author: CELEBREZZE, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Eugene Howard EDWARDS, Defendant-Appellant.
    No. 72-1219.
    United States Court of Appeals, Sixth Circuit.
    Argued Nov. 30, 1972.
    Decided March 8, 1973.

      Byron E. Trapp, Asst. U. S. Atty., Cincinnati, Ohio, for defendant-appellant; William W. Milligan, U. S. Atty., Cincinnati, Ohio, on brief.
    Thomas R. Smith, Court appointed, Cincinnati, Ohio, for plaintiff-appellee.
    Before CELEBREZZE, MeCREE and LIVELY, Circuit Judges.
   CELEBREZZE, Circuit Judge.

Appellant appeals from his conviction in a jury trial of attempted breaking and entry of a United States Post Office in violation of 18 U.S.C. § 2115. On May 21, 1970, at about 10:50 p. m. Patrolman Ashley of the Lebanon, Ohio Police Department was on duty in his cruiser and received a radio transmission advising him that a suspicious tan Plymouth with out-of-town license plates was parked on South Sycamore Street near the Post Office Building, that three men were seen leaving the vehicle and that two persons had been seen at a meat locker at the intersection of South Street and South Sycamore Street. Ashley examined the Plymouth, found it empty, checked the meat locker and found nothing amiss there.

Patrolman Ashley then drove northward on South Sycamore Street to Main Street, east on Main Street to the alley that runs in a north-south direction behind the Lebanon Post Office and turned south down the alley. Upon reaching the intersection of the alley and the Post Office driveway, Ashley then turned into the driveway. He went in back of the building, checked the windows there and along the side of the building.

Upon reaching the west sidewalk of Broadway, he looked to his left and observed two men, one of whom was the Appellant Edwards, on the west sidewalk of Broadway at a point approximately even with the extension of the north line of the Post Office building. At the time Ashley first observed them Edwards and his companion had their backs to him and were walking in a northerly direction on the West sidewalk of Broadway. They walked in a normal manner without looking over their shoulders or turning around to the intersection of Broadway and Main Street where they crossed Main Street to the northwest corner of the intersection and then turned west on the north sidewalk of Main Street.

When Edwards had reached and crossed the alley that intersects Main Street, Ashley received a radio transmission advising him that the burglar alarm system at the Post Office had been activated. He immediately overtook and apprehended Edwards and his companion, placed the two men in his cruiser and returned to the Post Office. Shortly thereafter Ashley took Edwards to the Lebanon Police Station where he was placed in a cell. Patrolman Ashley testified that approximately three minutes elapsed from the time he first observed Edwards on the sidewalk to the time that he received the radio transmission advising him that the Post Office burglar alarm had been activated.

On the same evening an investigation by Ashley and several other members of the Lebanon Police Department, including Captain James Toller, who took paint samples from the window sill and the wire mesh screen, revealed that an attempt had been made to gain entrance through a window located on the north side of the building. On the following morning the Lebanon Police Department purchased new clothing for Edwards and took from him the clothing he was wearing at the time of his arrest.

Subsequent microscopic comparison of paint chips obtained from Edwards’ clothing with chips from the vicinity of the damaged Post Office window made by the Ohio Bureau of Criminal Identification and Investigation revealed significant similarities. The paint samples were also examined microscopically and by means of a process known as neutron activation analysis at the Post Office laboratory in Washington, D. C., which indicated that such samples came or originated from the same source.

A motion to suppress the paint chips found in Edwards’ clothing was filed and, following an evidentiary hearing, was overruled.

The alarm system at the Lebanon Post Office was triggered by sound and is silent in that nothing occurs at the Post Office to indicate that the alarm has been activated. By means of a wireless transmitter an alarm bell is sounded in the home of a nearby resident.

Two issues are raised on this appeal. First, Appellant contends that Patrolman Ashley did not have probable cause to arrest him and that his arrest was therefore unlawful. Second, Appellant contends that the seizure and search of his clothing was unlawful because it was made after he had been in custody for ten hours. We reverse the determination of the District Court that the seizure of the clothing was lawful.

We first examine the question concerning the validity of the arrest. Whether an arrest is constitutionally valid depends upon “whether, at the moment the arrest was made, the officers had probable cause to make it — whether at that moment the facts and circumstances within their knowledge and of which they had reasonably trustworthy information were sufficient to warrant a prudent man in believing that the petitioner had committed or was committing an offense.” Beck v. Ohio, 379 U.S. 89, 91, 85 S.Ct. 223, 225, 13 L.Ed.2d 142 (1964); Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 (1925).

The problem posed, by this case, as it was in Brinegar v. United States, 338 U.S. 160, 69 S.Ct. 1302, 93 L.Ed. 1879 (1949), is determining where the line is to be drawn between mere suspicion and probable cause. The Supreme Court in Brinegar, supra, said “[t]hat line necessarily must be drawn by an act of judgment formed in the light of the particular situation and with account of all the circumstances.” 338 U.S. at 176, 69 S.Ct. at 1311. We think that under the facts of this case, there was probable cause to arrest the Appellant. He and his companion were seen directly in front of the Post Office three minutes before the message came that the alarm had gone off. They were the only persons observed by the officer in that vicinity and it was late on a Sunday night when few people were on the street. Patrolman Ashley testified that it appeared as though the two men had j'ust turned out of the drive leading to the Post Office. We hold that probable cause for the arrest existed at the time Appellant was apprehended.

It next must be determined whether the removal and testing of Appellant’s clothing for paint chips without a warrant was lawful.

We start with the premise that, absent some exception, a search or seizure cannot lawfully be made without the prior issuance of a warrant. The Supreme Court in Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971), reiterated this premise:

Thus the most basic constitutional rule in this area is that “searches conducted outside the judicial process, without prior approval by judge or magistrate, are per se unreasonable under the Fourth Amendment — subject only to a few specifically established and well-delineated exceptions.” The exceptions, are “jealously and carefully drawn,” and there must be “a showing by those who seek exemption . . . that the exigencies of the situation made that course imperative.” “[T]he burden is on those seeking the exemption to show the need for it.” In times of unrest, whether caused by crime or racial conflict or fear of internal subversion, this basic law and the values that it represents may appear unrealistic or “extravagant” to some. But the values were those of the authors of our fundamental constitutional concepts. In times not altogether unlike our own they won — by legal and constitutional means in England, and by revolution on this continent — a right of personal security against arbitrary intrusions by official power. If times have changed, reducing everyman’s scope to do as he pleases in an urban and industrial world, the changes have made the values served by the Fourth Amendment more, not less, important. 403 U.S. at 454-455, 91 S.Ct. at 2032.

