source: Caselaw Access Project

author: SIMPSON, Circuit Judge:

license: Public Domain

text:
    The FIDELITY AND CASUALTY COMPANY OF NEW YORK and E. F. Hutton and Co. Inc., Plaintiffs-Appellants, v. The KEY BISCAYNE BANK, Defendant-Third Party Plaintiff-Appellee, v. Charles L. LEWIS, Third Party Defendant-Appellee.
    No. 72-2545.
    United States Court of Appeals, Fifth Circuit.
    Oct. 4, 1974.
    Rehearing and Rehearing En Banc Denied Nov. 13, 1974.

      James E. Tribble, John B. Kelley, John R. Hoehl, Mark Hicks, Miami, Fla., for plaintiffs-appellants.
    Peter T. Fay, Alan G. Greer, Miami, Fla., for Bank.
    Before GEWIN, THORNBERRY and SIMPSON, Circuit Judges.
   SIMPSON, Circuit Judge:

We review the dismissal below with prejudice of plaintiff Fidelity & Casualty’s suit to recover the value of stolen stock certificates, granted after full evi-dentiary hearing on the motions of the defendant Key Biscayne Bank and the third party defendant, Charles L. Lewis. The certificates were transferred to the Bank by Lewis as collateral for a loan. We conclude that the district court properly determined that the plaintiffs failed to rebut the Bank’s showing that it was a bona fide purchaser for value without notice of adverse claims and entitled to possession of the stock under Fla.Stat. See. 678.8-301(2). Accordingly, we affirm.

At sometime during the period between May 1, 1968, and July 26, 1968, a block of certificates for 5000 shares of stock in International Business Machines, Corp. (IBM) disappeared from the vaults of appellant E. F. Hutton & Co. (Hutton). Their disappearance became known through an audit of Hutton by Haskins & Sells commenced on July 26 and completed on August 15, 1968. Hutton became aware of the possible theft of the stock certificates on September 13, 1968, at which time it notified the New York City Police, the Federal Bureau of Investigation, and its surety, appellant Fidelity & Casualty. A special audit by Haskins & Sells, commenced in October 1968 and completed in December 1968 produced the serial numbers of the missing stock certificates.

Prior to that time the third party defendant Charles L. Lewis appeared at the office of the appellee Bank in Key Biscayne, Florida on July 30, 1968, seeking a $195,000 loan, assertedly for the purpose of acquiring an interest in a Florida airline. Lewis offered nine certificates each representing 100 shares of IBM stock as collateral. Each certificate was in the “street name” of E. F. Hutton & Co. and endorsed in blank by Hutton. The district court found that: “Each of the stock certificates states in the assignment form on its reverse side that when endorsed in blank, ‘this stock certificate becomes fully negotiable, similar to a check endorsed in blank.’ ” (Unpublished opinion, Finding of Fact # 4).

On July 31, the Bank’s officers checked with IBM by telephone regarding its registration of the certificates. IBM reported that the stock was listed in the name of Hutton. Hutton was telephoned and advised that there were no stops or holds in effect as to the stock. IBM upon request transferred the registration of the stock to the name of Lewis and issued new certificates in Lewis’s name. The Bank granted the loan to Mr. Lewis and retained the nine stock certificates, whose market value was about $338,000, as collateral.

On September 23, 1968, Hutton issued notice to public and financial institutions that it was missing approximately 10,000 shares of IBM stock. Because of the prior transfer in registration of the 900 shares here involved from Hutton’s name into Lewis’s, the notice did not include these 900 shares.

In October 1968, the appellee Bank gave notice to Lewis that it intended to call his loan. In response, the Bank received instructions from Lewis to sell the 900 shares to satisfy the debt and to credit Lewis’s account with whatever excess remained from the sale of stock. The Bank, in compliance with these instructions, sold the shares in two blocks, 600 shares on October 17 for approximately $196,000, and the remaining 300 shares on November 13 for an amount not appearing in the record. The excess over the amount outstanding on the loan was credited to Lewis’s account.

It was not until December 5, 1968, however, that Hutton learned that the 900 shares here involved were among those that had been missing from its vault prior to July 26. Hutton notified its insurer, Fidelity & Casualty of the loss and this suit ultimately resulted.

At the trial the plaintiffs presented only three witnesses in support of their case in chief. An executive vice-president of Hutton testified as to the disappearance of the 900 shares of IBM stock here in question sometime prior to July 26, 1968, and further established that Hutton became aware that the 9 certificates involved were among those missing only at the completion of the Haskins & Sells special audit on December 5, 1968. Appellants' second witness was the Chairman of the Board and President of appellee Bank, Charles G. Rebozo, called under the adverse party rule, Rule 43(b), F.R.Civ.P. who related the particulars of the presentation of the stock certificates to the Bank by Lewis on July 30, 1968. Appellants’ final witness was an officer of Fidelity & Casualty who testified to payment of Hutton’s claim under its surety bond for the missing securities, establishing Fidelity & Casualty’s right to subrogation to Hutton’s claim.

At the close of the plaintiff-appellants’ case in chief, the appellee Bank moved for a directed verdict in its favor. The court granted the motion and entered judgment thereon. The prior appeal and remand ensued, (note 1, supra) followed by the entry of written findings and conclusions and reargument and submission to this panel.

Appellants raise two basic issues on this appeal. They argue first that the trial court improperly failed to place the burden of proving whether the Bank enjoyed the status of bona fide purchaser (BFP) of the securities in question upon the defendant below. They assert: (i) that the common law existing prior to the adoption of the Uniform Commercial Code in Florida is preserved to the extent it does not conflict with the provisions of the Code; (ii) that the Code is silent as to allocation of the burden of proving BFP status of a purchaser of securities; (iii) therefore, that pre-code law regarding burden of proof in actions for conversion should govern; and (iv) finally, that the burden of proving BFP status vel non in suits for conversion was upon the defendant Bank and should have been, but was not imposed below.

The second issue raised by appellants regards the scope of cross-examination of Bank’s President Rebozo, who was called by the plaintiffs as an officer of an adverse party under Rule 43(b), F.R.Civ.P. The contention is that the rule strictly limits the scope of cross-examination of an adverse witness to the matters addressed on direct examination, and that, to the contrary, appellee’s counsel was allowed to cross-examine witness Rebozo as to the bona fides of his acceptance of the stock certificates as collateral from Mr. Lewis. This, according to appellants’ view, constituted testimony in the nature of an affirmative defense and regarding matters not opened on direct examination. Absent consideration of this improperly allowed testimony, appellants say, the record before the trial judge was insufficient to support the granting of appellee’s motion to dismiss. These issues are dealt with in that order.

Burden of Proof

Appellants argue that, under the common law of conversion existing in Florida prior to the adoption of the Uniform Commercial Code, a plaintiff need only show rightful ownership of the stock certificates in order to shift to the defendant the burden of proving his status as a BFP, for value and without notice of adverse claims. Appellees reply that the provisions of Article 8 of the UCC as adopted in Florida, Fla.Stat. ch. 678, take precedence over the common law of conversion in suits to recover stock certificates, and that under the UCC the burden is upon the claimant to prove that the purchaser was not a BFP. We are cited to no definitive ruling on this issue by a Florida court, and we need not speculate in this respect. For, assuming the correctness of appellant’s position, we find, as did the trial court, that the Bank established prima facie its status as BFP of the IBM certificates in question. The appellants failed to rebut this prima facie showing.

The major portion of the testimony establishing the Bank’s prima facie case of BFP status came on cross-examination of the plaintiffs’ adverse witness Charles G. Rebozo, chief executive officer of the appellee Bank. We summarize his testimony: Lewis arrived at the Bank on July 30, 1968 for the purpose of applying for the loan. He was accompanied by a Mr. Walter Jernigan, who was known to Rebozo and who vouched for Lewis’s being an Atlanta business man of substance. Lewis represented that the loan proceeds were to be used to purchase an interest in a commercial airline. As collateral for a note in the amount of the loan, Lewis offered -nine certificates representing 900 shares of IBM stock. The stock certificates were in street name, that is issued to a brokerage house (here E. F. Hutton & Co.) and endorsed by the broker on the back of the certificate with the transferee’s name left blank. Lewis executed a Federal Reserve Board form affidavit stating that he was the rightful owner of the stock certificates, and his name was placed in the transferee blank on the back of the certificates. Earlier direct testimony by Rebozo was to the effect that the Bank had contacted IBM and verified the listing of the stock in Hutton’s name, and that the Bank sent the certificates with Lewis’s name added as transferee to IBM for issuance of new certificates in Lewis’s name. The certificates were issued and held by the Bank.

In our view this testimony established a prima facie case that the Bank was a BFP of the IBM certificates. Under the provisions of the UCC as adopted in Florida, the Bank became a “purchaser for value” when it accepted the stock certificates as collateral. Fla. Stat. Sec. 671.1-201(32), (33), & (44) (a) (1973). The “good faith” and “without notice” requirements are practically synonymous.

The narrative outline of Lewis’s appearance at the Bank on July 30 and of his presentation of the stock certificates adequately establishes that the Bank had no notice, actual or constructive, of Hutton’s adverse claims to the securities. As one court has noted regarding the use of stock certificates endorsed in blank:

The practice of delivering certificates endorsed in blank in connection with change of title without change in registration [was] stated [citation omitted] as follows: “It is common knowledge that certificates of stock standing in the name of an original owner and indorsed in blank are dealt in thousands of times, and during a period, often of many years, without charge of name of the original owner, although title has changed on innumerable occasions.”
The very purpose of rules making certificates negotiable when endorsed in blank is to enable all persons to treat possession of the certificates as equivalent to ownership. * * * To say that a street certificate, endorsed in blank, which ordinarily passes from hand to hand without further endorsement and, hence, does not indicate who was the last preceding owner, gives notice to a transferee of a diversion of the property of the last endorser, ignores the entire history of business experience concerning the delivery of such certificates.

Mason v. Public National Bank & Trust Co., 1941, 262 App.Div. 249, 28 N.Y.S.2d 416, 424. The plaintiffs offered no evidence that the Bank had any notice of Hutton’s adverse claim to the IBM stock. The proof in fact was directly to the contrary.

Cross-Examination Under Rule 43(b)

Appellants maintain, nonetheless, that the court below should be reversed because the Bank’s evidence of its BFP status was improperly introduced. They argue that the cross-examination of their adverse witness Rebozo was imper-missibly broad in violation of Rule 43(b) F.R.Civ.P. Therefore, they contend, the very facts forming the foundation for the lower court’s finding in favor of the Bank should have been excluded from the court’s consideration. The argument is not convincing.

