author: PHILLIPS, Chief Judge.

text:
    CHAMPION HOME BUILDERS CO., a Michigan Corporation, Plaintiff, Joseph L. Kramer et al., Intervenor-Plaintiffs-Appellants, v. Etson B. JEFFRESS, Defendant-Appellee.
    No. 73-1341.
    United States Court of Appeals, Sixth Circuit.
    Argued Oct. 17, 1973.
    Decided Jan. 11, 1974.

      Robert B. Block, New York City, for intervenor-plaintiffs-appellants; Pomer-antz, Levy, Haudek & Block, New York City, Louisell, Chilingirian & Kovaleski, Detroit, Mich., on brief.
    James C. Sargent, New York City, for defendant-appellee; Whitman & Ransom, New York City, Scholl, Jenkins, Robinson & Stieg, Detroit, Mich., on brief.
    Before PHILLIPS, Chief Judge, and EDWARDS and McCREE, Circuit Judges.
   PHILLIPS, Chief Judge.

This action was brought on behalf of a corporation to recover short-swing profits from the sale of stock by an insider. The issue on appeal is whether the purchase of the stock, within the meaning of § 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78p(b), occurred within a period of less than six months prior to its sale.

In an opinion published at 352 F. Supp. 1081 (E.D.Mich.1973), the District Court held that more than six months had elapsed between the purchase and sale and dismissed the action. We reverse.

Joseph and Beatrice F. Kramer were intervenor-plaintiffs in the District Court. They are stockholders of the Champion Home Builders Co. (Champion). On behalf of the corporation they seek to recover certain profits realized by the defendant-appellee Jeffress from a sale of Champion stock allegedly within six months after its purchase.

The District Court denied the Kra-mers’ motion for summary judgment on the issue of liability and granted Jef-fress’ motion for summary judgment of dismissal. The Kramers appeal. Champion has not appealed.

The case arose from the acquisition of Concord Mobile Homes, Inc. (Concord) by Champion. This acquisition was effected by a purchase of 100 per cent of the Concord stock, owned by Jeffress, in exchange for 105,000 shares of Champion stock (13 per cent of the total). After the exchange Jeffress became an officer and director of Champion. Pursuant to a public offering, and along with three other major officer-director-shareholders, Jeffress sold a portion of his Champion stock. The Kramers as shareholders of Champion seek to recover on behalf of Champion the profits from this sale as provided for under § 16(b) of the Securities Exchange Act of 1934. Section 16(b) provides as follows:

“For the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director, or officer by reason of his relationship to the issuer, any profit realized by him from any purchase and sale, or any sale and purchase, of any equity security of such issuer (other than an exempted security) within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the issuer, irrespective of any intention on the part of such beneficial owner, director, or officer in entering into such transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the issuer, or by the owner of any security of the issuer in the name and in behalf of the issuer if the issuer shall fail or refuse to bring such suit within sixty days after request or shall fail diligently to prosecute the same thereafter; but no such suit shall be brought more than two years after the date such profit was realized. This subsection shall not be construed to cover any transaction where such beneficial owner was not such both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions which the Commission by rules and regulations may exempt as not comprehended within the purpose of this subsection.” The sole question before this court is

to determine when Jeffress purchased the Champion stock. The date of the sale is not in dispute.

On February 17, 1968, Jeffress entered into a handshake agreement with the President and the Treasurer of Champion. This agreement was subject to the approval of Champion’s Board of Directors. On February 21, 1968, the Champion Board approved the acquisition of Concord and authorized negotiations to that end. The minutes of that meeting were signed by Champion’s President.

The parties entered into a 25 page written agreement and plan of reorganization on April 17, 1968. This agreement was approved by the Champion Board on April 24, 1968. Pursuant to a public offering, and after the stock had split two-for-one, Jeffress and three other officer-director-shareholders sold part of their stock on September 12, 1968.

If the Champion stock was “purchased” on February 21, 1968, the date of the resolution, as Jeffress contends and as held by the District Court, liability under the section will not attach. On the other hand, if the stock was “purchased” on April 17, 1968, the date the agreement and plan of reorganization was executed, liability will attach for any insider swing profits realized by Jeffress.

The District Court held that the purchase date of the Champion stock was February 21, 1968. The court reasoned that the resolution of the Board of Directors was an acceptance of Jeffress’ offer to sell and created a mutually binding contract. This “contract” was held to be a purchase within the meaning of § 16(b). We disagree.

Section 3(a) (13) of the Act, 15 U.S.C. § 78c(a), defines “purchase” so as to include “any contract to buy, purchase or otherwise acquire.” As said by then Circuit Judge Potter Stewart, “Every transaction which can reasonably be defined as a purchase will be so defined, if the transaction is of a kind which can possibly lend itself to the speculation encompassed by § 16(b).” Ferraiolo v. Newman, 259 F.2d 342, 345 (6th Cir. 1958), cert, denied, 359 U.S. 927, 79 S. Ct. 606, 3 L.Ed.2d 629 (1959).

The Supreme Court, speaking through Mr. Justice Stewart, has stated that “where alternative constructions of the terms of § 16(b) are possible, those terms are to be given the construction that best serves the congressional purpose of curbing short-swing speculation by corporate insiders.” Reliance Electric Co. v. Emerson Electric Co., 404 U. S. 418, 424, 92 S.Ct. 596, 600, 30 L.Ed.2d 575 (1972). This holding was reaffirmed in Kern County Land Co. v. Occidental Petroleum Corp., 411 U.S. 582, 595, 93 S.Ct. 1736, 36 L.Ed.2d 503 (1973).

The definition of these terms is a matter of federal law. See, e. g., Tcherepnin v. Knight, 389 U.S. 332, 337-338, 88 S.Ct. 548, 19 L.Ed.2d 564 (1967); Blau v. Lehman, 368 U.S. 403, 413-414, 82 S.Ct. 451, 7 L.Ed.2d 403 (1962); Bershad v. McDonough, 428 F. 2d 693, 696 (7th Cir. 1970), cert, denied, 400 U.S. 992, 91 S.Ct. 458, 27 L.Ed.2d 440 (1971). “The phrase ‘any purchase and sale’ in § 16(b) is therefore not to be limited or defined solely in terms of commercial law of sales and notions of contractual rights and duties.” 428 F. 2d at 697. The transaction must be examined primarily in terms of federal securities law, and the analysis must focus on and be consistent with the congressional mandate of curbing insider short-swing speculation. “The question thus becomes one of balancing the respective advantages and disadvantages of each contended for ‘purchase’ date and determining which one, if held to be the date of purchase, would be more likely to lend itself to. the abuses the statute was designed to protect against.” Booth v. Varian Associates, 334 F.2d 1, 4 (1st Cir. 1964), cert, denied, 379 U.S. 961, 85 S.Ct. 651, 13 L.Ed.2d 556 (1965).

With these considerations in mind, we now turn our attention to the transaction of February 21, 1968. The holding of the District Court was as follows:

“The court finds that on February 21 the parties had reached a meeting of the minds on the essentials of their exchange agreement and that if matters had thereafter bogged down in the drafting of a formal contract, either party could have sued to enforce the contract or for its breach. Since this was merely a purchase of stock by Champion, all that was needed to bind the corporation to the deal was the approval of the Board of Directors. This approval was formally given at the February 21 meeting. Jef-fress, as the seller of his own stock, was similarly bound by the acceptance of his offer of sale. Under the cases the parties were thus bound and defendant Jeffress then became the ‘beneficial owner’ and an insider.” 352 F.Supp. 1081, 1083, (E.D.Mich. 1973).

