitation that only the rights set forth in the assignment were intended to be transferred. In this case, however, interest is not recoverable pursuant to any express provision in the separation agreement but pursuant to operation of law. The principle is well settled that a valid assignment operates to pass the whole right of the assignor, and that thereafter the assignee stands in the place of the assignor, possessing all rights or remedies available to the assignor. Appellee’s former wife would have been awarded interest up to the date of judgment on the accrued but unpaid installments due under the separation agreement. It is clear to us that it was her intention to assign all of her rights under such agreement.

Accordingly, the judgment of the district court is affirmed in part, and reversed in part, and the case is remanded with instructions to the district court for the entry of judgment in accordance with, the foregoing opinion.

      . Appellee is the brother of Mrs. Vreden-burgh. Jurisdiction is based upon diversity of citizenship.

      . It is alleged in the supplemental counterclaim that John F. Vredenburgh conveyed to Faith S. Vredenburgh a joint interest in the assignment agreement, but the District Court did not find in favor of Faith S. Vre-denburgh on the supplemental counterclaim since no evidence was offered to support this contention.

      . The separation agreement was executed on December 15, 1965 and assigned to appellant John F. Vredenburgh on January 22, 1970 (the assignment was subsequently clarified by amendment on August 16, 1971). Under the terms of the agreement, appellee was to pay his wife $2,500 a month from February 1, 1966 to January 1, 1967, $2,000 a month from February 1, 1967 to January 1, 1976, and $1,000 a month from February 1, 1976 to January 1, 1981, except that if the wife remarried, appellee was to pay her $1,000 a month from the date of her remarriage to January 1, 1981.

      . Brosius Dev. Corp. v. City of Hagerstown (1965), 237 Md. 374, 206 A.2d 571.
      The first note became due on April 1, 1967. This suit was filed by appellee on June 25, 1970. The applicable statute of limitations is three years. The meeting at which appellants acknowledged their debt occurred in 1968.

      . More specifically, the Court found that the note had been placed in the files of a corporation owned by appellee but managed by appellant and had never been delivered directly to appellant; furthermore, the Court found that the $150,000 specified in the note was to be paid out of, and only in the event of, corporate profits, which were never realized.

      . 6 Am.Jur.2d, § 11, pp. 196-7; 6 C.J.S. Assignments § 26, pp. 1074-1076 ; 4 Corbin on Contracts, § 865, pp. 434-451.

      . 6 Am. Jur.2d, § 15, p. 200; 6 C.J.S. Assignments § 15, pp. 1060-1061; Industrial Trust Co. v. Stidham (1942), 3 Terry 339, 33 A.2d 159; Florance v. Kresge (1938, 4th Cir.), 93 F.2d 784.

      . 4 Corbin in Contracts, § 867, pp. 459-64; Logan Planing Mill Co. v. Fidelity and Casualty Co. of N. Y. (S.D.W.Va.1962), 212 F.Supp. 906, 912.
      It is clear in this case that appellee’s former wife did not attempt to assign the separation agreement itself to appellant, nor did she attempt to assign her obligation of continued performance.

      . Paragraph 7 (e), Separation Agreement.

      . Lachowicz Death v. Lechowicz (1943), 181 Md. 478, 30 A.2d 793; 25A C.J.S. § 5, pp. 547-550; Fid. Mut. Life Assn. v. Mettler (1902), 185 U.S. 308, 316, 22 S.Ct. 662, 46 L.Ed. 922; English v. United States (D.Md. 1928), 25 F.2d 335, 336-337.

      . Howard v. Equitable Life Assur. Soc. (1938), 197 Wash. 230, 85 P.2d 253, 119 A.L.R. 1302; Re Estate of Holmlund (1962), 232 Or. 49, 374 P.2d 393, 99 A.L.R.2d 296.

      . McCormick on Evidence (1954 ed.) p. 642; Allen v. Mazurowski (1944), 317 Mass. 218, 57 N.E.2d 544, 545-546.

      . Appellee argues that the presumption of the continuation of life is inapplicable in this case, since appellant’s counterclaim is not based upon contract rights which were his originally but rather is derived through the rights of the “missing” person (i. e. appellee’s former wife) as to whom the presumption is to be applied. The suggested distinction is without merit. Acosta v. United States (1963), 320 F.2d 382, 384-385, 162 Ct.Cl. 631; Tobin v. United States Railroad Retirement Board (6th Cir. 1961), 286 F.2d 480, 483-484.

      . Lichtenburg v. Joyce (1944), 183 Md. 689, 39 A.2d 789.

      . 6 Am.Jur.2d § 102, pp. 282-4; 6 C.J.S. Assignments § 82, pp. 1137-1138.

      . In fact, appellee’s wife was awarded interest in the judgment which she obtained in a Delaware Court in 1969.


author: WEICK, Circuit Judge.

text:
    In re William Norman TROY, Bankrupt. MENTOR LAGOONS MARINA, Petitioner-Appellant, v. Myron WASSERMAN, Trustee, Respondent-Appellee.
    No. 73-1287.
    United States Court of Appeals, Sixth Circuit.
    Argued Nov. 26, 1973.
    Decided Jan. 15, 1974.

      Albert C. Nozik, Nozik & Nozik, Mentor, Ohio, on brief, for petitioner-appellant.
    Lawrence I. Byrnes, Spieth, Bell, McCurdy & Newell, Cleveland, Ohio, on brief, for respondent-appellee.
    Frank Fetehet, Cleveland, Ohio, on brief for amicus curiae, National City Bank of Cleveland.
    Before WEICK, EDWARDS and LIVELY, Circuit Judges.
   WEICK, Circuit Judge.

This case arose in the Bankruptcy Court and involved the title to a sailboat which at one time had belonged to William N. Troy, who was adjudicated a bankrupt on February 8, 1972.

The Trustee in Bankruptcy filed an application in the Bankruptcy Court to sell the boat. He made as parties defendant to the application The National City Bank of Cleveland (Bank), Albert C. Nozik (Nozik), and Mentor Lagoons Marina (Marina). He alleged in the application to sell that the Bankrupt Troy was the owner of the boat; that the Bank had a security agreement noted as a lien on the Certificate of Title to the boat; that Nozik and Marina may have a lien or claim, the details of which were unknown to the Trustee; and that there is a reasonable prospect that a surplus will be left for the Bankrupt’s estate upon the sale of the boat. He prayed for an order of sale free from liens, which liens would be transferred to the proceeds of sale.