Appellants’ position is that their questioning of Rebozo concerned nothing more than the skeletal aspects of Lewis’s presentation of the stock as collateral for a loan. The record fails to indicate that the district judge allowed the scope of cross-examination to stray beyond the details of the single transaction covered by the direct examination. It was in the classic mold of legitimate cross-examination to add flesh to the bare bones of the direct examination by development of the surrounding circumstances. The construction of Rule 43(b) advanced by appellant would require the trial judge to notice not only the subject matter of the direct examination, but also the trial strategy of the party calling the adverse witness. The language of the rule does not support such an approach nor do the decisions under it. If it was necessary for the plaintiffs to question Rebozo concerning Lewis’s presentation of the IBM stock certificates, it was entirely proper for the defendants to question Rebozo concerning the details of the transaction. Cross examination would be completely sterilized by limiting it to a parroting of the specific questions asked on direct examination. Butler v. New York Central Railroad Co., 7 Cir. 1958, 253 F.2d 281, 283. Cf. Arnold J. Rodin, Inc. v. Atchison, T. & S. F. Ry. Co., 5 Cir. 1971, 477 F.2d 682, 686.

The court below, therefore, properly considered the matters elicited on cross-examination of witness Rebozo. That testimony, together with other evidence, established prima facie Bank’s claim of BFP status regarding the IBM stock certificates. The plaintiffs failed to rebut this prima facie showing. Thus, under Fla.Stat. Sec. 678.8-301, the Bank’s claim to the stock certificates was superior to that of Hutton’s, and the court was not in error when the motion to dismiss (denominated a motion for directed verdict) was granted under Rule 41(b), F.R.Civ.P.

Affirmed.

      . This is the second appearance of this litigation before this Court. The first appeal was from an order dismissing the plaintiffs’ suit with prejudice, after a full evidentiary hearing. We determined that despite the reasons dictated in the record by the trial court, its failure to enter findings of fact and conclusions of law in accordance with F.R.Civ.P. 41(a) prevented our giving eonfi-dent consideration to the issues presented on appeal. We remanded for the entry of such findings and conclusions as provided for in F.R.Civ.P. 52(a). Fidelity and Casualty Co., et al. v. Key Biscayne Bank v. Lewis, 5 Cir. 1973, 483 F.2d 438. The case is back before us on the findings and conclusions entered below on remand.

      . A misnomer. Properly the motion was one to dismiss under Rule 41(b), F.R.Civ.P. We so refer to it herein. See James v. DuBreuil, 5 Cir. 1974, 500 F.2d 155 [decided September 12, 1974, Note 2 and supporting text].

      . The UCC does not speak specifically to the question. Assuming the correctness of appellants’ assertion that pre-Code law is controlling, we think recourse should be had, not to the common law of conversion, but (i) first to the provisions of the Uniform Stock Transfer Act as adopted in Florida, Law of May 31, 1943, ch. 21894, Sec. 1 [1943] (repealed 1967) (formerly Fla.Stat. ch. 614), and (ii) second to the common law rule regarding suits to recover stolen securities or other negotiable instruments.
      The courts of Florida long ago observed a common law distinction between suits to recover negotiable instruments and securities and suits in conversion to recover ordinary chattels. Trustees v. Lewis, 1894, 34 Fla. 424, 16 So. 325. This distinction was maintained through the enactment of both the Uniform Negotiable Instruments Law, Law of June 1, 1897, ch. 4524 (repealed 1967) (former Fla.Stat. ch. 674), and the Uniform Stock Transfer Act, supra.

      Under Sec. 59 of the Negotiable Instruments Law, introduction by the claimant of evidence tending to show his ownership of the paper in question clearly shifted the burden to the holder to come forth with evidence tending to show his status as BFP. This rule explains the decision in Antonaeci v. Denner, Fla.App.3d 1963, 149 So.2d 52, relied upon by appellants. The Stock Transfer Act, which would have governed the suit here, has no such provision. Anton-aoei, therefore, is not dispositive.
      There is a split of authority on the question whether under prior common law the burden would be on the holder to prove his BFP status once the claimant has introduced evidence of ownership. In support of this rule, see Annot., 52 A.L.B.. 957 (1928) and cases cited therein. Contra, Murray v. Lardner, 1865, 69 U.S. (2 Wall.) 110, 121, 17 L.Ed. 857 (applying English common law). We need not attempt to decide the question here for the Florida courts.

      . Anderson on the Uniform Commercial Code, See. 8-203:3, p. 724 n. 7 (2d ed. 1971).

      . The district court observed that there was testimony to the effect that it was standard practice among stockbrokers not to deliver stock certificates to customers without a delivery ticket giving a description of tlie certificates and their serial numbers, and identifying the customer to whom they were delivered. The district court concluded, however, that there was insufficient evidence to show that the Bank knew or should have known of this practice in another industry.

      . Rule 43(b) provides in part:
      A party may call an adverse party or an officer, director, or managing agent of a public or private corporation or of a partnership or association which is an adverse party, and interrogate him by leading questions and contradict and impeach him in all respects as if he had been called by the adverse party, and the witness thus called may be contradicted and impeached by or on behalf of the adverse party also, and may be cross-examined by the adverse party only upon the subject matter of his examination in chief. (Emphasis added).

      . Specifically, the trial judge refused to allow counsel for the bank to question Rebozo as to any actions taken after Lewis’s leaving the Bank to verify Lewis’s ownership of the stock, despite a reference in the opening statement of Bank’s counsel to the fact that such efforts were made.


author: PER CURIAM:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. ONE (1) 1972 WOOD, 19 FOOT CUSTOM BOAT, FL 8443AY, and One (1) 1966 Lugg Boat Trailer, 1973 Florida Tag Number IV 7812, Defendant-Appellant, and Paul M. Doyon, Claimant-Appellant.
    No. 74-1294
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Oct. 7, 1974.
    Rehearing and Rehearing En Banc Denied Nov. 26, 1974.

      William P. Cagney, III, Miami, Fla., for defendant-appellant.

      Robert W. Rust, U. S. Atty., Raymond R. Ray, and C. Wesley G. Currier, Asst. U. S. Attys., Miami, Fla., for plaintiff-appellee.
    Before GEWIN, GODBOLD and CLARK, Circuit Judges.

       Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir. 1970, 431 E.2d 409, Part I.

   PER CURIAM:

This appeal is from a proceeding brought by the United States to enforce forfeiture of a boat and trailer used to transport marijuana. The innocent owner had rented the boat to a third party, Antunovich. Antunovich was arrested and when he was taken into custody, the boat contained five burlap bags of marijuana. After an investigation, the customs service agreed to remit the boat to its owner, Doyon, upon the payment of the storage charges of approximately $400. Doyon refused to pay, and forfeiture proceedings were instituted. After trial, the boat and trailer were ordered forfeited to the United States. We affirm.

Appellant alleges that the delay between the seizure of the boat in August 1972, and the institution of forfeiture proceedings in June 1973, resulted in a denial of due process. The statutes involved, 19 U.S.C. §§ 1602, 1603, and 1604, require the customs officer to report immediately any seizure to his district office, and the U.S. Attorney to forthwith institute proceedings where necessary. The Customs investigation and administrative processing was not completed until April 10, 1973. At that time appellant was informed he would have to pay the storage charges in order to obtain his boat. He negotiated with the department as to the storage charges for an unspecified time, but at least until May. The case was then turned over to the U.S. Attorney who instituted suit on June 1, 1973. In these circumstances, the actions of the U.S. Attorney were in compliance with the statute.

Appellant also contends that he was deprived of his property without due process of law, without just compensation, and without prior notice and an opportunity to be heard, in violation of the 5th Amendment. These points have been raised and rejected in numerous forfeiture cases. In Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974), the Supreme Court upheld a Puerto Rico statute which provided for seizure without notice and forfeiture to the Commonwealth of vessels used to transport controlled substances, including marijuana. As in the case at hand, the appellant in Calero-Toledo was an innocent lessor and was not involved in the criminal enterprise. The Court noted that “preseizure notice and hearing might frustrate the interests served by the statutes, since the property seized will often be of a sort that could be removed to another jurisdiction, destroyed or concealed, if advance warning of confiscation were given.” 416 U. S. at 679, 94 S.Ct. at 2090, 40 L.Ed.2d at 466. Rejecting the argument that the statute unconstitutionally authorized the taking for government use of innocent parties’ property without just compensation, the Court stated, “Forfeiture of conveyances that have been used — and may be used again — in violation of the narcotics laws fosters the purposes served by the underlying criminal statutes, both by preventing further illicit use of the conveyance and by imposing an economic penalty, thereby rendering illegal behavior unprofitable.” 416 U.S. at 686, 94 S.Ct. at 2093, 40 L.Ed.2d at 470. See also United States v. One 1970 Buick Riviera, 463 F.2d 1168 (5th Cir. 1972).

At trial appellant objected to the admission of a chemist’s report which stated that the substance seized from the boat was marijuana. The report was merely cumulative evidence. The government had already established that the arresting officer had detected the odor of marijuana in the boat and that his field test for marijuana had been positive. Under the provisions of 19 U.S.C. § 1615, once probable cause for seizure of a vessel has been shown, the burden is on the claimant to prove such facts as are necessary to show that the property should not be forfeited. This he failed to do.

Appellant’s arguments regarding the rulings of the trial court as to his cross-examination of the arresting agent are also without merit. His attempted cross-examination as to the affidavit in support of the arrest warrant ivas irrelevant to the question of whether the boat contained contraband.

Appellant also attempted to raise the defense of entrapment of the persons in possession of the boat at the time of its seizure. Entrapment is a personal defense and may be raised only by the person entrapped. Appellant had no standing to raise this defense.

Finally, appellant alleges the trial court erred in denying his counterclaim for damage to the boat and loss of service while it was in • storage. 28 U.S.C. § 2680 specifically prohibits the bringing of any claim arising from the detention of any goods or merchandise by a customs officer. Appellant’s remedy would be to show an unconstitutional forfeiture and sue under 28 U.S.C. § 1346(a)(2). He has not pursued that course.

Affirmed.


author:
TUTTLE, Circuit Judge:
      GEE, Circuit Judge BY THE COURT:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Alfonso ACOSTA, Defendant-Appellant.
    No. 73-4016.
    United States Court of Appeals, Fifth Circuit.
    Oct. 10, 1974.
    Rehearing En Banc Granted Dec. 18, 1974.

