author: GEWIN, Circuit Judge:

text:
    Pete D. ARVIZU et al., Plaintiffs, v. WACO INDEPENDENT SCHOOL DISTRICT et al., Defendants. Patricia Ann BAISEY et al., Plaintiffs-Appellants, v. The BOARD OF TRUSTEES OF the WACO INDEPENDENT SCHOOL DISTRICT et al., Defendants-Appellees.
    No. 73-3080.
    United States Court of Appeals, Fifth Circuit.
    May 17, 1974.

      John W. Walker, Little Rock, Ark., Jack Greenberg, Sylvia Drew, New York City, for plaintiffs7appellants.
    Minor L. Helm, Jr., Peeler Williams, Jr., Waco, Tex., for defendants-appellees.
    Guadalupe Salinas, Ed Idar, Jr., Jim Heidelberg, John E. Serna, San Antonio, Tex., for Pete D. Arvizu.
    Before GEWIN, GOLDBERG and DYER, Circuit Judges.
   GEWIN, Circuit Judge:

This appeal is taken from a district court order, 373 F.Supp. 1264, adopting the plan proposed by the Board of Trustees of the Waco Independent School District (WISD) for desegregating the schools of the district. The scrupulous regard for constitutional requirements manifested by both the Board and the district court has largely muted the objection most frequently interposed in litigation concerning remedial decrees in school desegregation cases —namely, that the decree endorses a plan which will not desegregate the entire system. Rather, here, appellants’ grievances are confined to the following: (1) the failure of the plan to prescribe standards for faculty and staff desegregation; (2) its failure to provide for integration of the 11th and 12th grades in one of the four high schools in the district; and (3) its imposition of an inordinate number of the burdens of desegregation on blacks. Finding the first and second contentions to be meritorious, and the third to be irresolvable on the record before us, we reverse as to the first two contentions and remand for further proceedings in accordance with this opinion. The remainder of the district court’s decree will not be disturbed.

I

The instant district court order marked the culmination of a protracted, albeit laudable effort on its part to secure a unitary school system in Waco. It was rendered approximately eight years after the Board of Trustees had been directed to dismantle the WISD’s segregated school system. As of the 1972-73 school year, the system’s student composition was 58.3% white, 28.-4% black, and 13.3% Mexican-American.

The Board plan, adopted by the court, was drawn around the four public high schools located in the district. The boundaries for junior high and elementary school zones, fashioned to insure the presence of integrated feeder systems into the high schools, created four component sectors or quadrants of the WISD: (1) University High, (2) Waco High, (3) Jefferson-Moore High, and (4) Richfield High. The record is largely bereft of any data concerning the district’s demographic patterns, distances between schools situated within each quadrant, and distances between schools serving comparable grade levels in different quadrants.

As was noted above, appellants’ objections to the court-ordered plan are threefold. First, it failed to condition acceptance of the plan upon compliance with the mandates of Singleton v. Jackson Municipal School District, 419 F.2d 1211 (5th Cir.), rev’d on other grounds, Carter v. West Feliciana School Bd., 396 U.S. 290, 90 S.Ct. 608, 24 L.Ed.2d 477 (1970). Although the Board plan was concededly remiss in this respect, the district court merely required the Board to submit semi-annual progress reports regarding criteria for recruitment, hiring and assignment of Mexican-American teachers and of black and Mexican-American administrative personnel.

Appellants’ second objection was prompted by the continued segregated operation of the 11th and 12th grades at the predominantly black Jefferson-Moore High School and the predominantly white Richfield High School for two years, with the only exception being that students from Richfield would attend 11th grade English and 12th grade government classes at the Jefferson-Moore High School. Classes for all 10th grade students in the two quadrants are conducted at Richfield High School.

The third objection to the plan is that it places a disproportionate number of the burdens of desegregation upon minority students. As a result of the plan, 1,906 black students (approximately 37%) and 1,467 white students (approximately 14%) are bussed fulltime. An additional 1,271 black students are bussed pursuant to a 1970 order which consolidated the Waco and LaVega School Districts, thereby increasing the percentage of blacks bussed to approximately 62%. The course pairing for Richfield and Jefferson-Moore High School students accounts for the transportation of an additional 648 whites and 132 blacks.

Appellants object specifically to the closing of four predominantly black schools, two at the elementary school level (Nalley and Sanger Avenue) and two at the junior high school level (Wiley and West Junior High Schools) and the conversion of two predominantly black elementary schools (Oakwood and Sul Ross) into integrated kindergarten and 6th grade centers. The junior high school closings necessitated the redistribution of students to the remaining junior high schools in the four quadrants. The closing of Sanger effected a redistribution in the Jefferson-Moore Sector and the remaining closing and school conversions effected a redistribution in University High Sector, all at the elementary school level. The student displacement created by the closing and conversion measures allegedly deprived minority students of neighborhood schools and heightened the need for bussing of minority students.

II

Having identified appellants’ contentions we proceed to consider their viability.

A. Non-Com/pliance with Singleton

Appellants’ claim that the court ordered plan does not comport with Singleton prescriptions is correct. The Board has, however, subsequently formulated its recruiting, hiring and assignment criteria for faculty and administrative personnel and incorporated them in its brief on appeal. Since the district court should pass upon their propriety in the first instance, we remand in light of Singleton and its progeny.

B. Failure to Integrate 11th and 12th Grades of Jeff er son-Moor e and Richfield High Schools

The viability of the proposed two-year delay in integrating Jefferson-Moore and Richfield High Schools is governed by the Supreme Court’s observation in Davis v. Bd. of School Commissioners, 402 U.S. 33, 37, 91 S.Ct. 1289, 1292, 28 L.Ed.2d 577, 581 (1971) that “[h]aving once found a violation, the district judge or school authorities should make every effort to achieve the greatest possible degree of actual desegregation, taking into account the practicalities of the situation.” See Wright v. Council of the City of Emporia, 407 U.S. 451, 461-462, 92 S.Ct. 2196, 2202-2203, 33 L.Ed.2d 51, 61 (1972); Swann v. Charlotte-Mecklenburg Bd. of Education, 402 U.S. 1, 26, 28, 91 S.Ct. 1267, 1281, 1282, 28 L.Ed.2d 554, 576 (1971). See also Alexander v. Holmes County Bd. of Education, 396 U.S. 19, 90 S.Ct. 29, 24 L.Ed.2d 19, rehearing denied, 396 U.S. 976, 90 S.Ct. 437, 24 L.Ed.2d 447 (1969). The Board’s justification for its proposal is that it would prevent disruption of extracurricular activities and the purchasing of class rings and would maintain student feelings of pride and tradition in the schools.

Were this measure to terminate at the end of the 1973-74 school year, we would be more favorably inclined to approve. We could then discern the benevolent aims which this measure is designed to and indeed has served. But its extension for a second school year will invariably cause as much disruption to school ties upon expiration of the two year delay as would have the desegregation of the two schools at the time the district court decree was rendered. For if the temporary measure is operative for a second year, then the incoming 11th graders like the present 12th graders, will have cultivated the same ties with their schools that the Board desired to avoid jeopardizing. Hence, the justification for allowing the temporary proposal to be operative for a second year is attenuated.

Moreover, this court has, with limited exceptions, disapproved of school board plans which exclude a certain age grouping from school desegregation, and has assiduously adhered to the proposition that part-time desegregation, while a salutary adjunct of desegregation plans, cannot be used as a substitute for the complete dismantling of a segregated school system. United States v. Texas Education Agency, 467 F.2d 848, 872 (5th Cir. 1972) (en banc); id. at 885 (Bell, J., concurring)United States v. Bd. of Education of Webster County, 431 F.2d 59, 61 (5th Cir. 1970); Hightower v. West, 430 F.2d 552, 557 (5th Cir. 1970); Bivins v. Bibb County Bd. of Education, 424 F.2d 97, 98 (5th Cir. 1970); cf. Miller v. Bd. of Education of Gadsden, Alabama, 482 F.2d 1234, 1236 (5th Cir. 1973). Thus, in Taylor v. Ouachita Parish School Bd., 424 F.2d 324, 326 (5th Cir. 1970), when confronted with the retention of an all-black high school, justified by a biracial committee in order to maintain the school’s identity, this court responded as follows:

“This explanation does not overcome the ‘heavy burden upon the board’ to justify ‘its preference for an apparently less effective method’ in the face of the more promising course of action which is available in the HEW plan. Green v. New Kent County School Board, 1968, 391 U.S. 430, 439, 88 S.Ct. 1689, 20 L.Ed.2d 716. Since the HEW plan is the only one currently available that gives any promise of ending the dual system with respect to Richwood High we must order its implementation.”

See also Lee v. Macon County Bd. of Education, 448 F.2d 746, 753 (5th Cir. 1971); United States by Mitchell v. Choctaw County Bd. of Education, 417 F.2d 838, 842 (5th Cir. 1969). This response compels our conclusion that in the instant case student affinity for a school is not a practicality which under Davis can vitiate the command for the most effective desegregation decree..

We intimate no view as to whether any heretofore unexpressed difficulties occasioned by the prospective integration of the two high schools may constitutionally justify a failure to integrate them completely. That bussing of students is taking place under the course pairing measure of limited duration tends to belie the suggestion that any of the customary difficulties will in fact be encountered. Consequently, on remand, the district court should order the Board of Trustees to formulate a plan for integrating Jefferson-Moore and Richfield High Schools, effective for the 1974-75 school year, unless evidence is adduced that such integration is impractical under the rationale of Davis.