The two basic exceptions to the rule are those searches and seizures made incident to a lawful arrest and those made during the existence of exigent circumstances.

We begin with an examination of the “search incident” exception. It is contended by the Government that Appellant’s clothing was seized incident to his arrest.

A search conducted incident to a lawful arrest must be limited to a carefully defined area, Chimel v. California, 395 U.S. 752, 762-763, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969), and must be substantially contemporaneous with and confined to the immediate vicinity of the arrest. Stoner v. California, 376 U.S. 483, 486, 84 S.Ct. 889, 11 L.Ed.2d 856 (1964); Coolidge v. New Hampshire, supra, 403 U.S. at 456, 91 S.Ct. 2022. In Chimel v. California, supra, the Supreme Court substantially restricted the “search incident” exception to the warrant requirement. The Court defined the proper extent of a search incident to an arrest:

“A similar analysis underlies the ‘search incident to arrest’ principle, and marks its proper extent. When an arrest is made, it is reasonable for the arresting officer to search the person arrested in order to remove any weapons that the latter might seek to use in order to resist arrest or effect his escape. Otherwise, the officer’s safety might well be endangered, and the arrest itself frustrated. In addition, it is entirely reasonable for the arresting officer to search for and seize any evidence on the arrestee’s person in order to prevent its concealment or destruction. And the area into which an arrestee might reach in order to grab a weapon or evidentiary items must, of course, be governed by a like rule. A gun on a table or in a drawer in front of one who is arrested can be as dangerous to the arresting officer as one concealed in the clothing of the person arrested. There is ample justification, therefore, for a search of the arrestee’s person and the area ‘within his immediate control’— construing that phrase to mean the area from within which he might gain possession of a weapon or destructible evidence.” 395 U.S. at 762, 763, 89 S.Ct. at 2040.

The Court reviewed the test of reasonableness as approved in United States v. Rabinowitz, 339 U.S. 56, 70 S.Ct. 430, 94 L.Ed. 653 (1950), and Harris v. United States, 331 U.S. 145, 67 S.Ct. 1098, 91 L.Ed. 1399 (1947), and determined that a reasonableness test cannot be substituted for the Fourth Amendment:

“Thus, although ‘[t]he recurring questions of the reasonableness of searches’ depends upon ‘the facts and circumstances — the total atmosphere of the case,’ [citation omitted], those facts and circumstances must be viewed in the light of established Fourth Amendment principles.” 395 U.S. at 765, 89 S.Ct. at 2041.

The concern of the Court in Chimel was that the reasonableness test had permitted searches beyond the arrested person himself and the area within his immediate control. Even under the Chimel rationale, however, “a search of the person of an arrestee and of the area under his immediate control could be carried out without a warrant. [The Court] did not indicate there that the police must obtain a warrant if they anticipate that they will find specific evidence during the course of the search.” Coolidge v. New Hampshire, 403 U.S. 443, 482, 91 S.Ct. 2022, 2046, 29 L.Ed.2d 564 (1971). In the present case the search did not extend beyond the person of the Appellant. The clothing seized and searched certainly was within his immediate control and probable cause existed to believe that paint chips would be found on the clothing. The Supreme Court has rejected the distinction between mere evidence and instrumentalities, fruits of crime or contraband found during a lawful search, as long as there is a nexus “between the item to be seized and criminal behavior. Thus in the case of ‘mere evidence,’ probable cause must be examined in terms of cause to believe that the evidence sought will aid in a particular apprehension or conviction.” Warden v. Hayden, 387 U.S. 294, 307, 87 S.Ct. 1642, 1650, 18 L.Ed.2d 782 (1967). In this case, there was cause for such a belief. Appellant’s clothing could, therefore, properly have been the subject of a search incident to a lawful arrest. because it was within the limited area defined in Chimel v. California, supra.

The question remains, however, as to whether the seizure was substantially contemporaneous with and confined to the immediate vicinity of the arrest. The removal of Appellant’s clothing did not occur until some ten hours after his arrest. In Preston v. United States, 376 U.S. 364, 84 S.Ct. 881, 11 L.Ed.2d 777 (1964), the Supreme Court said:

“Once an accused is under arrest and in custody, than a search made at another place, without a warrant, is simply not incident to the arrest.” 376 U.S. at 367, 84 S.Ct. at 883.

While Preston involved the search of an automobile, the same rule is applicable to the search of an individual. “The overriding function of the Fourth Amendment is to protect personal privacy and dignity against unwarranted intrusion by the State.” Schmerber v. California, 384 U.S. 757, 767, 86 S.Ct. 1826, 1834, 16 L.Ed.2d 908 (1966). Some Courts have distinguished Preston and rendered contrary decisions. In United States v. Caruso, 358 F.2d 184 (2d Cir. 1966), the Court found that the removal and search of the Appellant’s clothing at the police station some six hours after his arrest did not violate his Fourth Amendment rights. Also see Miller v. Eklund, 364 F.2d 976 (9th Cir. 1966). And in United States v. Williams, 416 F.2d 4 (5th Cir. 1969), the Court upheld a seizure of clothing made several hours after the arrest for the purpose of laboratory testing, because the seizure was “an integral part of, and therefore incident to, the process of arrest.” 416 F.2d at 8. See United States v. Gonzalez-Perez, 426 F.2d 1283, 1287 (5th Cir. 1970). We do not agree with this approach. The exception to the warrant requirement is that the search be incident to the arrest. We do not find that a seizure of clothing made long after the events of the arrest have ended can be an integral part of the arrest. While circumstances might render it possible that

“[a] search of an arrestee is still incident to an arrest when it is conducted shortly thereafter at the jail or place of detention rather than at the time and place of arrest,” United States v. Gonzalez-Perez, supra, 426 F.2d at 1287,

a search cannot be incident to an arrest after the administrative process and the mechanics of the arrest have come to a halt and the prisoner is in jail. At this point, the justifications for the “search incident” exception no longer exist. It is well to recall these justifications as stated in Preston v. United States, supra, and reiterated in Chimel v. California, supra:

“The rule allowing contemporaneous searches is justified, for example, by the need to seize weapons and other things which might be used to assault an officer or effect an escape, as well as by the need to prevent the destruction of evidence of the crime — things which might easily happen where the weapon or evidence is on the accused’s person or under his immediate control. But these justifications are absent where a search is remote in time or place from the arrest.” 395 U.S. at 764, 89 S.Ct. at 2040.

