source: Caselaw Access Project

author: LAY, Circuit Judge.

license: Public Domain

text:
    UNITED STATES of America, Appellee, v. James Harold WOODS, a/k/a Fats Woods, Appellant.
    No. 73-1243.
    United States Court of Appeals, Eighth Circuit.
    Submitted Sept. 12, 1973.
    Decided Oct. 29, 1973.
    Rehearing and Rehearing En Banc Nov. 23, 1973.

      James A. Bell, St. Louis, Mo., for appellant.
    Jerome J. Murphy, Asst. U. S. Atty., St. Louis, Mo., for appellee.
    Before VAN OOSTERHOUT, Senior Circuit Judge, and LAY and ROSS, Circuit Judges.
   LAY, Circuit Judge.

Defendant Woods was indicted on four counts of distribution of a controlled substance in violation of 21 U.S. C. § 841(a)(1). He was acquitted on the first count for alleged distribution of heroin on October 30, 1972, but was convicted on the other three counts which involved similar violations on subsequent dates. Woods was sentenced to ten years imprisonment and a three-year special parole term for each of the counts, the sentences to be served consecutively.

On appeal he alleges several grounds of error: (1) that the court failed to require the government to disclose the name of the confidential informant prior to trial; (2) that the court erred in denying a motion to transfer the case to another district since in light of pretrial publicity the defendant could not receive a fair trial in the Eastern District of Missouri; (3) that the court erred in failing to grant a continuance to allow counsel adequate time to prepare; (4) that the court erred in replacing a chosen juror with an alternate juror; (5) that the government induced prejudicial testimony from a key witness; (6) that the court erred in failing to grant motions for mistrial because of prosecutorial misconduct; (7) that the court erred in instructing on circumstantial evidence when there was only direct evidence.

The defendant does not challenge the sufficiency of the evidence on any count. We have fully reviewed the record and find that none of the claims raised on appeal may be deemed sufficiently prejudicial so as to require a new trial. We need discuss only three of the more serious errors alleged.

The claim that defendant could not receive a fair and impartial trial in the Eastern District of Missouri is not supported in the record. It is alleged that great prejudicial publicity occurred in the St. Louis newspapers prior to trial. None of those articles were placed in evidence. More important, only five jurors even remembered reading anything in the paper about the defendant and only one could recall what that was. All jurors on voir dire expressed their feeling that they could weigh the evidence impartially and fairly. The mere fact that the defendant received publicity by itself is not sufficient to require a change of venue. See McNally v. United States, 485 F.2d 398 (8th Cir. 1973), where we recently observed :

“Just because, however, there has been widespread or even adverse publicity is not in itself grounds to grant a change of venue. As stated in Irvin v. Dowd, 366 U.S. 717, 722, 81 S.Ct. 1639, 1642, 6 L.Ed.2d 751 (1961), an important case draws public attention through ‘swift, widespread and diverse methods of communication’ and hardly any prospective juror ‘will not have formed some impression or opinion as to the merits of the case.’ The proper test is whether the prospective juror ‘can lay aside his impression or opinion and render a verdict based on the evidence presented in court.’ ”

A more difficult claim is that the government failed to disclose prior to trial the name and address of the informant, Michael Woodley. Woodley was called as a witness by the government and testified as to purchasing narcotics from the defendant while acting as a paid government informant. See Roviaro v. United States, 353 U.S. 53, 77 S.Ct. 623, 1 L.Ed.2d 639 (1957). However, we need not resolve this issue here in light of the factual circumstances presented. Even assuming there was a duty to disclose the informant’s name and address prior to trial, nevertheless, on the basis of the events occurring at trial, we find no material prejudice resulted. Woodley was called as a government witness. The cross-examination by Woods’ counsel was intense and thorough and reflects that counsel either knew or had reason to expect that Woodley would be called as the informant. Furthermore, counsel made no motion for a continuance in order to prepare for his cross-examination. See Sartain v. United States, 303 F.2d 859, 861 (9th Cir. 1962). Accordingly, we find no prejudice in the failure to disclose the informant’s name prior to trial.

Defendant complains of prosecutorial misconduct in the examination of two defense witnesses.

Defendant produced Earl Williams, Jr. as a witness. Under Count I of the indictment the informant Woodley had earlier testified that on October 30, 1972, he had purchased heroin from the defendant in an apartment in which Sylvester Atkins and Earl Williams, Jr. were also present. Counts II and III involved sales made on November 2 and November 8, at which times Woodley testified that no other persons were present during the transactions. Under Count IV Woodley testified he purchased heroin from the defendant on February 9, 1973, at a time when two other men besides the defendant were present. Woodley did not identify the men by name.

Defense counsel asked Williams on direct examination whether he was present on February 9, 1973, (Count IV) at the time of the alleged sales. Williams denied that he was present and denied at any time ever seeing a sale made by the defendant. On cross-examination the government’s only question of Williams was: “Mr. Williams, you yourself are under indictment in this particular — by my office, are you not?” Defense counsel objected and moved for a mistrial. The court sustained the objection, denied the motion for mistrial and instructed the jury to disregard the question.

The question was obviously improper. As an officer of the court a prosecutor carries a heavy responsibility to both the court and the accused to conduct a fair trial. This responsibility requires that he not inject into the trial prejudicial matter which is obviously not admissible. See American Bar Association’s Standards Relating To The Prosecution Function and The Defense Function § 5.6(b) (1970).

The only factor which deters us from granting a new trial is that Williams’ testimony affirmatively aided the defendant only with respect to Count I, the alleged transaction on October 30, 1972. Woodley testified that Williams was present at the alleged sale at that time. However, the jury acquitted Woods on this count. The government did not attempt to show that Williams was present at any other time. Williams was asked by defense counsel only as to his presence on February 9, 1973, (Count IV). Williams denied he was there or that he saw Woods make any sale. This testimony did not affirmatively aid the defendant. The government did not attempt to show that he was present on the remaining counts. Notwithstanding our agreement as to prosecutorial misconduct, in view of the acquittal under Count I, we find no prejudice to the defendant.

The other claim is somewhat similar in nature. Both the informant and police officers had testified that Woods was driving a blue Nova immediately after the transaction. One of the officers identified the Nova by license number.

The first witness for the defense was Elaine LaBriado. She was asked on direct examination whether she owned a blue Nova. She answered she did but could not recall its license number. She admitted she knew the defendant but had never loaned him her car. On cross-examination the government asked her: “Your automobile has been seized by the Bureau of Narcotics and Dangerous Drugs, has it not?” Defense counsel objected and moved for a mistrial. After the objection discussion was held outside the presence of the jury. No actual ruling was ever made on the objection and no answer was ever received. The government claimed that the question was admissible to show bias against the government.

The question we are presented with is whether there was prejudice to the defendant. As the record stands the witness was never able to recall her license number. It is difficult to perceive the actual value of her testimony to the defendant. She did testify that she never loaned her car to the defendant, but as the trial judge commented, there are thousands of blue Novas running around. We find no prejudice resulting to Woods from the question.

We have reviewed the other issues raised by the defendant and on the basis of the overall record find no prejudicial error.

Judgment affirmed.


author: PER CURIAM:

text:
    FREEMAN & BASS, P. A., et al., Appellees, v. STATE OF NEW JERSEY COMMISSION OF INVESTIGATION et al., Appellants.
    No. 73-1405.
    United States Court of Appeals, Third Circuit.
    Argued July 9, 1973.
    Reargued Sept. 7, 1973.
    Decided Oct. 1, 1973.
    Martin G. Holleran, Executive Director, State of N. J. Commission of Investigation, Ronald S. Diana, Trenton, N. J., for appellants.
    Lewis M. Steel, Eisner, Levy & Steel, New York City, and Roger A. Lowen-stein, Newark, N. J., for appellees.
    Argued July 9, 1973
    Before VAN DUSEN and HUNTER, Circuit Judges.
    Reargued Sept. 7, 1973
    Before VAN DUSEN, ADAMS and HUNTER, Circuit Judges.
   OPINION OF THE COURT

PER CURIAM:

Appellant, the State of New Jersey-Commission of Investigation (hereinafter “SCI”) appeals, pursuant to 28 U.S.C. § 1292(a)(1), from an interlocutory order entered by the district court on May 14, 1973, restraining the SCI from referring by name to appellees and others during public hearings conducted by the SCI in its investigation of possible abusive practices and procedures in the New Jersey Workmen’s Compensation program.

This appeal arises out of appellees’ civil rights suit under 42 U.S.C. § 1983 charging the SCI, among other things, with having conducted an unconstitutionally broad investigation for the purpose of harassing and intimidating appellees and their clients, resulting in serious impairment of appellees’ professional reputation as well as deprivation of appellees’ right to petition for the redress of grievances on behalf of their clients.

The Supreme Court of New Jersey in 1969 and this court in 1972 had occasion to examine the nature and function of the SCI and to assess the constitutional sufficiency of the procedural safeguards it accords those whom it investigates. Zicarelli v. New Jersey State Commission of Investigation, 55 N.J. 249, 261 A.2d 129 (1969); United States ex rel. Catena v. Elias, 465 F.2d 765 (3d Cir. 1972). In Zicwrelli; the Supreme Court of New Jersey, after reviewing the enabling legislation, held that the statute created a commission with investigatory powers “to the end that helpful legislation may be proposed and receive needed public support.” *Furthermore, the court stressed that the SCI “is in no sense an ‘accusatory’ body” and is not empowered “to make and publicize findings with respect to the guilt of specific individuals.” Thus, it was because of this essentially investigatory character of the SCI that we held in Catena that the statutorily prescribed procedures of the SCI, while not providing for the full panoply of procedures accorded a criminal defendant, comports with due process as that concept was interpreted in Hannah v. Larche, 363 U.S. 420, 80 S.Ct. 1502, 4 L.Ed.2d 1307 (1960).

