author: ALDISERT, Circuit Judge.

text:
    The KANSAS STATE BANK AND TRUST COMPANY, Conservator of the Estate of Leon Cornell Van Vessum, a minor, Plaintiff-Appellee, v. OLD AMERICAN INSURANCE COMPANY, Defendant-Appellant.
    No. 73-1401.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted Nov. 12, 1973.
    Decided Feb. 5, 1974.

      Jack Peggs of Smith, Shay, Farmer & Wetta, Wichita, Kan., for plaintiff-appellee.
    J. L. Weigand, Jr., of Weigand, Curfman, Brainerd, Harris & Kaufman, Wichita, Kan., for defendant-appellant.
    Before SETH, ALDISERT , and DOYLE, Circuit Judges.

       Of the Third Circuit, sitting by designation.

   ALDISERT, Circuit Judge.

Presented in this diversity action, controlled by principles of Kansas law, is the question of whether an insurance policy providing for loss by “being struck or run over by any automobile” covers a loss sustained by being struck by a motorcycle. Having acquired jurisdiction after removal from the state court at the behest of the insurance company, the district court, on stipulated facts, interpreted the policy, found coverage to exist and granted summary judgment in favor of plaintiff. The insurance company has appealed. We reverse.

The adjudicative facts are set forth in the district court’s opinion:

The insured Jean K. Hunt, was struck by a 1970 Yamaha 175 c.c. M/C motorcycle while attempting to cross the street in the 300 block, North Coast Highway, Laguna Beach, California, on July 24, 1970. As a result of head injuries sustained in the accident, she died shortly thereafter. Under the policy issued by the defendant, the insured was protected against losses caused by accidental bodily injuries sustained in the following manner:
“1. While the Insured as a passenger or driver is riding in, entering, or alighting from, any private passenger automobile (whether or not owned by the Insured), or
2. While the Insured as a passenger ... is riding in, entering, or alighting from, any land, air, or water conveyance then engaged as a licensed common carrier of passengers for hire, or
3. By being struck or run over by any automobile or common carrier conveyance while the Insured is a pedestrian on any public street or highway. . . .”
For the purposes of the policy, automobile is defined as a “land vehicle of the type commonly and ordinarily known and referred to as an ‘automobile,’ and private passenger automobile . . . [is defined as] a ‘private automobile designed primarily for transporting persons.’ ” On August 13, 1971, plaintiff formally filed claimant’s proof of accidental death and a certified copy of Jean K. Hunt’s death certificate in accordance with the proof of loss provisions of the policy. On August 19, 1971, the defend- and denied coverage on the ground that a motorcycle was not an automobile as that term was defined in the policy. The dispute between the parties is centered on whether the term “automobile” as it is defined in the policy clearly excludes motorcycles.

The district court reasoned that the term “automobile” is broad enough- to include all forms of self-propelling vehicles; recognized that “[a] motorcycle is not customarily considered an automobile—the distinction being a motorcycle is a two-wheeled, as opposed to a four-wheeled vehicle”; and found that the “definition of ‘private passenger automobile’ describes what the Court feels an average person would described [sic] as an automobile, i. e., a four-wheeled vehicle designed primarily to carry passengers.”

But the court was impressed with the policy’s distinction between “automobile” and “private passenger automobile,” and found that “automobile” describes “a more extensive class of vehicles.” To hold otherwise, it reasoned, “would render the term [‘private passenger automobile’] superfluous.” It concluded that the “primary risk contemplated by the provision clearly appears to be that of a pedestrian exposed to motor vehicle traffic” and that “any ordinary insured would consider himself protected under this provision against being struck by any motor vehicle likely to use the streets.”

Each party has cited numerous Kansas cases as authority for supporting his position or negating that of his adversary. Unfortunately, none of these cases interprets the precise language at issue in these proceedings. As Justice Holmes once warned: “[E]very question of construction is unique, and an argument that would prevail in one case may be inadequate in another.” Thus, it is important to emphasize what is not before us. This is not a case where the policy contains no definition of the term “automobile”. Nor is the term defined as “the motor vehicle or trailer-described in this policy” as in Western Casualty & Surety Company v. Budig, supra. Here the policy contains a specific definition: “As used in this policy, automobile means a land vehicle of the type commonly and ordinarily known and referred to as an “automobile’ . . . . ”

A review of the authorities discloses that the Kansas Supreme Court respects the generally accepted standards for interpreting insurance contracts. That court has accepted as a threshold determinant our expression in Thomas v. Continental Casualty Company, 225 F.2d 798, 801 (10th Cir. 1955) :

All ambiguities will be resolved against the insurer, but the insured is charged with the plain ordinary meaning of inartistic words, and we will not torture words to import ambiguity where ordinary meaning leaves no room for such. * * * Words do not become ambiguous simply because lawyers or laymen contend for different meanings, or even though their construction becomes the subject matter of litigation. [Citation omitted.]

Kansas Farm Bureau Insurance Company v. Cool, supra, 471 P.2d at 356; and has emphasized:

If the language [of an insurance policy] when given its everyday commonly accepted meaning is clear and specific in presenting the subject matter at hand, the objective to be accomplished, the burdens assumed, and the benefits to be enjoyed or received, then the terms of the policy cannot be said to be doubtful of meaning or conflicting in terms. Under these circumstances, courts are not at liberty to indulge in a construction that would give an unnatural meaning to the language in order to accomplish results that could not be shown to have been in the minds of the parties.

Ibid., 471 P.2d at 356-357, citing Ferguson v. Phoenix Insurance Company of New York, 189 Kan. 459, 370 P.2d 379 (1962).

Thus, the polestar to guide our inquiry is one of the fundamentals urged by Wigmore: “the standard of the community, or popular standard, meaning the common and normal sense of words.”

We have been taught by Holmes that “each party to a contract has notice that the other will understand his words according to the usage of the normal speaker of English under the circumstances, and therefore cannot complain if his words are taken in that sense,” and that “[y]ou cannot prove a mere private convention between the two parties to give language a different meaning from its common one. [A]n artificial construction cannot be given to plain words by express agreement. . . . ”

Given this as the recognized standard of interpretation, it appears that we have a case of a fortiori proportions because this insurance policy commands us to limit our consideration to “a land vehicle of the type commonly and ordinarily known and referred to as an ‘automobile’.” Thus we not only have a standard of interpretation requiring common and ordinary meaning, but a contract defining the word in those terms.

As a starting point we agree with the district court that a “motorcycle is not customarily considered an automobile—the distinction being a motorcycle is a two-wheeled, as opposed to a four-wheeled vehicle.” We must then determine whether there are expressions of art or special nuances in the insurance contract to permit an interpretation “outside the hard core of standard instances or settled meaning,” described by Professor Hart in his classic debate with Professor Fuller as the “problems of the penumbra.”

The district court placed the term “automobile” within the penumbra by a process we find difficult to accept. It compared provision (3) of the policy, which is relevant to these proceedings, with provision (1) which is not. Provision (1) relates to losses occurring as a passenger or driver of a “private passenger automobile”; provision (3) relates to losses by being struck or run over by an “automobile” or “common carrier conveyance”. Provision (2) is distinct from (1) and (3) in that it relates to losses occurring as a passenger of “any land, air or water convenance then engaged as a licensed common carrier. . . . ” There is a rational explanation for the use of these various terms. To say, as did the district court, that the definition of “private passenger automobile” would be superfluous unless “automobile” in provision (3) is held to mean all motor vehicles is to tortur.e plain meaning.

We think it obvious that coverage under (3) extends to any automobile, whether or not it is a “private passenger” automobile. Additionally, this provision extends to a “common carrier conveyance” such as a bus or trolley car. By its very terms, coverage under (1) is much more limited than coverage under (3). While “automobile” as used in (3) covers a more extensive class of automobiles than the “private passenger automobile” described in (1), we cannot agree with the district court that it covers “a more extensive class of [motor] vehicles.”

When the meaning is plain— plain by the standard of the community and the ordinary reader—no deviation, without rational justification, is permitted. The most recent expression of the Kansas Supreme Court states: “Normally the word automobile when used in the popular sense would exclude motor vehicles such as motorcycles.” Western Casualty & Surety Company v. Budig, supra, 516 P.2d at 941. We find no difficulty with the ordinary meaning of the policy language. It therefore does not become necessary to invoke the time honored Kansas rule of construing ambiguous or conflicting provisions adversely to the draftsman, or to embark on a semantical excursion into the “problems of the penumbra.” We find the language to fall, in Hart’s phrase, within “a core of settled meaning.” It is difficult to disagree with Justice Noah Swayne’s remark a century ago: “If the language be clear it is conclusive. There can be no construction where there is nothing to construe.” As we said in Thomas v. Continental Casualty Company, supra, “we will not torture words to import ambiguity where ordinary meaning leaves no room for such.”

The district court found, and properly so, that “[a] motorcycle is not customarily considered an automobile— the distinction being a motorcycle is a two-wheeled, as opposed to a four-wheeled vehicle.” It should have stopped there and entered summary judgment for the defendant.

The judgment of the district court is reversed and the proceedings remanded with a direction to enter judgment in favor of appellant.

      . Western Casualty & Surety Company v. Budig, Kan., 516 P.2d 939 (1973) ; Kansas Farm Bureau Insurance Company v. Cool, 205 Kan. 567, 471 P.2d 352 (1970) ; Clark v. Prudential Insurance Company of America, 204 Kan. 487, 464 P.2d 253 (1970), and cases cited therein.

      . United States v. Jin Fuey Moy, 241 U.S. 394, 402, 36 S.Ct. 658, 659, 60 L.Ed. 1061 (1916).

      . The Kansas Supreme Court has explicitly recognized a distinction between cases where “automobile” is used as the broader generic term “motor vehicle” and those where “automobile” is more narrowly used. See, e. g., Western Casualty & Surety Company v. Budig, supra, 516 P.2d at 942: “The appellant cites cases from Arkansas, Pennsylvania, Tennessee and other states which hold that a motorcycle is not an automobile under the provisions of certain insurance policies. We have examined those cases and note that the word ‘automobile’ was- not defined in those policies by using the broader generic term ‘motor vehicle’.”

