author: JAMES M. CARTER, Circuit Judge:

text:
    Petition of NORTHERN FISHING & TRADING COMPANY, INC., a corporation, owners of the FISHING VESSEL NORTH SEA, and Aleutian King Crab, Inc., a corporation, charterer of the fishing vessel North Sea, for Exoneration from or Limitation of Liability, Petitioners-Appellees, v. Sophie M. GRABOWSKI, Individually, as personal representative of the Deceased, Edwin T. Grabowski, and as guardian of the Estate of the minor children of Edwin T. Grabowski, Claimant-Appellant.
    No. 71-2475.
    United States Court of Appeals, Ninth Circuit.
    April 23, 1973.
    Rehearing Denied June 21, 1973.
    Gale P. Hilyer, Jr. (argued), Hilyer & Levinski, Seattle, Wash., for claimant-appellant.
    Donald P. Marinkovich (argued), Detels, Draper, & Marinkovich, Robert V. Holland (argued), Bogle, Gates, Dobrin, Wakefield & Long, Seattle, Wash., for petitioners-appellees.
   OPINION

Before CARTER, CHOY and GOODWIN, Circuit Judges.

JAMES M. CARTER, Circuit Judge:

This case arises from the loss of the wooden fishing vessel NORTH SEA off the southwest coast of Unimak Island, Alaska, on December 12, 1968. Captain Grabowski, the skipper, and two other crew members were drowned. The deck hand, Golodoff, survived.

Appellant Sophie M. Grabowski, the widow of the Captain, was the claimant, individually, and as the personal representative of Captain Grabowski, and as the guardian of their minor children.

The appellees, petitioners for exoneration from or limitation of liability, are Northern Fishing & Trading Company, Inc., the owners of the NORTH SEA, and Aleutian King Crab, Inc., the charterer of the NORTH SEA.

The Issues

Although appellant raises other contentions to some of which we shall later advert, we view the important issues to be these:

1. Does the evidence support Finding No. 20 that the loss of the vessel resulted from the factors set forth in Findings Nos. 16 thi'ough 19?

2. Does the evidence support Finding No. 20 that the claimant failed to establish by a preponderance of the evidence a breach of the warranty of seaworthiness implied in the charter to Captain Grabowski of July 1, 1968, or that unseaworthiness of said vessel was a proximate cause of his death ?

3. Did the trial court properly place the burden of proof on the claimant, appellee? We affirm.

In 1967, Northern Fishing bareboat chartered the vessel to Captain Grabowski for a term from July 20, 1967, to April 30, 1968. On January 1, 1968, Northern Fishing again bareboat chartered the vessel to Aleutian for a term from January 1, 1968, to December 31, 1968.

On July 1, 1968, Aleutian sub-bare-boat chartered the vessel to Captain Grabowski for the period of July 1, 1968, to April 30, 1969. Thus, at the time of the loss of the vessel, Aleutian had a bareboat charter from Northern Fishing, and Captain Grabowski had a sub-bareboat charter from Aleutian.

The only direct evidence as to the storm and the loss of the vessel were two depositions of the surviving crew member, Golodoff.

We summarize briefly the events leading to the loss of the vessel. It had been fishing for crab in Unimak Pass, off the southwestern coast of Unimak Island. The vessel had been returning for anchorage at night in either Akun or Trident Bay on the southwest side of Unimak Pass.

On December 11, 1968, the vessel moved its fishing gear to the slime banks about ten miles from Cape Sari-chef, off the southwest coast of Unimak Island. After a day of fishing, adverse weather was encountered in the area of Cape Sarichef. The Captain elected to proceed for anchorage at Urilla Bay on the north central coast of Unimak Island. During the night and early morning the wind increased and swung around more out of the northwest, so that Urilla Bay no longer provided effective protection from the storm. The vessel left the Bay on December 12, proceeded northwesterly to deep water about seven or eight miles northwest of Cape Sarichef, then turned southwesterly “on a ‘jogging’ zigzag course.” The storm had increased in volume, with winds from the west-northwest.

The trial court found that the storm was unusually severe, with turbulence not experienced during that particular season or for several years prior thereto. There was a full gale, with mountainous seas and winds of hurricane force.

The following five events preceded the loss of the vessel:

(1) Before the vessel left Urilla Bay, a water pipe broke in the engine room, partially flooding the bilge. The crew made emergency repairs.

(2) While proceeding southwesterly, the vessel took a sea which knocked off the forward starboard bulwark. In order to allow the crew to remove the debris, the Captain put his stern to the storm and proceeded toward Unimak Island. After the debris was removed, the Captain completed a 360° turn and again proceeded southwesterly.

(3) About an hour later another sea knocked off the false bridge in front of the pilot house. Again the vessel’s stern was put to the storm and the debris removed.

(4) As the vessel started again to resume a southwesterly course, a monstrous sea entirely wiped out the pilot house. The steering controls were gone; an electrical short charged the hand rails to the engine room with electricity; and a break in the ammonia pipe system flooded the engine room with ammonia. The propelling engine quit and the vessel was a powerless hulk.

(5) An hour or so later, as the vessel took more water and sank lower in the sea, the crew attempted to launch the life raft and were swept away by the waves. Golodoff, who survived, and the body of Captain Grabowski, were found on the southwest coast of Unimak Island at Sennet Point.

We note that the loss of the vessel did not result from destruction or disintegration of the hull, but from the events above and the seas taken upon and into the vessel.

The Findings

The pertinent findings of the trial court were as follows:

“11. That in accordance with paragraph 15 of the admitted facts of the Pretrial Order, the only relationship between Northern Fishing & Trading Company, Inc. and Aleutian King Crab, Inc. on one hand and Captain Grabowski on the other was that created in the demise charters of the vessel NORTH SEA, and there was no employer-employee relationship between the aforesaid parties at any time.
12. That on December 12, 1968, the fishing vessel NORTH SEA was lost at sea off the coast of Unimak Island, Alaska in the vicinity of Cape Sarichef during a storm that was unusually severe, the turbulence of which had not been experienced during that particular season and for several years prior thereto. The said storm, which could reasonably have been anticipated at that time of year, was a full gale with mountainous seas and winds gusting to hurricane force.
* * * * * *
15. That Edwin T. Grabowski had greater knowledge of the condition, strengths and weaknesses of the NORTH SEA than any other person and did not at any time rely on any warranty implied in the charter. That with such knowledge of the vessel he had undertaken repeated charters of the same.
16. That Captain Grabowski was an ambitious, courageous crab fisherman who had no fear of the sea. That during the period of charter he subjected the vessel to unreasonable use under extreme conditions of weather and sea and without proper regard for his own safety or that of the vessel.
17. That Captain Grabowski could have fully bunkered his vessel by taking on additional fuel to the full capacity of her tanks at Dutch Harbor on December 9, 1968, but he did not do so.
18. That while in the vicinity of Urilia [sic] Bay on December 12, 1968, Captain Grabowski was of the opinion that the vessel did not have sufficient fuel to permit his taking protective action by ‘jogging’ or otherwise proceeding seaward into deep water in a direction where the actions of wind and sea would have presented less of a threat to the safety of the NORTH SEA.
19. That instead of navigating his vessel as set forth in the last preceding paragraph he proceeded into the area of Unimak Pass and through an area where the combined conditions of wind, sea and tide exposed the NORTH SEA to extra hazardous and more violent conditions, and subjected the vessel to the utmost peril.
20. That the loss of the NORTH SEA proximately resulted from the factors set forth in paragraphs 16 to 19, inclusive, and claimant has failed to establish by a preponderance of the evidence that breach of a warranty of seaworthiness implied in the charter of July 1, 1968, the charter in effect at the time of the loss of the NORTH SEA, or that unseaworthiness of said vessel was a proximate cause of the death of Captain Grabowski.”

Discussion

A holder of a bareboat charter, who is the operator of the vessel so chartered, has a non-delegable duty to his employees to furnish a seaworthy vessel. Reed v. Yaka, 373 U.S. 410, 415, 83 S.Ct. 1349, 10 L.Ed.2d 448 (1963). Such a person was Captain Grabowski, but this leads us nowhere, since his widow and personal representative is the claimant and no claims are before us against Grabowski’s estate in behalf of the two crewmen who died.

“Whether a bareboat charter absolves the owner from liability on its warranty of seaworthiness is a question we also reserved in Guzman v. Pichirilo, 369 U. S. 698, 700 [82 S.Ct. 1095, 8 L.Ed.2d 205] (1962). We do not reach the question here.” Reed v. Yaka, supra, p. 411, n. 1, 83 S.Ct. p. 1351.