In view of Catena, which we reaffirm, we disagree with the apparent position of the district court that due process requires that any individual referred to adversely in SCI hearings must remain anonymous so long as no legislative purpose can be shown for divulging his name. As noted in Catena, any person who feels adversely affected by evidence submitted at a public hearing, has at minimum an absolute right under the rules of the SCI to file a personal statement for incorporation into the record. Moreover, merely because evidence received by the SCI at public hearings may adversely affect certain individuals, may disclose wrongdoing or may be used in a criminal prosecution, neither alters the essentially investigatory nature of the SCI nor requires judicial imposition of anonymity of those being investigated. Doe v. McMillan, 412 U.S. 306, 93 S.Ct. 2018, 36 L.Ed.2d 912 (1973); Hannah v. Larche, 363 U.S. 420, 443, 80 S.Ct. 1502, 4 L.Ed.2d 1307 (1960); Sinclair v. United States, 279 U.S. 263, 295, 49 S.Ct. 268, 73 L.Ed. 692 (1929); McGrain v. Daugherty, 273 U.S. 135, 179-180, 47 S.Ct. 319, 71 L.Ed. 580 (1927). Cf. Anonymous v. Baker, 360 U.S. 287, 79 5. Ct. 1157, 3 L.Ed.2d 1234 (1959); In re Groban, 352 U.S. 330, 77 S.Ct. 510, 1 L.Ed.2d 376 (1957). Nor does it offend due process for the New Jersey legislature to empower the SCI Commissioners to determine whether testimony received in executive session should be heard at a public hearing.

Insomuch therefore as the order of the district court applies to the adverse public reference to named individuals not parties to this action, it is without basis in law.

As to appellees, Freeman and Bass, however, we are keenly aware that in any investigation of this kind there is potential for abuse and harm to one’s reputation, since the informing function of a commission presupposes the possibility of its uncovering improprieties, abuses or wrongdoing. New commissions such as the SCI would be established if there were not reason to believe that state programs have been functioning inadequately or improperly. The very purpose of the SCI is to ascertain the state of affairs in New Jersey’s Workmen’s Compensation program to the end that the public and the legislature might be awakened to possible needs for reform. The resulting conflict between private rights and the public interest is precisely what confronted the Supreme Court in Hannah and again in Jenkins v. Mc-Keithen, 395 U.S. 411, 89 S.Ct. 1843, 23 L.Ed.2d 404 (1969), where the Court, while reaffirming Hannah, held that when an inquiry goes beyond an investigation in aid of a valid legislative function and becomes “accusatory” in nature, due process requires certain procedural safeguards.

Conceivably, a commission such as the SCI might conduct its inquiry vis-a-vis an individual or association in bad faith with the purpose of harassment and of ultimately making and publicizing findings with respect to the guilt of such individual in transgression of its statutory mandate and in violation of .42 U.S.C. § 1988. In such event, a court is not without power to protect a person whose civil rights are being violated. Jenkins, supra.

On the record before us, however, it is difficult to discern the basis for the district court’s order of May 14, 1973. In numerous colloquies before the bench with counsel for appellants, the district court sought in vain to be persuaded of a legislative purpose for allowing adverse public disclosures with respect to named individuals. Yet a court must first focus its inquiry on whether the SCI has transgressed its investigatory function and become accusatory and then shape its relief in response to what due process requires.

Although appellees have alleged several incidents from which the district court may have concluded that the inquiry had been transformed into an accusatory proceedings against appellees, no findings of fact and conclusions of law were made in support of its order as required under Fed.R.Civ.P. 52(a) and 65(d). Nor did either party present any testimony or evidence on this critical issue on either May 14 or May 22, when appellant’s motion for a stay of the order was denied.

It is true that the district court, on April 9, 1973, characterized certain actions by the SCI as “Gestapo-like tactics” and on May 22 alluded to “witch-hunting” by the SCI. Moreover, the district court on May 22 very carefully and quite properly provided both parties the opportunity to adduce any evidence in their support. Though neither party availed themselves of this opportunity, we nevertheless cannot justify continuance of the order without a more sufficient record to support a showing of irreparable harm and probability of success and without the clarity afforded by specific findings.

Paragraphs 1, 2, and 3 of the order of the district court of May 14, 1973 will be vacated, and the cause remanded for further proceedings not inconsistent with this opinion. Insofar as paragraphs 4 and 5 are concerned, the appeal is moot.

      . The order of the district court provides:
      1. That there being no legislative purpose served in divulging the name of Freeman-Bass in public hearings, the law firm of Freeman & Bass shall not be mentioned either directly or indirectly in the public hearings presently being conducted by defendants ; and it is Further Ordered
      2. Where there is no legislative purpose served in divulging the name of individuals or associations in public SCI hearings in connection with alleged improper or criminal activities of any individuals or firms, the names of such individuals shall not be mentioned in public hearings of the SCI.
      Legislative purpose in divulging names of individuals or associations in connection with improper activities is found to be lacking in all cases where:
      (a) The witness called at a public hearing has already testified at a private hearing or has given information to the commission and no new matter is sought to be elicited at the public hearing;
      (b) employees or members of the commission testify as to names of individuals mentioned in connection with alleged abuses ; and it is Further Ordered
      3. That two weeks notice shall be given to the firm of Freeman & Bass in the event that they are to be mentioned in any public report; and it is Further Ordered
      4. That the requested release of the full testimony of Marion Kingsberry and Flora Ware be denied until such time that the court is assured by independent counsel for these witnesses that they desire their testimony to be released, and it is Further Ordered
      5. That all documents previously held under seal except for the depositions, the notice of motion to compel answers to said depositions and the minutes of April 9, 1973 are hereby unsealed.

      . 42 U.S.C. § 1983 provides:
      Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.

      . N.J.Stat.Ann. § 52:9M-1 et seq. (1970).

      . 55 N.J. at 261, 261 A.2d at 135.

      . 55 N.J. at 258, 260, 261 A.2d at 134, 135.

      . N.J.Stat.Ann. § 52:13E-6 (1970) provides:
      “Any person whose name is mentioned or who is specifically identified and who believes that testimony or other evidence given at a public hearing or comment made by any member of the [Commission] or its counsel at such a hearing tends to defame him or otherwise adversely affect his reputation shall have the right, either to appear personally before the agency and testify in his own behalf as to matters relevant to the testimony or other evidence complained of, or in the alternative at the option of the ageney, to file a statement of facts under oath relating solely to matters relevant to the testimony or other evidence complained of, which statement shall be incorporated in the record of the investigatory proceeding.”

      . See Hannah where the procedures of the Civil Rights Commission, upheld by the Court, included the right of a majority of the Commissioners to authorize the public disclosure of evidence received in executive session. 363 U.S. at 432, 433, n. 12, 80 S.Ct. 1502.

      . Whether the practice of the SCI in permitting at public hearings adverse references to named individuals in some evidence that the inquiry has become accusatory, we do not decide. We merely emphasize that, standing alone, such a practice is not inconsistent with the investigatory function of the SCI. See Zi-carelli v. New Jersey State Commission of Investigation, 55 N.J. at 258-261, 261 A.2d at 134-135.

      . See Jenkins v. McKeithen, 395 U.S. at 430, 89 S.Ct. 1843.

      . Rule 52 of the Federal Rules of Civil Procedure provides, inter alia:
      “In all actions tried upon the facts without a jury . . . the court shall find the facts specially and state separately its conclusions of law thereon . . . ; and in granting or refusing interlocutory injunctions the court shall similarly set forth the findings of fact and conclusions of law which constitute the grounds of its action.”
      The Notes of the Advisory Committee on this Rule when it was enacted stated :
      “The rule stated in the third sentence of Subdivision (a) accords with the decisions on the scope of the review in modern federal equity practice. It is applicable to all classes of findings in eases tried without a jury whether the finding is of a fact concerning which there was conflict of testimony, or of a fact deduced or inferred from uncontradicted testimony.”
      Tire Advisory Committee on the 1946 Amendment of the Rules stated:
      “Findings of fact aid in the process of judgment and in defining for future cases the precise limitations of the issues and the determination thereon. Thus they not only aid the appellate court on review, but they are an important factor in the proper application of the doctrines of res judicata and estoppel by judgment. These findings should represent the judge’s own determination and not the long, often argumentative statements of successful counsel. Consequently, they should be a part of the judge’s opinion and decision, either stated therein or stated separately.” [Citations omitted.]

      . Official Transcript of the Proceedings of April 9, 1973, at 28.

      . Official Transcript of the Proceedings of May 22, 1973, at 31.

      . Official Transcript of the Proceedings of May 22, 1973, at 8.

      . We believe the district court should receive testimony with respect to the alleged incidents relied upon by Freeman & Bass in support of the charge that the SCI was conducting its investigation in an accusatory fashion. Cf. Warner Bros. Pictures v. Gittone, 110 F.2d 292 (3d Cir. 1940).


author: GIBSON, Circuit Judge.

text:
    W. A. SHEAFFER PEN COMPANY, a Division of Textron, Inc., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
    Nos. 72-1778, 73-1007.
    United States Court of Appeals, Eighth Circuit.
    Submitted Sept. 10, 1973.
    Decided Oct. 11, 1973.
    Rehearing and Rehearing En Banc Denied Nov. 20, 1973.
    Paul J. Spielberg, Atty., N. L. R. B., Washington, D. C., for the N.L.R.B.
    William G. Haynes, Topeka, Kan., for W. A. Sheaffer Pen Company.
    Before GIBSON and BRIGHT, Circuit Judges, and SMITH, Senior District Judge.

