author: LIVELY, Circuit Judge.

text:
    Willie GLINSEY, Appellant, v. H. L. PARKER, Superintendent Shelby County Jail, Appellee. Arthur FRANKLIN, Appellant, v. H. L. PARKER, Superintendent Shelby County Jail, Appellee. Euan BAILEY, Appellant, v. H. L. PARKER, Superintendent Shelby County Jail, Appellee.
    Nos. 73-1806 to 73-1808.
    United States Court of Appeals, Sixth Circuit.
    Argued Dec. 4, 1973.
    Decided Feb. 13, 1974.

      Ural B. Adams, Jr. (Court-appointed), Memphis, Tenn., on brief, for appellants.
    James H. Allen, Asst. Dist. Atty. Gen., Memphis, Tenn., on brief, for appellee; David M. Pack, Atty. Gen. of Tenn., Nashville, Tenn., of counsel.
    Before PHILLIPS, Chief Judge and PECK and LIVELY, Circuit Judges.
   LIVELY, Circuit Judge.

The petitioners, Glinsey, Franklin and Bailey, appeal the orders of the district court which denied them habeas corpus relief. All are serving penitentiary sentences imposed in state court proceedings in which they were found guilty by a jury of committing armed robbery. Following a two-day evidentiary hearing, the district court filed an opinion in which three constitutional issues that had been raised by petitioners were considered. In denying habeas corpus writs the district court found that the arrests, interrogation and state court proceedings which resulted in the petitioners’ imprisonment did not violate their constitutional rights. In order to deal with the issues presented on appeal it is necessary to make a brief statement of the facts surrounding the arrest and trial of petitioners.

On the evening of December 8, 1969 the Memphis police picked up two young men named Hurd and Harris in connection with a holdup which had taken place earlier that evening. Hurd and Harris admitted their participation in the December 8 robbery and divulged to the police the fact that they had also been involved in approximately 13 other armed robberies which were unsolved at the time. In discussing the other robberies, Hurd and Harris implicated all three of the petitioners and one Frederick Johnson. Beginning shortly after 3:00 a. m. on December 9, 1969, the police, led by Lieutenant Hadaway who was then a detective lieutenant in the robbery bureau, arrested each of the petitioners and Frederick Johnson. Each petitioner was arrested at his home in the presence of an adult and all were taken to police headquarters and then to juvenile court where their names, addresses, telephone numbers and family information were recorded. A juvenile court attendant notified the parents of each petitioner of the arrests, the charges and the fact that they were not eligible for release because of the seriousness of the charges. Each one was checked physically to determine if any beating or mistreatment had taken place. All three petitioners and Frederick Johnson were taken back to the police station and placed in a room with Hurd and Harris. Another youth who had been implicated by Hurd and Harris was released by the police when it was learned that he had only loaned a gun to Hurd and Harris and had not actually participated in any of the holdups.

By the time the petitioners were first brought to the police station, Hurd and Harris had already admitted the armed robbery of a liquor store on November 29, 1969 and had implicated all three petitioners and Frederick Johnson. The six suspects were questioned intermittently for approximately 12 hours beginning about 5:00 a. m. Since the three petitioners were 17 years of age, they were taken back to juvenile court for nearly two hours around the middle of the day on December 9 for preliminary disposition of their cases. Food was available to them during this period. The juvenile judge entered an order bringing them within the protective custody of the court but ordering detention pending a hearing which was set for December 15. Between 3:00 and 5:00 p. m. on December 9 all six suspects signed written confessions in the presence of each other in which they admitted taking part in the November 29 liquor store robbery. Before the petitioners and Johnson had made any statements they requested the police to leave them alone in the room with Hurd and Harris. This was done, and it was following a discussion among all six of the suspects that petitioners and Johnson agreed to give statements.

Many statements were taken by the police. At first the six suspects, while together, were asked about a number of separate robberies. An officer would describe the date and place of the robbery and ask which ones of the suspects had taken part in that robbery. Those who had taken part would raise their hands, and notes were taken by another officer recording the names of those who admitted participation in each ’ of the crimes. After the group session was completed, the officers began taking statements from each individual suspect concerning specific robberies. These statements were written in long hand, signed by the suspects and were referred to by the police as “I” statements. Each of the petitioners made such a confession with respect to the November 29 liquor store robbery.

Following their return from juvenile court at about 2:00 p. m. on December 9, the petitioners and Johnson, Hurd and Harris were questioned in the presence of a stenographer who typed all the questions and answers. In the presence of each other all six suspects admitted certain robberies, including the one involving the liquor store on November 29, and typed statements were signed. These were referred to by the police as “We” statements. Each statement contained a Miranda type warning above the body of the confession.

On December 15, 1969 juvenile court ordered the petitioners remanded to the sheriff for disposition of the charges under the criminal laws of Tennessee on a finding of probable cause that they had committed the crimes charged. All were subsequently indicted for armed robbery in connection with the November 29 liquor store holdup and the court ordered all six defendants to be tried together. Bach defendant moved for a severance, but the motions were denied.

Prior to the trial, Hurd and Harris had agreed to plead guilty and the State offered to recommend a 25-year sentence if all six defendants would plead guilty. Armed robbery was a capital offense in Tennessee at that time. The petitioners and Johnson refused this proposition and entered not guilty pleas. After the jury had been impanelled, Hurd and Harris pled guilty in the presence of the jury and the other four defendants pled not guilty. Because the jury fixes punishment under Tennessee criminal practice, Hurd and Harris remained as defendants and their cases were submitted to the jury for the purpose of fixing punishment along with those of the other defendants. Before the end of the trial, Frederick Johnson changed his plea to guilty. All three petitioners took the stand and repudiated the confessions which they had made on December 9, 1969. Hurd, Harris and Johnson did not testify, but the “We” statements of all six defendants confessing the November 29 robbery and implicating the others were introduced at the trial. The jury was instructed both at the time the statements were introduced and in the final charge that admissions could not be considered as evidence against any defendant other than the one who had made the admission. The jury determined the guilt of the petitioners and fixed their punishment at the same time that it fixed the punishment of Hurd and Harris and Johnson.

After exhausting their state remedies the three petitioners brought this action, alleging that the confessions introduced at the trial were not freely and voluntarily given, but were the result of coercion; that they were denied their Sixth and Fourteenth Amendment rights to confront and cross-examine witnesses against them; and, that the denial of a severance and subsequent use of the “We” statements in the trial was a violation of due process under the Fourteenth Amendment.

In addition to conducting a hearing, the district judge had before him the entire record of proceedings in the state courts. The district court found that at the time of arrest and prior to interrogation the petitioners were clearly advised of their rights and that they never requested counsel nor were deprived of their right to counsel. Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966); Escobedo v. Illinois, 378 U.S. 478, 84 S.Ct. 1758, 12 L.Ed.2d 977 (1964). The court found that there were no threats or promises and that the confessions of the petitioners were freely and voluntarily given. It was pointed out in the court’s memorandum that the petitioners had confessed to the November 29 liquor store robbery in the morning of December 9 and shortly thereafter had signed “I” statements. The “We” statements which were introduced at the trial of the petitioners, although taken near the end of twelve hours of interrogation, were consistent with the oral confessions and the “I” statements which were taken near the beginning of the period of interrogation. We are mindful of the extreme care which must be exercised in determining whether a confession given by a juvenile charged with a serious crime is voluntary or coerced. Haley v. Ohio, 332 U.S. 596, 68 S.Ct. 302, 92 L.Ed. 224 (1948); Gallegos v. Colorado, 370 U.S. 49, 82 S.Ct. 1209, 8 L.Ed.2d 325 (1962). We believe from examining this record that the experienced and able district judge did closely scrutinize the facts and circumstances surrounding these confessions and that his findings and conclusions that the admission into evidence against them of the petitioners’ own confessions was not a violation of their federal constitutional rights are fully supported by the record. Waddy v. Heer, 383 F.2d 789, 793 (6th Cir. 1967), cert. denied, 392 U.S. 911, 88 S.Ct. 2069, 20 L.Ed.2d 1369 (1968).

The second issue in the case arises under the confrontation clause of the Sixth Amendment which provides in part as follows: “In all criminal prosecutions, the accused shall enjoy the right . to be confronted with the witnesses against him . . In Pointer v. Texas, 380 U.S. 400, 85 S.Ct. 1065, 13 L.Ed.2d 923 (1965), the Supreme Court held that the right to confront witnesses and cross-examine them is essential to a fair trial and is made applicable to the states by the Fourteenth Amendment. Petitioners maintain that the introduction of the “We” confessions of Hurd and Harris at the joint trial constituted a violation of their right of confrontation and cross-examination under the Supreme Court holding in Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968). There the Supreme Court held that a statement of one defendant who does not testify and which implicates another defendant in the crime for which they are on trial may not be introduced in a joint trial since the right of confrontation and cross-examination is denied the co-defendant. The Court held that even clear instructions to disregard such a statement as evidence against the co-defendant, as were given in the present case, do not make it admissible. The Court reasoned that the jury was likely to believe the portions of the statement implicating Bruton and that thus substantial weight was added to the prosecution’s case against him by the use of inadmissible evidence.

In Dutton v. Evans, 400 U.S. 74, 91 S.Ct. 210, 27 L.Ed.2d 213 (1970), the Supreme Court held that the confrontation clause does not preclude the use of all hearsay evidence in a criminal trial and upheld the admission of testimony which recounted a statement of an alleged co-conspirator. This testimony had been permitted in evidence under a state rule which allowed statements of co-conspirators to be introduced as evidence against other members of a conspiracy. The case is distinguishable from Bruton in that it involved a separate rather than a joint trial and the witness who related the alleged statement of the co-conspirator was cross-examined at length. In Campbell v. United States, 415 F.2d 356 (6th Cir. 1969), this court held that an out-of-court statement of a co-conspirator could be admitted in a joint trial because of a federal rule permitting such testimony to be received as evidence against other members of the conspiracy. This court held that the Bruton rule is limited to situations where the out-of-court statements are inadmissible hearsay and has no application to situations where the extrajudicial statement is admissible under the narrowly defined co-conspirator exception to the hearsay rule.