      John L. Fashing, El Paso, Tex., for defendant-appellant.
    William S. Sessions, U. S. Atty., San Antonio, Tex., Edward Marquez, Ronald F. Ederer, Asst. U. S. Attys., El Paso, Tex., for plaintiff-appellee.
    Before TUTTLE, WISDOM and GEE, Circuit Judges.
   TUTTLE, Circuit Judge:

Alfonso Acosta was found guilty in a non-jury trial of possessing, with intent to distribute, heroin, a schedule I controlled substance, in violation of 21 U.S. C. § 841(a)(1). Agents of the Drug Enforcement Administration obtained a search warrant for 7143 Alameda, El Paso, Texas, trailer space #11 on August 30, 1973 and there seized numerous packets of heroin weighing approximately one and one-fourth ounces. Appellant brings this appeal challenging the validity of the affidavit upon which this warrant was issued, as well as appealing the sentencing procedures used by the presiding judge. We reverse the conviction on the grounds that the warrant was improperly issued, and accordingly do not reach the question of sentencing. Reversed and remanded.

I.

The magistrate issued the search warrant, on the basis of an affidavit of federal Drug Enforcement Administration Agent Oscar Licon. The affidavit set out the following facts:

“On 8-30-73, at approx. 12:00 Noon, a confidential informant of Det. F. Maya stated to me that there was an ounce of heroin located at 7143 Alameda, Space #11, El Paso, Texas in the bathroom. The informant further stated that it belongs to Alfonso Acosta, a Mexican male, approx. 47 years of age, who resides at this trailer. The informant further stated that Acosta was in the act of cutting, diluting the heroin into small packets called papers for resale this same day. The informant stated that Acosta has done the same procedure in the trailer on at least 32 occasions after he has purchased large quantities of heroin. The informant has on another occasion assisted Federal Agents in initiating cases. The informant states positively that on August 30, 1973 at approximately 10:00 p. m. she observed the said heroin in the bathroom of said premises described above and that she knows it is heroin and that it is still present in said premises.”

The last sentence of this recital was added at the magistrate’s suggestion, for as the affidavit was originally presented to him the magistrate believed “it was pot adequate to justify the issuance of a search warrant,” for “there was nothing in the affidavit indicating the prior reliability of the informant.” In addition to seeking to bolster the affidavit by the detailing of the informant’s personal observations, the magistrate questioned Agent Licon and learned the name of the informant. By chance, this informant had been the source of information which had been the basis for a previous warrant issued by the magistrate, and based on his own knowledge and his past experience with the informant, Magistrate Boyd issued the warrant under consideration today.

At the suppression hearing, Magistrate Boyd testified that

. . once I learned the name of the informant I immediately reviewed all of these details about the informant’s past reliability and on that basis, in addition to the information which Agent Licon said he would swear to under oath about the informant having said she had seen heroin there that day and knew it to be there, at that point I agreed to issue the search warrant. At that point I became convinced that this was a reliable informant and the search warrant should issue.”

The magistrate did not feel it necessary to transcribe a recitation of his own information concerning the informant’s reliability because it “involved my own knowledge and subjective state of mind.” This procedure does not meet the required standards.

II.

The affidavit on its face fails adequately to set out facts sufficient to enable an impartial magistrate to conclude that probable cause existed to permit issuance of a search warrant. The standards to be used in evaluating the facts set forth in the affidavit are well understood and certain. As this Court has recently stated:

“This test is typically referred to as ‘Aguilar’s two-pronged test.’ Spinelli v. United States, 1969, 393 U.S. 410, 413, 89 S.Ct. 584, 587, 21 L.Ed.2d 637, 642. See United States v. Mendoza, 5 Cir. 1970, 433 F.2d 891; Gonzales v. Beto, 5 Cir. 1970, 425 F.2d 963; United States v. Marihart, 8 Cir. 1972, 472 F.2d 809, 811; Note, the Supreme Court — 1970 Term, 85 Harv.L.Rev. 40, 55 (1971). The first ‘prong’ requires that the affidavit disclose particular facts or circumstances which justify concluding that the informant is a reliable or trustworthy person. The second requires specific facts or circumstances tending to demonstrate that the informant, in the instance in question, had gathered his information in a reliable manner.” United States v. Chavez, 482 F.2d 1268, 1270 (5th Cir. 1973).

While the second “prong” of the test is satisfied by the detailing of the personal observations' of the informant, thereby guaranteeing that the informant is relying on “something more substantial than a casual rumor circulating in the underworld or an accusation based merely on an individual’s general reputation,” Spinelli v. United States, 393 U.S. 410, 416, 89 S.Ct. 584, 589, 21 L. Ed.2d 637 (1969), the first “prong” of the test is left unsatisfied. There is nothing in the affidavit which proves that the informant is reliable. The af-fiant himself had no personal knowledge as to the reliability of the informant; the fact that the informant had “on other occasions assisted Federal Agents in initiating cases” says nothing about whether the eases thus initiated were successfully prosecuted, whether they were based on information supplied by the informant, or if so, whether the information proved to be accurate. Finally, despite the fact that the affidavit identifies the informant as being “a confidential informant of Det. F. Maya,” there is no indication that Det. Maya regarded the informant as reliable, or whether he had past experience tending to show reliability. •

In United States v. Harris, 403 U.S. , 573, 91 S.Ct. 2075, 29 L.Ed.2d 723 the Supreme Court held that where an affidavit supporting a search warrant fails to establish the reliability of the informant, certain corroborative details might be substituted for a statement on reliability. In Harris four factors were held together to adequately establish reliability.

Unlike Harris, the affiant here could make no statement concerning the trustworthiness of the informant, nor could he make a statement concerning the bad reputation of the defendant. Further, unlike the statement of the informant in Harris that he had conducted illicit transactions with the defendant, thus constituting declarations against penal interest, nothing in the affidavit here suggests that the informant made any statement against her penal interest. While the fact that the informant said she was speaking from firsthand observation, like the informant in Harris, lends support to the statements in the affidavit, we do not believe Harris stands for the proposition that a statement of firsthand observation alone is a substitute for reliability in evaluating the worth of an informant’s statements. In Harris this factor was combined with three others, the cumulative effect of which was to offset the failure of the officer to establish the credibility and reliability of the informant. That cumulative effect is lacking here.

III.

We further find that the magistrate’s personal information cannot be used to save a defective affidavit. Rule 41(c) of the Federal Rules of Criminal Procedure states specifically:

“A warrant shall issue only on an affidavit or affidavits sworn to before the federal magistrate or state judge and establishing the grounds for issuing the warrant. . . . Before ruling on a request for a warrant the federal magistrate or state judge may require the affiant to appear personally and may examine under oath the affiant and any witnesses he may produce, provided that such proceeding shall be taken down by a court reporter or recording equipment and made part of the affidavit.”

This rule seems clearly to require that any evidence relied upon by the magistrate be recorded and made a part of the affidavit. While there was some divergence in views between the Circuits prior to the October 1972 amendment to Rule 41(c) as to whether this requirement of recording oral testimony supplementing an affidavit was required to salvage an otherwise invalid affidavit, this Court has now concluded that such recording of supplementary testimony was not required. See United States v. Hill, 5 Cir., 1974, 500 F.2d 315 (No. 73-1098) where this Court, construing the unamended Rule 41(c) which did not prescribe the manner in which oral testimony was to be taken or used by a magistrate in issuing a warrant, held in accord with Eighth and Tenth Circuit decisions that such non-transeribed, oral supplementation to an otherwise invalid affidavit, was proper under the Fourth Amendment and Rule 41(c). See alsot United States v. Beasley, 485 F.2d 60 (10th Cir. 1973); United States v. Marihart, 472 F.2d 809 (8th Cir. 1972) (en banc) petition for cert. filed, 42 L.W. 3611 (Apr. 8, 1974); Leeper v. United States, 446 F.2d 281 (10th Cir. 1971), cert. denied, 404 U.S. 1021, 92 S.Ct. 695, 30 L.Ed.2d 671 (1971); United States v. Berkus, 428 F.2d 1148 (8th Cir. 1970); Lopez v. United States, 370 F.2d 8 (5th Cir. 1966).

We are, of course, bound by the decision in the Hill case, which deals with search warrants issued before the amendment. There is no conflict between our decision today and the Hill decision, for in Hill this Court specifically stated: “We of course note that under the amended rule such interrogation and the affiant’s responses must be recorded and made a part of the affidavit.” United States v. Hill, supra, 500 F.2d at 322, n. 3. Under the amended rule as quoted above there can be no doubt that any oral additions to the affidavit must be recorded and made a part of the affidavit.

Beyond the literal language of Rule 41(c), it has been held that the requirement of the Fourth Amendment that information relied upon to establish probable cause be “supported by oath or affirmation” requires that any information relied upon by a magistrate be taken under oath and that this must be shown in the record. Tabasko v. Barton, 6 Cir. 1972, 472 F.2d 871. While we intimate no view on this question as it applies to state courts, we believe the weight of authority clearly is that any information relied upon by a federal magistrate in determining whether prob'able cause exists must be made a part of the affidavit or affidavits supporting the warrant. While the precise problem presented in this case has not previously occurred, where it is the magistrate himself who supplies the additional information necessary to constitute probable cause, we do not believe Rule 41(c) provides an exception for this situation.

While one rationale for this requirement that all evidence be part of the affidavit is to ensure that the magistrate has all the information necessary to arrive at a decision, another important rationale is to guarantee that the record is preserved for later review in such a way that new information, either newly discovered or remembered, cannot be used to validate a warrant after it has been issued. The requirement that all facts relied upon by the magistrate be in a written affidavit insures that “the reviewing court may determine whether the constitutional requirements have been met without reliance upon faded and often confused memories.” United States v. Anderson, supra, 453 F.2d at 177. This important requirement has not been satisfied in this case and accordingly we must find that the affidavit supporting the search warrant was inadequate and the evidence seized under that warrant must be suppressed.

The judgment is reversed and the case is remanded for further proceedings not inconsistent with this opinion.

GEE, Circuit Judge

(dissenting):

The result reached by the majority seems to me very grievous. Under it a rather high-level heroin dealer — not a mere street pusher — goes free, unpunished and as a practical matter likely unpunishable, for acts in which he was caught red-handed in the course of a search authorized by a conscientiously-issued warrant. He does so, although the magistrate was furnished sufficient facts for an affidavit amply supporting the issuance of the warrant, solely because under the pressure of events all of these facts were not reduced to affidavit form as required by Rule 41(c). The warrant being infirm, the majority brings the exclusionary rule into play to invalidate Acosta’s conviction and sentence. If this be the law’s demand it must, of course, be honored. Since I do not think it is, I respectfully dissent.

