author: LEVIN H. CAMPBELL, Circuit Judge. BAILEY ALDRICH, Senior Circuit Judge

text:
    UNITED STATES of America, Appellant, v. Guy Arthur CATES, Jr., Defendant-Appellee.
    No. 73-1261.
    United States Court of Appeals, First Circuit.
    Argued Nov. 7, 1973.
    Decided Jan. 8, 1974.
    Peter Mills, U. S. Atty., with whom Kevin M. Cuddy, Asst. U. S. Atty., was on brief, for appellant.
    Paul F. Zendzian, Bangor, Maine, by appointment of the Court, for appellee.
    Before ALDRICH, McENTEE and CAMPBELL, Circuit Judges.
   LEVIN H. CAMPBELL, Circuit Judge.

Cates was indicted by a federal grand jury impanelled in and drawn exclusively from the Southern Division of the District of Maine. The indictment specified that the criminal violation occurred in the Northern Division of the District of Maine. After arraignment in the Northern Division, Cates moved to dismiss the indictment because of alleged non-compliance in the assembling of the grand jury with the laws and constitution of the United States. Cates asserted that, because of intentional and systematic exclusion of Northern Division residents, the grand jurors were not selected from a fair cross section of the community either in the division wherein the court convened or in the district as a whole. The court, after hearing, dismissed the indictment.

The decision below rests on the court’s interpretation of the Declaration of Policy in the Jury Selection and Service Act of 1968, 28 U.S.C. § 1861, that

“It is the policy of the United States that all litigants in Federal courts entitled to trial by jury shall have the right to grand and petit juries selected at random from a fair cross section of the community in the district or division wherein the court convenes”

and on its interpretation of the Declaration of Policy in the plan, adopted pursuant to 28 U.S.C. § 1863, for the random selection of grand and petit jurors for service in the two statutory divisions, 28 U.S.C. § 99, of the District of Maine:

“It is the policy of this Court that all litigants entitled to trial by jury in each Division of this District shall have the right to grand and petit juries selected at random from a fair cross-section of the community in that Division.”

The court, in effect, construed the statutory language “wherein the court convenes” to mean “wherein the trial court convenes”. Under that interpretation, grand as well as petit jurors would have to come from a fair cross section of either the entire district or else the division wherein the trial court convened. The court seems also to have assumed that the Act required the trial court to convene not only in the district but also in the division wherein the offense occurred. Since the indictment handed down against Cates violated both formulae, it was dismissed.

While the court’s interpretation was a possible one, it is not the only reading comporting with the statutory language. Courts convene for the purpose of impanelling grand juries as well as conducting trials. In multi-judge districts, the judge to whom the grand jury reports is often different from the judge before whom the trial of a returned indictment is held. We hold that the statute means no more than that when the court convenes to impanel a grand jury, the grand jurors shall be drawn from the district or surrounding division, and that when later the trial court convenes ■ — perhaps in a different division — the petit jurors must come either from the district or from the division wherein the court is then convened.

There is no hint in the statutory history that the Jury Selection Act was intended to do more than provide improved judicial machinery so that grand and petit jurors would be selected at random by the use of objective qualification criteria to ensure a representative cross section of the district or division in which the grand or petit jury sits. Congress sought to eliminate the evil of discrimination, primarily racial, by the requirement that names of randomly selected prospective jurors be placed in a jury wheel from which jurors would then be randomly drawn. 28 U.S.C. §§ 1863(b)(3), 1864. See United States v. Matthews, 350 F.Supp. 1103 (D.Del. 1972). The district judge in the instant case, himself a member of the Judicial Conference which drafted the Jury Selection Act and, therefore, very familiar with its background, stated that the principal objective was to eliminate discrimination and that the statutory history would indicate “that there was no specific discussion or consideration given to this problem we are faced with right now. I am confident of that.”

A venue requirement for grand juries which return indictments within a state divided into divisions was most likely not discussed because it would be irrelevant to the purpose of guaranteeing random selection of jurors wherever the court convenes. Selecting jurors where the court happens to convene is a matter quite apart from deciding whether it may convene at separate places for indictment and for trial.

The district court’s interpretation of 28 U.S.C. § 1861 seems particularly questionable as it would mean that Congress was, in practical effect, altering and enlarging the federal criminal venue statute, 18 U.S.C. § 3232 incorporating Fed.R.Crim.P. 18. There is no specific criminal venue requirement for grand juries. Until 1966, Rule 18 required prosecutions (trials) to be held within the division where the offense had been committed. The Committee Note stated that it was intended to sanction the continuance of the prevailing practice “of impaneling a grand jury for the entire district at a session in some division and of distributing the indictments among the divisions in which the offenses were committed,” a practice which had been approved in Salinger v. Loisel, 265 U.S. 224, 237, 44 S.Ct. 519, 68 L.Ed. 989 (1924). 8 J. Moore, Federal Practice ¶[ 18.01, at 18-2 (2d ed. 1973). At the very least this indicates that before the Jury Selection Act, the court was plainly understood to convene twice: once when the grand jury was impanelled and once when the trial occurred. In 1966 Rule 18 was amended so that a trial must occur in the district in which the offense was committed but need no longer be in the division. Instead, “[t]he court shall fix the place of trial within the district with due regard to the convenience of the defendant and the witnesses.” The amendment was designed to avoid administrative hardship and undue delay in the disposition of criminal cases, particularly in districts such as Maine, in which there is only a single district court judge. 8 Moore, supra at 18-5. The amendment makes it quite clear that in fixing the place of trial the court may disregard the division where the crime was committed. The change brings the venue rule within the minimum required by the Sixth Amendment.

Under Rule 18, trials may now be had in the same division where the indictment was handed down, which may or may not be the division where the offense occurred, or the indictment and trial may each or both occur in different divisions. The Committee Note to the Amendment does not reflect any desire for uniformity; grand jury indictments are, in fact, not mentioned at all in the Note to the revised rule. Id. at 18 — 5-6. If the Jury Selection Act means that the court convenes only once and that convening must be where the offense was committed, it would have conflicted with the newly amended federal venue statute. Even if the Jury Selection Act means only that both trial and indictment must occur in the same division'irrespective of where the offense occurred, it would substantially amend Rule 18 by tying the trial to the place of indictment rather than to the convenience of the defendant and the witnesses, and would advance no apparent legislative purpose or social policy associated with the Act.

That the grand jurors who returned Cates’ indictment were all drawn from one division rather than district-wide is, of course, not prohibited by the Act which guarantees a random cross section in either the “district or division”. [Emphasis added]. Although Salinger, supra, noted that the prevailing practice at the time was to draw grand jurors from throughout the district to sit in one division, its holding that indictments do not have to be in the same division where the offense occurred does not rest on this practice. A defendant indicted for an offense by grand jurors drawn all from one division is an approved practice. See United States v. Grayson, 416 F.2d 1073 (5th Cir. 1969), cert. denied 396 U.S. 1059, 90 S.Ct. 754, 24 L.Ed.2d 753 (1970); Marvel v. Zerbst, 83 F.2d 974, 977 (10th Cir.), aff’d 299 U.S. 518, 57 S.Ct. 311, 81 L.Ed. 382 (1936). Contra, United States v. Beaugh, 2 F.2d 378 (W.D.La. 1924). Likewise, a petit jury may be drawn constitutionally from only one division and not the whole district. See Ruthenberg v. United States, 245 U.S. 480, 38 S.Ct. 168, 62 L.Ed. 414 (1918).

In light of the legislative purpose, statutory history, and Rule 18, we are unable to construe 28 U.S.C. § 1861 otherwise than as requiring only that when the court convenes in a division for a sitting of the grand jury, the grand jurors must be randomly (and in other respects appropriately) selected from that division. There is no requirement that they must come from the same division where a trial is later to take place or where the offense was committed. Since Cates was indicted by a grand jury appropriately selected from the Southern Division his indictment does not contravene the Act.