      . “[T]he possible standards fall roughly into four classes,—the standard of the community, or popular standard, meaning the common and normal sense of words; the local standard, including the special usages of a religious sect, a body of traders, an alien population, or a local dialect; the mutual standard, covering those senses which are peculiar to both or all the parties to a transaction, but shared in common by them; and the individual standard of one party to an act, as different from that of the other party or parties, if any.” IX Wigmore on Evidence, at 185-186 (1940).

      . Holmes, The Theory of Legal Interpretation, 12 Harv.L.Rev. 417, 419 (1899). (Citation omitted.)

      . Goode v. Riley, 153 Mass. 585, 28 N.E. 228 (1891) Holmes, J.

      . A factual predicate of the Hart-Fuller debate was the interpretation of the word “vehicle” : “A legal rule forbids you to take a vehicle into the public park. Plainly this forbids an automobile, but what about bicycles, roller skates, toy automobiles? What about airplanes? Are these, as we say, to be called ‘vehicles’ for the purpose of the rule or not? If we are to communicate with each other at all, and if, as in the most elementary form of law, we are to express our intentions that a certain type of behavior be regulated by rules, then the general words we use—like ‘vehicle’ in the case I consider—must have some standard instance in which no doubts are felt about its application. There must be a core of settled meaning, but there will be, as well, a penumbra of debatable cases in which words are neither obviously applicable nor obviously ruled out.” n.L.A. Ilart, Positivism and the Separation of Law and Morals, 71 Harv.L.Rev. 593, 607 (1958).
      Professor Puller responded:
      “Even in situations where our interpretive difficulties seem to head up in a single word, Professor Hart’s analysis seems to me to give no real account of what does or should happen. In his illustration of the ‘vehicle,’ although he tells us this word has a core of meaning that in all contexts defines unequivocally a range of objects embraced by it, he never tells us what these objects might be. If the rule excluding vehicles from parks seems easy to apply in some cases, I submit this is because we can see clearly enough what the rule ‘is aiming at in general’ so that we know there is no need to worry about the difference between Fords and Cadillacs. If in some cases we seem to be able to apply the rule without asking what its purpose is, this is not because we can treat a directive arrangement as if it had no purpose. It is rather because, for example, whether the rule be intended to preserve quiet in the park, or to save carefree strollers from injury, we know, ‘without thinking,’ that a noisy automobile must be excluded.
      “What would Professor Hart say if some local patriots wanted to mount on a pedestal in the park a truck used in World War II, while other citizens, regarding the proposed memorial as an eyesore, support their stand by the ‘no vehicle’ rule? Does this truck, in perfect working order, fall within the core or the penumbra?” Fuller, Positivism and Fidelity to Law—A Reply to Professor Hart, 71 Harv.L.Rev. 630, 663 (1958).

      . United States v. Hartwell, 6 Wall. 385, 396, 18 L.Ed. 830 (1868).


source: Caselaw Access Project

author: JONES, Circuit Judge:

license: Public Domain

text:
    The UNITED STATES of America, Plaintiff-Appellee, v. Nigel FANCUTT et al., Defendants-Appellants.
    Nos. 73-1410 to 73-1412.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted Oct. 16, 1973.
    Decided Feb. 5, 1974.
    Rehearing Denied Feb. 27, 1974.

      J. Terry Wiggins, Denver, Colo. (James L. Treece, U. S. Atty., J. Terry Wiggins, Asst. U. S. Atty., Denver, Colo., on the brief), for plaintiff-appellee.
    Ronald A. White, Aurora, Colo., for defendants-appellants.
    Before LEWIS, Chief Judge, and JONES and McWILLIAMS, Circuit Judges:

       Of the Fifth Circuit, sitting by designation.

   JONES, Circuit Judge:

The appellants, Nigel Fancutt, Kevin Smith and Paul Bushnell, together with Jeffery Whitfield, were charged in a one count indictment with the unlawful distribution of Lysergic Acid Diethylamide (LSD) in violation of 21 U.S.C.A. § 841(a)(1) and 18 U.S.C.A. § 2. A jury trial resulted in the conviction of the appellants. Their separate appeals have been consolidated.

Through an informer, Michael Franzen, David Hanks, an agent of the Federal Bureau of Narcotics and Dangerous Drugs, was put in contact with the appellants Smith and Bushnell and negotiations were had for the purchase by Hanks of LSD. A meeting was arranged with Hanks by Smith and Bushnell. The meeting was held in a motel room in Boulder, Colorado. At the meeting were Hanks, the appellants, the informer, an unidentified girl, and Jeffery Whitfield, who was indicted with appellants but not tried. Fancutt delivered 2,000 LSD tablets to Hanks who paid Fancutt $650. Hanks asked if Fancutt would take care of the others in the room. Smith and Bushnell each claimed and were paid $100. It was said that Hanks was to take care of Whitfield and Hanks gave him $20. Eleven days later the appellants were taken into custody.

The appellants assert that reversible error was committed by the prosecuting attorney in his jury argument. In his opening summation Government counsel said:

“Now, the evidence is clear that Mr. Fancutt actually handed over or delivered the pills, and he actually received the money. I think the conversation is clear enough in this case as to how the money was to be split up, and that both Mr. Smith and Mr. Bushnell took a principal part, really, in the sale, but aided and abetted for certain Mr. Fancutt in that sale.”

In his closing jury argument, and in response to comments of defense counsel, the prosecutor stated:

“And his [defense counsel’s] primary question to you was: ‘Where did the money go,’ and my answer is, T do not know.’
“Fortunately, it is not a part of the burden of proof upon the Government to know where that money went. You can’t explain what happened to it in ten days. I know where it initially went. It was given to Nigel Fancutt. I know where Mr. Smith said $200 was going; $100 to him and $100 to Paul Bushnell. I don’t know what the three of those defendants did with the money, but it is not necessary that I prove that to you.
“If you truthfully believe that Agent Hanks purposely, knowingly, and wilfully testified falsely to material facts in this case, then you should by all means dismiss all three of these defendants.
“But if you believe, as I believe the evidence indicates, that Agent Hanks testified truly, he testified to the transactions that took place; and I submit to you that the only verdict you can arrive at is guilty as to all three defendants. Thank you.”

No objection was made to the statements of counsel when they were made. No request was made for a jury instruction to disregard the statements. No reference to them was made in the motions for a new trial. Jury verdicts in criminal cases are to be rendered upon the facts as disclosed by evidence and the law as pronounced by the court. That which the prosecutor thinks, believes or knows are not to be given consideration. Such argument is improper. The evidence of guilt is strong. No fundamental right of the appellants has been jeopardized. No such prejudice is shown as requires this Court to invoke the plain error rule. Hall v. United States, 10th Cir. 1969, 404 F.2d 1367; Findley v. United States, 10th Cir. 1966, 362 F.2d 921; McManaman v. United States, 10th Cir. 1964, 327 F.2d 21.

Prior to the trial, at the direction of the court, the Government had furnished defense counsel with the last known address of the informer, Michael Franzen. Franzen was not at the trial and no request had been made by the Government or the defendants for a witness subpoena to procure his attendance. Agent Hanks testified that he had seen Fran-zen during the week prior to the trial. No inquiry was made of Hanks as to whether he knew of Franzen’s then whereabouts. The defendants requested the giving of the following instruction,

“You are instructed that the government has failed to produce a witness who would have elucidated certain facts which are presently at issue. This witness is peculiarly available to the government and the defense has been unable to locate him. Consequently, you are to presume that this witness would have testified against the government.”

The trial court refused to give the instruction and the refusal is asserted as error.

In appellants’ brief it is recited that defense counsel had stated to the trial court that the Government had supplied an address of Franzen but “That address in defenses’ investigation failed to locate him.” The record reflects the accuracy of the recital in the brief. The brief does not show, as does the record, that the court made the comment that “There wasn’t any evidence to that effect.” Nor does the brief show, as does the record, that counsel responded to the court’s comment by saying, “Okay, I will withdraw that.” Litigants should not rely, in this Court, upon that which was withdrawn in the district court. The' same unsubstantiated statement is set forth in the instruction tendered by the defense. This, without more, would require the court to refuse to give the instruction.

The Government is not, as a general rule, under a duty to have its informer present at the trial. The Government is required to give reasonable assistance to defendants and their counsel in making it possible for them to procure the informer as their witness. United States v. D’Angiolillo, 2nd Cir. 1965, 340 F.2d 453, cert. den. 380 U.S. 955, 85 S.Ct. 1090, 13 L.Ed.2d 972. Here the Government did all that was asked of it. If more was needed then more should have been demanded. United States v. Hayes, 10th Cir. 1973, 477 F.2d 868. The trial court properly refused to give the requested instruction.

On cross-examination Agent Hanks testified that he thought the unidentified girl was Smith’s girl friend, that he understood that Bushnell had arranged for the motel room and that he did not believe he had told Smith that next time he, Hanks, wanted to deal with Smith. Smith testified on his own behalf. He testified as to his name, his age and his address. In an apparent attempt to discredit Agent Hanks, he stated that the unidentified girl was not his girl friend, that he did not rent the motel room and that Agent Hanks had said that next time he wanted to do business with Smith. Such was Smith’s testimony and none other was put on by any of the defendants.

In his jury argument Government counsel said,

“Beyond that, [testimony of a chemist and Agent Hanks] the only testimony that you heard was the testimony of Mr. Smith. Mr. Smith took the witness stand. He stated to you that he lived in Boulder with his parents, if you will recall. He stated to you that he did not rent the room in which this transaction went on, you will recall, where the transaction took place.
“He testified to you that the young lady in the room was not his girl friend, if you will recall, and that’s all he said. He did not tell you about the transaction.”