1. The Deficiencies of the Affidavit.

Aguilar requires a policeman’s affidavit to set forth

some of the underlying circumstances from which the informant concluded that the narcotics were where he claimed they were, and some of the underlying circumstances from which the officer concluded that the informant . . . was “credible” or his information “reliable.” 378 U. S., at 114, 84 S.Ct., at 1514. (emphasis added).

Beyond per adventure the affidavit in this case fulfils the first of these requirements, and, to my mind, it complies on its face with one of the disjunctive requirements of the second: showing a basis for the policeman’s conclusion that the informant’s “. . . information [was] reliable.” It is admittedly somewhat weak on the informant’s intrinsic credibility, though it does not seem to me a very strained construction of the reference to her as being Detective Maya’s confidential informant as indicating he placed some credence in her, or of the description of her as having helped Federal Agents in initiating cases as forming a sufficient basis for the inference that the cases were not disasters — as indeed, in fact, they were not. I do not place much weight upon the presence or absence in the affidavit of such magic words as “reliable” or “accurate,” which cost little to add and mean little more. Transmitting such signals as these, we may expect affidavits which smell of the lamp and smack of common-law pleading.

At any rate, under Aguilar it is not necessary that the informant be shown to be credible; the alternative and sufficient course of showing circumstances justifying a conclusion that his information in this instance is reliable is available. Even paranoids sometimes have enemies, and liars sometimes tell the truth.

Here there are at least strong hints of the informer’s reliability. In addition, the affidavit is specific and detailed, telling just about all there was to tell about Acosta and his activities as then relevant to his traffic in misery. “A magistrate, when confronted with such detail, could reasonably infer that the informant had gained his information in a reliable way.” Spinelli v. United States, 393 U.S. 410, 417, 89 S.Ct. 584, 589, 21 L.Ed.2d 637 (1969). Had such an inference been made, it seems the affidavit in this case would clearly have supported it.

The trouble is our magistrate did not make this requisite inference, or rather declined to make it solely from the proper matter furnished him. Not content with the affidavit, even as supplemented at his suggestion, he went on to require matter beyond it — the informant’s name —and only then, when he recognized her as the source of earlier information personally known to him to have been reliable, was he satisfied that a warrant should issue.

A magistrate’s “. . . determination of probable cause should be paid great deference by reviewing courts.” Spinelli v. United States, 393 U.S. 410, 419, 89 S.Ct. 584, 591, 21 L.Ed.2d 637 (1969); see Jones v. United States, 362 U.S. 257, 80 S.Ct. 725, 4 L.Ed.2d 697 (1960). By a parity of reasoning, his refusal to do so until satisfied by consideration of material technically improper, as here, has weight. I am therefore unable to say with any assurance, in view of his testimony quoted at note four above, that he would have issued the warrant without the consideration of improper matter. Its basis was therefore infirm, both constitutionally as based in part on unsworn matter and procedurally, as relying on matter not reduced to affidavit form. Fed.R.Crim. P. 41(c). Thus though I think the majority wrong in holding, as I believe it does, that this affidavit is an insufficient basis for a magistrate’s inference of probable cause, I agree that the magistrate’s action in issuing the warrant was technically erroneous. Unlike the majority, however, I do not think this concludes the matter.

2. The Inapplicability of the Exclusionary Rule.

It is now clear both that the exclusionary rule represents, not a constitutional right, but a judge-made remedy to secure one and that its prime function is to deter future overzealous police conduct by removing the incentive to it. Moreover, “. . . [t]he deterrent purpose of the exclusionary rule neces-arily assumes that the police have engaged in willful, or at the very least, negligent conduct which has deprived the defendant of some right.” Michigan v. Tucker, 417 U.S., at 447, 94 S.Ct., at 2365, 41 L.Ed.2d, at 194 (emphasis added).

I search this record in vain for such conduct. Informed that Acosta was at that moment preparing his dreary elixirs for sale, the detective hopefully entered his essay in the cosmic contest. The magistrate, unsatisfied but plainly disturbed, questioned him further and satisfied himself in a good faith which shines in the record that probable cause existed to believe him and his informant. “[T]his situation furnishes no occasion to apply the exclusionary rule to bar the evidence of . criminality that was obtained in executing the warrant. [The detective] acted properly in going to the magistrate and seeking a warrant. [The magistrate] acted properly in calling for additional information to demonstrate credibility. Thus, the only error attributable to the procedure they followed is a technical one that would in no way serve the deterrent purposes of the rule.” United States v. Hill, 500 F.2d 315, at 322 (5th Cir. 1974) [No. 73-1098].

Correctly noting that Rule 41(c) has been amended to require matter supplementing an affidavit to be made part of it since presentation of the affidavit in Hill, the majority opinion seeks to dispose of that holding as a precedent on that basis. I do not think it will go away so easily. It is true that the Rule’s amendment is one basis of the Hill decision. It is also true, however, that the language quoted above appears immediately following the court’s conclusion “. . . that the warrant was duly authorized” and constitutes an alternate ground of the decision: that even had the warrant not been duly authorized, “. . . this situation furnished] no occasion to apply the exclusionary rule . . . [since] the only error attributable to the procedure they followed is a technical one that would in no way serve the deterrent purposes of the rule.” Ibid.

I would uphold the district court’s implied finding that this police conduct was neither wilful nor negligent and furnished no proper occasion for application of the exclusionary rule. Nor would I expand the rule to “deter” magistrates from failing to record matter upon which they rely, conceiving that they will obey the mandates of reviewing magistrates, such as we, when these are understood. At the least, I would remand to the district court for a fact finding whether the conduct of the police in this case was either wilful or negligent, and be guided accordingly. As here it was plainly at worst inartful, I would affirm.

3. The Sentencing Procedure.

So concluding, I would reach the question of the sentencing procedure employed by the court. Two sentencing hearings were held. At the first of these, the court gave Acosta to understand that if he would cooperate with the authorities by revealing his drug sources this would redound to his credit, recessing to permit him to do so. At the second hearing the Court, noting that the “Probation Officer doesn’t think you have shown any desire to cooperate,” passed a heavy, though not a maximum, sentence.

While I can only sympathize with the court’s efforts to reach the drug hierarchy through Acosta, the record suggests the possibility that the court may actually have taken Acosta’s refusal to cooperate into account in sentencing. If so, under such authorities as Thomas v. United States, 368 F.2d 941 (5th Cir. 1966) and United States v. Rodriguez, 498 F.2d 302 (5th Cir. 1974), the sentence should be vacated and a new sentence imposed without consideration of this refusal. As we said in Rodriguez,

In Thomas v. United States, . we held it a clear abuse of discretion for the sentencing judge to threaten the man before him with a more severe sentence if he did not “come clean” and admit his guilt. As we explained, the defendant retains important Fifth Amendment rights after the jury reaches a verdict, rights which must not be made the price of sentencing leniency. The court cannot place the defendant in the dilemma of either abandoning his Fifth Amendment rights or risking a harsher sentence.

True it is that in both cases the court was urging the convicted defendant to acknowledge only his own guilt, but I am unable to see how Acosta could have implicated others without, at least tacitly, admitting his own complicity. I would therefore affirm his conviction, but vacate his sentence and remand for resentencing.

ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC

Before BROWN, Chief Judge, and WISDOM, GEWIN,' BELL, THORN-BERRY, COLEMAN, GOLDBERG, AINSWORTH, GODBOLD, DYER, SIMPSON, MORGAN, CLARK, RONEY and GEE, Circuit Judges.

BY THE COURT:

A member of the Court in active service having requested a poll on the application for rehearing en bane and a majority of the judges in active service having voted in favor of granting a rehearing en banc,

It is ordered that the cause shall be reheard by the Court en banc on briefs without oral argument. The Clerk shall set a briefing schedule for the filing of supplemental briefs.

      . The First, Second, Third, Fourth, Sixth, Seventh and Ninth Circuits were in apparent disagreement with this use of untranscribed, oral testimony to supplement an affidavit. See United States v. Noreikis, 481 F.2d 1177 (7th Cir. 1973) ; United States v. Hatcher, 473 F.2d 321 (6th Cir. 1973) ; United States v. Bailey, 458 F.2d 408 (9th Cir. 1972) ; United States v. Anderson, 453 F.2d 174 (9th Cir. 1971) ; United States v. Cobb, 432 F.2d 716 (4th Cir. 1970) ; United States v. Melvin, 419 F.2d 136 (4th Cir. 1969) ; United States v. Sterling, 369 F.2d 799 (3rd Cir. 1966) ; United States v. Pinkerman, 374 F. 2d 988 (4th Cir. 1967) ; Rosencranz v. United States, 356 F.2d 310 (1st Cir. 1966) ; United States v. Freeman, 358 F.2d 459 (2d Cir. 1966), cert. denied, 385 UÍS. 882, 87 S.Ct. 168, 17 L.Ed.2d 109 (1966) ; see also Poldo v. United States, 55 F.2d 866 (9th Cir. 1932) ; United States v. Casino, 286 F. 976 (S.D.N.Y.1923).

      . We normally refrain from commenting on dissenting opinions, but due to the extreme novelty of the view espoused by the dissent that the exclusionary rule is to be balanced against police misconduct on a case-by-case basis, we feel obliged to make a brief comment.
      Many have criticized the utility of the exclusionary rule. These criticisms are familiar and need not be discussed more fully. There can be no doubt that Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652 (1914) and Mapp v. Ohio, 367 U.S. 643 (1961) control this case. There is no suggestion in either of these two landmark decisions that the exclusionary rule can be ignored if in the opinion of the reviewing court the police conduct was neither wilful nor negligent. The exclusionary rule is a per se, prophylactic measure designed to prohibit the use of evidence seized in violation of the Fourth Amendment. There is no authority for the proposition that the exclusionary rule is to be balanced against the deterrent effect that exclusion might have on police misconduct in an individual case. The dissent cites no authority for its reliance upon this novel approach.
      The dissent refers to United States v. Calandra, 414 U.S. 338, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974) which declined to extend the exclusionary rule to grand jury proceedings, and Michigan v. Tucker, 417 U.S. 433, 94 S.Ct. 2357, 41 L.Ed.2d 182 (1974), which used a balancing approach in determining the admissibility of statements made by the defendant to police prior to Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), where the police had failed to give the defendant the warnings Miranda later held to be required. The dissent i)roperly does not argue that these cases are authority for balancing exclusion of illegally seized evidence.
      Rather the dissent refers to United States v. Hill, 500 F.2d 315 (No. 73-1098, 5 Cir. 1974) as apparent authority for balancing the exclusion of evidence obtained on an invalid affidavit. As we discussed earlier, Hill does not stand as authority for this approach for in Hill this Court faced a situation where the warrant was issued prior to the October, 1972 Amendments to Rule 41(c) and the Court concluded the warrant was issued properly because the affidavit was proper under the then existing Rule 41(c). In this case, as the dissent agrees, the affidavit is facially invalid, for Rule 41(c) does not permit oral testimony to supplement it. Hill in no way suggests that an otherwise invalid warrant can justify the admission of illegally seized evidence if the police acted in good faith.
      The good faith of the police has never previously been used to overrule the requirements of the exclusionary rule. The Supreme Court has not modified the exclusionary rule, and accordingly we cannot understand how our dissenting brother can urge that we do so on our own authority.