C. Disproportionate Burdens of Desegregation

Although not without some ambiguity, appellants claim that the impermissible burdens of desegregation imposed upon them are evidenced by the elimination of neighborhood schools in the University High Sector in contravention of the Board’s avowed policy of preserving neighborhood schools, and the disproportionate number of black school children bussed to implement desegregation plans. These burdens are attributable to school closings and the suspended operation of grades 1-5 and the attendant conversion to kindergarten and 6th grade centers in certain schools in the district. The viability of appellants’ contentions invariably rest upon the validity of the Board’s justifications for its proposals and the availability of feasible alternatives to the measures that appellants deem objectionable. Since it is incumbent upon district courts to insure that the burdens of desegregation are distributed equitably, see United States v. Texas Education Agency, supra at 885 (Bell, J., concurring); Cisneros v. Corpus Christi Independent School District, 467 F.2d 142, 153 (5th Cir. 1972) (en banc); Lee v. Macon County Bd. of Education, supra at 753-754; cf. Quarles v. Oxford Municipal Separate School District, 487 F.2d 824, 826 (5th Cir. 1973); United States v. Greenwood Municipal Separate School District, 460 F.2d 1205, 1207 (5th Cir. 1972); Mims v. Duval County School Bd., 447 F.2d 1330, 1331-1332 (5th Cir. 1971), and the record is devoid of evidence which would enable us to determine whether this duty has been complied with, we must remand to the district court for further consideration in light of the following observations.

1. School Closings

The Board’s proposed closing of Nalley and Sanger Avenue Elementary Schools and West and Wiley Junior High Schools cannot withstand scrutiny if, as appellants maintain, such closings were for racial reasons. See Stout v. Jefferson County Bd. of Education, 483 F.2d 84, 86 (5th Cir. 1973); United States v. Texas Education Agency, supra; Lee v. Macon County Bd. of Education, supra; Allen v. Bd. of Public Instruction of Broward County, Fla., 432 F.2d 362 (5th Cir. 1970); Carr v. Montgomery County Bd. of Education, 429 F.2d 382 (5th Cir. 1970). The district court’s truncated explanation for approving the school closings was as follows:

“Of the four schools closed, two (Nal-ley and Wiley Jr. High) are predominantly black schools, and two (Sanger Ave. and West Jr. High) possess racially mixed student bodies, are located in racially mixed neighborhoods, and are not identified in either the black or the white community as predominantly or historically black schools. Thus, we have no impermissible closing of formerly black schools for racial reasons.”

We are unconvinced that this reasoning when viewed in light of the evidence adduced in the record satisfies what this court has characterized as a heavy burden to explain the closing of facilities used for the instruction of minority students. United States v. Texas Education Agency, supra at 872. See also Haney v. County Bd. of Education, 429 F.2d 364, 372 (8th Cir. 1970).

The Board proffered three explanations for the school closings: first, the schools were housed in out-moded facilities, second, they operated at under capacity or had a capacity so limited that the costs of operation were prohibitive, and third, they were confined by a small physical plant. Each of these justifications is facially legitimate. But where measures proposed by a school board are challenged, the Board must adduce evidence sufficient to support the conclusion that their actions were not in fact motivated by racial reasons, see Keyes v. School District No. 1, 413 U.S. 189, 209, 93 S.Ct. 2686, 2698, 37 L.Ed.2d 548, 564 (1973). To the extent that other schools which were kept open operate under the same handicaps from which the closed schools suffered, the viability of the Board’s justifications is diluted commensurately. See United States v. Texas Education Agency, supra at 872.

The challenge to the closing of the Nalley School is ill-founded. It lacked a cafeteria and possessed only a make-shift library. Moreover, its capacity (100) was so limited that the costs of operating it were prohibitive. Since no other school in the district was of comparable capacity, the Board’s decision to terminate operation at Nalley was clearly warranted. The same conclusion cannot, on this record, be drawn with respect to the other three schools.

It is uncontroverted that West, Wiley and Sanger Avenue operated at substantial under capacities. But the disparity between enrollment and capacity at Wiley, for example, was paralleled by that at the South Junior High School which remained in operation. Moreover, the under capacity at Sanger only slightly exceeded that at Parkdale, Crestview, and Hillcrest Elementary Schools— schools that also were utilized under the Board’s plan. In addition, while the dates of construction of the West (1914), Wiley (1938) and Sanger Avenue (1903) Schools when coupled with wear and tear attendant upon student occupancy may have resulted in the deterioration of facilities in these schools, the record is bereft of evidence which indicates that facilities of the closed schools are inferior to those in other schools in the district. Similar data comparing the physical plants of the Sanger Avenue, West and Wiley Schools with those of other schools still in operation is also absent.

Moreover, in contradistinction to the Board’s claims that the three schools were deficient, Superintendent of Schools Dr. Avery Downing stated his belief that the closed schools could have been utilized for the 1973-74 school year had it not been for the Board plan. He also testified that he had submitted several plans to the Board, some of which proposed that the three schools be used to house both black and white children but that the Board merely responded by endorsing the instant plan. Finally, Dr. Downing noted that the West and Wiley closings resulted in substantial over enrollment at the remaining junior high schools.

Thus, on remand the district court should re-examine the justifications for closing the Sanger, West and Wiley schools in light of the characteristics of the schools permitted to remain in operation, see United States v. Texas Education Agency, supra at 872; see also Jones v. Caddo Parish School Bd., 487 F.2d 1275, 1277 (5th Cir. 1973), and additionally the timing of the proposed school closings, see Wright v. Council of the City of Emporia, supra at 465, 92 S.Ct. at 2204, 33 L.Ed.2d at 63. The existence of some schools with either comparable facilities, physical plants or under capacities need not inexorably condemn the Board’s decision to close Sanger, West and Wiley as one prompted by impermissible racial considerations. But in view of Superintendent Downing’s testimony, and the heavy burden imposed upon school officials to justify the closings, a finding that more than an isolated few schools presently in operation suffer from the same deficiencies which plagued the closed schools should militate against the need for such closings.

2. Suspension of the Operation of Certain Grades

The elimination of neighborhood schools and the ineluctable increased bussing of black students required as a result is also traceable to the suspension of grades 1-5 in the predominantly minority Sul Ross and Oakwood elementary schools in the University High Sector. Under the Board’s plan, all students in grades 1-5 in this sector presently attend one of six elementary schools, and the formerly predominantly minority Oakwood and Sul Ross Schools house all kindergarteners and 6th graders respectively. Three witnesses testifying on behalf of the Board explained that they believed it was the most practical means for desegregating elementary schools in the University High Sector. Such general asseverations are insufficient if, as appellants maintain, the grade conversions deprive minority students of their neighborhood schools and concomitantly result in a proliferated bussing of minority students.

The paucity of evidence bearing upon the propriety of the grade conversions at Sul Ross and Oakwood precludes us from passing upon appellants’ contention. The record does not reveal the extent to which bussing of minority students has been increased by this measure. Moreover, we hasten to note that unless appellants can point to additional proposals of the Board which allegedly spawn the imposition of inequitable burdens of desegregation upon minority students, a court is powerless to mitigate them. In this vein, we reiterate that the annexation of the LaVega District to the Waco District accounts for the bussing of 1,271 of the 3,177 black students being transported. Unless some infirmity is discernible in the plan for assimilating the former LaVega students, the bussing of these students must be tolerated.

Conversely, however, if the Board’s measures do in fact increase these burdens, then it will be incumbent upon the Board to justify their actions. That students who formerly attended Sul Ross and Oakwood are purportedly being bussed and that Sul Ross and Oakwood are presently housing white and minority students in the 6th grade and in kindergarten tends to belie the assumption that educational considerations preclude the use of both schools for children in grades 1-6.

Ill

As we noted earlier, the Board and the district court have made a commendable attempt to dismantle the WISD dual school system. With the exception of the 11th and 12th grades at Jefferson-Moore High School, the district is in fact desegregated. Our decision cures this problem as well as that posed by noncompliance with Singleton.

Despite the efforts of the Board and the district court, however, it may be that appellants are shouldering a greater proportion of the burden of desegregation than that which is constitutionally permissible. Although a district court has wide discretion in formulating remedial decrees, such discretion is abused where a district court “approves a plan that, in the hope of providing better ‘quality education’ to some children, has a substantial adverse effect upon the quality of education available to others.” Wright v. Council of City of Emporia, supra, 407 U.S. 451, at 463, 92 S.Ct. 2196, at 2204, 33 L.Ed.2d 51, at 62. In view of the catholicity of opinion as to the hardship occasioned by the loss of neighborhood schools and the necessary bussing that such a loss entails, we remand for a determination of whether the closing and suspended operations in the aforementioned schools was justified.

Reversed in part and remanded with directions.

      . Appellants brought a class action on behalf of black and Mexican-American children residing in and eligible to attend the Waco, Texas public schools.

      . The only demographic data, other than a statistical breakdown of black, Mexican-American and white students in the district, was a general description of the racial composition of each quadrant. South Waco, while possessing a slight Anglo majority, contained the bulk of Mexican-American population in the district. North and Northeast Waco contained a substantial Anglo majority and a black student composition reflective of that in the entire district. East and West Central Waco possessed sizable black and white populations. Finally, Northwest Waco was predominantly white. The four sectors alluded to in the text are largely in conformity with the geographical breakdowns noted herein.