The jury was instructed that no presumption or inference of guilt could be drawn by reason of the failure of Fancutt and Bushnell to testify. The appellants Fancutt and Bushnell contend that the quoted portion of the prosecutor’s argument constituted comment on their failure to testify and required a new trial. It is the settled rule that the prosecutor may not direct the attention of the jury to the failure of a defendant charged with a criminal offense to testify. Knowles v. United States, 10th Cir. 1955, 224 F.2d 168. This does not preclude a fair comment on the evidence. In the Knowles case the Court held that “It is concededly improper and reversible error to comment on the failure of a defendant to testify in his own behalf, and the test is whether the language used was manifestly intended or was of such character that the jury would naturally and necessarily take it to be a comment on the failure of the accused to testify.” 224 F.2d 168, 170.

In a subsequent case, where the foregoing rule was applied, this Court said, “That Government counsel may direct the jury’s attention to the fact that the evidence against the defendant is uncontradicted, especially when the facts in issue could be controverted by persons other than the defendant.” Doty v. United States, 10th Cir. 1968, 416 F.2d 887, vacated on other grounds sub nom., Epps v. United States, 401 U.S. 1006, 91 S.Ct. 1247, 28 L.Ed.2d 542. There was no error in the challenged statement of the prosecutor.

Finally, the defendants contend that the cumulative effect of all of the assignments constitute error. This is not one of those rare situations where the sum of the parts is greater than the whole.

By a “Supplemental Brief” the appellant Paul Bushnell attempts to raise questions with respect to sentencing procedures in the district court. This Court need not now determine whether the questions are timely presented. It is enough to say that whatever needs to be done with respect to the sentencing of any or all of the appellants can be done in the district court on the going down of the mandate of this Court. Rule 35, Fed.Rules Crim.Proc.

The judgment of the district court is Affirmed.


author: PER CURIAM.

text:
    UNITED STATES of America, Appellant, v. REPUBLIC STEEL CORPORATION, Appellee.
    No. 73-1768.
    United States Court of Appeals, Sixth Circuit.
    Argued Dec. 13, 1973.
    Decided Jan. 23, 1974.

      Carl Strass, Dept. of Justice, for appellant; Wallace H. Johnson, Asst. Atty. Gen., Frederick M. Coleman, U. S. Atty., Joseph A. Cipollone, Asst. U. S. Atty., Cleveland, Ohio, Raymond N. Zagone, Atty. Dept. of Justice, Washington, D. C., on brief.
    Dennis M. Kelly, Cleveland, Ohio, for appellee; Victor DeMarco, Jones, Day, Coekley & Reavis, Cleveland, Ohio, on brief; Edward P. Weber, Jr., Asst. Gen., Counsel, Republic Steel Corp., Cleveland, Ohio, of counsel.
    Before CELEBREZZE, PECK, and LIVELY, Circuit Judges.
   PER CURIAM.

On August 7, 1972 there was a spill and discharge of coal tar into the Ma-honing River from a facility owned and operated by Republic Steel Corporation. This was a violation of a provision of the Rivers and Harbors Act of 1899, 33 U.S.C. § 407, which makes it unlawful to discharge any refuse matter of any kind into navigable waters of the United States. Thereafter the United States attorney filed a criminal information against Republic Steel Corporation charging it with violation of the above statute and 33 U.S.C. § 411 which provides the penalty for violation of § 407.

Republic made a motion to suppress evidence consisting of a notice which it had sent to the Coast Guard informing the government of the discharge into the Mahoning River and of all evidence gained from the exploitation of this notice. This motion was made in reliance upon Section 11 of the Water Quality Improvement Act of 1970, 33 U.S.C. § 1161(b)(4), which provides as follows:

(4) Any person in charge of a vessel or of an onshore facility or an offshore facility shall, as soon as he has knowledge of any discharge of oil from such vessel or facility in violation of paragraph (2) of this subsection, immediately notify the appropriate agency of the United States Government of such discharge. Any such person who fails to notify immediately such agency of such discharge shall, upon conviction, be fined not more than $10,000, or imprisoned for not more than one year, or both. Notification received pursuant to this paragraph or information obtained by the exploitation of such notification shall not be used against any such person in any criminal case, except a prosecution for perjury or for giving a false statement.

The United States attorney filed a bill of particulars in which it was stated that the United States “received from defendant notice of the spill and subsequent discharge of coal tar into the Ma-honing River.” The bill of particulars also stated that this notice and information learned in investigation and exploitation of the notice was the sole basis for the criminal charge and that such notice and information was the evidence relied upon to prove the charge contained in the Information. Thereafter District Judge LeRoy J. Contie, Jr. granted the motion to suppress evidence and, upon the representation by the government that the notification and information learned in exploitation thereof was the sole basis for the charge and constituted the evidence relied upon in the prosecution, also granted Republic’s motion to dismiss.

On appeal it is contended that the reference in § 1161(b)(4) to “Any person in charge of . . .an onshore facility . . ” refers only to natural persons and that a corporation which complies with the statute by giving immediate notice of a discharge is not entitled to rely upon the further provision of the same section which precludes the use of such notification or information flowing therefrom against any “such person” in any criminal case except one involving perjury or giving a false statement. The government contends that the purpose of the Act is to give supervisory personnel who might otherwise hesitate to report an oil spill an incentive to make the report by granting use immunity from prosecution based on such report. It is contended that the construction of the language “person in charge” adopted by the district court has the effect of indirectly repealing the provisions of the Rivers and Harbors Appropriation Act of 1899 whereas Congress specifically provided in 33 U.S.C. § 1174 that the 1970 Act should not be construed as affecting or impairing provisions of the 1899 Act.

While this is a case of first impression in this circuit, the identical issue was decided by the Fifth Circuit in United States v. Mobil Oil Corporation, 464 F.2d 1124 (5th Cir. 1972). The opinion in that case discloses that many of the same contentions were made by the government there as in the present case and the court refused to adopt the government’s construction of the language of the Act. We feel that the opinion of Judge Bell in the Mobil Oil case and the order of Judge Contie in the present case correctly dispose of each contention made by the government. We note that the Water Quality Improvement Act of 1970 has been amended by Congress since the decision in United States v. Mobil Oil Corporation, supra, was rendered and the language of § 1161(b)(4) was not changed. This indicates an acceptance by Congress of the construction placed on this statute by the Fifth Circuit.

One purpose of the Water Quality Improvement Act of 1970 is to attempt to control water pollution by requiring immediate reporting of accidental discharges of oil into navigable waters and providing an incentive for the person responsible for the discharge to make an immediate report. If the corporate owner of a facility where a spill and discharge occurs is denied protection from prosecution based solely on such reporting, at least part of the incentive to make the report is removed. Indeed, if this interpretation were followed, in cases where it might be difficult after passage of time to trace the source of a discharge, there would be incentive to a corporate owner of a facility to withhold reporting a spill. Of course, a corporation which reports a discharge pursuant to § 1161(b)(4) may still be prosecuted under 33 U.S.C. §§ 407 and 411. All that is required by our construction of the statute is that such prosecution be based on evidence other than notification or information obtained by exploitation of such notification. A prosecution based on any other evidence is unaffected by § 1161(b)(4).

The judgment of the district court is affirmed.


text:
    Olen KELLY et al., Plaintiffs-Appellants, v. KENTUCKY OAK MINING COMPANY, INC., Defendant-Appellee.
    No. 73-1734.
    United States Court of Appeals, Sixth Circuit.
    Feb. 6, 1974.
    Alva A. Hollon, Hazard, Ky., for plaintiffs-appellants.
    J. W. Craft, Jr., Craft, Barret, Haynes & Ward, Hazard, Ky., for defendant-appellee.
    Before PHILLIPS, Chief Judge, and PECK and LIVELY, Circuit Judges.
   PER CURIAM.

This appeal was assigned to this panel for consideration under Rules 3(e), 8 and 9, Rules of the Sixth Circuit. The sole issue presented is whether the District Judge erred in dismissing the action for lack of jurisdiction over the defendant corporation.

In 1964, plaintiffs Olen and Paul Kelly, both Ohio citizens, filed this action in trespass against the defendant, Kentucky Oak Mining Company, Inc. Olen and Paul Kelly are brothers and joint owners of a tract of land in Knott County, Kentucky, over which the defendant’s trucks allegedly hauled coal without the permission of the Kelly brothers.

Olen Ke'lly’s wife, Zola D. Kelly, instituted a similar action in 1964 in which she alleged that defendant’s trucks had also hauled coal without her permission over a nearby tract of Knott County land which she owns. Averments were made in both complaints of damage to the land caused by the alleged trespasses of the defendant.

The jurisdictional allegations in both complaints were identical. Jurisdiction was based on diversity of citizenship because the plaintiffs were Ohio citizens and the defendant was “a corporation existing under and by virtue of the law of the State of Kentucky with authority to sue and be sued in its corporate name with its home office at Hazard, Kentucky.” The defendant’s answers to the complaint specifically admitted the plaintiffs’ jurisdictional allegations, but generally claimed that the facts were not sufficient to constitute a cause of action.

Between 1964 and 1969 various depositions were taken, but the actions were regularly continued on the docket of the District Court. Although the litigants filed briefs in 1971, the actions were again continued.

Finally on March 7, 1973, almost nine years after the complaints were filed, the District Court sua sponte consolidated the actions and dismissed the consolidated action because of defective jurisdictional allegations with respect to the principal place of business of the defendant corporation.

Since this case is being considered pursuant to Rules 3(e), 8 and 9, Rules of the Sixth Circuit, in order to reverse the order of the District Court we must conclude that the District Judge committed “clear error” within the meaning of Rule 9. Rule 9, in relevant part, provides:

“Whenever a panel of this Court reviewing an appeal under procedures initiated under Rules 3, 8 or 9 concludes that clear error requires reversal or vacation of a judgment or order of the District Court or remand for additional proceedings in the District Court the panel may enter an appropriate order to accomplish this result.” 28 U.S.C. § 1332 provides for diversi-

ty of citizenship jurisdiction in the federal courts and, in relevant part, is as follows:

“(c) For the purposes of this section and section 1441 of this title, a corporation shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.”