Our discussion has so far related to the statute, 28 U.S.C. § 1861. The wording of the Declaration of Policy in the Maine plan is more troublesome. Its language can be read as assuming that some litigants may be “entitled” to trial in a particular division of Maine and that both the grand and petit jurors must be drawn only from that division. However, as we have shown, the Jury Selection Act, Rule 18, and the constitution afforded a criminal defendant no such entitlement, nor — in any specific way — does the plan itself. In the absence, either within the plan or elsewhere, of some source delineating such an entitlement, we decline to read the passing reference to “entitlement” as enunciating new local venue requirements. The sentence is most simply read as an effort to tailor the same policy language found in 28 U.S.C. § 1861 to a local plan which, rather than being district-wide, is based upon divisions. If more was intended, “it is but reasonable that that intention would, have been expressed in apt terms . . .” Salinger, supra, 265 U.S. at 237, 44 S.Ct. at 524. Certainly the general reference to litigants “entitled” to trial within a division falls far short of specifying that a criminal defendant committing an offense within a division is to be entitled to indictment therein.®

In declining to construe the language of the plan as establishing a local venue rule, we do not intimate that the district court is without authority to establish „practices and rules dividing up cases between divisions. Indeed, because of its undoubted authority to do so, we would normally defer to the district court’s interpretation were it not important to distinguish between those matters which are formally part of a plan promulgated under the Jury Selection Act and those which are in exercise of the court’s supervisory powers. Breaches of the former may confer rights upon litigants beyond those flowing from occasional departures from a court’s own administrative practices. Cf. 28 U.S.C. § 1867(a). We are unwilling to saddle the District of Maine unnecessarily with the consequences of reading such a requirement into its plan.

In the exercise of its supervisory power, the district court may allocate cases between divisions. It may customarily fix the indictment and trial of Northern Division offenses in that Division. Moreover, it may modify the plan, see 28 U.S.C. § 1863(a), to ensure a broader base of jurors or to avoid any systematic non-use of the Northern Division for indictments — such as by providing for district-wide selection of grand jurors. We hold merely that neither 28 U.S.C. § 1861 nor the Maine plan are to be read as declaring a criminal venue requirement which renders Cates’ indictment invalid.

Reversed.

BAILEY ALDRICH, Senior Circuit Judge

(concurring).

I am entirely content with the court’s opinion, but since it makes reference to individuals, I would like to add that neither as a then member of the Judicial Conference, nor as an approver of the Maine Jury Plan, did I have any thought that there was an intent to affect venue. I thought of no objective except the fairness and randomness of selection, and even there geography played a relatively minor part. Thus in Massachusetts, which is a single district, with no statutory divisions, the Act permitted, and the Massachusetts Plan took advantage of, geographical parameters. 28 U.S.C. §§ 1863(b)(3), 1869(e). Accordingly, a defendant charged with having committed • an offense in Springfield, could be both indicted and tried by juries empanelled in Boston, none of whose members resided west of Worcester County, even though the court might, had convenience dictated, have chosen to sit in Springfield, in which case a western domiciled jury would have sat. Apart from any requirement in the Jury Act a Maine defendant could be tried in the division other than where his offense occurred. F.R.Crim.P. 18; United States v. O’Clair, 1 Cir., 1971, 451 F.2d 485, 486 n. 2, cert. denied 409 U.S. 986, 93 S.Ct. 339, 34 L.Ed.2d 252; United States v. Florence, 4 Cir., 1972, 456 F.2d 46 (Selective Service). It would be ironic if that Act, which plainly permits the Massachusetts result aforementioned, even though Massachusetts has six district judges, should lead to a requirement that the single Maine district judge jump back and forth from one division to the other simply because Maine is divided into two divisions for purposes of convenience in no way previously thought connected with jury selection. I do not read the language, either of the Act, or of the Maine Plan, as requiring such a result.

      . For failure to submit to induction, in violation of 50 U.S.C. App. § 462.

      . See U.S.Const. Amend. VI: “In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed,

      . See Judicial Conference of the United States, Report of the Committee on the Operation of the Jury System, 42 F.R.D. 353 (1967); 1968 U.S.C. Cong. & Ad.News p. 1792; 1 E. Devitt & C. Blackmar, Federal Jury Practice and Instructions § 2.02 (2d ed. 1970).

      . There is no constitutional right to trial within a particular division. See United States v. Anderson, 328 U.S. 699, 66 S.Ct. 1213, 90 L.Ed. 1529 (1946); Barrett v. United States, 169 U.S. 218, 18 S.Ct. 327, 42 L.Ed. 723 (1898); Franklin v. United States, 384 F.2d 377 (5th Cir. 1967), cert. denied 390 U.S. 954, 88 S.Ct. 1048, 19 L.Ed.2d 1147 (1968); McNealy v. Johnston, 100 F.2d 280 (9th Cir. 1938).

      . We do not reach the question whether the Jury Selection Act itself authorizes the incorporation of express criminal venue requirements as part of a local plan. See 28 U.S.C. § 1863(a). Plans are to afford “a significant measure of flexibility so that localities may adjust the administration of jury selection to their particular needs.” 1968 U.S.Code Cong. & Ad.News p. 1799. The legislative history shows a concern for local convenience, such as transportation and attendance needs, exclusively in juror selection.

      . For the last five years the United States Attorney has been operating, apparently without protest, under a non-restrictive interpretation, a practice we recognized in United States v. Cabral, 475 F.2d 715, 718, n. 2 (1st Cir. 1973).

      . The district court expressed its own qualms by stating (with respect to the matter in issue) that the plan was “perhaps foolishly” adopted.


source: Caselaw Access Project

author: GIBBONS, Circuit Judge.

license: Public Domain

text:
    Jean Ann CHAMBERLAIN, Administratrix of the Estate of John L. Chamberlain, Deceased, Appellant in No. 72-1636, v. CARBORUNDUM COMPANY, a corporation v. BERWIND RAILWAY SERVICE COMPANY, a corporation, Appellant in No. 72-1637.
    Nos. 72-1636, 72-1637.
    United States Court of Appeals, Third Circuit.
    Submitted Under Third Circuit Rule 12(6) July 2, 1973.
    Before Gibbons and Hunter, Circuit Judges.
    Resubmitted Under Third Circuit Rule 12(6) September 7, 1973.
    Decided Sept. 19, 1973.
    John E. Evans, Jr., Evans, Ivory & Evans, Pittsburgh, Pa., for Chamberlain.
    Charles E. Evans, Dickie, McCamey & Chilcote, John R. McGinley, Jr., Grogan, Graffam & McGinley, Pittsburgh, Pa., for Berwind Railway Service Co.
    Kim Darragh, Meyer, Darragh, Buckler, Bebenek & Eck, Pittsburgh, Pa., for Carborundum Co.
    Before ADAMS, GIBBONS and HUNTER, Circuit Judges.
   OPINION OF THE COURT

GIBBONS, Circuit Judge.

In this diversity wrongful death case Pennsylvania law governs. Plaintiff’s decedent, John Chamberlain, was killed when an abrasive wheel on a grinder he was using in the course of his employment shattered. A fragment pierced his abdomen. Plaintiff, Chamberlain’s administratrix, sued the manufacturer, Carborundum Company, under the Pennsylvania Wrongful Death and Survival Statutes, asserting strict liability. See Restatement (Second) of Torts § 402A (1965); Webb v. Zern, 422 Pa. 424, 220 A.2d 853 (1966). Carborundum joined as a third-party defendant Berwind Railway Service Company, Chamberlain’s employer, seeking contribution from Berwind as a joint tortfeasor because of Berwind’s negligence in failing to provide a guard on its grinding wheel. The case was submitted to the jury on special interrogatories which were answered as follows:

“1. Was the accident . . . caused by a dangerously defective condition of the grinding wheel . . ?
YES
2. Was that defective condition in existence when the wheel was sold by the Carborundum Company?
YES
3. Was there any negligence on the part of the Berwind Railway Service Co., Mr. Chamberlain’s employer, which was a proximate cause of his injuries? . . .”
YES

The jury found damages sustained by the decedent’s estate and his surviving family totaling $103,100. The district court entered judgment on the jury verdict as follows:

“It is Ordered, Adjudged and Decreed:
That judgment be entered in favor of the plaintiff Jean Ann Chamberlain, Administratrix of the Estate of John L. Chamberlain, deceased, and against the defendant and third-party plaintiff, The Carborundum Company, in the amount of $103,100.00, less the amount of payments to date made by the third-party defendant Berwind Railway Service Company under the Pennsylvania Workmen’s Compensation Laws, together with costs; and
That judgment be entered in favor of the third-party plaintiff, The Carborundum Company, and against the third-party defendant, Berwind Railway Service Company, in an amount not to exceed a sum of $51,550.00, less the amount of payments made to date by the third-party defendant Berwind Railway Service Company, under the Pennsylvania Workmen’s Compensation Laws, and limited further to an amount not greater than the liability of third-party defendant Berwind Railway Service Company for future payments under the Pennsylvania Workmen’s Compensation Laws, together with costs.”