      . Three alternative plans were submitted by appellants. The Finger plan called for the conversion of all schools into centers for grades 1-4, 5-8, and 9-12, with grades 5-8 located in or on the fringe of minority communities and grades 1-4 and 9-12 to be bussed to schools in Anglo majority areas. The Black Federation proposed a 3-3-3-3 plan with space reserved in each school for a percentage reflecting the percentage of each racial or ethnic group in the community with those residing closest to the school given first priority. A third plan, submitted by Arvizu plaintiffs, consisted essentially of objections to the Board’s proposal. In view of the conceded efficacy of the Board plan in effecting desegregation in the WISD and the absence of any evidence which suggests that these plans would be demonstrably less burdensome to blacks and Mexiean-Ameri-cans than the court approved plan proposed by the Board, we need not further address the alternative plans.

      . As a result of a 1970 suit, initiated by the Justice Department against the Texas Education Agency, a district court entered an order approving a plan for disestablishment of the LaVega District dual structure. The implementation of this plan resulted in the transformation of the LaVega District into a predominantly black district. This latter development prompted the district court to grant a motion to annex LaVega to the Waco District in 1971. We emphasize this development in order to avoid a distorted perception of the bussing statistics and the problems which naturally and inevitably resulted from the court ordered change.

      . The evidence indicates that some whites are bussed in order to enable them to attend the predominantly white Crestview Elementary School, and hence to this extent the' burden exacted of white students as a result of the desegregation decree is lessened. The evidence is somewhat vague as to how many blacks and how many whites are being bussed as a result of the plan. Statistics do not indicate the number or proportion of Mexican-Ameriean students being bussed.

      . The Nalley school was situated in the University High Sector, West in the Jefferson-Moore Sector and Wiley in the Richfield Sector. It would appear from the record that the Sanger Avenue school was situated in the Jefferson-Moore Sector. Although historically white schools, Nalley and Wiley were predominantly black and Sanger Avenue and West Junior High were racially mixed at the time of their closing.

      . In their brief, appellants also challenge the conversion into one grade centers of South Junior High School and Brook Avenue, R. L. Smith and J. H. Hines Elementary School, located in the University High, Waco High, Jefferson-Moore and Richfield Sectors respectively. These conversions were alluded to only briefly at best in the hearing before the district court. To the extent the parties are instructed on remand to cure evidentiary deficiencies regarding the ramifications of the Sul Ross and Oakwood conversions, they must also cure such deficiencies regarding the conversion of the former four schools.

      . See Flax v. Potts, 464 F.2d 865, 869 (5th Cir.), cert. denied, 409 U.S. 1007, 93 S.Ct. 433, 34 L.Ed.2d 299 (1972) and Lockett v. Bd. of Education of Muscogee County School District, 447 F.2d 472, 473 (5th Cir. 1971) (non-inclusion of children in kindergarten is permissible because of the peculiarities of the kindergarten program).

      . Transportation hazards and difficulties are, under Swann, justifiable reasons for non-inclusion of certain grades in a school desegregation plan. See Ellis v. Bd. of Public Instruction of Orange County, 465 F.2d 878 (5th Cir. 1972); Lee v. City of Troy Bd. of Education, 432 F.2d 819 (5th Cir. 1970).

      . Under Keyes v. School District No. 1, 413 U.S. 189, 197, 93 S.Ct. 2686, 2691, 37 L.Ed.2d 548, 557 (1972) and Cisneros v. Corpus Christi Independent School District, supra at 144-145, schools in Texas with a combined predominance of black and Mexican-American students are eligible to be classified as “segregated schools.” In Keyes, the Court identified the composition of the student body and of faculty and staff, and community and administration attitudes toward the school as factors to be considered by a district court in determining whether a school is segregated. The district court’s response to the school closing challenge fails to take cognizance of the student and faculty composition factors, a failure which may or may not have led to the characterizations of West Junior High (approximately 70% black and Mexican-American) and Sanger Avenue (approximately 65% black and Mexican-American) schools as racially mixed and not segregated. A conclusion on remand that these schools are “segregated” will trigger the Board’s heavy burden to justify the closing of these two schools.

      . The following statistics indicate the degree of under enrollment at various schools in the district:
      School M-A Bl. Wh. Total Capacity
      Closed: West 74 218 128 420 575
      Wiley 4 391 0 395 500
      Sanger Ave. 74 162 111 347 500
      Open: South Junior 153 228 116 497 600
      Parkdale 3 55 378 436 500
      Crestview 27 53 383 463 600
      ■Hillcrest 9 65 296 370 450
      The problem of under enrollment at the latter four schools remains unabated by the Board plan. Moreover, at the Gurley and Kendrick elementary schools, under enrollment is exacerbated by 122 and 59 respectively to reflect under capacities of 184 and 103.

      . The result of the junior high school closings is witnessed by the following discrepancies between enrollments and capacity at the schools remaining open:
      Total Projected
      School (Sector) 1972-73 1974-75 Capacity
      Lake Air Jr. High (Richfield) 859 1,274 900
      North Jr. High (Waco) 742 882 625
      South Jr. High (University) 497 507 600
      Tennyson Jr. High (Jeff-Moore) 755 925 750
      University Jr. High (University) 1,032 1,007 900

      . Despite persistent cross-examination by appellants’ counsel, neither of the three Board witnesses was able to produce statistics on the bussing increases necessitated by the desegregation plan.

      . During the interim from the initial La-Vega desegregation order in 1970, see note 4 supra, and the annexation of LaVega to the Waco District, the closed black school has been vandalized to the extent that Waco school authorities deemed it unusable. The 1,400 LaVega black students have been assigned to schools, suggested by the Justice Department, which formerly served predominantly white students and which are located in predominantly white neighborhoods. That the former LaVega students are bussed to school is lamentable, although apparently unavoidable at present. We would, however, encourage the Board to reevaluate its plan for assimilating these students into the Waco school system, when and if, the La-Vega school is rehabilitated.

      . The most eloquent statement of these hardships is rendered by Justice Powell, concurring in part, and dissenting in part in Keyes, supra. See also Brice v. Landis, 314 F.Supp. 974, 978 (N.D.Cal.1969), cited approvingly in Lee, supra at 754 n.12.


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    UNITED STATES of America Plaintiff-Appellee, v. Robert William BOZEMAN, Defendant-Appellant,
    No. 74-1021
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    June 6, 1974.

      Edward A. Dempsey, Jr., Jacksonville, Fla. (Court-appointed), for defendant-appellant.
    John L. Briggs, U. S. Atty., Howard T. Snyder, Asst. U. S. Atty., Jacksonville, Fla., for plaintiff-appellee.
    Before GEWIN, GODBOLD and CLARK, Circuit Judges.

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

   PER CURIAM:

Robert William Bozeman was tried and convicted on an information charging him with violating 18 U.S.C. § 875(c) by making a telephonic threat on the life of one Lt. John William Acuff. On this appeal he argues that the evidence adduced at trial was insufficient to sustain his conviction. We affirm.

The factual background of this appeal is as follows. Bozeman, a merchant seaman whose documents had been revoked, filed an appeal for administrative clemency and for the return of his documents with the United States Coast Guard. During the pendency of this appeal, he on occasion discussed its progress with Lt. Acuff. On June 1, 1973 at approximately 11:30 A.M., Thomas Williams, a clerk-stenographer at the office of the Coast Guard commandant in Washington, D. C., received a phone call from a caller identifying himself as Robert William Bozeman. During the course of a fifteen minute conversation, the caller twice threatened to kill Lt. Acuff. That same afternoon, after Williams had informed his superiors of the call, the Washington Coast Guard office briefed the Jacksonville office on the threat. When Lt. Midgett of the latter office called Bozeman’s mother’s house in Clermont, Fla., someone identifying himself as Bozeman answered, and, after being asked about the Washington phone call, his response, was, “[i]f that is the only way I can get my documents back . to kill him, I guess I will have to do it.” Subsequently, Bozeman visited Lt. Acuff’s Jacksonville office. Two customs agents were present at the time and one, Ledford, testified that he heard Bozeman say, “Acuff was a sorry excuse for a human being or a man and that he didn’t deserve to live.” Another agent, Dukes, testified that Bozeman said, “Acuff was a sorry excuse for a human' being and he should be dead.”

Bozeman argues that the trial judge erred in not granting his motion for an acquittal because the government’s proof failed to show (1) he actually made the’alleged threatening call of June 1; (2) that a threat was actually made; and (3) that the threat was made knowingly and intentionally. As to (2), Bozeman relies on Watts v. United States, 394 U.S. 705, 89 S.Ct. 1399, 22 L.Ed.2d 664 (1969); in which the defendant, alluding to the possibility of being drafted, stated to a discussion group at apolitical gathering, “[i]f they ever make me carry a rifle the first man I want to get in my sights is L.B.J.” The Court held that “[t]aken in context, and regarding the expressly conditional nature of the statement and the reaction of the listeners [laughter],” this was not the sort of statement prescribed by 18 U.S.C. § 871(a). While it is true that the statements made to Lt. Midgett and in the hearing of the customs officers were phrased in conditional terms, the testimony of Williams makes it clear beyond cavil that the June 1 threat, the subject of this information, was express and unequivocable, to wit, “I will kill him.” Considering this testimony in the light most favorable to the government, see Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1944), this statement meets the test of what amounts to a threat under 18 U.S.C. § 875(c), i. e., “[this] communication ‘in its context’ would ‘have a reasonable tendency to create apprehension that its originator will act according to its ten- or’,” United States v. Holder, 302 F. Supp. 296, 301 (D.Montana 1969) aff’d 427 F.2d 715 (9th Cir. 1970), citing Landry v. Daley, 280 F.Supp. 938, 962 (D.C.Ill.1968).

