author: PER CURIAM:

text:
    William Michael BRYAN, Petitioner-Appellee, v. Louie L. WAINWRIGHT, Director, Division of Corrections, Respondent-Appellant.
    No. 74-3179.
    United States Court of Appeals, Fifth Circuit.
    April 16, 1975.
    Robert L. Shevin, Atty. Gen., Donald K. Rudser, Asst. Atty. Gen., Tallahassee, Fla., for respondent-appellant.
    Joseph S. Farley, Jr., Jacksonville, Fla., for petitioner-appellee.
    Before GOLDBERG and RONEY, Circuit Judges, and LYNNE, District Judge.
   PER CURIAM:

The district court ordered release or retrial of a state prisoner on the ground that the jury which convicted him of manslaughter was unconstitutionally coerced by the giving of an Allen charge and a subsequent twenty minute deadline to “see if you can arrive at a verdict.” Bryan v. Wainwright, 377 F.Supp. 766 (M.D.Fla.1974). Deciding that the coercive effect, if any, of the state trial procedure does not reach constitutional proportions, we reverse with instructions to deny the petition for writ of habeas corpus.

The facts are not in issue, only their effect. The district court relied on the state trial record which revealed the following. Petitioner’s trial for murder lasted approximately two and one-half days. Testimony as to some of the critical events occurring at the time of the homicide was directly contradictory. The jury received the case at 3:37 p. m. At approximately 9:07 p. m., after the jury had been deliberating for five and one-half hours, the judge returned the jury to the courtroom to determine whether they were close to a verdict. Upon learning that they were not, the judge gave the following supplemental instructions, which is commonly characterized as an Allen charge:

THE COURT: Be seated there. Let me just say this at this time. In a large proportion of cases, absolute certainty can’t be expected. Although a verdict must be the verdict of each individual juror, and not a mere acquiescence in the conclusion of his fellows, each juror should examine the request submitted with candor and fairness and with a proper regard and a deference to the opinion of others. You should listen to each other’s arguments and views with an open mind and in a disposition to be convinced. Just as it is your duty to decide this case with a unanimous verdict if you can conscientiously do so, no juror, however, is expected to yield a conscientious conviction he may have upon the evidence. If, however, the majority of your number are for a conviction, a dissenting juror should consider whether his doubt is reasonable when it has made no impression upon the minds of the other jurors, equally honest and equally intelligent. If, on the other hand, the majority of the jury is for an acquittal, a minority should ask themselves whether they might not reasonably doubt the correctness of their judgment, which is not shared by the majority of their fellow jurors. A jury verdict must be a unanimous verdict of all of you, but it must also be the verdict of each of you.
And I make these suggestions at this time, and we’ll give you some more time to see whether or not you can reconcile your differences and see if you can arrive at a unanimous verdict without yielding the conscientious conviction of your own. If you’d retire to the jury room, we’ll give it another try for a while. You may now return to the jury room.

After the jury had again retired to deliberate, the judge advised counsel that he would call the jury back at 9:37 p. m., saying “[tjhat will be six hours and if they can’t arrive at a verdict in six hours, I don’t think they ever will.” At 9:37 p. m., the judge did call the jury back, whereupon the following discussion took place:

THE COURT: Ladies and Gentlemen of the Jury, do you believe that you can arrive at a verdict in a short period of time?
JUROR: I believe we’re closer to it than we were. I have that idea.
THE COURT: If I give you another 20 minutes, will that be enough? You want to give it a try for 20 minutes? JUROR: All right.
THE COURT: All right. We’ll give you another 20 minutes and see if you can arrive at a verdict within the next 20 minutes. You can retire to the jury room.

Seventeen minutes later the jury returned with a unanimous verdict, finding Bryan guilty of the lesser included offense of manslaughter.

In exhausting his state remedies, petitioner’s argument that the above procedure was impermissibly coercive met with mixed acceptance but ultimate failure. On direct appeal, the Florida First District Court of Appeal reversed the conviction and remanded the case for a new trial because of the giving of the Allen charge. Bryan v. State, 280 So.2d 25 (Fla.App.1973). Two members of the three-judge appellate panel stated that, while the Allen charge was not impermissible per se, in this case the charge, coupled with the subsequent instruction setting a twenty minute period for deliberation, constituted prejudicial error. 280 So.2d at 28. Granting a writ of certiorari, the Florida Supreme Court reinstated the verdict and judgment of the trial court. In a 5-2 decision, the court found that neither the Allen charge nor the twenty minute instruction constituted prejudicial error. State v. Bryan, 290 So.2d 482 (Fla.1974).

The federal district court, however, reviewing the same record that was before the state court, decided that under the totality of the circumstances surrounding the eventual guilty verdict in this case a “coercive atmosphere was created in which the jury was forced to deliberate to verdict.” The court concluded that this coercive effect acted to deprive petitioner of his constitutional rights of due process under the Fifth and Fourteenth Amendments. Bryan v. Wainwright, 377 F.Supp. 766, 769 (M.D.Fla.1974). The cases relied on by the district court and cited in its opinion, 377 F.Supp. at 769-770, were direct appeals in which the coercive effect of the facts did not have to rise to the constitutional level of deprivation of due process to merit relief.

A federal writ of habeas corpus is available to a state prisoner “only on the ground that he is in custody in violation of the Constitution or laws or treaties of the United States.” 28 U.S.C.A. § 2254(a).

The United States Supreme Court has never receded from its approval of the supplemental charge given in Allen v. United States, 164 U.S. 492, 17 S.Ct. 154, 41 L.Ed. 528 (1896). Although many courts have criticized or discarded the Allen charge, we have not been referred to nor found any cases which have based the decision on federal constitutional grounds. This Court has recently once again approved the use of the Allen charge, United States v. Bailey, 480 F.2d 518 (5th Cir. 1973) (en banc), but even those courts which no longer approve the Allen charge have based their decisions on the general supervisory power of the reviewing court. See, e. g., United States v. Thomas, 146 U.S.App.D.C. 101, 449 F.2d 1177 (1971) (en banc); United States v. Fioravanti, 412 F.2d 407 (3d Cir.), cert. denied, 396 U.S. 837, 90 S.Ct. 97, 24 L.Ed.2d 88 (1969); Winters v. United States, 317 A.2d 530 (D.C.Ct.App.1974); People v. Sullivan, 392 Mich. 324, 220 N.W.2d 441 (1974), each of which cites many additional cases concerning the Allen charge. It is, therefore, left to each state to make its own decision as to the usefulness of this type of instruction.

The point for decision in this case then is whether the subsequent colloquy between the state trial judge and the jury which resulted in an additional twenty minute period for deliberation raised the approved impact of the Allen charge to unconstitutional coercion.

It is now well settled that “[ujnless there is a clear showing that the errors complained of were so gross or the trial was so fundamentally unfair, habeas corpus will not lie to set aside a conviction on the basis of improper instructions.” Young v. Alabama, 443 F.2d 854, 855 (5th Cir. 1971), cert. denied, 405 U.S. 976, 92 S.Ct. 1202, 31 L.Ed.2d 251 (1972); accord, Pleas v. Wainwright, 441 F.2d 56 (5th Cir. 1971).

Viewed in the totality of circumstances, we think the district judge erred in deciding from the state record that the jury was necessarily coerced to the point of constitutional prejudice to the defendant. Cf. Basker v. Crouse, 426 F.2d 531 (10th Cir. 1970); Connor v. Deramus, 374 F.Supp. 504 (M.D.Pa.1974). Having decided that the comment of the judge was not so prejudicial as to make the trial fundamentally unfair it becomes unnecessary to revisit the results reached in United States v. Amaya, 509 F.2d 8, (5 Cir. 1975), and Thaggard v. United States, 354 F.2d 735, (5 Cir. 1965), cert. denied, 383 U.S. 958, 86 S.Ct. 1222, 16 L.Ed.2d 301 (1966), in the exercise of our supervisory power over proceedings in federal courts. The petition for writ of habeas corpus should have been denied.