Nor do we need to reach it here, since Finding No. 20, expressly assumes such an implied warranty existed in the charter of July 1, 1968, from Aleutian to Captain Grabowski.

In this case we have the customary standard for review. Findings of fact as to the cause of the accident, here the loss of the vessel, will not be set aside unless clearly erroneous. The evidence must be reviewed in the light most favorable to the prevailing party and that party must be given the benefit of all inferences that may reasonably be drawn from the evidence. Sutherland v. Hudson Waterway Corp. (9 Cir. 1972) 468 F.2d 628.

The Findings of Fact Were Not Clearly Erroneous

As to Findings Nos. 16 through 19, without detailing the evidence, we conclude that the findings were not clearly erroneous.

As to the matter of unseaworthiness, considered in Finding No. 20, we have heretofore detailed the events leading to the loss of the vessel.

The testimony of the sole surviving crew member, Golodoff, described these events. There is no indication in the record that the vessel was taking water by reason of rotting planks or teredo holes. After the wheel house and false bridge had been wiped out by a series of mountainous waves, the vessel continued to take seas which eventually resulted in an extreme list during the last two-hour period.

Appellant relies almost solely on the testimony of Captain A. F. Raynaud, who inspected the vessel some three years and ten months before the loss. Appellant cites only a portion of his testimony in her Appendix “B”. That portion shows that Captain Raynaud examined only three or four planks. He noted some infestation in the horn timber and the lowest strake. But various parts of Raynaud’s testimony were ignored by appellant, including his comment that the rot in the keel did not appear to be too extensive; that he did not make any inspection above the main deck; that the keel was essentially sound; that he examined only two or three planks on the starboard side out of the eighteen or twenty-four; that his notes indicated only “scattered bug holes”; that the stem was in good, sound condition and that he had no way of knowing about the major structural members under the deck.

There was other evidence in the record. Some crew members observed defects and others observed none. The same is true as to the witnesses who were not members of the crew. Suffice it to say that although the evidence of the vessel’s condition was in conflict, it was sufficient to justify our conclusion that the trial court’s findings were not clearly erroneous.

II.

The Trial Court Applied the Proper Burden of Proof to the Claimant

By necessary implication, Finding No. 20 placed the burden of proof on the claimant to prove breach of the warranty of seaworthiness, and that unseaworthiness was the proximate cause of the loss of the vessel. The fact that this conclusion of law appears in a finding of fact does not change the situation.

Appellant cites only In re American Dredging Company (3 Cir. 1956) 235 F.2d 618, rev’d on other grounds sub nom. Kernan v. American Dredging Co., 355 U.S. 426, 78 S.Ct. 394, 2 L.Ed.2d 382 (1958). There, in a proceeding for exoneration, the Circuit stated that the district court “made findings of fact and concluded the petitioner [for exoneration] had sustained its burden of establishing that both it [the owner] and the master and crew of the tug were free from negligence and that the tug and tow were not unseaworthy.” 235 F.2d at p. 619. The Circuit cited the district court’s decision, In re American Dredging Co. (E.D.Pa.1956) 141 F.Supp. 582, and held that the findings of fact and legal conclusions were correct. No cases were cited, nor were any cases cited by the district court on the question of burden of proof.

Walston v. Lambertsen (9 Cir. 1965) 349 F.2d 660, 663, cert. denied, 382 U.S. 980, 86 S.Ct. 553, 15 L.Ed.2d 470 (1966), states: “In the admiralty proceeding in which a shipowner seeks to exonerate himself from liability or to limit his liability, the burden of proving negligence or unseaworthiness rests upon the claimant.” We could well stop at this point and rest upon the above holding except for the fact that the two cases cited in support of the statement are not exoneration or limitation of liability cases.

Appellees quoted the following from Gilmore & Black, The Law of Admiralty, 705, n. 106 (1957):

“While the shipowner must prove his freedom from privity or knowledge, the burden of proof as to negligence or other ground on which liability is based is of course on the libellants. See 3 Benedict, Admiralty § 489 (6th ed. 1940); Robinson, Admiralty 942 (1939).
* * * * * *
There is indeed language in the opinions to justify the commentator’s statement. It is believed that the rule should be as in the limitation cases: burden on the libellant to show negligence or fault; burden on the owner to show his (personal) freedom from ‘design or neglect.’ ”

Benedict states that the burden is on the libellant [claimant] to prove negligence or other ground on which liability is based. 3 Benedict, The Law of American Admiralty, § 524, pp. 557-58, and § 526, p. 560.

1 Edelman, Maritime Injury and Death 619 (1960) flatly states: “(1) the claimant has the burden of proving negligence or unseaworthiness; (2) then the shipowner must prove the absence of privity or knowledge.” (Footnotes omitted.)

One of the cases Edelman cites for the statement is The 84-H (2 Cir. 1923) 296 F. 427, 431, cert. den. sub nom. Randolph v. Bouker Contr. Co., 264 U.S. 596, 44 S.Ct. 454, 68 L.Ed. 867 (1924), which states:

“The whole doctrine of limitations of liability presupposes that a liability exists which is to be limited. If no liability exists there is nothing to limit. And in a proceeding to limit liability two duties are imposed upon the court. The first is to ascertain whether any liability exists. If it is found to exist the second duty arises, which is to ascertain whether the loss or damage was occasioned or incurred without the ‘privity or knowledge’ of the owner of the ship. If no liability is found to exist, the absence of all liability is to be decreed, and there the matter ends. If, on the other hand, liability is found and loss or damage is shown, and was not occasioned or incurred with ‘privity or knowledge’ of the shipowner, the limitation of liability should be decreed. See the decision of this court in The Rambler, 2 Cir., 290 F. 791, 1923 A.M. C. 618. Upon the issue of negligence, the claimant has the affirmative (The Titanic, 2 Cir., 225 F. 747, 748, 141 C.C.A. 19), and if negligence is found the petitioner has the burden of proof upon the further issue of the petitioner’s privity and knowledge as was held by this court in Re Reichert, 2 Cir., 251 F. 214, 217, 163 C.C.A. 370.”

The 84-H, supra, is a leading case for the proposition that in an exoneration or limitation case the burden is on the claimant to prove negligence or unseaworthiness. It has been followed in numerous cases: Binstock v. Friedman (2 Cir. 1964) 330 F.2d 267, 268; Southern Pacific Co. v. United States (2 Cir. 1934) 72 F.2d 212, 215; In re Pennsylvania R. Co. (2 Cir. 1931) 48 F.2d 559, 563, cert. den. sub nom. Long-Beach-on-the-Ocean v. Pennsylvania R. Co., 284 U. S. 640, 52 S.Ct. 21, 76 L.Ed. 544 (1931); In re Trawler Snoopy, Inc. (S.D.Me. 1967) 268 F.Supp. 951, 953; In re Marina Mercante Nicaraguense S.A. (S.D.N.Y.1965) 248 F.Supp. 15, 19, modif., 364 F.2d 118 (2 Cir. 1966), cert. den., 385 U.S. 1005, 87 S.Ct. 710, 17 L.Ed.2d 544 (1967); The Suduffco (S.D.N.Y.1929) 33 F.2d 775, 776. See Commercial Molasses Corp. v. New York Tank Barge Corp., 314 U.S. 104, 108, 110, 62 S.Ct. 156, 86 L.Ed. 89 (1941).

There is presented here no issue as to the proper order of proof. The appellant, as claimant, had the benefit of the implied warranty of seaworthiness. But she still had the ultimate burden of proof, after the conclusion of the testimony, to show a breach of that warranty or that unseaworthiness of the vessel was the proximate cause of the loss of the vessel. This she failed to do.

We conclude that the trial court applied the proper burden of proof.

III.

Other Contentions

We have held not to be clearly erroneous Finding No. 20, to the effect that the claimant had not sustained her burden of proof (1) that there was a breach of the implied warranty of unseaworthiness, and (2) that unseaworthiness of the vessel was a proximate cause of the death of Captain Grabowski. We have held that the court properly placed the burden of proof on the claimant.

Accordingly, appellant’s other contentions below, though interesting, have no merit:

(1) The statement in Finding No. 9, that the charter to Captain Grabowski included an agreement to hold the petitioner harmless against any claim arising out of his operation of the vessel.

(2) Finding No. 15, that Captain Grabowski did not at any time rely on any warranty implied in the charter. See Clarke S.S. Co. v. Munson S.S. Line (E.D.N.Y.1932) 59 F.2d 423, 427, aff’d, 64 F.2d 1011 (2 Cir. 1933) (per curiam), holding the charterer may waive the terms of a charter or a breach thereof.

(3) The contention that the trial court erroneously relied on the doctrine of assumption of risk.