      . As Mr. Justice Fortas might have said, he failed the essay contest. Spinelli v. United States, 393 U.S. 410, 438, 89 S.Ct. 584, 600, 21 L.Etl.2d 637 (1969) (dissent) “A policeman’s affidavit should not be judged as an entry in an essay contest.”
      Among the facts, known or made known to the magistrate, but not reduced to affidavit form, were the name of the informant, that she had furnished accurate information which resulted in a heroin arrest not a month earlier, and that her declarations were against her own penal interest.

      . Aguilar v. Texas, 378 U.S. 108, 84 S.Ct. 1509, 12 L.Ed.2d 723 (1964).

      . The address where he was, who he was, his age and ethnic group, where in the house Hie contraband was located, that he was in the very act of diluting and packaging it for street sale, and that Hie informant had seen it there with her own eyes and knew it was still there.
      It is interesting to compare this affidavit with the relevant portion of that in Aguilar bearing in mind that three Justices thought even it sufficient:
      Affiants have received reliable information from a credible person and do believe that heroin, marijuana, barbiturates and other narcotics and narcotic paraphernalia are being kept at the above described premises for the purpose of sale and use contrary to the provisions of the law. 878 U.S., at 109, 84 S.Ct., at 1511.
      If the majority are correct in their appraisal of this affidavit, we have indeed come a long way since Aguilar.

      . As he testified at the suppression hearing: . . . once I learned the name of the informant I immediately reviewed all of thesej details about the informant’s past reliability and on that basis, in addition to the information which Agent Licon said he could .swear to under oath about the informant having said she had seen heroin there that day and knew it to be there, at that point T agreed to issue the search warrant. At that- point I became convinced that this was a reliable informant and Hie search warrant should issue, (emphasis added).

      . Nathanson v. United States, 290 U.S. 41, 54 S.Ct. 11, 78 L.Ed. 159 (1933).

      . United States v. Calandra, 414 U.S. 338, at 347, 94 S.Ct. 613, at 619, 38 L.Ed.2d 561, at 571 (1974). Indeed, that is the sole suggested function of the exclusionary rule which could conceivably apply here. The others which have been advanced, avoidance by the judiciary of “the taint of partnership in official lawlessness” and maintenance of "the imperative of judicial integrity,” United States v. Calandra, 414 U.S. 338, at 357, 94 S.Ct. 613, at 624, 38 L.Ed.2d 561, at 576-578 (1974) cut no figure in this fact situation.

      . Michigan v. Tucker, 417 U.S. 433, at 447, 94 S.Ct. 2357, at 2365, 41 L.Ed.2d 182, at 194.

      . “THE COURT: ... I am sure you could help clear up some of this if you were of a mind to do so. Of course if you are not of a mind to do it, it doesn’t indicate to the Court that you are on the road to rehabilitation. ... I wish you would talk to the Probation Officer about this. ... I hate to see as good a mind as you have got be wasted. Talk to him and let’s see if we can’t do something.”


author: PER CURIAM.

text:
    PERFORMANCE SYSTEMS, INC., Successor to Minnie Pearl’s Chicken System, Inc., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.
    No. 73-2210.
    United States Court of Appeals, Sixth Circuit.
    Argued June 11, 1974.
    Decided July 30, 1974.
    Ernest Brown, Dept, of Justice, for defendant appellant; Scott P. Cramp ton, Asst. Atty. Gen., Meyer Rothwacks, Jonathan S. Cohen, William M. Brown, Attys., Tax Div., Dept, of Justice, Washington, D. C., on brief; Charles H. Anderson, U. S. Atty., of counsel.
    James D. Leekrone, Nashville, Tenn., for plaintiff appellee; John L. Chambers, Nashville, Tenn., on brief.
    Before WEICK, EDWARDS and CELEBREZZE, Circuit Judges.
   PER CURIAM.

The action in the District Court was for the recovery of federal corporate income taxes in the amount of $171,572 plus interest, for the taxable year 1967.

Minnie Pearl’s Chicken System, Inc., a Tennessee corporation, was a wholly owned subsidiary of the taxpayer, Performance Systems, Inc., likewise a Tennessee corporation.

The subsidiary filed its initial corporate income tax return for the period ending December 31, 1967, and paid the tax due thereon in the amount of $169,630. Additional taxes amounting to $7,521.28 were assessed against the subsidiary after examination. The subsidiary filed a federal corporate income tax return for a short period beginning January 1, 1968 and ending January 22, 1968, reporting a net operating loss. A refund was made to the subsidiary of $5,579, based upon a carryback of that net operating loss to the period ended December 31, 1967. This resulted in the subsidiary paying a total of $171,572.28 in income taxes for the year ended December 31, 1967.

A merger was effected between the parent company and the subsidiary on January 22, 1968, valid under Tennessee law.

The parent company filed its income tax return for the year ended December 28, 1969, reporting a let loss of $8,-367,168. It filed a timely claim for refund of the income taxes paid by its subsidiary for the year ended December 31, 1967. This claim was based on a carry-back of the parent corporation’s net operating loss for its year ended December 28, 1967 to its subsidiary’s year ended December 31, 1967. The claim was disallowed by the Internal Revenue Service, and the present action followed.

All of the material facts were stipulated by the parties and were not in dispute. The question presented was whether the merger of the parent corporation with its subsidiary qualified as a reorganization under 26 U.S.C. § 368(a)(1)(F), Internal Revenue Code of 1954, which permits a carryback of the loss claimed pursuant to Section 381(b) of the Internal Revenue Code.

A motion and cross-motion for summary judgment were filed by the parent corporation and the Government.

The District Judge, in a memorandum opinion reported at 73-2 U.S.T.C. ft 9743, granted the motion of the parent corporation and entered judgment against the Government for the full amount claimed. The Government appealed.

We affirm the judgment of the District Court for the reasons set forth in its Memorandum Opinion, and the decision of the Court of Claims on March 20, 1974 in the case of Movielab, Inc. v. United States, 494 F.2d 693.


text:
    Warren H. STEINBERG, a/k/a “Bud” Steinberg, Plaintiff-Appellant, v. OGDEN FOODS, INC., et al., Defendants-Appellees.
    No. 74-1126.
    United States Court of Appeals, Sixth Circuit.
    Argued June 17, 1974.
    Decided Aug. 29, 1974.

      Leo Blum, Columbus, Ohio, on brief, for plaintiff-appellant.
    Rankin Gibson, Columbus, Ohio, on brief, for defendants-appellees.
    Before WEICK, EDWARDS and Mc-CREE, Circuit Judges.
   PER CURIAM.

We consider an appeal from a judgment entered upon a jury verdict for defendants in a diversity action for breach of an oral contract of employment. Appellant claimed that he was employed on January 5, 1970, by appellees as regional supervisor of their food concession business under an oral contract for one year at a salary of $20,000. He charged that appellees breached the contract by wrongfully discharging him on August 27, 1970, before the end of the contract year, and he prayed for compensatory and punitive damages. Appellees admitted that Steinberg worked for them, but denied that he was employed on an annual contract. The proofs presented a direct factual conflict and the jury apparently believed appellees’ version that there was no annual contract and that there was cause for the discharge because of reduced sales in the area under appellant’s supervision.

Nine assignments of error are urged on appeal. Four of these contentions relate to the conduct of the trial judge. Steinberg asserts that the judge made rulings out of the hearing of the court reporter so that a full and complete transcript of the proceedings could not be prepared, and that he harassed, demeaned and humiliated appellant’s counsel. The other contentions are that the district court erred in foreclosing appellant’s counsel from interrogation of the jurors individually in the voir dire, in failing to rule on a motion to compel discovery; in refusing to permit a line of questioning of a witness tendered as an expert; in prejudicially and improperly examining witnesses; and in refusing to submit the issue of punitive damages to the jury.

The first category of contentions raises serious questions about the extent and manner of a judge’s intervention in the conduct of a trial. Although a trial judge is more than just a passive monitor, he must be careful not to indicate by his behavior that he prefers one litigant over another or that he disparages a litigant or his counsel. Also, the practice of “side-bar” conferences should not be encouraged because decisions that are not recorded by the reporter cannot be reviewed on appeal. In this trial, there were more than a dozen instances when the court, either sua sponte or upon request, called counsel to the bench and made some kind of ruling or gave some kind of instruction. Also, the record contains peremptory commands to counsel like “take your seat,” and invitations to counsel to object to a line of questioning. Nothing about the behavior of either lawyer appears to have warranted this treatment. On the contrary, counsel appear to have conducted themselves in an obsequious manner throughout the trial. Plaintiff and defendants shared the impact of the court’s behavior, and although plaintiff’s counsel was favored with the majority of the court’s attention, defense counsel was also interrupted and admonished in the presence of the jury.

The impartial and even-handed visitation of error on both litigants ordinarily will not cure the vice. However, in this case, neither side appears to have received an unfair advantage, and we are not persuaded to upset the verdict.

The remaining issues are without substance. The judge did not abuse his discretion in the conduct of the voir dire because appellant was permitted to ask questions of the jurors collectively, and it appears that in an appropriate instance he would have been permitted to explore a response individually. And, since appellant did not request a ruling on his motion for discovery at the final pretrial conference, we regard him as having abandoned it. Further, we perceive no abuse of discretion or other error in not permitting the expert witness to testify about appellees’ method of keeping accounts or in the court’s examination of witnesses. Finally, the court’s decision not to instruct on the issue of punitive damages was proper because, in Ohio, punitive damages will not be awarded for breach of contract, if at all, unless the breach was occasioned by malice, fraud, or some other aggravating circumstances, Schell v. Kaiser-Frazier Sales Corp., 28 Ohio App. 2d 16, 274 N.E.2d 315 (1971), and the record is devoid of any evidence that appellant’s discharge was so infected.

Although the trial court should have been more restrained in its conduct of the trial and more concerned about the appearance as well as the substance of impartiality, we hold that any error in his conduct was harmless.