As between Carborundum and Berwind the effect of the judgment was to enforce in favor of Carborundum a duty of contribution by Berwind, to the extent of one half the damages, but limited to the amount of Berwind’s liability for workmen’s compensation. As between the plaintiff and the defendants, although the language of the judgment is not entirely clear, the intended effect was to reduce the total recovery by the amount of Berwind’s workmen’s compensation liability. See Pa.Stat.Ann. tit. 77, § 671 which provides for subrogation by an employer against an employee’s claim against a third party. Thus the net effect is to eliminate Berwind’s subrogation lien on the judgment against Carborundum by one half of that judgment. The Berwind workmen’s compensation liability apparently exceeds one half of the judgment.

After the entry of judgment both the plaintiff and Berwind moved to amend the judgment, contending that between a manufacturer liable on a strict liability theory and an employer liable for negligence there is no right of contribution. The district court denied these motions, and both the plaintiff and Berwind appeal. In its opinion denying the motions the district court said:

“This court concludes that Carborundum and Berwind are joint tortfeasors in pari delicto whose derelictions concurred in producing the single result about which the plaintiff complains, the former under the duty to the plaintiff imposed by § 402(a), supra, and the latter by virtue of the duty incurred through the Pennsylvania Department of Labor and Industry Safety Regulations, supra, [respecting guards on grinding wheels]. Contribution between them is, therefore, appropriate.”

The appellants contend that this ruling misapplied the governing Pennsylvania law. The only authorities discussing that law to which they refer us, however, are opinions not of a Pennsylvania court, but of the United States District Court for the Middle and Western Districts of Pennsylvania. Walters v. Hiab Hydraulics, Inc., 356 F.Supp. 1000 (M.D.Pa. 1973). Fenton v. MeCrory Corporation, 47 F.R.D. 260 (W.D.Pa.1969). In Fen-ton the plaintiff sued a manufacturer of a safety-tipped arrow both on a strict liability theory and for negligence. The manufacturer joined as a third-party defendant the allegedly negligent user of the arrow, who had actually drawn the bow. When the plaintiff announced at the outset of the case that he was pressing only the § 402A theory of liability, the district court dismissed the third-party complaint, saying:

“We did so because we believe that there is no right of contribution between a party whose liability is imposed under the strict liability rule of § 402A, Restatement of Torts, 2d., and a party whose liability is based on negligence or want of due care. Strict liability is imposed regardless of the exercise of due care by the person sought to be charged; contribution exists between tort-feasors both of whom are charged with a want of due care proximately causing the accident. The history of the development of the doctrine of the right of contribution between joint tort-feasors in Pennsylvania, beginning with the judicial declaration of such right in derogation of the common-law of no contribution and the adoption and subsequent interpretation of the Uniform Contribution Among Joint Tort Feasors Act, 12 P.S. § 2082 et seq., indicates to us that no such right exists between those whose liability is imposed under different grounds. See Cage v. New York Central R. R. Co., D.C., 276 F.Supp. 778, affd. per curiam 386 F.2d 998 [3 Cir. 1967]. There is no authority in Pennsylvania on this point, and as far as we can determine no judicial construction or commentary elsewhere. . . .” Id. at 262.

Thus, two judges in the same district court have reached different conclusions on the question whether the Pennsylvania courts would require contribution between tortfeasors, one of whom is liable on a § 402A theory and the other on a negligence theory. Judge Muir in Walters v. Hiab Hydraulics, Inc., supra, sides with the opinion of the district court in this ease. Neither their research nor ours nor that of the parties has brought to light any Pennsylvania authority on the question. We must, therefore, add to that of the district court judges our own speculation as to what the highest court in the Commonwealth might decide. In doing so, we are mindful that our speculation is superior to that of either district court judge only because, compared to his, it is final.

We can set to one side any consideration of the effect of the Pennsylvania Workmen’s Compensation Act. It is established in Pennsylvania that a third-party tortfeasor has a right to contribution from a negligent employer, but that the employer’s duty to contribute does not exceed his liability under the workmen’s compensation statute. E. g., Brown v. Dickey, 397 Pa. 454, 155 A.2d 836 (1959); Maio v. Fahs, 339 Pa. 180, 14 A.2d 105 (1940). We can also set to one side eases in which a manufacturer, found liable to an injured plaintiff on a § 402A theory, has also been found to have breached a warranty to a puchaser of fitness for use. E. g., Greco v. Bucciconi Engineering Co., 407 F.2d 87 (3d Cir. 1969). The Greco case discusses the manufacturer’s duty to indemnify an intermediate seller, which had never handled the product, held liable to the plaintiff on a § 402A theory only because he was such a seller. While both the manufacturer and the intermediate seller were strictly liable, clearly they were not in pari delicto. The machine was never in the control of the intermediate seller. There was no bar to its recovery against the manufacturer on an indemnity theory, and no reason for requiring contribution from him.

Carborundum and Berwind, however, are in pari delicto. If the grinding wheel had not left Carborundum’s hands in a defective condition, despite the absence of a guard, the decedent would not have been injured. If Berwind had installed a guard, as the Pennsylvania regulations required despite the defective grinding wheel, the decedent would not have been injured. That in Carborundum’s case the law imposes an absolute duty of care to manufacture a nondefective product, while in Berwind's case the law imposes only the standard of reasonable care seems to us quite irrelevant. Relevant is the conjunction of defective performance of both duties, which produced the accident.

“The theory is that as between the two tort-feasors the contribution is not a recovery for the tort but the enforcement of an equitable duty to share liability for the wrong done.” Puller v. Puller, 380 Pa. 219, 221, 110 A.2d 175, 177 (1955).

The argument against allowing a § 402A tortfeasor to recover contribution proceeds upon the assumption that manufacturers’ strict liability to injured users of defective products is more in the nature of a contractual warranty than of classic tort liability, and that manufacturers should therefore be treated as indemnitors even in favor of others whose tortious conduct contributed to the accident. To reach this conclusion we would have to read- the Pennsylvania cases adopting § 402A liability not only as eliminating the necessity for proof of manufacturer’s negligence or contractual privity, but also of adopting a major shift in the burden of reparations in product personal injury cases by relieving negligent third parties of the burden of making contribution. We have discovered no indication that this result was intended.

We conclude that the Pennsylvania courts would, as the district court in this case concluded, enforce the manufacturer’s right to contribution from a negligent purchaser or user, employer or otherwise, even though Carborundum’s liability was based upon Restatement (Second) of Torts § 402A (1965) and the liability of Berwind on ordinary negligence.

The judgment of the district court will be affirmed.

      . The appellants refer us to Mixter v. Mack Trucks, Inc. v. Montgomery Ward & Co., Inc., Pa.Super. No. 91, June 14, 1973. It is not in point.

      . Cf. O’Neill v. United States, 450 F.2d 1012, 1016-1017 (3d Cir. 1971).

      . Our disposition makes it unnecessary to consider whether the plaintiff has any standing to object to the judgment awarding contribution in favor of Carborundum in view of Pa.Stat.Ann. tit. 77, § 671.


author: PER CURIAM.

text:
    Paul and Majorie HOWARTH, Appellants, v. DRUGGISTS MUTUAL INSURANCE COMPANY, Appellee.
    No. 72-1525.
    United States Court of Appeals, Eighth Circuit.
    Submitted Jan. 11, 1973.
    Decided July 25, 1973.

      Jo B. Gardner, Monett, Mo., for appellants.
    Paul H. Niewald, Kansas City, Mo., for appellee.
    Before MATTHES, Chief Judge, BRIGHT, Circuit Judge, and SMITH, District Judge.

       Eastern District of Michigan, sitting by designation.

   PER CURIAM.

Paul and Marjorie Howarth, appellants, sustained damages to their home and business property (Rexall Drug Store) as a result of a freight train explosion on the Kansas City Southern Railway at Noel, Missouri, on August 3, 1969. They brought an action in federal district court grounded on diversity of citizenship against Druggists Mutual Insurance Company, appellee, to recover these damages under a fire insurance policy affording coverage for loss by explosion, and requiring payment for damage to the dwelling and contents of the policyholders’ home, and for damage to the structure and contents of the drug store, as well as coverage for loss of profits from the interruption of the business.

In response to special interrogatories, a jury determined that the Howarths sustained loss to their residence and the contents thereof in the sum of $11,000, and sustained a loss with respect to their business property, including loss of profits, totalling $17,300. The jury found further that the insurer was guilty of vexatious delay in refusing to pay the claims of the policyholders under the insurance policy and it assessed additional damages for delay at ten percent of the jury award, plus reasonable attorney’s fees. See Mo.Rev.Stat. § 375.420, V.A.M.S. (1968). Post-verdict, the district court on motion of the defendant entered a judgment of dismissal n. o. v., holding that an earlier suit and recovery for the same losses by Mr. and Mrs. Howarth against the Kansas City Southern Railway barred them from recovering against the appellee-insurer. We affirm the judgment of dismissal.