       The Honorable Talbot Smith, Senior District Judge, Eastern District of Michigan, sitting by designation.

   GIBSON, Circuit Judge.

This ease is before us on a petition for review of an order of the National Labor Relations Board by W. A. Sheaf-fer Pen Company (Company). The Board cross-petitions for enforcement. Determining that the Company violated § 8(a)(1) of the National Labor Relations Act, the Board ordered the Company to cease and desist from an unfair labor practice by removing from its personnel files and destroying certain questionnaires and any information derived therefrom. The Board’s decision and order is reported at 199 N.L.R.B. No. 21.

The only issue presented is whether or not the Company’s use of a questionnaire to ascertain whether prospective employees would cross a picket line in the event of a strike was a violation of § 8(a)(1), in that it interfered with, restrained, or coerced employees in the exercise of their § 7 rights to organize and bargain collectively.

In September, 1968, the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (Union) and the Company signed a collective bargaining agreement that contained a no-strike clause and was due to expire on October 1, 1971. In July, 1971, the Union gave notice of its intention to reopen the contract, and the first bargaining meeting was held on August 17th. Beginning August 20th and continuing through September 29th, the contested questionnaires were attached to the Company’s employment applications. On September 30th, the Company discontinued using the questionnaire, because the Union had agreed to an indefinite extension of the old contract with a 10-day notice of termination provision. On October 31st, the Union gave notice it would strike November 11th, unless agreement on a new contract was reached. Use of the questionnaire was resumed November 4th and continued until November 22nd, when a new contract was signed.

The administrative law judge concluded that the questionnaire’s use was a violation of § 8(a)(1), because no assurances against reprisal were included in the questionnaire, as required by Struksnes Construction Co., 165 N.L.R. B. No. 102, 65 L.R.R.M. 1385 (1967). The Board adopted this conclusion.

On appeal, the Company argues that it had substantial justification for use of the questionnaire; that without a showing of anti-union animus, such questioning does not constitute a § 8(a)(1) violation; and that the Board improperly applied a per se rule in finding an unfair labor practice.

It is established that a company has the right to hire permanent replacements for economic strikers. N.L. R. B. v. MacKay Radio & Telegraph Co., 304 U.S. 333, 345, 58 S.Ct. 904, 82 L.Ed. 1381 (1938). The Company would have us extend that right to make any company conduct to locate replacements lawful under the Act. We do not believe that the right to hire replacements gives an employer automatic immunity for conduct violative of the Act. See N.L.R.B. v. Erie Resistor Corp., 373 U.S. 221, 83 S. Ct. 1139, 10 L.Ed.2d 308 (1963). It is conceded that the Company did not comply with the standards set out in Struksnes in that no assurances against reprisal were given.

In adopting the Struksnes standards in N.L.R.B. v. Harry F. Berggren & Sons, Inc., 406 F.2d 239, 244 (8th Cir. 1969), this Court found they were “soundly based in an attempt to balance the right of management to communicate with its employees and the employees’ statutory rights to be free from interference, restraint and coercion in engaging in organizational activity.” Although this Court adopted the Struksnes standards in a case dealing with employer interrogation to determine a union’s majority status, the standards apply equally well to this case.

The questioning in this case carried with it the inherent implication that the answer given would have affected the applicants’ chances of employment. Since the questionnaire became a part of the applicants’ permanent personnel records, we think that the applicants had a reasonable apprehension that their answer could have been used to affect future job security. Such an atmosphere created a fear of economic reprisal. Since the applicants knew that they were being solicited as possible replacements for striking workers, the questionnaire’s use was likely to serve as an implied threat or warning to the prospective employees of possible adverse consequences of any participation in concerted activity. As was found in Berggren:

“These adverse effects can follow interrogation regardless of the employer’s motive. Thus, if employees’ rights are not to be subject to derogation by the right of management to poll employees for a legitimate purpose, all of the safeguards enunciated in Struksnes should be observed.” (footnotes omitted).

Berggren, supra at 245.

Requiring compliance with these standards does not constitute enforcing a per se rule, since these standards represent a proper balancing of the employees’ right to organize and the employers’ right of communication.

Viewing the totality of the circumstances surrounding use of the questionnaire and its unmistakable potential for abuse of the employees’ protected § 7 rights, we think the Board’s decision finds substantial support in the record as a whole. Accordingly, the Board’s petition for enforcement of its order is granted.

      . 29 U.S.C. § 158(a)(1).

      . The questionnaire involved was attached to the Company’s regular employment application and no specific mention was made of the question to prospective employees when they made application for employment. The questionnaire read:
      “The W. A. Sheaffer Pen Company is currently engaged in contract negotiations. In the event of a strike, the plant may be picketed. Would you be willing, under these conditions, to cross a picket line when entering or leaving the plant?
      _ Yes
      _No
      (Signature and date)”

      . All dates hereinafter also occurred in 1971.

      . The record shows that 649 applicants were given applications with the questionnaire attached ; 440 made “yes” answers, 185 made “no” answers, and 14 did not answer. We note that these totals only add up to 639, but there is no explanation in the record as to the status of the missing 10 applicants.

      . The Board in 8truhsn.es Construction, Co., supra, held :
      “Absent unusual circumstances, the polling of employees will be violative of Section 8(a) (1) of the Act unless the following safeguards are observed: (1) the purpose of the poll is to determine the truth of a union’s claim of majority, (2) this purpose is communicated to the employees, (3) assurances against reprisal are given, (4) the employees are polled by secret ballot, and (5) the employer has not engaged in unfair labor practices or otherwise created a coercive atmosphere.”
      165 N.L.R.B. at 1063.


author: EAST, District Judge:

text:
    The UNITED STATES of America, Plaintiff-Appellee, v. Ronald Paul DUJANOVIC, Defendant-Appellant.
    No. 72-3007.
    United States Court of Appeals, Ninth Circuit.
    Oct. 15, 1973.

      Austin F. Rinella, Jr. (argued), Phoenix, Ariz., for defendant-appellant.
    Joseph S. Jenckes, Asst. U. S. Atty. (appeared), William C. Smitherman, U. S. Atty., Phoenix, Ariz., for plaintiff-ap-pellee.
   OPINION

Before ELY and TRASK, Circuit Judges, and EAST, District Judge.

EAST, District Judge:

The appellant was charged with the crime of Failing to Submit to Induction, in violation of Title 50, Appendix, U.S.C. § 462. He declined the appointment of counsel and proceeded pro se. He was convicted, sentenced to custody for study and report pursuant to Title 18 U.S.C. § 5010(e) and appeals. The appellant presents his assignments of error as three issues for review, namely:

(a) Dujanovic was not of sufficient presence of mind to either waive counsel or conduct his own defense, and the court did not adequately advise him of the consequences of his actions.

(b) Dujanovic presented a prima fa-cie case as regards his ineligibility for induction at the time of his physical examination. As competent refutation of this case was never included in his file, his induction was invalid, and further, as competent refutation was never presented at trial, his conviction is invalid.

(c) Taken either individually or together, the circumstances surrounding Dujanovic’s waiver of counsel, as well as his induction, constitute plain error within the meaning of Rule 52(b), Federal Rules of Criminal Procedure, 18 U. S.C.

The appellant timely appeared before the United States Magistrate whereat he was advised of his right to counsel, ordered to report the name and address of his attorney, to appear at a time fixed before the United States District Court for arraignment and released on his personal recognizance.

The appellant appeared without counsel before the District Court for arraignment on April 10, 1972, and upon the Clerk’s inquiry and offer, he refused appointed counsel. Whereupon the court appointed the public defender to represent the appellant. A few hours later on the same day the court permitted the public defender to withdraw as counsel upon the representation made in the presence of the appellant that the appellant “doesn’t want a lawyer,” entered a plea of not guilty on behalf of the appellant and set the case for trial on the following May 23rd.

On the opening of the trial, the appellant “appear[ed] in propria persona” with Mr. Karas of the public defender’s office sitting in attendance by the direction of the court. The trial court was most patient with the appellant in advising him on procedure and suggestion that the appellant seek the advice of the public defender, which was declined.

Issue (a):

This issue vividly presents the whip saw position in which the trial court is placed when faced with a request for self-representation. It has been said “[a] defendant in a criminal case not only has a constitutional right to the assistance of counsel, he has a correlative constitutional right to refuse the advice or interference of counsel and to present his own case. A court has no more right to force an attorney on a defendant than it has to ignore the Sixth Amendment right to counsel,” Arnold v. United States, 414 F.2d 1056, 1058 (9th Cir. 1969), cited in United States v. Price, 9 Cir., 474 F.2d 1223 at 1226. “The right to act pro se . . . is a right arising out of the Federal Constitution . . .,” United States v. Pike, 439 F.2d 695 (9th Cir. 1971), and “This circuit has recognized a constitutional right to represent oneself, Arnold v. United States, 414 F.2d 1056 (9th Cir. 1969), cert, denied, 396 U.S. 1021, 90 S. Ct. 593, 24 L.Ed.2d 514 (1970), and has recently stated that the complete denial of this right in a federal trial is, per se, reversible error.” Meeks v. Craven, 482 F.2d 465 (9th Cir. 1973).