The resolution of the Board of Directors is as follows:

“Resolved, that the proposed acquisition by Champion Home Builders Co. of all the issued and outstanding shares of the common stock, no par value (‘Concord Stock’), of Concord Mobile Homes, Inc. and [sic] Indiana corporation, from Etson B. Jeffress in exchange for 105,000 shares of the Common Stock, par value $1, of Champion Home Builders Co., is approved, and the President and/or the Treasurer of this corporation are hereby authorized and empowered to negotiate with Etson B. Jeffress and to enter into, on behalf of this corporation, an agreement and plan of reorganization providing for the acquisition of Jef-fress’ Concord Stock in exchange for 105,000 shares of this corporation’s Common Stock, par value $1, and providing for such additional terms and conditions (not to effect the foregoing) as they consider proper and in the best interests of the corporation;
“Further Resolved, that the President and/or the Treasurer of this corporation are authorized and empowered to execute such agreement and plan of reorganization, to make any necessary modifications thereto, to sign any and all papers, documents and instruments necessary in connection with such agreement, and to do and perform any and all acts in connection therewith; . . .

Jeffress has cited no authority, nor could we find any, to show that a Board of Directors’ resolution is a “purchase” within the meaning of § 16(b). To the contrary, the ease law forces us to reach the opposite conclusion.

In Blau v. Ogsbury, 210 F.2d 426 (2d Cir. 1954), the court held that the holder of an option to buy stock becomes the beneficial owner when he incurs “an irrevocable liability to take and pay for the stock.” Id. at 427. The court noted that the time when the insider’s rights and obligations became fixed was controlling in the application of the statute. Id. In Stella v. Graham-Paige Motors Corp., 232 F.2d 299 (2d Cir. 1956), cert, denied, 352 U.S. 831, 77 S.Ct. 46, 1 L.Ed.2d 52 (1956), the court was faced with a purchase contract which provided that the buyer could terminate the agreement if he could not obtain financing from a particular bank. The court, relying on Ogsbury, supra, held that the agreement was not a purchase because the buyer had not incurred an irrevocable liability to take and pay for the stock. 232 F.2d at 301.

These cases alone, however, would not be controlling. Even a firm commitment to buy, standing alone may not give rise to a purchase under § 16(b). In Booth v. Varían Associates, supra, there was an agreement that firmly committed the parties to an exchange of shares. The nature of the agreement left the price unfixed by providing that it would be determined at the closing market quotation on the day prior to closing, nearly three and a half years later. Moreover, the closing date could be accelerated by the issuing corporation and the buyers were insiders in this corporation. The court held that the purchase date was the date of actual exchange and not the date of agreement.

Finally, rights of ownership are pertinent factors in determining § 16(b) liability. In Newmark v. RKO General, Inc., 425 F.2d 348, 356 (2d Cir. 1970), cert, denied, 400 U.S. 854, 91 S.Ct. 64, 27 L.Ed.2d 91 (1970), the court stated:

“On May 3 or 4, 1967, RKO entered into an agreement which granted it a conditional right to purchase more than 50% of Central’s common stock at a fixed price, ensured that Central would be managed in accordance with its interests, and required a majority of Central shares to be voted in support of a merger it favored. This contract, we conclude, granted rights of ownership, particularly those rights most important to the speculative purchaser, so substantial as to make RKO a ten percent beneficial owner of Central at that time.”

Similarly, the relinquishment of incidents of ownership is relevant to determining § 16(b) liability. In Bershad v. McDonough, 428 F.2d 693, 698 (7th Cir. 1970), cert, denied 400 U.S. 992, 91 S.Ct. 458, 27 L.Ed.2d 440 (1971), the court stated:

“The circumstances of the transactions clearly indicate that the stock was effectively transferred, for all practical purposes, long before the exercise of the option. The $350,000 ‘binder’ ostensibly paid for the option represented over 14% of the total purchase price of the stock. Granting the magnitude of the sale contemplated, the size of the initial commitment strongly suggests that it ‘was not just a binder.’ Cf. Blau v. Allen, 163 F. Supp. 702, 705 (S.D.N.Y.1958). The extent of that payment represented, if not the exercise of the option, a significant deterrent to the abandonment of the contemplated sale. In addition, the reverse side of the ‘Option Agreement’ contained provisions for the transfer of the Cudahy stock, endorsed in blank, to an escrow agent pending completion of the transaction. At the same time, the McDonoughs delivered an irrevocable proxy to Smelting to vote the 272,000 shares at any regular or special shareholders’ meetings. Within a few days, Mc-Donough and one of his associate directors resigned and were replaced by representatives of Smelting’s interests, including the Chairman of the Board of Directors of Smelting, and the president and director of that corporation.”

In light of the above considerations, we think that the resolution of the Board of Directors was, by its literal wording and in its legal effect, nothing more than an authorization to negotiate. The resolution set the purchase price and authorized and empowered the President and Treasurer of Champion to provide for such additional terms, conditions and modifications as were proper and in the best interests of the company. The entire transaction had been contingent on Concord’s earnings at the end of the fiscal year, February 29, 1968. Negotiations continued after February 21 and culminated on April 17, 1968, with a 25 page agreement and plan of reorganization.

Jeffress incurred no irrevocable liability to take and pay for the Champion stock because he had not signed the Board minutes. Moreover, because there had been no consideration or contractual intent, the resolution cannot be viewed as giving him an option to buy Champion stock. Although resolutions such as the one before us are a prerequisite to corporate transactions of the type here involved, they are only a prelude to negotiations and may be rendered ineffective when-the negotiations deadlock.

Additionally, we find no incidents of ownership arising from the resolution of the Board of Directors such as those that were present in Newmark or Bershad, supra. The resolution was no more than a license to bargain. We conclude that the resolution was not a contract in the traditional rights and obligations sense of the word. Nor can we conclude that such a tenuous posture is a “purchase” under § 16(b).

Our inquiry, however, does not end here. The transaction also must be examined to determine if there was the potential for speculative abuse.

At the time of the resolution Jeffress was not a statutory insider of Champion. He previously had owned no stock, nor was he an officer or director. The record does not show that Jeffress had advance knowledge of the merger. The Board had made a press release notifying the public of the proposed merger. The transaction is, therefore, unlike that of Newmark, supra, where RKO had not only a conditional right to purchase, but also advance knowledge of the impending merger.

Jeffress has argued that incorporation of the purchase price set in the February 21 resolution into the April 17 contract when the market price of Champion was rising, shows that the parties intended the agreement to be firm. The intent of the parties is irrelevant to determining § 16(b) liability. Kern, supra. Even assuming that intent was relevant, adherence to the earlier purchase price is not conclusive. It only shows that Jeffress would not settle for or Champion did not propose a lower price. It does not establish that the parties were bound to that price.

Jeffress also argues that other corporate documents refer to February 21 as being the significant date. This argument is not convincing. Jeffress referred to April 17 as the date he acquired beneficial ownership when he filed his Form 3 report to the SEC. Moreover, the parties cannot contract away their § 16(b) liability by agreements as to the purchase date. 15 U.S. C. § 78cc(a) provides:

“Any condition, stipulation, or provision binding any person to waive compliance with any provision of this chapter or of any rule or regulation thereunder, or of any rule of an exchange required thereby shall be void.”

The record in this case compels us to conclude that Jeffress “purchased” the Champion stock on April 17, 1968, thereby becoming a beneficial owner and 13 per cent shareholder of Champion. It was at that time that Jeffress incurred an irrevocable liability to take and pay for the Champion stock. This transaction gave rise not only to the potential for speculative abuse but also to actual abuse.

The record shows that when Jeffress was discussing the purchase of Concord in the preliminary negotiations, he valued it at about $4,000,000. After he was advised that Champion was not willing to give him cash for Concord, he agreed to sell it for Champion stock that was worth about $2,000,000 at the time. He knew that “the two companies was [sic] going to make the stock go up, or at least this is what [he] thought would happen.” Jeffress intended to profit from this expected rise in Champion stock. He wanted to realize cash from the exchange as soon as possible. From this there arose an understanding between Jeffress and Champion that he along with three major officer-director-shareholders would participate in a stock offering later that year. The timing of that offer was to be mutually satisfactory to all and was to coincide with peak market value.