As to (1), relying on,United States v. Smith, 5 Cir., 433 F.2d 1266, cert. denied 401 U.S. 977, 91 S.Ct. 1206, 28 L.Ed.2d 328 (1970), Bozeman argues that since there was no proof either Williams or Midgett recognized his voice or that he was physically -present in Clermont, Florida at the time of the June 1 call, the government failed to create a jury issue as to his identity as the caller. This issue is one often contested in 875(c) cases and “[i]t is [clear] beyond dispute that identification of a telephone caller may be [established] by circumstantial evidence.” United States v. Holder, supra; Spindler v. United States, 336 F.2d 678 (9th Cir. 1964); Seeber v. United States, 329 F.2d 572 (9th Cir. 1964). In Smith a voice identification and proof of Smith’s physical presence near the phone booth to which the call was traced at about the time of the call were elements considered by the court as bearing on identity. However, our reading of Smith is that these are relevant considerations, not essential ones. In the instant case, Williams’ testimony that the caller claimed to be Bozeman, telephone company records of a call from Bozeman’s mother’s house to a Washington Coast Guard number on the same date and at the same times as Williams testified the call was made; Midgett’s testimony indicating an admission by someone identifying himself as Bozeman that he made the threatening call; and the customs agents’ testimony as to subsequent statements by Bozeman taken together were a sufficient basis for a jury to conclude that Bozeman was the caller.

Finally, as to his point 3, Bozeman argues that Williams’ description of the caller as being irrational makes it clear that the government failed to prove that the alleged threat was wilfully and intentionally made. He is correct in asserting that a conviction under 18 U.S.C. 875(c) requires proof that the threat was made knowingly and intentionally. See, e. g., United States v. LeVison, 418 F.2d 624 (9th Cir. 1969); United States v. Dutsch, 357 F. 2d 331 (4th Cir. 1966); and Seeber v. United States, supra. However, the evidence, viewed in the light most favorable to the government, see Glasser v. United States, supra, and United States v. Squella-Avendano, 478 F.2d 433 (5th Cir. 1973); was sufficient to support the conviction. On cross-examination, Williams did once use the adjective “irrational” in describing his evaluation of Bozeman’s telephone threat. However, in light of the remainder of Williams’ testimony, as well as the testimony of Lt. Midgett and the two customs officers concerning subsequent statements made by Bozeman relevant to the issue of intent, Dutsch, supra, and LeVison, supra, ample proof was provided of this element of the crime. In these circumstances the jury, which was properly instructed, could have found that this threat was made knowingly and intentionally.

Affirmed.

      . 18 U.S.C. § 875 (c) provides :
      “Whoever transmits in interstate commerce any communication containing any threat to kidnap any person or any threat to injure the person of another, shall be fined not more than $1,000 or imprisoned not more than five years, or both.”

      . When Bozeman came to the Jacksonville office, Acuff had asked the customs officers to be present since he was afraid of Boze-man.

      . 18 U.S.C. § 871(a) provides:
      “Whoever knowingly and willfully deposits for conveyance in the mail or for a delivery from any post office or by any letter carrier any letter, paper, writing, print, missive, or document containing any threat to take the life of or to inflict bodily harm upon the President of the United States, the President-elect, the Vice President or other officer next in the order of succession to the office of President of the United States, or the Vice President-elect, or knowingly and willfully otherwise makes any such threat against the President, President-elect, Vice President or other officer next in the order of succession to the office of President, or Vice President-elect, shall be fined not more than $1,000 or imprisoned not more than five years, or both.”

      . The court instructed the jury that “the threat must have been made by the Defendant knowingly and intentionally.” It further instructed the jury that “when the word used because of mistake, inadvertence or other innocent reason convey an apparent intention to injure the person of another, such words are not a threat within the meaning of the statute.”


author: ALFRED T. GOODWIN, Circuit Judge:

text:
    In the Matter of William Guy MUNGER, Bankrupt. Ernest J. POMBO, Appellant, v. Jack A. ULRICH, Trustee, Appellee.
    No. 72-3041.
    United States Court of Appeals, Ninth Circuit.
    April 4, 1974.

      Alfred Nelson, Oakland, Cal., for appellant.
    Rolla L. Garretson, Jr., Blewett, Gar-retson & Hachman, Stockton, Cal., for appellee.
    Before CHAMBERS, CHOY, and GOODWIN, Circuit Judges.
   ALFRED T. GOODWIN, Circuit Judge:

In a contest between the trustee in bankruptcy and the holder of an assignment of an agreement to assign farm subsidy payments “upon receipt” and several security agreements covering crops and proceeds, the referee in bankruptcy and the district court found for the trustee. We reverse.

Appellant claims the funds under either (1) security agreements executed between 1966 and 1969 between appellant’s predecessor in interest, the Stockton Production Credit Association, and the bankrupt, Munger, or (2) a 1969 agreement in which Munger agreed to assign upon receipt any federal subsidy payments he might receive.

The two issues raised are (1) whether perfected security agreements held by the Association covering “all crops” and the “proceeds” thereof included within their term certain federal farm subsidy payments to which the debtor may become entitled; and (2) whether the 1969 agreement to assign upon receipt any subsidy payments is itself a security agreement giving appellant priority to such payments as against the trustee. Because we conclude that, under the facts of this case, the term “proceeds” as used in the security agreements includes the subsidy payments in dispute, we need not reach the second issue.

Munger, a sugar-beet farmer, gave as collateral for a loan several statutory security interests, covering his farm equipment, the crops to be grown on his land over the next five years, and the proceeds or products from these crops. The financing statements covering these security agreements satisfied California law. Three years later, desiring additional security, the Association asked Munger to sign an “Agreement to Assign Payments Due Producer Under Sugar Beet Production Adjustment Contract.” Munger signed. He thereby agreed to assign to the Association any subsidy payments he might receive from the Department of Agriculture, either for harvesting or not harvesting his crop.

Prior to his bankruptcy, Munger abandoned a part of a crop and applied for abandonment payments. After his bankruptcy, he applied for other subsidy payments. Eventually, Munger became entitled to the funds here in dispute, and they were paid to the trustee. Meanwhile, the Association had assigned to appellant its interest in the payments.

Only the most basic description of property deemed to be collateral for a security interest under Division 9 of the California Commercial Code (hereinafter C.C.C.) is required by C.C.C. § 9402. The test of the sufficiency of the description is whether it would indicate to an interested third party the possible existence of prior encumbrances on the collateral. Biggins v. Southwest Bank, 490 F.2d 1304, 1307 (9th Cir. 1973). Using this standard, we conclude that the term “proceeds” used in the security agreements and financing statements includes the federal subsidy payments in question here.

C.C.C. § 9306(1) defines proceeds broadly as including “whatever is received when collateral or proceeds is sold, exchanged, collected or otherwise disposed of.” To us, such a definition indicates that the word “proceeds” is to be given a flexible and broad content. Furthermore, we assume that the security agreements were drafted with an awareness of the importance of the various forms of federal subsidy payments to the realities of financing a farming operation based upon sugar beets, and that an interested third party could also be expected to know that the crops described were sugar beets and entitled to various conditional subsidy payments under the Sugar Act of 1948. Some of these payments are closely connected with the sale of the sugar beets, being computed on the basis of the amount of sugar in the sugar beets grown on the farm and marketed, and paid to the farmer by the Department of Agriculture in addition to any payment from the purchaser. 7 U.S.C. §§ 1131, 1132. These payments would be “proceeds” under the most grudging interpretation of the security agreement. The other payments are “abandonment payments” based upon the acreage abandoned because of disease. Such payments depend upon the size of the subsidy pool available in a given year and locality. 7 U.S. C. §§ 1131, 1133. Although resembling insurance payments, these subsidy payments flow not from private contract between the debtor and a third party but rather from a government program designed to protect both the United States sugar industry and the welfare of sugar producers. Abandonment payments, like the subsidy payments based on sugar content, are an integral part of the sugar-beet farming business and, when received, are within a broad reading of “proceeds.” Not to include such payments within the term “proceeds” would be to raise distinctions of form over the realities underlying this financing transaction, a result contrary to the intent of the Uniform Commercial Code. See Uniform Commercial Code § 9-110; C. C.C. § 9110; Biggins v. Southwest Bank, 490 F.2d at 1308.

The order of the district court upholding the decision of the referee in bankruptcy is reversed.

      . Cf. Quigley v. Caron, 247 A.2d 94 (Me. 1968); Universal C.I.T. Credit Corp. v. Prudential Investment Corp., 101 R.I. 287, 222 A.2d 571 (1966).

      . See 1947 U.S.Code Cong.Serv. 1685.


author: PER CURIAM.

text:
    Howard D. HENDRICKSON and Marilyn J. Hendrickson, Plaintiffs, Appellants, v. Clark S. SEARS, Defendant, Appellee.
    No. 73-1210.
    United States Court of Appeals, First Circuit.
    Heard Nov. 5, 1973.
    Decided April 30, 1974.