So, whether it be by the design or because of misguidance or naivete on the part of the accused, the trial court lays an appeal or a collateral attack by either a denial or the granting of the request.

It is no understatement to say that under the existing authorities in this circuit, the district judge is most likely to be placed in the predicament above described. It may be all due to too easily interpreted generalities or as stated by Judge Trask, concurring, in Meeks, supra, “the conflict is partially semantic.”

In any event, the rule of the right of self-representation flows from the two founts of Adams v. United States, ex rel. McCann, 317 U.S. 269, 279, 63 S.Ct. 236, 87 L.Ed. 268 (1942), and Johnson v. Zerbst, 304 U.S. 458, at 464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938). We read the rationale of these authorities to be: An accused has the constitutional right to be represented in a criminal ease by competent counsel and the correlative constitutional right to dispense with counsel and assume the management and control of his defense to a criminal charge pro se.

This circuit has from case to case as noted above applied that rationale in a progressively narrowing context in order to meet exigencies of the given case. There is no reason to burden this writing with a recital of the specific facts and statement of the rule applied in each case, except to point out that the judicial route has been a torturous one and generally dictated by the facts and circumstances of the given case viewed retrospectively. Hodge v. United States, 414 F.2d 1040 (9th Cir. 1969), was the product of a rehearing en banc, reversing the original panel, and carried the dissent of three circuit judges. Price, supra, carries the dissent of the district judge and a five circuit judge dissent from the majority’s rejection of an en banc consideration, Order, dated August 17, 1973. This dissent, however, does not attack the more flexible statement of the constitutional right of self-representation but is geared against the application thereof to the given facts and circumstances. Meeks carries the dissent of a circuit judge attacking the reiteration of the absolutism of a constitutional right to represent oneself.

The statements in Meeks, like those in Pike, were apropos for the exigencies of the given case but carry a rule, if literally taken in future application, beyond the concept of Adams and Johnson. The Ninth Circuit decisions speak subjectively of an accused having a constitutional right to have competent counsel, and also, a constitutional right to represent himself pro se; however, it is manifest that any such two constitutional rights cannot actively co-exist. The very thesis of Adams and Johnson is that the constitutional right of counsel, specifically expressed in the Sixth Amendment, may be waived by an accused, through an intelligent relinquishment or abandonment thereof, and only then may the correlative constitutional right of self-representation be asserted and brought into play.

We firmly believe that the statement and appraisal of the developed rule of this circuit in Price carries a flexibility more comparable with the spirit and rationale of Adams and Johnson. So, for the guidance of the district judges when faced with the demand on the part of an accused to proceed pro se, either in total management and control of his defense or in a lesser degree to actively participate along with counsel in the development of evidence and arguments to the court or jury, as well as our own in reaching a determination in this cause, we delineate our interpretation of the composite rule of Price as follows: An accused has the limited constitutional right upon demand to competently and intelligently waive his constitutional right to assistance of competent counsel and assume the management and control of his defense or participate therein under controlled circumstances as determined by the trial court.

The trial court when faced with a demand on the part of an accused to waive counsel and proceed pro se in his criminal trial is in reality faced with a two-pronged problem, this:

(a) ascertaining whether a demand to waive the constitutional right to the assistance of competent counsel is competently, voluntarily and intelligently made, and

(b) meeting its obligation to assure both the accused and the government a fair trial conducted in a judicious, orderly fashion which is always threatened and endangered with the gathering signs of disruptive actions or attitudes.

To date this circuit has established two limitations:

(1) the demand must be timely, Pike, supra, 439 F.2d at 695, and

(2) the demand must be unequivocal, Meeks, supra, at 467 of 482 F.2d.

The reasons for one charged with crime to waive the assistance of competent counsel in any given case range from the misguided or naive who just wants to tell the jury the truth, through the pressured one under the hardships of the accusation of crime and the sophisticated person enamored with his own ability, to the crafty courtroom experienced one who ruthlessly plays for the breaks.. All eventually play the part of the proverbial fool. Accordingly, reasons for the waiver are not the concern of the trial court.

However, the American criminal jurisprudence is geared to the inviolate constitutional concept that an accused is entitled to competent counsel and legal representation, either of his own choice and arrangement or court appointed at government expense. So it is that the keystone determination or resolution of the two-pronged problem in the first instance is whether the request to waive the assistance of competent counsel is competently and intelligently made because with that determination the die is cast. Nothing whatsoever can thereafter occur during the pilotless journey which will evidence the state of mind of the accused or information at hand upon which he at that time intelligently waived his constitutional right of counsel.

We see no rational distinction between the test for determining a competent and intelligent waiver of competent counsel and that for determining a competent, voluntary and intelligent waiver of any other constitutional right. Judicial experience with human frailties has long since taught the necessities of safeguarding the accused in criminal proceedings. See the historical notes to the 1966 amendment to Rule 11, Federal Rules of Criminal Procedure. We cannot visualize a less minimal requirement than the District Court shall not grant & request to waive counsel and proceed pro se without addressing the accused personally and determining on the record that the demand to waive counsel and proceed pro se is competently and intelligently made with understanding of the nature of the charge and the penalties involved.

The trial court in meeting its obligation to assure the accused and the government a fair trial has various options under the controlled circumstances sanction. As stated in Price, supra, “pro se representation is usually inadequate and often inconclusive to the orderly administration of a criminal trial” and a lack of skill or ability on the part of the accused to represent himself is not a consideration for the denial of the request. However, the trial court may appoint competent counsel to merely advise or give the accused meaningful assistance in presentation of the defense and the saving of the record for appeal, see Haslam v. United States, 431 F.2d 362 (9th Cir. 1970), cert, denied 402 U. S. 976, 91 S.Ct. 1680, 29 L.Ed.2d 142 aff’d on rehearing, 437 F.2d 955 (1971), and Hodge, supra. Furthermore, we above mentioned the gathering signs of disruptive actions or attitudes. Among these are the actual or ready potential unruly and obstreperous accused. Such activities or potentialities can well stand as a voluntary relinquishment or forfeiture of the limited constitutional right to proceed pro se, just as the trial court may take appropriate steps to quiet or remove obstreperous accused including binding and gagging, if necessary, see Illinois v. Allen, 397 U.S. 337, 90 S.Ct. 1057, 25 L.Ed.2d 353 (1970), cited in the dissent from the rejection of en banc consideration in Price, supra. In this regard the trial court may in its discretion determine when and under what circumstances such an accused may represent himself to the extent of complete denial.

We are convinced that the district judge was misled by the terse recitals in the mentioned decisions that an accused has a constitutional right to proceed pro se and was not made mindful that the searching question placed to the court by the appellant’s refusal to accept counsel was whether “[the appellant knew] what he [was] doing and his choice [was] made with open eyes.” Adams, 317 U.S. at 279, 63 S.Ct. at 242, and reiterated belatedly for this cause, in Price, 474 F.2d at 1227.

Following the appellant’s refusal of court appointed counsel at the arraignment and his acknowledgment that “I have read it [the indictment] before,” this colloquy was had between the district judge and the appellant:

“The Court: Mr. Dujanovic, how old are you?
Defendant: Dujanovic. I am 21.
The Court: How much education have you had?
Defendant: Two years of junior college.
The Court: Is this the first time that you have been involved with any kind of a criminal charge ?
Defendant: No, sir.
The Court: I think, in view of your age, I am going to appoint counsel to represent you, to at least talk to you before I accept a plea or go further with this. I am going to appoint the public defender, Mr. O’Toole, under the terms of the Criminal Justice Act, to represent the defendant at least at this time for purposes of discussing the charge and discussing the matter with him, and I will continue it until next Monday at 12:00 o’clock, for plea.
Defendant: What if I don’t want to talk to him?
The Court: Well, we will cross that bridge when we get to it, Mr. Dujan-ovic.”

Later that day the following occurred:

“Mr. O’Toole: May it please the Court, after the Court asked this gentleman to talk to our office, I conversed with him in the hall for approximately five minutes, and he is of the sentiment that he doesn’t want a lawyer, so at this time I advised the defendant I would ask the Court to reconsider the proceeding at this time in order that he wouldn’t have to go back next Monday.
The Court: Very well. I will permit the — an order consenting to the withdrawal of the Federal Public Defender, and I presume you wish to enter a plea of not guilty, Mr. Dujanovic.
Defendant: Yes.
The Court: Very well. The plea of not guilty will be received and you will receive in the mail a notice of the trial setting date in this case, the date on which it will proceed to trial.”

and at the commencement of the trial this:

“(Proceedings at the bench, outside the hearing of the panel, attended by the defendant, Mr. Jenckes and Mr. Karas:)
The Court: Mr. Karas is going to be sitting at the table. He is not going to participate except as you ask him to. If you want to ask him a question or anything, feel perfectly free to ask him anything you want in the way of procedure or anything.
Just so you understand. . . .” (Here follows the district judge’s explanation of the jury selection and trial procedures.)

The foregoing is the sum and substance of the inquiry as to the appellant’s “capacity to decide intelligently and to understand what he is doing, i. e., [thereby making] a valid waiver of his right to counsel.” Price, et al., supra 474 F.2d, at 1227.

We note that at no time during the waiver proceedings did the district judge personally advise the appellant of his constitutional right to have competent counsel or of the consequences of his choice of self-representation; nor does the record reveal that the appellant had any advice from any person as to, or any understanding of, the nature of the charges and the penalties involved, except only his acknowledgment to the Clerk that he had read the indictment. The record before us just does not reflect any rational factual basis to establish a competent and intelligent waiver of competent counsel by the appellant.