Shortly after Jeffress became a beneficial owner and 13 per cent shareholder of Champion, the Board of Directors approved a two-for-one stock split. Jef-fress had advance knowledge of this. On June 19, 1968, as a result of an understanding, Jeffress was elected Secretary and Director of Champion. Thus, Jeffress was not only an insider because of his stock holdings, but also because of his position in the Company. We reemphasize that this occurred after April 17 and was not a result of the resolution of February 21.

Having been its owner, Jeffress had inside knowledge of the Concord operation. His position as an insider in Champion and his active role in its management gave him an intimate knowledge of internal corporate matters. He had access to all financial records of the company. The evidence shows that the earnings rose from 100 per share for the quarter ending May 31, 1967, to 360 per share for the corresponding period in 1968.

Jeffress knew the effect that a stock split coupled with increased earnings would have in providing a rising market for his shares. He took advantage of this information and participated in the timing of the sale to maximize profits in a rising market situation. His participation was not limited solely to giving his approval as a director or signing the registration statement. It is logical to conclude that Jeffress was personally interested in obtaining the maximum amount of cash as soon as possible. This is precisely the kind of speculative abuse which the statute is designed to prevent.

The fact that the sale was made pursuant to a registration statement is of no moment. If registration were enough to dissolve liability the legislative intent would be thwarted. A registration statement would not provide the intimate information that an insider such as Jeffress relied on.

Jeffress could have waited out the six month period. Instead he chose to maximize his profits as early as possible. In Bershad v. McDonough, supra, the Seventh Circuit Court of Appeals noted:

“The thrust of the statutory scheme thus placed responsibility for meticulous observance of the provision upon the shoulders of the insider. He was deemed capable of structuring his dealings to avoid any possibility of taint and therefore must bear the risks of any inadvertent miscalculation.” 428 F.2d at 696.

Jeffress has defended on the basis of his good faith and the doctrine of unjust enrichment. He contends that he was required to sell his stock and that it would be unjust enrichment for Champion to regain, at his expense, part of the consideration for Concord. The record does not show that Jeffress was forced to sell his Champion stock. To the contrary, the record indicates that Jeffress wanted to sell to realize cash and actively participated in the timing of the sale so as to maximize his profits.

This defense is also based on a misinterpretation of § 16(b). Section 16(b) is designed to discourage short-swing transactions by insiders by taking away the profit and placing it in the hands of the corporation. By the very words of the statute, liability attaches regardless of the intention of the insider. The purpose of the statute is to protect the minority shareholders and the investing public. Magida v. Continental Can Co., Inc., 231 F.2d 843, 846 (2d Cir.), cert, denied, 351 U.S. 972, 76 S.Ct. 1031, 100 L.Ed. 1490 (1956). Thus the absence of corporate damage is not a factor in assessing § 16(b) liability. Oftentimes the corporation will suffer no measurable damage or may even be an unwilling beneficiary of these profits. On the other hand, there are times when short-swing speculation by an insider may cause substantial corporate damage. “When officers and directors abuse their position to gain personal profits, the effect may be to cast a cloud on the corporation’s name, injure stockholder relations and undermine public regard for the corporation’s securities.” Diamond v. Oreamuno, 24 N.Y. 2d 494, 499, 301 N.Y.S.2d 78, 81-82, 248 N.E.2d 910 (1969).

While good faith and unjust enrichment are factors that can be relevant to classifying a transaction as a purchase or sale within the scope of § 16(b), it is clear that, once the transaction has been so classified, the section will impose strict liability. In Bershad v. McDonough, supra, the Seventh Circuit Court of Appeals stated:

“In order to achieve its goals, Congress chose a relatively arbitrary rule capable of easy administration. The objective standard of Section 16(b) imposes strict liability upon substantially all transactions occurring within the statutory time period, regardless of the intent of the insider or the existence of actual speculation.” 428 F. 2d at 696.

We hold that Jeffress is liable for short-swing profits, if any, realized by him from the sale of the stock in question. The amount of liability is a matter for determination by the District Court on remand. The issues raised by Jeffress’ counterclaim under § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 also are matters to be resolved on remand.

Reversed and remanded for further proceedings not inconsistent with this opinion.

      . Tlie lower court did not reach Jeffress’ counterclaim under § 10(b) of the Act and Rule 10b-5, nor do we.


source: Caselaw Access Project

author: LEWIS, Chief Judge.

license: Public Domain

text:
    RINGSBY TRUCK LINES, INC., et al., Appellees, (Plaintiffs below), v. UNITED STATES of America and Interstate Commerce Commission, (Defendants below), v. The NATIONAL SMALL SHIPMENTS TRAFFIC CONFERENCE, INC., and Drug and Toilet Preparation Traffic Conference, Appellants. (Intervening Defendants below).
    No. 72-1887.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted July 9, 1973.
    Decided Dec. 13, 1973.
    Rehearing Denied Feb. 21, 1974.

      William Q. Keenan, New York City (James L. Tilly, Denver, Colo., of counsel; Arsham & Keenan, New York City, and Tilly & Graves, Denver, Colo., with him on the brief), for appellants.
    Alvin J. Meiklejohn, Jr., Denver, Colo. (David E. Driggers, of Jones, Meikle-john, Kehl & Lyons, and Z. L. Pearson, Jr., William E. Kenworthy and Gerald W. Hess, Denver, Colo., were with him on the brief), for appellees.
    Before LEWIS, Chief Judge, and BARRETT and DOYLE, Circuit Judges.
   LEWIS, Chief Judge.

This appeal is brought by the National Small Shipments Traffic Conference, Inc. and the Drug and Toilet Preparation Traffic Conference, intervening defendants below, from the judgment of a statutory three-judge court convened in the United States District Court for the District of Colorado. The court vacated and set aside an Interstate Commerce Commission rate cancellation order and remanded the matter to the Commission for further proceedings.

A full understanding of the issues presented here requires a detailed accounting of the complex procedural history antedating this appeal. By schedules which became effective on August 1, 1964, appellees-motor carriers established a general three percent increase in their transcontinental rates and charges. In response to a filed protest the Interstate Commerce Commission instituted an investigation into the lawfulness of this increase but decided,, pending the outcome of its investigation, not to suspend the operation of the increase but rather to permit it to become effective. The ICC ultimately concluded, however, that the increase had not been shown to be just and reasonable and on April 15, 1966 it ordered that the rate increase be canceled before June 1966. Increased Class and Commodity Rates, Transcontinental, 326 I.C.C. 397. A petition for reconsideration was denied but the original cancellation order was modified so as not to become effective until September 12, 1966.

The motor carriers instituted an action in the United States District Court for the District of Colorado, seeking to set aside, annul and enjoin the rate cancellation order. The United States was joined with the ICC as a mandatory defendant under 28 U.S.C. §§ 2321, 2322. Appellants-shippers were permitted to intervene in-this action. On September 9, 1966 a temporary restraining order was entered preventing the ICC from canceling the rate increase and on November 4, 1966 the court directed that this order remain in effect until a final judicial determination was made.

A three-judge district court was convened pursuant to 28 U.S.C. §§ 1336, 2325, and 2284. On January 5, 1967 the court vacated the rate cancellation order and remanded the matter to the ICC for further proceedings. Ringsby Truck Lines, Inc. v. United States, D.C.Colo., 263 F.Supp. 552. The court concluded that the findings and reasoning of the ICC were insufficient to support its holding and that a remand was necessary to afford the ICC an opportunity to articulate the basis of its holding.