The Supreme Court in Coolidge v. New Hampshire, supra, again recognized that the search incident exception is based on these justifications:

“The Court [in Chimel] applied the basic rule that the ‘search incident to arrest’ is an exception to the warrant requirement and that its scope must therefore be strictly defined in terms of the justifying ‘exigent circumstances.’ The exigency in question arises from the dangers of harm to the arresting officer and of destruction of evidence within the reach of the arrestee.” 403 U.S. at 478, 91 S.Ct. at 2044.

Nor can the seizure be deemed a matter of reasonable police practice pursuant to a lawful arrest. In Coolidge the Supreme Court rejected such a theory:

The rule that “searches conducted outside the judicial process, without prior approval by judge or magistrate, are per se unreasonable under the Fourth Amendment — subject only to a few specifically established and well-delineated exceptions,” is not so frail that its continuing vitality depends on the fate of a supposed doctrine of warrantless arrest. The warrant requirement has been a valued part of our constitutional law for decades, and it has determined the result in scores and scores of eases in courts all over this country. It is not an inconvenience to be somehow “weighed” against the claims of police efficiency. It is, or should be, an important working part of our machinery of government, operating as a matter of course to cheek the “well-intentioned but mistakenly over-zealous executive officers” who are a part of any system of law enforcement. If it is to be a true guide to constitutional police action, rather than just a pious phrase, then “[t]he exceptions cannot be enthroned into the rule.” United States v. Rab-inowitz, supra, . . . (Frankfurter, J., dissenting). The confinement of the exceptions to their appropriate scope was the function of Chimel v. California, 403 U.S. at 481, 91 S.Ct. at 2046.

In determining whether a search or seizure falls within one of the established exceptions to the warrant requirement, the burden is on the party claiming the exception to show that the circumstances permit an exception to the rule. This is not an arbitrary requirement. The Supreme Court has continually emphasized the importance of the constitutional requirement:

“We are not dealing with formalities. The presence of a search warrant serves a high function. Absent some grave emergency, the Fourth Amendment has interposed a magistrate between the citizen and the police. This was done not to shield criminals nor to make the home a safe haven for illegal activities. It was done so that an objective mind might weigh the need to invade that privacy in order to enforce the law. The right of privacy was deemed too precious to entrust to the discretion of those whose job is the detection of crime and the arrest of criminals. . And so the Constitution requires a magistrate to pass on the desires of the police before they violate the privacy of the home. We cannot be true to that constitutional requirement and excuse the absence of a search warrant without a showing by those who seek exemption from the constitutional mandate that the exigencies of the situation made that course imperative.” Chimel v. California, 395 U.S. qt 761, 89 S.Ct. at 2039, 23 L.Ed.2d 685 quoting from McDonald v. United States, 335 U.S. 451, 455-456, 69 S.Ct. 191, 93 L.Ed. 153 (1948).

To find that the seizure of Appellant’s clothing was made incident to his arrest would require us to engage in the fiction that time was frozen for a period of ten hours or until the police could obtain substitute clothing. We hold that such a fiction is not permitted under the limited scope of the search incident exception. As the Supreme Court said in Coolidge, quoting from Boyd v. United States, 116 U.S. 616, 635, 6 S.Ct. 524, 29 L.Ed. 746 (1886):

“It may be that it is the obnoxious thing in its mildest and least repulsive form; but illegitimate and unconstitutional practices get their first footing in that way, namely, by silent approaches and slight deviations from legal modes of procedure. This can only be obviated by adhering to the rule that constitutional provisions for the security of person and property should be liberally construed. A close and literal construction deprives them of half their efficacy, and leads to gradual depreciation of the right, as if it consisted more in sound than in substance. It is the duty of courts to be watchful for the constitutional rights of the citizen, and against any stealthy encroachments thereon.” 403 U.S. at 454, 91 S.Ct. at 2031.

We determine that the seizure of Appellant’s clothing was not conducted incident to his arrest.

It has been suggested that the warrantless seizure of Appellant’s clothing was permitted because of the existence of some exigent circumstances. We are unable to determine, however, what those circumstances might be. The burden, of course, lies with Appellee to show the existence of exigent circumstances. “We cannot be true to [the] constitutional requirement and excuse the absence of a search warrant without a showing by those who seek exemption from the constitutional mandate that the exigencies of the situation made that course imperative.” McDonald v. United States, 335 U.S. 451, 456, 69 S.Ct. 191, 193, 93 L.Ed. 153 (1948); Coolidge v. New Hampshire, supra, 403 U.S. at 455, 91 S.Ct. 2022, 29 L.Ed.2d 564.

Appellant had been in custody for ten hours when his clothing was seized. He presented no danger to the police during this period. After substitute clothing had been purchased, it was not imperative that the clothing be seized without a warrant. Any additional time that would have been needed to obtain a warrant would have been very small in comparison with the period of time Appellant had already been in the jail. Nor is it likely that any additional time would even have been required, in view of the fact that ten hours had elapsed.

“[T]he police must, whenever practicable, obtain judicial approval of searches and seizures through the warrant procedure, . . . and [t]he scope of [a] search must be ‘strictly tied to and justified by’ the circumstances which rendered its initiation permissible.” Chimel v. California, supra, 395 U.S. at 762, 89 S.Ct. at 2039; Terry v. Ohio, 392 U.S. 1, 20, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968).

We find no exigent circumstances existed which prevented the police from obtaining the necessary warrant.

One final consideration is whether Appellant could be held to have consented to the surrender of his clothing, as was the holding in Clarke v. Neil, 427 F.2d 1322 (6th Cir. 1970). We do not find that Appellant’s status as a prisoner permits the inference that he consented to the removal of his clothing.

In view of the foregoing, we find that the seizure of Appellant’s clothing was not made pursuant to any exception to the rule requiring that a warrant be obtained. We remand to the District Court with instructions to grant Appellant’s motion to suppress the evidence obtained by the unlawful seizure of Appellant’s clothing.

      . Several courts have held that laboratory testing of the clothing of a jailed person without a warrant is permissible. Hancock v. Nelson, 363 F.2d 249 (1st Cir. 1966); Golliher v. United States, 362 F.2d 594 (8th Cir. 1966); Whalem v. United States, 120 U.S.App.D.C. 331, 346 F.2d 812 (en banc 1965); Robinson v. United States, 109 U.S.App.D.C. 22, 283 E.2d 508 (1960), cert. denied 364 U.S. 919, 81 S.Ct. 282, 5 L.Ed.2d 259; United States v. Guido, 251 F.2d 1 (7th Cir. 1958). In these cases the court was not presented with the constitutional problem of the time delay presented here.