Upon the filing of the application to sell, the Bankruptcy Court entered an ex parte order requiring the defendants to show cause why the Trustee should not be permitted to sell the boat free from liens.

Marina filed an answer to the application to sell, alleging that it, and not the Trustee in Bankruptcy, was the owner of the boat, and prayed that the application to sell be dismissed.

The Bankruptcy Court, after hearing, adopted findings of fact and conclusions of law holding that the Trustee in Bankruptcy was the owner of the boat, and ordered that the Trustee sell the boat.

The boat was appraised for $10,000, and later was sold for $7,500.

Upon review by the District Court, the decision of the Bankruptcy Court was affirmed. Marina appealed. We reverse.

In determining the issues we accept the findings of fact of the Bankruptcy-Court, which findings were adopted by the District Court. We reject only its conclusions of law.

Troy acquired the boat in 1969. He borrowed from the bank $10,605, to enable him to purchase it, and he executed and delivered to the Bank a Security Agreement which was duly noted as a lien on his Certificate of Title.

On March 11, 1971 the loan to the Bank was in default, with an outstanding balance of $7,582.23.

On July 1, 1971 Marina addressed a letter to the Bank enclosing a check for $707, a copy of which letter is as follows:

MENTOR LAGOONS MARINA
“Paradise of the Great Lakes”
HARBOR DRIVE, MENTOR, OHIO 44060
July 1, 1971
Mr. Zammerra
National City Bank of Cleveland 623 Euclid Avenue Cleveland, Ohio 44114
Re: Account of William Troy
Dear Mr. Zammerra:
Pursuant to our telephone conversation of June 30, 1971, we herewith enclose our check #4993 in the sum of $707.00 representing four (4) monthly payments @ $176.75 on account of William Troy.
Said payment will be accepted by you upon the following conditions:
1. That you have in your possession the Certificate of Title executed by William Troy, properly notarized, assigning title to the 27' Tartan boat built in 1966, together with all furnishings and equipment thereon or intended for said boat, to Mentor Lagoons Marina. The assignee, Mentor Lagoons Marina, may be omitted and left blank.
2. Mentor Lagoons Marina will either pay to you the monthly installments as they become due or the prepayment balance which may be due at the time the boat is sold by Mentor Lagoons Marina.
3. Upon payment to you of the balance due, you will deliver to. Mentor Lagoons Marina the Certificate of Title to said boat and equipment free and clear of all liens and encumbrances.
Should there be any question with reference to any of the items contained herein, please call the writer. May we please have your ac-knowledgement.
Very truly yours,
MENTOR LAGOONS MARINA
/&/ Albert C. Nozik
s
Albert C. Nozik
ACN :eas enclosure

Three weeks later, on July 21, 1971, the Bank, acting pursuant to the instructions contained in the letter, arranged to have Troy execute the assignment portion of the Certificate of Title with the name of the assignee thereof left blank. Troy’s signature thereon was acknowledged before a Notary Public.

Marina continued to make monthly payments to the Bank. On the date of bankruptcy, February 8, 1972, there was a balance due to the Bank of only $5,475.73. On March 16, 1972 Marina paid to the Bank the balance due amounting to $4,940.33. The Bank then inserted in the blank space on the Certificate of Title the name of Marina as assignee, and delivered the Certificate of Title to Marina. Marina applied to the Clerk of the State Court for a new Certificate of Title, which was issued to it on May 3, 1972.

It was the theory of the Trustee in Bankruptcy that the assignment on the Certificate of Title, executed by Troy seven months before bankruptcy, was invalid merely because the name of the as-signee was left blank; that Marina, in making the payments to the Bank was a pure volunteer; and that the Bankrupt’s estate is entitled to be enriched to the extent of the entire proceeds of sale, free from the Bank’s lien which Marina paid.

We have consistently held that the Trustee in Bankruptcy stands in the shoes of the Bankrupt. He also stands in the position of an execution creditor. He is not an innocent holder for value, but takes title to the property of the Bankrupt subject to all liens and equities. In Re Alikasovich, 275 F.2d 454 (6th Cir. 1960), aff’d sub nom. Lewis v. Manufacturers Nat’l Bank, 364 U.S. 603, 81 S.Ct. 347, 5 L.Ed.2d 323 (1961); In Re Easy Living, Inc., 407 F.2d 142, 144 (6th Cir. 1969).

As we view the transaction between the Bank, Troy and Marina, under the letter dated July 1, 1971 there was a relinquishment by Troy of any interest which he had in the boat and a contract of sale to Marina. The consideration was Marina’s payment of the $707-check and the assumption of the monthly payments on the Bank’s security agreement. It constituted a novation. At the time of the transaction the Bank’s loan was in default. The Bank could have foreclosed its lien. It is obvious that Troy executed the assignment because he was unable to make the payments on his obligation to the Bank, and that he had little, if any, equity in the boat. The fact that the Trustee sold the boat for $7,500 indicates rather clearly that neither Troy nor the Trustee had any equity in the boat.

The assignment in blank on the Certificate of Title constituted the Bank as the holder of the Certificate under Ohio law. Ohio Rev.Code § 1301.01 (T). United States v. Milton, 382 F.2d 976 (6th Cir. 1967).

The Bank had authority to fill in on the Certificate the name of the person to whom the boat was sold. Burke v. Jenkins, 128 Ohio St. 86, 190 N.E. 238 (1934).

When the Bank received the Certificate of Title with the assignment in blank, it continued to hold the Certificate as security for the payment of the balance due to it from Marina, and upon payment in full it then inserted Marina’s name in the blank space as assignee of the Certificate, and delivered the Certificate to Marina. The fact that bankruptcy intervened vested no rights in the Trustee because Troy had relinquished his title to the boat on July 21, 1971, seven months prior to bankruptcy. Such relinquishment did not affect the rights of creditors of the Bankrupt because Troy had no equity in the boat.

Even if the assignment were defective (which it was not), Marina upon payment of the lien of the Bank would be subrogated to the rights of the Bank to the lien. 50 Ohio Jur.2d Subrogation, § 25, p. 412.

After Troy executed the assignment in blank and delivered to the Bank the Certificate of Title, he could never prevail in any action in replevin which he might bring against the Bank on the theory that he still was the owner of the boat. The Trustee in Bankruptcy, standing in the shoes of the Bankrupt, is in no better position.

The Trustee is attacking Marina’s title on the basis of its weakness, rather than on the strength of his title as Trustee; but the trouble is that' the Trustee has no title.