Accordingly, we conclude under our analysis of the rule of this circuit and the test thereunder that the District Court committed plain error in acceding to the appellant’s declination of competent counsel and permitting him to proceed pro se.

Issue (b):

It is unnecessary for us to deal with this issue; nevertheless, we comment that the issue is without merit, yet does present a classical example of one of the many dangers of self-representation. No purpose will be served by a detailed description of the trial proceedings. Suffice, had the appellant been represented by counsel, either of his own choice or under court appointment, we would be obliged to conclude the appellant had received a wholly inadequate factual or legal representation; however, one of the penalties of the appellant’s self-representation is that he is bound by his own acts and conduct and held to his record. It might be as his own counsel on appeal asserts that within the pages of the Selective Service file itself was a complete factual and legal defense to the charge; however, such was not called to the attention of the district judge and he was not requested nor otherwise required to make any ruling with respect thereto.

The cause is remanded to the District Court for a new trial or further proceedings.

Reversed and remanded.

       Honorable William. G. East, Senior United States District Judge for the District of Oregon, sitting by designation.

      . “The basic rule stated in Johnson, [supra] is: ‘A waiver is ordinarily an intentional relinquishment or abandonment of a known right or privilege. The determination of whether there has been an intelligent waiver of the right to counsel must depend, in each case, upon the particular facts and circumstances surrounding that case, including the background, experience, and conduct of the accused.’ ” Hodge, ante, at 1042, footnote 2.

      . “While we would have preferred the record to have shown that the district court had advised Mitchell more fully of the consequences of his choice (of. Von Moltke v. Gillies, 332 Ü.S. 708, 723-724, 68 S.Ct. 316, 92 L.Ed. 309 (1948)), or that it had instructed Mitchell to consult with an attorney for advice on the wisdom of dispensing with counsel (see A.B.A. Project on Minimum Standards for Criminal Justice, Standards Relating to Providing Defense Services § 7.3 (1968)), . . . ” United States v. Mitchell, 472 F.2d 1223 (9th Cir. 1972).
      “ ‘While an accused may waive the right to counsel, whether there is [an intelligent and competent] waiver should be clearly determined by the trial court, and it would be fitting and appropriate for that determination to appear upon the record,’ ” Mr. Justice Black, writing for the majority in Johnson, cited in the dissent in Hodge, 414 F.2d at 1052. We reiterate that admonition to and commend its application by the district judges.

      . Arguably, a history of emotional unstability caused by excessive drug usage, a disqualifying physical defect.


text:
    James Edward ANTWINE, Petitioner-Appellant, v. W. J. ESTELLE, Director, TDC, Respondent-Appellee.
    No. 73-2442
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 28, 1973.
    Certiorari Denied Dec. 17, 1973.
    See 94 S.Ct. 847.
    James Edward Antwine, pro se.
    Robert C. Flowers, Asst. Atty. Gen., Thomas H. Routt, Austin, Tex., for respondent-appellee.
    Before GEWIN, COLEMAN and MORGAN, Circuit Judges.

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

   PER CURIAM:

Appellant Antwine received a jury trial where he was represented by counsel and was found guilty of murder with malice. He was sentenced in May of 1971, to death. Following the Supreme Court’s decision in Branch v. Texas, 408 U.S. 238, 92 S.Ct. 2726, 33 L.Ed.2d 346 (1972), which outlawed the death penalty as it was then imposed in Texas, Ant-wine’s sentence was commuted by the Governor of Texas to life imprisonment. Antwine petitioned the district court below seeking habeas relief and an injunction to stay all state court proceedings until a federal determination could be made as to whether this commutation of sentence was unconstitutional. The district court denied the habeas relief and found that the Supreme Court in Branch, supra, did not dictate a reversal of Antwine’s conviction. Appellant urges this court that the court below committed two errors. First, appellant alleges that the Governor of Texas did not have the power or authority to commute Antwine’s sentence after such a sentence had been ruled invalid and struck down by the United States Supreme Court and the district court should have so ruled. Secondly, Ant-wine contends that the district court should have ruled that the Governor of Texas violated Antwine’s' constitutional rights to a fair appeal by commuting Antwine’s sentence.

In answer to appellant’s contentions of error we need only to look to the Supreme Court’s decision in Branch v. Texas, at 408 U.S. at 239, 92 S.Ct. at 2727, 33 L.Ed.2d 350, where the Supreme Court stated:

The Court holds that the imposition and carrying out of the death penalty in these cases constitutes cruel and unusual punishment in violation of the Eighth and Fourteenth Amendments. The judgment in each case is therefore reversed insofar as it leaves undisturbed the death sentence imposed, and the cases are remanded for further proceedings.

It is obvious then that the Supreme Court did not make an all encompassing rule as regards death penalties. Therefore, appellant’s contentions can be seen to be without merit. The lower court is in all respects

Affirmed.


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Frank D. POLLARD, Defendant-Appellant.
    No. 73-2458
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Oct. 18, 1973.
    John S. Bowman, (court appointed), Montgomery, Ala., for defendant-appellant.
    Ira DeMent, U. S. Atty., David B. Byrne, Jr., Asst. U. S. Atty., Montgomery, Ala., for plaintiff-appellee.
    Before JOHN R. BROWN, Chief Judge, and DYER and SIMPSON, Circuit Judges.

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

   PER CURIAM:

The sole issue before us on this appeal is whether the indictment upon which Pollard was convicted and sentenced below was sufficient to charge an offense under Title 18, U.S.Code, Section 912. Neither of the three counts alleged that the acts charged as violative of Section 912 were done “with intent to defraud”, each count of the indictment simply tracking the statute.

Section 912 is framed in the alternative with separate offenses defined in each section and separated by the disjunctive or:

“§ 912. Officer or employee of the United States
Whoever falsely assumes or pretends to be an officer or employee acting under the authority of the United States or any department, agency or officer thereof, and acts as such, or in such pretended character demands or obtains any money, paper, document, or thing of value, shall be fined not more than $1,000 or imprisoned not more than three years, or both.”

Honea v. United States, 5 Cir. 1965, 344 F.2d 798, involved a conviction of the second offense proscribed by Title 18, U.S.Code, Section 912. We held the indictment in Honea fatally defective for failure “to allege that the defendant did the acts with intent to defraud either the United States or any person”. Ibid at 800. We had occasion in United States v. Randolph, 5 Cir. 1972, 460 F.2d 367, to consider the sufficiency of an indictment drawn under the first part of Section 912. We held in Randolph that an intent to defraud remained “an essential element of the offense defined under part [1] of § 912 * * * ”, and set the conviction aside for this defect in the indictment.

The three counts of the indictment involved in the instant appeal each appear to have been framed under part (2) of the statute, but since the indictment is fatally defective under either Honea or Randolph whether framed under the first part or the second part of the statute, we need not attempt to distinguish the portion of the statute involved.

By its brief on appeal the United States concedes error in this respect in the following language:

“We recognize the rule enunciated in Honea v. United States, (C.A.5, 1965), 344 F.2d 798; and United States v. Randolph, (C.A.5, 1972), 460 F.2d 367. A careful reading of these cases would indicate that the Indictment in the instant case was insufficient. The United States does not agree with the rule in these cases, but concedes that these cases hold that an Indictment charging a violation of Title 18, Section 912, United States Code, must charge that the defendants did the acts ‘with intent to defraud.’ Under these cases it would appear that the Indictment is fatally defective, and that the conviction thereunder must be set aside, and the Indictment dismissed.”

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

Reversed.


author: PER CURIAM.

text:
    In the Matter of SIERRA TRADING CORPORATION, a Nevada corporation, Debtor-Appellee. Arthur SHERR and Richard Rubin, Petitioners-Appellants, v. L. W. WINKLER, Jr., Trustee, Respondent-Appellee.
    No. 72-1537.
    United States Court of Appeals, Tenth Circuit.
    Aug. 15, 1973.
    Rehearing Denied Sept. 17, 1973.

      Paul B. Rodden, Rodden, Cooper, Woods & Mitchell, Denver, Colo. (C. James Cooper, Jr., and Richard T. Payn-ter, Jr., Denver, Colo., with him on the brief), for petitioners-appellants.
    James A. Clark, Denver, Colo., for trustee-appellee.
    Before PICKETT, HILL and BARRETT, Circuit Judges.
   PER CURIAM.

This appeal is from an order of the United States District Court of Colorado determining the rights of a mortgagee and assignee to oil and gas income that was delivered to a trustee in a proceeding under Chapter X of the Bankruptcy Act wherein Sierra Trading Corporation sought reorganization. The dispute arises over the division of the costs of drilling and development of producing property in Campbell County, Wyoming. The trial court held that the trustee was entitled to Sierra’s share of the income from these leases without cost “until the wells were in production.”

In 1968 Sierra Trading Corporation was the owner of a number of oil and gas leases in Campbell County, Wyoming, including a one-half interest in those known as the Ute leases. The remaining '50% of the Ute leases belonged to American Petrofina Corporation of Texas which had drilled four producing wells thereon under a prior operating agreement with Sierra. It is agreed that Petrofina had the right to retain its development and production costs from the sale of oil and gas.

On December 16, 1968, Sierra entered into a general agreement with Rapp Oil Corporation wherein Rapp represented that it had $3,000,000 available for a program of drilling and completion of oil and gas wells during the year 1969 on leases owned by Sierra. The unrecorded agreement, which described no leases in particular, required Rapp to drill and develop leases to be designated by the parties, with a portion of the cost of development wells to be paid by Sierra. Pursuant to this agreement Sierra assigned 75% of its interests in oil and gas leases, including a 37%% interest in the Ute leases.