In considering this issue in the present case the district judge found that the “We” confessions of Hurd and Harris were actually admissible as to the petitioners because the six suspects each adopted the statements given by the others as the officers questioned them as a group. The district court thus reasoned that the state trial court could have received the “We” statements of Hurd and Harris as evidence against these petitioners the same as the statements which petitioners themselves had given because they were “adoptive statements.” The petitioners were present when Hurd and Harris gave the statements which were introduced at the trial. Their adoption of such statements was inferred from the similarity between the statements of Hurd and Harris and their own statements and the failure of petitioners to object or specifically disavow the statements of Hurd and Harris at the time they were made.

This court has had occasion to deal with the issue of an adoptive statement in a recent case. In Miller v. Cardwell, 448 F.2d 186 (6th Cir. 1971), cert. denied, 405 U.S. 1033, 92 S.Ct. 1295, 31 L.Ed.2d 490 (1972), one Swiger made a statement in Miller’s presence which was recorded on an electric device. Following the completion of Swiger’s statement, Miller was asked by the officers whether the statement was true and he eventually ratified Swiger’s statement and this was recorded as well. At Miller’s trial the recording was played following correct instructions to the jury to the effect that it should consider Swiger’s statement as evidence against Miller only if the jury found that Miller had accepted Swiger’s statement as his own. Following conviction, Miller sought a writ of habeas corpus asserting that he was denied his right to confront witnesses and cross-examine them by the admission of Swiger’s out-of-court statement. We held that Miller’s consitutional rights had not been violated since he adopted the statement of Swiger as his own and thus made it admissible against him.

The case before us now raises the issue of whether petitioners can be held to have adopted the statements of Hurd and Harris by reason of their silence upon hearing such statements given. Of course all were in custody when the statements were given and this court has long held that no derogatory inferences may be drawn from the silence of a person who is in custody and accused of crime. McCarthy v. United States, 25 F.2d 298 (6th Cir. 1928). One in custody has the right to remain silent and it would violate rights guaranteed by the Fifth Amendment to hold that such a person, by his silence, has acquiesced in a statement made by another in his presence which implicates him in a crime. See Miranda v. Arizona, supra, 384 U.S. 436 at 468, n. 37, 86 S.Ct. 1602, 16 L.Ed.2d 694. In reversing the conviction in the McCarthy case, the court noted that the defendants later took the stand and denied all connection with the crime as was done here. The holding of McCarthy v. United States, supra, was reaffirmed in a recent case where it was held that an admission by silence, made while the defendant on trial and the maker of an inculpatory statement were undergoing police interrogation and at the time when they were obviously accused of having committed an offense, may not be received in evidence. To permit the jury to treat silence of one accused and in custody as an admission of guilt would contravene that person’s rights under the Fifth Amendment to remain silent. United States v. McKinney, 379 F.2d 259 (6th Cir. 1967). In United States v. Brinson, 411 F.2d 1057 (6th Cir. 1969), the decisions in McCarthy and McKinney were relied upon in holding that the use of the fact that a person accused of a crime remains silent against such person is an error of constitutional magnitude.

Hurd and Harris did not testify at the joint trial. Thus there was no opportunity for the petitioners’ counsel to cross-examine Hurd and Harris concerning the contents of the statements. As the Supreme Court said in Pointer v. Texas, supra, “. . .a major reason underlying the constitutional confrontation rule is to give a defendant charged with crime an opportunity to cross-examine the witnesses against him.” 380 U.S. 400 at 406-407, 85 S.Ct. 1065 at 1069, 13 L.Ed.2d 923. The petitioners cannot be held to have waived their right of confrontation and cross-examination by their silence in the police station when Hurd and Harris made statements which implicated them. The right to confrontation and cross-examination is meaningful only if it can be exercised in the presence of the jury which is charged with deciding the question of guilt or innocence. We therefore hold that the silence of petitioners in the face of incriminating statements of Hurd and Harris cannot constitutionally be held to be an adoption of such statements under the circumstances of this case.

On the basis of the finding that each of the defendants had adopted the statements of the others, the district court also held that it was not a violation of due process for the trial court to refuse to sever the Hurd and Harris cases from those of petitioners, stating, “If the guilty pleas of Hurd and Harris can be said to be an assertion of guilt as to petitioners such assertion of guilt was encompassed by the confessions of Hurd and Harris that could have, though they were not, admitted in evidence against petitioners.” While we do not agree that the petitioners adopted the confessions of Hurd and Harris, this nevertheless is not dispositive of the issue of severance. The matter of severance is always addressed to the sound discretion of the trial judge and accordingly is only reviewable for abuse. United States v. Ethridge, 424 F.2d 951 (6th Cir. 1970), cert. denied, 400 U.S. 993, 91 S.Ct. 463, 27 L.Ed.2d 442 (1971). Though there appears to be little reason for joining guilty-pleading defendants with those pleading not guilty even under Tennessee practice where the jury must set the punishment of those pleading guilty, still we cannot say that thisjoinder standing alone was prejudicial to the petitioners. Compare Crampton v. Ohio, 402 U.S. 183, 208-222, 91 S.Ct. 1454, 28 L.Ed.2d 711 (1971). It is conceivable that such a joint trial could be conducted without the use of the Hurd and Harris confessions and, if so, it would not be an abuse of discretion to deny severance.

One other point needs to be considered in this case. The district court found that all of the “We” statements were in substance the same concerning the November 29 liquor store robbery. Since the petitioners’ own statements were found to be admissible against them, if the statements of Hurd and Harris which were admitted were identical with those of the petitioners in every material detail, such statements might be considered merely cumulative evidence and their admission harmless error. In Harrington v. California, 395 U.S. 250, 89 S.Ct. 1726, 23 L.Ed.2d 284 (1969), while holding that the rule of Bruton applies to state prosecutions, the Supreme Court refused to set aside a conviction where the other co-defendants were tried jointly with Hárrington over his objection that there should be a severance. The confessions of each of the four defendants were introduced into evidence with limiting instructions and one of them took the stand and was cross-examined. The other two co-defendants did not testify. The Supreme Court affirmed the conviction of Harrington, holding that in view of the other evidence of guilt the introduction of statements of co-defendants was merely cumulative evidence and was harmless beyond a reasonable doubt.

At a joint murder trial where neither defendant took the stand, a police officer in Schneble v. Florida, 405 U.S. 427, 92 S.Ct. 1056, 31 L.Ed.2d 340 (1972), testified to certain admissions by each of the defendants implicating both of them in a murder. Both were convicted and the conviction of one defendant (Snell) was reversed by the Florida Supreme Court after remand from the United States Supreme Court. Nevertheless, the Supreme Court affirmed the conviction of the other defendant (Schneble) on the ground that any violation of the Bruton doctrine which had occurred at the trial was, as to him, harmless beyond a reasonable doubt. The admissions of Schneble were held to be voluntary and admissible against him, but he contended that the introduction of his co-defendant’s out-of-court statement deprived him of a constitutional right. The Court held that there was independent evidence of guilt which was overwhelming and that the allegedly inadmissible statement of the co-defendant merely tended to corroborate details of the petitioner’s own comprehensive confession. Holding that there was no rational hypothesis on which the jury could have found Schneble guilty without reliance on his own confession the Court stated “In some cases the properly admitted evidence of guilt is so overwhelming, and the prejudicial effect of the codefendant’s admission is so insignificant by comparison, that it is clear beyond a reasonable doubt that the improper use of the admission was harmless error.” 405 U.S. at 430, 92 S.Ct. at 1059.

We have examined the trial transcript of the state proceedings against the appellants. Aside from the statements which were introduced, there is no evidence linking Glinsey or Bailey with the November 29 robbery. Franklin was positively identified by an employee of the liquor store as one of the holdup men. The same witness identified Hurd, but was unable to identify either of the other participants, though the statements of all agreed that Hurd and the three appellants took part in the robbery inside the store while the other two z’emained in the car. We find the error in the introduction of the Hurd and Harris statements to be harmless beyond a reasonable doubt insofar as it affected the trial of Franklin. His own confession in conjunction with the positive . identification by a victim of the robbery constituted overwhelming evidence of guilt. Schneble v. Florida, supra. We find no such overwhelming evidence of guilt outside of the improperly admitted statements with respect to Glinsey and Bailey.

The judgment of the district court is affirmed in No. 73-1807; it is vacated in Nos. 73-1806 and 73-1808 and these cases are remanded with directions to grant writs of habeas corpus to the petitioners Glinsey and Bailey unless the State of Tennessee shall grant them new trials within a reasonable time to be fixed by the district court.


source: Caselaw Access Project

author: TALBOT SMITH, Senior District Judge. GIBSON, Circuit Judge

license: Public Domain

text:
    Malcolm Ralph MORRISON, Defendant-Appellant, v. UNITED STATES of America, Plaintiff-Appellee.
    No. 73-1442.
    United States Court of Appeals, Eighth Circuit.
    Submitted Dec. 11, 1973.
    Decided Feb. 12, 1974.

      Clyde A. Christian, Omaha, Neb., for appellant.
    Stephen Muehlberg, Asst. U. S. Atty., Omaha, Neb., for appellee.
    Before GIBSON and ROSS, Circuit Judges, and TALBOT SMITH, Senior District Judge.

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

   TALBOT SMITH, Senior District Judge.

This is an appeal from a conviction for passing a counterfeit $20 bill (Count I) and for possession of an additional $400 of counterfeit currency (Count III).

The appellant ordered two beers at Marina Inn on February 5, 1972 and paid for them with a $20 bill. The waitress who served him testified that “this one looked so obvious that it just caught our attention.” She took it to the bartender. He thought that “the face on it looked funny.” He called the other bartender, who had previously worked in a bank as teller and had had training in the detection of counterfeit currency. He thought that the bill was counterfeit and so informed the owner, Mr. Carlson, who in turn called the police. The arresting officer did not, after receiving the bill from Mr. Carlson, make a personal determination as to its valid or counterfeit character, but arrested the appellant upon the charge made. At the time of the arrest, appellant was sitting in a leased vehicle in the parking lot. The car was returned by the police to the rental company the following day. It was again rented, on the day immediately thereafter, to another lessee who found $400 in counterfeit currency secreted under a headrest in the car. This currency was the subject of the charge of possession in Count III.