In the present case, the plaintiffs alleged not that the defendant corporation’s “principal place of business” was in Kentucky, but that the defendant’s “home office” was in Kentucky. Citing Wymard v. McCloskey Co., 342 F.2d 495, 497 (3rd Cir. 1965), the District Judge held that because of this discrepancy in jurisdictional allegation, § 1332(c) was not satisfied and therefore dismissed the action.

The facts in this case are clearly distinguishable from those in Wymard in at least three respects. First, and most importantly, the plaintiff in Wymard specifically declined to amend its complaint to comply fully with § 1332(c). Here the District Judge did not give the plaintiffs such an opportunity to amend their complaints. Second, the record in Wymard suggested that the principal place of business of the defendant corporation was located in the same state of which the plaintiff was a citizen. In this case, the record strongly suggests that the principal place of business of the defendant corporation is in Kentucky, a state diverse to the Ohio plaintiffs. Third, there was no allegation at all in Wymard with respect to the principal place of business of the defendant corporation. Here the plaintiffs at least attempted to comply with the requirements of § 1332(c) by alleging the state in which the defendant’s “home office” was located.

Although Rule 12(h)(3), Fed.R.Civ.P., permits the District Judge to dismiss an action when jurisdiction of the subject matter is lacking, Rule 15(a), Fed.R. Civ.P., sanctions liberal granting of permission to amend the pleadings when justice so requires. In this case, which had been on the docket of the District Court for almost nine years when the District Judge sua sponte dismissed the action, the corporate defendant specifically admitted the jurisdictional allegations in both complaints. The plaintiffs, of course, relied on these admissions of the presence of jurisdiction.

Accordingly, we hold that the action of the District Judge in dismissing the consolidated action was clear error within the meaning of Rule 9, Rules of the Sixth Circuit. That portion of the District Judge’s order of March 7, 1973, dismissing the trespass action is therefore vacated. The case is remanded to the District Court with instructions to permit the plaintiffs to amend their complaint to comply with the requirements of 28 U.S.C. § 1332(c).

Reversed and remanded.

      . The plaintiffs do not dispute that the District Judge correctly consolidated the two actions.

      . There is no dispute that the plaintiffs satisfied the first half of the § 1332(c) requirement by alleging that the defendant corporation was incorporated under the laws of the state of Kentucky.

      . This disposition of the case makes it unnecessary for us to reach the issue of whether the allegation of a corporation’s “home office” satisfies the “principal place of business” jurisdictional requirement of 28 U.S.C. § 1332(c). We note Delome v. Union Barge Line Co., 444 F.2d 225, 233 (5th Cir. 1971), in which the court stated “ . . . an allegation that a corporation’s home office is located in a certain state is not equivalent to a declaration that its principal place of business is situated in that state.” We, however, specifically defer resolution of this issue until such time as it is squarely presented to us.


author: FAIRCHILD, Circuit Judge.

text:
    CHRYSLER CORPORATION et al., Plaintiffs-Appellants, v. M. PRESENT COMPANY, INC., Defendant-Appellee. PENN CENTRAL COMPANY, Plaintiff-Appellant, v. M. PRESENT COMPANY, INC., et al., Defendants-Appellees.
    Nos. 72-1726, 72-1727.
    United States Court of Appeals, Seventh Circuit.
    Argued June 6, 1973.
    Decided Feb. 5, 1974.

      Aribert L. Young, Howard J. De-Trude, Jr., William A. Wick, John A. Stocker, Indianapolis, Ind., for plaintiffs-appellants.
    Leo L. Kriner, Jerry P. Belknap, Indianapolis, Ind., for defendants-appellees.
    Before SWYGERT, Chief Judge, and FAIRCHILD and STEVENS, Circuit Judges.
   FAIRCHILD, Circuit Judge.

These are appeals from a judgment dismissing consolidated actions upon their merits, defendant’s motion for summary judgment having been granted.

Plaintiffs brought their actions to recover damages for loss of property in a warehouse fire, October 8, 1966, in Indianapolis. Although defendant M. Present Company, Inc. was the owner of the warehouse, it was occupied at the time of the fire by A.A.A. Warehouse Corporation, defendant’s lessee. Several plaintiffs, like Chrysler, were owners of goods which had been placed in the warehouse for the purpose of storage. Penn Central’s loss arose primarily from the destruction of railroad cars which Penn Central’s predecessor had delivered on a side track inside the warehouse.

M. Present Company was alleged, in substance, to have been negligent in leasing its building to A.A.A., with knowledge that it would be used as a warehouse, when it knew or should have known that the water supply had been and was permitted to remain disconnected, that the fire extinguishers, fire hoses, valves and similar extinguishing equipment (expressly included in the lease as equipment of the building) were defective, inadequate, and inoperable, that the building lacked fire curtains or fire walls and was not adequately protected against fire. Although the complaint is phrased in terms of negligence with respect to leasing the property with the knowledge specified, it also sufficiently asserts that the various deficiencies in equipment and construction were present at the time of leasing.

After a number of procedural skirmishes, the district court granted summary judgment for defendant M. Present Company and certain other defendants. For the most part the facts recited by the district court are undisputed. M. Present Company had leased the entire premises to A.A.A. under a written lease, October 9, 1964; the lease contained no covenant by M. Present Company to keep the premises in repair, except for certain repairs to the roof, not alleged to have contributed to the fire; there is no claim that the conditions said to constitute negligence on the part of M. Present Company were concealed from A.A.A.; the portion of the warehouse in which plaintiffs’ property was located was the storage area.

The district court also asserted that the storage area was not thrown open for the public, and admission was carefully restricted. Plaintiffs argue that they had sufficiently shown that there is an issue on this point. It appears to be conceded that if M. Present Company contemplated that its lessee, A.A.A., would generally invite members of the public to enter the storage area in person, the law of Indiana would subject M. Present Company to liability for injury to person or property of such frequenters, resulting from defective conditions existing at the time of leasing. Walker v. Ellis, 126 Ind.App. 353, 129 N.E.2d 65 (1955), transfer denied, 235 Ind. 692, 133 N.E.2d 54. Thus if there were shown to be a genuine issue of fact concerning the use of the storage area by members of the public in person, it was error to grant summary judgment.

Plaintiffs’ principal contention, however, is that the so-called public purpose doctrine, recognized as part of the law of Indiana by Walker v. Ellis, applies to the storage area in any event and subjects M. Present Company to such liability because M. Present Company, as owner-lessor, was aware that A.A.A., its lessee, would extend a general invitation to members of the public to deposit their goods in the leased property, for storage. If this contention be correct, it would be immaterial whether there were a general invitation to members of the public to enter the storage areá in person.

Plaintiffs also argue, independently of the public purpose doctrine, that because M. Present Company reserved in its lease the right to enter the premises and make repairs, there was an issue of fact whether it was in control of the premises so as to be subject to liability to customers of A.A.A. for damages caused by defective conditions.

Finally, Penn Central contends that a side track agreement between.it and M. Present Company puts its ease upon a special and more advantageous footing.

1. Applicability of the public purpose doctrine.

As a general rule a landlord is not liable to invitees of his tenant for injury caused by defective conditions existing at the time of the lease. Prosser, Law of Torts, 400 (4th ed., 1971). The theory is that a vendor of land is not subject to liability to his vendee or others for the condition existing at the time of transfer, caveat emptor applying, and that a lessor is similarly not liable because the lease is regarded as equivalent to a sale for the term of the lease. Courts have, however, carved out several exceptions to the general rule cf. non-liability, calling for liability to the lessee and others upon the land, or to the latter, alone. See generally 2 Powell, Real Property ¶ 234 (rev. ed., 1971); Prosser, supra, § 63; Restatement, Torts 2d §§ 356-62.

The policy considerations underlying the exceptions are stated in Comment a under § 356 of the Restatement, as follows:

“These exceptions have been due in large part to increasing recognition of the fact that tenants who lease defective premises are likely to be impecunious and unable to make the necessary repairs which their own safety and that of others may demand; that one who is in possession of the premises only for a limited term does not have the same incentive to maintain them in good condition as the lessor to whom they will revert at the end of the lease; and that the landlord who receives benefit from the transaction in the form of rent may properly be required to assume in return at least certain limited obligations with respect to the safety of others.”

The public purpose exception applies where property is leased for a purpose which involves the admission of the public. It is then the rule that “the lessor is under an affirmative duty to exercise reasonable care to inspect and repair the premises before possession is transferred, to prevent unreasonable risk of harm to the public.” Prosser, at 403.

As Mr. Justice, then Judge, Cardozo observed, “We may say that those who enter a structure designed for public amusement are there at the invitation, not only of the lessee who maintains it, but also of the lessor who has leased it for that purpose, and that the latter’s liability is merely an instance of the general rule which charges an owner of property with a duty toward those whom he invites upon it. We may say more simply, and perhaps more wisely, rejecting the fiction of invitation, that the nature of the use itself creates the duty, and that an owner is just as much bound to repair a structure that endangers travelers on a walk in an amusement park as he is to repair a structure that endangers travelers on a highway. Whatever the underlying principle that explains the rule, the rule itself is settled. The owner of such a park must use all reasonable care to make its structures safe before he leases it for his profit.” Junkermann v. Tilyou Realty Co., 213 N.Y. 404, 108 N.E. 190, 191 (1915).

In 1955 the Appellate Court of Indiana expressly recognized the public purpose exception in Walker v. Ellis, 126 Ind.App. 353, 129 N.E.2d 65, transfer to the Supreme Court denied 235 Ind. 692, 133 N.E.2d 54. There a patron of a store brought action against the storekeeper’s lessor for injuries sustained in a fall. The trial court sustained a demurrer based on the lessor’s lack of duty. The Appellate Court reversed, saying that “where premises have been leased for a purpose which contemplates their use by the public, the courts seem to regard such circumstances as one which makes of such cases a class peculiar in itself and forming an exception to the general rule of caveat emptor.” 129 N.E.2d at p. 73.