The record shows without dispute that, following the explosion, insurance companies which had issued policies covering property in the Noel, Missouri, area, sent adjusters into the community to process and adjust claims arising from the explosion. The adjuster representing Druggists Mutual indicated a willingness to settle appellants’ claims for damage to their property under the policy, and made an offer on the loss to the drug store. The company insisted that the insureds sign a loan receipt as a condition of payment. The insureds, with advice of counsel, declined to sign the loan receipt and elected to proceed with a lawsuit in their own name against the railroad.

The loan receipt tendered to the insureds stipulated that they would acknowledge the funds received from the insurer as a loan to be repaid “only in the event and to the extent of any net recovery” the insureds might receive from any third person responsible for the insureds’ damages. The loan receipt did not involve any financial undertaking on the part of the insureds, but obligated them to cooperate with the insurer to collect their claim- against any third party ultimately liable for the loss. The testimony establishes that under a loan receipt, unlike a subrogation receipt, the insurer might press an action to recover the loss from a negligent tort-feasor in the name of the insured rather than in the name of the insurer. See Annot., 13 A.L.R.3d 42 (1967).

The- record clearly indicates that the appellants ■ elected to proceed against the railroad, rather than settling their loss with their own insurer. By prosecuting the lawsuit in state court against the railroad, obtaining a judgment against it, and thereafter collecting that judgment, the insureds thereby accepted satisfaction of their claims for loss to the buildings and their contents, and for loss of profits. This action released the tort-feasor, and at the same time destroyed any possibility of Druggists Mutual obtaining a right of recovery by subrogation against the negligent tort-feasor, should this insurer be called upon to pay the loss to the insureds. In Missouri, the cases clearly state that the release of the tort-feasor and the destruction of the subrogation rights of the insurer operate as a complete defense to a subsequent action on the policy brought by the insured against the insurer. Hubbard v. United States Fidelity & Guaranty Co., 430 S.W.2d 607, 610-611 (Mo.Ct.App.1968); Richardson v. Employers Mutual Liability Ins. Co. of Wis., 269 S.W.2d 132, 135 (Mo.Ct.App.1954); Knight v. Calvert Fire Ins. Co., 268 S.W.2d 53, 55 (Mo.Ct. App.1954). See Farm Bureau Mutual Ins. Co. v. Anderson, 360 S.W.2d 314, 320 (Mo.Ct.App.1962).

Appellants vigorously assert that an unfavorable judgment on the merits ought not to affect the recovery against the insurer for vexatious damages. We reviewed the test to be applied in establishing a vexatious refusal to pay, under Missouri law, in United States v. F. D. Rich Co., Inc., 439 F.2d 895 (8th Cir. 1971):

In order for a plaintiff to recover for vexatious refusal to pay, he must produce evidence which shows that the refusal was wilful and persistent and without reasonable cause as the facts would appear to a reasonable and prudent person before trial. Id. at 905.

The record shows that the insureds wrote the carrier on October 5, 1969, complaining of the delay- by the independent adjusters (General Adjustment Bureau) in concluding settlements. The insurer promptly responded indicating its willingness to cooperate even to the extent of making advance payments to contractors and advising:

Also, we need from you subrogation rights which will protect our interests as concerns our hopes of making some sort of recovery from whoever might be judged responsible for the explosion. No payment of any kind can be made to you without a proper loan receipt of [sic] subrogation receipt.

The company further advised that “ * * * we are again writing to the adjuster and he should be in touch with you shortly although they undoubtedly a!re extremely busy with the numerous claims that have arisen from this unfortunate occurrence.”

Upon receipt of this letter, appellants hired counsel who, on December 8, 1969, by amendment of a complaint, added plaintiffs’ claim to others in the suit then pending against the railroad. .

Assuming, arguendo, that the insurer had no contractual right to demand the insureds sign a loan receipt in order to protect its subrogation interest, we find no evidence to show such request to be vexatious or prejudicial to an insured. Counsel for appellants argues, however, that the insureds were entitled to their own counsel. Yet upon paying an insured’s loss, the insurer’s right of subrogation entitled it to control any litigation in enforcing an insured’s claim against third parties. Nothing suggests that the insurer would not have cooperated with the appellants to enforce claims for their loss against the railroad ■for any damages not covered by the insurance. The parties, however, concede that the policies covered appellants’ explosion losses in full, notwithstanding the fact that the insureds recovered a lesser amount from the railroad and from the jury in the present action.

In short, we find nothing in this record which affords justification for assessing damages for vexation against appellee.

No doubt the insureds were disappointed by the outcome of the litigation against the railroad. A measure of prudence would have dictated that the insureds present and collect their claims against their insurer rather than embarking upon an uncertain course of litigation. Mr. and Mrs. Howarth, upon the advice of their attorney, elected to proceed against the railroad to collect their losses. By taking these steps without the insurer’s authorization, and by ultimately collecting the loss as determined in the prior litigation from the railroad, Mr. and Mrs. Howarth extinguished the claims for loss they might have collected against their own insurer.

Accordingly, the judgment of the district court is affirmed.


author: COFFIN, Chief Judge.

text:
    UNITED STATES of America, Appellee, v. Gennaro J. ANGIULO, Defendant, Appellant.
    No. 73-1199.
    United States Court of Appeals, First Circuit.
    Heard Sept. 12, 1973.
    Decided Oct. 11, 1973.

      Joseph J. Balliro, Boston, Mass., with whom Henry D. Katz, Boston, Mass., was on brief, for appellant.
    Gerald E. McDowell, Sp. Atty., U. S. Dept. of Justice, with whom James N. Gabriel, U. S. Atty., and Jeffrey M. Johnson, Sp. Atty., U. S. Dept. of Justice, were on brief, for appellee.
    Before COFFIN, Chief Judge, McENTEE and CAMPBELL, Circuit Judges.
   COFFIN, Chief Judge.

This is an appeal from a judgment entered May 31, 1973, convicting the defendant of impeding a federal officer in violation of 18 U.S.C. § 111. The jury began its deliberations at approximately 6:20 p. m. and two hours later, after informing the court that it was unable to agree, recessed for the evening. At 11:15 the next morning, after two hours of deliberation, the jury informed the court that it was deadlocked and “unable to make any unanimous decision as to the guilt or innocence on the evidence given us.”

At that juncture the court asked the reporter to play back the original instructions to the jury, and the court gave the jury the following supplementary instructions :

“Just remember this — I am sure that you are aware of it — that you are just as capable as any other jury would be to decide this case, and if it were tried again, it would probably be tried in just about the same way on just about the same evidence. Also, as you know, this case is expensive to try, just as expensive for the government as it is for the defendant, and I would like to have you think these things over again, and proceed with your deliberations so we can get these things behind us. I would urge you to do your very best to arrive at a verdict, ,a unanimous verdict. . . . ”

The jury then retired for further deliberation, but at 2:10 p. m. again informed the court that it was deadlocked. At 3:25 p. m. the court gave the jury the following supplementary instructions:

“Well, all I can say is that I will ask you to continue in that field, do the very best you can, because we don’t want to try this case but one time. We have great confidence in the sincerity of all the jurors. I will ask you to retire again and devote your honest and sincere efforts to the reconciliation of differences among you jurors. This is not a very difficult case, when you come right down to it, it is just a matter of fact. I think it is just a question of resolving the facts in the case. I think you should all try again, do the best you can.”

The jury again returned for further deliberation, appellant’s trial counsel moved for a mistrial, and two hours later, at 5:37 p. m., the jury returned a verdict of guilty.

On appeal, the defendant contends that the trial court erred in giving two supplementary instructions to the jury, both of which substantially departed from the formulation of the Allen charge approved by this court in United States v. Flannery, 451 F.2d 880, 883 (1971).

We have come a long way from the era when deadlocked jurors were locked into an oxcart and carried about with the judge until they reached a verdiet, but perhaps not far enough. A supplementary charge instructing a deadlocked jury to go back again and try to reach a verdict, although permitted in this circuit, see United States v. Flannery, supra, must be used with great caution. As we said in Flannery, at 883, “The caution required dictates also that trial courts should avoid substantive departures from the formulations of the charge that have already received judicial approval .... And in all events, the court should be careful to include all those elements of the original charge designed to ameliorate its coercive effect, and to avoid language which might heighten it.” For the judge, without ameliorative “balancing” language, to instruct a deadlocked jury to reexamine its position may be prejudicial to a defendant in at least three ways. First, either directly or by implication it may place the burden of reconsideration upon jurors holding a minority opinion, thereby losing for the defendant whatever influence a minority in favor of acquittal might have in the jury room. Secondly, such a charge may cause a jury to agree when they might otherwise never have come to agreement, thereby losing for the defendant whatever safeguard he might have had in a hung jury, a declaration of mistrial, and either a new trial or a subsequent decision by the prosecutor not to retry the case. Thirdly, and closely allied to the other two, the charge might move some jurors to forget the prosecution’s heavy burden of proof and the defendant’s fundamental presumption of innocence. Pugliano v. United States, 348 F.2d 902, 904 (1st Cir. 1965).