In his interview with agents of the Secret Service on February 6, the appellant was informed of his rights, but refused to sign a waiver thereof on a form submitted to him. Thereafter he refused to make any statement regarding the incidents on February 5, 1972, but did furnish general information “such as his name, age, employment and prior criminal record.” He also informed the agents that he was “presently on parole from a federal counterfeit conviction in Las Vegas, Nevada.” The general information thus furnished is sometimes described as the “processing” of a suspect, for purposes of identification.

At the trial, over appellant’s objection, a certified, exemplified copy of his former conviction was received into evidence. The evidentiary use of this conviction as evidence of appellant’s intent, is the focal point of this appeal. Appellant argues 1) that the February 5th arrest was illegal as made without probable cause and hence any statement made thereafter “was not admissible under Wong Sun * * *; ” and 2) that the “admission of the prior criminal conviction [w]as a violation of Miranda * * *.

We turn first to the legality of the arrest. The pertinent Nebraska statute, R.S.Neb. § 29-404.02 (Supp.1969), provides :

“A peace officer may arrest a person without a warrant if the officer has reasonable cause to believe that such person has committed:
(1) A felony; * *

It is appellant’s argument that upon the facts before us there was no “probable cause” for his arrest. He would require that the arresting officer, Mr. Ross, by personally inspecting the dubious bill in the parking lot, “determine the character of the bill” before making the arrest, and, in addition, that he question the “other employees of the Marina Inn who had observed defendant.” Such are not the demands of probable cause upon these facts. There is no constitutional or statutory requirement that before an arrest can be made the officer must conduct a trial. Lathers v. United States, 396 F.2d 524 (5th Cir. 1968). As we held in United States v. Stratton, 453 F.2d 36 (8th Cir. 1972), cert. denied, 405 U.S. 1069, 92 S.Ct. 1515, 31 L.Ed.2d 800 (1972), probable cause is to be determined upon the objective facts available to the arresting officer at the time of the arrest. He must appraise the type and nature of the offense charged, the substance and apparent reliability of the complaint made to him, and the identity of and knowledge possessed by the complainant, together with other relevant facts and circumstances. “In dealing with probable cause * * * as the very name implies, we deal with probabilities * * *. [T]hey are the factual and practical considerations of everyday life on which reasonable and prudent men, not legal technician, act.” For such determination there can be no formula, each case being decided “on its own facts and circumstances.” So tested, and upon the totality of the circumstances presented, there was probable cause for the arrest made. United States v. Masini, 358 F.2d 100 (6th Cir. 1966). Thus to the degree that illegal arrest may be found to fault statements or admissions made by the appellant so arrested, cf. Wong Sun, supra, the doctrine finds no application here.

The difficulty with appellant’s attempted use of Miranda, supra, to suppress his statements, lies in the nature of the statements made by appellant without counsel and after refusing to sign a waiver. At the root of the Miranda proscriptions was the vice of “obtaining evidence against an accused through ‘the cruel, simple expedient of compelling it from his own mouth,’ ” of forcing the appellant himself to self-condemnation. We do not have such here. What we have is the appellant’s criminal record. It is not a matter of either privilege or privacy. It does not concern “a private inner sanctum of individual feeling and thought” forbidden to “state intrusion to extract self-condemnation.” On the contrary we have a matter of public record, pertaining to and involving appellant’s identification. Its disclosure after lawful arrest, whether by appellant himself, or another, is clearly not a matter of self-incrimination.

Appellant also urges that the evidence was insufficient to go to the jury on Count III, relating to the counterfeit money found in the headrest of the car used by appellant, and in which he was sitting when arrested. Some of this money bore the identical front plate, back plate, and serial numbers as the bill described in Count I. The sentence imposed upon conviction was ten years, upon both counts, the sentences to run concurrently. As to Count III we apply the concurrent sentence rule, that a conviction will be sustained on appeal where concurrent sentences have been given if the appellant has been properly convicted under any count which is valid and sufficient in itself, and where the collateral legal consequences which might flow from the added conviction are remote. Cf. Benton v. Maryland, 395 U.S. 784, 89 S.Ct. 2056, 23 L.Ed.2d 707 (1969) ; United States v. Whitlock, 442 F.2d 1061 (8th Cir. 1971). We therefore do not pass on the evidentiary issues argued with respect to this count.

We have considered with care the remaining allegations of error argued by appellant but find no merit therein.

The judgment is affirmed.

GIBSON, Circuit Judge

(concurring).

I concur in the opinion of Judge Smith but would also reach the validity of the judgment under Count III. The evidence was persuasive and was clearly adequate to support a judgment under Count III, and the objections raised thereto by the defendant are without merit. I therefore would affirm the judgment entered under Count I and Count III.

      . Both counts charge a violation of 18 U.S.C. § 472.

      . Court’s Memorandum and Order, April 10, 1973.

      . The jury was warned in the Government’s final arguments and. in the court’s Instruction # 12 that evidence of the prior conviction could be considered only as going to the intent to defraud and for no other purpose.

      . Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963).

      . Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966).

      . That probable cause and reasonable cause have essentially the same significance in this context. See United States v. Carney, 328 F.Supp. 948 (D.Del.1971), aff’d 455 F.2d 925 (3d Cir. 1972).

      . Brinegar v. United States, 338 U.S. 160, 175, 69 S.Ct. 1302, 1310, 93 L.Ed. 1879 (1949).

      . Go-Bart Importing Co. v. United States, 282 U.S. 344, 357, 51 S.Ct. 153, 158, 75 L.Ed. 374 (1931).

      . See Rogers v. United States, 330 F.2d 535 (5th Cir. 1964).

      . The form used in this case by the Secret Service agents consists of two parts, first “the warning of the constitutional rights,” which was signed by defendant, the second “a waiver of rights” which defendant refused to sign.

      . Schmerber v. California, 384 U.S. 757, 763, 86 S.Ct. 1826, 1831, 16 L.Ed.2d 908 (1966).

      . Couch v. United States, 409 U.S. 322, 327, 93 S.Ct. 611, 615, 34 L.Ed.2d 548 (1973).

      . Id. at 327, 53 S.Ct. 615.


author: FAIRCHILD, Circuit Judge.

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. FAMILY HERITAGE HOME-BEAVER DAM, INC., Respondent.
    No. 72-1443.
    United States Court of Appeals, Seventh Circuit.
    Argued Feb, 12, 1973.
    Feb. 12, 1974.

      Peter G. Nash, Gen. Counsel, Kenneth B. Hipp, Atty., N.L.R.B., Washington, D. C., for petitioner.
    John S. Greenebaum, Louisville, Ky., for respondent.
    Before CASTLE, Senior Judge, and FAIRCHILD and CUMMINGS, Circuit Judges.
   FAIRCHILD, Circuit Judge.

The National Labor Relations Board is seeking enforcement of its order of March 29, 1972, requiring Family Heritage Home-Beaver Dam, Incorporated and “its officers, agents, successors, and assigns” to bargain collectively with Local 150, Service and Hospital Employee’s International Union, AFL-CIO. At the time of the events giving rise to the Board order, Family Heritage was a Wisconsin corporation engaged in the operation of a nursing home at Beaver Dam, Wisconsin.

Two questions are presented: (1) whether the Board properly found that Family Heritage violated Section 8(a)(1), (5) of the National Labor Relations Act, 29 U.S.C. § 158(a)(1), (5), by refusing to bargain with the certified representative of its employees; and (2) whether this action for enforcement is rendered moot by the alleged sale of the nursing home, after entry of the Board order, to National Health Enterprises, Incorporated.

On April 29, 1971, the Union filed a petition under Section 9(c) of the Act, 29 U.S.C. § 159(c), seeking certification as the collective bargaining representative of certain of the Family Heritage employees. On July 15, 1971, there was an election at which eighteen ballots were counted for the Union; seventeen against; and three unopened ballots were challenged, one by Family Heritage, and two (including that of Jeanne Stern) by the Board Agent conducting the election on the ground that their names did not appear on the eligibility list. On August 24, 1971, after investigation, but no hearing, the three challenges were upheld and the Union was certified.

On August 31, 1971, Family Heritage requested review of the certification decision asserting that the challenged ballot east by Jeanne Stern should have been counted or in the alternative that a hearing should have been conducted after the election to settle substantial and material factual questions raised by its exceptions. The Board denied this request.

The Union requested that Family Heritage bargain. Family Heritage refused, and a complaint issued. On March 29, 1972, the Board granted General Counsel’s motion for summary judgment, and entered the order presently before this court.

(1) The Validity of the Certification

It is undisputed that the Company refused to recognize and bargain with the Union after certification. Accordingly, review must focus on the validity of the certification.

Family Heritage first complains that the Regional Director applied an arbitrary standard in considering the challenge to Jeanne Stern’s ballot and rejecting it because, although hired early enough to be eligible, she had not begun work. We disagree. The election direction made eligible those “employed” during the payroll period. The Board’s settled policy is that ordinarily an employee must be both “hired and working” on the eligibility date in order to participate in a Board-directed election. This rule was adopted to simplify the process of identifying eligible voters: objective evidence is usually available to pinpoint the time at which an employee commences work while the date of “hire” is often subject to dispute. Annot., 69 ALR2d 1191, 1199, § 8. Family Heritage notes that the Board makes exceptions to this rule for employees who have been temporarily laid off, who are absent on sick leave, or on vacation, or who are engaged in an economic strike and accordingly do not work on the eligibility date. But the status of such individuals as employees with a stake in the outcome of the election is established prior to their “excused absence,” presumably by application of the same standard, whether they were both “hired and working.”

The second claim of Family Heritage is that due process and Board rules were violated by the Board’s failure to provide a hearing at any stage of the administrative proceedings on the challenge to Jeanne Stern’s ballot. We conclude, however, that the Family Heritage exceptions to the Regional Director’s findings did not demonstrate substantial and material unresolved factual questions. See Macomb Pottery Company v. N.L.R.B., 376 F.2d 450, 452-453 (7th Cir., 1967).