Zoloto v. Scott, 111 Ohio App. 372, 160 N.E.2d 318 (1959), relied on by the District Court, involved a fraudulent Notary’s acknowledgment on the application for a certificate of title. Fraud had been practiced on the seller by obtaining his certificate of title with an N.S.F. check. The case is inapposite.

In Kelley Motors, Inc. v. Adams, 91 Ohio App. 68, 107 N.E.2d 363 (1951), cited by the Bankruptcy Court, the Court said:

The effect of the latest ruling of the Supreme Court is that the possession of a certificate of title is the sine qua non to the assertion of any right, title, claim or interest in or to any motor vehicle. (Id. at 72, 107 N.E.2d at 365.)

The Trustee in Bankruptcy never had actual or constructive possession of the Certificate of Title; nor has he been in possession of the boat. Marina at all times has been in possession of the boat.

The Ohio statute recognizes that waiver or estoppel may be asserted against a person who does not possess a certificate of title. Revised Code of Ohio § 1548.04 provides in pertinent part as follows;

No person acquiring a watercraft or outboard motor from the owner thereof, whether such owner is a manufacturer, importer, dealer, or otherwise, shall acquire any right, title, claim, or interest in or to such watercraft or outboard motor until such person has had issued to him a certificate of title to such watercraft or outboard motor, or delivered to him a manufacturer’s or importer’s certificate for it; nor shall any waiver or estoppel operate in favor of such person against a person having possession of such certificate of title, or manufacturer’s or importer’s certificate for such water craft or outboard motor, for a valuable consideration.

The Bankrupt was estopped from claiming title to the boat; so also is the Trustee in Bankruptcy.

See also In Re Easy Living, Inc., supra; Klaustermeyer v. Cleveland Trust Co., 89 Ohio St. 142, 105 N.E. 278 (1913), Syl. 1, 2&4.

The judgment of the District Coui’t is reversed and the cause is remanded to the District Court with instructions to direct the Trustee in Bankruptcy to pay to Marina the net proceeds of sale of the boat.


author: WALLACE, Circuit Judge:

text:
    In the Matter of WESTERN STATES WIRE CORP., Bankrupt. William A. ROBERTSON, Petitioner-Appellant, v. TRUSTEE IN BANKRUPTCY, Respondent-Appellee.
    No. 71-3047.
    United States Court of Appeals, Ninth Circuit.
    Jan. 9, 1974.

      Robert E. Hannon (argued) Castro Valley, Cal., for petitioner-appellant.
    Nathan Markowitz, Marvin Neben of Neben & Starrett, Inc., Anaheim, Cal., for respondent-appellee.
    Before GOODWIN and WALLACE, Circuit Judges, and EAST, District Judge.

       Honorable William G. East, Senior United States District Judge, District of Oregon, sitting by designation.

   WALLACE, Circuit Judge:

On February 22, 1970, the trustee in bankruptcy for Western States Wire Corporation (the bankrupt estate) held a public auction at which Robertson placed the successful bid of $49,500 for an undocumented vessel. On the same day, Robertson paid a deposit of $12,000 to the auctioneer. The balance was to be paid before Robertson could take possession of the boat. On March 1, 1970, Orange County assessed an annual property tax against the boat in the amount of $897.39. Thereafter, on March 4, 1970, Robertson paid the balance of $37,500 and received the keys to the boat and, on March 17, 1970, he was given the certificate of ownership. When the trustee refused the tax claim of Orange County, the referee ordered the trustee to allow the claim, but also ordered Robertson to reimburse the trustee. The district court denied Robertson’s petition for review. We reverse.

Orange County assessed the tax against the boat pursuant to California Revenue & Taxation Code § 405 which reads: “Annually, the assessor shall assess all the taxable property in his county. . to the persons owning, claiming, possessing, or controlling it on the lien date.” The lien date is set by statute as March 1. Cal.Rev. & Tax. Code § 2192.

The referee found that title to the boat was not transferred until March 17, 1970, when the certificate of ownership was delivered. However, on the basis of In re Crowell, 199 F. 659 (D.C.Mass. 1912), the referee held that Robertson, as the purchaser at the auction, became the equitable owner as of February 22, 1970, and was therefore liable for the personal property tax. The referee’s reliance on Crowell is misplaced. In that case the referee authorized the trustee to sell certain real estate “free from any incumbrance or lien of any other party.” 199 F. at 659. Subsequent to the sale, but before the trustee had delivered the deed, the town assessed taxes that became a lien upon the property. The purchaser of the property, after paying the taxes, argued that the trustee should reimburse him since he had advertised the property as being sold free of any liens. The court held that the referee could only order the property sold free of liens listed in the petition for bankruptcy and that he did not have authority to free the property of liens that attached after the petition had been filed.

Under California law taxes are not automatically a lien on personal property. Dohrmann Co. v. Security Savings & Loan Association, 8 Cal.App. 3d 655, 663, 87 Cal.Rptr. 792 (1970); K. Ehrman & S. Flavin, Taxing California Property § 529 at 505 & n. 3 (1967). See Fresno County v. Commodity Credit Corp., 112 F.2d 639 (9th Cir.), cert, denied, 311 U.S. 686, 61 S.Ct. 61, 85 L.Ed. 443 (1940). However, section 2191.4 of the California Revenue & Taxation Code provides that taxes can become a lien on personal property if the assessor files a certificate for delinquent taxes with the county recorder pursuant to section 2191.3 of the same code. There is no evidence that such a certificate was filed. Therefore, the taxes were not a lien and we are not faced with the Crowell question of whether a person who becomes the owner subsequent to the lien date is liable for a tax which has become a lien against the property. The only question presented is who owned, claimed, possessed or controlled the boat on March 1,1970.

Since the trustee concedes that the bankrupt estate controlled and possessed the boat on March 1, 1970, the only remaining issue is who was the owner on that date. The sufficiency of the acts necessary to transfer title from the bankrupt estate to the purchaser are determined by state law. 4A Collier on Bankruptcy ¶ 70.18[3] (14th ed. 1971).