      . The Court in Caruso distinguished the holding in Preston:

      “Appellant argues on the basis of Preston v. United States, 376 U.S. 364, 84 S.Ct. 881, 11 L.Ed.2d 777 (1964), that it is the time lapse of about six hours between the moment of arrest and the final taking and holding of his clothes by the F.B.I. which violated his Fourth Amendment Federal Constitutional rights. But this case is distinguishable from Preston because there the question concerned the search of an automobile long after the defendants had been put in jail. Here the clothes were constantly in sight, were taken on the person of the suspect at the time of arrest and were continuously in custody. Ker v. State of California, 374 U.S. 23, 83 S.Ct. 1623, 10 L.Ed.2d 726 (1963); United States v. Barone, 330 F.2d 543, 544 (2d Cir. 1964), cert. denied 377 U.S. 1004, 84 S.Ct. 1940, 12 L.Ed.2d 1053 (1964).
      The appellant’s contention means that the seizure of his clothing could have been made constitutionally only if, immediately on his arrest, he had been stripped to the buff on the public highway. Even though that April 13th may have been a very pleasant spring day, we are of the opinion that the argument is somewhat extreme.” 358 F.2d at 185-186.


source: Caselaw Access Project

author: WILLIAM M. BYRNE, Sr., District Judge:

license: Public Domain

text:
    UNITED STATES of America, Plaintiff and Appellee, v. Margarita JACOBO-GIL, Defendant and Appellant.
    No. 72-2976.
    United States Court of Appeals, Ninth Circuit.
    Feb. 13, 1973.

      George Benedict, of Herman & Benedict, San Diego, Cal., for defendant-appellant.
    Harry D. Steward, U. S. Atty., Stephen W. Peterson, Stephen G. Nelson, Douglas G. Hendricks, Asst. U. S. Attys., San Diego, Cal., for plaintiff-ap-pellee.
    Before CHAMBERS and TRASK, Circuit Judges, and BYRNE, Sr., District Judge.

         Honorable William M. Byrne, Sr., United States Senior District Judge, Central District of California, sitting by designation.

   WILLIAM M. BYRNE, Sr., District Judge:

Jacobo-Gil appeals from her conviction by jury of one count of conspiring to violate the immigration laws of the United States and five counts of illegally transporting aliens within the United States. The conspiracy count charged a violation of both 18 U.S.C. § 371 and 8 U.S.C. § 1324. Each of the transportation counts charged a separate violation of 8 U.S.C. § 1324(a)(2).

Appellant contends that the evidence produced at her trial was insufficient to support the jury’s verdict of guilty on the conspiracy count.

In determining the merits of this contention, we are required to view the evidence in the manner most favorable to the jury’s verdict and uphold that verdict if substantial evidence exists to support it. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942); United States v. Callahan, 445 F.2d 552, 554 (C.A.9, 1971); Henderson v. United States, 143 F.2d 681, 682 (C.A.9, 1944).

A reading of the transcript of appellant’s trial reveals ample evidence which, if believed, could have formed the basis for the jury’s verdict óf guilty on the conspiracy count. The evidence includes the testimony of five women aliens who were apprehended by border patrol agents while being transported within the United States in a car driven by the appellant; the testimony of a border patrol agent who interviewed the appellant shortly after her arrest; and appellant’s own testimony.

Four of the five women aliens testified at some length about the circumstances leading to their apprehension. Each of them stated that she had arranged to illegally enter this country with a man in Tijuana who charged $300 and promised transportation to Los Angeles. Each of them also described how she had crossed the border with false immigration documents and been driven to an unknown house in San Ysi-dro, California, where the man had told her to wait. Three of the four unequivocally testified that she had been instructed by the man that, in the event that she was arrested while en route to her destination, she was to tell the authorities that she had been picked up “at a gas station.” They further testified that, after waiting a short time at the house with the fifth woman alien, the appellant picked up all five of them and transported them toward Los Angeles until they were apprehended. It is noted that none of the alien women testified that the appellant picked them up at a gas station. Instead, two of the women explicitly testified that the appellant had driven up to the front of the unknown house, stopped her ear, and motioned for them to get in.

One of the border patrol agents who testified stated that, shortly after the arrest of the appellant, she told him that she had picked up the aliens “at a gas station” in San Ysidro after they had approached her and asked for a ride to Los Angeles. In addition, the appellant took the witness stand in her own defense and testified, in part, that she had picked up the aliens “at a gas station” rather than “at a house” and was transporting them to Los Angeles when she approached the immigration check point, and realizing it was in operation, reversed her direction of travel and was apprehended by border patrol agents.

Although there was only circumstantial evidence that the charged conspiracy was formed and the appellant wilfully became a member of it, it is well-established that those elements may be proved by such evidence. E. g., Delli Paoli v. United States, 352 U.S. 232, 236, 77 S.Ct. 294, 1 L.Ed.2d 278 (1957); Blumenthal v. United States, 332 U.S. 539, 557, 68 S.Ct. 248, 92 L.Ed. 154 (1947); Glasser v. United States, supra. In addition, if the jury did in fact base its verdict upon the above-mentioned evidence, it could hardly have failed to find that the appellant’s transporting of the aliens was an overt act in furtherance of the conspiracy. Therefore, after reviewing the evidence in the required manner, we conclude that it was substantial and that the appellant’s contention is without merit.

Appellant further contends that, after the close of the evidence, the trial judge made two statements to the jury which constitute prejudicial error. Since her attorney objected to those statements, they are properly before us on this appeal. The first statement was as follows:

“I suggest to you, ladies and gentlemen, in the consideration of the evidence in the case that the credibility of the witnesses is the most important and most difficult of your tasks, and that the most important single factor in determining the credibility of the witnesses is their interest in the outcome of the case and, of course, no one has the interest in the outcome of the case that the defendant [appellant] has in the case.” [Emphasis supplied.]

Appellant argues that this statement unfairly singled out her credibility for attack by emphasizing that she had more of a “motivating interest” to lie than the other witnesses. Such an argument has been consistently rejected. Reagan v. United States, 157 U.S. 301, 310-311, 15 S.Ct. 610, 39 L.Ed. 709 (1895); United States v. Eskridge, 456 F.2d 1202, 1205-1206 (C.A.9, 1972); Stapleton v. United States, 260 F.2d 415, 420, 17 Alaska 713 (C.A.9, 1958); Papa-dakis v. United States, 208 F.2d 945, 954 (C.A.9, 1953).