The shippers appealed to the United States Supreme Court under 28 U.S.C. § 1253, contending that any restitutionary claim for excessive rates charged would be destroyed if the judgment of the district court were permitted to stand. On February 1, 1967, less than one month after the initial remand, the ICC affirmed its previous decision canceling the rate increase. Increased Class and Commodity Rates, Transcontinental, 329 I.C.C. 420. It articulated as the basis of its decision the failure of the motor carriers to sustain their burden of proof of establishing that the rate increase was just and reasonable with the type of evidence which they had been given notice to provide. The ICC conceded that the quantum of proof necessary to support an increase in motor carrier rates was different and heavier than that required in the years prior to 1963, but stated that this change had been set forth in its decisions in and after 1963 and in specific detail in an' order entered on August 3, 1964. The motor carriers were directed to cancel the subject rate increase on or before March 10, 1967, but the order provided that its effectiveness would be stayed or postponed if a further complaint was filed in district court by one or more of the motor carriers prior to the March 10 compliance date.

The instant action was filed by the motor carriers on February 27, 1967, seeking to annul, set aside, and vacate the second ICC rate cancellation order. The three percent rate increase was superseded by a further increase which became effective on August 29, 1967. On September 4, 1968 the shippers were allowed to intervene in the instant action and counterclaim for restitutionary damages. Their appeal to the Supreme Court from the original three-judge decision was dismissed as moot. National Small Shipments Traffic, Conference, Inc. v. Ringsby Truck Lines, Inc., 389 U.S. 576, 88 S.Ct. 689, 19 L.Ed.2d 775.

Because of the contingency provision of the second rate cancellation order, its effectiveness was stayed pending judicial disposition of the controversy. When no party pressed for trial the court, on its own motion, set the case to be heard on December 1, 1971. In a judgment entered March 2, 1972 the three-judge court vacated and set aside the second rate cancellation order and remanded the matter to the ICC for further appropriate proceedings. The issue of the shippers’ restitutionary counterclaim was not addressed. Shippers again appealed to the Supreme Court and filed a protective appeal with this court. The ICC has taken no further action on the remand.

The ICC and the United States moved to dismiss the appeal in the Supreme Court for lack of jurisdiction. They contended that once the 1964 rate increase was superseded by the 1967 rates, the rate cancellation order lost all vitality except with respect to the possibility of restitution for charges collected in the interim. They thus argued that while the relief sought and granted was in form injunctive, it was in substantive effect only declaratory and retrospective. The motion to dismiss concluded that the three-judge procedures were not properly invoked, that the matter should have been referred to a single judge, and that the Supreme Court therefore lacked jurisdiction of the direct appeal.

Without articulating its reasons, the Supreme Court dismissed the appeal on October 24, 1972 for lack of jurisdiction, National Small Shipments Traffic Conference, Inc. v. Ringsby Truck Lines, Inc., 409 U.S. 943, 93 S.Ct. 292, 34 L. Ed.2d 215, and the shippers have now pressed their appeal before this court.

The motor carriers have challenged our jurisdiction to entertain this appeal. They argue that their complaint below sought injunctive relief against an ICC order under 28 U.S.C. § 1336, that under 28 U.S.C. § 2325 such a complaint can be heard only by a district court composed of three judges, that the case below was properly decided by such a court, and that appeal therefrom lies only to the United States Supreme Court under 28 U.S.C. § 1253. They conclude that under 28 U.S.C. § 1291 courts of appeals are denied jurisdiction where direct review may be had in the United States Supreme Court.

We do not agree with this contention. The proper application of the rule of exclusive review upon which appellees rely necessarily depends upon whether the dispositive issue requires the consideration of a three-judge court, for the Supreme Court will not directly review a judgment of a three-judge court when such court was not required. Pennsylvania Public Utility Comm’n v. Pennsylvania R.R., 382 U.S. 281, 86 S.Ct. 423, 15 L.Ed.2d 324.

The appeal to the United States Supreme Court, brought by the shippers alone, was dismissed without opinion for lack of jurisdiction. In the absence of an articulated reason for this dismissal, we will not presume to engage in a meaningless exercise of reading that Court’s mind. It is sufficient to note for our purposes that the appeal could have been dismissed because the Court felt that the three-judge court below was not required.

We are convinced that events occurring subsequent to the convening of the statutory three-judge court abrogated the necessity of such a court and that the dismissal of the shippers’ appeal to the Supreme Court was justified on this ground alone. We are mindful of the fact that the complaint of the motor carriers as originally filed sought relief from the ICC rate cancellation order in a manner which was in form injunctive. At that time it properly would have been heard before a three-judge court pursuant to 28 U.S.C. §§ 1336, 2325, and 2284. This is so because the complaint was filed at a time in February 1967 when the ICC rate cancellation order was directed at a current rate increase. When the case was finally heard before the three-judge court in 1971, however, that rate increase had been superseded by an August 1967 increase which had, in turn, been superseded by other increases. The necessity for a three-judge court to provide injunctive relief against the three percent rate cancellation order was therefore obviated and determination of the validity of the ICC order was of practical import only as it related to the restitutionary claim of the shippers, for charges previously exacted. The ICC order thus became essentially one for the payment of money and was properly reviewable by a one-judge rather than a three-judge district court. Pennsylvania R.R. v. United States, 363 U.S. 202, 80 S.Ct. 1131, 4 L.Ed.2d 1165.

In Middlewest Motor Freight Bureau v. United States, 8 Cir., 433 F.2d 212, cert. den., 402 U.S. 999, 91 S.Ct. 2169, 29 L.Ed.2d 165, closely related factually to the case at bar, a three-judge court below dismissed an action brought by motor carriers for injunctive relief against an ICC rate cancellation order because superseding rate increases had mooted the issue of the cancellation order as between the ICCand the carriers, der as between the ICC and the carriers. In our opinion this procedure should have been followed in the case at bar.

The fact that a three-judge court was not required does not automatically render its judgment invalid. It merely constitutes a squandering of judicial energy and the proper procedure is simply to bring the appeal in the appropriate court of appeals. Moody v. Flowers, 387 U.S. 97, 87 S.Ct. 1544, 18 L.Ed.2d 643.

But the motor carriers maintain that there is a further impediment to our appellate jurisdiction in that the judgment below was not final. While it is true- that the three-judge court vacated the ICC order and remanded the case “for such further proceedings as may be appropriate,” our refusal to entertain this appeal on grounds of nonfinality would elevate form over substance. Although the court below did not address itself to the issue of the shippers’ restitutionary counterclaim, it is clear that any right to restitution is dependent upon the validity of an ICC rate cancellation order which has twice been set aside by a three-judge district court. In fact both parties to this appeal agree that the judgment of the court below is final with respect to the validity of the ICC order. The ICC has taken no further action on the remand (an entirely understandable position in view of the fact that the rate increase which its order sought to cancel has been superseded). Any future action for relief brought by the shippers before a single judge would necessarily be subject to dismissal on grounds that the order upon which the cause of action depends has been vacated. In this important sense, the judgment of the three-judge court below is indisputably final.

The finality requirement of 28 U.S.C. § 1291 is meant to be given a practical rather than technical effect. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L. Ed. 1528. To deny jurisdiction here would effectively signal the end of appellants’ cause of action without any judicial review. We are aware that under normal circumstances a remand to an administrative agency for further proceedings is not a final judgment within the meaning of 28 U.S.C. § 1291. Boston & Maine R.R. v. United States, 358 U.S. 68, 79 S.Ct. 107, 3 L.Ed.2d 34; Pauls v. Secretary of the Air Force, 1 Cir., 457 F.2d 294. But we are unable to apply this rule where, as here, to do so would violate basic judicial principles. “Where the effect of a district court’s order, if not reviewed, is the death knell of the action, review should be allowed.” Eisen v. Carlisle and Jacquelin, 2 Cir., 370 F.2d 119, 121, cert, den., 386 U.S. 1035, 87 S.Ct. 1487, 18 L.Ed.2d 598. The appeal is properly before this court.