The trustee, citing Opinion Number 47-84 of the Attorney General, 10 Ops.Att’y Gen. 177 (1947), argues that under California law title passes at an auction by the fall of the hammer when the auctioneer accepts the successful bid. See also Gentillalli v. County of San Diego, 240 Cal.App.2d 456, 49 Cal. Rptr. 705 (1966). In Opinion Number 47-84, however, the Attorney General was construing California Civil Code § 1741 and prior case law and specifically said that “[t]he general principles applicable to the formation of sales contracts and the passage of title thereon are also applicable to sales made at auction . . . .”10 Ops.Att’y Gen. at 178. Section 1741 has since been repealed and replaced by provisions in the California Commercial Code, which is now the law applicable to the formation of sales contracts. Although section 2328(2) of the Commercial Code still provides that “[a] sale by auction is complete when the auctioneer so announces by the fall of the hammer . . . ,” under the new Code completion of the sale is not determinative of when title passes. The Code abolishes the concept of title for the allocation of risk between the buyer and seller, but provides that when the concept of title is material, the provisions of section 2401 control. 3 Benders U.C.C. Service, Duesenberg & King. Sales and Bulk Transfers § 8.06 (1973). Under section 2401, title in this ease would pass either under subsection (2), when the seller completed his performance by physically delivering the goods, or under subsection (3), when the seller delivered the documents of title. Since the county assessed the boat before the trustee had completed either of these acts, we need not decide which subsection controls. Similarly, we need not decide if section 700 of the California Harbors & Navigation Code (now section 9900 of the California Vehicle Code) governs since under that section title would have passed when the trustee delivered the certificate of ownership, which also occurred after the county had assessed the tax.

Since under California law the bankrupt estate owned, controlled and possessed the boat on lien date, the referee erred in holding that Robertson’s equitable interest made him liable for the tax. The California courts have held that the person owning the property on lien date must pay the tax even though some other person has an enforceable contract for the sale of the property. Francis H. Leggett & Co. v. County of Los Angeles, 235 Cal.App.2d 752, 45 Cal.Rptr. 561 (1965). At the fall of the auctioneer’s hammer, Robertson had an enforceable contract for the purchase of the boat, but he was not yet the owner because the conditions precedent to the passing of title had not yet been completed. Thus, the bankrupt estate still owned the assessable interest and should be liable for the tax.

Reversed.

      . Even had there been a certificate filed, it would not affect the outcome of this case because liens that attach under Section 2191.3 cannot be enforced against a purchaser for value who acquires his interest without actual knowledge of the lien. Cal.Rev. & Tax.Code § 2191.4.


author: HASTIE, Circuit Judge.

text:
    Harry H. JESSUP et al. v. R. Richard CLARK and Donald J. McDonald, Individually and as Special Agents of the Internal Revenue Service of the United States. Appeal of Allen BRUNWASSER.
    No. 73-1183.
    United States Court of Appeals, Third Circuit.
    Argued Oct. 11, 1973.
    Decided Dec. 12, 1973.

      Allen N. Brunwasser, Pittsburgh, Pa., for appellant.
    Richard L. Thornburg, U. S. Atty., Kathleen Kelly Curtin, Asst. U. S. Atty., Pittsburgh, Pa., for appellees.
    Richard H. Seeburger, Pittsburgh, Pa., for the American Civil Liberties Union, as amicus curiae.
    Robert Raphael, President, Pittsburgh, Pa., for The Allegheny County Bar Ass’n, as amicus curiae.
    Before HASTIE, VAN DUSEN and ADAMS, Circuit Judges.
   OPINION OF THE COURT

HASTIE, Circuit Judge.

Allen Brunwasser, a practicing lawyer, has taken this appeal from a summary adjudication under which he stands convicted of contempt of court.

On October 19, 1972 District Judge Hubert I. Teitelbaum instructed Brun-wasser, counsel for plaintiffs in a civil action then pending before Judge Teitel-baum in the District Court for the Western District of Pennsylvania, to appear for oral argument at 9:30 A.M. on Friday, January 19, 1973. On Wednesday, January 17, Brunwasser began a trial in state court. He continued to conduct that trial on January 18 and 19, thus failing to appear as directed before Judge Teitelbaum on the morning of January 19.

Shortly after Brunwasser failed to appear, Judge Teitelbaum entered an order instructing Brunwasser to appear at 4:00 P.M. on the same day and to show cause why he should not be held in contempt for his absence that morning. That order also instructed the United States Marshal to take custody of Brun-wasser and bring him before Judge Tei-telbaum at 4:00 P.M. Although the record is unclear, it seems that Brun-wasser was first notified of the show cause order when the marshal arrested him sometime in the afternoon.

At the 4 o’clock hearing Brunwasser requested a postponement in order to consult with counsel and prepare a defense. He also asked Judge Teitelbaum to recuse himself. Judge Teitelbaum denied both requests, but gave Brunwasser an opportunity to explain why he had not appeared that morning.

In responding, Brunwasser stated that he had gone to the state court that morning, believing that he was obligated to do so, that he had “brought the matter [of conflicting commitments] to Judge Clarke’s [the state judge’s] attention” and that Judge Clarke then instructed him: “ ‘You stay here. We are going on with this case.’ ” Judge Tei-telbaum found this explanation insufficient, adjudged Brunwasser in contempt and sentenced him to 48 hours in county jail, effective immediately. The judge also denied Brunwasser’s request for release on bond pending a superse-deas or an appeal. The present appeal was perfected after Brunwasser had served his full 48 hour sentence.

Certain additional statements of fact appear in a memorandum opinion filed by the district judge after sentence had been imposed and served. That opinion states that during the afternoon immediately preceding Brunwasser’s scheduled conflicting appearances in state and federal courts, Judge Teitelbaum’s office had informed Brunwasser that Judge Teitelbaum had obtained the consent of the President Judge of the state court (not the judge before whom Brunwasser was trying a case) that Brunwasser appear the following morning in federal rather than state court. The opinion also recites that, after the 4:00 P.M. hearing at which Brunwasser was orally adjudged in contempt, but before that adjudication was reduced to writing and before Brunwasser was taken to jail, Judge Teitelbaum had telephoned Judge Clarke. At that time Judge Clarke stated that he had informed Mr. Brunwas-ser (presumably when Brunwasser appeared for the state proceeding) that he had agreed to postpone the state court hearing, but Brunwasser then told him that the federal matter “had been taken care of”.

It is agreed that the procedure which Judge Teitelbaum followed is that of summary contempt, as authorized and limited by Rule 42(a), F.R.Cr.P. That rule provides:

“Summary Disposition. A criminal contempt may be punished summarily if the judge certifies that he saw or heard the conduct constituting the contempt and that it was committed in the actual presence of the court. The order of contempt shall recite the facts and shall be signed by the judge and entered of record.”

Rule 42(b) states that all criminal con-tempts not decided under Rule 42(a) are subject to various due process safeguards, including, inter alia, notice, reasonable time for preparation of a defense, and admission to bail. Although the rule does not expressly provide for it, in our view a defendant is entitled to representation by counsel in a Rule 42(b) proceeding. Cooke v. United States, 1925, 267 U.S. 517, 537, 45 S.Ct. 390, 69 L.Ed. 767; Argersinger v. Hamlin, 1972, 407 U.S. 25, 92 S.Ct. 2006, 32 L.Ed.2d 530.