M. Present Company concedes that to the extent the public purpose exception is properly applicable, there is no distinction between personal injury and property damage cases. It argues, however, that the exception, at least as recognized in Indiana, is limited to premises which are open to the public to enter in person, and does not extend to premises which are held open to the public for the storage of goods, and only for such entry in person as may be incidental to such storage.

The use by the public for storage of goods is within the language of Walker v. Ellis, but it is true that the cases announcing the doctrine seem, like Walker v. Ellis, to have involved places held open to the public for entry in person, although, as M. Present Company concedes, recovery has been allowed for damage to property as well as for personal injury.

It seems to us that similar policy reasons exist for subjecting the owner lessor to liability to a person who responds to a general invitation to store his goods as to a person who responds to a general invitation to enter in person. The possible distinctions which occur to us are (1) that personal safety is of greater significance to the community than the safety of property, and (2) that it is more realistic to expect the owners of stored goods to insure them and thus obtain protection from loss than to expect members of the public to be adequately insured against accident. Neither distinction, however, seems to be a sufficient reason for insulating an owner lessor from duty and liability for defective conditions of which he was or should have been aware.

No case has been cited, nor have we found any, in which the application of the public purpose exception to a commercial warehouse has been directly considered and ruled upon. In an early case, the Court of Appeals of New York drew an analogy which is relevant here, although the premises considered were a theater:

“If he [the lessor] lets a building for a warehouse, knowing that it is so weak and imperfectly constructed that the floors will break down from the weight necessarily to be placed on them, his negligence imposes liability upon him for injury to the person or property of anyone who may lawfully be upon the premises using them for the purposes for which they were demised.” Edwards v. N. Y. & H. R. R. Co., 98 N.Y. 245, 249 (1885). See also Barrett v. Lake Ontario Beach Imp. Co., 174 N.Y. 310, 66 N.E. 968, 969 (1903).

The New York court later declined to apply the public purpose exception to a warehouse in which storage was not shown to have been available to anyone but the lessee. Campbell v. Elsie S. Holding Co., 251 N.Y. 466, 167 N.E. 582 (1929). Although noting that'the language above quoted from Edwards and its repetition in Barrett were dicta, the court also pointed out that in those cases “the court spoke concerning warehouses which served a public use.” Warehouses are private if they do “not carry anything in storage except for their owners.” J. Frederick, Using Public Warehouses, 13 (1957).

The public purpose exception has been considered applicable to piers which are generally available for use. Swords v. Edgar, 59 N.Y. 28, and CIA Exportadora E. Importadora Mex. v. Marra Bros., 59 F.Supp. 989, 991 (S.D.N.Y., 1944).

That the public purpose exception is recognized in Indiana is clear. Our problem in this case is to discern the content of the exception. Is it confined to a use where the property is held open for entry of members of the public in person or does it include such a use as the storage of goods for whoever among the public may deposit them? We find no satisfactory logical policy ground for excluding the latter.

We note a recent and significant decision of the Supreme Court of New Hampshire, authored by Chief Justice Kenison. The doctrine of “landlord non-liability in tort” is discarded. “Henceforth, landlords as other persons must exercise reasonable care not to subject others to an unreasonable risk of harm.” Sargent v. Ross, 308 A.2d 528, 534 (N. H., 1973). It is stated as a corollary that public use and other factors formerly bringing a case within one of the recognized exceptions to landlord nonliability will henceforth be relevant only inasmuch as they bear on the basic tort issues. See also Presson v. Mountain States Properties, Inc., 18 Ariz.App. 176, 501 P.2d 17, 20 (1972) for discernment of a trend in this area toward disfavoring caveat emptor.

We by no means speculate that Indiana courts will adopt the New Hampshire formulation. That would be an inappropriate role for this court. But although the observed trend seems almost always to involve cases of risk to bodily security, we think the trend also makes less credible any prediction that exceptions to the rule of landlord nonliability will be closely confined.

Accordingly we conclude that the public purpose exception deprives M. Present Co. of insulation from liability to plaintiffs. It follows that the issues raised as to its negligence in leasing the premises in the condition they allegedly were are material and must be resolved.

2. Plaintiffs’ claim as to M. Present Company’s control of the premises.

Where an owner leases part of his premises and retains control of part, he is subject to liability with respect to the part which he controls. If it can be shown that a landlord, although purportedly transferring possession to a lessee, has retained control, he is also subject to liability. Plaintiffs contend that the reservation by M. Present Company of the right to repair, and certain activity in exercise of ¿hat right, are themselves sufficient to create a genuine issue of fact whether, notwithstanding the lease, M. Present Company was in control of the warehouse at the time of the fire.

Plaintiffs rely on decisions from other jurisdictions which hold either that a reservation of the right to enter and repair is a reservation of control in the landlord, sufficient to subject him to liability or that such reservation creates a jury question whether the landlord retained such control as to subject him to liability. We see no indication in the reservation of the right to repair that M. Present Company retained control in any larger sense. It appears that under the law in Indiana, a reservation by the landlord of the right to repair is not enough to subject him to liability, but a covenant to repair is required. “The Law is well settled that in general a landlord cannot be held liable for negligence in failing to repair leased property in the absence of a covenant to repair.” Stover v. Fechtman, 140 Ind. App. 62, 222 N.E.2d 281, 283 (1966).

Accordingly, liability of M. Present Company can not be predicated upon its reservation of the right to repair.

3. Issues peculiar to Penn Central.

Penn Central alleges in Count II of its complaint that the railroad cars lost in the fire had been delivered to A.A.A. pursuant to a private side track arrangement covered by an agreement between Penn Central’s predecessor (hereinafter the “Railroad”) and M. Present Company. M. Present Company, if negligent as alleged, was subject to liability to the Railroad under the .public purpose exception, already discussed. We conclude that M. Present Company also had a contractual duty to the Railroad, although such duty may turn out to have no more than duplicating significance.

The sidetrack agreement contemplated a track, leading from the Railroad’s line, and serving and entering the warehouse. Up to a point called the clearance point, the track was owned and to be maintained by the Railroad; beyond that point by M. Present Company. The agreement includes provisions for construction and maintenance of the track and devices to be used in connection with it. Each party undertook various obligations. The agreement does not refer to the Railroad’s propelling cars along the track into the warehouse, but that process was surely contemplated.

When the warehouse was leased to A.A.A., there was no further agreement with the Railroad by which A.A.A. would be substituted for M. Present Company under the side track agreement. The lease may well have included a transfer of the rights of M. Present Company under the side track agreement, but an assignment, without the consent of the Railroad, did not relieve M. Present Company of obligations under the agreement. Navin v. New Colonial Hotel, 228 Ind. 128, 90 N.E.2d 128 (1950), 6 Am.Jur.2d 293, Assignments, § 110. Although a clause in the agreement providing that M. Present Company will not permit the use of the track by another without the consent of the Railroad has been referred to as if it prohibited assignment without consent, an express nonassignability clause is unnecessary.

If any course of dealing between the time of the lease to A.A.A. and the fire might be deemed an acceptance by the Railroad of A.A.A. as a substitute for M. Present Company, that would be an issue for proof at trial. Absent such proof, the Railroad would be deemed to have entered the warehouse as an invitee of M. Present Company, and would be entitled to performance by M. Present Company of the agreement.

Paragraph FIFTH of the agreement provided in part as follows:

“Except as herein otherwise specifically provided, in respect of all loss or damage to property, other than by fire caused as aforesaid [by .locomotives], or in respect of injury to or death of persons caused by or in connection with the construction, operation, maintenance, use, presence or removal of said track, (a) the RAILROAD COMPANY shall assume responsibility for and hold the INDUSTRY harmless from all losses (including Workmen’s Compensation), damages, claims and judgments arising from or growing out of the sole actionable acts or omissions of the RAILROAD COMPANY, its agents or employees; (b) the INDUSTRY shall assume the responsibility for and save the RAILROAD COMPANY harmless from all losses (including Workmen’s Compensation), damages, claims and judgments arising from or growing out of the sole actionable acts or omissions of the INDUSTRY, its agents or employees; and (c) the parties hereto shall equally bear all losses (including Workmen’s Compensation), damages, claims and judgments arising from or growing out of the joint or concurring actionable acts or omissions of both parties hereto, their respective agents or employees.”

We think it follows from paragraph FIFTH that if the Railroad, though exercising ordinary care, sustains loss or damage, or is subjected to liability to a third party, on account of the railroad cars on the side track, or their contents, as a result of a failure of M. Present Company to exercise ordinary care, M. Present Company has a contractual liability to compensate the Railroad for such loss or damage or hold it harmless from such liability.

It follows that Count II' should be reinstated, as well as Count I, although it may turn out to make no practical difference whether recovery is pursued on a tort or contract theory.

Penn Central also asserted a claim against American District Telegraph Company, Inc. (ADT). ADT allegedly was responsible for maintenance of a fire warning system, and negligently performed various duties in that respect. Penn Central’s complaint against ADT was dismissed, although the reason for dismissal was not stated and may have been the result of oversight, other plaintiffs having voluntarily dismissed as against ADT. ADT did not file a brief on this appeal. Reversal and reinstatement of the complaint of Penn Central against ADT is appropriate in the light of the record before us, although we express no opinion as to the ultimate merit of the claim.

The judgment appealed from is reversed and the cause remanded for further proceedings consistent with this opinion.

      . Jurisdiction is founded on diversity. All parties accept Indiana law as controlling on substantive questions.

      . See 49 Am.Jur.2d 727 ff., Landlord and Tenant §§ 782-785; Restatement, Torts 2d § 359, Illustrations; Annot. 17 A.L.R.3d 873.