We now proceed to a consideration of the judgment which vacated and set aside the ICC rate cancellation order and remanded the matter to the Commission for further proceedings. For reasons already discussed, we believe that the three-judge court below was not required and that it should have been dissolved, thereby enabling the shippers to bring their claim for restitution before a single judge. While the judgment below is nevertheless operative, we feel that the very fact that the court below felt that three-judge consideration was required resulted in its disposition of the case in a manner which was not responsive to the real issue in question.

As previously indicated, the sole remaining justiciable controversy when this case was heard in 1971 was the shippers’ counterclaim for restitution. What was really at stake was the legality of charges exacted under the three percent rate increase between the time when the first rate cancellation order was scheduled to become effective and the time when the superseding increase became operative. It was during this time that, but for the direct and indirect effect of judicial action, the motor carriers would have been unable to charge the increased rate.

The court below, at the outset of its opinion, properly stated that the crucial issue in determining the validity of the rate cancellation order was whether the ICC had given fair notice of its departure from standards employed in previous years relating to the quantum of evidence which would justify a rate increase. This issue was never resolved, the court concluding that the question of fairness of notice was “a debatable one.” The court instead based its judgment on factors which we today hold were non-germane. Construing its role as one of determining the propriety of injunctive relief against an ICC order, the court’s primary concern was the length of time which these rates had been in effect.

Now they have been in effect for 6% years. The presently effective rates are substantially higher. Without going into the multitudinous technical arguments relating to the change in Commission standards and the adequacy of the notice of those changes, we are convinced that there was “a period of uncertainty and room for misunderstanding,” Wyoming v. Colorado, 309 U.S. 572, 582, [60 S.Ct. 765, 84 L.Ed. 954] which makes unfair the 1971 refection of rates which have been effective since 1964. (Emphasis added.)

While it is true that the three percent increase has technically been in effect since 1964, in the sense that it has never been finally canceled, in practical import the “effect” of the increase ceased to operate in August 1967 when it was first superseded. The increase is thus not a current, but rather a dated, one whose validity is important only to those who were charged thereon after the first ICC rate cancellation order was scheduled to become operative and before the superseding increase. The crucial issue, therefore, was whether the rate was just and reasonable during that period and proper consideration of the rate cancellation order should have been limited to its validity at the time it was issued. The deliberation of the court below was not so limited and in view of this we cannot let stand a judgment with such preemptive collateral consequences. The shippers are entitled to their day in court.

It is apparent that the court below perceived its function as one of determining a controversy between the ICC and the motor carriers. We have concluded that this controversy was moot and that ripeness existed only in the shippers’ restitutionary claim. This claim the court below refused to entertain, and in its capacity as a three-judge court we think that this procedure was proper. This action belongs before a single judge and it may now be so brought. We therefore consider it inappropriate to make an essentially de novo determination of the validity of the ICC order in question. Any consideration of other issues raised by both parties relating to the restitutionary claim would be similarly premature.

The judgment of the court below remanding the action to the Commission is vacated and the case is remanded to the district court (one judge) with instructions to entertain appellants’ claim.

      . In Middle-west, however, the three-judge court had entertained the shippers’ counterclaim for restitution and had denied relief on equitable grounds. The appellate court held that while the three-judge court should not have considered the counterclaim because it was not within the statutory purpose of a three-judge court, the failure to dismiss the counterclaim did not invalidate the judgment. It merely rendered direct appeal to the Supreme Court inappropriate and the appeal properly lay before the appropriate court of appeals.

      . In Wisconsin v. Federal Power Commission, 373 U.S. 294, 83 S.Ct. 1266, 10 L.Ed.2d 357, rates charged by the Phillips Petroleum Company had been investigated by the FPC. The Court pointedly addressed the significance of a superseded rate:
      An increased rate which is later superseded by a further increase is thus e£-feetive only for tlie limited intervening period, called the “locked-in” period, and retains significance in § 4(e) proceedings only in respect of its refundability if found unlawful. 373 U.S. at 298 n.5, 83 S.Ct. at 1269.

      . The direct judicial effect was the temporary restraining order issued after the first ICC rate cancellation order. The indirect effect was the provision in the second ICC order which allowed for a stay if further judicial action was initiated prior to the order’s designated compliance date.


author: PER CURIAM.

text:
    Frankie Joe TODD, Appellant, v. A. L. LOCKHART, Superintendent, Cum-mins Unit, Arkansas Department of Correction, Appellee.
    No. 73-1501.
    United States Court of Appeals, Eighth Circuit.
    Submitted Dec. 12, 1973.
    Decided Jan. 16, 1974.
    Tom F. Lovett, Little Rock, Ark., for appellant.
    Alston Jennings, Jr., Asst. Atty. Gen., Little Rock, Ark., for appellee.

      Before GIBSON and ROSS, Circuit Judges, and TALBOT SMITH, Senior District Judge.

       The Honorable TALBOT SMITH, Senior District Judge, Eastern District of Michigan, sitting by designation.

   PER CURIAM.

Todd, a state prisoner, appeals from the dismissal without a hearing, of his habeas corpus action brought pursuant to 28 U.S.C. § 2254. We reverse and remand with instructions.

On September 9, .1970, Todd pleaded guilty to second degree murder in the Ouachita County Circuit Court in the State of Arkansas. The, transcript of the plea taking indicates that Todd was asked essentially two questions by the trial judge. Todd was first asked whether he was guilty. He responded in one word, “Guilty.” Todd was then asked whether he was acquainted with meritorious and statutory good time. Todd responded that he was aware of these provisions. The court then accepted the plea.

Subsequently, Todd sought relief from his plea by way of state post-conviction procedures claiming essentially that his plea was involuntary because: 1) the jury was impaneled shortly before he entered his plea, and he was aware of this fact, and 2) he feared the threat of a first degree murder charge if he went to trial. After an evidentiary hearing, these contentions were decided adverse to Todd. See Todd v. State, 485 S.W.2d 533 (Ark.1972).

Todd then sought relief in federal court. On December 27, 1972, the federal court, apparently the first to do so, recognized that the requirements of Boykin v. Alabama, 395 U.S. 238, 89 S. Ct. 1709, 23 L.Ed.2d 274 (1969), may not have been followed when Todd entered his plea. The court, indicating that Arkansas Criminal Rule 1(H) prohibited successive post-conviction attacks, and noting that the State of Arkansas had not raised an exhaustion argument, proceeded to determine the Boy-kin issue.

The court determined that the “mechanics” of Boykin had not been followed. But the court, on the basis of the state post-conviction record, determined. that Todd’s plea was both voluntary and intelligent. The court held no evidentiary hearing.

As a consequence, we are faced with two questions in this case: 1) whether an otherwise defective plea-taking record may be cured by a record developed in either a state post-conviction proceeding or in a federal post-conviction proceeding, and, 2) if so, whether the record in this case demonstrates that the plea was both voluntary and intelligent.

Boykin v. Alabama, supra, 395 U.S. at 242, 89 S.Ct. 1709, held that it was impermissible to assume that a plea of guilty was both voluntary and intelligent on a silent record. For all practical purposes the record made in this case at the time the plea was accepted is silent, and “[i]t was error, plain on the face of the record, for the trial judge to accept petitioner’s guilty plea .” Id. Unlike McCarthy v. United States, 394 U.S. 459, 89 S.Ct. 1166, 22 L.Ed.2d 418 (1969), which dealt with a question similar to the Boykin issue but in terms of the Court’s supervisory power in relation to F.R.Crim.P. 11, the Boykin Court did not specifically indicate that every plea of guilty should be automatically vacated when the precepts of Boykin are violated.