Reversed.


source: Caselaw Access Project

author: BELL, Circuit Judge: THORNBERRY, Circuit Judge

license: Public Domain

text:
    AMERICAN BODY AND EQUIPMENT COMPANY, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
    No. 74-2756.
    United States Court of Appeals, Fifth Circuit.
    April 16, 1975.
    Charles G. Barnett, James A. Knox, Dallas, Tex., for plaintiff-appellant.
    Frank D. McCown, U. S. Atty., Ft. Worth, Tex., Martha Joe Stroud, Asst. U. S. Atty., Dallas, Tex., Scott P. Cramp-ton, Asst. Atty. Gen., John E. Lutz, Ernest J. Brown, Myron C. Baum, Attys., Dept, of Justice, Tax Div., Washington, D. C., Howard A. Weinberger, Tax Div., Dept, of Justice, Dallas, Tex., for defendant-appellee.
    Before BELL, THORNBERRY and GEE, Circuit Judges.
   BELL, Circuit Judge:

This appeal is brought from a judgment by the district court denying appellant taxpayer’s claim for a $3,302.84 refund on federal income taxes assessed and collected for fiscal year ending August 31, 1968. The court rejected appellant’s contention that it should have been allowed to deduct interest paid on insurance policy loans under Section 264(c)(4) of the Internal Revenue Code of 1954. We affirm.

In 1963, appellant American Body and Equipment Company purchased the entire capital stock of another corporation. The purchase price was $214,000, plus the assumption by appellant of a $177,-457.94 debt owed by the acquired corporation. Appellant paid $20,000 in cash at the closing, and the remaining $194,000 was to be paid thereafter in monthly installments bearing 6 percent interest. As security for these installment notes, appellant was required to purchase $194,000 worth of insurance on the life of its president, F. Edward Clay, whose presence at the helm of appellant was thought to be essential to its future earning success. There was no such insurance requirement for the assumed debt of the acquired corporation.

Because of the assumed debt, appellant decided to purchase insurance on its president over and above that necessary to meet the requirement based on the indebtedness of $194,000. It thereupon purchased a whole life insurance policy face valued at $308,000 on Clay’s life. For each of the next five years, appellant paid the annual premium on the policy, and borrowed against the policy’s accrued cash value the maximum available. Appellant also received annual dividends from the insurer. The net death benefit on the policy was reduced each year by the amount of the loans, and by 1968 had been reduced to $200,000.

During fiscal year 1968, appellant paid the $26,000 annual premium, but received $5,400 in dividends and borrowed $21,600 against the policy’s accrued cash value. Appellant also paid $5,670 in interest to the insurer on the $108,000 debt that it had built up over the first five years of the policy’s life.

On its 1968 tax returns, appellant attempted to deduct $5,577.75 of the interest payment, relying upon IRC § 264(c)(4). Section 264(a)(3) disallows deduction for

any amount paid or accrued on indebtedness incurred or continued to purchase or carry a life insurance endowment, or annuity contract pursuant to a plan of purchase which contemplates the systematic direct or indirect borrowing of part or all of the increases in the cash value of such contract .

Section 264(c)(4) provides, however, that the above subsection shall not apply to amounts paid or accrued on indebtedness “if such indebtedness was incurred in connection with [the taxpayer’s] trade or business.” The IRS refused to permit appellant to deduct the interest on its insurance loan under the trade or business exception, and this refund suit followed.

After reviewing the House and Senate Reports which accompanied the 1964 amendments to § 264, the district court determined that the intent of Congress with respect to the trade or business exception was to deny tax deductions for interest payments where there exists no “economic substance” to the transaction giving rise to the indebtedness. Relying heavily upon Knetsch v. United States, 1960, 364 U.S. 361, 81 S.Ct. 132, 5 L.Ed.2d 128, the court found the premium payment-cash value loan transaction between appellant and its insurer to be an “in and out proposition” creating no real economic debt. Consequently, interest paid thereon was outside the scope of the congressionally-intended statutory deduction embodied in § 264(c)(4).

Whether the interest payment herein made can be construed to fit within the § 264(c)(4) exception to that section’s general rule of nondeductibility is a question of first impression at the federal appellate level. The major cases involving similar deductibility questions have all been decided with reference to the law as it existed prior to August 6, 1963, the applicability date for § 264(a)(3) and the exceptions to it found in § 264(c). In these cases, the deductibility of interest payments was determined according to the economic substance and business purpose of the underlying transaction. See e. g., Knetsch v. United States, supra; Salley v. Commissioner, 5 Cir., 1972, 464 F.2d 479; Woodson-Tenent Laboratories, Inc. v. United States, 6 Cir., 1972, 454 F.2d 637; Golsen v. Commissioner, 10 Cir., 1971, 445 F.2d 985; Campbell v. Cen-Tex, Inc., 5 Cir., 1967, 377 F.2d 688. This same approach was taken by the court below in the instant case.

Without reaching the question of the economic substance of appellant’s insurance loan transaction, we affirm the district court based upon the legislative history of § 264(c)(4) as found in the House and Senate Reports accompanying the 1964 Revenue Act. See note 2 supra. On the importance of legislative history in discerning the meaning and purpose of statutory language, see Commissioner v. Bilder, 1962, 369 U.S. 499, 502-504, 82 S.Ct. 881, 8 L.Ed.2d 65, 68-69; Graff Chevrolet Co. v. Campbell, 5 Cir., 1964, 343 F.2d 568, 571. It was clearly the intent of Congress in creating the trade and business exception to § 264(a)(3) not to allow a taxpayer to deduct interest on cash value indebtedness incurred to finance the very insurance which created the cash value. The debt against cash value must be incurred for a business purpose apart from the insurance plan itself before interest paid thereon may be deductible under § 264(c)(4). Cf. Treas.Reg. § 1.264-4(d)(4). Here, interest was paid on indebtedness systematically incurred for the purpose of life insurance, not for an independent business purpose. Interest paid thereon was thus not deductible.

Affirmed.

THORNBERRY, Circuit Judge

(concurring):

Although the district court insisted on utilizing “economic substance” analysis found in earlier ease law to decide this matter, instead of utilizing the statute which Congress enacted partially to supplant the earlier case law, I believe the judgment for the government is correct and therefore must be affirmed. I concur in the judgment of this court and in its opinion with respect to the facts of this appeal, but I feel it necessary to add a few remarks concerning my apprehension of what we do and do not decide for the future.

It seems to me that the appellant’s real problem in this refund suit is a failure to prove its case. As the taxpayer, the appellant had the burden of proof on all material issues. Appellant relies on § 264(c)(4) of the Internal Revenue Code, the so-called “trade or business exception” to the general disallowance expressed in § 264(a)(3). Added to the Code by the 1964 Revenue Act, these provisions read together say that a taxpayer may not deduct interest on money borrowed, directly or indirectly, against a life insurance policy pursuant to a plan of systematic borrowing whose purpose is to finance the cost of insurance, i. e., the premium(s). The “exception,” however, goes on to say that the interest may be deducted, if the borrowing was done “in connection with [the taxpayer’s] trade or business.” A close reading of the legislative history and applicable Treasury Regulations persuades me that this “exception” is not really that at all, but rather a different rule.

I suspect that what Congress and the Treasury had in mind with § 264(c)(4) was a situation in which the purpose of the borrowing is the financing of business obligations other than the purchase of life insurance. If the latter is the thing that the taxpayer has done, then I read § 264(a)(3) as saying that interest on the borrowing may not be deducted under any label.

The examples of “business obligations” given in the legislative history and in the Regulations are expansion of inventory and purchase of capital improvements. I seriously question whether § 264(c)(4), as written, may be limited so narrowly. If it were, then the Regulation might be unreasonable. For example, if I ran a business and needed cash to meet my payroll; I went to the bank and borrowed $10,000 at 10% per annum; I paid my employees; then I repaid the bank a total of $11,000; I assume that I ■ would be entitled to deduct $10,000 under § 162 (the trade or business deduction) and $1,000 under § 163 (the interest deduction). Yet I have neither expanded my inventory nor made a capital improvement to my business.