To mitigate these serious possibilities of prejudice, in United States v. Flannery, supra, we strongly advised trial courts to balance a supplementary charge so that (1) the onus of reexamination would not be on the minority alone, saying, “Whenever a court instructs jurors to reexamine their positions, it should expressly address its remarks to the majority as well as the minority.” Id. 451 F.2d at 883; (2) a jury would not feel compelled to reach agreement, saying, “We expressly disapprove the Tuey statement that ‘the case must at some time be decided.’ 8 Cush. (62 Mass.) at 2. A jury, any number of juries, have a right to fail to agree.” Id. at 883; and (3) jurors would be reminded of the burden of proof. Id. at 883.

Here, after the jury had expressed an inability to agree, the trial court twice instructed them to go back and try again. In the first supplementary instruction, the court also reminded the jury that the case was expensive to try, implying that they had best reach agreement and reach it soon. In the second supplementary instruction, the court commented that “We don’t want to try this case but one time”, directly implying that it would be reasonable for the jury to reach a decision on the evidence before them. In addition, the court opined that “This is not a very difficult case when you come right down to it, just a matter of fact”, implying that there was little justification for the jurors not to be able to agree. Neither set of instructions and comments contained the three elements which, in Flannery, we urged should be included in such charges.

The government argues that the supplementary instructions were not coercive in form or in their effect upon the jury, noting first that the court did not directly instruct the minority to reexamine its position and, secondly, that the jury deliberated a full two hours after receiving the final supplementary instruction. In effect, the government would have us examine whether the charge, taken as a whole, was coercive, treating the omission of the three elements set out in Flannery as mere evidence of coercion which may be rebutted by circumstantial evidence of a lack of coercion.

The only reason we have for not prohibiting the Allen charge altogether, as has been done in several other circuits, is our feeling that there may be times when, for the sake of judicial economy, jurors need to be reminded that they should deliberate together in an atmosphere of mutual deference and respect. But any economies which may accrue at the trial level are likely to be lost at the appellate level if on-going review of supplementary instructions is invited by departing from approved formulations of the charge. Moreover, “[S]uch departures impose on appellate courts the almost impossible task of weighing the prejudicial impact” of variations in the approved charge. United States v. Flannery, supra,, 451 F.2d at 883. The impact can never be assessed accurately, for the relevant events take place in the secrecy of the jury room, and never appear in the trial record. For us to become involved, at this point, in gauging the coerciveness of various Allen-type renditions would be to launch us on an unnecessary voyage in judicial review.

We have little doubt that the trial court had the best of intentions, and disapproved our approved formulation of the Allen charge out of uncertainty or confusion. It may have thought that the time of impasse, which would trigger an Allen charge, had not yet come. We think, however, that whenever a jury first informs the court that it is deadlocked, any supplemental instruction which urges the jury to return to its deliberations must include the three balancing elements stated above. While we specifically refrain from offering definite wording for the charge, “as graven in stone”, United States v. Thomas, 146 U.S.App.D.C. 101, 449 F.2d 1177, 1188 (1971), we have illustrated in a footnote below an instruction consistent with this rule.

Reversed; new trial ordered.

      . Crabb, History of English Law 287 (1829); “[Jurors were kept] without meat, drink, fire, or candle, unless by permission of the judge, until they were all unanimously agreed”, People v. Sheldon, 156 N.Y. 268, 50 N.E. 840, 842 (1898).

      . The Allen charge has been replaced by the “modified” charge recommended by the American Bar Association, Standards Relating to Trial by Jury § 5.4, 145-146 (1968), in three circuits. See United States v. Thomas, 146 U.S.App.D.C. 101, 449 F.2d 1177, 1187 (1971); United States v. Fioravanti, 412 F.2d 407, 420 (3d Cir. 1969), cert. denied, Panaccione v. United States, 396 U.S. 837, 90 S.Ct. 97, 24 L.Ed.2d 88 (1969); United Slates v. Brown, 411 F.2d 930 (7th Cir. 1969). Elsewhere, the Allen charge has been either modified to include “balancing” elements, see United States v. Bailey, 468 F.2d 652, 663 (5th Cir. 1972); Burrup v. United States, 371 F.2d 556, 557 (10th Cir. 1967), or given a strict formulation that may not be altered by the trial court, see United States v. Kenner, 354 F.2d 780, 782-784 (2d Cir. 1965); United States v. Sawyers, 423 F.2d 1335, 1340 (4th Cir. 1970); United States v. Harris, 391 F.2d 348, 355 (6th Cir. 1968); United States v. Pope, 415 F.2d 685, 691 (8th Cir. 1969); Sullivan v. United States, 414 F.2d 714 (9th Cir. 1969).

      . The following instruction, approved in large part by the ABA in its Standards Relating to Trial by Jury, Commentary to § 5.4(a), has been modified to include the three Flannery balancing elements, shown in italics:
      “The verdict must represent the considered judgment of each juror. In order to return a verdict, it is necessary that each juror agree thereto. Your verdict must be unanimous.
      “It is your duty, as jurors, to consult • with one another and to deliberate with a view to reaching an agreement, if you can do so without violence to individual judgment. Each of you must decide the case for yourself, but do so only after an impartial consideration of the evidence with your fellow jurors. In the course of your deliberations, do not hesitate to reexamine your own views and change your opinion if convinced it is erroneous, even if your opinion is now in the majority. But do’ not surrender your honest conviction as to the weight or effect of evidence solely because of the opinion of your fellow jurors, or for the mere purpose of returning a verdict. A jury has the right to fail to agree.

      “You are not partisans. You are judges —judges of the facts. Your sole interest is to ascertain the truth from the evidence in the case. The high burden of proof which must be sustained by the prosecution has not changed."


author: BOREMAN, Senior Circuit Judge:

text:
    UNITED STATES of America, Appellee, v. Clifford Taylor LEE, Appellant.
    No. 72-2062.
    United States Court of Appeals, Fourth Circuit.
    Argued March 8, 1973.
    Decided Oct. 5, 1973.
    Thomas R. Dyson, Jr., Alexandria, Va., for appellant.
    Justin W. Williams, Asst. U. S. Atty. (Brian P. Gettings, U. S. Atty., on brief), for appellee.
    Before BOREMAN, Senior Circuit Judge, and CRAVEN and WIDENER, Circuit Judges.
   BOREMAN, Senior Circuit Judge:

Appellant, Clifford Taylor Lee (hereafter Lee or defendant), was tried and convicted by a jury in the District Court for the Eastern District of Virginia on all counts of a ten-count indictment. He was charged in four counts with forging Government Transportation Requests (GTR’s) and in four counts with uttering the same, all in violation of 18 U.S.C. § 508. In the two counts remaining the defendant was charged with obtaining property by false pretenses in violation of 18 U.S.C. § 13 assimilating §§ 18.1-118 and 18.1-107 of the Code of Virginia, 1950, as amended, on lands under the territorial jurisdiction of the United States (18 U.S.C. § 7). On appeal the parties submitted an agreed statement of facts which may be stated in abbreviated form in the paragraphs to follow.

According to testimony it was shown that a GTR is a form of negotiable instrument and constitutes a request by a government agency (in this case the United States Department of Labor) to a carrier to furnish transportation to the designated bearer. At trial in 1972 none of the ticket agents had any recollection of the transaction involving any particular GTR and thus no agent was able to state whether or not the signature of the traveler or issuing officer thereon was made in his presence. Each agent was able to state positively that a particular GTR was passed to him at his ticket counter at Washington National Airport by virtue of the stamp appearing on the back of the GTR which reflected the day of the uttering, the ticket agent’s number, and the place where the GTR was received.

Each of the four GTR’s has thereon a space for the signature of the issuing officer and a space for the signature of the traveler. All signatures on the four GTR’s involved in this case were of unknown or fictitious persons except the purported signature of Thomas W. Hall. The head of the personnel department of the Department of Labor testified from his official records that no one by the name of Barry Adams, Terry Bell, John Thompson, Mary French or John Taylor had ever worked for the Department and no such names were reflected in any records of the Department. The Government produced the real Thomas W. Hall, an employee of the Department, who testified that the signature on the GTR’s bearing his name were forgeries and that he had never authorized anyone to sign his name; that he had never handled or received any of the GTR’s here involved. There was other evidence to show that the GTR’s were false and forged but that all of the tickets which were issued in exchange for them were, in fact, used for airline transportation.