Since we believe that as a constitutional matter the question is whether the plea was voluntary and intelligent, we agree with a number of other courts which have held that a state may, in a state post-conviction hearing, McChesney v. Henderson, 482 F.2d 1101, 1109 (5th Cir. 1973), or in a federal post-conviction hearing, Walker v. Caldwell, 476 F.2d 213, 215-216 n.l (5th Cir. 1973), cure the otherwise defective plea-taking transcript. See also Turner v. Haynes, 485 F.2d 183, 184 (4th Cir. 1973); Mountjoy v. Swen-son, 306 F.Supp. 379, 384-385 (W.D. Mo.1969); State v. Darling, 109 Ariz. 148, 506 P.2d 1042, 1046 (1973); Merrill v. State, 206 N.W.2d 828, 830-831 (S.D.1973). In so doing we do not return to the pre-Boykin practice of assuming that a defendant represented by counsel has entered a voluntary and intelligent plea. Rather, we hold that once a state prisoner has demonstrated that the plea taking was not conducted in accordance with Boykin, the state may, if it affirmatively proves in a post-conviction hearing that the plea was voluntary and intelligent, obviate the necessity of vacating the plea.

Assuming that an otherwise defective plea-taking transcript may be cured by the state’s later affirmative showing that the plea was voluntary and intelligent, the record is not adequate here to support such a conclusion. The record, as we read it, does not contain specific testimony pertinent to whether the plea was intelligent and voluntary. Our conclusion in this respect is supported by the fact that the Boykin question was not at issue in the state proceedings, and there was apparently no awareness that Todd had, albeit implicitly, demonstrated “error, plain on the face of the record . . . . ” Boykin v. Alabama, supra, 395 U.S. at 242, 89 S.Ct. at 1711.

Specifically, we note that Todd testified that he was informed of the range of penalties with regard to first and second degree murder by his attorney, Mr. Street, but “he never did tell me no definition to it.” Although Todd demonstrated a general understanding of the jury system, it is unclear that Todd knew at the time the plea was taken that he was entitled to a jury trial:

Q. Did you understand that you would get a jury trial that day?
A. I didn’t know what was happening.

When asked whether Mr. Barnes, the attorney who represented Todd at the arraignment, advised Todd of his constitutional rights, Todd testified, “I don’t recall, because at that time I didn’t know that I could have any rights.” There is further testimony from Todd that, “I was unaware of any knowledge of the law.”

Mr. Barnes testified, without elaboration, that “we discussed his rights.” Street, Todd’s attorney at the plea-taking session, did not testify that he informed Todd of any constitutional rights. Street did testify that he discussed the case with Todd, disclosed the penalties of the various possible charges, and indicated that he told Todd that Todd could be convicted of second degree murder, based upon Street’s investigation of the facts.

The record discloses facts from which it could be determined that Todd knew the possible range of punishment if he entered a plea of guilty. But it does not show whether or not Todd understood his rights if he chose to stand trial and is also deficient in failing to show that at the time of the change of the plea, there was a factual basis for the plea of guilty.

For the reasons hereinbefore expressed, we reverse and remand with directions that the district court shall hold an evidentiary hearing. We emphasize that Todd has demonstrated pri-ma facie error, and it is up to the state to affirmatively demonstrate that Todd’s plea was voluntary and intelligent when made.

Reversed and remanded for proceedings consistent with the views expressed herein.

      . We note that Boykin enumerated three constitutional rights which are waived by a plea of guilty, and those rights are: the right to a jury trial, the right to confront one’s accusers, and the privilege against self-incrimination. But we agree that Boykin does not require the express articulation and waiver of these three rights at the time the plea is entered. See, e. g., Lockett v. Henderson, 484 F.2d 62, 63 (5th Cir. 1973) ; McChesney v. Henderson, supra, 482 F.2d at 1110; Stinson v. Turner, 473 F.2d 913, 915-916 (10th Cir. 1973). If these three rights were known at the time the plea was taken, such knowledge goes far toward establishing that the plea was knowing. Cf. Missouri v. Turley, 443 F.2d 1313, 1318 (8th Cir.), cert, denied, 404 U.S. 965, 92 S.Ct. 336, 30 L.Ed.2d 284 (1971). The absence of such knowledge would, of course, be highly material.


text:
    William D. HILL, Petitioner-Appellant, v. W. J. WHEALON, Superintendent, Southern Ohio Correctional Facility, Respondent-Appellee.
    No. 73-1549.
    United States Court of Appeals, Sixth Circuit.
    Submitted Oct. 17, 1973.
    Decided Jan. 11, 1974.
    William D. Hill, pro se.
    William J. Brown, Atty. Gen. of Ohio, Leo J. Conway, Asst. Atty. Gen., Columbus, Ohio, on brief for respondent-appel-lee.
    Before PHILLIPS, Chief Judge, and EDWARDS and McCREE, Circuit Judges.
   PHILLIPS, Chief Judge.

William D. Hill, the petitioner-appellant in this habeas corpus case, was given Miranda warnings immediately after being taken into custody and declined to make a statement. About an hour and a half later he again was given Miranda warnings by another officer and made an oral confession.

The District Court ruled that the confession was properly admitted into evidence. The record demonstrates to the satisfaction of this court that, under the facts and circumstances of this case, the prosecution has carried the “heavy burden” of proving that the confession was voluntary. We affirm the denial of the writ.

Hill contends that once he had declined to make a statement following Miranda warnings, any subsequent statement made by him necessarily would be inadmissible. In support of this contention he relies upon the following language in Miranda v. Arizona, 384 U.S. 436, 473-474, 86 S.Ct. 1602, 1627, 16 L. Ed.2d 694 (1966):

“Once warnings have been given, the subsequent procedure is clear. If the individual indicates in any manner, at any time prior to or during questioning, that he wishes to remain silent, the interrogation must cease. At this point he has shown that he intends to exercise his Fifth Amendment privilege; any statement taken after the person invokes his privilege cannot be other than the product of compulsion, subtle or otherwise. Without the right to cut off questioning, the setting of in-custody interrogation operates on the individual to overcome free choice in producing a statement after the privilege has been once invoked.”

Following the foregoing statement, the opinion in Miranda continues:

“If the interrogation continues without the presence of an attorney and a statement is taken, a heavy burden rests on the government to demonstrate that the defendant knowingly and intelligently waived his privilege against self-incrimination and his right to retained or appointed counsel. Escobedo v. Illinois, 378 U.S. 478, 490, n. 14, 84 S.Ct. 1758, 12 L.Ed.2d 977. This Court has always set high standards of proof for the waiver of constitutional rights, Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938), and we re-assert these standards as applied to in-custody interrogation. Since the State is responsible for establishing the isolated circumstances under which the interrogation takes place and has the only means of making available corroborated evidence of warnings given during incommunicado interrogation, the burden is rightly on its shoulders.
“An express statement that the individual is willing to make a statement and does not want an attorney followed closely by a statement could constitute a waiver. But a valid waiver will not be presumed simply from the silence of the accused after warnings are given or simply from the fact that a confession was in fact eventually obtained.” 384 U.S. at 475, 86 S.Ct. at 1628.

The question to be determined in this case, as in other cases involving Miranda warnings, is whether the prosecution has carried its “heavy burden” of estab- . lishing that Hill was advised effectively of his rights and whether his confession was made knowingly and voluntarily.

We agree with the language of Judge Matthes in Hughes v. Swenson, 452 F.2d 866, 868 (8th Cir. 1971):

“It is neither necessary nor desirable to undertake to fashion a per se rule to be applied in all cases presenting the Miranda issue. The crucial question always must be: has the prosecution sustained its heavy burden of demonstrating that the defendant was effectively advised of his rights, and did he knowingly and understandingly decline to exercise them?”

Hill was found guilty of second degree murder in a jury trial in the Court of Common Pleas of Lucas County, Ohio. On April 14, 1971, he was sentenced to life imprisonment in the Ohio Penitentiary. The conviction was affirmed by the Court of Appeals of the Sixth Ohio Appellate District. His motion for leave to appeal was overruled by the Ohio Supreme Court and the appeal dismissed for lack of a substantial constitutional question. The Miranda contention asserted in the present case was rejected by both of the Ohio Appellate Courts.