(4) The reference in the trial court’s oral decision (but not in his formal findings and conclusions) “. . . that the doctrine of caveat emptor applies with respect to all patent defects but not to latent defects.” [This apparently in connection with the bareboat charter to Captain Grabowski.] See Sanford & Brooks Co. v. Columbia Dredging Co. (4 Cir. 1910) 177 F. 878, 882.

(5) The reliance on Walker v. Harris, (5 Cir. 1964) 335 F.2d 185, cert. den., 379 U.S. 930, 85 S.Ct. 326, 13 L.Ed.2d 342, which we do not find apposite.

The judgment is affirmed.

      . The first case cited, Lieberman v. Matson Navigation Co. (9 Cir. 1962) 300 F.2d 661, was an action under the Jones Act and for unseaworthiness, where the burden of proving negligence or unseaworthiness was properly placed on the seaman. The second case cited, Ramos v. Matson Navigation Co. (9 Cir. 1963) 316 F.2d 128, was an action for damages, based on unseaworthiness, and negligence under the Jones Act, and for maintenance and care, where again the burden of proof was properly placed upon the seaman. Accordingly, we must look elsewhere for authority for the proposition stated in Walston, supra.


source: Caselaw Access Project

author: KENT, Circuit Judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellant, v. Anthony GIACALONE, Defendant-Appellee.
    No. 72-1765.
    United States Court of Appeals, Sixth Circuit.
    Argued Feb. 9, 1973.
    Decided May 2, 1973.
    John T. Spotila, Crim. Div., U. S. Dept. of Justice, Washington, D. C., for plaintiff-appellant; Ralph B. Guy, Jr., U. S. Atty., Laurence Leff, Sp. Atty., Dept. of Justice, Detroit, Mich., Jerome M. Feit, Eugene M. Propper, Dept. of Justice, Washington, D. C., on brief.
    Neil H. Fink, Detroit, Mich., on brief, for defendant-appellee; Joseph Louisell, Detroit, Mich., of counsel.
    Before PECK and KENT, Circuit Judges, and YOUNG, District Judge.

       Honorable Don J. Young, United States District Judge, for the Northern District of Ohio, sitting by designation.

   KENT, Circuit Judge.

This is an appeal by the United States from the District Court’s order dismissing an indictment. The appeal is taken under the provisions of Title 18 U.S.C. § 3731.

The facts are relatively simple. On November 14, 1968, appellee and his brother, Vito Giacalone, were indicted by a Grand Jury sitting in the United States District Court for the Eastern District of Michigan. In that indictment appellee and his brother were charged with extortion in violation of Title 18 U.S.C. § 1951. In addition to the extortion charges appellee’s brother was charged with violation of the Income Tax laws. Appellee was not charged with any income tax law violation in the 1968 Indictment. On motion of the appellee’s brother the income tax charges were severed and there has been no trial on those charges. After a jury trial, and on June 4, 1971, all defendants charged with extortion, including appellee and his brother, were acquitted.

On January 6, 1972, a Grand Jury sitting in the same District returned an Indictment in which appellee and his brother were charged with violation of the Income Tax laws, 26 U.S.C. § 7201; 26 U.S.C. § 7206(1), and conspiracy to defraud the United States by violating the income tax laws in violation of 18 U.S.C. § 371. The charges in the January, 1972 Indictment were alleged to relate to and involve funds received by the appellee and his brother from one of the alleged extortion transactions upon which the 1968 Indictment was based. On appellee’s motion the 1972 Indictment was dismissed by the District Court after the Court concluded that the Government’s delay in presenting the income tax case against the appellee to the Grand Jury was unreasonable and unnecessary under Rule 48(b), Federal Rules of Criminal Procedure, and further on the ground that the delay in presentation of the income tax case had denied appellee due process of law under the Fifth Amendment. The District Court rejected appellee’s claim that he was denied a speedy trial in violation of the Sixth Amendment to the Constitution of the United States, relying upon United States v. Marion, 404 U.S. 307, 92 S.Ct. 455, 30 L.Ed.2d 468 (1971). The District Court, however, found that Rule 48(b) is broader than the Sixth Amendment when applied to the pre-indictment period and concluded that the Government had offered inadequate explanation for what the Court found to have been dilatory tactics.

We are of the opinion that the District Judge misapplied Rule 48(b). Clearly, the application of Rule 48(b) was not an issue in Marion. However, in the Marion decision, 404 U.S. at 312, 92 S.Ct. at 459, Footnote 4, the Court said:

“In any event, it is doubtful that Rule 48(b) applies in the circumstances of this case, where the indictment was the first formal act in the criminal prosecution of these appellees.”

and further at page 319, 92 S.Ct. at 463, the Supreme Court had the following to say in regard to Rule 48(b):

“No federal statute of general applicability has been enacted by Congress to enforce the speedy trial provision of the Sixth Amendment, but Rule 48(b) of the Federal Rules of Criminal Procedure, which has the force of law, authorizes dismissal of an indictment, information or complaint ‘[i]f there is unnecessary delay in presenting the charge to a grand jury or in filing an information against a defendant who has been held to answer to the district court, or if there is unnecessary delay in bringing a defendant to trial. . . . ’ The rule clearly is limited to post-arrest situations.” (Emphasis added.) Footnote omitted.

We point out that in this case appellee was not arrested for any violation of the income tax laws or conspiracy to violate such laws until after the Grand Jury had returned an Indictment for those offenses in January, 1972. Thus the appellee had not prior to the Indictment “been held to answer to the District Court.”

This Court has previously held that Rule 48(b) is not applicable until after defendant has been held to answer to the District Court. Hoopengarner v. United States, 270 F.2d 465, 469 (6th Cir. 1959):

“As to Rule 48(b) of the Federal Rules of Criminal Procedure, the District Court is authorized to dismiss the indictment, information, or complaint, providing there has been an unnecessary delay in presenting a charge to a grand jury or in filing an information against a defendant who has been held to answer to the District Court, or if there is unnecessary delay in bringing a defendant to trial. There was no unnecessary delay in the prosecution of defendant after he had been held to answer. As to delay from the time of the commission of the offense to the commencement of the criminal proceedings, that is controlled by the Statute of Limitations, which is not here in question.”

The other Circuits which have considered the issue have reached the same conclusion. United States v. Daley, 454 F.2d 505 (1st Cir. 1972); United States v. Iannelli, 461 F.2d 483 (2nd Cir. 1972), cert. denied, 409 U.S. 980, 93 S.Ct. 310, 34 L.Ed.2d 243 (1972); United States v. Grayson, 416 F.2d 1073 (5th Cir. 1969), cert. denied, 396 U.S. 1059, 90 S.Ct. 754, 24 L.Ed.2d 753 (1970); United States v. DeTienne, 468 F.2d 151 (7th Cir. 1972); Nickens v. United States, 116 U.S.App.D.C. 338, 323 F.2d 808 (1963), cert. denied, 379 U.S. 905, 85 S.Ct. 198, 13 L.Ed.2d 178 (1964); United States v. Dukow, 453 F.2d 1328 (3rd Cir. 1972), cert. denied, 406 U.S. 945, 92 S.Ct. 2042, 32 L.Ed.2d 331 (1972), and Benson v. United States, 402 F.2d 576 (9th Cir. 1968).

We agree with the language of the Seventh Circuit in DeTienne, 468 F.2d 151, 156:

“Similarly appellants fare no better under Rule 48 (b) of the Federal Rules of Criminal Procedure which authorizes dismissal of an indictment for unreasonable delay in presenting a charge to the grand jury because ‘[t]he rule is clearly limited to post-arrest situations.’ United States v. Marion, supra [404 U.S.] at 319, 92 S.Ct. at 463. The pre-indictment delay herein was well within the applicable statute of limitations, which remains the primary yardstick for measuring pre-accusation delays to prevent possible prejudice.”

We do not consider that the circumstances of this case or the alleged facts giving rise to the indictment require consideration of the conclusion reached by the Court of Appeals for the District of Columbia Circuit in Hanrahan v. United States, 121 U.S.App.D.C. 134, 348 F.2d 363 (1967). In Hanrahan the second indictment for fraudulent use of the mail involved the same scheme for which the appellants had been arrested and indicted almost five years earlier. The only variation between the two indictments was the individual mailings. Thus, the cases are readily distinguishable since the present indictment in this case charges an entirely different and separate offense, although based upon some of the same facts.

Having reached the conclusion that Rule 48(b) is not applicable to this case we must then determine whether there was a denial of due process of law within the meaning of the Fifth Amendment because of delay in bringing the case to the grand jury. At the outset we point out that no evidence was offered before the District Court to show any actual prejudice to the appellee’s defense because of the delay, and there has been no allegation of any actual prejudice but only general conclusory statements alleging prejudice but without facts in support of that claim.