Affirmed.


author: TALBOT SMITH, Senior District Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Dennis Edward BORG, Defendant-Appellant.
    No. 73-1648.
    United States Court of Appeals, Tenth Circuit.
    Sept. 4, 1974.

      Felix D. Lepore, Denver, Colo., for defendant-appellant.
    C. Nelson Day, U. S. Atty., and H. Ralph Klemm, Asst. U. S. Atty., for plaintiff-appellee.
    Before SETH and HOLLOWAY, Circuit Judges, and TALBOT SMITH Senior District Judge.

       TALBOT SMITH, United States Senior District Judge, Eastern District of Michigan, sitting by designation.

   TALBOT SMITH, Senior District Judge.

Defendant, charged in two counts with violation of 18 U.S.C. § 2314, interstate transportation of falsely made and forged securities, was convicted by a jury on both counts. His appeal to us raises questions of the admissibility of his extrajudicial statements and of the sufficiency of the evidence. We affirm.

The facts will be discussed in more detail in our examination of the errors asserted. In substance the offenses charged involve the cashing of two American Express money orders, part of a group of some 280 stolen in blank from the store of Mr. Salisbury, in Salt Lake City, Utah. The defendant testified he had been arrested December 30, 1971 upon a warrant “from the city police department * * * for a $25 personal check I purportedly had cashed.” During defendant’s interrogation by local police subsequent to his arrest he admitted cashing the two money orders before us. On January 19, 1972 he was interviewed by two F.B.I. agents (who had not been present at the initial interrogation) and made the same admissions. Defendant’s principal claim of error relates to the court’s denial of his motion to suppress the statements made to the police officers “and all subsequent conversations with officers arising fairly from that initial conversation.”

The defendant asserted that his interrogation by the police officers did not comply with the Miranda requirements, that it was coercive, and that his admissions were induced by promises of “immunity” from prosecution. The court took extensive testimony out of the presence of the jury on these charges and, finding the statements involuntary, ruled that all testimony from the local police would be excluded.

But, according to defendant’s theory, such exclusion does not exhaust the possible evils flowing from the police interrogation under the “fruit of the poisonous tree” doctrine, since, defendant asserts, the police officers passed on to the F.B.I. agents their unlawfully acquired knowledge of defendant’s cashing of the two American Express money orders. Moreover, defendant continues, he would not have admitted to the agents his cashing of the money orders had he not been “promised immunity” by the city police officers. The agents, in reply, deny that any information from the police led them to the defendant. Rather, agent Davis testified, “as I recall I took a very direct route on this case. Dennis Borg’s name was on the money order itself. I had a very direct route to follow. He had to be in it because his name was on the money orders.”

Having suppressed the testimony of the police officers the court reserved immediate ruling as to the F.B.I. agents, stating:

I am going to take that evidence for the F.B.I. agents in front of the jury. If I decide it should be excluded, why, I will then give you a judgment of acquittal. If I decide it is admissible, we will submit the matter to the jury. We will do that in front of the jury.

Before the jury, agent Empey recounted his and agent Davis’ interview with the defendant. After warning to defendant of his Miranda, rights, Empey testified, defendant “signed the waiver and was agreeable to being interviewed by us.” He then freely admitted receiving the money orders from two named individuals and cashing them in his own name in exchange for half the proceeds, but denied that he knew the money orders were forged. The finding of the trial court that there was no derivation of F.B.I. knowledge from unlawful sources is clearly supported in the record.

The defendant took the stand in his own defense and substantially confirmed Empey’s testimony, amplifying his defense of lack of knowledge. The defendant urges that the evidence was insufficient to sustain the conviction in that there was a failure of proof as to scienter, relying on Pauldino v. United States, 379 F.2d 170 (10th Cir. 1967). But PauLdino does not aid defendant on the facts before us, for the guilty knowledge there required may and often is inferred from circumstantial evidence, particularly when involving unusual circumstances. United States v. Greene, 442 F.2d 1285 (10th Cir. 1971); United States v. Infanti, 474 F.2d 522 (2nd Cir. 1973) ; United States v. Brawer, 482 F.2d 117 (2nd Cir. 1973). Here the totality of circumstances is overwhelming. The jury heard and rejected defendant’s story.

Affirmed.

      . 18 U.S.C. § 2814 provides in part:
      Whoever, with unlawful or fraudulent intent, transports in interstate or foreign commerce any falsely made, forged, altered, or counterfeited securities * * ®, knowing the same to have been falsely made, forged, altered, or counterfeited; * ® ® Shall be fined not more than $10,000 or imprisoned not more than ten years, or both.

      . Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966).

      . This claim, rather than one of technical immunity, 18 U.S.C. § 6001 et seq., more properly goes to the voluntariness of the statements made and we will so construe it.

      . Upon defendant’s arrest he was searched and was found to be in possession of a wallet containing the identification papers of one L. K. Wilkins. This wallet, Borg testified, he had purchased from a prostitute. The money orders before us bear the forged name of Wilkins as purchaser and the defendant as payee.

      . By ultimately submitting the case to the jury the court impliedly ruled the agents’ testimony admissible. There is no merit to the contention that the court, in contravention of the holding in Jackson v. Denno, 378 U.S. 368, 84 S.Ct. 1774, 12 L.Ed.2d 908 (1966) improperly delegated to the jury the issue of the constitutional voluntariness or “taintedness” of defendant’s statements to the agents.


text:
    UNITED STATES of America, Appellee, v. Donald Ray DAVIS, Appellant.
    No. 73-3203.
    United States Court of Appeals, Ninth Circuit.
    July 17, 1974.
    James L. Varnell (argued), Des Moines, Wash., for appellant.
    J. Ronald Sim, Asst. U. S. Atty. (argued), Seattle, Wash., for appellee.
    Before MERRILL and WALLACE, Circuit Judges, and SKOPIL, District Judge.

       The Honorable Otto R. Skopil, Jr., United States District Judge for the District of Oregon, sitting by designation.

   OPINION

PER CURIAM:

Donald Ray Davis appeals a conviction of knowingly distributing and possessing with the intent to distribute mushroom pieces containing lysergic acid diethylamide (LSD) in violation of 21 U. S.C. §§ 841(a)(1) and 841(b)(1)(B), and 18 U.S.C. § 2.

Davis’ first contention is that the trial court erred in denying Davis’ motion to suppress the use of a prior state court conviction for a similar offense. On July 12, 1973, Davis was convicted in King County Superior Court for the State of Washington. The charge was for possession of cocaine. On September 12, 1973, the morning of trial in this case, counsel for Davis apprised the court of Davis’ intention to testify. Davis requested that the United States not be allowed to impeach his testimony by the prior state conviction. The court denied Davis’ motion.

Davis claims that the trial judge, in refusing to suppress the prior conviction, failed to properly exercise his discretion under the Luck rule. Luck v. United States, 121 U.S.App.D.C. 151, 348 F.2d 763 (1965). The Luck doctrine is not the rule in this circuit. In United States v. Villegas, 487 F.2d 882, 883 (9th Cir. 1973), we stated that “[t]he point of our prior decisions is that in this circuit reversible error cannot be predicated upon a refusal to follow the Luck rule.” However, proof of prior convictions for impeachment may be excluded if the trial judge, in the exercise of his discretion, concludes that it lacks sufficient probative value because of the remoteness in time of the convictions. United States v. Hatcher, 496 F. 2d 529 (9th Cir. 1974); United States v. Allison, 414 F.2d 407, 412 (9th Cir. 1969); Singleton v. United States, 381 F.2d 1, 4 (9th Cir. 1967). The trial judge in this instance concluded that the prior conviction was not too old to be relevant to the issue of credibility. The conviction was a very recent one. The trial judge did not abuse his discretion.

Davis’ second contention is that the trial court erred by instructing the jury that psilocybin was a controlled substance and that the first element of the offenses would be satisfied by a finding that the substance involved was psilocy-bin.

All three counts alleged that the controlled substance involved was LSD. The chemist testified that the substance found in the mushrooms was LSD. In closing argument, Davis’ counsel and the government each acknowledged that the substance was LSD. The government stated that “the evidence in this case clearly shows that material distributed, in fact, was LSD. There is no question there.” Counsel for Davis said, “On behalf of Mr. Davis, of course, we acknowledge, of course, that the substance was LSD.”

The court instructed that the essential elements of the offenses charged in Counts I and II were (1) that the substance involved is a controlled substance, (2) that the defendants distributed a controlled substance, and (3) that the defendants did so knowingly and intentionally, and that Count III contained the additional element that the defendants’ possession was with the intent to distribute. The court then instructed that LSD and psilocybin are controlled substances and a finding that the substance was either LSD or psilocybin would be enough to satisfy the first element of the offenses. This was error. The Indictment specified that the substance involved was LSD. Davis could be convicted only upon a finding that it was LSD.

Viewing the record, it is clear that the jury was not confused by the instruction. The evidence was that the mushrooms contained LSD. Both the government and Davis conceded that the substance involved was LSD. Psilocybin was interjected only in the context of Davis’ knowledge as to what he was selling. The error was harmless.

Davis’ final contention is that the trial court erred in instructing the jury as to the word “knowingly” and in refusing to give defendant’s requested instruction. The defendant requested an instruction which stated in part: “The word ‘knowingly’ as used in the Indictment means that the act was done with full knowledge on the part of each defendant that the substance delivered and possessed was lysergic acid diethyla-mide (LSD).” This is not a correct statement of the law. 21 U.S.C. § 841 describes a general-intent offense. The government is not required to prove that the defendant actually knew the exact nature of the substance with which he' was dealing. United States v. Balint, 258 U.S. 250, 254, 42 S.Ct. 301, 66 L.Ed. 604 (1922); United States v. Hillman, 461 F.2d 1081, 1082 (9th Cir. 1972). The trial court’s instruction was proper.

Affirmed.


author: CRAVEN, Circuit Judge:

text:
    Milton O. CHEATHAM, Appellant, v. VIRGINIA ALCOHOLIC BEVERAGE CONTROL BOARD, Appellee.
    No. 74-1243.
    United States Court of Appeals, Fourth Circuit.
    Argued June 3, 1974.
    Decided Aug. 1, 1974.

      Edwin M. Young, Richmond, Va., for appellant.
    Henry M. Massie, Jr., Asst. Atty. Gen. of Virginia (Andrew P. Miller, Atty. Gen. of Virginia, on brief), for appellee.
    Before HAYNSWORTH, Chief Circuit Judge, and WINTER and CRAVEN, Circuit Judges.
   CRAVEN, Circuit Judge:

Milton O. Cheatham brought suit versus the Virginia Alcoholic Beverage Control Board in the United States District Court for the Eastern District of Virginia alleging that his discharge from employment for failure to make reasonable provision for payment of his just debts was in violation of Section 304(a) of the Consumer Credit Protection Act, 15 U.S.C. § 1674(a). The district court dismissed the action on the ground that the Board, an agency of the state, was immune from suit under the Eleventh Amendment in the absence of a showing that it had consented to suit. Cheatham has appealed.