In the course of complying with the contract, Rapp borrowed $1,000,000 from appellants Sherr and Rubin and executed a 20% interest per annum note for that amount. To secure the payment of this note Rapp gave Sherr and Rubin a mortgage on the leases acquired from Sierra and assigned all of its interests in the production income from the Petrofina lease.

In the Chapter X proceedings the court ordered Petrofina to turn over to the trustee all monies then held by it over and above the costs of development and expenses of operation of the oil lease. Pursuant to this order Petrofina delivered to the trustee a total of $248,992.40, which represented a 50% working interest on the four Ute wells through February 11, 1972. As a result of three separate orders following an ev-identiary hearing, the court directed the trustee to pay to Sherr and Rubin the sum of $91,821.08. The court computed this amount by crediting petitioners with 37% % of the income from the Ute leases, net of royalties, and charging them with 50% of the total development costs and 37%% of production costs. Sherr and Rubin concede that their share of the income received by Petrofi-na from production income was chargeable with 37%% of the drilling and development costs, but assert that the court’s division order requires them to pay, in addition, Sierra’s 12%% share of these costs. This 12%% share amounts to $58,788.74 and is the amount appellants seek to recover herein. Although we are unable to independently compute or reconcile exactly the cost figures, the parties are apparently in agreement as to such amounts and the only question presented is the allocation of those undisputed costs.

We think a fair analysis of the various court orders affecting the distribution of the fund is that Sierra or the trustee should receive a 12%% share of the income from the Ute leases without any deduction for costs incurred until the wells were in production and that Rapp, and therefore appellants, should have to bear 50% of the total development costs on all the Ute wells. This conclusion apparently was based on a finding that from all the circumstances Sherr and Rubin “knew or should have known that Rapp was obligated to bear some portion of development costs.” Accepting the court’s conclusion that the mortgage lien and assignment of proceeds do not include development and operational costs, we find no basis for fixing the liability at more than Rapp’s 37%% proportional share of the total expenditure. The owner of a working interest in an oil and gas lease is entitled to its pro rata share of the net proceeds from the production from the lease, which is to be determined by deducting royalties and the necessary expense of development, production and marketing. Shinn v. Buxton, 154 F.2d 629 (10th Cir. 1946); Torgeson v. Connelly, 348 P.2d 63 (Wyo.1959); 3A Summers on Oil & Gas § 599 (2nd ed. 1958). When Sherr and Rubin accepted the mortgage and assignment as security for the loan, an examination of the abstract of title showed that Rapp owned 37% % of the Ute leases and Sierra 12%%, and as held by the trial court the security was accepted without knowledge of any unrecorded agreement between Sierra and Rapp. It follows that in computing the distribution of the net proceeds from the Ute leases, Sherr and Rubin should be charged with 37%% of the costs of development and production, and Sierra with 12%% thereof.

It is urged that the trustee purchased interest bearing certificates of deposit with the funds acquired from Petrofina and should be required to account for the amount earned through investment of the money belonging to appellants. These funds were never the property of Sierra or the trustee. Petrofina held them for the benefit of the owners of a 50% working interest and the intervention of bankruptcy on the part of Sierra did not affect the rights of others to possession of their share of the funds. Except for the turnover order they would have been paid directly to the assignees. We see no reason why the trustee should receive a windfall by way of interest earned from the investment of money belonging to others and he will be required to account therefor. Sherr and Rubin are not creditors of the bankrupt and cases like City of New York v. Saper, 336 U.S. 328, 69 S.Ct. 554, 93 L.Ed. 710 (1949), and Vanston Bondholders Protective Committee v. Green, 329 U.S. 156, 67 S.Ct. 237, 91 L. Ed. 162 (1946), have no application.

A question is raised concerning the validity of the 20% interest provision of the notes in question. This is not an issue properly before this court for deter-, mination.

Reversed and remanded with instructions to enter judgment in accordance with the views herein expressed.

      . The contract provided that Rapp should furnish the necessary funds to pay for the initial well drilled by it on each lease acquired to be drilled. On subsequent development wells Sierra was required to pay its proportionate share of the costs. No special reference was made to allocation of costs which had been expended in the development of the Ute leases.


text:
    Paul E. GUTEKUNST, Appellant, v. CONTINENTAL INSURANCE COMPANY, Appellee.
    No. 25, Docket 73-1204.
    United States Court of Appeals, Second Circuit.
    Argued Oct. 15,1973.
    Decided Oct. 16, 1973.
    Daniel A. Pollack, New York City (Neil D. Thompson, and Pollack & Singer, New York City, on the brief), for appellant.
    Arthur Lambert, New York City (Hendler & Murray, New York City, on the brief), for appellee.
    Before KAUFMAN, Chief Judge, and LUMBARD and TIMBERS, Circuit Judges.
   PER CURIAM:

In August 1964 certain bearer bonds were stolen from Dr. Gutekunst’s residence in Philadelphia. In October 1964 one Herbert Schwartzman appeared at the branch of Manufacturers Hanover Trust Company (“Manufacturers”) located at 39th Street and Seventh Avenue in New York City. He was accompanied by Herman Nowick, a certified public accountant, who on several occasions in the past had introduced customers to the officers of this branch and assisted them in obtaining personal loans. Nowick introduced Schwartzman to the loan officer on duty, Nathan Plishtin, and recommended that the bank lend him $11,500 on the collateral of $23,000 of bearer bonds. These later proved to be the Gutekunst bonds stolen two months previously. No proof was offered at trial concerning the means by which they had come into Schwartzman’s possession.

Plishtin approved the loan on the strength of Nowick’s recommendation, some minimal questioning of Schwartz-man, and the apparent regularity of the bonds on their face. It is conceded that neither he nor William Zitek, the bank officer who dealt with Schwartzman on subsequent occasions, made any investigation of Schwartzman or his authority to transfer the securities. On three other occasions in October the bank advanced further credit on the strength of the same collateral. The total indebtedness of Schwartzman exceeded $21,000 at the end of October, when he defaulted. The bank attempted to sell the bonds but was informed by its broker on November 2 that they were listed as having been stolen.

The bonds then came into the possession of the United States Attorney for the Southern District of New York, who used them as evidence in criminal proceedings. Plaintiff brought this action to recover the securities from the United States. Since the Government was merely a stakeholder, it was permitted to deposit the bonds in the court registry and was dismissed as a party. Adverse claimants came forth and were joined as defendants. One of these was the appellee Continental Insurance Company (“Continental”), which had received assignment of the claim of Manufacturers.

The only issue is whether Manufacturers enjoyed the status of a bona fide purchaser under §§ 8-301 to 8-304 of the New York Uniform Commercial Code, so as to cut off the rights of Gutekunst, the “true” owner. Continental’s claim, of course, is wholly dependent upon that of Manufacturers in whose shoes it stands. The burden of proof was on Continental as the party claiming the rights of a bona fide purchaser. See Otten v. Marasco, 353 F.2d 563 (2d Cir. 1965).

Appellant asserts that Manufacturers acted in bad faith because it dealt with a total stranger without making any investigation of him or his right to negotiate the securities. Reliance is placed on Canajoharie National Bank v. Diefendorf, 123 N.Y. 191, 25 N.E. 402 (1890), and its progeny, for the principle that negligence in dealing with negotiable instruments may be so gross as to constitute bad faith.

Despite some broad language in the cases, the New York law is that only actual knowledge or disregard of suspicious circumstances may constitute evidence of bad faith. These decisions have been codified in UCC § 8-304(3) which requires that the purchaser have “knowledge of such facts that his taking the security amounts to bad faith.” (Emphasis added) Plaintiff concedes, however, that Manufacturers did not know any facts which should have aroused its suspicion. The entire argument proceeds from the premise that because the bank knew nothing about either Schwartzman or the bonds, it acted in bad faith in failing to investigate. This assertion must fall before the clear rule set forth in the New York decisions and statute that it is not ignorance, but guilty knowledge or conduct that can be equated with guilty knowledge, that can rise to bad faith.

Appellant also contends that the district court erred in failing to find that the bank had received notice of the adverse claim. There was some evidence at trial tending to indicate that a stolen-security circular may have been sent to the bank’s main office prior to the transactions with Schwartzman at the 39th Street branch. Judge Duffy did not deem it necessary to make a finding on whether the main branch received this flyer, because he viewed the New Yoi'k law as providing that notice received by one branch of a bank does not constitute constructive notice to any other branch of the same bank. We agree with this statement of the law; see UCC § 4-106; Chrzanowska v. Corn Exchange Bank, 173 App.Div. 285, 159 N.Y.S. 385, aff’d, 225 N.Y. 728, 122 N.E. 877 (1919).

Since the bank acted in good faith and without notice, it was a bona fide purchaser and Continental was properly held entitled to the bonds. Accordingly, the judgment is affirmed.

      . Alhough Plishtin testified that he ordered a Dun and Bradstreet report on Schwartz-man’s business firm, he also stated that it was not received until after the loan was made, and hence not relied upon by the bank in approving the transaction.