In his motion before the District Court appellee made the following allegation:

“5. That because of the government’s unreasonable delay in presenting its case to the Grand Jury the defendant has been prejudiced by being unable during the intervening time to prepare a defense.” App. p. 21.

and in this Court the only statement as to prejudice resulting from the delay was as follows:

“In the instant case appellee Anthony Giacalone urges that the almost four-year delay in presenting the case to the Grand Jury inherently prejudices a defendant in the preparation of his defense and further that the Government delay can be considered nothing other than oppressive.” Plaintiff’s brief, p. 5.

In Marion the Supreme Court recognized the possibility that pre-indictment delay could amount to the denial of due process.

“* * * [I]t is appropriate to note here that the statute of limitations does not fully define the appellees’ rights with respect to the events occurring prior to indictment. Thus, the Government concedes that the Due Process Clause of the Fifth Amendment would require dismissal of the indictment if it were shown at trial that the pre-indictment delay in this case caused substantial prejudice to appellees’ rights to a fair trial and that the delay was an intentional device to gain tactical advantage over the accused. Cf. Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963); Napue v. Illinois, 360 U.S. 264, 79 S.Ct. 1173, 3 L.Ed.2d 1217 (1959). However, we need not, and could not now, determine when and in what circumstances actual prejudice resulting from pre-accusation delays requires the dismissal of the prosecution. Actual prejudice to the defense of a criminal case may result from the shortest and most necessary delay; and no one suggests that every delay-caused detriment to a defendant’s case should abort a criminal prosecution. To accommodate the sound administration of justice to the rights of the defendant to a fair trial will necessarily involve a delicate judgment based on the circumstances of each case.” 404 U.S. at 324-325, 92 S.Ct. at 465-466. (Footnote omitted).

In the instant case the trial judge concluded that the Government’s delay in presentation of the case to the Grand Jury was not justified, but we find no evidence that such delay was for the purpose of harassment or to enable the Government to gain some tactical advantage over the appellee. It does not appear that there was in this case the “prosecutorial gamesmanship” referred to by the Second Circuit in United States v. Iannelli, 461 F.2d 483, 485 n. 2.

Thus, we must accept the general rule that in the absence of a showing of intentional Government delay actual prejudice must be demonstrated in order to establish a violation of the Fifth Amendment. United States v. Capaldo, 402 F.2d 821 (2nd Cir. 1968), cert. denied, 394 U.S. 989, 89 S.Ct. 1476, 22 L.Ed.2d 764 (1969); United States v. Baker, 424 F.2d 968 (4th Cir. 1970); United States v. Golden, 436 F.2d 941 (8th Cir. 1971), cert. denied, 404 U.S. 910, 92 S.Ct. 236, 30 L.Ed.2d 183 (1971).

In United States v. Feinberg, 383 F.2d 60, 67 (2nd Cir. 1967), cert. denied, 389 U.S. 1044, 88 S.Ct. 788, 19 L.Ed.2d 836 (1968), the Court of Appeals for the Second Circuit had before it a case in which there were allegations that the pre-arrest delay was deliberate and thereby became unreasonable and oppressive. In concluding that deliberate delay, absent a showing of actual prejudice, was insufficient to constitute a denial of due process the court said at 383 F.2d at page 67:

“Inasmuch as we have observed that there is an absence of prejudice shown by this record, the remaining issue for our resolution is whether a delay in arrest, however unjustifiable or unnecessary, is sufficient to invalidate a conviction where the defendant has not shown that he was prejudiced by the delay. We hold that it is not, for ‘[T]he Constitution and Rule 48 (b) protect only against unreasonable and unnecessary delay * * *.’ (Emphasis added.) United States v. Simmons, supra [2 Cir.,] 338 F.2d 804, at 806; see Powell v. United States, 122 U.S.App.D.C. 229, 352 F.2d 705, 708 (1965). No case has been found holding a deliberate, unnecessary pre-arrest delay sufficient basis for reversal unless it also became unreasonable and oppressive by reason of prejudice to the accused.
“It would be unwise to impose upon the judiciary the inquisitorial function of scrutinizing the internal operations of law enforcement agencies when no possible prejudice to the accused has been shown. Acceptance of the proposition advanced by appellant would encourage hasty, less efficient investigation and premature deprivations of freedom, curtail the investigation of organized crime, and lodge with enforcement agents the procedural onus of recording in detail every event in the investigative process. In short, fear of forfeiting a prosecution would frequently induce unreasonable speed which 'would have a deleterious effect both upon the rights of the accused and upon the ability of society to protect itself.’ United States v. Ewell 383 U.S. 116, 120, 86 S.Ct. 773, 776, 15 L.Ed.2d 627 (1965).”

On the record before us we conclude that the appellee failed in his effort to show deliberate delay and we conclude further that there is no showing of prejudice because of the delay in the return of the indictment in January, 1972. Under such circumstances the provisions of Rule 48(b) are not applicable, and we find nothing to sustain a claim of a denial of due process within the meaning of the Fifth Amendment.

The judgment of the District Court is reversed and the case is remanded for reinstatement of the indictment.

      . “§ 3731. Appeal by United States.
      In a criminal case an appeal by the United States shall lie to a court of appeals from a decision, judgment, or order of a district court dismissing an indictment or information as to any one or more counts, except that no appeal shall lie where the double jeopardy clause of the United States Constitution prohibits further prosecution,”

      . “Rule 48. Dismissal. * * *.
      (b) By Court. If there is unnecessary delay in presenting the charge to a grand jury or in filing an information against a defendant who has been held to answer to the district court, or if there is unnecessary delay in bringing a defendant to trial, the court may dismiss the indictment, information or complaint.”


author: COFFIN, Chief Judge.

text:
    UNITED STATES of America and United States Postal Service, Appellants, v. INTERNATIONAL TERM PAPERS, INC., et al., Appellees.
    No. 72-1397.
    United States Court of Appeals, First Circuit.
    Heard March 5, 1973.
    Decided May 3, 1973.

      Frederic R. Kellogg, Asst. U. S. Atty., with whom Harlington Wood, Jr., Asst. Atty. Gen., James N. Gabriel, U. S. Atty., Robert E. Kopp, and Anthony J. Steinmeyer, Attys., Department of Justice, were on brief, for appellants.
    Before COFFIN, Chief Judge, ALD-RICH and CAMPBELL, Circuit Judges.
   COFFIN, Chief Judge.

The United States Postal Service seeks to invoke 39 U.S.C. § 3007 and Rule 65, Fed.R.Civ.P. to detain defendants’ incoming mail pending statutory proceedings under 39 U.S.C. § 3005. Defendants-appellees are four “term paper” companies, engaged in selling academic papers to students for submission to universities and other institutions as the work of the students. The question before the district court was whether there is probable cause to believe that appellees are “engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations”. 39 U.S.C. § 3005.

The district court, 351 F.Supp. 76, while recognizing that a companion criminal statute, 18 U.S.C. § 1341, might well embrace appellees’ conduct, held that, since there was no allegation that the mails were used to communicate with the persons intended to be defrauded, § 3005 did not apply and dismissed the complaint.

18 U.S.C. § 1341 makes it a federal offense to use the mails in connection with a scheme to defraud. It is not necessary that the mailing be between the perpetrator and the victim; any mailing in connection with the scheme is enough. Thus the use of the mails to realize on a check previously received from the victim satisfies the statute. Pereira v. United States, 347 U.S. 1, 74 S.Ct. 359, 98 L.Ed. 435 (1954). Of greater present relevancy, the mailing of a false medical certificate to a person who intends to commit fraud by posing as a licensed physician is a covered offense. Alexander v. United States, 95 F.2d 873 (8th Cir.), cert. denied, 305 U. S. 637, 59 S.Ct. 99, 83 L.Ed. 409 (1938).

We do not say that § 1341, more explicitly covering use of the mails in connection with schemes exploiting third party victims of false representations, who themselves may have had nothing to do with use of the mails, compels a similar interpretation of § 3005. But we see no bander, in construing this civil statute dealing with commercial fraud, to give it as broad an interpretation as the language can gracefully bear, particularly in the light of the general “purpose of Congress to utilize its powers, particularly over the mails and in interstate commerce, to protect people against fraud.” Donaldson v. Read Magazine, Inc., 333 U.S. 178, 190, 68 S.Ct. 591, 598, 92 L.Ed. 628 (1948). Cf. United States v. Seuss, 474 F.2d 385, p. 388 (1st Cir. 1973) (slip op. p. 5).