At the outset, the government argues that this appeal is moot because Brunwasser has fully served his sentence. Two considerations dictate rejection of that contention.

First, the Supreme Court has narrowly restricted the application of the mootness doctrine in cases which attack criminal convictions. In Carafas v. La-Vallee, 1968, 391 U.S. 234, 88 S.Ct. 1556, 20 L.Ed.2d 554, a unanimous court held that the petitioner’s final unconditional release from prison did not moot his ha-beas corpus attack. The court ruled that serious collateral consequences of the conviction, such as prohibitions against holding certain offices or engaging in certain businesses, sufficed to prevent mootness. 391 U.S. at 237-238, 88 S.Ct. 1556.

Brunwasser suggests that his conviction may well have a res judicata effect in professional disciplinary proceedings that may be brought against him. Although it is far from clear that this summary conviction would be given such effect, this court cannot declare with assurance that it will not. Further, there is a greater likelihood that the contempt conviction will at least cause the institution of disciplinary proceedings. Even that consequence should be sufficient to preclude mootness under Sibron v. New York, 1968, 392 U.S. 40, 55, 88 S.Ct. 1889, 20 L.Ed.2d 917, where the Court said that a conviction is not moot if there is any possibility that collateral consequences will result from the conviction.

Second, Brunwasser tried to prevent the appeal from becoming moot, but the district judge denied bail and superse-deas and required that he begin serving the 48 hour sentence on Friday afternoon immediately after conviction. It would have been difficult to present the matter properly to this court before Monday. Since that time he has pursued this appeal diligently. In Sibron, supra, the petitioner’s diligent efforts to obtain review before the expiration of his six-month sentence were found to militate against a conclusion of mootness. 392 U.S. at 51-52, 88 S.Ct. 1889.

This brings us to the merits of the appeal. Because a summary contempt proceeding dispenses with procedural safeguards ordinarily deemed essential to fair criminal trials, decisions of the Supreme Court and several courts of appeals, including this one, have severely constricted the scope of the summary contempt power.

One constraint on the use of Rule 42(a) is a requirement that there be “need for immediate penal vindication of the dignity of the court”. Cooke v. United States, supra, 267 U.S. at 536, 45 S.Ct. at 395. The defendants in Cooke had written and delivered an insolent letter to a district court judge who had just presided over several cases in which the defendants had an interest, and who was about to preside over other such cases. The Supreme Court, reversing summary contempt convictions, carefully distinguished obstructive contempts in open court from other forms of contempt. Disturbance, violence, or disrespectful behavior may be dealt with summarily, if committed in open court, because of the need to vindicate the court’s authority on the spot. “When the contempt is not in open court, however, there is no such right or reason in dispensing with” normal plenary procedure. 267 U.S. at 536, 45 S.Ct. at 395.

The Court has preserved the distinction it articulated in Cooke. In Re Oliver, supra note 2, reversed the contempt conviction of a witness who appeared before a judge sitting as a one-man grand jury in Michigan. The judge-grand jury found the witness in contempt for giving evasive answers to his questions. The inquiry had occurred in chambers, with few people present. Quoting from Cooke, the Court made clear that summary contempt power can constitutionally reach “only such conduct as created ‘an open threat to the orderly procedure of the court and such a flagrant defiance of the person and presence of the judge before the public’ that, if ‘not instantly suppressed and punished, demoralization of the court’s authority will follow.’ [Cooke] [267 U.S.] at 536 [45 S.Ct. 390].” 333 U.S. at 275, 68 S.Ct. 508.

Two more recent cases, Harris v. United States, supra note 2, 382 U.S. at 165, 86 S.Ct. 352, and Johnson v. Mississippi, supra note 2, 403 U.S. at 214, 91 S.Ct. 1778, reaffirmed, with reliance on Cooke, the view that need of immediate action to restore order to an ongoing court proceeding is a prerequisite, both constitutionally and under Rule 42(a), to use of the summary contempt power.

The Court of Appeals for the Fourth Circuit has reversed a contempt conviction on facts remarkably similar to this case. In United States v. Willett, supra note 3, an attorney failed to appear for. a scheduled hearing. At the rescheduled hearing the judge asked the attorney to explain his earlier absence. The attorney stated that there had been a misunderstanding, but the court rejected that explanation and adjudged him in contempt. The court of appeals reversed. After first stating that failure to appear was not an act committed in the presence of the court, it observed that, in any case, failure to appear did not seem to be an act requiring immediate penal vindication. 432 F.2d at 205.

In the light of these authorities, the contempt which Brunwasser is alleged to have committed does not fall within the narrow range of conduct that may be punished summarily. There was no disruption of the orderly course of proceedings in progress. There was no affront to the court before the general public, as might occur during a trial, and there were no tactics that required immediate cessation. Indeed, Judge Teitelbaum appears to have recognized that immediate vindication of judicial authority was not necessary, for he did not seek it. He did not instruct the marshal to arrest Brunwasser immediately but ordered that he be brought before the court at the end of the day. His motive for delay, not to interfere with the business of the state court, is laudable, but nevertheless demonstrates that summary procedure was not necessary.

As a second and independent ground for holding that Rule 42(a) should not have been applied, the record shows that this case does not satisfy the facial requirements of the Rule, that “the judge certif[y] that he saw or heard the conduct constituting the contempt and that it was committed in the actual presence of the court”. As both the Supreme Court in the Cooke case and this court in Tauber v. Gordon, supra note 4, have indicated, those requirements are intended to serve as imperfect but tolerable substitutes for the procedural safeguards that a summary proceeding lacks. If the judge did see or hear everything essential to a finding of contempt, so that all of the relevant facts are within his personal knowledge, then the value of a plenary hearing is minimal and, in a proper setting, is outweighed by the “need for immediate penal vindication”. A reviewing court can be satisfied that the trial court did see or hear the punished conduct only if the trial court states what that conduct was, and certifies that he saw or heard it. United States v. Marshall, supra note 3, 451 F.2d at 374-375. Such a certificate is no mere formality, because it demonstrates, imperfectly but sufficiently in the narrow set of circumstances in which such procedure is authorized, that the omitted procedural protections could not have produced a different result.