The record shows the second statement as follows:

“I suggest further to you that as far as Counts Two through Six [the transportation counts] are concerned, that the evidence coming from the defendant [appellant] herself is sufficient to have her suffer a conviction upon a finding of guilty on those counts even after she admits when she found out that they [the five women aliens] were not lawfully in the United States. Her own testimony is sufficient to cause her conviction on those particular counts.” [Emphasis supplied.]

This statement brings into issue the propriety of the trial judge’s exercise of his power to comment upon the evidence. While the existence of his power to do so is well-established, he must exercise it with caution. Quercia v. United States, 289 U.S. 466, 470-471, 53 S.Ct. 698, 77 L.Ed. 1321 (1933); Billeci v. United States, 87 U.S.App.D.C. 274, 184 F.2d 394, 403 (1950). The trial judge may even, with proper cautionary instructions, include comments as to the sufficiency of the evidence to sustain a verdict of guilty, but when he does so, he faces perils similar to those of a soldier who walks through a mine field. One false step may be fatal.

Here the false step is apparent from a reading of the statute. A separate element of the offense of illegally transporting an alien within the United States is that the accused know or have reasonable grounds to believe that the alien last entered this country less than three years prior to the time that the accused commenced transporting him. 8 U.S.C. § 1324(a)(2). Nowhere in the appellant’s testimony did she state that she had such knowledge. Although the jurors might have easily inferred that the appellant had reasonable grounds to believe so, the trial judge took this factual issue from their consideration by making this statement. United States v. Murdock, 290 U.S. 389, 394, 54 S.Ct. 223, 78 L.Ed. 381 (1933); Lovejoy v. United States, 128 U.S. 171, 173, 9 S.Ct. 57, 32 L.Ed. 389 (1888). The statement inaccurately summarized the appellant’s testimony. Harding v. United States, 335 F.2d 515, 517 (C.A.9, 1964); Chavez v. United States, 275 F.2d 813, 818 (C.A.9, 1960). The error was not cured by the trial judge’s instructions that the jurors were free to disregard his comments upon the evidence if they desired to do so.

By its terms, the statement pertained only to the transportation counts. This had no effect upon the jury’s verdict of guilty on the conspiracy count. Since the sentences which the appellant received on the transportation counts were less than the sentence on the conspiracy count and made to run concurrent with it, neither a new trial nor a rehearing on sentencing are necessary.

Affirmed.


author: LARAMORE, Senior Judge. BRIGHT, Circuit Judge

text:
    EAGLE STAR INSURANCE COMPANY, LTD., Appellant, v. Jo C. DEAL et al., Appellees.
    No. 72-1157.
    United States Court of Appeals, Eighth Circuit.
    Submitted Oct. 17, 1972.
    Decided March 9, 1973.

      Bright, Circuit Judge, filed concurring opinion.

      E. C. Gilbreath, Fort Smith, Ark., for appellant.
    James W. Gallman, Fayetteville, Ark., for appellees.
    Before LARAMORE, United States Court of Claims Senior Judge, and BRIGHT and ROSS, Circuit Judges.
   LARAMORE, Senior Judge.

This case involves an insurance coverage question arising out of an aircraft accident which occurred on March 6, 1971, while Dr. Phil L. Deal was piloting his plane with five passengers aboard. Upon approach for landing at Harrison, . Arkansas, Deal’s plane crashed, killing everyone on board. Eagle Star Insurance Company, Ltd. had issued to Deal an aircraft liability policy which was in full force and effect on his aircraft at the time of the accident. However, Eagle Star brought suit for declaratory judgment asserting that there was no coverage in this case because of the “employee exclusion” clause, under which it contended that the five deceased passengers were employees of Dr. Deal or that they were entitled to workmen’s compensation benefits. Eagle also contended that Deal was making an improper use of the aircraft which, if true, would also void coverage.

In an opinion reported at 337 F.Supp. 1264 (W.D.Ark.1972), the District Court held, contra to Eagle’s contentions, that there was coverage under the policy issued by Eagle Star to Dr. Deal. The court found, as a matter of fact, that the five decedent passengers were employees of Ozark Lab, Inc., not Dr. Deal, and that, in any case, the five decedents were not engaged in the duties of their employment at the time of the accident. Although the court noted that it was without jurisdiction to determine entitlement to workmen’s compensation benefits, the court found, for purposes of the exclusion relied upon by Eagle, that decedent passengers were not entitled to workmen’s compensation benefits. In addition, the lower court held that the exclusion for improper use of the aircraft was not applicable.

Appellant, Eagle Star, asserts that the above factual findings are unsupported by substantial evidence and the holding of the District Court is clearly erroneous. While the evidence in this case is essentially undisputed, appellant contests the inferences and the conclusions of law based thereon. For the reasons set forth herein, we must sustain the appellant’s position.

The uncertainty which exists in this’ ease arises largely from the fact that in October 1968, Dr. Deal organized “Ozark Lab, Inc.,” an Arkansas corporation of which Dr. Deal was president, sole director and sole shareholder. It appears uncontradieted that Deal set up Ozark solely as a means of denuding himself of his employees for pension and profit sharing purposes. That is, he wished to remove his staff from “his employment” as an orthodontist, so that when he later adopted a retirement or deferred compensation plan for himself it would not be necessary for him to make contributions for his qualifying employees. Aside from this purpose, the evidence does not disclose any further independent business purpose for Deal’s organization of Ozark Lab, Inc. As the District Court indicated, Deal went through the various formalities of making Ozark a separate business entity, including maintenance of separate books of accounting and filing of appropriate tax returns. By April 1, 1970, Dr. Deal had transferred all of his former, non-domestic employees to Ozark, and two of his subsequently hired employees were placed directly on the Ozark Lab payroll. At the time of the accident, all five of the decedent passengers were “employed” by Ozark Lab.

Appellant refers to the foregoing motives and various additional evidence as indicating that “Ozark Lab, Inc. amounted to nothing more than a payroll account for Phil L. Deal,” and as a result such entity should be disregarded. The District Court, on the other hand, concluded that Eagle had “not met the burden of proof necessary to pierce the corporate veil,” or otherwise demonstrate that Ozark was invalid. While substantiation of Ozark’s invalidity would serve to illustrate that the deee-dent passengers were de facto employees of Deal’s, the insufficiency of the evidence to “pierce the corporate veil” is not, however, controlling of the issue of whether the decedents were Dr. Deal’s “employees”. For notwithstanding the fact that Ozark may have been a valid corporation with the decedents technically being “employees” of that entity, it is possible that they were also employees of Dr. Deal. This possibility was recently noted in Beaver v. Jacuzzi Brothers, Inc., 454 F.2d 284 (8th Cir. 1972), where this court, in determining whether a person was an employee under Arkansas law, stated:

* * * As a matter of common experience and of present business practices in our economy, it is clear that an employee may be employed by more than one employer even while doing the same work. Biggart v. Texas Eastern Transmission Corp., 235 So.2d 443, 445 (Miss.1970).