It seems that the appellant would show the court that its activity resembled the hypothetical, only the appellant borrowed the principal amount from the insurance company instead of the bank. Its problem, however, is twofold. First, appellant failed to keep a separate accounting of how the borrowed funds were spent. Second, it failed t.o prove that the accumulated borrowings represented a genuine indebtedness in the sense of a factually genuine expectation of repayment on the part of the lender, the insurance company. The first failure is explicit in the trial court’s findings of fact. The second is implicit in the trial court’s conclusion that “the indebtedness was not real.” These findings, in light of the record, are not clearly erroneous, and indeed the testimony of Mr. Clay, appellant’s president whose life was insured, supports the conclusion that the “debt” was not genuine.

Under these circumstances, the appeal does not present an appropriate occasion to consider the scope of the “trade or business exception,” the interpretative value of the legislative history and Regulations, or the question whether in fact appellant used the borrowed sums to finance the cost of life insurance. Before any of these issues could become germane, it was necessary that appellant present evidence of a genuine indebtedness- — so that the premium thereon could constitute “interest” within the meaning of § 163 — and evidence that the borrowed principal was spent in furtherance of trade or business activity other than the purchase of life insurance. Appellant did neither. The district court, despite the unclear language about shams in its opinion, found that appellant failed to meet its burden. That finding is not erroneous; therefore I concur.

      . American Body and Equipment Co. v. United States, N.D.Tex., 1974, 372 F.Supp. 525.

      . The trade or business exception to the general rule of nondeductibility found in § 264(a)(3) is explicated in the House and Senate Reports accompanying the Revenue Act of 1964. See 1964 U.S.Code Cong. & Ad.News, pp. 1369-71 (House Report); 1750-52 (Senate Report). Both Reports provide, in identical language:
      The interest deduction is not to be denied where the indebtedness actually is to finance business obligations, rather than to carry insurance. For example, an individual with an insurance policy would not have his interest deductions denied where it can be shown that the amounts borrowed by him were actually used to finance the expansion of inventory or for other similar business needs.
      Id. at pp. 1371, 1752.

      . Under our holding, we reach the scope of the § 264(c)(4) exception only to the extent of finding it inapplicable to the facts presented.

      . See the citations in note 2 of Judge Bell’s opinion, supra.

      . Treas.Reg. § 1.264^(d)(4).

      . Cf. Knetsch v. United States, 364 U.S. 361, 81 S.Ct. 132-, 5 L.Ed.2d 128 (1960).


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Elizabeth TUCKER, Defendant-Appellant.
    No. 74-3735.
    United States Court of Appeals, Fifth Circuit.
    April 16, 1975.

      E. Glenn Tucker, John L. Laskey, Naples, Fla., for defendant-appellant.
    Robert W. Rust, U. S. Atty., David F. McIntosh, Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee.
    Before TUTTLE, COLEMAN and SIMPSON, Circuit Judges.
   PER CURIAM:

The appellant, Mrs. Elizabeth Tucker, an elderly widow, for a number of years prior to September 1973, was the owner of “Angelus”, a forty-eight foot, 1933 model Matthews, gas screw cruiser, which she customarily kept moored at the City Dock, Naples, Florida. This was nearby and convenient to her place of business, and she lived aboard the vessel. Naples adopted a city ordinance the effect of which was to prohibit use of vessels moored at the City Dock as living quarters. The appellant’s modest finances would not permit her to maintain both the yacht and separate living quarters as well. She listed the yacht for sale with a local yacht brokerage, which on October 9, 1973 communicated an offer from Thomas DelGaudio to purchase the vessel for $9,000, with a deposit of $1000 earnest money being tendered. Mrs. Tucker accepted the offer and the sale was consummated, except for necessary paper work as to licensing and registration, on October 10 by the payment of an additional $4,000. The remaining purchase price of $4,000 was covered by the delivery to the seller of a promissory note calling for payments of $2,000 each on November 15, 1973 and December 15, 1973. The broker prepared the note, a “Marine Purchasing Agreement and Deposit Receipt”, and a “Closing Statement”. The Purchasing Agreement restricted use of the vessel to a radius of 50 miles from Naples, Florida, a not unusual provision for the seller’s protection where a security interest is retained.

Mrs. Tucker removed all her effects from the vessel and delivered possession of it, with its keys to DelGaudio on October 10. At that time the documentation papers were in transit for annual renewal between Mrs. Tucker and the United States Coast Guard. Subsequent to October 10, 1973 the record is undisputed that she was never again aboard the vessel and never exercised any dominion over it. DelGaudio had exclusive control of “Angelus” at all times thereafter.

Four weeks later, at 3:45 p.m. on November 7, 1973, the “Angelus” exploded and sank alongside the fuel pumps at the Naples City Dock. Both Mrs. Tucker and DelGaudio received notice from the United States on November 10, 1973 that the “Angelus” was sunk at Naples, Florida, and were requested by the notice to mark and remove the vessel. Neither Mrs. Tucker nor DelGaudio marked the vessel. The City of Naples about that date marked the vessel for a time ending in early December 1973. The vessel was not thereafter marked nor removed up to the date of the trial below, March 14, 1974. The appellant refused to sign a permit for the City to remove the vessel on the ground that such permission might be construed as an admission of ownership.

Mrs. Tucker and DelGaudio were indicted on April 4, 1974 on two counts charging violation of Title 33, U.S.C., Sections 409 and 411: Count I alleged that they, as owners of the “Angelus” had knowledge that the vessel had exploded and sunk in a navigable channel and failed to commence and diligently prosecute removal of the vessel; and Count II alleged that the two defendants, as owners of the yacht “Angelus” had knowledge that the vessel had exploded and sunk in a navigable channel and failed to mark the vessel and to maintain such marks until her removal or abandonment. Joint jury trial was held after the denial of Mrs. Tucker’s motion for severance, with the appellant being found guilty of both counts and DelGaudio being found not guilty as to both counts. Mrs. Tucker testified at length in her own behalf. DelGaudio did not take the stand but testimony was introduced showing that the vessel was in the custody of and being operated by a man who had been seen with and associated with DelGaudio on numerous prior occasions. The defendant was sentenced to thirty days confinement (suspended) and six months probation as to each count to run concurrently, one condition of probation being that she move the “Angelus” from the Naples harbor within thirty days of the imposition of sentence. This condition was complied with.

After the district court denied timely motion for judgment n. o. v. and for a new trial, this appeal timely followed. Mrs. Tucker presents several issues for our consideration on appeal: (a) whether the statute on its face authorized her prosecution; (b) whether the trial court erred when it denied her motion for judgment of acquittal and for judgment n. o. v.; (c) whether it was error to deny her motion for severance, and (d) whether the trial court erroneously refused certain jury instructions requested by the defendant Tucker.

We find it necessary to consider only the second ground of appeal, which raises the sufficiency of the evidence to support the verdict. Since Title 33, U.S.C., Section 409, is directed against failure of an owner to mark and remove a sunken vessel, the indictment accordingly necessarily charged the appellant as an owner, and it was essential to the government’s case to prove that she was either the owner or a co-owner, of the vessel when it sank. The failure to prove the defendant-appellant’s ownership was fatal to the government’s case. The point was preserved for appellate review' by the trial court’s denial of appellant’s motions for judgment of acquittal at the close of the government’s case, and at the close of all the evidence, and also by the post-trial denial of her motion for judgment n. o. v.

The judgment appealed from is reversed with directions to dismiss the indictment.

Reversed.