      . DeClara v. Barber Steamship Lines, 309 N.Y. 620, 132 N.E.2d 871, 874 (1956) ; Montgomery Ward & Co. v. New York Central Railroad Co., 389 F.2d 556 (2d Cir., 1968) ; Levy v. Logan, 99 Ga.App. 253, 108 S.E.2d 307, 309. Cf. Honeycutt v. Cincinnati Metropolitan Hous. Auth., 114 Ohio App. 311, 175 N.E.2d 116 (Ct. of App. Ohio, 1961).

      . La Scalea v. Woolsey Holding Corp., 14 A.D.2d 912, 221 N.Y.S.2d 551 (1961).


author: LEVIN H. CAMPBELL, Circuit Judge.

text:
    A. SHAPIRO REALTY CORPORATION, Plaintiff-Appellant, v. BURGESS BROTHERS, INC., Defendant-Appellee. A. SHAPIRO & SONS, INC., Plaintiff-Appellant, v. BURGESS BROTHERS, INC., Defendant-Appellee.
    Nos. 73-1155, 73-1156.
    United States Court of Appeals, First Circuit.
    Argued Nov. 8, 1973.
    Decided Feb. 11, 1974.

      Albert P. Zabin, Boston, Mass., with whom Schneider & Reilly, Inc., Boston, Mass., was on brief, for plaintiffs-appellants.
    Thomas R. Morse, Boxborough, Mass., with whom Philander S. Ratzkoff, Boston, Mass., was on brief, for defendantappellee.
    Before COFFIN, Chief Judge, and Mc-ENTEE and CAMPBELL, Circuit Judges.
   LEVIN H. CAMPBELL, Circuit Judge.

Plaintiffs (collectively “Shapiro”) owned two buildings in North Adams, Massachusetts, the “Old Eagle Mill” and an adjacent modern structure built in the 1950’s. Shapiro hired defendant Burgess, a Vermont wrecking firm, to tear down the Old Eagle Mill, under a contract which called for Burgess to leave the newer building intact. While

Burgess was engaged in wrecking the older building, a fire suddenly occurred destroying both buildings. Shapiro brought a diversity action for damages against Burgess in the district court. The jury returned a verdict for Burgess.

The only issue raised on appeal is the adequacy of the court’s charge on Shapiro’s negligence claim. The court gave a normal negligence charge. It instructed that Shapiro had to prove that it was more likely than not that the fire was proximately caused by Burgess’ negligence, and that proof of negligence could be by direct evidence or could be in the form of reasonable inferences drawn from proven facts. The court instructed that there could be no inference of negligence from “the mere fact an accident happened, considered alone, and standing by itself.”

Shapiro registered a timely objection both to the last-mentioned instruction, and to the court’s failure to give requested instructions. Under these, the jury would, in essence, have been told that it might infer Burgess’ negligence from its exclusive control of the premises or that the burden was on Burgess to prove due care.

The facts can be summarized briefly: Burgess began to dismantle the four story Old Eagle Mill in December of 1970. By the day of the fire, March 31, 1971, much of its floors and much of the roof over the wing had been removed. Debris was piled in the basement. Elsewhere were several bales of rags, some broken carts, and perhaps barrels. There were no known inflammables anywhere. Burgess’ men did not smoke and brought to the site no torches requiring gas or other volatiles. Shapiro had responsibility under the contract for shutting off utilities. An electrician had appeared a week or so before the fire to turn off the power, and a day before the fire someone from the gas company came and was understood to have capped the gas line in the basement. Mr. Shapiro testified that his personnel did not go into the Old Eagle Mill, although it was disputed whether fire doors between the new and old buildings had been locked. There was easy ingress to the Old Mill through open outside doors, and most of the windows were out.

On the day of the fire, Mr. Shapiro and his son went by the Mill, looked in, and left. Burgess’ men were at work in or near the wing area. They had just removed an elevator from the shaft, using a crane to which was attached a clamshell bucket, when a loud noise was heard. Burgess’ employees went outside to investigate, and some minutes later saw smoke from the top of the exposed elevator shaft. They ran to sound the alarm, and soon found the lower floors of the main section of the Mill to be in flames. There were several explosions. Almost instantly the Mill and the adjoining new building were engulfed. After the fire, nothing remained to tell how it began. No likely source of spontaneous combustion was identified. Except for the Shapiros, father and son, who, while smokers, had not actually entered the Old Mill and had left several hours before the fire, only Burgess’ men were known to have been on the premises. However, onlookers were observed on nearby streets prior to the fire.

Plaintiffs’ experts testified that the most probable cause of the fire was a dust explosion ignited by sparks from the clashing of the metal jaws of the clamshell. Although the clamshell had been working on the upper stories of the wing, and the fire was first seen on lower stories of the main part of the Mill, it was theorized that a dust explosion chain could have ignited the lower part. Burgess’ expert impressively disputed the theory, but could come up with none of his own, other than that the debris piled in the basement was somehow ignited. There was a dispute whether good practice called for wetting down the areas being demolished as a safety precaution; Burgess had not done so. A demolition expert called by Burgess testified that he never knew of dust explosions when dismantling buildings, and that wetting down was done for environmental, not safety, purposes, and then only in the summer.

We conclude that Massachusetts law gave the plaintiff no right to instructions beyond those given. The court, apparently responding in part to plaintiff’s proffered instructions, told the jury in understandable language that it could rely on circumstantial evidence as proof of negligence and that the plaintiff had to establish merely that defendant’s negligent act was probably the cause of the fire. The court did not limit the jury to the dust explosion theory. Its instructions correctly permitted recovery on “a more generalized inference of negligence” as well as on the particular theory advanced. See United States v. Hull, 195 F.2d 64, 65 (1st Cir. 1952); Cassady v. Old Colony St. Ry., 184 Mass. 156, 68 N.E. 10, 12-13 (1910).

Res ipsa loquitur subsumes a variety of subtly different concepts; for this reason, commentators and courts have retreated from the term. See Gelinas v. New England Power Co., 359 Mass. 119, 268 N.E.2d 336, 338 (1971). In Massachusetts the doctrine never causes a shift in the burden of proof, and in recent times has simply been described as

“whether the evidence, considered in its entirety and in its light most favorable to the plaintiff, was sufficient to permit the jury as the trier of facts to infer that some negligent act or omission by the defendant caused the injuries sustained by the plaintiff. The test is not whether the evidence was such that it required the jury to infer negligence by the defendant, but only whether it was sufficient to permit such an inference.” Gelinas v. New England Power Co., supra, 268 N.E.2d at 338-339.

Here plaintiffs “got to the jury”, United States v. Hull, supra, 195 F.2d at 66; but they say the doctrine entitled them to have the judge tell the jury that, in essence, negligence could be inferred from defendant’s control and possession of the Old Mill at the time of the fire.

The plaintiffs might be right if logic or the law plainly gives rise to such an inference. While there is little authority on when a res ipsa instruction is required, we assume that in a sufficiently clear case, upon request, an instruction must be given. Cf. Ryan v. George L. Lilley Co., 121 Conn. 26, 183 A. 2 (1936) and Annot., 173 A.L.R. 880 (1948).

But there was here no such readily discernible connection between the fire and Burgess’ responsibilities as to require a special instruction. While the sum total of circumstantial evidence would have supported a plaintiff’s verdict had there been one, no particular feature of Burgess’ relation to the fire, or to the premises, was so suspect that the court had to single it out. We do not say the jury could not have drawn its own inferences from Burgess’ control of demolition and, when the fire occurred, of the premises; but the inference of negligence from those facts was not so manifest as to compel calling it to the jury’s attention, with the risk of giving it undeserved prominence. Burgess shared control of the premises with Shapiro. The latter was responsible for turning off the electricity and gas. The fire could have started from gas in the basement; a gas company workman had visited the premises shortly before the day of the fire to cap the pipes. Power remained in the new building, and there was some possibility of an electrical cause. Anyone could have entered the Old Mill from the street and there was perhaps access from the new building. Militating most strongly against any “common-sense” inference was the inability of either party’s experts to suggest—apart from the dust explosion theory, which the jury plainly rejected —how the fire began. The possibilities were canvassed in detail at trial. Where the experts had failed, it would have been illogical for the court to specifically point out to the jury that the event might speak for itself.

The Massachusetts cases reveal no judicial rule of thumb supportive of plaintiff’s contention. Outbreak of a fire is not evidence of negligence on the part of the owner of premises. Little v. Lynn & Marblehead Real Estate Co., 301 Mass. 156, 16 N.E.2d 688 (1938). In Roscigno v. Colonial Beacon Oil Co., 294 Mass. 234, 200 N.E. 883 (1936), the court declined to hold that common knowledge would warrant a finding of the owner’s negligence from the mere fact of an explosion in an oil refinery. In Zezuski v. Jenny Mfg. Co., 1973 Mass.Adv.Sh. 475, 293 N.E.2d 875 (1973), the court sustained a jury verdict against a supplier of gasoline for injuries from an explosion occurring during delivery. There is language in Zezuski that negligence could be inferred from the supplier’s “exclusive control” of the truck and hose, but other evidence supporting the verdict is also cited, and the case most likely reflects the higher duty of care imposed upon those dealing in ultra-hazardous substances. W. Prosser, Torts § 78 (4th ed. 1971). Cf. Triangle Dress, Inc. v. Bay State Service, Inc., 356 Mass. 440, 252 N.E.2d 889 (1969). In modern times, the Massachusetts court has most often avoided judicial rules of thumb except in clear cases, see Wilson v. Colonial Air Transport, Inc., 278 Mass. 420, 180 N.E. 212 (1932), and has left the jury to its own inferences.

Proposed instructions 2A and 3 which, in large part, were invitations to infer negligence from defendant’s purported “exclusive control and possession” were thus properly denied. Request No. 4 added nothing legally necessary to what had been said and was more favorable in tone to plaintiff than the court had to accept. The court was not required to put its thumb to the scales.