While appellant raises interesting questions as to whether the state has waived either explicitly or eonstructively its Eleventh Amendment immunity and whether a private cause of action should be implied under the Consumer Credit Protection Act, we find decision of these questions unnecessary to the disposition of the case.

Even if we assume that the Act created a cause of action for private parties and the Board was amenable to suit in federal court under the Eleventh Amendment the complaint is defective on its face. Section 304(a) of the Act protects an employee from discharge where his earnings have been garnished “for any one indebtedness.” It does not protect him where there have been, as here, multiple garnishments based on more than a single indebtedness. Nor does the Act purport to wipe the slate clean by defining “garnishments” to mean “garnishments after July 1,1970.” Brennan v. General Telephone Co. of Florida, 488 F.2d 157 (5th Cir. 1973). Since the complaint does not state a claim upon which relief could be granted, the district court’s dismissal was proper.

Affirmed.

      . Section 304(a) provides:
      No emj)loyer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness.

      . See Va.Code §§ 4-12, 2.1-223.1 and 8-752. See also Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662, 681 n.19 (1974).

      . Compare Parden v. Terminal R. Co., 377 U.S. 184, 84 S.Ct. 1207, 12 L.Ed.2d 233 (1964) with Employees of the Dep’t. of Public Health & Welfare v. Dep’t. of Public Health & Welfare, 411 U.S. 279, 93 S.Ct. 1614, 36 L.Ed.2d 251 (1973). See also Dawkins v. Craig, 483 F.2d 1191 (4th Cir. 1973).

      . See Simpson v. Sperry Rand Corp., 350 F.Supp. 1057, 1059 (W.D.La.1972), vacated 488 F.2d 450 (5th Cir. 1973). We specifically left the question open. Western v. Hodgson, 494 F.2d 379 (4th Cir. 1974). See generally Note, The Implication of a Private Cause of Action Under Title III of the Consumer Credit Protection Act, 47 So.Cal.L.Rev. 383 (1974).

      . Such an interpretation, here applied, would mean that Cheatham could not be discharged since the two garnishments after July 1, 1970, against his earnings were apparently for the same $150 debt. The Wage-Hour Administrator has adopted this interpretation. Opinion Letter No. 1136 (No. WH-89), Oct. 26, 1970, CCII Lab.L.Rep. 1f 30,703, but we agree with the Fifth Circuit’s decision in the General Telephone Co. case, supra.


author: JAMES M. CARTER, Circuit Judge;

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Jeffrey Lynn JUDGE, Defendant-Appellant.
    No. 74-1384.
    United States Court of Appeals, Ninth Circuit.
    Aug. 9, 1974.
    John Y. Tremblatt, (argued) of Mar-golin, Somers, Kallen & Tremblatt, San Diego, Cal., for defendant-appellant.
    James W. Meyers, Asst. U.S. Atty. (argued), San Diego, Cal., for plaintiff-appellee.
   OPINION

Before CARTER and TRASK, Circuit Judges, and WHELAN, District Judge.

JAMES M. CARTER, Circuit Judge;

This is an appeal from a judgment of conviction for possession of marijuana (1,100 pounds) with intent to distribute under 21 U.S.C. § 841(a)(1). We affirm.

A motion to suppress the evidence on the ground that the search and seizure of the marijuana violated the fourth amendment was denied. The court at trial found Judge guilty.

The search of Judge’s pickup truck took place in the employee parking lot of a closed fruit market at about 8:30 a.m. on May 22, 1973. United States Border Patrol Agent Walters observed Judge’s truck pass the Temecula, California, traffic checkpoint and turn from Pala Road onto Route 71. Because the vehicle had a cover of the kind used to transport aliens over the bed of the truck and a paper license plate indicating recent transfer of registration, and because Agent Walters knew many of the residents of the rural area but did not recognize Judge, he pulled out to follow the vehicle. Walters was in uniform and was driving a marked car.

When the pickup truck pulled into the parking lot of a closed fruit market, Agent Walters got out of his car and walked over to Judge, who was leaving the truck. After several minutes’ conversation, Walters identified himself as a border patrol agent making a routine check for aliens, and asked to inspect the truck. Judge agreed and unlocked the cover himself, revealing 1,100 pounds of marijuana. Judge contends that Agent Walters’ request to search was made under color of his badge and was inherently coercive. Judge’s subsequent consent was therefore not voluntary.

First, since Judge stopped his car voluntarily and Walters in no way ordered or requested him to do so, there was no “stop” of the vehicle as would require a “founded suspicion” on the part of Walters. Cf. Almeida-Sanchez v. United States, 413 U.S. 266, 93 S.Ct. 2535, 37 L.Ed.2d 596 (1973).

Further, the record below amply supports the district court’s finding that the consent was voluntary. Judge stopped his vehicle on his own and initiated the conversation with Agent Walters. He readily agreed to the search of his pickup, performing the physical act of unlocking the back cover himself. He was neither threatened nor ordered to comply with the request to search. Under these circumstances, the recent decision in Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1972) is controlling. In Schneckloth, supra, on facts very similar to those in the present case, the Supreme Court held:

“Voluntariness is a question of fact to be determined from all the circumstances, and while the subject’s knowledge of a right to refuse is a factor to be taken into account, the prosecution is not required to demonstrate such knowledge as a prerequisite to establishing a voluntary consent.” 412 U.S. at 248-249, 93 S.Ct. at 2059.

Whether a consent which appears to be voluntary was actually coerced by implicit means can be determined only by the careful sifting of the unique facts and circumstances of each case. Id. at 233, 93 S.Ct. 2041, 36 L.Ed.2d 854. The district court considered all of the evidence, and had an opportunity to observe the demeanor of both Agent Walters and Judge. His finding of voluntary consent has substantial support in the evidence.

We affirm. Bond is revoked forthwith.

       Honorable Francis C. Whelan, United States District Judge, Central District of California, sitting by designation.


text:
    In the Matter of CHARMAR INVESTMENT COMPANY, alleged bankrupt. CITY NATIONAL BANK & TRUST CO. et al., Petitioners-Appellees, v. CHARMAR INVESTMENT COMPANY, Bankrupt-Appellant.
    No. 74-1354.
    United States Court of Appeals, Sixth Circuit.
    Argued June 17, 1974.
    Decided Aug. 28, 1974.

      John E. Palcich, Columbus, Ohio, on brief, for appellant.
    Bradley Hummel, Columbus, Ohio, for appellees; Robert T. O’Brien, David H. Putnam, Columbus, Ohio, on briefs.
    Before PHILLIPS, Chief Judge, CELEBREZZE and PECK, Circuit Judges.
   PER CURIAM.

This is an appeal from an order entered by the district court pursuant to a jury verdict adjudging appellant, Char-mar Investment Company (hereinafter “Charmar”), a bankrupt. A creditors’ petition for the involuntary bankruptcy of Charmar was filed by appellees in May 1971. Jurisdictional questions concerning appellees Adrian and Radbill’s qualifications as creditors under the Bankruptcy Act arose, and following resolution in favor of appellees in the district court, Charmar perfected an appeal to this Court. In In re Charmar Investment Co., 475 F.2d 560 (6th Cir. 1973), we held that “appellees Adrian and Radbill qualify as creditors under Section 59(b)” of the Bankruptcy Act and affirmed the district court decision. On Charmar’s demand the case was tried to a jury, which found that the sale of the major asset of the corporation to two of its shareholders was a preferential sale within the meaning of the Act and returned a verdict adverse to Charmar. This second appeal followed.

Appellant contends that the district court erred in not directing a verdict in its favor and in excluding testimony of the corporate officers and owners of the real estate in question as to its value and determination of sale price. Appellant has failed to point out and we are unable to find any record of a motion for a directed verdict in the proceedings below. A complaint that the trial court failed to direct a verdict addresses itself to the sufficiency of the evidence, and this Court will not consider the sufficiency of the evidence in the absence of a motion for a directed verdict unless a miscarriage of justice will result. Cutter v. Cincinnati Union Terminal Co., 361 F.2d 637 (6th Cir. 1966); Nailling v. United States, 124 F.2d 431 (6th Cir. 1941); see 5A J. Moore, Federal Practice jf 50.05 (2d ed. 1974). We find no miscarriage of justice.

Similarly, there is no record of the district judge refusing to admit testimony of corporate officers concerning the worth of the real estate involved, and therefore, this issue is not before us.

The judgment of the district court is affirmed.


author:
PER CURIAM:
      WALLACE, Circuit Judge

text:
    UNITED STATES of America, Appellee, v. Ann Yvonne MORGAN, Appellant.
    No. 73-1669.
    United States Court of Appeals, Ninth Circuit.
    June 14, 1974.
    Michael Hannon, Ashman & Hannon, Los Angeles, Cal., for appellant.
    Harry D. Steward, U. S. Atty., Thomas M. Coffin, Asst. U. S. Atty., San Diego, Cal., for appellee.
    Before CHAMBERS, MERRILL, KOELSCH, BROWNING, DUNIWAY, ELY, HUFSTEDLER, WRIGHT, TRASK, CHOY, GOODWIN, WALLACE and SNEED, Circuit Judges.
   OPINION

PER CURIAM:

Ann Yvonne Morgan appeals her conviction for conspiring to possess and possessing with intent to distribute 389 pounds of marijuana. The evidence of these violations was discovered on September 26, 1972, during a search of her automobile at the Immigration and Naturalization Service’s San Onofre checkpoint near San Clemente, California.

In United States v. Bowen, 500 F.2d 960 (9th Cir., 1974) (en banc)-, this court held that under the rule announced by the Supreme Court in Almeida-Sanchez v. United States, 413 U.S. 266, 93 S.Ct. 2535, 37 L.Ed.2d 596 (1973), searches by border patrol agents at fixed checkpoints which were not the functional equivalents of border searches violated the Fourth Amendment. We hold here that a search at the San Onofre checkpoint, located approximately 65 miles north of the Mexican border on Interstate 5 between San Diego and Los Angeles, is not the functional equivalent of a border search, as that term is used in Almeida-Sanchez and Bowen.

However, we also held in Bowen that the Almeida-Sanchez ruling would not be applied to fixed-checkpoint searches conducted prior to June 21, 1973, the date of decision of Almeida-Sanchez. Since the search of Morgan’s automobile was conducted before that date, the evidence was not subject to the motion to suppress.