      . The jury’s verdict inexplicably was reached despite the adequate definition of ownership given them by the court as part of its general charge:
      In considering ownership, you may consider first in whose name was the vessel documented; second, who had the right to possession and enjoyment of the vessel; three, who had the right to restrict the vessel’s movements; and four, you may consider that ownership need not be all in one person, but may be divided.
      By the term “owner” is meant the one in whom is vested the dominion or title of the property. The one who has the right to enjoy and do with the property as he or she pleases, so far as the law permits, unless he or she is prevented by agreement which restrains that right.
      The term can mean one who has dominion or control over a thing, the title of which is in another. It may also include a person who has possession, care and control of property.
      The term “owner” however, is a general one and its meaning is to be gathered from the subject matter to which it is to be applied.
      One may speculate that perhaps the jury had the impression that it was required to convict one defendant or the other: either Mrs. Tucker or Mr. DelGaudio. Analysis of this possibility would be appropriate to a discussion of the third issue raised on appeal, the refusal of the trial court to sever the trial of Mrs. Tucker. As the text indicates, we do not consider the severance issue.


text:
    George McGOVERN, Plaintiff-Appellant, v. AMERICAN AIRLINES, INC., et al., Defendants-Appellees.
    No. 74-2362.
    United States Court of Appeals, Fifth Circuit.
    April 18, 1975.
    Rehearing and Rehearing En Banc Denied May 30, 1975.
    Arthur M. Gochman, Warren Weir, San Antonio, Tex., for plaintiff-appellant.
    Richard A. Lempert, New York City, for American Airlines, Inc.
    B. J. Bradshaw, Houston, Tex., for Ashland Oil, Inc.
    Morris Harrell, Dallas, Tex., E. H. Brown, Houston, Tex., for Phillips Pet. Co.
    W. B. West, III, Dallas, Tex., for Braniff Airways, Inc.
    Ralph S. Carrigan, Houston, Tex., for Goodyear Tire & Rubber Co.
    Leonard J. Keyes, St. Paul, Minn., for Minn. Mining, etc.
    W. B. Edwards, Houston, Tex., for Gulf Oil Corp.
    Before BELL, THORNBERRY and GEE, Circuit Judges.
   PER CURIAM:

George McGovern filed a complaint in the United States District Court for the Southern District of Texas, alleging that certain corporations were civilly liable to him in double the amount each had contributed to candidate for President Richard M. Nixon, in violation of Article 14.-07 of the Texas Election Code, V.A.T.S., as well as of 18 U.S.C. § 610, a federal criminal statute. Defendant Gulf Oil Corporation moved to dismiss the complaint for lack of standing and failure to state a claim upon which relief could be granted. The district court granted Gulf’s motion without prejudice, on grounds that McGovern had failed to allege a jurisdictional basis and venue. The court’s order also referred to the possible unavailability of a private cause of action under 18 U.S.C. § 610. Rather than refile as he was invited to by the court, McGovern stood on his complaint and moved to vacate, amend and/or cancel the dismissal of Gulf Oil Corporation. Both in his motion and in his brief in support of his motion, McGovern stated that the sole allegation of jurisdiction was diversity, and he specifically disclaimed reliance on federal question jurisdiction. The court again found the jurisdictional allegation inadequate and dismissed as to all defendants without prejudice nunc pro tunc. This appeal followed.

The burden is on a plaintiff to allege and invoke jurisdiction. McGovern having chosen diversity and having expressly abandoned reliance on the federal question as a jurisdictional ground, we have no choice but to’ take him at his word. Clearly, the trial court was correct in finding deficient, allegations of diversity. McGovern’s complaint reads:

1. Plaintiff is a citizen of South Dakota. Defendants are corporations incorporated and having their principal places of business in states other than South Dakota. The matter in controversy exclusive of interest and costs is for a sum in excess of TEN THOUSAND DOLLARS ($10,000.00).

When jurisdiction depends on citizenship, citizenship should be “distinctly and affirmatively alleged.” 2A Moore’s Federal Practice ¶ 8.10 at 1662; Wright & Miller, Federal Practice & Procedure § 1208. Centraal Stikstof Verkoopkantoor v. Pensacola Port Authority, 205 F.Supp. 724, 725 (N.D.Fla.1962), aff’d 316 F.2d 189 (5th Cir. 1963); Bryant v. Harrelson, 187 F.Supp. 738, 739 (S.D.Tex.1960). There is nothing in plaintiff’s complaint to negate the conclusion, for example, that these companies are also incorporated in South Dakota, incorporation in more than one state being a viable possibility.

Having found a jurisdictional defect, the court did not abuse its discretion in dismissing without prejudice. Indeed, McGovern did not even offer to change his jurisdictional pleadings in his motion to vacate, convinced they were correct despite the trial court’s specific reference to jurisdictional defects in its original dismissal order. On this record, therefore, it appears giving McGovern a chance to amend would not have cured the jurisdictional defect. He continues to maintain in this court that the clearly defectivo, allegation of diversity jurisdiction is without error.

The facts as stated above compel us to reject the plea to allow a chance to amend based on 28 U.S.C. § 1653. Certainly, the section should be construed liberally, bet where as here there is no indication in the record that diversity in all probability exists and the appellant has shown in a second plea to the trial court no inclination to cure the jurisdictional defect even though on notice of the defect, we decline to allow appellant an opportunity to amend. John Birch Society v. National Broadcasting Co., 377 F.2d 194 (2d Cir. 1967).

Affirmed.

      . In view of our disposition of this case, we need not reach other issues discussed by the trial court.

      . “Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.”

      . See Kaufman v. Western Union Telegraph Co., 224 F.2d 723, 725 (5th Cir. 1955), cert. denied, 350 U.S. 947, 76 S.Ct. 321, 100 L.Ed. 825 (1956); Firemen’s Ins. Co. of Newark, N. J. v. Robbins Coal Co., 288 F.2d 349, 350 (5th Cir.), cert. denied, 368 U.S. 875, 82 S.Ct. 122, 7 L.Ed.2d 77 (1961); Niagara Fire Ins. Co. v. Dyess Furniture Co., 292 F.2d 232, 232-33 (5th Cir. 1961).

      . Contrary to the situation in Kaufman, supra.


author: MURRAH, Circuit Judge:

text:
    Lester A. MEIS et al., Plaintiffs-Appellees, v. SANITAS SERVICE CORPORATION et al., Defendants-Appellants.
    No. 74-1184.
    United States Court of Appeals, Fifth Circuit.
    April 18, 1975.
    Richard H. Caldwell, Houston, Tex., James F. Buchanan, Corpus Christi, Tex., for defendants-appellants.

      Phillip J. Tibiletti, Victoria, Tex., Patrick F. McGowan, Dallas, Tex., for plaintiffs-appellees.
    Before BROWN, Chief Judge, and MURRAH  and WISDOM, Circuit Judges.

       Senior Circuit Judge of the Tenth Circuit sitting by designation.

   MURRAH, Circuit Judge:

The sole issue in this interlocutory appeal is the propriety of the trial court’s temporary injunction (Fed.R. Civ.P. 65(b)) in a suit under the anti-fraud sections and applicable regulation of the federal Securities Acts of 1933 and 1934, the Texas common law, and Section 27.01 of the Texas Business and Commerce Code, V.T.C.A. In this suit, appellees seek to rescind a corporate merger contract between the parties whereunder the appellant acquired all the assets of the appellees in exchange for appellant’s common stock. They further seek concomitant restoration of their properties or, in the alternative, money damages for the value of the stock at the time of the merger and punitive damages. A jury trial was requested. At this stage of the proceedings they assume the burden of making out a prima facie case for a status quo temporary injunction.

This court has often had occasion to consider the propriety of a Rule 65 temporary injunction under a variety of facts and circumstances. Each case must stand on its own facts, based upon the generally accepted notion that the purpose of a preliminary injunction is always to prevent irreparable injury so as to preserve the court’s ability to render a meaningful decision on the merits. “It requires a balancing of the probabilities of ultimate success on the merits with the consequences of court intervention at a preliminary stage. The prerogative to weigh the nice distinctions involved belongs to the district court, not this court.” Sargent v. Genesco, 492 F.2d 750, 770 and cases there (5th Cir. 1974); Mercury Motor Express v. Norman C. Brinke, 475 F.2d 1086, 1095 (5th Cir. 1973); American Radio Association v. Mobile Steamship Association, Inc., 483 F.2d 1, 4 (5th Cir. 1973). The appellant insists that the temporary injunction is defective because the trial court made no specific finding that the appellee was likely to succeed on the merits. But we think a prima facie showing is legally sufficient in this case and that the requisite findings are implicit in the status quo memorandum and order.