Accepting all factual assertions made by Family Heritage where in conflict with the Regional Director’s findings based upon his post-election investigation, it appears that Jeanne Stern’s name was not on the eligibility list; that she was hired on June 10, 1971; that she arrived at the nursing home at about 6:40 a. m. on June 11, 1971; that her normal working hours were from 7 a. m. to 3 p. m.; that it was not until after the investigation by the Regional Director that Family Heritage decided to pay Jeanne Stern for the extra twenty minutes on June 11, 1971, and to alter her timecard for that day to reflect a starting time of 6:40 a. m. rather than 7 a. m.; and that the payroll period during which an employee must have been “employed” in order to be eligible ended at 7 a. m., June 11. Family Heritage contends that her reporting for work at about 6:40 a. m. made her eligible. We conclude, however, that taking the facts as proffered by Family Heritage, Jeanne Stern’s workday on June 11, as on all subsequent days, commenced at 7 a. m. and her presence 20 minutes early, even though ultimately compensated, was reasonably deemed not to be work during the preceding payroll period. Accordingly, she was not eligible to vote and her lack of eligibility could properly be established without a hearing to resolve issues of fact.

(2) Mootness of the Board’s Order.

At the time of the Board-directed election on July 15, 1971, the Family Heritage Home-Beaver Dam, Incorporated, the named respondent in the unfair labor practice proceeding, was one of seven corporations, each operating a nursing home, and wholly owned by Ex-tendieare. It is asserted in the Family Heritage brief that on August 31, 1971 (before completion of administrative action in the representation proceeding) the seven corporations were merged into Extendicare of Wisconsin, a wholly owned subsidiary of Extendicare; that by agreement executed June 14, 1972, subsequent to the Board’s final order in the unfair labor practice proceeding, the seven nursing home facilities were sold to National Health Enterprises, Inc. (sale of assets); and that there is no corporate relationship between Extendicare, or any of its subsidiaries and National Health Enterprises, or any of its subsidiaries.

The order of the Board directs “Family Heritage Home-Beaver Dam, Incorporated, its officers, agents, successors, and assigns,” to bargain with the Union and to post specified notices. Family Heritage (presumably Extendicare of Wisconsin) argues that enforcement of the order as it stands is inappropriate because Family Heritage no longer has the means to carry out the affirmative action required by the order.

At the outset we note that the Board is not asking us to name National Health Enterprises, the purchaser as claimed, in our decree and to compel it, as successor, to carry out the Board order. Instead, the question is whether we should enter a decree compelling Family Heritage and its unspecified “officers, agents, successors, and assigns” to carry it out. Presumably, depending upon facts developed by further inquiry, the Board may contemplate subsequent Board proceedings against National Health Enterprises, if warranted. See Golden State Bottling Company, Inc. v. N.L.R.B. 414 U.S. 168, 94 S.Ct. 414, 38 L.Ed.2d 388 (1973); N.L.R.B. v. Burns Security Services, 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1971).

Family Heritage suggests as an alternative to enforcement a remand to the Board for enlargement of the record as to the merger and sale, presumably pursuant to Section 10(e), 29 U.S.C. § 160(e).

In Southport Petroleum Co. v. N.L.R.B., 315 U.S. 100, 62 S.Ct. 452, 86 L.Ed. 718 (1942), where the respondent employer, like Family Heritage here, asserted that subsequent to the Board order it had discontinued operations and transferred assets, the Supreme Court affirmed the court’s decree enforcing the Board’s order and denying respondent’s motion to dismiss or for leave to adduce additional evidence. Subsequently, courts of appeals have rejected mootness contentions on the ground that the application of Board orders to respondent employers which have undergone changes in ownership, or to successors, should be developed after enforcement in compliance proceedings before the Board or in contempt adjudications before the courts. N.L.R.B. v. West Coast Casket Company, Inc., 469 F.2d 871, 873 (9th Cir., 1972); N.L.R.B. v. Autotronics, Inc., 434 F.2d 651 (8th Cir., 1970); Cap Santa Vue, Inc. v. N.L.R.B., 137 U.S.App.D.C. 395, 424 F.2d 883, 885-886 (1970); N.L.R.B. v. Kostilnik, 405 F.2d 733, 734 (3rd Cir., 1969). See National Labor Relations Board v. Acme Mattress Co., 192 F.2d 524, 528 (7th Cir., 1951). Contra, N.L.R.B. v. McMahon, 428 F.2d 1213, 1214 (9th Cir., 1970); N.L.R.B. v. Schnell Tool & Die Corporation, 359 F.2d 39, 44 (6th Cir., 1966).

Of course, an employer will not be held responsible for failure to perform acts genuinely made impossible by bona fide dissolution or sale occurring subsequent to the Board order but prior to a court decree. West Coast Casket Company, supra; Cap Santa Vue Inc., supra; Kostilnik, supra.

Ordinarily a court would not grant an injunction requiring affirmative action in the face of a serious assertion that the decree will be meaningless because it can no longer be carried out, without inquiry into the truth of such assertion.

Judicial and administrative economy, and our proper role in effectuating the purposes underlying the National Labor Management Relations Act, however, outweigh the gaps in logic and the minimal prejudice, if any, caused by a decree at this stage. Our entry of a decree will adjudicate the merits of the Board order as to Family Heritage and all in privity with it. See Golden State Bottling Co. v. N.L.R.B., supra, 414 U.S. p. 179, 94 S.Ct. p. 422. The issues available to an alleged successor in proceedings against it will thereby be minimized.

Accordingly, the order will be enforced.

      . The Union sought to represent all employees at the nursing home including licensed practical nurses, maintenance employees, acting director and medical aides, excluding registered nurses, professional employees, guards and supervisors. Family Heritage does not contend that this unit is inappropriate for bargaining purposes.

      . 29 C.F.R. § 102.69(c) provides that the Regional Director shall investigate challenges and may request a hearing if there are “substantial and material factual issues” to resolve.

      . The Board found that all issues raised by Family Heritage in response to General Counsel’s motion for summary judgment were or could have been litigated in the prior representation proceeding, and that accordingly, in the absence of an offer of newly discovered or previously unavailable evidence or special circumstances, no issues remained to be litigated. See Pittsburgh Plate Glass Co. v. N. L. R. B., 313 U.S. 146, 162, 61 S.Ct. 908, 85 L.Ed. 1251 (1941).

      . An alternative would be to remand to the Board under 29 U.S.C. § 160(e) for the taking of additional evidence about the alleged merger and sale. Upon filing of the Board’s findings, we would then decide whether to enforce or deny the petition and against which corporate entity. See N. L. R. B. v. Schnell Tool & Die Corporation, 359 F.2d 39, 44 (6th Cir., 1966).

      . Because we presume that the Board will act with regularity and not seek compliance where such compliance is impossible, parties subject to our enforcement decree are unlikely to be prejudiced to any significant degree. (See National Labor Relations Board v. Acme Mattress Co., 192 F.2d 524, 528 (7th Cir., 1951)).


author: KILEY, Senior Circuit Judge.

text:
    Eric NELSON, by his next friend, Corine Nelson, and Daniel R. Roberts, by his next friend, Robert Brown, on behalf of themselves and a class of persons similarly situated but too numerous and too transitory to mention, Plaintiffs-Appellees, v. Robert P. HEYNE, Individually and in his capacity as Commissioner of Corrections, Indiana Department of Corrections, et al., Defendants-Appellants.
    Nos. 72-1970, 73-1446.
    United States Court of Appeals, Seventh Circuit.
    Argued Sept. 20, 1973.
    Decided Jan. 31, 1974.

      Theodore Sendak, Atty. Gen., Darrel K. Diamond, Deputy Atty. Gen., Indianapolis, Ind., for defendants-appellants.
    Thomas A. Digrazia and John P. Forhan, South Bend, Ind., for plaintiffs-appellees.
    Before KILEY, Senior Circuit Judge, and FAIRCHILD and SPRECHER, Circuit Judges.
   KILEY, Senior Circuit Judge.

The district court in this class civil rights action enjoined defendants from implementing alleged unconstitutional practices and policies in conducting the Indiana Boys School under their administration ; and declared the practices and policies unconstitutional. In Appeal No. 72-1970 defendants challenge the validity of the judgment granting the injunction, and in Appeal No. 73-1446 challenge the declaratory judgment. We affirm.

The School, located in Plainfield, Indiana, is a medium security state correctional institution for boys twelve to eighteen years of age, an estimated one-third of whom are non-criminal offenders. The boys reside in about sixteen cottages. The School also has academic and vocational school buildings, a gymnasium and an administrative building. The average length of a juvenile’s stay at the School is about six and one-half months. Although the School’s maximum capacity is less than 300 juveniles, its population is generally maintained at 400. The counselling staff of twenty individuals includes three psychologists with undergraduate academic degrees, and one part-time psychiatrist 'who spends four hours a week at the institution. The medical staff includes one part-time physician, one registered nurse, and one licensed practical nurse.

The complaint alleged that defendants’ practices and policies violated the 8th and 14th Amendments rights of the juveniles under their care. Plaintiffs moved for a temporary restraining order to protect them from, inter alia, defendants’ corporal punishment and use of control-tranquilizing drugs. After hearing, the district court denied the motion and set the date for hearing on the merits. Defendants’ answer generally denied plaintiffs’ allegations. Trial briefs were filed upon the issue whether defendants deprived plaintiffs of their alleged right to adequate rehabilitative treatment.

The court found that it had jurisdiction and that the corporal punishment and the method of administering tranquilizing drugs by defendants constituted cruel and unusual punishment in violation of plaintiffs’ 8th and 14th Amendment rights. The judgment restraining the challenged practices followed. The court thereafter, in a separate judgment, declared plaintiffs had the right to adequate rehabilitative treatment.

I—CRUEL AND UNUSUAL PUNISHMENT

A.

It is not disputed that the juveniles who were returned from escapes or who were accused of assaults on other students or staff members were beaten routinely by guards under defendants’ supervision. There is no proof of formal procedures that governed the beatings which were administered after decision by two or more staff members. Two staff members were required to observe the beatings.