      Daniel J. Gleason, Boston, Mass., with whom Nutter, McClennen & Fish, Boston, Mass., was on brief, for plaintiffs, appellants.
    Vincent Galvin, Boston, Mass., with whom Robert B. Smith and Galvin, Smith & Nordlinger, Boston, Mass., were on brief, for defendant, appellee.
    Before COFFIN, Chief Judge, ALD-RICH and CAMPBELL, Circuit Judges.
   PER CURIAM.

This suit, based on diversity jurisdiction, was instituted in the district court on October 27, 1971 to recover damages incurred as a result of an erroneous title certification in April of 1961, which failed to note a recorded easement, provided by the defendant as attorney for the plaintiffs., The complaint was dismissed on the grounds that applying either the six year statute of limitations applicable to actions in contract, M.G.L. ch. 260 § 2, or the two year statute applicable to actions in tort, M.G.L. ch. 260 § 2A, the suit was time barred. The district court relied on Pasquale v. Chandler, 350 Mass. 450, 215 N.E.2d 319 (1966), holding that in a medical malpractice suit, the cause of action accrues on the date of the act of malpractice. On appeal, the single issue is a question of first impression in Massachusetts law: Does a client’s cause of action against an attorney for negligent certification of title to real estate “accrue” for purposes of M.G.L. ch. 260 § 2A, at the time the certification was given, at the time of discovery of the misrepresentation, or at the time when any misrepresentation should reasonably have been discovered?

Pursuant to Rule 3:21 of the Supreme Judicial Court of Massachusetts, we certified the above stated question to that court for a definitive ruling of law. In its opinion of April 8, 1974 the Supreme Judicial Court ruled that “the cause of action does not accrue until the misrepresentation is discovered or should reasonably have been discovered, whichever first occurs.” Hendrickson v. Sears, Mass. (1974), 310 N.E.2d 131. The court further indicated that “[Wjhere as here the alleged defect in the certified title is a recorded easement . . . [it] is ‘inherently unknowable’ to the client unless he duplicates the attorney’s title search.” Id. at 136. The Court was not called upon to answer whether the appropriate limitations section is § 2 or § 2A.

Here the complaint was filed within two years of date of discovery, June 15, 1970, and was therefore within the limitations period under either § 2 or § 2A. Whether the misrepresentation, though “inherently unknowable”, should reasonably have been discovered earlier, and, if so, whether the limitations period of § 2 or § 2A should apply, we leave to the district court. It is in any event now clear that the complaint was erroneously dismissed.

The order of the District Court is therefore reversed and the cause is remanded for further proceedings.


author: LEWIS R. MORGAN, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellant, v. Adria Smith STANTON et al., Defendants-Appellees.
    No. 73-2266.
    United States Court of Appeals, Fifth Circuit.
    June 10, 1974.
    Rehearing Denied July 17, 1974.
    Nancy L. James, Asst. U. S. Atty., Roby Hadden, U. S. Atty., Tyler, Tex., Eva R. Datz, Atty., Wallace H. Johnson, Asst. Atty. Gen., Jacques B. Gelin, Atty., Appellate Sec., Dept, of Justice, Land & Natural Resources Div., Washington, D. C., for plaintiff-appellant.
    W. G. Walley, Jr., Beaumont, Tex., for defendants-appellees.
    Before DYER, MORGAN and RO-NEY, Circuit Judges.
   LEWIS R. MORGAN, Circuit Judge:

In 1971, the United States filed suit to quiet title on a 77-acre tract in the Sabine National Forest in Texas. 2The United States claimed title to the entire tract under a general warranty deed dated December 27, 1935, and by adverse possession under the three, five, ten and 25-year statutes of Texas (Vernon’s Ann.Civ.St. Arts. 5507, 5509, 5510, 5519). The district court held the United States to be owner of not more than an undivided Yu interest in the land. The United States appeals that decision. We reverse, finding the United States to. be the absolute owner of the entire tract.

This action arose because of the following occurrences: In 1968, Adria Smith Stanton and her husband moved a mobile home onto a portion of the property in question, claiming an undivided Yu interest. The Stantons immediately brought an action for partition against the United States, but it was dismissed upon a motion based on sovereign immunity. Stanton v. United States, 434 F.2d 1273 (5th Cir. 1970). Nevertheless, the Stantons remained on the land, causing the United States to bring this action to quiet title.

The Stantons base their claim on occurrences beginning in the 19th Century. In 1887, John E. Smith purchased the tract in question. Two years later, Smith’s wife Laura died intestate, and under Texas law, her one-half interest in the land passed to their two children, Anna and Obie. Lynch v. Lynch, 130 S. W. 461 (Tex.Civ.App.1910). Smith then remarried and fathered five additional children who later inherited, along with Anna and Obie, two thirds of Smith’s one-half interest in the tract. Slavin v. Greever, 209 S.W. 479 (Tex.Civ.App.—Amarillo, 1919). At this point, Anna and Obie had accumulated title to Yu of the land. In 1910, Obie and Anna executed a deed, to L. E. King, purportedly conveying full title to the tract. King transferred the land to Temple Lumber Company in 1918 through a deed for the entire fee. Temple, in 1935, deeded the tract to the United States, the ownership of which was not challenged until 1968. The Stantons now claim an undivided Yu interest in the land based on Adria Smith Stanton’s being a daughter of John E. Smith’s second marriage.

The district court found that under the laws of Texas the possessory acts by the United States and its predecessor in interest were not sufficient to establish absolute title to the tract. We disagree.

There are at least two theories on which we can base our decision: (1) purported transfer by a co-tenant of the entire fee to a stranger, and (2) adverse possession under the laws of Texas. The facts set out both above and below strongly support both theories.

It is the law in Texas that a conveyance by one co-tenant to a stranger purporting to convey the entire common property, when followed by actual adverse possession, amounts to a disseizin of the non-participating co-tenants; and the recording of such conveyance followed by possession, constitutes notice of the repudiation. Parr v. Ratisseau, 236 S.W.2d 503, 506 (Tex.Civ.App.1971).

As has been stated, two of the co-tenants, Anna and Obie, executed a deed conveying the entire tract in 1910 to King. In 1918, the entire tract was deeded by King to Temple Lumber Company, which, by general warranty deed, conveyed it to the United States in 1935. At that point, the office of the Attorney General checked the title and found it in order. The trial record indicates that none of Smith’s heirs set foot on the land after 1913 until 1968.

Were the acts of the United States and its predecessors in title sufficient to satisfy the prerequisites of adverse possession under the co-tenant theory? There is no doubt that the acts were sufficient. Art. 5515 of the Revised Civil Statutes of Texas, 1925, states:

‘Adverse possession’ is an actual and visible appropriation of the land, commenced and continued under a claim of right inconsistent with and hostile to the claim of another.

When Temple Lumber Company, one of the predecessors in title, purchased the land by recorded deed in 1922, it paid all taxes due, cut timber and otherwise exercised ownership. In 1935, Temple conveyed the tract to the United States, reserving certain mineral rights and the right to cut timber for a 10-year period.

Following the conveyance to the United States, the Forest Service conducted timber stand improvement and the tract was “prescribe burned” twice to eliminate underbrush, briars, bushes and other matter that create litter on the ground attracting destructive insects and generally depreciating the land. About 1935, telephone lines connecting various Forest Service fire towers were put up along existing roads. A service road was constructed in 1936, and by 1966 its annual traffic flow was more than 10,000 vehicles. Also in 1936, the United States leased a portion of the land f<?r a 5-year period to be used for grazing and farming. The Texas Highway Department requested and received permission to build a road across the land, which was completed in 1949. A portion of the land was again leased for grazing and farming from 1951 to 1964. Timber sales by the United States in 1953 were publicly advertised. Advertised sales again took place in 1965 and 1967. The Forest Service posted notices of ownership along both roads and the entire western boundary of the tract adjacent to private property.

During the 1960’s, construction of the Toledo Bend Reservoir caused inundation of one-third of the tract. A memorandum of understanding concerning this flooding was entered into ' by the Forest Service and the Sabine River Authority prior to this inundation.

For what reason then did the trial court refuse to acknowledge the United States’ right to absolute ownership of the land ? In certain special use permits issued by the Forest Service in 1949 and 1955, a clause was included, to-wit: “This permit is subject to all valid claims.” The trial court determined this clause to be an acknowledgement by the United States of the Stanton’s interest in the land. We find such a determination to be untenable for several reasons.

Under Texas law recognition of another’s interest in land sufficient to bar adverse possession must not only be clear and unequivocal, but also such recognition must be specific as to whose interest is acknowledged. Young v. Williams, 80 S.W.2d 399 (Tex.Civ.App. 1938). Evidence at trial showed the clause in question was part of a standard printed form used by the Forest Service for all use permits. Furthermore, the clause could be considered to have referred to the mineral rights reserved by Temple Lumber Company in 1935. There is no evidence that indicates any specific acknowledgement by the United States of any other interest. Without such a specific acknowledgement, no bar to adverse possession occurs. Young, supra.

Even if, however, such an acknowl-edgement could be found, the United States would still be the rightful absolute owner of the land. Texas has at least four statutes which convey title by adverse possession, any of which can be applied to the facts before this court.