Request No. 2 was not a res ipsa instruction but was based on the recent case of Knowles v. Gilchrist Co., 1972 Mass.Adv.Sh. 1783, 289 N.E.2d 879, holding that a bailee, once a bailor proves delivery, has the burden of proving that he exercised due care to prevent loss of the property. As a possible harbinger it is not without interest. Burgess agreed to demolish the Mill and to leaye the new building intact, and might be likened to a bailee who contracts to hold and restore property intact. But we think it impermissible to read Knowles as setting down a rule applying not only to bailees but to contractors who, because of fire or other disasters, fail to comply with their contract. The court said, “our decision in this case creates only a specific rule for a specific class of cases, bailment for hire”, Id. n. 4, and its analysis was largely based upon the rules growing up in bailment cases. There are significant differences between a bailee and a contractor like Burgess. While the latter exercises some control, he shares it with others; a bailee, on the other hand, retains exclusive dominion. Whether to extend the Knowles rule to contractors is a matter we must leave to the Massachusetts courts.

Finally, we find no error in the court’s instruction that there could be no inference of negligence from the mere fact an accident happened, “considered alone, and standing by itself.” The instruction did not negate the jury’s right to infer negligence from the facts as a whole or any part of them. See Carmody v. Boston Gaslight Co., 162 Mass. 539, 39 N.E. 184, 185 (1895).

Affirmed.

      . “. . . in addition to the testimony of the witnesses and the facts established by your taking a look at the site, and examining the exhibits admitted in evidence which you have available to you, you are permitted to draw such reasonable inferences as seem advisable to you in the light of your experience, and common sense.”
      “An inference is not a guess, a surmise, or speculation, it is a deduction, a conclusion which reason and common sense leads a jury to draw from facts which are proven.”
      “Speaking of proving facts in issue in a case, they may be proven either by direct evidence of those facts or by circumstantial evidence of the facts.”
      “When I later in this charge tell you the plaintiff must prove three propositions to be more likely so than not, I want to tell you the plaintiff may prove these three things by direct evidence from what the witness says or by proving other facts from which you may reasonably infer the existence of those facts which is a way, I suppose, of telling you that either direct or circumstantial evidence can be used to prove facts.”
      “Direct evidence is what I have already indicated, the lay witness telling you what he learned by using his eyes or ears or any of his five senses.”
      “Circumstantial evidence is indirect evidence consisting of proof of certain facts from which a jury may properly infer the existence of still other facts which other facts usually and reasonably follow from the existence of those facts which have been directly proved.”
      “Incidentally, I am going to tell you that one of the things the plaintiff must prove to be more likely so than not is that the fire was caused by the negligence of the Burgess Brothers or an employee of the Burgess Brothers.”
      “When I tell you the plaintiff must prove it is more likely so than not that the cause of the fire was a negligent act on the part of someone for whom the Burgess Brothers are responsible, I do want to call to your attention at this time that the plaintiff does not have to exclude every other possibility. The plaintiff does have to prove a negligent act was probably the cause of this conflagration.
      * * * * * *
      “Your verdict must be based on what you find to be the credible or believable evidence as you recall it, supplemented by such inferences as your judgment, experience and plain common sense tells you to draw from those sources.”

      . Shapiro’s requests for instructions, as filed with the court, were as follows :
      “Request No. 2—It is conceded that there was no fire at the time that possession and control of the old mill was surrendered to the Defendant. Therefore, the Defendant lias the burden to prove by fair preponderance of the evidence that it has exercised due care to prevent the loss or destruction of the Plaintiff’s buildings and property in the buildings.
      Knowles v. Gilchrist Company, et al., 72 Adv.Shts. 1783 [289 N.E.2d 879] (Mass. 1972)
      “Request No. 2A—If you find that the Defendant had exclusive control and possession over the old mill at the time that the fire broke out and if you find that under the circumstances under which the fire broke out were such that it is probable that but for the negligence of someone that fire would not have occurred and you further find that the fire did not occur through the negligence of the Plaintiff, then you may conclude that the fire occurred because of the negligence of the Defendant.
      Edmonds v. Heil, 333 Ill.App. 497 [77 N.E.2d 863] ; Oakdale Building Corporation v. Smytherine [Smithereen] Co., 322 Ill.App. 222, 54 N.E.2d 231 (1944)
      “Request No. 3—The plaintiff has advanced the theory that the fire was caused by a dust explosion which occurred because the Defendant failed to take reasonable measures to prevent the formation of flammable dust clouds in the course of the demolition. Even if you do not accept this explanation put forth by the Plaintiff through its lay and expert witnesses, you are not precluded from finding that the Defendant’s negligence was the proximate cause of the fire if you find that a fire under the circumstances in which it occurred would not have occurred without the negligence on the part of some person and that the Defendant had exclusive control over the building in which the fire originated.
      Cassady v. Old Colony Street Railway Co., 184 Mass. 150 [68 N.E. 10] ; Cleary v. Cavanaugh, 219 Mass. 281 [106 N.E. 998].
      “Request No. 4—If you find that the negligence of the Defendant created a hazardous condition from which a fire could have started, the Plaintiff need not show in order to prevail in this ease the exact cause of the fire in order to establish the Defendant’s liability for the damage caused by that fire.
      Erbetta v. Gibbs Oil Company, 32 Mass.App.Dec. 123 (1964).”

      . The length of time between the first crash and the fire was, he testified, too great; moreover, there was no roof over much of the area where the clamshell was working, hence no enclosed space for a dust cloud to form.

      . We so characterize the requests for simplicity’s sake. We recognize that there was more to them ; they appear in the margin, supra.

      . For example, the escape of gas from a main has long been recognized as some evidence of the utility's negligence, see Smith v. Boston Gas Light Co., 129 Mass. 318 (1880). In the case of a passenger, the fact of an accident may evidence a common carrier's negligence, see Patton v. Texas & Pac. Ry., 179 U.S. 658, 665, 21 S.Ct. 275, 45 L.Ed. 361 (1901). The mere starting of a factory machine without human agency may evidence an employer's negligence. Ryan v. Fall River Iron Works Co., 200 Mass. 188, 86 N.E. 310 (1908). Beyond such sanctioned rules of thumb, sometimes based on policy, are occurrences giving rise to obvious, common-sense inferences of negligence. Had Burgess' crane dropped bricks on a passerby, negligence might be inferred from the fact of the accident coupled with Burgess' exclusive control of the crane; and, upon request, the jury should be instructed of its right to draw the inference. Restatement (Second) Torts § 328D, comment g. Cf. Pelland v. D'Allesandro, 321 Mass. 387, 73 N.E.2d 590, 591 (1947).


author: PER CURIAM:

text:
    Edith P. GOODWIN, Appellee, v. HARTFORD LIFE INSURANCE COMPANY, Appellant.
    No. 73-1645.
    United States Court of Appeals, Third Circuit.
    Argued Dec. 11, 1973.
    Decided Jan. 14, 1974.
    See also, D.C., 352 F.Supp, 907.

      Stephen J. Laidhold, James K. O’Malley, Morris, Safier & Makoroff, Pittsburgh, Pa., for appellee.
    Edward L. Springer, Joseph Friedman, Springer & Perry, Pittsburgh, Pa., for appellant.
    Before HASTIE, HUNTER and GARTH, Circuit Judges.
   OPINION OF THE COURT

PER CURIAM:

This is a diversity action, in which the plaintiff-appellee has sued the appellant-insurance company to recover as the beneficiary of her deceased husband who was allegedly covered by a group life insurance policy issued to the Ever-Soft Company of Pennsylvania as policyholder. Pennsylvania law is applicable.

The district court found that the deceased husband, though enrolled under the policy, was never eligible for coverage. This conclusion was based on the fact that eligibility under the policy was limited to “active full-time employees” of the Ever-Soft Company and this, in turn, was defined under the contract to include only those people who were employed “the normal work week, but in no event less than 30 hours per week.” The court found that the deceased husband never put in the required number of hours with the Company and was therefore never qualified for coverage. However, despite this finding, the district court went on to conclude that the plaintiff could still recover the face amount of the policy ($25,000.00) since it felt that the insurance company was estopped from invoking the decedent’s inadequate employment status as a defense to liability.

In this appeal, the insurance company contends that equitable estoppel should not have been invoked against it and that therefore recovery by the plaintiff was improper. The plaintiff-appellee makes no objection to the finding that her deceased husband was ineligible for coverage. Her only contention is that the district court was correct in barring the appellant’s use of this defense. We find that all of the elements needed for an equitable estoppel are not present in this case. As a result, the appellant’s meritorious defense can operate and we must reverse the decision of the district court.

The appellant argues that the claim to an equitable estoppel by the appellee is defective in several respects. While we believe that a number of these contentions are strong, there is no need to discuss each of them since the absence of sufficient proof of any one of the required elements must dictate a decision in favor of the appellant.

Under the law of Pennsylvania, one necessary element of an equitable estoppel is a finding that the party seeking to invoke it has established, by a preponderance of the evidence, that he relied in good faith upon the position assumed by the opposite party. Nesbitt v. Erie Coach Co., 416 Pa. 89, 95-96, 204 A.2d 473 (1964). Stated otherwise, “the party claiming the estoppel [must establish a] lack of knowledge and of the means of knowledge of the truth as to the facts in question." Watt Estate, 409 Pa. 44, 65-66, 185 A.2d 781, 792 (1962).

In the case before us, the district court refused to find that the appellee had established her deceased husband’s “good faith” despite the fact that the absence of this finding was specifically brought to the court’s attention by the appellant's “Motion to Alter, Amend, Reconsider or Vacate Judgment.” When squarely faced with this omission, the district court found not that good faith was established by the appellee, but only that bad faith was not established by the appellant. Since the burden of proof on this issue is upon the appellee, as the party relying on the estoppel, this finding is insufficient since it in no way suggests that a preponderance of the evidence presented supports a finding of good faith.