      . Continental argues that under New York evidence law, the proof in this ease concerning transmittal of the circular to Manufacturers was inadmissible. Judge Duffy did not place any reliance on any of this evidence in reaching his decision. Because we agree with his view that receipt of notice at the main office was not constructive notice to the branch bank, and since appellee introduced evidence to support the finding that the 39th Street branch did not have actual notice of the circular, we need not decide the evidentiary question.


author: HILL, Circuit Judge.

text:
    PORT CITY STATE BANK, Plaintiff-Appellant, v. AMERICAN NATIONAL BANK, LAWTON, OKLAHOMA, Defendant-Appellee.
    No. 73-1019.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted July 10,1973.
    Decided Oct. 23, 1973.

      Eugene J. Pitman, Houston, Tex., for plaintiff-appellant.
    C. William Stratton, Lawton, Okl. (T. D. Nicklas and C. E. Wade, Jr., Lawton, Okl., on the brief), for defendant-appel-lee.
    Before HILL, HOLLOWAY and MC-WILLIAMS, Circuit Judges.
   HILL, Circuit Judge.

This appeal is from a judgment entered against appellant Port City State Bank in its suit to collect upon two checks forwarded to appellee and not returned as insufficient before the appropriate midnight deadline. Following a trial without a jury, the United States District Court for the Western District of Oklahoma ruled that the failure to notify of dishonor prior to the deadline was excused in this ease by Regulation J of the Federal Reserve Regulations, 12 C.F.R. 210.14, and 12A O.S.A. 4-108(2).

This court has jurisdiction by virtue of the diversity of citizenship of the parties and the allegation in the complaint of liability greatly exceeding the jurisdictional amount.

The record discloses that appellant was the holder of two checks drawn upon the J. H. McClung Coin Shop account with American National. Both items were forwarded through collecting channels for payment. The first cheek arrived at American National on Friday, November 28, 1969. That cheek contained two conflicting amounts: in figures $72,000.00 and in words seventy-two dollars and no/100 dollars. It was processed manually and stamped insufficient funds on Saturday, November 29; however, it was not returned immediately but was placed in Monday’s business to determine if any deposits were forthcoming on Monday which would balance the account. Notice of dishonor was given to the last endorser of the check, the Federal Reserve Bank at Oklahoma City, on Wednesday, December 3, and the check was returned to the Federal Reserve on December 4.

The second check, in the amount of $120,377.20, arrived at American National on Tuesday, December 2, 1969. The first notice of its dishonor was by telephone to the Federal Reserve on Friday, December 5; it was returned to the Federal Reserve the same day.

It was stipulated by the parties that the “midnight deadline” for these items as established by Regulation J, 12 C.F.R. 210.12, and 12A O.S.A. 4-104(1) (h) was midnight December 1 for the first check and midnight December 3 for the second check. Additionally, it was stipulated that neither check was dishonored before the applicable deadline.

These facts establish a prima facie ease for the application of 12 C.F.R. 210.12 and 12A O.S.A. 4-302(a), both concerning the necessity of fulfilling the midnight deadline, and thus it became the obligation of appellee at the trial to prove an excuse from these provisions under 12 C.F.R. 210.14 and 12A O.S.A. 4-108 (2) . The latter regulations in essence prevent the operation of the midnight deadline in cases when the delay by the payor bank is caused by the interruption of communication facilities, suspension of payments by another bank, war, emergency condition or other circumstances beyond the control of the bank provided it exercises such diligence as the circumstances require.

In furtherance of its contention, American National presented evidence that prior to December 1, 1969, it had performed its bookkeeping functions by machine posting, a so-called manual system. During 1969, however, a decision was made to implement a computer bookkeeping operation, and a rental agreement was entered into with a large computer company. That lease provided that all repairs and maintenance were the obligation of the computer firm, and American National was not authorized to undertake any such tasks. After the installation of the computer, American National paralleled its manual system with computer operations for approximately two weeks. Finally the decision was made to change over to computer processing beginning on December 1. A last manual posting was made on Saturday, November 29, and the manual bookkeeping equipment was removed from the bank during that weekend.

At approximately 10:00 a. m. on December 1, the first day for use of computer operations, the American National computer developed a “memory error” which rendered it unusable. Though the computer manufacturer indicated repairs would not take “too long”, they lasted until late Monday night and the testing procedure extended into the early hours of Tuesday, December 2.

In reliance upon the belief that the computer would be repaired without prolonged delay, American National took no extraordinary steps to process Monday’s business during the business day. However, when it became apparent that evening that the computer was not going to be ready immediately, American National decided to utilize an identical computer in a bank which was a trip of some hours away, in accord with a backup agreement they had made with the other banking institution. Thus at about 11:30 p. m. personnel from American National and the computer company began processing Monday’s business on the backup computer and continued processing through .the night. This work had proceeded to the point of capturing the items on discs when, because the backup computer was required by its owner and because they were informed their own computer was operational, the American National personnel returned to their bank to complete the work on their own machine. After returning to American National, the work was processed to the point of completing the printing of the trial balances when another memory error developed which again rendered the computer unusable. No further use could be made of the appellee’s computer until a new memory module was installed on Thursday, December 4.

Because of the second failure, American National was forced to utilize the backup computer both Wednesday and Thursday during times it was not required by its owner. Monday’s business was completed and work was begun on Tuesday’s items the evening of Tuesday, December 2. Tuesday’s items were not completed until either Wednesday, the third, or Thursday, the fourth. When the second check arrived in Tuesday’s business, it was held to determine if a later deposit had balanced the account. Through the use of the backup computer and then its own computer during the next weekend, American National was fully “caught up” by Monday, December 8.

Based upon this evidence, the trial court held that the computer malfunction suffered by American National was the cause of its failure to meet its required midnight deadline on the cheeks, and that such malfunction constituted both an emergency condition and a circumstance beyond the control of the bank as outlined in 12 C.F.R. 210.14 and 12A O.S.A. 4-108(2). The court further held that the reaction to the situation by American National fulfilled the requirements of diligence imposed by those regulations, and therefore the court entered judgment for American National on both checks.

Appellant has urged several grounds for the reversal of this judgment, none of which we find merits that action. Though § 4-108(2) of the Uniform Commercial Code is in effect in the vast majority of states, we find no reported cases interpreting or defining this particular provision of the Code. And, of course, our obligation in this appeal is to apply this statute as would the Supreme Court of the State of Oklahoma. Primarily we are faced with reviewing a factual determination by the trial court, and its findings will be affirmed unless clearly erroneous.

Appellant’s first contention is that the computer malfunction experienced by appellee was not the cause of the failure to notify on either check and thus could not excuse that lack of action. Though the trial court did not expressly rule upon this causation issue, it impliedly held that the delay in notification was a result of the computer breakdown in both instances, we believe that holding is not clearly erroneous.

As to the first check, it is true that it was processed and stamped insufficient on Saturday, however it was held for Monday’s business to allow any deposits made on Monday to balance the account before notice was required. This procedure is reasonable, and only the subsequent computer breakdown prevented timely notice upon the check. In the case of the second check, appellant contends that problems involved in balancing the “proof batches” caused the delay, not the unavailability of the computer. Such a contention ignores the problems encountered by the bank on Tuesday as a result of the delay in processing Monday’s business. Tuesday’s work was delayed first by the necessity of driving 2% hours each day before work could commence, and second by the necessity that Monday’s business be completed first. Without doubt, both of these delays resulted from the computer problems at American National.

Further appellant contends that a computer failure, as a matter of law, is not an event which can impose the application of 12A O.S.A. 4-108(2). In our opinion, such a determination is a mixed question of fact and law; however, neither treatment justifies the reversal of the trial court’s determination in this case. Factually, it was in no way erroneous to conclude that the malfunction created an emergency condition in the bank and was also a condition beyond the control of the bank. Appellant’s argument that in law this malfunction is not included within the prescribed contingencies of § 4-108 (2) is without foundation. The statute is clear and unambiguous on its face, and we need not resort to interpretive aids as urged by appellant. Our judgment coincides with that of the trial court that a computer failure such as in this case qualifies for the application of the statute. Additionally, this court has previously indicated that the views of a district judge who is a resident of the state where the controversy arose in a case involving interpretation of laws of that state carries extraordinary persuasive weight on appeal.

Port City next alleges that the trial court erred in its determination that American National exercised “such diligence” as the circumstances required. Basically, appellant asserts three alternative procedures that American National could have employed, and asserts that if any of these alternatives would have resulted in meeting the deadline, then appellee did not exercise diligence under the circumstances. As the trial court correctly concluded, the statute does not require perfection on the part of appel-lee, and American National’s performance should not be judged on the basis of 20-20 hindsight.

It must first be noted that appellee quickly notified the computer firm of the breakdown, and that company began an immediate repair effort. Further, there was evidence to indicate that such computer breakdowns are generally repaired very quickly. Thus it would appear that appellee was justified in its initial delay in adopting emergency procedures based on its belief such measures would prove unnecessary. Additionally, we must agree with the trial court that appellee’s duty under these circumstances was much broader than one requiring merely that it meet its midnight deadline. It was further obligated to keep the bank open and to serve its customers. To abandon the orderly day by day process of bookkeeping to adopt radical emergency measures would have likely prolonged the delay in returning the bank to normal operations.

As to appellant’s assertion that appellee should have returned to manual posting, it was shown that the equipment for this procedure was no longer in the bank. Further, no clear evidence was presented to indicate such a procedure would have allowed appellee to fulfill its deadlines if the procedure had been implemented. Any decision to return to manual posting would have to have been made very soon after the discovery of the initial failure. At that time, because of their own experience with computers and the industry history, and also because the manufacturer did not foresee the serious nature of the repairs, American National was justified in believing its computer would be back in service soon. Their delay in commencing emergency operations was reasonable, and these facts prevented a return to manual posting in time to fulfill the deadlines.