The 25-year statute states:

Art. 5519.
No person who has a right of action for the recovery of real estate shall be permitted to maintain an action therefor against any person having peaceable and adverse possession of such real estate for a period of twenty-five years prior to the filing of such action, under claim of right, in good faith, under a deed or deeds, or any instrument or instruments, purporting to convey the same, which deed or deeds or instrument or instruments purporting to convey the same have been recorded in the deed records of the county in which the real estate or a part thereof is situated; and one so holding and claiming such real estate under such claim of title and possession shall be held to have a good marketable title thereto, and on proof of the above facts shall be held to have established title by limitation to such real estate regardless of coverture, minority, insanity or other disability in the adverse claimant, or any person under whom such adverse claimant claims, existing at the time of the accrual of the cause of action, or at any time thereafter. Such peaceable and adverse possession need not be continued in the same person, but when held by different persons successively there must be a privity of estate between them. The adverse possession of any part of such real estate shall extend to and be held to include all of the property described in such deed or instrument conveying or purporting to convey, under which entry was made upon such land or any part thereof, and by instrument purporting to convey shall be meant any instrument in the form of a deed or which contains language showing an intention to convey even though such instrument, for want of proper execution or for other cause is void on its face or in fact.

The facts previously set forth demonstrate the prerequisites of Art. 5519 to have been met, the United States had possessed the land with the title properly recorded for more than 33 years prior to the entry of the Stantons. The predecessors in title and possession to the United States had been there for more than 25 years.

The 10-year statute, Article 5510, is equally applicable, only restricting itself to tracts of not more than 160 acres. Texas has two other adverse possession statutes which need not be discussed here, the question having been decided.

It is our holding that the United States is the exclusive owner of the entire undivided interest in the 77 acres. The judgment of the district court is

Reversed and remanded for entry of an order in accordance with this opinion.

      . The district court’s jurisdiction was based on 28 Ü.S.C. §§ 1345 and 1655.

      . The other one-third of his one-half interest went to John Smith’s then living wife. Scales v. Marshall, 60 S.W. 336 (Tex.Civ. App.1901).

      . Anna and Obie’s original one-half interest in the land inherited from their mother added to the one-seventh interest they inherited from their father equals %iths.

      . Ortiz V. State, 86 S.W. 45, 46 (Tex.Civ.App.1905) aff’d. 99 Tex. 475, 90 S.W. 1084 (1906).

      . Vernon’s Ann.Civ.St. Arts. 5510, 5519. We find it unnecessary to consider the Texas three and five year statutes (Articles 5507 and 5509) because of the result of application of the ten and 25-year statutes.

      . Vernon’s Ann.Civ.St. Art. 5510 states :
      Any person who has the right of action for the recovery of lands, tenements or hereditaments against another having ' peaceable and adverse possession thereof, cultivating, using or enjoying the same, shall institute his suit therefor within ten years next after his cause of action shall have accrued, and not afterward. The peaceable and adverse possession contemplated in this article, as against ,the person having right of action, shall be construed to embrace not more than one hundred and sixty acres, including the improvements or the number of acres actually enclosed, should the same exceed one hundred and sixty acres; but when such possession is taken and held under some written memorandum of title, other than a deed, which fixes the boundaries of the possessor’s claim and is duly registered, such peaceable possession shall be construed to be co-extensive with the boundaries specified in such instrument.


text:
    The FIRST NATIONAL BANK OF MIAMI, Plaintiff-Appellant, v. INSURANCE COMPANY OF NORTH AMERICA, Defendant-Appellee.
    No. 73-3052.
    United States Court of Appeals, Fifth Circuit.
    June 12, 1974.
    Barry R. Davidson, Joseph P. Klock, Jr., Miami, Fla., for plaintiff-appellant.
    Charles F. Mills, South Miami, Fla., for defendant-appellee.
    Before JONES, THORNBERRY and COLEMAN, Circuit Judges.
   PER CURIAM:

On April 13, 1972, with an initial cash deposit of $200, Harriet Clifford opened a checking account with the First National Bank of Miami, plaintiff-appellee. On April 21, a deposit of $125,000 was made in the form of a cheek purportedly drawn by the Apple Canyon Company of Hanover, Illinois, on the Elizabeth State Bank of Elizabeth, Illinois. It appeared to be signed by one Diane Ward, an authorized signatory. The First National Bank of Miami forwarded the check for collection but subsequently received a wire that the check in question was being returned for insufficient funds. Due to the receipt of the wire a freeze was placed on the Clifford account on April 25. Approximately seven days later, evidently on instructions from Ms. Clifford, plaintiff re-deposited the check for collection.

In the interim, Ms. Clifford had, on April 14, drawn a check in the amount of $42,056.50 payable to W. F, Fitzim-mons and Co., Inc., and Industrial Steel Construction, Inc. That check was presented for payment on May 1 and was honored that same day.

On May 4 First National Bank of Miami telephoned Elizabeth State Bank and was informed that the check would be “coming back”. Six days later, Miami received the instrument with standard return form attached. This form had checked the “Insufficient Funds” category and contained the printed phrase “Signature not like on file”. Upon these developments plaintiff-appellant filed a Proof of Loss form with the defendant-appellee, claiming $41,858.50 in damages ($42,056.50, minus Ms. Clifford’s balance of $198.00), plus attorneys’ fees and other costs and expenses, less the $20,000 deductible of the Deductible Rider attached to the Bond. The claim was rejected, and this litigation followed.

After discovery was completed, cross motions for summary judgment were filed. The motion of the Insurance Company of North America was granted ; the motion of the Bank was denied. We reverse, with directions.

The Bank’s Blanket Bond contained the following provisions:

Insuring Agreement D: (D) Loss through FORGERY OR ALTERATION of, on or in any checks, drafts, acceptances, withdrawal orders or receipts for the withdrawal of funds or Property certificates of deposit, letters of credit, warrants, money orders or orders upon public treasuries, or loss (1) through transferring, paying or delivering any funds or Property or establishing any credit or giving any value on the faith of any written instructions or advices directed to the Insured and authorizing or acknowledging the transfer, payment, delivery or receipt of funds or Property, which instructions or advices purport to have been signed or endorsed by any customer of the Insured or by any banking institution but which instructions or advices either bear the forged signature or forged endorsement or have been altered without the knowledge and consent of such customer or banking institution (telegraphic, cable or teletype instructions or advices, as aforesaid, sent by a person other than the said customer or banking institution purporting to send such instructions or advices shall be deemed to bear a forged signature), or (2) through the payment by the Insured of promissory notes which are payable at the Insured or which are or purport to be notes payable at the Insured under instructions of any depositor thereof, and which are actually paid by the Insured out of funds on deposit with it, and which prove to be forged or altered or which bear forged endorsements. Any check or draft (a) made payable to a fictitious payee and endorsed in the name of such fictitious payee or (b) procured in a face transaction with the maker or drawer thereof or with one acting as agent of such maker or drawer by anyone impersonating another and made or drawn payable to the one so impersonated and endorsed by anyone other than the one impersonated, shall be deemed to be forged as to such endorsement. Mechanically reproduced facsimile signatures are treated the same as handwritten signatures.

Exclusions Section 1. This bond does not cover:

(a) loss effected directly or indirectly by means of forgery or alteration of, or in any instrument, except when covered by Insuring Agreement (A), (D), (E), (F), or (G). ******
(d) loss resulting from the complete or partial non-payment of, or default upon,
(1) any loan or transaction in the nature of, or amounting to, a loan made by or obtained from the insured, or
(2) any note, account, agreement or other evidence of debt assigned or sold to, or discounted or otherwise acquired by, the insured.

whether procured in good faith or through trick, artifice, fraud or false pretenses unless such loss is covered under Insuring Agreement (A), (D), or (E); or loss resulting from payments made or withdrawals from any depositor’s account by reason of uncollected items of deposit having been credited by the insured to such account, unless such payments are made to, or withdrawn by, such depositor or representative of such depositor who is within the office of the insured at the time of such payment or withdrawal, or unless such loss is covered under Insuring Agreement (A).

After reviewing the evidence and receiving supporting memoranda, the District Judge held that, interpreted together or as a whole, there was no ambiguity in the Blanket Bond and that the sole proximate cause of the loss was due to plaintiff’s extension of funds on an uncollected item of deposit. This, he felt, fell within Exclusion § 1(d) of the Bond.

Plaintiff’s first assignment or error cites the general principle of insurance law requiring strict interpretation of such contracts and a resolution of ambiguous provisions in favor of the insured. Substantial support for plaintiff’s position was accomplished by the introduction of an “Analysis of Changes”, prepared by the Surety Association of America in conjunction with the revision of its Bankers Blanket Bond, Standard Form 24 — the bond in question here.

In 1969, due to certain court decisions interpreting the then existing contract to include coverage for check “kiting”, the Association added the following language to Exclusions Section 1(d):

. . . or loss resulting from payments made or withdrawals from any depositor’s account by reason of uncollected items of deposit having been credited by the Insured to such account, unless such payments are made to, or withdrawn by such depositor or representative of such depositor who is within the office of the Insured at the time of such payment or withdrawal, or unless such loss is covered under Insuring Agreement (A).

According to the Analysis, the following was the reason for the change:

LOAN EXCLUSION AND CHECK KITING EXCLUSION—

The Loan Exclusion Clause has been clarified by including reference to the following:

“(1) any loan or transaction in the nature of, or amounting to, a loan made by or obtained from the Insured, or
“(2) any note, account, agreement or other evidence of debt assigned or sold to, or discounted or otherwise acquired by, the Insured.”