We respect the district court’s reluctance to find “good faith” on the facts of this case, for this is not a situation in which an unsuspecting layman was led to believe that he met the eligibility requirements for a policy of insurance. Indeed, if such a finding had been made, we feel that it would have been clearly erroneous. The appellee’s deceased husband, in addition to being a self-employed accountant doing tax and pension consulting work, was qualified by examination of the Pennsylvania Insurance Department to write both individual and group life insurance. As a result there is no serious question as to his ability to understand the eligibility requirements attached to the policy in question.

In addition, the evidence establishes that he served as controller of the Ever-Soft Company for several years, and that at the time he “enrolled” under the policy he was managing the company while the president recuperated from a heart attack. Thus, his ready access to information on the eligibility requirements—including full-time employment status—cannot seriously be questioned either.

Given these facts, we feel compelled to conclude that good faith is not established since, under the language of Watt Estate, the appellee’s deceased husband clearly had, at a minimum, “the means of knowledge of the truth as to the facts in question” 409 Pa. at 65-66, 185 A.2d at 792. Inasmuch as the appellee failed to establish the requisite good faith, an equitable estoppel cannot act to bar the appellant’s reliance on a defense found to be otherwise meritorious by the district court.

The judgment of the district court will be reversed with instructions to enter judgment for the defendant.

      . We note that the briefs of the parties and the eases they cite seem to refer to the doctrine applied as “equitable estoppel” or “waiver” as though those two concepts were completely interchangeable. This is somewhat troubling, since the concepts, though related, are not identical. See 14 P.L.E. Estoppel § 28 (1959).
      However, in this case, there is no suggestion that the waiver was express, so that if a waiver is present, it would have to be an implied waiver. Under Pennsylvania law an implied waiver exists only when the elements of an estoppel are present. Brown v. Pittsburgh, 409 Pa. 857, 360-361, 186 A.2d 399 (1962) ; Yellow Cab Co. v. Carpol Realty Co., 221 Pa.Super. 132, 136, 289 A.2d 241 (1972). Therefore, in the circumstances of this case, the two doctrines have precisely the same requirements.

      . See Albert v. Lehigh Coal and Navigation Co., 431 Pa. 600, 615, 246 A.2d 840 (1968).

      . At oral argument the appellee’s attorney suggested that the district court “found” good faith in a paragraph contained in footnote 2 of its Supplementary Opinion and Order where the court pointed to several pieces of evidence as “indicative of good faith.” We do not believe this can be considered a proper finding, nor do we believe it was intended as such. The paragraph does not purport to weigh all the evidence on the question of good faith in order to draw an overall conclusion. Instead, it only seeks to recapitulate several items of evidence favorable to the appellee.

      . We note, once again, that despite the highly responsible nature of these positions, the appellee does not dispute the finding that her deceased husband worked less than the required thirty hours per week.


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Joseph J. SHAPIRO, Defendant-Appellant.
    No. 73-1670.
    United States Court of Appeals, Sixth Circuit.
    Argued Dec. 5, 1973.
    Decided Feb. 6, 1974.
    Robert L. Sloss, Jon L. Fleischaker, Wyatt, Grafton & Sloss, Laurence E. Higgins, Louisville, Ky., on brief, for defendant-appellant.
    Margaret A. Cotter, U. S. Dept. of Justice, for plaintiff-appellee; George J. Long, U. S. Atty., A. Duane Schwartz, Asst. U. S. Atty., Gregory B. Hovendon, Chief, Consumer Affairs Section, AntiTrust Div., U. S. Dept. of Justice, Washington, D. C., on brief; Peter Barton Hutt, Asst. Gen. Counsel, Joanne S. Sisk, Chief, App. and Sp. Proceedings Branch, Barbara L. Spivak, Atty., Office of the Gen. Counsel, Food and Drug Div., Dept. of Health, Ed. and Welfare, Rockville, Md., of counsel.
    Before EDWARDS and PECK, Circuit Judges, and McALLISTER, Senior Circuit Judge.
   PER CURIAM.

This is an appeal from the District Court’s order revoking defendant-appellant’s probation and imposing a sentence of six months imprisonment.

Appellant Shapiro is the former co-owner of the Tasty Cookie Company, holding the positions of president and sales manager. His partner Yandell O’Koon was secretary-treasurer and production manager. After charges of violating the Food, Drug and Cosmetic Act, 21 U.S.C. § 331(a) & (k) (1970), were filed in an information both men pled guilty to four counts involved in those charges and nolo contendere to one count. Each defendant was fined three hundred dollars on each count and was given a probated two-year sentence “. with the condition that the defendant conduct his food handling in accordance with the Federal Food, Drug and Cosmetic Act.” After the probation order was entered, the plant was closed for a one-month period for cleaning purposes and reopened in mid-January 1973. The men also agreed to sell the plant and in early February a prospective purchaser, Red River Industries, was found. Negotiations with Red River proceeded but in the meantime disagreements arose between the partners, and in late March Shapiro bought out his partner in order to complete the sale to Red River. During the subsequent negotiations Red River hired a man named Reed to take charge of Tasty’s production. Six days after hiring Reed, Red River signed a formal agreement with appellant giving the “operations and management” to Red River effective April 10. On April 18, a stock purchase agreement reciting the undertakings of the parties in great detail was signed. Final closing occurred on April 27 but just prior to the closing date, on April 23-24, an FDA inspector examined the Tasty premises and found them to be in noncompliance with the FDA regulations in that they were accessible to and infested with vermin.

Armed with the inspection’s results, the FDA petitioned the District Court to revoke Shapiro’s probation and, after a hearing, the court found Shapiro had violated the terms of probation and imposed a six months incarceration. No action was taken against Shapiro’s former partner since his resignation preceded the April 23-24 inspection of the company by the FDA.

As a point of departure, we note that it is well settled that a trial court has discretion to revoke an order of probation and that, upon review, an appellate court must determine whether that discretion was abused. Burns v. United States, 287 U.S. 216, 53 S.Ct. 154, 77 L.Ed. 266 (1932); United States v. Tucker, 444 F.2d 512 (6th Cir. 1971), cert. denied, 404 U.S. 1048, 92 S.Ct. 711, 30 L.Ed.2d 739 (1972). Our review of the record convinces us that the District Court did not abuse its discretion in revoking the appellant’s probation.

The record clearly establishes that not only was Shapiro given adequate notice as to the type of activity proscribed by the terms of his probation but also it is clear that the terms of the probation were neither vague nor uncertain. Further, there is more than sufficient evidence for the District Court to reasonably conclude that Shapiro had not complied with the terms of his probation. The record is replete with evidence, testimonial and demonstrative, that food products continued to be produced under unsanitary conditions in a vermin infested plant. The results of the April 23-24 inspection clearly reflect that there was a continuing lack of interest in plant sanitation and that the promised correction of unsanitary conditions was not met with adequate attempts to fulfill those promises.

At the revocation hearing Shapiro did not contest any factual matters relating to the condition of the plant nor did he dispute that the conditions violated the Act. His only defense was that he was not responsible for the discovered violations because he was no longer a responsible officer of the company. He maintains that although legal title to the plant did not pass until the closing date of April 27, equitable title passed to Red River pursuant to the April 10 agreement and that transfer was sufficient to absolve him of responsibility for the violations. In support of this contention, Shapiro relies on Hamilton v. United States, 219 F.2d 364 (10th Cir. 1955). In that case Hamilton had been previously placed on probation for violating certain federal income tax laws. At the time he owned a 51 percent partnership interest in a pharmacy and subsequent to the imposition of the probated sentence, in a separate proceeding, the pharmacy and his partner were indicted and convicted for violations of the Federal Food, Drug and Cosmetic Act. However Hamilton was not indicted inasmuch as he exercised no control over the pharmacy’s management and relied upon auditor’s reports for information regarding the business’ operation. Despite this, the trial court revoked his probation. On appeal, the Tenth Circuit concluded that under the circumstances there was no proof that the defendant had committed any violation of the Act and therefore it was an abuse of discretion to revoke his probation.

Hamilton is inapposite on its facts. Here Shapiro held the same corporate title on the date of the inspection that he held on the date he entered the guilty pleas to violating the Act. During that period his ownership of the corporate assets actually increased from 50% to 100%. In his capacity as president of the company and owner of all the assets, Shapiro had the power and the authority to devise whatever measures were necessary to assure compliance with the FDA regulations. There was no need for him to continue producing cookies under unsanitary conditions. He could have shut down the plant until the company was sold and new ownership could assume complete and unobstructed control. He could have required Red River, in the April 10 agreement, to assure that adulterated food products from the Tasty plant would not be made available to the consumer. Or he could have completely and adequately cleaned the plant. It is clear that appellant failed to implement adequate safeguards at any time.

Of course, neither physical presence nor personal participation is required for a finding of criminal responsibility under the Act. United States v. Dotterweich, 320 U.S. 277, 64 S.Ct. 134, 88 L.Ed. 48 (1943); United States v. Cassaro, Inc., 443 F.2d 153 (1st Cir. 1971); United States v. Parfait Powder Puff Co., 163 F.2d 1008 (7th Cir. 1947), cert. denied, 332 U.S. 851, 68 S.Ct. 356, 92 L.Ed. 421 (1948). Shapiro admits that he made several visits to the plant after the April 10 agreement and he had adequate opportunity to observe the conditions.

The appellant also contends that the sentence imposed by the District Court is harsh considering the facts of the case and Shapiro’s advanced age. Until there has been an application to the District Court and either a denial of the application or a failure to act thereon, this Court has no basis on which it may review the matter. Glouser v. Van Alstine, 313 F.2d 199 (8th Cir. 1963), cert. denied, 374 U.S. 857, 83 S.Ct. 1902, 10 L.Ed.2d 1077. Accordingly, the appellant’s arguments as to this issue should properly be directed to the District Court in the form of a motion to reduce sentence pursuant to Rule 35, Fed.R.Crim.P.

The judgment of the District Court is affirmed.