Although Beaver and Biggart deal with the employer-employee relationship within the context of workmen’s compensation, we find this general principle to be equally applicable to the determination of employee status within the context of an insurance exclusion, as it is an observation of the economic realities of today’s business world and there is nothing peculiarly esoteric about this fact which would make it indigenous to workmen’s compensation law. Consequently, we cannot agree with the lower court’s suggestion that interpretations of workmen’s compensation laws are not relevant to insurance exclusions. Campbell v. American Farmers Mutual Ins. Co., 238 F.2d 284 (8th Cir. 1956). Although there are differences in the general construction of each (e. g., exceptions and words of limitation in liability policies are to be strictly construed against an insurer, Aetna Casualty & Surety Co. v. Stover, 327 F.2d 288 (8th Cir. 1964), while workmen’s compensation laws must be liberally construed in furtherance of the purpose for which they were enacted, Huffstettler v. Lion Oil Co., 208 F.2d 549 (8th Cir. 1954)), there can be little doubt that the essential elements of employment remain the same regardless of the context. Moreover, a review of cases in both areas discloses their common reliance on the older, more general principles of master-servant, despite the different contexts.

The Arkansas courts have not addressed this question directly, but we do note that in Walker v. Countryside Casualty Company, 239 Ark. 1085, 396 S.W.2d 824 (1965), the Arkansas Supreme Court adopted rather liberal criteria in determining whether a casual employee was, in fact, an “employee” for purposes of an insurance exclusion clause. Utilization of this liberal criteria resulted in finding that the injured party was an employee, which in turn denied him coverage under the liability policy, notwithstanding the general rules of construction in favor of coverage.

In any event, it is clear that undefined terms of an insurance policy, such as “employee,” must be construed in their plain, ordinary and everyday sense and the parameters of the definition should reflect the legal characteristics most frequently attributed to the word. Jefferson Insurance Co. of Pine Bluff, Ark. v. Hirchert, 281 F.2d 396 (8th Cir. 1960); State Farm Mutual Automobile Insurance Co. v. Pennington, 324 F.2d 340 (8th Cir. 1963). Such guidelines suggest that economic reality and substance, rather than legalistic form, should be determinative of the word’s meaning.

In considering the employment relationship, the factors to which the Arkansas courts have most frequently referred include employer’s right to direct and control the employee, the right or power to hire or discharge, employer’s furnishing of tools, duration and time of employment, and fact, manner and basis of payment. Irvan v. Bounds, 205 Ark. 752, 170 S.W.2d 674 (1943); Clemons v. Bearden Lumber Co., 236 Ark. 636, 370 S.W.2d 47 (1963). These factors have usually been applied in distinguishing between an “employee” and an “independent contractor,” but as thé business relations have become more complex, e. g., with sub and sub-sub contractors, and temporary agencies as in Beaver, the element of control has emerged as generally being the most important determinant. Clemons v. Bearden, supra; Brinkley Heavy Hauling Co. v. Youngman, 223 Ark. 74, 264 S.W.2d 409 (1954); Beaver v. Jacuzzi Brothers, supra. Nonetheless, the status of employment is a question of fact to be considered in light of all of the surrounding facts and circumstances. Walker v. Countryside Casualty Co., supra.

A review of the facts in this case against the framework set out above leads us to the inescapable conclusion that the decedent passengers were, in fact, employees of Dr. Deal. Although Dr. Deal went through the necessary formalities to set up Ozark and maintain it as a separate business, the thrust of the evidence is to the effect that there were no substantive changes in his orthodontic practice or in his relationship to the decedent passengers. He continued to exercise control over his staff in the details of their work in assisting him and he continued to exercise his authority to hire and discharge personnel as necessary.

Appellees contend, however, that these circumstances fail to account for the fact that Dr. Deal was also president of Ozark and that it was only natural for him to exercise such control as a result of this position. This assertion would bear more weight if not for two factors. First, Dr. Deal drew no salary from Ozark Lab, Inc. From this we must infer that Dr. Deal did not see his role as president of Ozark and its appurtenant duties to be of sufficient demand on his time to merit remuneration. Instead, he obviously saw his control and authority as being a function of his position as an orthodontist, not as president of Ozark Lab, Inc. Secondly, the services and supplies which Ozark rendered to other dentists constituted only one percent of Ozark’s gross receipts. As a result, it js evident that the primary function and purpose of Ozark Lab and its “employees” was, as always, to service and support Dr. Deal’s orthodontic practice. As a matter of economic reality, the decedents were totally dependent on Dr. Deal’s orthodontic practice and it was on behalf of Dr. Deal as an orthodontist that they rendered their services. Fru-co Construction Co. v. McClelland, 192 F.2d 241 (8th Cir. 1952); Westover v. Stockholders Publishing Co., 237 F.2d 948 (9th Cir. 1956). In this respect, it is pertinent to note that none of Ozark’s lab work was done in Harrison, but rather only the performance of Dr. Deal’s orthodontic services. At the time of the accident the decedents were flying to Harrison with Dr. Deal to assist him in his orthodontic practice; therefore, it is particularly obvious that they were employees acting for and on behalf of Dr. Deal as an orthodontist, rather than Dr. Deal as president of Ozark Lab, Inc., at the time of this accident. The adoption of the variant business structure and the payment of wages through Ozark did not serve to alter the substantive economic realities of the employment relation. The decedent passengers were employees of Dr. Deal in the ordinary sense of the word and the District Court’s holding to the contrary is clearly erroneous.

We are now confronted with the question of whether the decedent employees were “engaged in the duties of (their) employment” at the time of the accident. The District Court stated that such phrasing “requires more than the passive act of accepting transportation afforded gratuitously by the employer,” but we do not find this holding to be a valid reflection of the facts herein or the current status of Arkansas law. While this court has previously noted in Bryan v. Aetna Casualty & Surety Co., 381 F.2d 872 (8th Cir. 1967) that the position of the Arkansas courts on “employer-furnished transportation” is less than certain, we nevertheless held therein that an employee was “injured in the course of such employment” where the employee’s injury occurred while riding on his employer’s bus from the employer’s warehouse to a jobsite. We reached this conclusion notwithstanding the fact that the bus ride was not mandatory, and the employee could have reached the jobsite by other means.