In beating the juveniles, a “fraternity paddle” between y2' and 2" thick, 12” long, with a narrow handle, was used. There is testimony that juveniles weighing about 160 pounds were struck five blows on the clothed buttocks, often by a staff member weighing 285 pounds. The beatings caused painful injuries. The district court found that this disciplinary practice violated the plaintiffs’ 8th and 14th Amendment rights, and ordered it stopped immediately.

We recognize that the School is a correctional, as well as an academic, institution. No ease precisely in point has been cited or found which decided whether supervised beatings in a juvenile reformatory violated the “cruel and unusual” clause of the 8th Amendment. However, the test of “cruel and unusual” punishment has been outlined. In his concurring opinion in Furman v. Georgia, 408 U.S. 238, 279, 92 S.Ct. 2726, 2747, 33 L.Ed.2d 346 (1971), Justice Brennan stated that:

The final principle inherent in the [Cruel and Unusual Punishment] Clause is that a severe punishment must not be excessive. A punishment is excessive under this principle if it is unnecessary: The infliction of a severe punishment by the State cannot comport with human dignity when it is nothing more than the pointless infliction of suffering. If there is a significantly less severe punishment adequate to achieve the purposes for which the punishment is inflicted, the punishment inflicted is unnecessary and therefore excessive. (Citations omitted.)

Expert evidence adduced at the trial unanimously condemned the beatings. The uncontradicted authoritative evidence indicates that the practice does not serve as useful punishment or as treatment, and it actually breeds counter-hostility resulting in greater aggression by a child. For these reasons we find the beatings presently administered are unnecessary and therefore excessive. We think, under the test of Furman, that the district court did not err in deciding that the disciplinary beatings shown by this record constituted cruel and unusual punishment.

The 8th Amendment prohibition against cruel and unusual punishment is binding on the states through the 14th Amendment. Robinson v. California, 370 U.S. 660, 82 S.Ct. 1417, 8 L.Ed.2d 758 (1962); Francis v. Resweber, 329 U.S. 459, 67 S.Ct. 374, 91 L.Ed. 422 (1947). The meaning of cruel and unusual punishment in law has varied through the course of history, and as the Court observed in Trop v. Dulles, 356 U.S. 86, 101, 78 S.Ct. 590, 598, 2 L.Ed.2d 630 (1958):

The [8th Amendment] must draw its meaning from the evolving standards of decency that mark the progress of a maturing society.

The district court’s decision meets tests that have been applied in decisions to determine whether the standards of decency in a maturing society have been met, i. e.: whether the punishment is disproportionate to the offense, Weems v. United States, 217 U.S. 349, 30 S.Ct. 544, 54 L.Ed. 793 (1910); and whether the severity or harshness of the punishment offends “broad and idealistic concepts of dignity, civilized standards, humanity, and decency.” Jackson v. Bishop, 404 F.2d 571 (8th Cir. 1968). The record before us discloses that the beatings employed by defendants are disproportionate to the offenses for which they are- used, and do not measure up to contemporary standards of decency in our contemporary society.

There is nothing in the record to show that a less severe punishment would not have accomplished the disciplinary aim. And it is likely that the beatings have aroused animosity toward the School and substantially frustrated its rehabilitative purpose. We find in the record before us, to support our holding, general considerations similar to those the court in Jackson found relevant: (1) corporal punishment is easily subject to abuse in the hands of the sadistic and unscrupulous, and control of the punishment is inadequate; (2) formalized School procedures governing the infliction of the corporal punishment are at a minimum; (3) the infliction of such severe punishment frustrates correctional and rehabilitative goals; and (4) the current sociological trend is toward the elimination of all corporal punishment in all correctional institutions -

The Indiana Supreme Court decision in Indiana State Personnel Board v. Jackson, 244 Ind. 321, 192 N.E.2d 740 (1963), cited by the defendants, is of no aid to set aside the district court decision. There the court held, inter alia, under the parens patriae doctrine, that a public school teacher, in proper cases and proportions, may administer corporal punishment. We agree with that decision.

B.

Witnesses for both the School and the juveniles testified at trial that tranquilizing drugs, specifically Sparine and Thorazine, were occasionally administered to the juveniles, not as part of an ongoing psychotherapeutic program, but for the purpose of controlling excited behavior. The registered nurse and licensed practical nurse prescribed intramuscular dosages of the drugs upon recommendation of the custodial staff under standing orders by the physician. Neither before nor after injections were the juveniles examined by medically competent staff members to determine their tolerances.

The district court also found this practice to be cruel and unusual punishment. Accordingly the court ordered the practice stopped immediately, and further ordered that no drug could be administered intramuscularly unless speeifically authorized or directed by a physician in each case, and unless oral medication was first tried, except where the staff was directed otherwise by a physician in each case.

We agree with defendants that a judge lacking expertise in medicine should be cautious when considering what are “minimal medical standards” in particular situations. However, practices and policies in the field of medicine, among other professional fields, are within judicial competence when measured against requirements of the Constitution. We find no error in the competent district court’s determination here that the use of tranquilizing drugs as practiced by defendants was cruel and unusual punishment.

We are not persuaded by defendants’ argument that the use of tranquilizing drugs is not “punishment.” Experts testified that the tranquilizing drugs administered to'the juveniles can cause: the collapse of the cardiovascular system, the closing of a patient’s throat with consequent asphyxiation, a depressant effect on the production of bone marrow, jaundice from an affected liver, and drowsiness, hemotological disorders, sore throat and ocular changes.

The interest of the juveniles, the School, and the state must be considered in determining the validity of the use of the School’s tranquilizing drugs policy. The interest of the state appears to be identical more or less with the interest of the maladjusted juveniles committed to the School’s care, i. e., reformation so that upon release from their confinement juveniles may enter free society as well adjusted members. The School’s interest is in the attainment and maintenance of reasonable order so that the state’s purpose may be pursued in a suitable environment. The School’s interest, however, does not justify exposing its juveniles to the potential dangers noted above. Nor can Indiana’s interest in reforming its delinquent or maladjusted juveniles be so compelling that it can use “cruel and unusual” means to accomplish its benevolent end of reformation.

We hold today only that the use of disciplinary beatings and tranquilizing drugs in the circumstances shown by this record violates plaintiffs’ 14th Amendment right protecting them from cruel and unusual punishment. We do not intend that penal and reform institutional physicians cannot prescribe necessary tranquilizing drugs in appropriate cases. Our concern is with actual and potential abuses Under policies where juveniles are beaten with an instrument causing serious injuries, and drugs are administered to juveniles intramuscularly by staff, without trying medication short of drugs and without adequate medical guidance and prescription.

II—THE RIGHT TO REHABILITATIVE TREATMENT

The School staff-to-juvenile ratio for purposes of treatment is approximately one to thirty. The sixteen counselors are responsible for developing and implementing individualized treatment programs at the institution, but the counselors need have no specialized training or experience. Administrative tasks (“paper work”) occupy more than half of the counselors’ time. The duties of the staff psychiatrist are limited to crises. He has no opportunity to develop and manage individual psychotherapy programs. The three staff psychologists do not hold graduate degrees and are not certified by Indiana. They render, principally, diagnostic services, mostly directed toward supervising in-take behavior classifications.

In June, 1971, the School adopted what was described as a differential treatment program, bottomed mainly on the Quay Classification .System. Under the Quay System, upon their admission to the School, juveniles are classified with respect to four personality and behavior types on the basis of standardized tests: the inadequate, the neurotic, the aggressive, and the sub-cultural. Each of the sixteen cottages at the School houses twenty to thirty juveniles, with common personality and behavior patterns. Each cottage is served by a staff comprising a house manager, a counselor, an educator, and a consulting psychologist. The cottage staff meets weekly for evaluation of the rehabilitation program of each inmate. Upon admission to a cottage, each juvenile agrees to improve his behavior in four areas of institutional life: “cottage,” “recreation,” “school,” and “treatment.” Correspondingly, each has responsibility for physical maintenance of the residential area, social and athletic activities, specified levels of academic or vocational skills, and improved personality goals. With success in each of the four areas, the juvenile earns additional privileges, ultimately culminating in a parole date.

The district court decided that both Indiana law and the federal Constitution secure for juvenile offenders a “right to treatment,” and that the School failed to provide minimal rehabilitative treatment. Defendants contend that there exists no right to treatment under the Constitution or Indiana law, and that if there is the right, the Quay Classification System used at the School did not violate the right. We hold, with the district court, that juveniles have a right to rehabilitative treatment.

The right to rehabilitative treatment for juvenile offenders has roots in the general social reform of the late nineteenth century, was nurtured by court decisions throughout the first half of this century, and has been established in state and federal courts in recent years. In re Gault, 387 U.S. 1, 15-16, 87 S.Ct. 1428, 1437, 18 L.Ed.2d 527 (1967), the Court stated:

The early reformers were appalled by adult procedures and penalties, and by the fact that children could be given long prison sentences and mixed in jails with hardened criminals . . . The child was to be “treated” and “rehabilitated” and the procedures, from apprehension through institutionalization, were to be “clinical” rather than punitive.

Since the beginning, state courts have emphasized the need for “treatment” in their Juvenile Court Acts. Wisconsin Industrial School for Girls v. Clark County, 103 Wis. 651, 79 N.W. 422, 427 (1899); Commonwealth v. Fisher, 213 Pa. 48, 62 A. 198, 199 (1905); Ex Parte Sharp, 15 Idaho 120, 96 P. 563, 564 (1908); Wissenberg v. Bradley, 209 Iowa 813, 229 N.W. 205, 207 (1929).

The United States Supreme Court has never definitively decided that a youth confined under the jurisdiction of a juvenile court has a constitutionally guaranteed right to treatment. But the Court has assumed, in passing on the validity of juvenile proceedings, that a state must provide treatment for juveniles. In Kent v. United States, 383 U. S. 541, 86 S.Ct. 1045, 16 L.Ed.2d . 84 (1966), the Court reversed the district court’s conviction of a sixteen year old after the District of Columbia Juvenile Court had waived its jurisdiction. Justice Fortas there, writing for the Court, commented on the theory and practice of juvenile courts:

There is evidence, in fact, that there may be grounds for concern that the child receives the worst of both worlds: that he gets neither the protections accorded to adults nor the solicitous care and regenerative treatment postulated for children. 383 U.S. at 556, 86 S.Ct. at 1054.