Concededly, all of the injunctive cases which have come to our attention have involved a seller of goods, investment opportunities, or services sending false information about them through the mails to the intended victims. But the technology of merchandising false representations is not confined to selling directly to the consumer. We can see no basis for a policy which would allow a § 3007 injunction against one who mails false advertising to a prospective buyer but would forbid an injunction against one who mails false advertising and fraudulent selling advice to sales representatives for use in calling on prospective buyers. Nor is the language of § 3005 limited to one who falsifies to another and subsequently receives money. Unlike the language in similar statutes aimed at preventing the use of the mails for fraudulent purposes, neither the timing, the source, nor the target of the false representation is here specified. The critical requirement here is that the scheme contemplate the receipt of money through the mail generated by means of false representations. That the student first pays for that which will enable him to make a subsequent false representation to his college does not affect the means-end relationship. That it is not the seller but the buyer who makes the false representation seems equally irrelevant. The reality is that the appellees receive money through the mail by means of assisting students to make false representations to universities.

We are aware of Congress’ intent, in amending this statute in 1968, to eliminate the requirement of proving the sender’s intent to deceive. P.L. 90-590, 82 Stat. 1153, 1968 U.S. Code Cong. & Admin.News, pp. 1327, 4290-4302. Lynch v. Blount, 330 F.Supp. 689, 693 (S.D.N.Y.1971) (three-judge court) aff’d, 404 U.S. 1007, 92 S.Ct. 673, 30 L.Ed.2d 676 (1972). This was sought to be accomplished by substituting “false representations” for “false or fraudulent pretenses, representations, or promises”, 1968 U.S.Code Cong & Admin.News, at p. 4297, while retaining the phrase “engaged in conducting a scheme or device”. In a two-party, sender-receiver situation, the requirement of a “scheme or device” offers no problem of proof; it is simply the intentional mailing-for-money transaction in which a false statement was sent. The Congressional purpose of imposing strict liability for even innocent falsehoods is thus not impeded by the reference to “scheme”. In a three-party situation — not, so far as we can discern, considered during the Congressional deliberations — the phrase “scheme or device” becomes important. Encyclopedia Britanniea could not be enjoined from distributing its sets simply because a student purchaser submits its essay on Jefferson as his own term paper. For the statute to apply to a sender, where a third party is deceived by a recipient, the sender must contemplate a “scheme” which involves a misrepresentation based on the materials which he sends. In such a case, therefore, the intent of the seller, in the sense of his knowing cooperation in a scheme, is, by the words of the statute, a necessary prerequisite for injunctive remedy — a prerequisite obviously present in this case.

Finally, it is clear that the fraudulent transaction need not itself be illegal to permit a postal injunction. Public Clearing House v. Coyne, 194 U.S. 497, 24 S.Ct. 789, 48 L.Ed. 1092 (1904); Durland v. United States, 161 U.S. 306, 16 S.Ct. 508, 40 L.Ed. 709 (1896); Harris v. Rosenberger, 145 F. 449 (8th Cir. 1906) and cases cited therein. Indeed, no such underlying illegality is required for conviction under the criminal mail fraud statute. Pereira v. United States, 347 U.S. 1, 74 S.Ct. 358, 98 L.Ed. 435 (1954). The purpose of both statutes was and is to protect the public against, fraud of all kinds, whether or not already legally condemned.

The judgment is vacated and cause is remanded for further proceedings consistent with this opinion.

      . Nothing we say here is to be construed as deciding what connection between the mailing and the fraudulent scheme is necessary for conviction under the criminal statute. (Compare United States v. Maze, 468 F.2d 529 (6th Cir. 1972), pet. for cert. filed 41 U.S.L.W. 3530 (U.S. Apr. 3, 1973), with United States v. Thomas, 429 F.2d 407 (5th Cir. 1970).

      . In the Investment Advisers Act, Congress made unlawful “by use of the mails directly or indirectly — (1) to employ any device, scheme, or artifice to defraud any client or prospective client.” 15 U.S.C. § 80b-6. [Emphasis added.] In the Federal Trade Commission Act, Congress explicitly limited a prohibition to direct misrepresentations by the sender to the recipient, by making it “unlawful for any person ... to disseminate any false advertisement — (1) by United States mails.” 15 U.S.C. § 52(a).


author: HEANEY, Circuit Judge.

text:
    UNITED STATES of America, Appellee, v. Jake Frank RICHARDSON, Appellant.
    No. 72-1414.
    United States Court of Appeals, Eighth Circuit.
    Submitted March 14, 1973.
    Decided April 20, 1973.

      James R. Wyrsch, Kansas City, Mo., for appellant.
    William A. Kitchen, Asst. U. S. Atty., Kansas City, Mo., for appellee.
    Before VAN OOSTERHOUT, Senior Circuit Judge, HEANEY, Circuit Judge, and VAN SICKLE, District Judge.

       District of North Dakota, sitting by designation.

   HEANEY, Circuit Judge.

The defendant, Jake Frank Richardson, appeals from his conviction of possessing heroin with intent to distribute and distributing heroin, in violation of 21 U.S.C. § 841(a)(1). The defendant urges that he is entitled to a reversal of the conviction on the following grounds:

(1) That 21 U.S.C. § 841(a)(1) is unconstitutional. There is no merit to this contention. See, United States v. Scales, 464 F.2d 371 (6th Cir. 1972). See also, White v. United States, 399 F.2d 813 (8th Cir. 1968).

(2) That the trial court erred in: (a) neglecting to admonish the jurors at each recess with respect to their obligation not to discuss the case with others, and not to read published accounts of the trial; (b) not requiring the defendant’s presence during the conference on instructions; and (e) not requiring the defendant’s presence during the conference on the qualifications of prospective jurors and while the defendant’s trial attorney was making strikes. The defendant has not pointed to any specific instances of juror misconduct, and has not shown that he was prejudiced by his absence from the conferences. Under such circumstances, we find no merit to his contentions. Peterson v. United States, 411 F.2d 1074 (8th Cir.), cert. denied, 396 U.S. 920, 90 S.Ct. 247, 24 L.Ed.2d 199 (1969). Moreover, the record does not reflect that either the defendant or his attorney requested that the defendant be present at the conferences, nor were any objections to his absence made below.

(3) That the indictment was multiplicious and prejudiced the defendant before the jury as it charged both distribution and possession with intent to distribute. There is no merit to this contention as the evidence needed to prove possession with intent to distribute is different from that required to prove actual distribution. See, United States v. Funk, 412 F.2d 452 (8th Cir. 1969); Cardarella v. United States, 375 F.2d 222 (8th Cir.), cert. denied, 389 U.S. 882, 88 S.Ct. 129, 19 L.Ed.2d 176 (1967).

(4) That it was error to permit an informant to testify that the defendant had distributed heroin to the informant on occasions prior to the transactions for which the defendant was tried below and, alternatively, that it was error to admit this testimony without giving an instruction limiting the use of such evidence. We disagree. This evidence was properly admissible to show that the defendant had the requisite criminal intent and guilty knowledge. See, e. g., Dranow v. United States, 307 F.2d 545, 566 (8th Cir. 1962).

(5) That he was deprived of a fair trial because the prosecutor referred to, and had witness identify, his co-defendant who was present in the courtroom during the trial. There is no indication that this in any way prejudiced the defendant, and this contention is without merit.

(6) That there was insufficient evidence to sustain the conviction. We find no merits to this contention. The evidence was more than sufficient to sustain a conviction.

(7) That the trial court erred by permitting a federal narcotic’s agent to testify with respect to conversations between the agent and Frank Richardson, who was initially a co-defendant, because these conversations took place outside the presence of the defendant. Alternatively, he contends that it was error to admit this testimony without an instruction limiting its use by the jury.

We are persuaded that the narcotics agent’s testimony was properly admissible under the long-standing rule that a statement is not hearsay if it is a statement made during the course of and in furtherance of a conspiracy by the co-conspirator of a defendant. See, e. g., United States v. Schroeder, 433 F.2d 846 (8th Cir. 1970), cert. denied, 401 U.S. 943, 91 S.Ct. 951, 28 L.Ed.2d 224 (1971) and sub nom. Allen v. United States, 400 U.S. 1024, 91 S.Ct. 590, 27 L.Ed.2d 636 (1971). See also, Federal Rules of Evidence, Rule 801(d)(2)(E). This rule has been held to apply even in the absence of a conspiracy charge so long as there is independent evidence of concert of action. See, United States v. Sanders, 463 F.2d 1086 (8th Cir. 1972); United States v. Reed, 446 F.2d 1226 (8th Cir. 1971); United States v. Williams, 435 F.2d 642 (9th Cir. 1970), cert. denied, 401 U.S. 995, 91 S.Ct. 1241, 28 L.Ed.2d 533 (1971). Contra, United States v. Harrell, 436 F.2d 606 (5th Cir. 1970). Moreover, application of the rule has not been confined to those who are co-defendants at the same trial. United States v. Williams, supra, 435 F.2d at 645. See also, United States v. Sanders, supra.