In denying the application for habeas coi'pus, District Judge Nicholas J. Wal-inski made the following findings, which are supported fully by the record:

“At or about 8:00 p.m. on the evening of September 9, 1970 Sergeant John Mason of the Toledo Police Department informed Detective Russ Field of the same police force, that he had received some information concerning a possible homicide. Sometime between 9:00 and 9:30 p.m. of the same evening, in furtherance of the investigation, Detective Field and Lieutenant Gene Huffman picked up Sergeant Mason at his home and proceeded to the East Side where they picked up Deputy Chief Davy. They drove around the East Side looking for one Ronald Bennett, a person Sergeant Mason had interviewed earlier at about 5:00 p.m. on September 8th. They found Mr. Bennett between 11:30 p.m., and midnight and took him to the police station for questioning. Between midnight and 12:15 a.m. on the 9th of September, Mr. Bennett made a statement to Sergeant Mason and Detective Field which implicated William David Hill in the homicide case under investigation. At or about 1:00 a.m., subsequent to the interview with Bennett, Sergeant Mason learned that Mr. Hill had been taken into custody.

“Mr. Hill was taken into custody by Lieutenant Huffman and several other police officers at or about midnight on the 8th at the Arlington Hotel. He was taken from there to the police station by Lieutenant Huffman and two other officers. After they arrived at the police station, Lieutenant Huffman took Mr. Hill to the Detective Bureau. After informing him of his rights pursuant to the standards set forth in Miranda, Lieutenant Huffman asked Mr. Hill if he was willing to waive his rights and Mr. Hill replied unequivocally, that he was not. Thereupon Lieutenant Huffman had Mr. Hill booked, and shortly thereafter, Mr. Hill was placed in a cell at or about 12:30 a.m. on September 9th.

“Sometime around 1:00 a.m. of the same morning, Sergeant Mason became aware of the fact that Mr. Hill was in custody. At some time during this period he spoke to two of the officers who had apprehended Mr. Hill, Lieutenant Huffman and Deputy Chief Davy. Lieutenant Huffman, of course, was the person who attempted to interrogate Mr. Hill a short time before. The context of the conversation which these officers had was not brought out either on direct examination or on cross examination, but Sergeant Mason did testify that he was aware of the fact that Lieutenant Huffman had talked to Mr. Hill earlier. Whether Lieutenant Huffman informed Sergeant Mason that Mr. Hill refused to waive his constitutional rights during the earlier interrogation is not clear from the record, but, for the purpose of this petition, this Court will assume that Sergeant Mason was so informed.

“At approximately 2:00 a.m., Sergeant Mason and Detective Field went to Mr. Hill’s cell. Mr. Hill was lying down at the time. They called his name; he sat up; and then Sergeant Mason truthfully related to him that they had obtained a statement from Ronald Bennett. Sergeant Mason then asked him if he wanted to talk about it and Mr. Hill said, ‘Yes, I might as well.’ (Record at 13). Immediately thereafter, Sergeant Mason and Detective Field escorted Mr. Hill from his cell to the Detective Bureau for the purpose of questioning him. - Detective Field left the interrogation room soon after they arrived there to get some coffee for Mr. Hill; he did not return to the room until 2:25 or 2:30 a.m.

“Soon after Detective Field left, and before the questioning began, Sergeant Mason fully advised Mr. Hill of his constitutional rights. After reading each portion of the warning to him, he inquired of Mr. Hill whether he understood it and Mr. Hill indicated that he did. After completing the appropriate warnings, Sergeant Mason informed Mr. Hill that he could proceed no further with the interrogation unless Mr. Hill was willing to waive his rights. (Mr. Hill, having had the experience of the earlier interrogation with Lieutenant Huffman an hour and a half earlier, must have been aware of the fact that if he expressed a desire to proceed no further with the interrogation, the interrogation would cease.) Mr. Hill then stated that he was willing to waive his rights.

“Twenty-five to thirty minutes later, Detective Field returned to the interrogation room, presumably with some coffee, and at that time Mr. Hill was asked to repeat a statement which he had made to Sergeant Mason while they were alone. He was again advised of his rights by Detective Field, and Mr. Hill agreed to repeat his statement.

“After going over the statement one or two times, Sergeant Mason asked Mr. Hill if he was willing to have his statement recorded on a tape recorder. Mr. Hill indicated that he thought his statement had already been recorded, but when the officers informed him that it had not been, he said, ‘Before I do that, I think I should probably talk to a lawyer.’ (Record at 18.) Sergeant Mason ceased the interrogation immediately. He asked Mr. Hill if he wanted to call a lawyer; Mr. Hill said he did not. He asked him if he had a lawyer; Mr. Hill said he did not. Sergeant Mason asked Mr. Hill if he wanted him to call a lawyer for him; Mr. Hill said he did not. Then Mr. Hill was taken back to his cell.

“At approximately 8:30 a.m. on the same morning, Sergeant Mason returned to Mr. Hill’s cell to determine whether or not he was willing to go with Sergeant Mason to point out the location of the car, the victim and the murder weapon. Sergeant Mason did so because Mr. Hill had told him during the 2:00 a.m. interview earlier that morning that he would take the police to the spot where he disposed of the body. Sergeant Mason again advised Mr. Hill of his constitutional rights and he told Mr. Hill explicitly that he did not have to go with him, that he did not have to show anyone anything. Mr. Hill indicated that he was willing to go. When they reached the detective car, Detective Sergeant Norbert Field again informed Mr. Hill that he did not have to go, but Mr. Hill indicated that he would go with them and at no time did he say that he did not want to proceed any further.

“These are the uncontroverted facts of the case upon which the trial judge based his decision on the motion to suppress.

******

“Based upon the facts related above, it is clear that the trial judge did not err when he factually determined that the statements given to the police were voluntary. The testimony of the police officers was uncontradicted. Mr. Hill never took the stand during the hearing despite the fact that cross examination at that hearing had to be limited solely to the issue of voluntariness. (Simmons v. United States, 390 U.S. 377, 88 S.Ct. 967, 19 L.Ed.2d 1247 (1968).

“Given such uncontradicted testimony, this Court concurs in the determination made by the trial court that the statements were made voluntarily. Mr. Hill was fully advised of his constitutional rights twice in a period of ninety min-nutes; he was reminded of those rights at least three more times during the period. When he stated to Lieutenant Huffman that he did not wish to waive his rights, Lieutenant Huffman ceased interrogating him immediately. He did not request an attorney; he merely asserted his right to remain silent, thereby forcing the police to terminate the interrogation. Ninety minutes later, Sergeant Mason visited him at his cell; Sergeant Mason informed him that Ronald Bennett had made a statement, and he inquired of Mr. Hill if he had anything he wished to say. Without any further prompting, cajoling, harassment, threats or inducements, Mr. Hill said that he wanted to talk about it. The officers escorted him to an interrogation room; they asked him if he wanted anything to eat or drink; Sergeant Mason fully advised him of his rights; and Mr. Hill then proceeded, voluntarily, to make a statement. When Detective Field returned, Mr. Hill was reminded of his rights before he was asked to repeat his earlier statement; and knowing from his earlier experience that he could terminate the interrogation at will merely by saying that he did not wish to be questioned any longer, he went over his statement one or two more times. It was not until the officers asked him if they could tape record his statement that he expressed any reluctance to proceed any further; but after expressing his desire not to make such a tape without having counsel present on his behalf, he declined to call an attorney or have the police call one for him. Again, Mr. Hill was returned to his cell without any further interrogation taking place.

“When Sergeant Mason returned later that morning to see if Mr. Hill still chose to show the police where he disposed of the body and the murder weapon, a choice which Mr. Hill had expressed during the interview earlier that morning, he did not infringe any of Mr. Hill’s constitutional rights. He was relying upon Mr. Hill’s previous representations, i.e., that he would assist the police. The fact that Mr. Hill said that he would not make a taped statement without counsel, should not have been construed by Sergeant Mason as anything other than that, i. e., Mr. Hill would not make a taped statement, especially since Mr. Hill refused Sergeant Mason’s offer to call an attorney for him. Sergeant Mason reminded Mr. Hill of his constitutional rights; he told him flatly that he did not have to go. Detective Sergeant Field reiterated this same point to him when Mr. Hill got in the car. Mr. Hill did what he did knowingly and voluntarily.”