Later, in In re Gault, supra, Justice Fortas “reiterate [d] the view” of Kent that the juvenile process need not meet the constitutional requirements of an adult criminal trial, but must provide essential “due process and fair treatment.” This view has been continued subsequent to Gault in the Supreme Court decisions involving juvenile court procedures. In re Winship, 397 U.S. 358, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970); McKeiver v. Pennsylvania, 403 U.S. 528, 91 S.Ct. 1976, 29 L.Ed.2d 647 (1971).

It is true that the Supreme Court cases discussed above deal with procedural due process and not the right to rehabilitative treatment, but several recent state and federal cases, out of concern —based upon the parens patriae doctrine underlying the juvenile justice system—that rehabilitative treatment was not generally accorded in the juvenile reform process, have decided that juvenile inmates have a constitutional right to that treatment. M. v. M., 71 Misc.2d 396, 336 N.Y.S.2d 304 (1972); Inmates of Boys’ Training School v. Affleck, 346 F.Supp. 1354 (D.C.R.I.1972); Martarella v. Kelley, 349 F.Supp. 575 (S.D.N.Y. 1972).

In Martarella the court found a clear constitutional right to treatment for juveniles based on the 8th and 14th Amendments:

What we have said, although the record would justify more, is sufficient to establish that, however benign the purposes for which members of the plaintiff class are held in custody, and whatever the sad necessities which prompt their detention, they are held in penal condition. Where the State, as parens patriae, imposes such detention, it can meet the Constitution’s requirement of due process and prohibition of cruel and unusual punishment if, and only if, it furnishes adequate treatment to the detainee. 349 F.Supp. at 585. (Emphasis supplied, footnotes omitted.)

After an historical analysis of the development of the right, the court concluded:

In sum, the law has developed to a point which justifies the assertion that: “A new concept of substantive due process is evolving in the therapeutic realm. This concept is founded upon a recognition of the concurrency between the state’s exercise of sanctioning powers and its assumption of the duties of social responsibility. Its implication is that effective treatment must be the quid pro quo for society’s right to exercise its parens patriae controls. Whether specifically recognized by statutory enactment or implicitly derived from the constitutional requirements of due process, the right to treatment exists.” 349 F.Supp. at 600. (Footnotes omitted.)

In a most recent case, Morales v. Turman, 364 F.Supp. 166 (E.D.Tex.1973), a federal district court specifically found that juveniles at Texas’ six juvenile training schools have both a statutory and constitutional right to treatment.

We hold that on the record before us the district court did not err in deciding that the plaintiff juveniles have the right under the 14th Amendment due process clause to rehabilitative treatment.

III—ADEQUACY OF TREATMENT

Experts testified at the trial, and the defendants admit, that the Quay System of behavior classification is not treatment. And case histories of maladjusted juveniles show that use of the System falls far short of its improved personality goals. Mrs. Betty Levine, resident instructor in sociology at the University of Indiana, testified that the School lacks the individual treatment given in the Indiana Girls School. The record shows very little individual treatment programmed, much less implemented, at the School; and it is unclear exactly how much time is spent in individual counselling. We conclude that the district court could properly infer that the Quay System as used in the School failed to provide adequate rehabilitative treatment.

We leave to the competent district court the decision: what is the minimal treatment required to provide constitutional due process, having in mind that the juvenile process has elements of both the criminal and mental health processes.

In our view the “right to treatment” includes the right to minimum acceptable standards of care and treatment for juveniles and the right to individualized care and treatment. Because children differ in their need for rehabilitation, individual need for treatment will differ. When a state assumes the place of a juvenile’s parents, it as.sumes as well the parental duties, and its treatment of its juveniles should, so far as can be reasonably required, be what proper parental care would provide. Without a program of individual treatment the result may be that the juveniles will not be rehabilitated, but warehoused, and that at the termination of detention they will likely be incapable of taking their proper places in free society; their interests and those of the state and the school thereby being defeated.

We therefore affirm the judgment of the district court in each appeal, and remand only for the limited purpose of further proceedings in No. 73-1446 with respect to the right to rehabilitative treatment.

      . 42 U.S.C. § 1983.

      . Nelson v. Heyne, 355 F.Supp. 451 (N.D. Ind.1972). The district court’s decision was entered as if a declaratory judgment on the right to treatment. We treat that portion of the decision, however, as an otherwise nonappealable interlocutory order and grant review pursuant to 28 U.S.C. § 1292(b). Formal certification by a district judge is not always required in a marginally final case. See Gillespie v. U. S. Steel Corp., 379 U.S. 148, 154, 85 S.Ct. 308, 13 L.Ed.2d 199 (1964) ; 9 Moore’s Federal Practice, ¶ 110.12 and ¶ 110.22(3).

      . The trial record indicates that one juvenile was struck with such force that it caused him to sleep on his face for three days, with black, blue and numb buttocks. One juvenile testified that he bled after receiving five blows on his buttocks. Another, Daniel Roberts, testified that once he pleaded, to no avail, with staff personnel not to be beaten until after certain blisters on his buttocks ceased to cause him pain.

      . (a) The law appears to be well settled in both- state and federal jurisdictions that school officials do not violate 8th Amendment proscriptions against cruel and unusual punishment where the punishment is reasonable and moderate. Ware v. Estes, 328 F. Supp. 657 (N.D.Tex.1971) ; Sims v. Board of Education, 329 F.Supp. .678 (D.C.N.M. 1971) ; Tinkham v. Kole, 252 Iowa 1303, 110 N.W.2d 258 (1961) ; Carr v. Wright (Ky.) 423 S.W.2d 521 (1968) ; Houeye v. St. Helen Parish School Board, 223 La. 966, 67 So.2d 553 (1953). In Ware there was evidence of beatings usually administered by hitting the student on his buttocks with a paddle. The paddle was wooden, 2' long, 14” to V>" thick, 6" wide, used under a written rule which proscribed corporal punishment without parents’ permission. The district court found that “some of the seven thousand” teachers in the public school district abused the policy, but that that fact, and nothing more, would not make the policy itself unconstitutional. In Sims, the court found that beatings by school officials did not constitute cruel and unusual punishment where the plaintiff student received three blows with a paddle on the buttocks and experienced slight physical harm. In our case, there is amide evidence that the beatings caused severe injury. See generally 68 Am. Jur.2d Schools § 258 (1973).
      (b) The courts in recent years have frowned upon the use of corporal punishment in penal and correctional institutions. See generally 60 Am.Jur.2d Penal and Correctional Institutions § 43 (1972). Corporal punishment has not been used for years in federal prisons. Jackson v. Bishop, 404 F.2d 571, 575 (8th Cir. 1968). Courts have enjoined prison personnel from inflicting corporal punishment including the use of a strap for whipping. Talley v. Stephens, 247 F.Supp. 683 (E.D.Ark.1965) ; Jackson v. Bishop, supra. In Talley the court did not hold prison whippings are per se unconstitutional, but stated that they will be enjoined if excessive, and not applied under recognizable standards. In Jackson the 8th Circuit held that use of a strap in Arkansas penitentiaries was cruel and unusual punishment. See generally, Holt v. Sarver, 309 F.Supp. 362 (E.D.Ark.1970) ; Comment, Cruel and Unusual Punishment-Arkansas Penitentiary Violates the Eighth Amendment, 84 Harv.L.Rev. 456 (1970) ; M. Wheeler, Toward a Theory of Limited Punishment, 24 Stan.L.Rev. 838 (1972).

      . The court in Lollis v. New York, 322 F.Supp. 473 (S.D.N.Y.1970), involving the constitutionality of solitary confinement in juvenile institutions, obliquely considered the binding and handcuffing of an inmate. Inmates of Boys’ Training School v. Affleck, 346 F.Supp. 1354 (D.C.R.I.1972), also concerned the question of whether isolation of juvenile inmates constitutes cruel and unusual punishment.

      . We do not hold that all corporal punishment in juvenile institutions or reformatories is per se cruel and unusual.

      . There the dismissed teacher disciplined a fourteen year old girl in the classroom and in his office by striking her, in the presence of witnesses, very lightly and without anger, across the buttocks with a belt, and only after persuasion and other means had been tried and had failed.

      . Plaintiff Steven Hegg testified that on one occasion while lie was recuperating from a blow to the nose inflicted upon him by another student, his nose began to bleed profusely and he began to vomit and “holler for help.” The nurse told him there was nothing seriously wrong with him; but when Steven continued to request help, she became infuriated and injected him with a tranquilizing drug. Eric Nelson testified to the effect that he was given shots of tranquilizing drugs on several occasions for the purpose of preventing him from running away from the School.

      . The standing order provided that an emotionally upset boy under 116 pounds be given a half cc or 25 milligrams of Sparine. Above that weight he was to be given one cc or 50 milligrams of Sparine.

      . Dr. James W. Worth, psychologist with the Mental Health Center of St. Joseph County, Indiana, also testified as follows:
      I think the use of major tranquilizing drugs without intelligent and informed medical observation have no place . . . in the institution. These are serious drugs. They have serious effect on the individual. ... [I]f this is not done with a full medical understanding of this individual with a physician present, harm could occur and furthermore, I think it tends to be degrading to an individual.

      . Experts testified that the following minimum medical safeguards should be followed in the use of tranquilizing drugs:
      (1) The individual administered the drug should be observed, during the duration of the drug’s effect, by trained medical personnel, familiar with the possible adverse and harmful side effects of the drug used.
      (2) The person receiving an IM (intramuscular) injection of a major tranquilizing drug should first receive a diagnosis or prescription authorizing the use of said drug by a qualified medical doctor, child psychiatrist, psychologist or physician.
      (3) IM injections should only be administered by a physician or intern and only after all attempts have failed to get the individual to take the drug orally.
      (4) Major tranquilizing drugs, such as Thorazine and Sparine, should not be administered IM, unless given in a hospital where there is an intensive care unit and emergency facilities which could deal with possible adverse effects from the use of said drugs.
      (5) Major tranquilizing drugs should only be used to control psychotic or pre-psychotic breakdowns or as a followup in assisting a schizophrenic patient from having a recurrence of a psychotic breakdown.
      (6) Major tranquilizing drugs should not be used merely to induce sleep or unconsciousness for a period of time, but only as a part of a psychotherapeutic program of treatment.