There is testimony in the record, other than that which is argued to be inadmissible, which indicates that the defendant and the declarant, Frank Richardson, were acting in concert with respect to relevant transactions. It is also clear that the declarant’s statements —arranging for the January 3, 1973, heroin sale — served to further the joint venture of the two brothers. Accordingly, the court did not err by admitting the agent’s testimony.

We also reject the defendant’s alternative argument that the court erred by not giving a limiting instruction to the jury on this evidence. The defendant did not request such an instruction below, and he did not object when none was given. Thus, we are governed by the plain error rule on this issue. That rule is “to be sparingly applied and is to be invoked only to prevent a plain miscarriage of justice.” United States v. Reed, supra, 446 F.2d at 1230. No such miscarriage of justice has occurred here.

Affirmed.

      . Jake Frank Richardson and Frank Richardson are brothers. They were charged in the same indictment and initially were to be tried in a common trial. A joint motion of the Richardsons, requesting a severance of their trials, was denied by the trial court. However, because Frank Richardson later changed his attorney, it was necessary to postpone his trial to a later date.


author: DYER, Circuit Judge:

text:
    H. C. COLVIN, O. M. Prigmore, et al., Plaintiffs-Appellants, v. DEMPSEY-TEGELER & CO., INC., et al., Defendants-Appellees.
    No. 72-2243.
    United States Court of Appeals, Fifth Circuit.
    April 20, 1973.
    Rehearing and Rehearing En Banc Denied June 12, 1973.

      Sam Rosen, Kleber C. Miller, Fort Worth, Tex., for plaintiffs-appellants.
    Dean Shuman, Lubbock, Tex., for Bass.
    Allen Butler, Barefoot Sanders, William L. Keller, Dallas, Tex., for Dempsey-Tegler and Harold Levitt.
    Before GEWIN, GOLDBERG and DYER, Circuit Judges.
   DYER, Circuit Judge:

Between December 19, 1968, and April 16, 1969, the eight plaintiffs purchased a total of 7,900 shares of Erie Technological Products, Inc. stock through the Lubbock, Texas, office of Dempsey-Tegeler & Company, Inc., a broker-dealer in securities. The market price of this stock subsequently dropped substantially and most of the 7,900 shares were sold at a considerable loss. The plaintiffs thereafter brought this suit against Dempsey-Tegeler and three of its employees, claiming that the misrepresentation of certain material facts and the omission of others had caused the purchase of the stock, which in turn resulted in plaintiffs’ damages.

After a trial before a jury and after receiving its answers to a complicated series of fact questions, the district court entered judgment for the defendants. Pursuing on appeal only two of their original four substantive theories, plaintiffs contend that the answers to the questions propounded to the jury dictate a finding of liability under section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. § 78j(b) and Rule 10b-5, 17 C.F.R. § 240.10b-5, and under the Texas Securities Act, article 581-33, subd. A(2), V.A.T.S. In the alternative they argue that the jury’s answers are irreconcilable and thus require a new trial in full or in part. Because we are of the opinion that the jury’s answers with respect to each of the plaintiffs are totally irreconcilable, we reverse and remand for a new trial.

The fact that this judgment was entered upon the jury’s answers to a series of questions from the court under Fed.R.Civ.P. 49(a) imposes special obligations on us as an appellate court. These requirements were recently discussed by this court in Griffin v. Matherne, 5 Cir. 1973, 471 F.2d 911.

The Seventh Amendment requires that if there is a view of the case which makes the jury’s answers consistent, the court must adopt that view and enter judgment accordingly. Atlantic & Gulf Stevedores v. Ellerman Lines, 369 U.S. 355, 364, 82 S.Ct. 780, 786, 7 L.Ed.2d 798, 806-807 (1962). This court has stated that the test to be applied in reconciling apparent conflicts between the jury’s answers is whether the answers may fairly be said to represent a logical and probable decision on the relevant issues as submitted, even though the form of the issue or alternative selective answers prescribed by the judge may have been the likely cause of the difficulty and largely produced the apparent conflict. R. B. Company v. Aetna Insurance Company, 299 F.2d 753, 760 (5th Cir. 1962). If on review of the district court’s judgment we find that there is no view of the case which makes the jury’s answers consistent and that the inconsistency is such that the special verdict will support neither the judgment entered below nor any other judgment, then the judgment must be reversed and the cause remanded for trial anew. Missouri Pacific Ry. Co. v. Salazar, 254 F.2d 847, 849 (5th Cir. 1958); Wright v. Kroeger Corporation, 422 F.2d 176, 178-179 (5th Cir. 1970).

471 F.2d at 915. Because none of the jury’s answers in this case specifically mentioned either of the securities acts now in question, it is incumbent upon us to consider separately how the questions as a whole relate to each act.

I. Securities Exchange Act

Rule 10b-5 of the Securities and Exchange Commission, promulgated under section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. § 78j(b), establishes, indirectly, private liability for certain proscribed acts done “in connection with the purchase or sale of any security.” If the other stated conditions are satisfied, the Rule makes it unlawful:

(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. . .

The plaintiffs initially sought recovery under each facet of each clause in the Rule, but on appeal are claiming only under clauses (b) and (c).

A. Misrepresentations

The first possible avenue of recovery under clause (b) of Rule 10b-5 is based upon misrepresentations of material facts. Questions to the jury numbers 1, 2, and 3 and their subparts are addressed to this point, with each question referring to a different individual defendant. Question 3 identifies the problem in this area.

The answers to 3(a) show that defendant Levitt made material misrepresentations in connection with each plaintiff’s purchase, the responses to 3(b) establish that these misrepresentations caused each plaintiff to purchase shares of Erie Technological, and the answers to 3(d) show that these misrepresentations were made by Levitt with knowledge of their falsity or from a lack of due diligence. The irreconcilable feature of the jury’s answers, however, stems from the wording of and answers to Questions 3(c), 20, and 6A. Question 3(c) asks:

Do you find from a preponderance of the evidence that, in the light of the facts and circumstances existing at the time of the misrepresentations, that in the exercise of due care, Plaintiffs would have been entitled to rely upon the misrepresentations ?
Answer: (“Yes” as to each plaintiff).

The apparent inconsistency arises when, in response to the following question, the jury stated that none of the plaintiffs was entitled to any recovery.

Question No. 20
From a preponderance of the evidence state in dollars and cents the amount of damages, if any, incurred by each Plaintiff, as a result of such Plaintiff’s purchase of the Erie stock in question.
In answering this Question No. 20 you will include in the amount of damages only those losses on the shares of Erie Technological Product, Inc. stock which were purchased by each Plaintiff because of the misrepresentations, omissions, negligence or fraudulent scheme of the Defendants and none other.

Defendants try to reconcile these answers in two ways. First, they argue that Question 20 asks the jury to determine causation, and they conclude that a $0 answer is a finding that plaintiffs suffered no damages as a result of defendants’ alleged wrongdoing. However reasonable this interpretation might be when Question 20 is read separately, it fails to recognize that the answers to 3 (b) establish a causal relationship between the misrepresentations and the purchases, which would normally be enough to satisfy this aspect of a 10b-5 suit.

Secondly, they argue that 3(c) does not ask the jury to consider all of the factors that influenced the plaintiffs’ decision to purchase, but instead they suggest that the question, worded conditionally and in the subjunctive, instructs the jury to assume due care and to ignore such factors as the plaintiffs’ expertise, their sophistication in the industry, their knowledge of the stock market, and their ability to investigate the misrepresentations. As such, the defendants argue that the jury was entitled to rely upon its answers to Question 6A — which state that each plaintiff failed to exercise due care in the purchase of the stocks in question and that such failure was a proximate cause of any damages ■ — in finding $0 damages in Question 20. We disagree.

Although the defendants’ argument is one possible reconstruction of the jury’s thought processes used in answering the questions asked it, it is a possibility which we are not at liberty to consider. Question 3(c) and 3(d) were derived from Clement A. Evans & Co. v. McAlpine, 5 Cir. 1970, 434 F.2d 100, 103, cert. denied, 1971, 402 U.S. 988, 91 S.Ct. 1660, 29 L.Ed.2d 153 (relying on City National Bank v. Vanderboom, 8 Cir. 1970, 422 F.2d 221, 230, cert. denied, 399 U.S. 905, 90 S.Ct. 2196, 26 L.Ed.2d 560), both of which eases explained the proper meaning to be given these questions.