In this case, although it is true that Judge Teitelbaum “saw” that Brunwas-ser was absent from his court at the appointed time, he did not, at the hearing, have information which was crucial to a determination whether that absence was contemptuous. Although Judge Teitel-baum had been responsibly advised a day earlier that the conflict between federal and state commitments would be resolved, he did not know whether this had been accomplished. Moreover, at the contempt hearing Brunwasser stated that Judge Clarke had directed him to' remain in his court, thus confronting him with an immediate persisting conflict. That was his defense. In these circumstances, Judge Teitelbaum was confronted with an issue of fact that could not be decided on the basis of his own knowledge or observation. That issue made a plenary hearing essential, despite Judge Teitelbaum’s understandable reluctance to ask a state judge to testify in federal court.

The summary conviction will be vacated as unwarranted by Rule 42(a), both because Brunwasser’s conduct, however contumacious it may have been, did not require summary punishment, and because the circumstances of the contempt were not sufficiently within the judge’s personal knowledge to warrant elimination of normal due process protections in proving them. Because the accused has served his sentence, he shall not be required to be tried again for failing to appear in federal court as directed. However, this decision shall not preclude any appropriate disciplinary proceeding in the district court or elsewhere to determine whether, at the contempt hearing before Judge Teitelbaum, Brunwas-ser culpably misrepresented to the court what had occurred between him and Judge Clarke.

      . Before he was removed to jail, Brunwasser filed in the district court both a notice of appeal and a motion for supersedeas. The district court formally denied supersedeas • after the sentence had been served.

      . Cooke v. United States, 1925, 267 U.S. 517, 45 S.Ct. 390, 69 L.Ed. 767; In Re Oliver, 1948, 333 U.S. 257, 68 S.Ct. 499, 92 L.Ed. 682; Harris v. United States, 1965, 382 U.S. 162, 86 S.Ct. 352, 15 L.Ed.2d 240; Johnson v. Mississippi, 1971, 403 U.S. 232, 91 S.Ct. 1778, 29 L.Ed.2d 423.

      . United States v. Meyer, 1972, 149 U.S. App.D.C. 212, 462 F.2d 827 (collecting cases) ; United States v. Willett, 4th Cir. 1970, 432 F.2d 202; United States v. Peterson, 10th Cir. 1972, 456 F.2d 1135; United States v. Marshall, 9th Cir. 1971, 451 F.2d 372. But see In Re Niblack, D.C.Cir.1973, 476 F.2d 930, and In Re Gates, D.C.Cir. 1973, 478 F.2d 998, discusesd at note 7, infra.

      . Tauber v. Gordon, 3d Cir. 1965, 350 F.2d 843 (en banc).

      . Cf. Johnson v. Mississippi, supra note 2. But see Sacher v. United States, 1952, 343 U.S. 1, 72 S.Ct. 451, 96 L.Ed. 717, affirming a contempt conviction despite delay, where the trial court delayed so as not to convict an attorney in front of the jury. It has been said however, that Sacher’s authority is doubtful after Offutt v. United States, 1954, 348 U.S. 11, 75 S.Ct. 11, 99 L.Ed. 11. United States v. Meyer, supra note 3, 462 F.2d at 837.

      . No document designated as such a certificate appears on the docket. Although some of Judge Teitelbaum’s comments in his memorandum opinion may have been intended to serve as such a certificate, the opinion indicates reliance on occurrences that the judge did not see or hear.

      . In Re Niblack, D.C.Cir.1973, 476 F.2d 930, and In Re Gates, D.C.Cir.1973, 478 F.2d 998, are distinguishable, if not incorrectly decided. Those cases held, Gates on the authority of Niblack, that absence from the courtroom is conduct in the presence of the court for purposes of Rule 42(a). Neither opinion answers any other question. Gates, however, strongly suggests that a Rule 42(b) proceeding is required when the excuse for tardiness involves matters which are not within the judge’s personal knowledge, but did not decide that question because the appellant did no.t raise it. 478 F.2d at 1000. Niblack does not discuss the nature of that appellant’s excuse.

      . The district court has recognized its disciplinary responsibilities over the members of its bar in its Local Rule 22, and the conflict between Brunwasser’s testimony concerning the statements of Judge Clarke on the morning of January 19 and the statement of Judge Clarke to Judge Teitelbaum on the phone that Brunwasser told him the federal matter “had been taken care of” may very well come before it in this connection.


author: HASTINGS, Senior Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. John Clifton PICHANY, Defendant-Appellant.
    No. 73-1422.
    United States Court of Appeals, Seventh Circuit.
    Argued Oct. 18, 1973.
    Decided Dec. 19, 1973.

      Kenneth H. Clapper, Danville, Ill., for defendant-appellant.
    Henry A. Schwarz, U. S. Atty., Joel Merkel, Asst. U. S. Atty., East St. Louis, Ill., for plaintiff-appellee.
    Before HASTINGS, Senior Circuit Judge, and CUMMINGS and SPRECHER, Circuit Judges.
   HASTINGS, Senior Circuit Judge.

Appellant John Clifton Pichany was convicted after a jury trial on three counts of receiving and concealing stolen motor vehicles moving as interstate commerce, in violation of Title 18, U.S.C. § 2313; and on one count of receiving and concealing stolen goods having a value in excess of $5,000 which were moving as, or which were part of, or which constituted interstate commerce, in violation of Title 18, U.S.C. § 2315.

. The four counts correspond to four vehicles discovered on appellant’s premises near Momence, Illinois, on July 15, 1972, by Illinois State Police Officers and Kankakee County Sheriff’s Deputies who were searching the property pursuant to a search warrant. The vehicles specified in the § 2313 counts (Counts V, VI and VII óf the indictment) were a 1971 International Tractor, a 1972 Chevrolet truck and a 1971 Champion Motor Home. The subject of the § 2315 count (Count IV) was a 1971 Tempte Refrigeration Trailer. Counts I, II, III and VIII of the indictment were dismissed on the Government’s motion prior to trial. Appellant was sentenced to concurrent terms of five years imprisonment on Counts IV, V and VI; on Count VII, appellant was placed on probation for a period of two years, such period to run consecutively to the five years imprisonment.

On appeal appellant claims that the Government did not prove the elements of a § 2313 or § 2315 violation and thus his timely filed motions for judgment of acquittal and for a new trial were erroneously denied. More specifically, he argues that the Government introduced no evidence that the vehicles were concealed, that appellant knew the vehicles were stolen, or that the vehicles were moving as interstate commerce. Appellant does not contest the evidence that the vehicles were in fact stolen. Appellant also argues that he was denied a fair trial because the trial court did not on its own motion strike certain allegedly prejudicial testimony by a government witness.