Some background will be helpful to a consideration of the question as it comes to us. The appellant, Sanitas Service Corporation, is a multi-service conglomerate with headquarters in Hartford, Connecticut, operating through wholly owned subsidiaries in a number of large cities throughout the country. It is engaged in a wide variety of services including solid waste control operations, the provision of dust control products, a complete janitorial service for industrial facilities, and the renting and cleaning of linens, uniforms, work garments, and industrial wiping towels. For the past twenty years the appellees, Texas Sanitation Company, Inc., and Janitorial Services, Inc., have owned and operated a pest control and sanitation business and janitorial service in a number of counties in south Texas, headquartered in Victoria, with about sixty employees and revenues of approximately $350,000 to $400,000. The Meis family is the principal stockholder, and Meis is the president and general manager.

In the summer of 1971 Meis learned of Sanitas and its expanding program, and on request, was provided with a 1970 and 1971 annual report containing financial statements. Ensuing negotiations resulted in a merger contract in October, 1971. Under the terms of this contract, Sanitas acquired all the assets of Texas Sanitation Company, Inc., and Janitorial Services, Inc., in exchange for 34,000 shares of Sanitas stock, having an agreed value of $10 per share. Meis continued to manage the companies under a three-year executive employment contract, very much as before the merger.

According to the allegations of the verified complaint and the documentary and live testimony at the injunction hearing, Sanitas suffered losses in 1971, reported in 1972, ultimately resulting in a precipitous decline in the listed price of Sanitas common stock from approximately $10 to $3 per share and a suspension of trading on the American Stock Exchange. Contemporaneously with these events, Sanitas challenged some of the expenditures by Meis and threatened to terminate the employment contract unless the irregularities were immediately corrected. In these circumstances Meis brought this suit claiming that he had been induced to consummate the merger by misrepresentations in the annual reports and oral statements during the negotiations for the merger. He emphasizes the representations in the flamboyant 1971 report concerning the condition of the Economy Linen Service, an industrial laundering subsidiary in Detroit, Michigan. The report recited that a five month strike had been resolved in April of 1971, and that with the completion of a major equipment installation program resulting in operational efficiency in production capacity, substantial gains in the operations from these modernized facilities were anticipated.

By reference to the financial statements in the annual reports of the fiscal years 1971 and 1972, appellees presented proof tending to show that significant losses were incurred at the Detroit laundry facility in the fiscal year 1971 while negotiations for the merger were underway; that such losses were not disclosed until the report of June 30, 1972, after the merger had been consummated; and that Sanitas knew of the losses and failed to disclose them to the public or to Meis. He says he relied to his detriment on Sanitas’ failure to disclose these losses, which ultimately resulted in the permanent closing of the Detroit industrial laundry after a loss of 1.9 million dollars.

Sanitas insists that the representations and financial statements in the reports are in accordance with accepted accounting procedures and are in no way untrue or misleading. This may well be true, but we can not be sure on the abbreviated record before us that the reports and oral communications before the consummation of the merger did not include “an untrue statement of a material fact or [omitted] to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading . ” Section 12 of the Securities Act of 1933, 15 U.S.C. § 777(2). We leave the final determination of that crucial issue to the trial on the merits, confident that the trial court or the jury, as the case may be, will scrutinize the representations in the reports in consonance with the statutory requirements. It suffices that the plaintiff’s case is not insubstantial.

Invoking the clean hands doctrine, appellant would bar the appellees from equitable relief for irregularities in the conduct of the business in Meis’ managerial capacity. There was proof, inconclusive on this record, that Meis did use company funds to pay personal obligations. The trial court took due note of the clean hands doctrine and admitted evidence of the post-merger irregularities but rejected the effect of it, in accordance with Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 54 S.Ct. 146, 78 L.Ed. 293 (1933), because such alleged irregularities bear no relation to the consummation of the merger agreement, the subject matter of the suit. After all, “Equity does not demand that its suitors shall have led blameless lives.” Loughran v. Loughran, 292 U.S. 216, 229, 54 S.Ct. 684, 689, 78 L.Ed. 1219 (1934). The court concluded that the plaintiffs were entitled to maintain this equitable action for rescission. And see Occidental Life Insurance Company of North Carolina v. Ryan and Associates, Inc., 496 F.2d 1255, 1268 (4th Cir. 1974); Johns Hopkins University v. Hutton, 488 F.2d 912 (4th Cir. 1973), cert. denied, 416 U.S. 916, 94 S.Ct. 1623, 40 L.Ed.2d 118 (1974). For the purposes of this appeal, we agree. The parties must stand or fall on the evidence of preconsummation conduct.

The court found that the plaintiffs, including Sephus Clifton, Jr., (not an original party to this suit) have tendered the 34,000 shares of Sanitas stock into the registry of the court. It specifically found that, due to the personal nature of the Victoria operations having been operated for a number of years under the direction of Meis, irrevocable injury would be suffered by the plaintiffs should Meis be removed from management, and thereafter on trial of the merits be successful in rescinding the merger. The court went on to find, however, that since the merger agreement, Meis had handled the affairs of the business and its funds in a very informal manner and not at all in accord with good corporate business practices and that the defendants were justified in being dissatisified with Meis in this regard.

The court proceeded to mold the temporary decree to the peculiar circumstances of the case. To preserve the status quo, it enjoined Sanitas from (1) removing Meis as president and general manager of the two local corporations, (2) altering the authority of Meis to continue the management of the normal business of the corporation, (3) removing any of the assets, books and records from the corporation which belonged to it immediately prior to the merger that are now being kept in the day to day operation of the business, and (4) refusing to pay him for services as agreed in the management contract, subject, however, to strict compliance with the limitations placed on Meis. And it enjoined Meis from (1) destroying any of the records, notes or memoranda of either corporation, (2) in any way handling corporate assets except as may be reasonably necessary in the ordinary course of business and in accordance with good corporate business practices, (3) exercising authority over the Victoria operations except in regard to the payment of salaries and the day to day operating expenses, and (4) interfering with the relationship between the local companies and the customers who were doing business with the companies before the merger and “this limitation is to be strictly construed.”

The court expressly permitted Sanitas to have a representative present on the premises of the local companies during normal business hours or while business is being transacted on the premises and provided that such representative may, from time to time, review the books and records of the operations so long as the representative acts reasonably and does not interfere with normal operations. Sanitas was enjoined from interfering with the business in regard to customer relations or causing the loss of business by the manner in which any representative of Sanitas might supervise the business operations. Meis was required to file a bond with corporate surety to be approved by the court in the sum of $25,000 conditioned for the payment of such cost and damages which may be incurred or suffered by the defendants in the event it is finally held that they have been improperly enjoined or restrained. Hedged by these restrictions imposed on both parties, the status quo is insured. No irreparable harm can result until the trial on the merits. The temporary injunction is accordingly sustained.

Affirmed.

      . See §§ 12(2) and 17(a) Securities Act of 1933, 15 U.S.C. §§ 111 and 77q; and § 10(b) Securities and Exchange Act of 1934, 15 U.S.C. § 78j and regulation 17 C.F.R. § 240.-10b-5. For jurisdiction, see § 22 Securities Act of 1933, 15 U.S.C. § 77v.

      . See Wright and Miller, Federal Practice and Procedure § 2947; Moore’s Federal Practice, § 65.04(1). See also “Probability of Ultimate Success Held Unnecessary for Grant of Interlocutory Injunction,” 71 Columbia Law Review 165; Special Problems of the Preliminary Injunction and the Temporary Restraining Order, 70 Harvard Law Review 996, 1056.