In McAlpine this court quoted with approval a commentator who argued that a bare showing that a plaintiff relied would not be sufficient for him to recover in the absence of a showing that the reliance was reasonable; an investor with “ ‘business sophistication,’ acumen, or ready access to the information involved” might then be denied recovery because he could reasonably be held to a higher standard of care and investigation. The court went bn, however, to say that step one of its test (Question 3(c) here) properly reflects these considerations and does not ignore them, as the defendants here suggest. 434 F.2d at 103-104. Consequently, the only interpretation we can give the answers to 3(c) is that, even if the plaintiffs had exercised due care (in light of all the circumstances and considering all of their sophistication in the stock market), the jury still felt the plaintiffs would have been entitled to rely on the misrepresentations. When interpreted in this light, the fact the jury found in Question 6A that the plaintiffs’ failure to exercise due care proximately caused any damages that occurred, becomes hopelessly inconsistent with 3(c). The plaintiffs’ negligence could not have been a proximate cause of any purchase if, in the absence of any such negligence, the plaintiffs would still have been entitled to make the same purchases.

An additional inconsistency becomes apparent by realizing that, in the context of these interrogatories, Questions 3(a)-(d) establish a prima facie case of liability, but that, without any valid defense being found, the jury returned a verdict of $0 damages. Defendant has attempted to reconcile this conflict by citing a series of cases which stand for the proposition that a general verdict for the plaintiff in the amount of $0 does not require a new trial. Wingerter v. Maryland Casualty Co., 5 Cir. 1963, 313 F.2d 754; see Fairmount Glass Works v. Cub Fork Coal Co., 1933, 287 U.S. 474, 53 S.Ct. 252, 77 L.Ed. 439; Joseph v. Rowlen, 7 Cir. 1970, 425 F.2d 1010; Association of Western Railways v. Riss & Co., 1962, 112 U.S.App.D.C. 49, 299 F.2d 133, cert. denied, 370 U.S. 916, 82 S.Ct. 1555, 8 L.Ed.2d 498. See also Spears v. Hough, 8 Cir. 1972, 458 F.2d 529, cert. denied, 409 U.S. 878, 93 S.Ct. 130, 34 L.Ed.2d 131.

Although we recognize the validity of this rule of law, it cannot be applied in this case. The judgment in each of the cases cited was returned in the form of a general verdict, whereas the case below involved the answers to a complicated series of specific questions asked in accordance with Fed.R.Civ.P. 49(a). One purpose of this latter procedure is to dispel a portion of the inscrutability inherent in broad general verdicts. Here, the jury's answers clearly demonstrate a misunderstanding of the precise meaning of the questions asked them and provide no basis for a $0 damages answer if the answer to 3(c) is correct. In this posture, a new trial is required.

B. Omissions

Our decision with respect to the second avenue of recovery under clause (b) of Rule 10b-5 — omissions of material facts — exactly tracks the above discussion about misrepresentations. Questions 4, 5, and 6 and their subparts were addressed to this point, and Question 6 fully identifies the problem here.

The answers to 6(a) show that, with respect to each plaintiff’s purchases, defendant Levitt failed to disclose certain material facts which should have been stated to prevent other information from being misleading, and the responses to 6(c) establish that these failures to disclose occurred with knowledge of the omitted information or from a lack of due diligence. The difficulty, however, arises from the answers to 6(b). The question read :

Question No. 6
* *
(b) Do you find from a preponderance of the evidence that such Plaintiffs, in light of the facts existing at the time of the non-disclosure which you have found in Question (a) above, and in the exercise of due care, would have been caused not to purchase the shares of Erie Technological Products, Inc., if the disclosures had been made rather than withheld ?

The jury’s answer was “Yes” as to each plaintiff.

Because the thrust of this language also was taken from McAlpine, 434 F.2d at 103, the meaning of it is subject to the same interpretation as was the misrepresentation question discussed supra. Consequently, the answers to Question 6 •generate the same irreconcilable conflict with Questions 6A and 20 as the answers to Question 3(c), and require a new trial.

C. Act, Practice, or Course of Business

Questions 10, 11, and 12 asked the jury to decide whether any of the three defendants had violated clause (c) of Rule 10b-5, which essentially proscribes any act, practice, or course of business that operates as a fraud. The responses establish that each defendant engaged in such conduct in connection with each plaintiff’s purchases of stock and that this conduct caused each plaintiff to purchase shares of Erie Technological.

The answers to these questions, which differ from Questions 1-6 in that they were not lifted from the McAlpine opinion, create inconsistencies similar to those surrounding the answers to the questions concerning misrepresentations and omissions. On their face Questions 10-12 are not literally consistent with Questions 6A and 20, contributory negligence not being a defense per se to a 10b-5 action. Nevertheless, several specific activities that would constitute common-law contributory negligence could also be defenses to a private 10b-5 action for damages. See generally McAlpine, supra. Thus, we choose not to rely on such potential inconsistency, but instead look at the basis for the finding that an illegal act, practice, or course of business was involved.

An examination of the pleadings and proof in the court below convinces us that the only foundation for finding such acts, etc. to have existed is the proof relevant to the alleged misrepresentations and omissions. As such, it is inconceivable that that proof and the jury’s answers relevant thereto, could take on any character other than the fatally defective inconsistency which we have concluded surrounds Questions 3 and 6. The confusion which resulted from the technical wording of Questions 1-6 and from the inappropriate inclusion, without limiting instructions, of 6A has rendered the jury’s answers on this aspect of the case wholly unreliable and irreconcilable, requiring a new trial.

II. Texas Securities Act

Article 581-33, V.A.T.S., provides in pertinent part:

A. Any person who
* * * * * *
(2) Offers or sells a security (whether or not the security or transaction is exempt under Section 5 or 6 of this Act) by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made not misleading (when the person buying the security does not know of the untruth or omission, and who in the exercise of reasonable care could not have known of the untruth or omission) is liable to the person buying the security from him. .

The plaintiffs claim, as they did under Rule 10b-5, that they are entitled to a judgment under the Texas Act based on the jury’s answers to the questions concerning misrepresentations and omissions. Even a cursory review of the questions to the jury and its answers, however, demonstrates' an almost identical irreconcilability.

Of the twenty-five questions, and their subparts, asked the jury, only the first six directly apply to misrepresentations and omissions. These were the questions whose language was drawn from the McAlpine opinion. Despite the fact that the questions had their source in a 10b-5 case and were drafted with that rule in mind, the jury was not asked to differentiate between the two theories of recovery and its answers to Questions 1-6 must be said to have the same meaning under the Texas Securities Act as they did under Rule 10b-5. Therefore, the jury concluded that each individual defendant made misrepresentations which caused purchases of stock, and decided that, even in the exercise of due care, the plaintiffs would have been entitled to rely on the misrepresentations. Additionally, the jury found that certain material facts, not disclosed by defendant Levitt, if disclosed, would have caused the plaintiffs not to purchase the shares if they had exercised due care.

If the remaining questions and answers were ignored, the answers to the misrepresentation and omission questions would establish a prima facie case under the Texas Securities Act, at least as against the individual defendant who acted knowingly or negligently. The existence of such a prima facie case raises the spectre of irreconcilability when compared with the jury’s answer of $0 damages in Question 20.

Defendants again seek to explain the difference by noting the jury’s answers to Question 6A, which state that each plaintiff failed to exercise due diligence in the purchases of his stock. This explanation is rooted in the Texas Act itself which precludes recovery if it is shown that the plaintiffs knew or reasonably could have known of the untruth or omission. Although Question 6A is not phrased in the words of the Act, it would be reasonable for us to infer that, because of the testimony offered at the trial, the jury concluded that the plaintiffs were negligent because they knew or could have known of the untruths or omissions.

Instead of resolving the conflict, however, this inference, necessary for the defendants to prevail, merely intensifies it. On the one hand the jury has said that the plaintiffs, even if careful, would have been entitled to rely on the misrepresentations and omissions, and on the other hand they might have been saying that the plaintiffs were negligent (in not finding out the truth) and that this negligence caused any damages which resulted. Regardless of whether the Texas Act has eliminated the requirement of a plaintiff’s reliance on a misrepresentation or omission, we think it beyond the limits of human credibility to suggest that this jury considered it reasonable for the plaintiffs to rely on misrepresented or omitted facts which were material, but nevertheless concluded that the failure to discover the true facts caused the damages which resulted from the reliance previously considered reasonable.

With no perceptible way to reconcile these answers we conclude that a new trial on the Texas Act is required.