The evidence disclosed that the defendant, Lee, was an attorney in the Solicitor’s office of the United States Department of Labor. Extensive handwriting exemplars were taken from Lee and two handwriting and document analysts testified that the defendant was the forger of six of the eight names on the four GTR’s with the high probability that the defendant affixed the remaining two signatures.

A forged GTR, admitted in evidence but not included in the indictment, had been passed on May 20, 1970, at the Northwest Airlines ticket counter of the Statler-Hilton Hotel in Washington, D. C. This instrument bore a number consecutive to that of one of the GTR’s described in the indictment and there was circumstantial evidence to indicate that the two GTR’s bearing consecutive numbers were used to provide transportation for a man and woman for round trip travel to Chicago, Illinois.

The defendant did not testify and the only witness for the defense was a fingerprint expert who testified that none of the fingerprints found on three of the four GTR’s matched those of the defendant and that one which was passed at the Washington National Airport had no identifiable fingerprints on it. On cross-examination the expert testified that the defendant could have handled the forged instruments without leaving fingerprints thereon.

At the close of the Government’s case Lee moved for a judgment of acquittal, pursuant to Rule 29, F.R.Crim.P., on the ground that the prosecution had failed to prove that venue lay in the Eastern District of Virginia since there was no evidence of any kind to show that the accused was ever in Virginia or that he committed a crime there. The United States countered with the argument that there was evidence sufficient to prove that Lee forged the instruments and that the prosecution was entitled to the benefit of a presumption that the forgery occurred in the Eastern District of Virginia because the GTR’s were uttered there and were first found there in their forged condition.

Included in the court’s charge to the jury appear the following:

“Insofar as the offense of uttering or obtaining property or money by false pretenses, there is no evidence that the Defendant was the actual passer — which is what uttering is, passing or attempting to pass — or that he in fact actually tried to obtain or did obtain any airline tickets by means of false pretenses. Therefore, if the Defendant is to be found guilty of the offense of uttering or the offense of obtaining money or property by false pretenses he must be found guilty because he is what is known as an aider or abettor in a crime.
“The burden is also on the United States to prove, beyond a reasonable doubt, that the forgery was committed within the Eastern District of Virginia in order to give jurisdiction to this Court. In this connection, you are told that in the absence of evidence to the contrary the presumption is that the forgery was committed where the travel requests were first found in a forged state. That is, the finding of the forged instrument at the National Airport is itself sufficient to warrant the inference that the forgery was committed there and was, therefore, within the jurisdiction of this Court.” (Emphasis added.)

Appellant Lee contends that the district court erred in denying his motion for judgment of acquittal, in ruling that the Government was entitled to a presumption that the forgery of the GTR’s was committed where they were first found at the National Airport in a forged state and in so instructing the jury.

The United States Constitution contains pertinent venue provisions of general application. Art. III, § 2, Cl. 3 provides :

“The Trial of all Crimes, . . ., shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed »

Amendment VI provides:

“In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district, wherein the crime shall have been committed . . ..”

The sole issue here is whether the evidence was sufficient to establish venue in the Eastern District of Virginia in which district the National Airport is located. The only relevant evidence was that the forged GTR’s were passed or uttered in said district. We conclude that the assignments of error are without merit and that the convictions must be affirmed.

In support of his contentions Lee places sole reliance on Serio v. United States, 126 U.S.App.D.C. 297, 377 F.2d 936 (1967). That case involved four al- • tered money orders which were presented and uttered in Washington, D. C., on the same day of their issuance. The defendant, Serio, was charged with altering the instruments and he and a eodefendant were charged with the uttering thereof. The codefendant had been convicted on the uttering charge in the District of Columbia and his conviction had been previously affirmed on appeal by the D. C. Circuit. The evidence indicated, as stated in the majority opinion of the Court of Appeals, that Serio had filled in the money orders with the name of a payee whose automobile registration card and driver’s license had been stolen. The evidence indicated that the codefendant had uttered the instruments in Washington, D. C. Serio was convicted on the altering counts, and on the uttering counts as an aider and abettor. The evidence further disclosed that the money orders were issued in Maryland, Serio resided in Maryland, the payee whose name was forged resided in Maryland, and the payee’s stolen driver’s license which was used for identification purposes in cashing the money orders was issued in Maryland. The Serio court noted all of these facts and stated:

“Faced with this factual situation as to venue, the United States contends there is a presumption ‘or at least an inference' that the altering occurred in this jurisdiction because the uttering occurred here. There is decisional support for a presumption that alteration of an instrument such as a money order occurred where it was uttered, provided the uttering was by the same person charged with the alteration, or the one so charged is shown to have been in possession of the instrument where the uttering occurred. True, in Judge Story’s instructions to the jury in United States v. Britton, 24 Fed.Cas. 1239, 1241 (No. 14,650) (C.C.D.Mass.1822), he stated there was a presumption an instrument was forged where it is first found in its altered state or uttered, but the defendant there had possession of the instrument when he unsuccessfully presented it for payment. Other authorities state the presumption as requiring possession by the accused in the jurisdiction where he is charged with having made the alteration. 1 Wharton, Criminal Evidence (12th ed.) § 92; 3 Greenleaf, Evidence 120-21. Cf. The King v. Parkes & Brown, 2 Leach 776, 168 Eng.Rep. 488 (1797). And in Read v. United States, 55 App.D.C. 43, 45, 299 F. 918, 922, cert. denied, 267 U.S. 596, 45 S.Ct. 352, 69 L.Ed. 805, though it is not certain the coui't resorted to the presumption, it appears defendant had possession in this jurisdiction. In United States v. Di Pietroantonio, 289 F.2d 122 (2d Cir.), however, the court upheld venue in the District of Connecticut although defendant’s possession in that District was not shown by direct evidence. But in so holding the court did not rely upon a presumption attaching to the place the instruments were uttered; the court relied upon circumstantial evidence deemed sufficient to enable the trier of facts to have inferred that the altering had been done in Connecticut. In our case the evidence points to the altering having been done in Maryland. There is accordingly no room for the presumption, in the absence of possession of the■ orders by appellant in this jurisdiction. We add that the presumption which, is supported by decisional law should not be expanded to cover such a case as this where two persons participated in such circumstances as to preclude a presumption that the documents were altered by one participant in this jurisdiction because another defendant succeeded in uttering them here.” (Emphasis added.) 377 F.2d at 939-940.

The majority affirmed the convictions of Serio on the uttering counts, but reversed the convictions on the altering counts since, as the court concluded, the evidence pointed to the fact that the altering was done in Maryland, there was no room for the presumption in the absence of possession of the orders by Serio in the District of Columbia and that the District of Columbia had no jurisdiction of the altering counts.

Judge Burger (then United States Circuit Judge, now Chief Justice of the Supreme Court) concurred in the affirmance of the conviction for uttering forged documents but vigorously dissented from the holding that the district court did not have jurisdiction to try Serio on the alteration counts. Judge Burger’s dissent was based primarily on the ground that, in the words of Justice Frankfurter in United States v. Johnson, 323 U.S. 273, 65 S.Ct. 249, 89 L.Ed. 236 (1944), venue is a matter which touches closely “the fair administration of criminal justice and public confidence in it, on which it ultimately rests,” and which raises “deep issues of public policy.” He wrote that “Venue is intended to protect defendants, but it is not designed. to protect them by preventing the Government from trying them anywhere.” (Emphasis in the dissenting opinion. 377 F.2d at 941.) Judge Burger added that, even assuming the majority’s view of the evidence means that Serio could be tried in Maryland on the altering charges, such a second trial would be a waste of public resources and an undue harassment of Serio; these practical considerations are reflected in the eases which indicate that the presence of a forged or altered document in the jurisdiction permits a jury to infer that the crime was committed where the document is found; the cases sometimes •state the rule in terms of presumption, sometimes as an inference, but at the very least the rule permits the jury to find the ultimate fact on the basis of the location of the forged document even if there is evidence pointing to a different jurisdiction.