      . “The essence of equity jurisdiction has been the power of the Chancellor to do equity and to mould each decree to the necessities of the particular case. Flexibility rather than rigidity has distinguished it. The qualities of mercy and practicality have made equity the instrument for nice adjustment and reconciliation between the public interest and private needs as well as between competing private claims.” Hecht Co. v. Bowles, 321 U.S. 321, 329-330, 64 S.Ct. 587, 592, 88 L.Ed. 754 (1944). Quoted in Lemon v. Kurtzman, 411 U.S. 192, 200, 93 S.Ct. 1463, 36 L.Ed.2d 151 (1973).


author: GEE, Circuit Judge:

text:
    RINGEL & MEYER, INC., Plaintiff-Appellant, v. FALSTAFF BREWING CORPORATION, Defendant-Appellee.
    No. 73-3642.
    United States Court of Appeals, Fifth Circuit.
    April 17, 1975.
    Rehearing and Rehearing En Banc Denied June 12, 1975.
    James J. Morrison, Jr., New Orleans, La., for plaintiff-appellant.
    Bruce A. North, Lawrence J. Molony, New Orleans, La., for defendant-appellee.
    Before DYER, MORGAN and GEE, Circuit Judges.
   GEE, Circuit Judge:

Ringel & Meyer, Inc. brought this diversity action against Falstaff Brewing Corporation for breach of a requirements contract involving the diecutting and delivery of 24/12 ounce fibre cartons. The trial court found that Falstaff began ordering die cut cartons from a competitor of Ringel & Meyer in May of 1969 in violation of the requirements contract. It also found that there was not sufficient evidence to establish that Ringel & Meyer itself had actively breached the contract prior to Falstaff’s deviation, as Falstaff had contended. The trial court held, nevertheless, that, under the law of Louisiana, Falstaff’s obvious nonadherence to its contractual commitment to Ringel & Meyer was excused by the latter’s anticipatory breach. We reverse.

The trial court found that prior to Falstaff’s placing orders with Ringel & Meyer’s competitor it had learned that Ringel & Meyer was in financial straits. In March 1969, a garnishment of Ringel & Meyer funds in Falstaff’s hands was instituted by a bank on its judgment of $15,000. Several days later garnishment was filed on a judgment of $4,725. In early April, the electricity to Ringel & Meyer’s plant was turned off for nonpayment of the company’s utility bill. After the electricity had been shut off, Ringel & Meyer kept its full work force on for a short time but then cut back until eventually only two employees remained. These were last paid for the period ending April 17. In addition, during the March/April period foreclosure of the mortgage on Ringel & Meyer’s plant had commenced, and its bank account was depleted. Further, to prevent funds due Ringel & Meyer from being paid to its creditors under the garnishments, the company refrained from sending Falstaff invoices for cartons it had actually delivered. Hence, during March and April it had no income even from work it had actually performed. The trial court concluded that by mid-April Ringel & Meyer “had given every manifestation that it could not, and would no longer, perform its contract with Falstaff” by its “obvious incapability of performance.”

There is no doubt that Louisiana has accepted the common-law concept of anticipatory breach of contract, at least insofar as it is not inconsistent with its Civil Code. Marek v. McHardy, 234 La. 841, 101 So.2d 689 (1958). In Louisiana, an anticipatory breach will serve as the basis for an action for damages against the party to a contract who has repudiated his obligation, Marek v. McHardy, supra, and, although we have found no Louisiana cases on the subject, there seems to be little doubt that such an anticipatory breach by repudiation could also be interposed as a defense to a claim by the repudiator. Beginning with these basic premises, both the opinion of the court below and Falstaff’s brief press on into the mysteries of the Louisiana Civil Code and discuss such concepts as the difference between active and passive breaches, the necessity of putting in mora prior to a damages or dissolution action based on a passive breach, and the lack of any such requirement when an antecedent breach (active or passive) is raised as a defense. Such discussions are interesting, but they beg the real issue presented, which is whether “obvious incapability of performance” because of financial distress is any kind of a breach— or at any rate anticipatory breach — of contract under Louisiana law. The trial court found it an anticipatory breach, but we disagree.

The concept of anticipatory breach is an alien engraftment upon Louisiana’s essentially civil-law system. If its application is to be extended beyond the most basic form of the doctrine into areas of existing Louisiana jurisprudence, the task and policy choices entailed are of unusual delicacy and are, at all events, for Louisiana courts, not federal ones.

We have searched the reports and the Code but can find neither case nor article which indicates that Louisiana has yet recognized anything short of an outright, unequivocal repudiation such as that considered in Marek v. McHardy, supra, as constituting an anticipatory breach. Thus, we find the Louisiana law on anticipatory breach in a nascent state. Falstaff would have us transmute this babe with a touch into a full-grown adult. This we refuse to do. There are logical stopping places short of an extension of the doctrine to circumstances such as those of our case. So far as we know, no court, common-law or civil, has yet held that obvious incapability of performance due to financial difficulties constitutes anticipatory breach. To the contrary, the general rule in the common-law states is that mere insolvency is not itself an anticipatory breach. Forced by Erie to anticipate, we predict that the Louisiana courts would not extend the doctrine of anticipatory breach beyond the frontiers now established by the common law and leave the task of child rearing to the doctrine’s legitimate parents- — the courts of Louisiana.

The case is reversed and remanded with instructions to enter judgment for Ringel & Meyer and for computation of damages.

      . Even the UCC, which would be applicable if this were a contract for the sale of goods and if the state law to be applied were other than that of Louisiana, requires that a party fearful of another’s ability to perform allow him the opportunity to provide adequate assurance of performance before permanently, unilaterally ceasing performance. U.C.C. § 2-609.


author: C. WILLIAM KRAFT, District Judge.

text:
    Roy M. HOFHEINZ, Independent Executor of the Estate of Irene C. Hofheinz, Plaintiff, v. UNITED STATES of America, Defendant-Appellee, v. HOUSTON CITIZENS BANK AND TRUST COMPANY, Co-Trustees of the Roy M. Hofheinz Charitable Foundation, Movant-Appellant.
    No. 74-2768.
    United States Court of Appeals, Fifth Circuit.
    April 17, 1975.
    Louis B. Paine, Jr., B. Hunter Loftin, J. Kent Friedman, Houston, Tex., for movant-appellant.
    Anthony J. P. Farris, U. S. Atty., Houston, Tex., Louis A. Bradbury, Tax Div., Scott P. Crampton, Asst. Atty. Gen., Ernest J. Brown, Atty., Gilbert E. Andrews, Acting Chief Appell. Sec., Tax Div., U. S. Dept, of Justice, Washington, D. C., Howard A. Weinberger, Michael L. Paup, George G. Wolf, Attys., Tax Div., Dept, of Justice, Dallas, Tex., for defendant-appellee.
    Marvin K. Collie, Donald F. Wood, Houston, Tex., for other interested parties.
    Before WISDOM and DYER, Circuit Judges, and KRAFT , District Judge.

       C. William Kraft, Jr., Senior District Judge for the Eastern District of Pennsylvania, sitting by designation.

   C. WILLIAM KRAFT, District Judge.

The sole question presented on this appeal is whether a residuary legatee may intervene as a party plaintiff in a pending suit brought by the executor of an estate against the United States for the recovery of excessive federal estate tax, alleged to have been erroneously assessed and collected. The court below summarily denied appellants’ motion for leave to intervene. Its order will be affirmed.

The essential facts are as follows: Irene C. Hofheinz died, testate, on December 1, 1966. Roy M. Hofheinz (Executor) was appointed executor of her estate. The relevant dispository provisions of the decedent’s will gave two million dollars in real estate, securities or other property to the Hofheinz Family Trust No. 2 (Trust) and the residue of her estate to the Roy M. Hofheinz Charitable Foundation (Foundation) of which Roy M. Hofheinz and The Houston Citizens Bank and Trust Company are cotrustees. All taxes were to be paid from the residue of her estate. By written conveyance, effective August 31, 1967 a portion of decedent’s interest in 22,000 shares of stock of Houston Sports Association, Inc. (H.S.A.) was distributed to the Trust in partial satisfaction of the two million dollar bequest. A value of approximately $96.59 per share was placed on the H.S.A. stock by the Executor at the time of this transfer.