In addition, a Check Kiting Exclusion has been added reading as follows:

“loss resulting from payments made or withdrawals from any depositor’s account by reason of uncollected items of deposit having been credited by the Insured to such account, unless such payments are made to, or withdrawn by, such depositor or representative of such depositor who is within the office of the Insured at the time of such payment or withdrawal, or unless such loss is covered under Insuring Agreement (A).”

The Bank’s second assignment takes issue with the Court’s finding of proximate cause of the loss. Steadfastly adhering to its position of no relation, the Bank contends it must absorb only losses occasioned by credit risks, the reason being that in true credit risk transactions plaintiff has the right of a holder in due course to initiate suit against the drawer of the dishonored bill, whereas, when losses are occasioned by forgery, the plaintiff has no right of action against the drawer.

The main thrust of the Insurance Company’s argument is that the loss now before us was precipitated by the extension of funds on an uncollected item of deposit. It contends that whether the check was drawn on insufficient funds or in the commission of a forgery is irrelevant — by paying out the money the Bank assumed a credit risk and thus the Bond did not cover it. In other words, construing the contract of insurance as a whole, there is no ambiguity and its language supports the interpretation given it by the lower court.

This, of course, collides with the Bank argument that § 1(d) applies exclusively to credit transactions and does not exclude losses occasioned by forgery.

There is virtually unanimous acceptance of the proposition that the interpretation of a contract is a question of law, not fact, and, therefore, not restricted to review under the “clearly erroneous” rule. Kell v. Gross, 5 Cir., 1949, 171 F.2d 715; Frost v. Davis, 5 Cir., 1965, 346 F.2d 82; Republic Pictures Corp. v. Rogers, 9 Cir., 1954, 213 F.2d 662, cert. denied, 348 U.S. 858, 75 S.Ct. 83, 99 L.Ed. 676; Pekovich v. Coughlin, 9 Cir., 1958, 258 F.2d 191, 17 Alaska 691; Wooddale, Inc. v. Fidelity and Deposit Co. of Maryland, 8 Cir., 1967, 378 F.2d 627.

What were the terms of the Bond?

1.

Insuring Agreement D extends coverage to losses resulting from the forgery of checks, etc.

2.

Exclusion § 1(a) excludes losses due to forgery not otherwise covered by Insuring Agreement D, etc.

3.

Exclusion § 1(d) excludes losses resulting from the extension of credit on an uncollected item of deposit.

The $125,000 check deposited on April 21 was a forgery. It, therefore, was clearly within the provisions of the Insuring Agreement D.

The $42,056.50 check in issue was written by Ms. Clifford on April 14. A freeze had been placed on her account on April 25, when it was learned that, at least for insufficient funds, the check was no good. Nevertheless, the Bank paid her $42,056.50 check on May 1. This act would fall within Exclusion § 1(d) if it had been merely an extension of credit on an uncollected item of deposit, but Exclusion § 1(d) is silent as to forgeries, clearly included in Insuring Agreement D.

This, in our view, inescapably raises an ambiguity which eluded the notice of the District Court. It is an ambiguity which the Insurance Company could have easily avoided in the drafting of its contract of coverage.

This being a diversity case, on a Florida insurance contract, we look to the law of Florida, which seems to be quite clear:

“Where the terms of an insurance policy will bear two interpretations, that one will be adopted which sustains the claim for indemnity. Queen Insurance Co. v. Patterson Drug Co., 73 Fla. 665, 74 So. 807, L.R.A.1917D, 1091; National Surety Co. v. Williams, 74 Fla. 446, 77 So. 212; Elliott v. Belt Automobile Association, 87 Fla. 545, 100 So. 797; Aetna Casualty & Surety Co. v. Cartmel, 87 Fla. 495, 100 So. 802, 35 A.L.R. 1013. A contract of insurance . . . will be construed liberally as against the insured and strictly as against the company. Martin v. Sun Insurance Office of London, 83 Fla. 325, 91 So. 363. Provisions of a policy limiting or avoiding liability are construed strictly against the insurer and liberally in favor of the insured. Palatine Insurance Co. v. Whitfield, 73 Fla. 716, 74 So. 869.”

Poole v. Travelers Insurance Co., 1938, 130 Fla. 806, 179 So. 138, 141-142.

Accordingly, there should have been summary judgment for the Bank.

The Judgment of the District Court is reversed, and remanded for the entry of judgment not inconsistent with this opinion.

Reversed and remanded.


text:
    William H. BERRY, Plaintiff-Appellee-Cross Appellant, v. SLADCO, INC., et al., Defendants-Appellants-Cross Appellees. CONTINENTAL OIL CO., INC., Defendant-Third Party Plaintiff-Appellee, v. DIAMOND M. DRILLING COMPANY, Third Party Defendant, Travelers Insurance Company, Inter-venor-Appellee.
    No. 73-3023.
    United States Court of Appeals, Fifth Circuit.
    June 7, 1974.

      Wood Brown, III, New Orleans, La., for appellant.
    John R. Martzell, New Orleans, La., for Berry.
    Frank C. Allen, Jr., New Orleans, La., for Continental Oil & Travelers Ins. Co.
    Sam A. Le Blanc, III, New Orleans, La., for Diamond Drilling.
    Before GEWIN, GOLDBERG and CLARK, Circuit Judges.
   GEWIN, Circuit Judge:

I

William H. Berry commenced this personal injury action against Sladco, Inc. (Sladco) pursuant to the Outer Continental Shelf Lands Act, 43 U.S.C. § 1331 et seq. (1970) (Lands Act), for compensatory damages he claims to have sustained as a result of the alleged defective condition of the hydraulic casing tongs owned and furnished by Sladco pursuant to a lease for the purpose of casing a drill hole on an offshore platform in the Gulf of Mexico. Berry was an employee of the Louisiana Casing Crew & Rental Service Corporation (Louisiana Casing Crew) which had contracted with the Continental Oil Company (Continental), the lessor of the platform and drilling site, to ease the drilling hole. Additionally, Sladco had contracted with Continental to supply tongs and a tongs operator which were necessary for the casing operation.

Following a trial on the issue of Slad-co’s negligence and the damages suffered by Berry, a jury returned a verdict against Sladco and awarded Berry $100,000.00 in compensatory damages in addition to an award for the medical expenses he had incurred as a result of his injuries. Thereafter, Sladco filed a motion for judgment notwithstanding the jury’s verdict, a motion for remittitur or in the alternative a new trial, and a motion to limit interest on the amount awarded by the jury’s verdict from the date of judgment pursuant to 28 U.S.C. § 1961 (1970), instead of the date of judicial demand as provided by Louisiana law, L.R.S. 13:4203. Additionally, Slad-co requested that the court retain jurisdiction over any claim which Sladco might wish to assert against Continental. Continental, an original party-defendant, had been non-suited prior to trial. The trial court denied all the motions except it did order that interest would accrue from the date of judgment.

Sladco has appealed and presents the following issues for our review. First, it asserts that the district court erred when it refused to submit for the jury’s consideration a proffered instruction which Sladco characterizes as the law applicable to the doctrine of assumption of risk in Louisiana. All parties agree that this issue is governed by Louisiana law since the Outer Continental Shelf Lands Act, supra, looks to the applicable state law on, substantive issues unless there is controlling federal law on the particular issue involved. Second, Slad-co contends that the district court erred in failing to grant its motion for judgment notwithstanding the verdict since Berry failed to prove that the tongs were defective when they left its control and further that Berry’s proof is infirm since he failed to show that Sladco knew or should have known that the tongs were defective. Third, the district court abused its discretion by refusing to retain jurisdiction over Continental. Finally, Sladco asserts that the trial court should have granted its motion for re-mittitur or in the alternative a new trial since the damages awarded by the jury are excessive. Berry has cross appealed on the interest issue. It is his contention that the district court should have granted interest from the time of judicial demand as permitted under Louisiana law. We affirm.

II

In this case, Louisiana Casing Crew contracted with Continental to provide casing for the well hole on Continental’s stationary platform located in the Gulf of Mexico. Berry was employed by Louisiana Casing Crew as a general casing hand and relief man. Berry was completely familiar with the various jobs of the crew.

One of the last steps in the construction of an oil and gas well before it is placed into production is the installation of casing. The casing operation results in the insertion in the well hole of a large diameter pipe which serves as a protective covering of the drill pipe. Once the casing procedure has begun, it is necessary to continue it until completion since there is a grave danger of the casing sticking in the well if the operation ceases for any extended period of time. Therefore an entire casing crew cannot take a “break” for lunch and rest periods. Instead each member of the crew takes a break separately. To provide for individual breaks and to prevent boredom which would result from continued operation in the same position over a long period of time, the members of a casing crew usually rotate from one position to another.

The necessary mechanical devices for the installation of casing pipe include tongs which are large wrenches employed to screw the successive joints of the casing pipes together as they are inserted into the well hole. Because Louisiana Casing Crew did not have large enough tongs to attach the pipes in the instant case, it was necessary for Continental to acquire the tongs from another source. Accordingly, Continental entered into a lease agreement with Sladco whereby Sladco would supply tongs and a tongs operator.