Some years ago, in Conley v. United States, 23 F.2d 226 (4 Cir. 1928), this court adopted and applied the rule as stated by Judge Story in United States v. Britton, 24 Fed.Cas. 1239, 1241 (No. 14,650) (C.C.D., Mass.1822). In Conley the defendant was charged in the Middle District of North Carolina with altering three stolen registered United States Liberty Bonds by erasing names of payees, and with possession of the bonds so altered with intent to defraud. The bonds were stolen at Greensboro, North Carolina, on October 2, 1926, and on November 19, 1926, defendant Conley was arrested while sitting at a table with companions in a resort in Detroit, Michigan, and the three stolen bonds, with the names of the payees erased, were found under the table. Conley was convicted and sentenced to imprisonment for a term of ten years. This court reversed the conviction, holding that the North Carolina district court had no jurisdiction since proper venue was not established and stated:

“[T]he presumption is, in the absence of evidence to the contrary, that the forgery was committed where the bonds were found in a forged state. The rule is thus stated by Mr. Justice Story in U[nited] S[tates] v. Britton, Fed.Cas.No.14650, 24 Fed.Cas. at page 1241.
“ ‘And I take the rule of law to be, that the place, where an instrument is found or offered in a forged state, affords prima facie evidence, or a presumption, that the instrument was forged there, unless that presumption be repelled by some other fact in the ease. . . . The rule, which I have stated, is not merely correct in a legal sense, but is the dictate of common sense and reason. If a forged instrument is found or uttered in one place, and there is no evidence to show, that it was forged elsewhere, what ground is there to presume, that it was not forged, where it was found, or uttered? If its existence in a forged state is not proved in any other place, it must, from the necessity of the case, be presumed to have been forged, where its existence in such state is first made known.’ ” 23 F.2d at 228.

This court reached the conclusion that the larceny of the bonds and having the bonds in possession unaltered are not federal offenses. • The charges upon which the defendant was tried, convicted and sentenced were the altering of the stolen bonds and having them in possession after they were altered, offenses which are clearly a violation of the federal statutes. A different question would have been presented had Conley been charged and tried in Detroit where he was found in possession of the altered bonds.

In United States v. Owens, 460 F.2d 467 (5 Cir. 1972), the court was asked to affirm the conviction of the defendant for aiding and abetting the interstate transportation of forged money orders. The evidence disclosed that one Raymond Roberts, who resided near the defendant in Shreveport, Louisiana, stole approximately 68 Nation-Wide Money Orders from a store in Patterson, New Jersey. One month later the defendant and his brother attempted to cash five of the stolen money orders at a grocery store in Shreveport. Police were called and as they entered the grocery store the defendant and his brother fled. 18 U.S.C. § 2314 makes it a crime for any person to transport in interstate or foreign commerce any falsely made, forged, altered, or counterfeit securities, knowing the same to have been falsely made, forged, altered, or counterfeited. On appeal from Owens’ conviction the court held that in order to prove the commission of an offense under § 2314 the prosecution must show that the instrument traveled interstate in its forged or altered condition. At page 469 the court stated:

“The difficulty of detecting and proving the locale of the alteration or forgery of the security has engendered a presumption in aid of proof. As early as 1822 Judge Story instructed a jury that there exists a presumption that an instrument was forged where it was first found in its altered state or uttered. . . . Applying this rule to the instant case, a presumption arises that the five money orders which the defendant attempted to utter were falsely made and forged in Louisiana.. Of course, as the Government correctly notes, this presumption does not obtain when circumstances reasonably indicate that alteration or forgery occurred outside the jurisdiction where the instrument was first found in its forged state or uttered. See, e. g., Castle v. United States, 5 Cir. 1961, 287 F.2d 657.”

Since there was no evidence to show where the forgery of the money orders had occurred and the defendant’s possession in Louisiana of forged money orders recently stolen in New Jersey did not establish that the money orders had been transported interstate in a forged or altered condition the conviction was reversed.

It thus appears that in both Conley, supra, and Owens, supra, the presumption that an instrument was forged where it was first found in its altered state or uttered was applied to protect a defendant and to reverse his conviction where there was no evidence to show where the alteration or forgery had occurred. The evidence in the instant case is sufficient to identify Lee as the forger of six of the eight names on the GTR’s and also to further identify him by a finding of “high probability” as the forger of the remaining two signatures. The evidence clearly established that the GTR’s here involved were uttered in Virginia and were first found there in a forged state. We reaffirm the holding of this court in Conley, supra, to the effect that, in the absence of evidence to the contrary, the presumption is that the forgery was committed where the instruments were first found in a forged state. Thus it follows that venue was properly established and the convictions on the forgery counts must be upheld.

Next we turn to the charges of uttering the forged GTR’s and to the assimilated crimes of obtaining property by means of false pretenses.

It is established beyond doubt that the uttering or passing of the forged instruments described in the indictment occurred in the Eastern District of Virginia at the Washington National Airport and no question as to venue arises. However, none of the airline ticket agents was able to testify as to the identity of the utterer.

As hereinbefore shown the district court instructed the jury that if Lee was to be found guilty of the offense of uttering or obtaining money or property by false pretenses he must be found guilty because he is what is known as an aider or abettor in crime. No challenge is presented on appeal to the propriety of this instruction. This court has decided that the prosecution is entitled to an aiding and abetting instruction even though the defendant is charged solely as a principal. United States v. Duke, 409 F.2d 669, 671 (4 Cir. 1969). While there was no direct evidence that Lee himself uttered or passed the forged GTR’s there is circumstantial evidence, sufficient in our view, to show that he aided and abetted the uttering.

A GTR which was introduced into evidence as Exhibit 2 was issued to Mrs. Mary French and was passed on May 20, 1970, at the American Airlines Ticket Office at the Washington National Airport, requesting transportation to Chicago and return. A GTR identified as Exhibit 4A was passed on May 20, 1970, at the Northwest Airlines ticket counter of the Statler-Hilton Hotel in Washington, D. C., and requested transportation to Chicago and return for John Taylor although the GTR identified as Exhibit 4A was not one of those included in the indictment. The evidence established that Exhibit 2 and Exhibit 4A were forged by Lee and were shown to bear consecutive numbers. It appeared from the evidence that 'Lee had taken sick leave from his employment on Thursday, May 21, and Friday, May 22, 1970. Evidence indicated that Lee was the holder of an American Express Credit Card and that this credit card was in fact used in Chicago on approximately May 22 in payment of a charge incurred at a Chicago restaurant in the amount of $6.-89. While it was shown that the signature on the charge slip was not that of the defendant the evidence indicated that the credit card was never reported lost or stolen. There was no evidence to show that the charge from the Chicago restaurant or any other credit card charge to Lee was ever dishonored or contested. It was further disclosed by evidence that the defendant Lee had close connections with Chicago by reason of previous government employment and residence there.

A GTR identified as Exhibit 3 requested transportation for Terry Bell from Washington to Chicago and return and was honored by United Airlines at the Washington National Airport on July 9, 1970. A GTR identified as Exhibit 4 requested transportation for Barry Adams from Washington to Chicago and return and was honored by Trans-World Airlines Ticket Office at Washington National Airport on June 5, 1970.

GTR identified as Exhibit No. 1 requested transportation for John Taylor from Washington, D. C., to New York City and return and was honored by Eastern Airlines Ticket Office at Washington National Airport on May 27, 1970. While the GTR identified as Exhibit 1 was incorrectly described in the forgery count of the indictment as requesting transportation from Washington to Chicago and return it was obvious that this was only a typographical error since a copy of the GTR itself was attached to and made a part of the indictment. It was correctly described in the uttering count as a request for transportation from Washington to New York City and return. No objection to this GTR was interposed because of the error in its description.

As the forger it is clear that Lee had to have possession of the GTR’s mentioned in the indictment at some time after they were stolen. The forged GTR’s which were the subjects of the counts in the indictment were, in fact, uttered in Virginia and we are of the opinion that the. jury could find that even if Lee himself did not actually utter them he aided and abetted the unidentified utterer by knowingly forging the signatures and preparing them to be passed in the Eastern District of Virginia at the Washington National Airport. Such evidence could lead reasonable men to conclude beyond a reasonable doubt that Lee was guilty of aiding and abetting the uttering and the same reasoning would apply to the counts on which the defendant was convicted of obtaining property by false pretenses.

The convictions on all counts of the indictment and the judgments entered thereon are

Affirmed.

      . The purported signature of Thomas W. Hall appears in the space provided for the signature of the issuing officer on three of the GTR’s. The purported signature of Barry Adams appears in the space provided for the traveler’s signature on one of the GTR’s bearing the purported signature of Thomas W. Hall; on another the purpoi'ted signature of Mary French appears in the space provided for the traveler’s signature; on another the purported signature of John Taylor appears in the space provided for the traveler’s signature. One GTR bore the purported signature of John Thompson as the issuing officer and the purported signature of Terry Bell appears in the space provided for the traveler’s signature.


author: STALEY, Circuit Judge.

text:
    Melvin HILLER, Appellant, and Philip Stoller (57) (Stoller Dismissed) v. The FRANKLIN MINT, INC. and Joseph M. Segal.
    No. 72-2019.
    United States Court of Appeals, Third Circuit.
    Argued June 5, 1973.
    Decided July 26, 1973.