The precedential value of Bryan is not entirely clear, however, inasmuch as it dealt with the type of employee exclusion clause which is couched in terms of “in the course of * * *” or “arising out of and within the scope of employment,” whereas we here deal with “while engaged in the duties of his employment.” Some courts have found this variation in terminology to be a decisive difference, e. g., Passmore M. & R. Co. v. New Amsterdam Casualty Co., 147 F.2d 536 (10th Cir. 1945), suggesting that those clauses using “engaged” draw narrower parameters of exclusion as the word “engaged” connotes action. Travelers’ Indemnity Co. of Hartford v. Smith, 190 Ark. 492, 79 S.W.2d 1008 (1935) is in accord as to engaged denoting action, but Arkansas courts have not commented on the differences, if any, of these two types of employee exclusion clauses.

In Commercial Casualty Ins. Co. v. Cherry, 190 Ark. 422, 79 S.W.2d 270 (1935) the Arkansas Supreme Court held that cotton-pickers were not “engaged in the business of the assured” while riding back from the cotton fields on the owner’s bus to their homes. The court emphasized that the injured had not picked cotton that day due to rain, and as a result had not been engaged in the business of their master. The court implied that the holding might have been different had they engaged in work that day. It is also pertinent to note that (1) the cotton-pickers were not regular employees, but rather a varying group of occasional employees, and (2) the bus ride was within the “going to work and returning home” situation. Because of the considerably different factual setting and the variant form of the exclusion clause, we find Cherry to be of minimal assistance with the issue herein.

In Martin v. Lavender Radio & Supply, Inc., 228 Ark. 85, 305 S.W.2d 845 (1957) the Arkansas Supreme Court considered whether an employee was within the “scope of his employment” while driving his own car from home to work. The uncertainty stemmed from the fact that the employee often stopped on his way to work at the post office to pick up the employer’s mail. The court stated:

* * * ipjjg decisive test must be whether it is the employment or something else that has sent the traveler forth upon the journey or brought exposure to its perils. [Id. at 849.]

In Martin the court interpreted this test as meaning that the employee was not within the “scope of his employment” until he reached the point in his trip to work where he would turn off for the post office, and until that time his principal purpose was only reaching his regular place of employment. Implicit in this interpretation was the fact that reporting to the normal place of employment from one’s home is not within the “scope of employment,” at least when the employee was supplying his own transportation.

To the extent that the above test is applicable here, it is clear that the duties of the decedents’ employment had sent them forth upon the journey which brought exposure to the subsequent tragedy, as they had deviated from their normal place of employment when they embarked on this trip to service Dr. Deal’s patients.

While the foregoing cases set out the framework within which this issue must be considered, the question presented remains one of fact. Specifically, the question devolves to whether flying from Fayetteville to Harrison was a “duty of their employment,” as this was the activity in which they were “engaged” at the time of the accident. From all of the surrounding facts and circumstances we must conclude that the flight was such a duty.

In reaching this conclusion it is important to first recognize, as suggested above, that the trip from Fayetteville to Harrison was not within the “going to work and returning home” situation. This is apparent not only from the fact that Fayetteville was the main office of operations, but is also evidenced by the apparent necessity of having a $34,000 plane to make the trip. Secondly, there can be little doubt that going to Harrison when Dr. Deal requested was as much a duty or obligation of their employment as assisting Dr. Deal in the Fayetteville office. Furthermore, there is various testimony indicating that the employees were considered “on the job” when they reported to the Fayetteville airport at 8:00 a. m., which was also their regular reporting time when they worked at the Fayetteville office. While there is some conflict in testimony as to whether it was mandatory to reach Harrison via Dr. Deal’s airplane, we do not find the mandatoriness of the flight determinative. The employees had to go to Harrison and they had accepted Dr. Deal’s flying them there as a means of fulfilling their duty to be in Harrison. That there may have been alternative means of fulfilling the duty of going to Harrison is immaterial. The fact is that they were engaged in a duty of their employment when they were going to Harrison — be it via Dr. Deal’s airplane or otherwise. Consequently, we must conclude that the employees were “engaged in the duties of (their) employment” when flying to Harrison.

In light of this conclusion, we must further hold that the employee exclusion clause is applicable here to deny coverage, and the lower court’s holding to the contrary is clearly erroneous. Because of our holding as to this first portion of the employee exclusion clause, we find it unnecessary to also consider whether the employees were entitled to workmen’s compensation benefits or whether use of the plane was improper. Judgment is hereby reversed.

BRIGHT, Circuit Judge

(concurring).

Since the facts affirmatively demonstrate that the decedents met death in Dr. Deal’s airplane while enroute to Harrison, Arkansas, for the purpose of assisting Dr. Deal in his practice of orthodontia, these decedents occupied the status of employees of Dr. Deal and as such are excluded from the coverage of the policy here in question. For this reason I concur in the result.

      . “This policy does not apply:
      4. Under Coverages A, B or D to bodily injury, to sickness, disease or death of any employee of the insured while engaged in the duties of his employment or to any obligation for which the insured or any company as his insuror may be held liable under any Workmen’s Compensation Law.”

      . Although not determinative of the issues herein, it is pertinent to note that because of the evidenced intent, Dr. Deal probably could not have adopted a valid pension plan.

      . As noted by the District Court, “[i]t is only when the privilege of transacting business in the corporate form has been illegally abused to the injury of a third person that the corporate entities should be disregarded.” Rounds & Porter Lumber Co. v. Burns, 216 Ark. 288, 225 S.W.2d 1, 2-3 (1949). “Piercing the corporate veil” is most frequently applied in instances where third parties seek to place financial responsibility on those individuals or separate corporate entities who, because of their ownership or control and means of operating the corporation, can be said to be the party responsible for the actions of the corporation to be disregarded. Black & White v. Love, 236 Ark. 529, 367 S.W.2d 427 (1963); Plant v. Cameron Feed Mills, 228 Ark. 607, 309 S.W.2d 312 (1958); Banks v. Jones, 239 Ark. 396, 390 S.W.2d 108 (1965); Henderson v. Rounds & Porter Lumber Co., 99 F.Supp. 376 (D.C.Ark.1951); Green v. Equitable Powder Mfg. Co., 95 F.Supp. 127 (D.C.Ark.1951). Although there is a certain amount of overlap between the considerations pertinent to “piercing the corporate veil” for financial responsibility reasons and those relevant to determining the substantive employer-employee relationship, the factors are not identical and they are weighted differently in light of the distinct purposes to be resolved. Because our purpose herein is a determination of whether the decedents were employees of Dr. Deal, we find it unnecessary to decide whether the evidence was sufficient to “pierce the corporate veil” or otherwise demonstrate Ozark’s invalidity.