I. CONCEALMENT

When discovered on appellant’s premises, each of the four vehicles was in plain view. Appellant relies on this fact as conclusively demonstrating that there was no concealment of the vehicles and, hence, no violation of §§ 2313 and 2315.

Such contention is without merit. Concealment is not limited to the hiding away of an entire vehicle. There was substantial evidence that appellant had obtained Alabama license plates for the vehicles, from which a jury might conclude that the vehicles were being concealed. See United States v. Brady, 8 Cir., 425 F.2d 309, 312 (1970); Babb v. United States, 8 Cir., 351 F.2d 863, 864-865 (1965); Phillips v. United States, 10 Cir., 206 F.2d 923 (1953). The jury might also have found concealment from evidence that vehicle identification numbers on the tractor, trailer and motor home had been obliterated or altered. Donaldson v. United States, 7 Cir., 82 F.2d 680, 681 (1936).

II. KNOWLEDGE OF THEFT

Both § 2313 and § 2315 require that the accused have knowledge that the vehicle or goods are stolen. There is substantial evidence in the record from which a jury could conclude that appellant possessed such knowledge with respect to each vehicle charged in the indictment.

As mentioned above, identification numbers were altered on three of the vehicles (the tractor, trailer and motor home). These alterations were obvious to anyone inspecting the numbers. Appellant listed altered or completely false numbers on his applications for Alabama license plates for the three vehicles. In addition, the ignition on the fourth vehicle (the truck) and on the motor home were punched out and hot wired. A jury might reasonably regard the condition of the ignitions both as incapable of escaping notice and as engendering doubts regarding ownership. An accumulation of circumstantial evidence can without more support a jury’s finding that a defendant knew a vehicle which he possessed was in fact stolen. See, e. g., United States v. Briddle, 8 Cir., 430 F.2d 1335, 1338 (1970).

In addition, direct evidence on the knowledge issue was supplied by the testimony of Arnold Kuta, an F.B.I. agent who interviewed appellant on July 18, 1972. In the course of that interview, prior to which appellant was fully advised of his rights, Kuta asked appellant whether he knew that the vehicles named in the present indictment were stolen. Appellant answered, “I am not going to say I didn’t know they was stolen.”

Appellant argues that the trial court committed reversible error in permitting agent Kuta to so testify. In support of this contention, appellant argues first, that the statement is “patently ambiguous” in that, by a mere pause after the word “say,” the sentence becomes, “I am not going to say. I didn’t know they was stolen.” Thus transformed, the statement becomes a denial rather than an admission of the element of knowledge. Second, appellant argues that oral admissions cannot be considered against a defendant without independent proof of the corpus delicti. Such proof, it is argued, was lacking here.

We are not persuaded by these arguments. As related by agent Kuta, appellant’s statement is not ambiguous. On the contrary, it is a clear admission of a material element of criminal liability. The real issue which appellant’s argument raises is the credibility of Kuta, and this was a jury question. Kuta was subjected to rigorous cross-examination regarding his interpretation of appellant’s statement, and counsel strenuously advanced during final argument his theory that Kuta may have been mistaken. Obviously the jury was not persuaded that Kuta misinterpreted appellant.

On the question of corroboration, we agree with appellant that Opper v. United States, 348 U.S. 84, 75 S.Ct. 158, 99 L.Ed. 101 (1954) requires that

“* * * where extrajudicial admissions that .point to guilt are made by the accused, after the date of the acts charged as crime, testimony by witnesses other than the accused as to such oral or written admissions cannot be accepted as evidence without corroboration of the facts stated.” Id. at 89, 75 S.Ct. at 162.

The crucial fact stated in the admission to agent Kuta is appellant’s knowledge that the vehicles were stolen. As noted above, however, there was additional evidence before the jury which corroborates this admission, namely, the altered identification numbers and the punched out and rewired ignitions. Opper additionally held that the corroborative proof need not of itself be sufficient to establish the corpus delicti. Rather, “[i]t is sufficient if the corroboration supports the essential facts admitted sufficiently to justify a jury inference of their truth.” Id. at 93, 75 S.Ct. at 164. In light of the independent evidence against appellant, we have no difficulty in concluding that the Opper requirement has been met.

III. INTERSTATE COMMERCE

Appellant contends that the Government’s proof wholly failed to show that the stolen vehicles were “moving as” interstate commerce on July 15, 1972, the date alleged in the indictment on which the illegal acts occurred. Admittedly, no evidence was presented which linked appellant with the actual theft of the vehicles outside Illinois. Rather, the evidence on the interstate commerce issue consisted primarily of proof that the vehicles were stolen in Indiana (Counts V, VI and VII) and Ohio (Count IV), and were recovered on appellant’s premises in Illinois some seven to ten months later. In addition, the Government was able to connect appellant with three of the vehicles prior to July 15, 1972, through testimony as to the date on which appellant applied by telephone for Alabama license plates for the vehicles. These dates were: February 2, 1972, for the trailer (Count IV); January 4, 1972, for the tractor (Count V); and April 17, 1972, for the motor home (Count VII). The trailer was stolen on an undetermined date between November 28, 1971, and January 18, 1972; the tractor was stolen on January 1 or 2, 1972; the truck was stolen on October 1 or 2, 1971; and the motor home was stolen during November 1971.

The question of interstate commerce is for the jury, and we must affirm if substantial evidence exists in the record to support the jury’s verdict. United States v. Briddle, 8 Cir., 430 F.2d 1335 (1970); Powell v. United States, 5 Cir., 410 F.2d 710 (1969). It is well settled, however, that mere proof of some prior interstate movement of the stolen vehicle or goods is not, in itself, sufficient to supply the interstate commerce element of a § 2313 or § 2315 offense. Schwachter v. United States, 6 Cir., 237 F.2d 640 (1956); Davidson v. United States, 8 Cir., 61 F.2d 250 (1932); Wolf v. United States, 7 Cir., 36 F.2d 450 (1929). But cf. United States v. Bass, 404 U.S. 336, 350, 92 S. Ct. 515, 30 L.Ed.2d 488 (1971).

The vehicle or goods must retain their interstate character at the time the accused received or concealed them. United States v. Wyatt, 7 Cir., 437 F.2d 1168, 1172 (1971); United States v. Briddle, supra; Powell v. United States, supra. As was stated in Schwaehter, supra: “* * * After a period of time and depending upon what is done with the car, it may no longer be correct to treat it as moving in interstate commerce. * * * The acquisition of the car and later sale of it by a person who is in no way connected with the theft and transportation may be under such circumstances as to terminate its interstate character. * * * ” 237 F.2d at 644.