As to the possibility of utilizing another backup computer at the regional headquarters of the computer leasing firm, we must agree with the trial court that there was no evidence that this alternative would have proved any more successful than the method actually employed by appellee.

In regard to the last alternative, “sight posting”, the evidence is conflicting but sufficient to indicate it is not clear this alternative was so obviously superior as to be mandated under these circumstances. There were differing estimates as to the time required, and it was indicated such a procedure would upset and delay the eventual computer bookkeeping required to return the bank to current status. And as in the consideration of the previous alternatives, it was not clearly demonstrated that this procedure would have allowed American National to meet its deadlines even if it had been adopted.

Appellant asserts two other grounds for reversal that merit some discussion here. First, they assert that if the first check was only for $72.00, then it was not insufficient and thus the appellee is liable. This argument ignores the fact that the check had been encoded for $72,000 and thus had to be returned before proper credits could be advanced. Additionally, Oklahoma statutes and case law provide that a check is not an assignment of funds held by the drawee and fixes no liability on the drawee until its accepts or pays an instrument.

Next appellant asserts that appellee adopted an order of payment that ignored first-in-first-out, and argues that appellee should be liable as a result. However, as appellant indicates in its brief, there is no ease law or statute establishing such a procedure as mandatory. We find no merit in such a contention.

Lastly, the parties have asserted several contentions concerning the proper face amount of the first check and the measure of damages under the applicable provisions of the code. However, as we affirm the trial court’s holding denying liability, the discussion of these contentions is unnecessary.

Affirmed.

      . 12 C.F.R. § 210.14 Timeliness of action. If, because of interruption of communication facilities, suspension of payments by another bank, war, emergency conditions or other circumstances beyond its control, any bank (including a Federal Reserve bank) shall be delayed beyond the time limits provided in this part or the operating letters of the Federal Reserve banks, or prescribed by the applicable law of any State in taking any action with respect to a cash item or a non-cash item, including forwarding such item, presenting it or sending it for presentment and payment, paying or remitting for it, returning it or sending notice of dishonor or nonpayment, or making or providing for any necessary protest, the time of such bank, as limited by this part or the operating letters of the Federal Reserve banks, or by the applicable law of any State, for taking or completing the action thereby delayed shall be extended for such time after the cause of the delay ceases to operate as shall be necessary to take or complete the action, provided the bank exercises such diligence as the circumstances require.

      . 12A O.S.A. 4-108(2) Delay by a collecting bank or payor bank beyond time limits prescribed or permitted by this Act or by instructions is excused if caused by interruption of communication facilities, suspension of payments by another bank, war, emergency conditions or other circumstances beyond the control of the bank provided it exercises such diligence as the circumstances require.

      . Marken v. Goodall, 478 F.2d 1052 (10th Cir. 1973) ; Hardberger & Smylie v. Employers Mut. Liab. Ins. Co., 444 F.2d 1818 (10th Cir. 1971) ; Hamblin v. Mountain States Tel. & Tel. Co., 271 F.2d 562 (10th Cir. 1959).

      . 12A O.S.A. 3-409(1) ; Mid-Continent Cas. Co. v. Jenkins, 431 P.2d 349 (Okl.1967) ; First Nat’l Bank v. Whitelock, 181 Okl. 431, 74 P.2d 355 (1937).


text:
    UNITED STATES of America, Appellee, v. Zali FRIED, Appellant.
    No. 133, Docket 73-1776.
    United States Court of Appeals, Second Circuit.
    Argued Sept. 24, 1973.
    Decided Oct. 12, 1973.

      Nathan Lewin, Washington, D. C. (Miller, Cassidy, Larroca & Lewin, Washington, D. C., Steven H. Thai, Thai & Youtt, New York City, of counsel), for appellant.
    Bernard J. Fried, Asst. U. S. Atty. (Robert A. Morse, U. S. Atty., E.D.N.Y., L. Kevin Sheridan, Asst. U. S. Atty., Brooklyn, N. Y., of counsel), for appel-lee.
    Before KAUFMAN, Chief Judge, and MOORE and MANSFIELD, Circuit Judges.
   PER CURIAM:

Following a jury trial before Judge Bartels, Zali Fried was convicted of unlawful possession of some 589 cartons of Unisonic AM-FM stereos stolen from a foreign shipment of freight, 18 U.S.C. § 659 (Count 2), and of unlawful sale of the stolen goods, 18 U.S.C. § 2315 (Count 3). She was sentenced to three years’ imprisonment and a $5,000 fine on Count 2 and a subsequent two-year period of probation on Count 3. On appeal this court affirmed the conviction. 464 F.2d 983, cert, denied, 407 U.S. 911, 92 S.Ct. 2437, 32 L.Ed.2d 684 (1972). Subsequently, Mrs. Fried moved pursuant to Rule 33, F.R.Cr.P., for a new trial, alleging that the prosecution had suppressed several pieces of material information. After an evidentiary hearing Judge Bartels, 359 F.Supp. 227, denied the motion, finding that the suppression was not deliberate and that the suppressed or newly discovered evidence would not in any case have affected the jury’s verdict. We reverse the order insofar as it relates to Count 3 and remand for a new trial on that count. Otherwise the order is affirmed.

The principal item of information which the government failed to disclose to the defense was the pendency in the Southern District of New York of an indictment against Joseph Levy, a key government witness, charging him with receiving other stolen goods (a shipment of clothing stolen from a pier). The indictment was particularly significant for the reason that if it had been disclosed by the government the defense would have used it to impeach Levy’s credibility and would have urged that he was testifying favorably for the government against Mrs. Fried in the expectation that he would be accorded leniency in the pending case against him. See United States v. Bonanno, 430 F.2d 1060 (2d Cir.), cert, denied, 400 U.S. 964, 91 S.Ct. 366, 27 L.Ed.2d 384 (1970); United States v. Campbell, 426 F.2d 547, 549 (2d Cir. 1970). Indeed, as matters turned out Levy was later convicted after a trial in the Southern District of New York and the prosecutor in the present case wrote a letter to the sentencing judge pointing out the importance of Levy’s testimony against Mrs. Fried. Thereafter Levy received a suspended sentence and $1,000 fine. In addition, since the indictment against Levy charged him with the same type of offense as that leveled against Mrs. Fried (receiving goods stolen off a pier), a jury might have reasoned that Levy may have been implicating Mrs. Fried in order to exculpate himself in the present case.

At the conclusion of the post-trial hearing Judge Bartels found that the prosecutor’s non-disclosure of the indictment, though careless, was not deliberate. With some reluctance we accept this finding which has evidentiary support in the testimony of the prosecutor himself. Surely the average competent prosecutor would quickly recognize the importance and value of this information to the defense, even in the absence of a request for it. Such negligence hardly adds lustre to an important government office whose aim should be to achieve justice rather than merely to obtain convictions.

Accepting the view that this was a case of negligent non-disclosure, we are governed by the rule that a new trial may be ordered only upon a showing that there is a significant chance that the non-disclosed item, developed by skillful counsel, could have induced a reasonable doubt in the minds of enough jurors to avoid a conviction. See United States v. Miller, 411 F.2d 825 (2d Cir. 1969); cf. United States v. Bonanno, 430 F.2d 1060 (2d Cir.), cert, denied, 400 U.S. 964, 91 S.Ct. 366, 27 L.Ed.2d 384 (1970). We find that this test has been met as to Count 3, which was based entirely on the sale of stolen goods. Since the government’s ease against Mrs. Fried in support of Count 3 rested almost entirely on Levy’s testimony, it is clear that if the indictment against him for possession of other stolen goods had been revealed by the government his credibility would probably have suffered a severe blow. There is therefore a significant chance that such a material disclosure would have raised a sufficient doubt in the minds of enough jurors to negate conviction.

We cannot conclude that such evidence might have induced a similar doubt with respect to Mrs. Fried’s guilt on Count 2, which charged unlawful possession of stolen goods, including stereos other than those sold to Levy. That count was established by proof wholly independent of Levy’s testimony. For instance, William Hendler, a Philadelphia appliance dealer, testified that on October 28, 1970, Mrs. Fried induced him to purchase 15 cartons of stereos later proved to have been stolen, which were shipped to him from a non-existent concern, G. S. Trading Company, 55 Avenue A, New York City. Later she called him once or twice and offered to sell him other merchandise. This testimony by Hendler, which remains untainted by the impeaching effect of the disclosure of Levy’s indictment, provides an ample independent basis for the verdict finding Mrs. Fried guilty on the possession count.

To the extent that Mrs. Fried’s additional arguments are directed toward impeachment of Joseph Levy’s credibility (e. g., that he gave perjured testimony) our foregoing disposition renders further discussion of that issue unnecessary. We find no merit in the other grounds urged in support of a new trial. There is no showing that evidence regarding seizure of some of the stolen stereos in the possession of so-called “legitimate” purchasers could not* have been uncovered with due diligence prior to trial. Indeed, the witness Kalman Lax was called by the defense and gave testimony as to seizure of cartons in his store. Since the earlier arrest of the witness Serhofer on charges of grand larceny and receipt of stolen property was unknown to the government, the information was not suppressed. Furthermore, it does not rise to a level that would warrant a new trial. See United States v. Kahn, 472 F.2d 272, 287 (2d Cir.), cert, denied, 411 U.S. 982, 93 S.Ct. 2270, 36 L.Ed.2d 958 (1973).

The order of the district court denying a new trial of Count 3 is reversed and the case is remanded for a new trial of that count. In all other respects the district court’s order is affirmed.