The judgment of conviction is affirmed.

WALLACE, Circuit Judge

(concurring and dissenting):

I concur in the result. I concur with that part of the majority opinion which holds Almeida-Sanchez is not retroactive as applied to searches conducted at fixed checkpoints. I dissent from that part of the majority opinion which applies a “functional equivalent” test to fixed checkpoints such as the one involved in this case. See United States v. Bowen, 500 F.2d 960, 979 (9th Cir. 1974) (en banc) (Wallace, J., dissenting). Further, from the limited record before us, I cannot make a factual finding that the San Onofre (San Clemente) checkpoint is not a functional equivalent of the border. I hasten to point out that the district judge made no such finding. However, one district court heard evidence on this precise issue and concluded this checkpoint was a functional equivalent of the border. United States v. Baca, 368 F.Supp. 398, 415 (S.D.Cal.1973). I believe our decision should be based upon a sufficient factual record such as that in Baca.

CHAMBERS, Circuit Judge, concurs in this concurring and dissenting opinion.


author: SWEIGERT, District Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Aron FRIEDMAN, Defendant-Appellant.
    No. 74-1143.
    United States Court of Appeals, Ninth Circuit.
    Aug. 14, 1974.
    Certiorari Denied Dec. 9, 1974.
    See 95 S.Ct. 635.

      Walter B. Nash, III (argued), of Waterfall, Economidis, Caldwell & Hanshaw, Tucson, Ariz., for defendant-appellant.
    Gerald S. Prank, Asst. U. S. Atty. (argued), Tucson, Ariz., for plaintiff-ap-pellee.
    Before KOELSCH and MERRILL, Circuit Judges, and SWEIGERT, District Judge.

       The Honorable William T. Sweigert, Senior United States District Judge for the Northern District of California, sitting by designation.

   OPINION

SWEIGERT, District Judge:

Defendant-appellant was convicted by jury verdict of importing cocaine into the United States in violation of 21 U. S.C. § 952(a); also of the lesser offense of possession of cocaine (21 U.S.C. § 844 (a)), included in 21 U.S.C. § 841(a)(1).

Defendant appeals only from the judgment rendered upon the importing conviction, contending that the evidence was insufficient to establish importation within the meaning of 21 U.S.C. § 951(a)(1) which defines import as “any bringing in or introduction of such article into any area (whether or not such bringing in or introduction constitutes an importation within the meaning of the tariff laws of the United States)”.

The evidence was to the effect that prior to August 12, 1973, a co-defendant had brought the cocaine into the United States from Mexico; that on August 12th defendant and the co-defendant flew by plane from Washington, D.C., to Tucson, Arizona, with the cocaine in their possession; that they rented a car in Tucson, crossed the international border at Nogales, Arizona, and contacted a supplier in Nogales, Sonora, Mexico, for the purpose of exchanging the cocaine; that no such exchange having been made, the cocaine, concealed in their car, was driven by defendants back to the entry port at Nogales, Arizona, where the car was searched, the cocaine discovered and defendant and his co-defendant arrested.

Defendant, citing United States v. Claybourn, 180 F.Supp. 448 (S.D.Cal.1960); Leary v. United States, 395 U.S. 6, 89 S.Ct. 1532, 23 L.Ed.2d 57 (1969) and United States v. Pyle, 424 F.2d 1013 (9th Cir. 1970), argues that, since his possession of the cocaine originated in the United States, its subsequent reintroduction by him into the United States after having been taken out of the United States does not constitute importation within the meaning of Sections 952(a) and 951(a).

Claybourn did so hold with respect to the smuggling portion of 18 U.S.C. § 545, but, with respect to the importation portion of that section, it held that there could be importation, even under such circumstances, if the defendant had the requisite intent to fraudulently and knowingly import the goods in question.

In Leary, the Supreme Court, considering the importation element of 21 U.S.C. § 176a merely noted (p. 11, note 4) that the trial court, apparently following Claybourn, had dismissed a Section 545 smuggling count against Leary when it appeared without dispute that the defendant had obtained the goods in the United States, carried them to Mexico and then back into the United States.

In Pyle the court, considering § 176a, merely noted (p. 1015, note 4) Clay-bourn and Leary as recognizing this exceptional situation, i. e., where a defendant, charged with smuggling under Section 545, is found to have been returning to the United States with the identical goods he had previously taken out of the country, a smuggling count will not stand.

Pyle, however, clearly recognizes (as did Claybourn and as did also United States v. Williams, 435 F.2d 1001 (5th Cir. 1970)) that there can be importation under either Section 545 or Section 176a even though the defendant’s connection with the goods originated in the United States — provided only that importation is knowing or fraudulent (as required by Section 545) or with intent to defraud and contrary to law (as required by Section 176a).

The stated qualification stems from the fact that both Section 545 and former Section 176a, with which these eases were dealing, are framed in a context of customs law violation.

The present conviction rests, not on Section 545 nor on Section 176a (since repealed and replaced by Section 952(a), but upon the new (1970) statute, 21 U. S.C. § 952(a)), which now makes it an offense to (willfully) import any controlled substance into the United States —without requirement for any particular specific intent or any customs law involvement as required under Section 545 and former Section 176a.

This is clear from the Section 951(a) definition of importation (for Section 952(a) purposes) as being the bringing in or introduction of narcotics into the United States “whether or not such bringing in or introduction constitutes an importation within the meaning of the tariff laws of the United States.”

Even if a specific intent to defraud the customs laws of the United States were required for the present conviction, it has been held that, as the court noted in Pyle (424 F.2d pp. 1015, 1016), evidence is sufficient to support an implied finding of such intent when it shows an attempt by defendant to bring narcotics, undeclared and concealed, through a port of entry — as is shown by the evidence in the present case.

For the foregoing reasons we hold that the evidence was sufficient for the jury to have found defendant guilty of importation of cocaine within the meaning of Sections 952(a) and 951(a)(1) and the judgment thereon is affirmed.


author: GODBOLD, Circuit Judge:

text:
    In the Matter of Zachery Joseph NERO, Bankrupt. UNITED STATES of America, Appellant, v. Rodney BERNARD, Jr., Trustee, Appellee.
    No. 74-1520
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Oct. 10, 1974.

      Donald E. Walter, U. S. Atty., Leven H. Harris, Asst. U. S. Atty., Shreveport, La., Joe W. Rhodes, State Director, Farmers Home Adm., U. S. Dept, of Agriculture, Alexandria, La., Robert E. Kopp, Eloise E. Davies, Attys., Dept, of Justice, Washington, D. C., for appellant.
    Rodney Bernard, Jr., Lafayette, La., for appellee.
    Alfred R. Ryder, Oberlin, La., for Z. J. Nero.
    Before GEWIN, GODBOLD and CLARK, Circuit Judges.

      Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I.

   GODBOLD, Circuit Judge:

This bankruptcy case could only arise in Louisiana, the one state that has not enacted the Uniform Commercial Code. The UCC has liberal rules governing the content of the documents required to be filed to inform the world of the existence of a security interest in a piece of property. Under UCC § 9-110 the documents need only include a description that “reasonably identifies what is described,” whereas the correlative Louisiana statute, La.Rev.Stat. 9:5352, requires a “full description.”

At issue is whether the Farmers Home Administration has a valid security interest in a Farmall tractor, value about $5,000. The FHA made a series of loans totalling over $20,000 to Nero, the bankrupt. The mortgage Nero gave in return listed the tractor, reciting its serial number as “12374.” The FHA duly filed a copy of the mortgage instrument with the appropriate Louisiana official. But after Nero became insolvent, it turned out that the tractor’s full serial number was “2510175V012374.” The bankruptcy judge held that Louisiana law governed the sufficiency of the document; under Louisiana law the description was sufficient; thus the FHA had a perfected security interest. Upon the trustee’s petition for review the District Court agreed that Louisiana law was applicable, but overturned the bankruptcy judge’s fact finding as to sufficiency of description. Thus, as between the government and the trustee, the trustee was held to have the prior right to the tractor.

The FHA argues as follows :

1. (a) Since the U. S. was the lender of the money and the secured party (mortgagee), the adequacy of the steps taken to perfect the security interest is a question of federal law; (b) the federal law rule should be borrowed from “the general law” as embodied in the UCC; (c) under the UCC, the description of the tractor was sufficient.

2. Even if Louisiana law applies, the District Court’s determination that the description was insufficient should be overturned.

We need not consider or decide Issue (l), because we hold that the FHA must in any event prevail upon (2).

The leading Louisiana case on the subject, Union Bldg. Corp. v. Burmeister, 186 La. 1027, 173 So. 752 (1937), announced a liberal rule governing sufficiency of description. From that case, together with subsequent cases decided by Louisiana intermediate appellate courts, the following principle emerges: except in instances where the mortgagor is a dealer in essentially fungible but serial-number-bearing goods like cars or appliances, see All State Credit Plan Houma, Inc. v. Fournier, 175 So.2d 707 (La.App.l965); Hamner v. Domingue, 82 So.2d 105 (La.App.1955), the correct question under Louisiana law is whether the description would enable reasonable third persons, aided by prior reasonable inquiries, to identify the property. The District Court employed a different standard and thereby fell into error.

We note the following factors: the bankrupt’s status as a farmer, not a tractor dealer; the limited nature of his operation; the tractor in question was made in 1972, whereas the two other tractors that it appeared the bankrupt owned were made in 1963 and 1961; the number on the mortgage accurately recited the last five digits of the actual serial number; the make and model of the tractor were accurately set out. In view of these factors, we hold that under the correct Louisiana standard, the mortgage description was sufficient as a matter of law, and the FHA must prevail.

Reversed and remanded for entry of judgment in favor of the FHA.

      . It appears that “bankruptcy judge” and “referee in bankruptcy” are now interchangeable appellations, see Rule 901(7), Bankruptcy Rules. There are certain exceptions, however, which can lead to confusion. For example, when a District Judge is issuing an injunction under § 2a (15) of the Bankruptcy Act, he is properly titled “bankruptcy judge.” Rule 991(7).

      . For some illumination of the issue see generally United States v. Hext, 444 F.2d 804 (CA5, 1971), and especially footnote 2 therein.

      . In reversing the bankruptcy judge’s fact finding, the Court wrote:
      The referee concluded that the description of the subject tractor in the act of chattel mortgage was sufficient and opined that if a third person, using a correct and full description of the tractor, had ordered a chattel mortgage certificate from the Clerk of Court of the parish where the chattel is located, the Clerk would have shown the FHA mortgage in view of the similarity of the description. We do not agree.