In the early morning hours of July 4, 1969, the casing operation began. Luther Arnold, Sladco’s tongs operator, set up the tongs on two fifty-five gallon, five-foot high drums over the well hole. The tongs supplied by Sladco were over eight years old and from the beginning of their use in this operation, it was apparent that they were defective. Rather than securely biting the pipe which is necessary for a successful attachment of one pipe to another, the tongs began to slip. Apparently, the jaws of the tongs were defective which prevented firm attachment and resulted in the slipping action. Several times Arnold was required to replace various parts of the tongs in an attempt to inhibit the slipping.

In late afternoon, Arnold decided to take his lunch break and Berry took his place at the tongs so the casing operation could continue. This was normal practice since the casing operation could not be interrupted for any extended period of time. In the event that the tongs slip, the operator is required to release the spring loaded throttle which allows the jaws of the tongs to return to a neutral position automatically. If the tongs are permitted to slip to the snub line that is placed in such a fashion as to keep the tongs stationary, they will snap back in a violent reaction. While Berry was operating the tongs, they slipped. When he attempted to use the throttle, it jammed and the tongs hit the snub line, snapped back and knocked Berry from the five-foot high barrel or drum on which he was standing resulting in severe injury to his right foot.

Ill

At trial, Sladco requested the court to give the following instruction for the jury’s consideration in its determination of liability:

DEFENDANT’S CHARGE 10
You are charged that a person who voluntarily exposes himself to a known danger assumes the risk, and is guilty of contributory negligence if injured.
This doctrine of assumption of the risk applies where the plaintiff, who knows of a particular peril, voluntarily enters into a particular activity with full knowledge of the danger of his doing so. Under the circumstances, even though the defendant might be negligent, plaintiff’s recognition of this negligence and his choice to expose himself [to] any hazard created by this negligence bars his recovery.

The trial court refused Sladco’s tendered instruction on assumption of risk and Sladco contends that it erred in this regard. A reading of the record and reference to applicable law convinces us that the trial court was correct.

First, the proffered instruction equates assumption of risk with contributory negligence and as such would have been confusing to the jury. Second, Sladco’s primary affirmative defense at trial was an attempt to show that Berry had been guilty of contributory negligence in the operation of the tongs. Sladco relied exclusively on this defense in its answer to Berry’s complaint, its opening statement to the jury, its questioning of various witnesses and as' grounds for a directed verdict after all the evidence had been submitted for the jury’s consideration. By the jury’s answers to the special interrogatories presented for its finding of contributory negligence on the part of Berry, the jury found no negligence on his part. Third, the evidence shows that although Berry was aware that the tongs had been previously operating in an improper manner, he was not aware that the throttle on the tongs would stick thus preventing them from being placed in a neutral position once the slipping began. The evidence shows that the failure of the throttle to function properly in combination with other malfunctions of the tongs was the actual cause of the acci.dent and as the jury concluded not the negligent operation of the tongs by Berry. Thus Berry did not assume the risk of an open throttle and the Louisiana hybrid of the doctrine of assumption of risk is inapplicable. See Langlois v. Allied Chemical Corporation, 258 La. 1067, 249 So.2d 133 (1971). Cf. Chaney v. Brupbacher, 242 So.2d 627, 632 (La.App.1970). A complete reading of the instructions that were given by the district court leads us to the conclusion that appellant has suffered no harm by its failure to include appellant’s confusing and misleading instruction on assumption of risk. See Brents v. Freeman’s Oil Field Service, 448 F.2d 601 (5th Cir. 1971).

Similarly, appellant’s other three contentions are equally without merit. There was sufficient evidence from which the jury could infer that the tongs left the control of Sladco in defective condition and that Sladco knew or should have known of the defective condition of the tongs. Furthermore the evidence supports the jury’s damage award and thus Sladco was not entitled to a new trial or remittitur on this ground. Berry introduced extensive evidence as to time lost from work, reduced wages after the accident and the resultant incapacity of his foot following the accident. His proof amply supports the jury’s award.

Berry had originally joined Continental Oil Company as a party defendant in his suit seeking damages. Furthermore, Sladco filed a cross claim against Continental seeking indemnity for any liability which it might incur as a result of Berry’s suit. On the eve of trial, both Berry and Sladco agreed to dismiss their respective actions against Continental and were content to rest the disposition of Berry’s case on the liability which might be proved against Sladco alone. After the jury returned its verdict, Sladco filed a post trial motion seeking to. have the district court “retain” jurisdiction over Continental for any claims which Sladco might wish to assert against it. The trial court refused to “retain” jurisdiction. Sladco now contends that the trial court erred in refusing to “retain” jurisdiction. No abuse of the trial court’s sound discretion was evidenced by its refusal to retain jurisdiction over Continental since previously Sladco had voluntarily dismissed its cross claim against Continental. We fail to perceive merit in such a contention.

Sladco further asserts in connection with its retention of jurisdiction argument, that counsel for Berry contended in his closing argument that any negligence on the part of Luther Arnold could be imputed to his employer, Sladco, as a basis for holding it liable. No instructions were given by the court which would have permitted the jury to base liability purely on the actions of Sladco’s employee Arnold. There was no objection by Sladco to the references made by Berry’s counsel to the negligence of Arnold. Moreover, the great weight of the evidence clearly established a sufficient basis to support a conclusion by the jury that the tongs were defective at the time they were leased to Continental. In these circumstances it is our opinion that no prejudicial harm could have resulted to the substantial rights of Sladco from counsel’s references to the alleged negligence of Arnold, even assuming as Sladco argues, that there was some- indication in the evidence that Arnold was the “borrowed servant of Continental.” Indeed the record clearly demonstrates that the trial proceeded against Sladco alone and Continental was not involved in the actual trial of the case. Moreover, the “borrowed servant” contention asserted on this appeal was not a contested issue during the trial.

IV

Berry has appealed on the issue of the proper time period to be employed in computing interest on the jury's award of damages to him. He contends that interest should accrue from the time of judicial demand as is provided under Louisiana law, L.R.S. 13:4203, since this action was brought under the Outer Continental Shelf Lands Act, 43 U.S.C. § 1331 et seq. He maintains that when an action is brought under the Lands Act, applicable state law is controlling on the interest issue unless it contradicts federal enactments on the issue of judgment interest. By its judgment, the district court awarded interest from the date of judgment as provided by 28 U.S.C. § 1961, instead of the more favorable Louisiana interest statute which permits interest from the date of judicial demand. Berry contends that the court erred since the Louisiana law does not conflict with federal law but complements the federal interest statutes by providing a more complete remedy.

Resolution of Berry’s disingenuous argument is controlled by the Supreme Court’s opinion in Rodrigue v. Aetna Casualty and Surety Company, 395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d 360 (1969). In Rodrigue, the Court noted the conditions which should exist before a district court may properly look to state jurisprudence with respect to a particular issue of law which may arise when an action is brought under the Lands Act. The Court made clear that state law should be applied only where there is no controlling federal law on the issue involved. The Court stated:

The purpose of the Lands Act was to define a body of law applicable to the seabed, the subsoil, and the fixed structures such as those in question here on the outer Continental Shelf. That this law was to be federal law of the United States, applying state law only as federal law and then only when not inconsistent with applicable federal law, is made clear by the language of the Act. Section 3 makes it the “policy of the United States” that the affected areas “appertain to the United States and are subject to its jurisdiction, control, and power of disposition.” Section 4 makes the “Constitution and laws and civil and political jurisdiction of the United States” apply “to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction located within a State.” Since federal law, because of its limited function in a federal system, might be inadequate to cope with the full range of potential legal problems, the Act supplemented gaps in the federal law with state law through the “adoption of State law as the law of the United States.” Under § 4, the adjacent State’s laws were made “the law of the United States for [the relevant subsoil and seabed] and artificial islands and fixed structures erected thereon,” but only to “the extent that they are applicable and not inconsistent with * * * other Federal laws.” (Emphasis added)

395 U.S. at 355-356. The tenets of Ro-drigue make firm the conclusion that 28 U.S.C. § 1961 controls the applicable time period for determining interest in this case. Section 1961 provides in relevant part that, “interest shall be calculated from the date of the entry of the judgment, at the rate allowed by State law.” (emphasis added) This is a positive statement of federal law, obligatory in its terms, and as such is controlling in an action brought under the Lands Act. See Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). Moreover, permitting interest to accrue from judicial demand would certainly be inconsistent with the result provided by Section 1961. The district court was correct in limiting interest from the date of its judgment.

Accordingly, the judgment of the district court is affirmed.

      . The record is not entirely clear as to the procedural maneuvers which took place on the eve of the trial. The record does indicate that the plaintiff dismissed his claim against Continental Oil Company and elected to proceed against Sladco alone. There appears to have been no objection to the dismissal on the part of Sladco. In its brief Continental asserts without contradiction on the part of Sladco that at the time plaintiff dismissed his claim against Continental Oil Company, Sladco also dismissed its cross-claim against Continental Oil Company and indicated to the trial judge that Sladco would go “head and head” against plaintiff. It is further asserted in the brief that at the same time Continental Oil Company dismissed its claim for indemnity and/or contribution against the drilling company. The witnesses for the drilling company and Continental Oil Company together with their attorneys left the court and did not participate in any of the proceedings. In a post trial memorandum filed in the district court, appendix page 348, counsel for Sladco asserted that there “did not seem to be any way that Continental could be successfully held in the litigation. Accordingly, at that juncture plaintiff’s counsel non-suited Continental and the trial proceeded ‘one on one’ between plaintiff and Sladco.”