III. Miscellaneous Errors

Plaintiffs assert that the submission of Question 25 — which inquires whether the defendants acted in good faith and with no intent to defraud— was erroneous. It seems fairly clear that, while perhaps not reversible error per se, the instruction has no place in this Rule 10b-5 case. See McAlpine, supra; SEC v. Texas Gulf Sulphur Co., 2 Cir. 1968, 401 F.2d 833, 862, cert. denied, 1969, 394 U.S. 976, 89 S.Ct. 1454, 22 L.Ed.2d 756; Kohler v. Kohler Co., 7 Cir. 1963, 319 F.2d 634, 637. Here the jury had already been specifically asked, in Questions 1-6, whether each defendant had acted knowingly or negligently.

Under the Texas Act, Question 25 read alone could have some relevance to the punitive or exemplary damages allowed in article 581-33, subd. A(2). However, because that Act allows such damages only if a defendant acts willfully and because Questions 21-23 asked whether each defendant acted willfully, Question 25 was at best redundant. As a result, if, on remand, the jury is questioned properly about the defendants acting knowingly, with lack of due diligence, or willfully, a further inquiry into good faith or intent to defraud would be improper.

Defendants also have raised two points, but they merit only brief attention. First, they argue that the district court should have asked the jury to consider whether the plaintiffs are barred from recovery because they were in pari delicto. Secondly, they contend that, as a matter of law, the district court did not have any personal jurisdiction over one of the defendants with respect to the Texas Act. Whatever the merits of these positions may be they are not properly before this court. Defendants filed no notice of cross-appeal as they are allowed to do under Fed.R.App.P. 4(a), and, in the absence of such an appeal, they will not be heard to question the district court’s judgment in this court. See United States ex rel. Goetz Construction Inc. v. Yorfino, 5 Cir. 1969, 412 F.2d 329.

IV. Scope of Remand

Because the inconsistencies in the jury’s answers described above require a new trial, we must determine the scope of the new trial. In one of their alternative prayers for relief, plaintiffs request that any new trial be on the issue of damages alone. In support of this position they argue that certain interrogatories clearly establish prima facie cases against certain defendants under one or both acts. Although this may be true when the questions are viewed separately, as we have indicated several times, we are not at liberty to so fragmentize the jury’s answers. We can no more be sure that the answers to Questions 3, 6, 10, 11, or 12 are the true expressions of the jury’s intent than we could be sure that the answers to Questions 6A and 20 express their final decision. In fact the complex wording and technical meaning of Questions 3(e) and 6(b) make it unlikely that the jury fully comprehended their meaning.

Consequently, unable to reconcile the jury’s answers and without authority under these facts to accept some answers and totally ignore others, we reverse and remand for a new trial on liability and damages.

Reversed and remanded.

      . The misrepresentations and omissions alleged in the complaint concerned a proposed tender offer by International Systerns Corporation (ISC) to purchase the outstanding Erie Technological stock at a price well above the prevailing per share market price. This information, which was not otherwise fully disclosed to the investing public, was alleged to have come to the individual defendants from the president of ISC.

      . The plaintiffs had also sought relief under section 12(2) of the Securities Act of 1933, 15 U.S.C.A. § 77l(2), and under the Texas common law of negligence. No error is raised with respect to the judgment on either of these theories and we need not consider them further,

      . See Hooper v. Mountain States Securities Corp., 5 Cir. 1960, 282 F.2d 195, cert. denied, 1961, 365 U.S. 814, 81 S.Ct. 695, 5 L.Ed.2d 693; Reed v. Riddle Airlines, 5 Cir. 1959, 266 F.2d 314.

      . The jury found that none of the defendants had “employed any device, scheme or artifice to defraud.” The correctness of this finding is not questioned on appeal.

      . Question No. 3
      (a) Do you find from a preponderance of the evidence that in connection with the purchase by any of the Plaintiffs of the shares of the stock of Erie Technological Products, Inc. the Defendant Harold E. Levitt made any untrue statement or misrepresentation of a material fact?
      Answer: (“Yes” as to each plaintiff)..
      (b) Do you find from a preponderance of the evidence that such untrue statement or misrepresentation made by Defendant Harold E. Levitt in answer to Question 3(a) above, caused any of the Plaintiffs to purchase shares of Erie Technological Products, Inc.?
      Answer: (“Yes” as to each plaintiff) .
      (d) Do you find from a preponderance of the evidence that the misrepresentations made were made by the Defendant Harold E. Levitt with knowledge on his part that same contained misrepresentations or untrue material facts or from a lack of due diligence in connection with the sale of the Erie stock to the Plaintiffs?
      Answer: (“Yes” as to each plaintiff) .
      It should be noted that the responses to Questions 1 and 2 establish that defendants Cornelius and Bass each made material misrepresentations which caused the plaintiffs to purchase Erie Technological stock, but also show that the jury concluded that neither of these defendants made the misrepresentations negligently or knowingly.

      . The confusion which has resulted from the answers to the questions asked the jury in the case is largely attributable to two factors. First, the instructions on misrepresentations and omissions, taken straight from the legal tests adopted in McAlpine and not from the jury instruction upheld in that case, were probably less than perfectly clear to the average juror and, without some explanation, should not have been given in that form. Secondly, this confusion was magnified by letting the jury consider all the questions together even though some of them liad only limited applicability. For example, the question on plaintiffs’ contributory negligence (correct under the common law negligence claim and at least arguably relevant to the Texas Securities Act claim, see infra) was juxtaposed with the McAlpine questions on 10b-5, with respect to which it is totally irrelevant as the questions are presently worded and as they were answered.

      . Although the exact damages suffered were not directly stipulated to, the value of the shares on the date of purchase and on the date of sale (or on the date of trial for the shares still held) was conceded and, in the absence of some reduced loss or shared blame for a portion of the loss, this stipulation would have precluded a $0 damages verdict if liability had been established.

      . Questions 6(a), (b), and (c) concerned possible omissions made by one defendant. This is totally separate from and should not be confused with Question 6A, which concerned any contributory negligence of the plaintiffs.

      . Question No. 6
      (a) Do you find from a preponderance of the evidence that in connection with the purchase by any of the Plaintiffs of shares of the stock of Erie Technological Products, Inc. the Defendant Harold E. Levitt failed to state or reveal one or more material facts which would be necessary in order to prevent the statements which were made from being misleading, in light of the circumstances under which they were made?
      Answer: (“Yes” as to each plaintiff) .
      (c) Do you find from a preponderance of the evidence that the failure to disclose by the Defendant Harold E. Levitt was done with his knowledge of the existence of certain material facts which he withheld or from a lack of due diligence on his part?
      Answer: (“Yes” as to each plaintiff).
      Questions 4 and 5 asked the jury to decide whether either Cornelius or Bass failed to disclose any material information. It answered “No” as to each of these individual defendants and the correctness of these findings is not questioned on appeal.

      . Question No. 10 is typical of these three questions.
      (a) Do you find from a preponderance of the evidence that in connection with the purchase by Plaintiffs of shares of Erie Technological Products, Inc., the Defendant Tommie Lee Cornelius engaged in any act, practice or course of business which operated as a fraud or deceit upon any of the Plaintiffs.
      Answer: (“Yes” ns to each plaintiff).
      (b) Do you find from a preponderance of the evidence that such act, practice or course of business which operated as a fraud or deceit caused any such Plaintiff to purchase shares of Erie Technological Products, Inc.?
      Answer: (“Yes” as to each plaintiff).

        . Although we do not decide the question, it is possible that under the Texas Act, the plaintiffs have established a prima facie case concerning misrepresentations against the other two individual defendants as well, despite the jury’s finding that they did not act knowingly or negligently. Compare Article 581-33 (A) (2), V.A.T.S., with Uniform Securities Act § 410(a) (2). See also 2 A. Bromberg, Securities Law: Fraud § 8.4(210) (1971); Bordwine, Civil Remedies Under the Texas Securities Laws, 8 Houst.L.Rev. 657, 674 (1971).

      . By indicating that the jury could have reasonably concluded that the plaintiffs knew or could have known, we are not expressing our view that the burden of showing the nonexistence of this knowledge is on the plaintiff nor are we saying that the burden of proving plaintiff’s knowledge as an affirmative defense is on the defendant. Compare 2 A. Bromberg, supra note 11 at § 8.4(220) and Comm, on Seo. & Inv. Banking of the Section on Corp., Banking and Business Law of the State Bar of Texas, Comment — 1963 Amendment 1B Vernon’s Texas Civ.Stat. 69 (1964) with Bordwine, supra note 11 at 661, 674. The resolution of that dispute will have to await another day.