      Tom P. Monteverde, Max L. Lieberman, Pelino, Wasserstrom, Chucas & Monteverde, Philadelphia, Pa., for appellant.
    Waters, Fleer, Cooper & Gallager, Daniel I. Murphy, Bolger & Picker, Carl S. Tannenbaum, Philadelphia, Pa., for appellees.
    Before SEITZ, Chief Judge, and STALEY and HUNTER, Circuit Judges.
   OPINION OF THE COURT.

STALEY, Circuit Judge.

This action was commenced in the district court by a complaint filed on behalf of Melvin Hiller, a New York resident, and Philip Stoller, which alleged that the Pennsylvania appellees, Joseph Segel and The Franklin Mint, Inc., breached an oral contract to pay Hiller a finder’s fee. Jurisdiction rested on diversity and an amount in controversy in excess of $10,000. The appellees moved for summary judgment, asserting that the alleged contract was governed by New York law and that under the relevant New York statute of frauds, it was void. The district court granted the motion.

On appeal Hiller argues that the district court erred in granting summary judgment to the appellees. He maintains, inter alia, that neither the law of New York nor that of Pennsylvania precludes proof of the alleged oral contract. We agree and, therefore, reverse the district court’s grant of summary judgment.

In paragraph 11 of his amended complaint, Hiller alleged the following:

“On February 29, 1968, at GNC’s then place of business in Yeadon, Pennsylvania, Segal, acting on behalf of himself and GNC, orally promised plaintiff Hiller that, if Hiller could find a source of the additional funds which GNC required on terms more favorable to GNC than those proposed by Weis, Voisin, Hiller would be granted an option to purchase 5,000 shares of GNC stock at its then market value of $30 per share, which option would be exercisable at any time within two years, and Hiller orally agreed to undertake to find such a source.”

Hiller introduced appellee Segel to C. E. Unterberg, Towbin, a New York brokerage house. This firm subsequently committed itself to and ultimately arranged for the placement of 33,000 shares of common stock of The Franklin Mint. The appellees deny the existence of the alleged oral offer. However, their denial at this stage of the proceedings is immaterial. The question is, at this point, whether the district court erred in determining that the appellant was barred from proving the alleged oral contract.

Operating on the assumption that New York law and Pennsylvania law were different with respect to the contractual issue before it, the district court approached the choice of law issue. It analyzed what it conceived to be the relevant facts in determining what law was applicable in this multistate case. The court determined that New York had more significant contacts with the alleged contract than did Pennsylvania and that its law was applicable. We believe that the district court’s initial determination that a different result would be obtained under New York law than would be under Pennsylvania law was erroneous.

The New York statute of frauds which the district court held to be a bar to the appellant’s claim provides in pertinent part as follows:

“Every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking:
-X- * -X- * * -X-
“10. Is a contract to pay compensation for services rendered in negotiating a loan, or in negotiating the purchase, sale, exchange, renting or leasing of any real estate or interest therein, or of a, business opportunity, business, its good will, inventory, fixtures or an interest therein, including a majority of the voting stock interest in a corporation and including the creating of a partnership interest. ‘Negotiating’ includes procuring an introduction to a party to the transaction or assisting in the negotiation or consummation of the transaction. This provision shall apply to a contract implied in fact or in law to pay reasonable compensation * * (Emphasis added.) General Obligations Law, 23A McKinney’s Consolidated Laws of New York, c. 24-A, § 5-701 (1964).

This statute bars the appellant’s claim if that which Hiller negotiated was the sale of a “business opportunity” or a “business.” We believe that it was not.

We agree with one court’s observation that “if the statute were literally construed it might be deemed to cover each individual sale of any part of a business or its inventory, as well as every fixture owned by that business.” Atlas Steamship Chartering Corp. v. Dillingham Corp., 314 F.Supp. 1118, 1121 (S.D.N.Y. 1970). New York has not so construed this statute.

The transfer of the majority of the voting stock of a corporation has been deemed to fall within the meaning of “business” or “business opportunity.” Clivner v. Ackerman, 51 Misc.2d 856, 274 N.Y.S.2d 112 (1966). Further, when a single seller did not own a majority of the stock interest but he and another seller combined in the transaction did, the statute was held applicable. Minichiello v. Royal Business Funds Corp., 18 N.Y.2d 521, 277 N.Y.S.2d 268, 223 N.E.2d 793 (1966), cert. denied, 389 U.S. 820, 88 S.Ct. 41, 19 L.Ed.2d 72 (1967). However, it is clear that a majority of the voting stock need not be involved to fall within the purview of § 5-701.

“While transfer of the majority of the voting stock of a corporation must always be deemed transfer of a business opportunity, the converse is not true, since, conceivably, transfer of a minority interest in a corporation would afford the recipient no opportunity to engage in the business pursuits of the corporation. However, where * * * the transfer of the minority interest is coupled with other circumstances so as to clothe the purchaser with the right to dictate the business policies of the. corporation, it exceeds the realm of simple investment and becomes a transfer of a business or business opportunity * * Clivner v. Ackerman, supra, 274 N.Y.S.2d at 114; see Karlin v. Avis, 457 F.2d 57 (C.A.2 1972).

Another court has stated: “What ob- - viously must be intended to be covered by the statute is something in the nature of the sale of an entire business or a substantial part thereof * * Lounsbury v. Bethlehem Steel Corp., 53 Misc.2d 151, 277 N.Y.S.2d 700, 705 (1967).

In the instant case Hiller allegedly arranged for the placement of 33,000 shares of The Franklin Mint stock. This did not constitute a majority interest. Nor is there any indication in the record that these shares were “coupled with other circumstances so as to clothe the purchaser with the right to dictate the business policies of the corporation.” See Clivner, supra. We, therefore, con-elude that § 5-701 does not bar the appellant’s claim.

Since Hiller alleges that he was to be compensated for his efforts on behalf of the appellees with a stock option another New York statute of frauds could arguably bar his claim. That statute with certain exceptions not here relevant provides that contracts for the sale of securities must be in writing to be enforceable. Uniform Commercial Code, 62% McKinney’s Consolidated Laws of New York Ann. § 8-319 (1964). New York’s highest court has not ruled on the issue presented to this court. We must, therefore, apply the rule New York would apply if faced with this issue. Tyminski v. United States, 481 F.2d 257 (C.A. 3, 1973). We believe that New York would consider Hiller’s alleged arrangement with Segel to be a contract of employment rather than a sale, and hence it would not be barred by § 8-319. This is how Pennsylvania construed an identical Pennsylvania statute. Baldassarre v. Singer, 444 Pa. 100, 282 A.2d 262 (1971); see Uniform Commercial Code, 12A Purdon’s Pa.Stat.Ann. § 8-319 (1970). In Baldassarre a transfer of stock pursuant to an employment contract was held not to be a sale of securities. In short, appellant’s claim of an oral contract is not barred by any New York statute of frauds. We turn now to an analysis of the Pennsylvania statute.

As we have noted above, the Pennsylvania statute of frauds dealing with the sale of securities has been held inapplicable to contracts of employment. Baldassarre, supra. It is Pennsylvania’s view that transfers of securities pursuant to an employment contract simply are not sales. Therefore, appellant’s claim of an oral contract in this case would not be barred in Pennsylvania’s courts.

Since both New York and Pennsylvania would permit the appellant to offer proof of the alleged oral contract, there is no conflict of law. An analysis by the district court with respect to the significance of contacts in this case was unnecessary.

“When certain contacts involving a contract are located in two or more states with identical local law rules on the issue in question, the ease will be treated for choice-of-law purposes as if these contacts were grouped in a single state.” Restatement of Conflicts 2d, § 186, comment c.

The forum state in this case was Pennsylvania, and its law should have been applied. See McSwain v. McSwain, 420 Pa. 86, 215 A.2d 677 (1966).

The judgment of the district court will be reversed and the cause remanded for further proceedings consistent with this opinion.

      . Stoller’s claim was dismissed with prejudice by the district court for failure to answer certain interrogatories.

      . Prior to May 31, 1968, The Franklin Mint’s corporate name was General Numismatics Corporation.

      . Segel bad accepted a Letter of Intent from this New York brokerage firm. It was the Weis, Voisin, and Cannon offer that Hiller sought to better.