The Internal Revenue Service later audited the decedent’s federal estate tax return and determined that the H.S.A. stock had a fair market value of $400.00 per share and assessed a deficiency, which, with interest and penalty, amounted to $2,302,210.65. The Executor paid this sum from assets of the estate and the Trust and thereafter brought suit for a refund in which appellants then sought to intervene under F.R.C.P. 24(a)(2) and 24(b)(2).

The appellee urges that appellants, who were not the taxpayer, lack standing to join in the action because of want of waiver of immunity in their favor by the United States and, alternatively, that appellants do not meet the conditions prescribed by Rules 24(a)(2) and 24(b)(2). The court below assigned no reason for its order denying appellants’ motion and we do not know the basis of its decision.

The language of 28 U.S.C. § 1346(a)(1) “[i]s reasonably to be read as merely authorizing a taxpayer, or perhaps someone claiming in the interest of a taxpayer, to sue to get back .taxes which the taxpayer has wrongfully been required to pay.” First National Bank of Emlenton, Pa. v. United States, (3 Cir. 1959), 265 F.2d 297, 299 — 300. In the present case the taxpayer has brought the suit and no necessity exists for others to act in the taxpayer’s interest. One of the two co-trustees for the Foundation who sought to intervene, Roy M. Hofheinz, is the same individual who, as the Executor and taxpayer, is plaintiff in the action.

In Phillips v. United States (2 Cir. 1965), 346 F.2d 999, the court held that § 1346(a)(1) is not available where the plaintiff does not bring the suit as a taxpayer. In reaching its decision the court stated (p. 1000): “Faced with what is at best an absence of any evidence as to an intent to waive sovereign immunity with respect to suits by non-taxpayers, we think that § 1346(a)(1) should be interpreted as not extending to such suits.”

The Court of Appeals for the Tenth Circuit adopted the same reasoning and reached the same result in Eighth Street Baptist Church, Inc. v. United States (10 Cir. 1970), 431 F.2d 1193.

We find neither authority nor reason to impel us to reach a different conclusion here. We hold that, in the circumstances of this case, appellee’s sovereign immunity has not been waived and appellants’ motion to intervene was properly denied.

Affirmed.

      . 28 U.S.C. § 1346 United States as Defendant
      (a) The district courts shall have original jurisdiction, concurrent with the Court of Claims, of:
      (1) Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws;

      . 26 U.S.C. § 2002. Liability For Payment.
      The tax imposed by this chapter shall be paid by the executor.


text:
    Thomas C. HALL, Plaintiff-Appellee, v. EASTERN AIR LINES, INC., Defendant-Appellant.
    No. 74-3883
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    April 17, 1975.
    William G. Bell, Jr., Roland H. Moore, Miami, Fla., for defendant-appellant.
    Barry S. Maram, Miami, Fla., for plaintiff-appellee.
    Before THORNBERRY, SIMPSON and MORGAN, Circuit Judges.

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

   PER CURIAM:

On September 19, 1973, Eastern Air Lines discharged Thomas C. Hall for leaving work early without company approval. He filed a grievance and a hearing was held before the company’s Mechanical Department System Board of Adjustment, a body established pursuant to 45 U.S.C. § 184. The Board upheld the discharge decision, and Hall appealed to the district court, alleging he had been denied fundamental due process because the Board refused to consider his alibi defense.

The district court recognized that its scope of review is limited. See 45 U.S.C. § 153, First (q). In general the Board’s decision on the merits is final and not subject to review. Gunther v. San Diego & Arizona Eastern Ry. Co., 382 U.S. 257, 86 S.Ct. 368, 15 L.Ed.2d 308 (1965). However, review is not absolutely foreclosed where petitioner alleges a denial of fundamental due process. See Rosen v. Eastern Air Lines, 400 F.2d 462 (5th Cir. 1968), cert. denied, 394 U.S. 959, 89 S.Ct. 1307, 22 L.Ed.2d 560 (1969); Southern Pacific Co. v. Wilson, 378 F.2d 533, 536-537 (5th Cir. 1967). Here the Board refused to give any weight to Hall’s alibi defense merely because he had not previously presented it. The Board, of course, is entitled to completely reject such evidence after reviewing it on the merits, but this procedure in this case denied Hall the opportunity to present his alibi defense at the de novo hearing.

Appellants argue the Board did consider the evidence and then decided to accord it no weight. Yet a careful reading of its entire opinion compels us to find that the Board rejected the evidence because Hall was tardy in presenting it. Further, a refusal to consider the evidence was not harmless; the Board itself recognized that if the facts Hall relied on were true, they would constitute a complete defense to his discharge. The presentation of one’s defense is a basic due process right, and the district court properly remanded the case to afford Hall the opportunity to exercise that right in a de novo hearing.

Affirmed.


text:
    Sylvian Dale BISHOP, Petitioner-Appellant, v. Louie L. WAINWRIGHT, Director, Division of Corrections, Respondent-Appellee.
    No. 74-2617.
    United States Court of Appeals, Fifth Circuit.
    April 18, 1975.

      L. B. Vocelle, Charles M. Rieders (Court appointed), Vero Beach, Fla., John P. Grier, Cocoa Beach, Fla., for petitioner-appellant.
    Robert L. Shevin, Atty. Gen., Tallahassee, Fla., Basil S. Diamond, Asst. Atty. Gen., West Palm Beach, Fla., for respondent-appellee.
    Before BROWN, Chief Judge, and MURRAH  and WISDOM, Circuit Judges.

       Senior Circuit Judge of the Tenth Circuit sitting by designation.

   MURRAH, Circuit Judge:

Appellant Bishop was convicted by jury verdict in state court and sentenced to death for the murder of two girls. On appeal, the Florida Supreme Court upheld the conviction while commuting the sentence to life imprisonment. Bishop then filed this habeas corpus petition alleging these errors: (1) denial of change of venue in light of jury bias, caused by intense and inflammatory pre-trial publicity; (2) failure to suppress as evidence Bishop’s in-custody statements following illegal arrest and detention; (3) admission of improper evidence; and (4) prejudicial comments by the prosecutor. The trial court denied the petition without a hearing upon its scrutiny of the state court record, under Townsend v. Sain, 372 U.S. 293, 83 S.Ct. 745, 9 L.Ed.2d 770 (1963) and Procunier v. Atchley, 400 U.S. 446, 91 S.Ct. 485, 27 L.Ed.2d 524 (1971). The case comes here on the same record. We affirm.

We begin by reiterating that the writ of habeas corpus cannot ordinarily be used to correct mere errors or irregularities in the trial court proceedings. A judgment may be void, however, and subject to collateral attack for palpable irregularities resulting in a denial of fundamental fairness or of a specific constitutional right. See Davis v. United States, 417 U.S. 333, 346, 94 S.Ct. 2298, 41 L.Ed.2d 109 (1974); Burgett v. Texas, 389 U.S. 109, 113-114, 88 S.Ct. 258, 19 L.Ed.2d 319 (1967); Alligood v. Wainwright, 440 F.2d 642 (5th Cir. 1971); Pleas v. Wainwright, 441 F.2d 56 (5th Cir. 1971). We accordingly examine the record for error so fundamental as to render the trial court judgment a nullity.

We know, of course, that prejudicial pre-trial publicity may so infect community sentiment as to render the selection of a fair and impartial jury improbable and thus constitutionally require a continuance or change of venue on request. See Sheppard v. Maxwell, 384-U.S. 333, 86 S.Ct. 1507, 16 L.Ed.2d 600 (1966); Irvin v. Dowd, 366 U.S. 717, 81 S.Ct. 1639, 6 L.Ed.2d 751 (1961); United States v. Collins, 472 F.2d 1017 (5th Cir. 1972); United States v. Nix, 465 F.2d 90, 96 (5th Cir. 1972); Fed. Rules Crim.Proc. 21(a). Cf., Estes v. Tex as, 381 U.S. 532, 85 S.Ct. 1628, 14 L.Ed.2d 543 (1965). We must also recognize that “in these days of . diverse methods of communication scarcely any of those best qualified to serve as jurors will not have formed some impression or opinion as to the merits of the case . . It is sufficient if the juror can lay aside his impression or opinion and render a verdict based on the evidence presented in court.” Irvin v. Dowd, supra, 366 U.S. at 722-723, 81 S.Ct. at 1642. The trial court is necessarily the first and best judge of community sentiment and the indifference of the prospective juror. Appellate courts, especially on collateral attack, will interfere only upon a showing of manifest probability of prejudice. Id., at 723-724, 81 S.Ct. 1639; United States v. Nix, supra, 465 F.2d at 96.