      . We note that the district court additionally determined that a right to treatment in this case has a statutory basis in view of the “custody, care, and discipline” language of the Indiana Juvenile Court Act, Burns Ind.Stat.Ann. § 9-3201, IC 1971, 31-5-7-1. (Emphasis supplied.) We agree with this conclusion. Since we have today determined that the federal Constitution affords juveniles a right to treatment, any interpretation of the Indiana Act which would find no such right to exist would itself be unconstitutional.

      . The juvenile justice process can be understood to be a hybrid between the criminal system and the mental health process.
      . . . Finally, the arguments for the right to treatment in both processes rely heavily upon the medical services, especially psychiatry and psychology.
      Note, A. Right to Treatment for Juveniles, 1973 Wash.U.L.Q. 157, 160.

        See also, N. Kittrie, Can the Right to Treatment Remedy the Ills of the Juvenile Process? 57 Geo.L.J. 848, 860-861 (1969) ; Note, The Courts, the Constitution and Juvenile Institutional Reform, 52 B.U.L.Rev. 33, 42-49 (1972).

      . See note 2, supra.


author: HAMLIN, Circuit Judge: KOELSCH, Circuit Judge

text:
    In the Matter of Charles W. Wolverton, fdba Wolco Stations and Wolverton Oil Company, Bankrupt No. 78006. TIME OIL COMPANY, Appellant, v. Charles W. WOLVERTON, and Wolverton Oil Company, Appellees.
    No. 71-2273.
    United States Court of Appeals, Ninth Circuit.
    Jan. 3, 1974.
    Rehearing Denied March 12, 1974.
    Bernard Petrie (argued), San Francisco, Cal., for appellant.

      William E. Anderson, Jr. (argued), William I. Cohen, Palo Alto, Cal., Daniel Aronson, Jr., of Anixter & Aronson, Burlingame, Cal., for appellees.
    Before HAMLIN, KOELSCH and ELY, Circuit Judges.
   OPINION

HAMLIN, Circuit Judge:

This bankruptcy appeal comes before us in an unusual posture. All of the bankrupt’s creditors have been paid 100 cents on the dollar. A creditor, however, appeals from the denial by the United States District Court for the Northern District of California of a petition to review the Referee in Bankruptcy’s decision denying its claim upon surplus monies remaining in the bankrupt’s estate.

The issue herein presented, characterized by the district court as one of first impression, was succinctly summarized by the referee:

“A preferential transfer is made to secure an antecedent debt. The transferee, being unable to return the property, pays its value to the trustee. Later, all allowed claims properly filed are paid. A surplus exists.
“May a creditor receive from a bankruptcy estate not only the amount of his debt, but the value of the property the bankrupt has given him to secure the debt ?”

The referee concluded that the creditor was limited to receiving from the bankrupt’s estate only the amount of the debt. The district court agreed. We affirm.

FACTS

The bankrupt, appellee herein, doing business as Wolverton Oil Company and Wolco Stations, operated a retail gasoline service station in Sunnyvale, Santa Clara County, California. On February 7, 1964, he was indebted to his supplier, Time Oil Company (Time), appellant herein, for the purchase of petroleum products in the amount of $22,560.33. On that date, the bankrupt assigned and transferred to Time, as security for said indebtedness and consideration for future consignments of gasoline, the following: (1) the leasehold on the above noted Sunnyvale service station, said lease having two years remaining on its original term, plus two renewal options for five years each, (2) the sum of $3,600, which had been deposited with the lessor as prepaid rent, and (3) improvements which the bankrupt had constructed and installed upon the premises covered by the lease.

The value of the leasehold assigned and transferred, including the amount of the prepaid rent, but excluding the value of the improvements, as found by the referee, was the sum of $36,000.00.

In April, 1964, within four months after-the assignment and transfer noted above, the bankrupt filed a voluntary Petition in Bankruptcy, and was adjudicated a bankrupt. Subsequent to April, 1964, Time used up the prepaid rent on the property which had been assigned to it to secure the debt owed by the bankrupt, and failed to exercise the option to renew the aforementioned lease. In late 1966, Time abandoned the property, returning to the landlord its rights, title and interest therein.

In April, 1966, the trustee brought a preference action against Time for recovery of the property assigned and transferred to it in February, 1964, or its value. After a trial held in July, 1968, the referee found that the assignment and transfer constituted a voidable preference as defined in section 60 of the Bankruptcy Act (hereinafter the Act), 11 U.S.C. § 96 The referee further found that Time had converted the assigned leasehold by failing to exercise the option to renew.

Upon the referee’s finding of the voidable preference, it became incumbent upon Time to return the object of that preference, the leasehold, to the bankrupt’s estate. Section 60(b) of the Act, 11 U.S.C. § 96(b). However, Time could not return that which it had converted and, in lieu thereof, the referee ordered Time to pay into the bankrupt’s estate the leasehold’s value, plus interest, a total sum of $45,308.08. The referee had ascertained this exact value largely upon the basis of the value of the five-year renewal option periods.

In March, 1969, the referee entered a judgment awarding the $45,308.08 to the trustee, payable to him by Time.

A Petition for Review was filed by Time from this judgment. The United States District Court for the Northern District of California (Harris, J.) denied the petition, and also denied a concurrently filed Motion for Relief from said judgment under section 60(b) of the Federal Rules of Civil Procedure. No appeal was taken by appellant from these orders and they became final. Thereafter, the trustee duly recovered from Time the $45,308.08 in payment of the judgment entered by the referee.

Acting for himself, and prior to the issuance of the preference order and judgment, the bankrupt had secured a new lease on the very property it had previously assigned and transferred to Time. The bankrupt took possession of the property in January, 1967, under a new five-year lease, with a five-year renewal option. Apparently, the operation of the service station under this new lease was profitable.

In the meantime, in March, 1965, the bankrupt had purchased from the trustee cause of actions for violations of the antitrust laws by the major oil companies. That sale, however, was consummated without notice to the creditors. The United States District Court for the Northern District of California (Zirpoli, J.) therefore set aside the order confirming said sale, and this court affirmed. Wolverton v. Shell Oil Company, 442 F.2d 666 (9 Cir. 1971.) The result was to cast into the bankrupt’s estate in excess of $150,000 in settlement proceeds. These funds created a substantial surplus in the bankruptcy estate.

In November, 1971, the referee entered his order directing the trustee to pay in full all properly filed claims, and to distribute a notice of additional time in which to file claims not previously filed.

Time then filed a claim for $45,308.08, the amount of the preference judgment it had been ordered by the referee to pay to the trustee and refiled its claim of $22,560.33.

The original indebtedness owed by the bankrupt to Time, $22,560.33, was paid in full. But the referee, sustaining the trustee’s objection, held that Time’s sole legitimate claim was limited to this amount, i. e., the amount owed before the preferential transfer, and that Time was not entitled to recover both the amount of said debt and the value of the property given by the bankrupt to secure this indebtedness.

The issue for review is properly before us on appeal.

DISCUSSION

Consideration of Time’s arguments for reversal is prefaced by our identifying and separating the three aforementioned orders resulting in review.

We first noted the order and judgment in the preference action against Time, in favor of the Trustee in Bankruptcy (hereinafter preference order). The referee, after a trial, concluded that Time had converted the security it received for the indebtedness (the service station leasehold), and ordered Time to reimburse the bankrupt estate at the value thereof ascertained by the referee. Judge Harris affirmed this order, and Time took no appeal therefrom. The order is therefore final.

We also noted the order holding that Time had no interest in the excess estate monies beyond the sum of the indebtedness owed by the bankrupt. That order was also affirmed by Judge Harris, and is the subject of this appeal.

The other order, confirming the antitrust sale, reversed by Judge Zirpoli who was in turn affirmed by this court in Wolverton v. Shell Oil Company, supra, is of mere historical significance here.

Because Time did not appeal the preference order, we must accept it at face value. That order set aside a preference pursuant to section 60(b) of the Act. The preference consisted not of a payment, but rather of security. This is a distinction without a difference, however, because a transfer set aside pursuant to section 60(b) of the Act includes the creation of a security interest. Section 1(30) of the Act, 11 U.S.C. § 1(30).

Explicit in the preference order is the finding that the secured property could not be recovered, inasmuch as it consisted of a leasehold which the referee found Time had converted. Section 60(b) of the Act specifically provides that, if the secured property has been converted, the trustee is entitled “[to] recover * * * its value * * *.” See California Mercury Record Distributors, Inc. v. Phelps, 283 F.2d 261 (9 Cir. 1960). Accordingly, the referee ascertained the value of the leasehold, plus interest, a total sum of $45,308.08. His judgment in favor of the trustee and against Time for that sum was consistent with the relevant Bankruptcy Act provisions.

Time, having disgorged its preference by payment of the above noted figure, was then in a position to recover the outstanding debt owed to it by the bankrupt, the sum of $22,560.33. See section 57(g) of the Act, 11 U.S.C. § 93(g); Katchen v. Landy, 382 U.S. 323, 330, 86 S.Ct. 467, 15 L.Ed.2d 391 (1966).

Time’s contention that it is entitled to not only the amount of the debt owed prior to the preferential transfer, but also to the value of the converted property received from the bankrupt as security for said debt is predicated entirely upon equitable considerations.

Working from the premise that there now exists a substantial surplus in the bankruptcy estate, Time contends that to permit the bankrupt to retain the $45,308.08 it recovered for Time’s conversion of the service station leasehold, when the bankrupt has independently acquired a new lease on those very same premises, would result in an inequitable windfall for the latter.