A defendant need not know that the vehicle or goods are moving as interstate commerce; it suffices that his actions were in fact one step in a total scheme of interstate transportation. United States v. Brady, 8 Cir., 425 F.2d 309 (1970); Donaldson v. United States, 7 Cir., 82 F.2d 680 (1936); McNally v. Hill, 3 Cir., 69 F.2d 38, aff’d on other grounds, 293 U.S. 131, 55 S.Ct. 24, 79 L.Ed. 238 (1934); Loftus v. United States, 7 Cir., 46 F.2d 841 (1931).

Appellant correctly contends that the Government presented no substantial direct evidence linking him to illegal activity outside Illinois. The question presented is therefore, whether a jury on these facts may be permitted to infer that the vehicles here involved retained their character as interstate commerce when concealed by appellant on July 15, 1972. More specifically, the issue is whether a presumption of continuing interstate commerce arises from proof of theft in one state and possession in another, which is sufficient to carry the Government’s burden of proof on interstate commerce.

In Wolf v. United States, 7 Cir., 36 F.2d 450 (1929), our court recognized the possibility of such a presumption where “the date and circumstances be such as to justify the inference,” and no credible explanation of possession is offered by the defendant. The court there overturned the defendants’ convictions on the grounds that defendants had conclusively proved they did not learn of the stolen vehicle’s existence until at least one month after the theft and interstate transportation.

A number of other courts have permitted a jury to infer from defendant’s unexplained possession in one state of a vehicle or goods stolen elsewhere, not only that the defendant knew the vehicle or goods were stolen, but also that the defendant’s activities were one step in the interstate transportation of the stolen vehicle or goods. See Kramer v. United States, 8 Cir., 408 F.2d 837 (1969); Phillips v. United States, 10 Cir., 206 F.2d 923 (1953); United States v. DiCarlo, 2 Cir., 64 F.2d 15 (1933); and see cases cited at 15 ALR Fed. 856, 871 (1973). As in Wolf, the crucial elements in these cases are (1) a relatively brief time span between the theft and defendant’s possession, and (2) the absence of a credible explanation to refute the inference. The evaluation of defendant’s explanation is, of course, primarily a jury function, and an appellate court will reverse on this basis only where, as in Wolf, defendant’s evidence is so overwhelming that a refusal by the jury to credit the explanation is manifestly unreasonable.

Turning to the facts of the present case, we believe the jury was warranted in refusing to credit appellant’s explanation of possession. Appellant himself did not testify; the sole defense witness was his wife, who identified four bills of sale to the vehicles, each signed by one George Austin. Mrs. Pichany testified that she had never met George Austin and had “no idea” who he was. The bills of sale were dated but did not specify the place of sale.

This evidence, even if believed by the jury, does not refute an inference of interstate commerce. The fact that the vehicles were purchased from the mysterious Austin, without additional explanation, is completely consistent with a single scheme of interstate theft and transportation, especially where, as here, there is substantial evidence that appellant knew the vehicles were stolen.

The question of the time span between theft and possession is more troublesome. Courts have been reluctant to prescribe a maximum period beyond which a jury may not be permitted to infer interstate commerce. Nevertheless, such a limit surely must exist. As stated in Wolf, supra, “[e]ach case must be decided on the facts established in that case.” 36 F.2d at 452.

A comparison of the dates when appellant was shown first to have been associated with the vehicles and the dates of theft indicates a maximum span of 2 months, 4 days on Count IV; 3 days on Count V; 9 months, 15 days on Count VI; and 5 months, 17 days on Count VII.

We conclude that in light of all the evidence in the ease, the conviction must be upheld. “The jury is permitted to infer from one fact the existence of another essential to guilt, if reason and experience support the inference.” Tot v. United States, 319 U.S. 463, 467, 63 S.Ct. 1241, 1244, 87 L.Ed. 1519 (1943). We cannot say that there was here “no rational connection between the fact proved and the ultimate fact presumed.” Id. On Count V, the inference was practically compelled inasmuch as appellant applied for an Alabama license for the tractor not more than three days after the vehicle’s theft. The jury’s decision on Counts IV and VII, while hardly compelled, is nevertheless well within the bounds of reason. While we might question the evidence on Count VI as straining the inference to the limit, the five year sentence imposed on that count is to be served concurrently with the like sentences on Counts IV and V, and thus a conclusive review here is unnecessary. United States v. Guido, 2 Cir., 200 F.2d 105 (1952), citing Hira-bayashi v. United States, 320 U.S. 81, 85, 63 S.Ct. 1375, 87 L.Ed. 1774 (1943).

IV. PREJUDICIAL TESTIMONY

During the direct examination of government witness Clay Boyer, a police officer who took part in the search, certain photographic exhibits were identified and offered into evidence. Defense counsel objected to two of these exhibits, and the objections were sustained, apparently on the ground of lack of relevancy. Prior to each objection the witness partially described the scene depicted by the photographs. Defense counsel did not move that this testimony be stricken. Appellant now claims, however, that it was error for the trial court not to strike the testimony on its own motion because the oral description of the photographs allegedly prejudiced appellant.

Boyer testified that one photograph showed a 1972 Fruehauf trailer with a 1974 Granger Pickup “with two fuel tanks” inside; the other showed “parts of vehicles we found in the barn.” Appellant argues that such descriptions might suggest to the jury a modus oper-andi for the interstate transportation and concealment of stolen motor vehicles. We find this contention tenuous at best. The trial court, in sustaining the objection, apparently felt that the photographs thus described were irrelevant as proof of the crime charged. We are at a loss to understand how appellant was prejudiced by the testimony and conclude that the court did not err in failing to strike it on its own motion.

In view of the foregoing, the judgment of conviction is affirmed.

Affirmed.

      . Counsel objected to the testimony during an in camera hearing on the question of voluntariness.

      . Opper clearly does not require that the Government produce “corroboration as to whether the oral statement was made as one sentence or not” (appellant’s brief at 38), if this is read to argue that the Government must produce another witness to the admission. Of course, by corroborating the admission as stated by Kuta, the independent proof supports Kuta’s contention that the statement was made without pause.

      . If the vehicles were moving as interstate commerce when acquired by apijellant, the mere passage of additional time prior to their concealment need not alter their character as interstate commerce. United States v. Briddle, supra; Powell v. United States, supra. Cf. United States v. Johnson, 7 Cir., 409 F.2d 861, 864 (1969).