In our case, of the forty-eight prospective jurors called, forty-three indicated some exposure to pre-trial publicity. In the case of seven, the exposure was sufficient to lead to a fixed opinion; and six of these were excused. Neither side exercised all available peremptory challenges. We find nothing in the record to indicate that, as a result of pre-trial publicity, there was any specific prejudice to the right to a fundamentally fair trial or even a substantial likelihood of such prejudice. Under these circumstances, we cannot, in habeas corpus, review the trial court’s sound discretion in denying the change of venue.

Bishop was arrested without warrant at a public movie theater. The government makes no claim that any exigent circumstances prevented obtaining a warrant before the arrest; in fact, the officers possessed a warrant for the search of Bishop’s home at the time of the arrest. It seems to be the law, in Florida and generally, that the Fourth Amendment does not forbid warrantless arrest in a public place for manifest probable cause. Falcon v. Florida, 226 So.2d 399 (Fla.1969); Odom v. United States, 403 F.2d 45 (5th Cir. 1968), appeal dismissed, 400 U.S. 23, 91 S.Ct. 112, 27 L.Ed.2d 122 (1970); United States v. Hall, 348 F.2d 837, 841-842 (2d Cir. 1965). Cf., Ker v. California, 374 U.S. 23, 34-41, 83 S.Ct. 1623, 10 L.Ed.2d 726 (1963); Giordenello v. United States, 357 U.S. 480, 484-487, 78 S.Ct. 1245, 2 L.Ed.2d 1503 (1958); Jones v. United States, 357 U.S. 493, 497-500, 78 S.Ct. 1253, 2 L.Ed.2d 1514 (1958). Thus, the only requirement for the arrest here is probable cause — i. e., facts and circumstances which would warrant a reasonably prudent man to believe that an offense had been committed by the arrestee. See Thornton v. Beto, 470 F.2d 657 (5th Cir. 1972), cert. denied, 411 U.S. 920, 93 S.Ct. 1560, 36 L.Ed.2d 313 (1973). Brinegar v. United States, 338 U.S. 160, 175-176, 69 S.Ct. 1302, 93 L.Ed. 1879 (1949).

It is not disputed that at the time of the arrest on September 19, the police knew from their investigation that the two girls stopped for service at the gas station where Bishop worked at 1:00 A.M. on September 1; that he asked his supervisor for permission to leave at about that time, and before departing, was the last person seen talking to the . girls; that he was seen soon thereafter leaving the turnpike at the Vero Beach exit with at least one of the girls in his car; that, a week later, on September 8 or 9, he told a friend about seeing what appeared to be two corpses in the woods; that, on September 14, he led his friend to the corpses; that the friend immediately called the police, who then came to the scene and found the nude and decomposed bodies, one with hands bound behind her back; that the bodies were later identified as the two girls; that Bishop gave the police a statement the next day, September 15, claiming no knowledge of the corpses until September 14; that a discrepancy later appeared in his September 15 statement regarding his reason for being in the area of the corpses; and that he told his supervisor he did not take the girls to Vero Beach on September 1. We think these facts sufficient to constitute probable cause for the warrantless arrest here; and Bishop’s in-custody statements were not made inadmissible by this arrest.

Nor were they made so by the fourteen hour delay between the arrest at 11:25 P.M. Saturday and the taking before a magistrate at 1:30 P.M. the next day. The facts regarding the arrest are in the record and are not disputed. Bishop was properly advised of his rights at the time of arrest Saturday night. He then unsuccessfully attempted to telephone his attorney. He was briefly questioned as to his knowledge of the girls, to which he replied he knew nothing. From the jail the next morning, Sunday, he caused a police officer to be called at home for the purpose of coming to the jail to talk to him. Upon the officer’s arrival, Bishop was again advised of his rights and thereupon stated he had taken the girls to the scene where their bodies were found and had struck one of them. He volunteered to take the officers to the scene for a reconstruction of the events and, at the scene, helped officers find the girls’ clothing and pocketbooks. He gave all this information freely and voluntarily. We conclude that Bishop’s statements were not the product of interrogation, but were volunteered on his own initiative. Such statements are admissible. Gissendanner v. Wainwright, 482 F.2d 1293 (5th Cir. 1973); United States v. Powers, 444 F.2d 260 (5th Cir. 1971).

Bishop argues that evidence bearing on his character was admitted when he did not take the stand to put his character at issue and that his own statements were admitted prior to the establishment of a prima facie corpus delicti. He complains specifically of testimony that he had once threatened the life of a repairman who awakened him; that he had been fired from a job for displaying a knife and talking about his violent temper; and that he had training in butchering animals. Our examination of the record demonstrates that there was an apparent knife wound on each girl’s neck; that a knife was found near the scene of the bodies; and that the bodies were nude, one with hands bound in back. Apart from Bishop’s statements, this was sufficient evidence of criminal agency causing the deaths of the girls to establish a prima facie corpus delicti. Even assuming some irregularity in the admission of the testimonial evidence or the order of proof, there is here no fundamental defect cognizable in habeas corpus. See Loper v. Beto, 405 U.S. 473, 480-484, 92 S.Ct. 1014, 31 L.Ed.2d 374 (1972).

Finally, Bishop alleges that the prosecutor, in closing to the jury, commented on Bishop’s failure to take the stand, thus prejudicing his constitutional protection against self-incrimination. We have carefully reviewed the prosecutor’s closing statements and understand them to be a comment upon Bishop’s expressionless courtroom demeanor rather than upon his failure to take the stand. Such comment raises no habeas corpus issue. See Higgins v. Wainwright, 424 F.2d 177 (5th Cir. 1970).

Affirmed.

      . The Florida Supreme Court commuted the sentence from death to life imprisonment on the authority of Furman v. Georgia, 408 U.S. 238, 92 S.Ct. 2726, 33 L.Ed.2d 346 (1972). Bishop v. Florida, 276 So.2d 831 (Fla. 1973).

      . The errors alleged in this habeas corpus attack were also alleged in Bishop’s brief on the direct appeal. The Florida Supreme Court did not treat these allegations specifically, but stated only that “no reversible error is made to appear and the evidence does not reveal that the ends of justice require a new trial . . . ” Bishop v. Florida, supra, 276 So.2d at 832. We conclude that there was no failure to exhaust state remedies here. The trial court so found, and the parties do not dispute it.

      . The seventh juror, who was not excused for cause, when asked whether he had formed any opinion as to any elements of this homicide, answered: “I sort of have, yes, sir.” When later asked by the state trial judge: “Does one side or the other have one strike against them at this point?” he answered, “No.” Challenge for cause was then denied, and no peremptory challenge was made, although more than one was available.

      . Bishop admits that the other elements of corpus delicti were established — i. e., the identity and death of the two victims.

      . In pertinent part, the prosecutor stated:
      “The defense asked you why didn’t this boy bury these bodies. If he killed them, why did he do things that would make it obvious he was the one that did it? Why didn’t he just bury the bodies? I think I have an answer for you: no one would have known about it, that’s why. This boy wants notoriety; he wants to play games, just like he did the night he gave the statement. Tempt you a little bit, holds the carrot. If no one knew about it, it wouldn’t mean anything. Sylvian Bishop wouldn’t be on the front page of the paper or in this courtroom. Look at his attitude during the week. Have you seen one little ounce of remorse on his face, one outburst, one apparent showing of concern? He’s sat there like a knot on a log through the whole trial. He didn’t talk to his lawyer, hasn’t said anything. He just sits there. He doesn’t do anything. Absolutely nothing.”