Collier states that “(t)he whole purpose of the bankruptcy system is to make the bankrupt’s property available to his creditor and to give back any surplus to him.”- 3A Collier on Bankruptcy If 66.03 at 2327, n. 8 (14th ed. 1971). Accordingly, the case law indicates the general rule to be that surplus monies held by the trustee pass and return to the-bankrupt after payment of all properly filed claims and costs of administration. See, e. g., Hendrie v. Lowmaster, 152 F.2d 83, 85 (6 Cir. 1945); Wheeling Structural Steel Co. v. Moss, 62 F.2d 37, 40 (4 Cir. 1932); Berl v. Crutcher, 60 F.2d 440, 444 (5 Cir. 1932), cert. denied 287 U.S. 670, 53 S.Ct. 314, 77 L.Ed. 578 (1933); In re Silk, 55 F.2d 917, 918 (2 Cir. 1932); Johnson v. Norris, 190 F. 459, 462 (5 Cir. 1911), cert. denied 232 U.S. 723, 34 S.Ct. 479, 58 L.Ed. 815 (1914). See generally, 6 Remington, Bankruptcy Law, § 2890 (5th ed. 1952).

We recognize, of course, that “courts of bankruptcy are essentially courts of equity, and their proceedings inherently proceedings in equity.” Local Loan Co. v. Hunt, 292 U.S. 234, 240, 54 S.Ct. 695, 697, 78 L.Ed. 1230 (1934). See also Pepper v. Litton, 308 U.S. 295, 304, 60 S.Ct. 238, 84 L.Ed. 281 (1939). See generally, 1 Collier, supra, at § 2.09. Indeed, the above noted general rule regarding distribution of surplus estate funds is based on just such principles of equity. See, 6 Remington, supra. Hence, there exists a corollary to that rule which recognizes that exceptional considerations of equity may dictate that surplusage pass to one other than the bankrupt. E. g., In re Lenox, 2 F.2d 92 (W.D.Pa.1924). See, In re Goss, 43 F.2d 746 (W.D.Ga.1930).

Time stands before this court having obtained a preference of the bankrupt’s leasehold interest while having reasonable cause to believe that the bankrupt was insolvent. This leasehold interest has been found by the referee to be worth $45,308.08, including interest. Time converted this property and was ordered to return its value to the bankrupt’s estate.

Time’s standing as a converter is the product of a final order which may not now be collaterally attacked. See Angel v. Bullington, 330 U.S. 183, 67 S.Ct. 657, 91 L.Ed. 832 (1947). Neither can the referee’s assessment of the converted property’s value be herein challenged. Id.

There exists an equitable doctrine which states that “ ‘he who comes into equity must come with clean hands.’ ” Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 814, 65 S.Ct. 993, 997, 89 L.Ed. 1381 (1945). See also, Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 244-245, 54 S.Ct. 146, 78 L.Ed. 293 (1933). It would be anomalous for this court to invoke equitable principles to allow a converter of security to recover payments for losses attributable to his own actions.

“The issuance of equity relief is a matter of discretion.” Berman v. Narragansett Racing Association, 48 F.R.D. 333, 336 (D.R.I.1969). Precision Instrument Mfg. Co., supra, 324 U.S. at 815, 65 S.Ct. 993. The scope of our review is accordingly limited to a determination of whether there was an abuse of said discretion by either the referee or the district court. Delno v. Market St. Ry. Co., 124 F.2d 965, 967 (9 Cir. 1942); Borchard v. California Bank, 107 F.2d 96, 98 (9 Cir. 1940), rev’d on other grounds, 310 U.S. 311, 60 S.Ct. 957, 84 L.Ed. 1222 (1940). See Lemon v. Kurtzman, 411 U.S. 192, 200, 93 S.Ct. 1463, 36 L.Ed.2d 151 (1973) (Burger, C. J.). Cf. PPG Industries, Inc. v. Continental Oil Co., 478 F.2d 674, 682 (5 Cir. 1973); Broadview Chemical Corp. v. Loctite Corp., 417 F.2d 998, 1000 (2 Cir. 1969), cert. denied, 397 U.S. 1064, 90 S.Ct. 1502, 25 L.Ed.2d 686 (1970). On the facts of this case, we are unable to so conclude.

Therefore, the district court’s order denying appellant’s Petition for Review, and the referree’s order sustaining the trustee’s objection to appellant’s proof of claim, must both be

Affirmed.

KOELSCH, Circuit Judge

(dissenting) :

This court pays lip service to the undoubted proposition that courts of bankruptcy are essentially courts of equity, and after doing so, applies dry legal principles to selected facts and summarily proceeds to decision. Such treatment effectively “pulls the curtain” upon much that in conscience would and should be considered in arriving at an equitable conclusion; as a result, Wolverton, the erstwhile bankrupt, is allowed to both eat his cake and have it too.

As I read the opinion, the sole basis for the court’s conclusion is that Time was a “converter” of Wolverton’s property. We are told that “ [i] t would be anomalous for this court to allow a converter of security to recover payments for losses attributable to his own actions.” However true that pronouncement might be in a dispute governed by legal principles, it should not be given currency in one tested by considerations of fairness. Wolverton has suffered no losses. To the contrary, he was able to, and in fact did, regain possession of the same property which he now has under a new lease on better terms than the old one. Moreover, by securing the new lease, Wolverton effectively foreclosed Time from recovering the property itself and being able to turn it back to Wolverton.

Time has compensated Wolverton’s trustee for the value of the property it converted. Wolverton now enjoys that property and is not “out of pocket”; indeed, he has profited as a consequence of the conversion. Time is entitled to a return of its money. I would reverse and remand with appropriate directions.

      . The question for review was initially indirectly presented by the bankrupt’s petition to release certain monies held in trust. The Referee in Bankruptcy ordered the monies released on February 5, 1971. Appellant Time Oil Company’s Petition for Review from this order was denied by the district court on July 15, 1971, and this appeal was taken therefrom.
      Thereafter, on September 11, 1972, the Referee entered an order sustaining the trustee’s objection to appellant Time Oil Company’s proof of claim for the sum of $45,308.08.
      By agreement and stipulation of both parties, this appeal is deemed to include an appeal by appellant Time Oil Company from the Referee’s order of September 11, 1972, without the necessity for appellant to petition the district court for review.
      The relevant facts and issues are identical to both appeals.

      . Section 60(a)(1), 11 U.S.C. § 96(a)(1), defines a ‘preference’ as (1) a transfer of any property of the debtor, (2) to or for the benefit of the creditor, (3) for or on account of an antecedent debt, (4) while the debtor is insolvent, (5) within four months of bankruptcy, (6) which enables the creditor to obtain a greater percentage of his debt than some other creditor of the same class. Section 60b [11 U.S.C. § 96(b)] permits the trustee to avoid a preference if the creditor had reasonable cause to believe that the debtor was insolvent at the time of the transfer.” DuBay v. Williams, 417 F.2d 1277,1286 (9 Cir. 1969).

      . In affirming Judge. Zirpoli’s order setting aside the sale from the trustee to the bankrupt, we stated:
      “* * * a sale to the bankrupt, especially when it is of an asset such as a cause of action of unknown but potentially great value, as here, offers opportunity for skulduggery that make it suspect. * * * Such a sale, when conducted with the total informality that appears here, ought not to stand.” 442 F.2d at 669.

      . Reference is made to Wolverton v. Shell Oil Company, 442 F.2d 666 (9 Cir. 1971). for further details.

      . See note 1, supra.

      . But see Burton Coal Co. v. Franklin Coal Co., 67 F.2d 796, 799 (8 Cir. 1933).

      . Counsel responsible for prosecution of this appeal did not represent appellant during pendency of the “preference” litigation. At oral argument, he was unable to explain Time’s failure to take an appeal from the preference order and judgment.

      . As succinctly said by the Fifth Circuit in Johnson v. Norris, a case cited by this court in its opinion, “A court of bankruptcy is a court of equity seeking to administer the law according to its spirit and not merely by its letter.”

      . The conversion occurred when Time failed to renew the lease which Wolverton had assigned to Time as security and allowed the property to revert to the lessor.
      The purpose of the reminder that “Time stands before this court having obtained a preference of the bankrupt’s leasehold interest while having reasonable cause to believe that the bankrupt was insolvent” is not clear to me. The dispute here, of course, is not between the trustee and Time but between Time and Wolverton. The fact that Time was the recipient of a preferential transfer (from Wolverton) should not serve to put Time in a “bad light.” There does exist a tendency to lose sight of the fundamental differences that exist between preferential and fraudulent transfers and indiscriminately to regard the recipients of both types of transfers as cheats or worse: “. . . the underlying theories of preferences and fraudulent conveyances are occasionally forgotten and the transactions so prohibited are accordingly confused. . . . There are however, certain clear distinctions between the two types of prohibited transactions which should be borne in mind constantly. First, of all, it must be remembered that aside from legislative restrictions ... a preference may be a perfectly valid and legitimate business transaction. On the other hand a fraudulent conveyance of transfer aside from statutory interdiction, is almost always invalid. There is no element of moral turpitude connected with the giving (or receipt) of a mere preference; . . . .” 3 Collier on Bankruptcy (14 ed.), Sec. 60.03, p. 763-4.

      . In this regard, attention should also be directed, if equitable treatment is to be granted Time, to the strange sequence of events ensuing Wolverton’s transfer of the property to Time. Section 60(b) of the Act provides that “the trustee may recover the property, or, if it has been converted, its value.” The alternative is not available absent a conversion. After Wolverton went into voluntary bankruptcy, Wolverton’s trustee made no effort to reclaim the property while it remained in Time’s possession. Had he done so, then, of course, he would have lost it to the lessor; for, as the referee found, “at no time prior to the expiration of the initial term of the Sunnyvale lease was there suffiment casli to perform the conditions and obligations of the lease.”
      Instead, the trustee waited until the “conversion” occurred and then engaged the bankrupt’s personal attorney as special counsel for the purpose of conducting the preference action. The question arises as to the bona fides of the arrangement, for, as the Supreme Court noted in Pepper v. Litton, 308 U.S. 295, 299, n. 4, 60 S.Ct. 238, 242, 84 L.Ed. 281 (1939) :
      “On the professional ethics of the conduct of Quillen, the District Court aptly observed: ‘It is generally accepted that an attorney for the bankrupt should not be chosen attorney for the trustee in any case.’ ”