Sergeant John Mason, who made the second interrogation, testified as follows:

“Q When was the first occasion that you talked with the defendant ?

“A About 2:00 a. m. on September 9, 1970.

“Q What were the basic underlying circumstances involving that conversation?

“A The reason I talked to him?

“Q Yes.

“A Well, we had some information that he was involved in a homicide.

“Q At the time that you had talked with the defendant, had he been arrested?

“A Yes, he had.

“Q And the charge had been placed against him at that time ?

“A Yes, sir.

“Q What were those charges ?

“A False hotel registration and murder.

“Q Prior to talking to the defendant did you advise him of his constitutional rights ?

“A Yes, sir, I did.

“Q Specifically what rights did you advise him of ?

“A I read him each of these rights that are posted on the rights chart in the conference room on the second floor of the Safety Building in the Detective Bureau. They are as follows, ‘Notice. You have the right to refuse to make a statement and to answer questions. If you remain silent, your silence cannot be used against you in a court of law.’

“At that point I asked Mr. Hill if he understood what that meant and he said yes.

“I then said, ‘Anything you do say can be used against you in the court of law.’ I again asked him if he understood that, and he said, ‘Yes.’

“I told him, ‘You have the right to the presence of your lawyer during the questioning. If you cannot afford a lawyer, a lawyer will be appointed for you before the questioning if you so desire.’ I asked him if he understood that, and he said, ‘Yes.’

“I then told him ‘Unless you are willing to give up the above rights, no statement of yours can be accepted and no questions will be asked of you.’ I asked him if he understood that, and he said, ‘Yes.’

“And I told him, ‘The above rights stay with you and may be claimed now or at any time during the questioning.’ I asked him if he undérstood that, and he said, ‘Yes.’

“I asked if there is anything in his rights he did not understand or that he wanted explained to him, and he said, no, he understood them.

“I then told him, ‘I can’t talk to you or take any statement from you unless you are willing to waive these rights.’ I asked him, ‘Will you waive these rights?’ And he said, ‘Yes.’

“Q Now, that conversation took place where ?

“A In the conference room in the Detective Bureau on the second floor of the Safety Building.

“Q Who was present at the initial juncture?

“A Mr. Hill and myself.

“Q No one else was present at that time?

“A Not at that particular time, no, sir.

“Q Were these rights ever repeated to him again ?

“A Not verbatim but he was reminded of them.

“Q At what juncture and relationship?

“A About twenty minutes to half an hour later.

“Q Who was present at that time?

“A Detective Russ Field.

“Q And the defendant?

“A And Mr. Hill.

* * * * * *

“Q -After you had initially advised the defendant of his rights, I think you indicated that you advised him of the fact no questions could be asked unless he waived those rights ?'

“A Yes, sir.

“Q And he consented to make a statement ?

“A Yes, sir.

“Q And then did he thereafter make a statement to you concerning the offense with which he was charged ?

“A Yes, sir. .

“Q When those questions were put to him as to his rights, was he at that time aware of what charges had been lodged against him ?

“A Yes, sir.

“Q Did you later have an occasion, subsequent to the statement that the defendant made to you, did you later have an occasion to have any communication with the defendant ?

“A Yes, sir.

“Q When was that ?

“A About 8:30 a. m. on September 9, 1970.

“Q What were the basic circumstances underlying that conversation?

“A Well, during our conversation in the early morning hours at approximately 2:30 a. m., Mr. Hill made certain statements as to where a knife that was used in the commission of this offense was, and where Mr. Hill had put a car in the Maumee River, and where the offense had taken place. At that time we asked him if when it got light out in the morning if he would be willing to take us out to the locations and point them out. He indicated that he would.

“So I reported for work about 8:00 o’clock, and at 8:30 I went up to the turnkey’s office. Mr. Hill was in Cell No. 3 in the jail. We got Mr. Hill out and I told him the purpose I was there, asked him if he was still willing to show us where these things took place and where the knife supposedly was. He said, ‘Yes.’

“I again reminded him of his rights; that he did not have to show us; he had the right to have an attorney; he said, ‘No, I will take you over.’ ”

* * * * * *

“Q Would you just again reiterate substantially what you advised the defendant of on that morning at approximately 8:30 in the morning?

“A I told him that he had been advised of his rights, and that he knew what his rights were, and he did not have to go with us, he did not have to show us anything, and he indicated that he would.

“Q And thereafter did you, you and the defendant, then proceed to the scene ?

“A Yes. We took him down the elevator and put him in one of our detective cars, and at that time Detective Sergeant Norbert Field was in the car and Sergeant Field presently again advised him that, ‘You do not have to go with us. You do not have to show us.’ And he again indicated that he would.

“Q Now, during the course of both of these conversations, the one that took place in the interrogation room, the conversation that you had with him earlier that morning, did the defendant appear to you to be sober ?

“A Yes, sir.

“Q Did he appear to be coherent and able to understand what you were talking about?

“A Yes, sir.

“Q At any time during the period othe conversations that you had with him in the interrogation room as well as the conversation you had with him in the early morning hours about 8:30 or so, and during the subsequent trip to the scene, did the defendant ever indicate that he did not desire to proceed any further ?

“A No, sir.”

The record shows that Miranda warnings also were given to Hill in substantially the same detail earlier the same night by Lieutenant Huffman of the Toledo police force.

Based upon the above-quoted testimony and other evidence in the record, we agree with the findings of the District Court that, under the facts of this case, the prosecution has sustained its “heavy burden” of demonstrating that Hill was effectively advised of his rights and that he knowingly and voluntarily declined to exercise them.

Hill contends that his confession was involuntary as a matter of law. He asserts that once he was advised of his Miranda rights and declined to make a statement, the police were precluded at all times thereafter from asking him any questions or talking with him about the case in any way. We join other eir-cuits in refusing to adopt such a narrow construction of Miranda.

In United States, v. Collins, 462 F.2d F.2d 792, 802 (2d Cir. 1972), the Court of Appeals for the Second Circuit, in banc, said:

“[W]e are agreed that what Miranda requires is that ‘interrogation must cease’ until new and adequate warnings have been given and there is a reasonable basis for inferring that the suspect has voluntarily changed his mind.”

To like effect see United States v. Jackson, 436 F.2d 39 (9th Cir. 1970), cert, denied, 403 U.S. 906, 91 S.Ct. 2209, 29 L.Ed. 682 (1971), [distinguishing United States v. Barnes, 432 F.2d 89 (9th Cir. 1970)], and Jennings v. United States, 391 F.2d 512 (5th Cir.), cert, denied, 393 U.S. 868, 89 S.Ct. 154, 21 L.Ed.2d 136 (1968).

Nor does the fact that Hill, having made a confession, later declined to made a taped statement until he had consulted counsel, negate the voluntariness of the earlier statement. As said by Judge Wisdom in United States v. Johnson, 455 F.2d 311, 314 (5th Cir. 1972):

“ . . . Young concedes that he was given proper Miranda warnings when taken into custody by the state police and again when the FBI took him into custody. He argues, however, that his Fifth Amendment rights were violated when a statement was taken from him during interrogation after he had( refused to sign a written waiver of his right to remain silent. When all the circumstances indicate that the defendant knew of his right to remain silent and intelligently waived that right, the refusal to sign a written waiver does not render a confession inadmissible:”

See also United States v. Thompson, 417 F.2d 196, 197 (4th Cir. 1969), cert, denied, 396 U.S. 1047, 90 S.Ct. 699, 24 L.Ed.2d 692 (1970).

Affirmed.