      . It might be noted that while liberal constructions of workmen’s compensation laws may have served the employee’s best interests at one time, such situation has changed markedly where encompassment by workmen’s compensation precludes a potentially greater recovery from insurance or tort action. This was the case in both Beaver and Biggart, and, notwithstanding the detrimental ramifications, the courts found the respective parties to be employees.

      . One witness testified that an employee lost her job because she would not fly with Dr. Deal any more, while another witness stated that she thought it did not matter how the employees readied Harrison as long as they did so on time.


author: HUFSTEDLER, Circuit Judge:

text:
    UNITED STATES of America, Appellee, v. Trunnell Levett PRICE, and Arnold Lewis Coffey, Appellants.
    Nos. 71-3038, 71-3039.
    United States Court of Appeals, Ninth Circuit.
    March 5, 1973.
    David W. Williams, District Judge, dissented without opinion.

      William J. Zumwalt (argued), San Diego, Cal., Artie Henderson of Huntington, Byrans, Harper, Henderson, Burney & Newman-Crawford, San Diego, Cal., for appellants.
    Robert H. Filsinger, Asst. U. S. Atty. (argued), James W. Meyers, Asst. U. S. Atty., Harry D. Steward, U. S. Atty., San Diego, Cal., for appellee.

      Before ELY and HUFSTEDLER, Circuit Judges, and WILLIAMS, District Judge.

       Honorable David W. Williams, United States Judge for the Central District of California, sitting by designation.

   OPINION

HUFSTEDLER, Circuit Judge:

Price and Coffey appeal from their convictions for armed robbery of a post office (18 U.S.C. § 2114). Of their many contentions on appeal, only three require discussion: (1) denial of their preindictment motions to compel recor-dation of grand jury proceedings and of their postindictment motions to disclose the content of grand jury transcripts; (2) denial of Coffey’s motion to appear pro se at trial; and (3) error in sentencing them to the “mandatory” term prescribed by 18 U.S.C. § 2114, without revealed consideration of the sentencing alternatives of the youthful offender provisions of 18 U.S.C. §§ 4208(a)(1) and 4209.

I.

After appellants were in custody but before they were indicted, they moved for an order compelling recordation of the anticipated grand jury proceedings. The court observed that recordation was desirable, but it denied the motion on the ground that Rule 6(d) of the Federal Rules of Criminal Procedure did not make transcription mandatory and that the court would not “make the rule” itself. In noting that Rule 6(d) is permissive, the district court followed the language of the Rule and the decisions' of our court interpreting it. In denying the motion, however, the district court abdicated the discretion committed to it to order recordation, despite assurances by this court that it has such discretion and that it is obliged to exercise it. As we said in United States v. Thoresen (9th Cir. 1970) 428 F.2d 654, 666:

“[T]he fact that a particular discovery procedure is ‘permissive’ rather than ‘mandatory’ does not mean that permission may be arbitrarily denied. Where a defendant, anticipating future grand jury proceedings involving himself, gives notice in advance that he will seek a transcript of the proceedings if an indictment is returned and offers to pay the expense of having a reporter in attendance or shows inability to pay, a sound exercise of discretion would ordinarily call for the granting of a motion that a reporter be in attendance.”

We adhere to the principles stated in Thoresen, and we now implement them by holding that the district court must exercise its discretion in passing upon a preindictment motion for recordation of grand jury proceedings and that a district court abuses its discretion in denying the motion of parties situated as were appellants, in absence of a Government showing that it has a legitimate and compelling interest to be served by nonrecordation. The Government cannot meet its burden by resort to the secrecy rubric. Secrecy of grand jury proceedings is not jeopardized by recordation. The making of a record cannot be equated with disclosure of its contents, and disclosure is controlled by other means.

Our holding, in part, is predicated on our recognition in Thoresen that recor-dation of grand jury proceedings should be routine and nonrecordation should be permissible only in exceptional circumstances. It is also based on our awareness that a less strict rule invites defeat of the principles enunciated in Dennis v. United States (1966) 384 U.S. 855, 86 S.Ct. 1840, 16 L.Ed.2d 973.

Dennis held that it was reversible error to deny petitioners’ motion for disclosure of certain portions of a grand jury transcript for which the petitioners had shown a particularized need. The Court reasoned that the broadened discovery available to defendants is “entirely consonant with the growing realization that disclosure, rather than suppression, of relevant materials ordinarily promotes the proper administration of criminal justice.” (384 U.S. at 870, 86 S.Ct. at 1849. See also U. S. Industries, Inc. v. United States District Court (9th Cir. 1965) 345 F.2d 18.)

When Price and Coffey moved for disclosure of portions of the grand jury proceedings, their showing of particularized need may not have been adequate. However, even if their showing had been overwhelming, it would have been futile because the nonexistent is nonproduci-ble, and the Government had arranged that no record be made.

The Government has known at least since Thoresen that a failure to record grand jury proceedings after notice that a defendant wants recordation could jeopardize a prosecution. In Thoresen we declined to dismiss the indictment because the Government had had no prior Circuit warning that its refusal to record could bring its case to grief. The warning was given, and it has been ignored. We are unwilling to go so far as to order dismissal of the indictments of Price and Coffey because we are not convinced that they have adequately demonstrated prejudice. (428 F.2d at 666.) However, we will vacate their sentences and on remand permit them a further opportunity to expand the record by offering additional evidence bearing on the issue.

II.

After the jury had been impaneled and before it was sworn, Coffey moved to dismiss his court appointed counsel and have new counsel appointed, or in the alternative, moved for leave to proceed pro se. There was ample room for an exercise of discretion refusing to substitute new counsel on the eve of the trial. See Good v. United States (9th Cir. 1967) 378 F.2d 934. Denial of Coffey’s motion to proceed pro se, however, is more troublesome.

Federal law guarantees parties the right to conduct their own cases: “In all courts of the United Statés the parties may plead and conduct their own cases personally or by counsel as, by the rules of such courts, respectively, are permitted to manage and conduct cases therein.” 28 U.S.C. § 1654. No recent innovation, this statutory guarantee has existed since the First Congress. Judiciary Act of 1789, § 35, 1 Stat. 73, 92 (1789). See United States v. Plattner (2d Cir. 1964) 330 F.2d 271, 274. Indeed, it is now clear that the right to proceed pro se is not merely statutory, it is a right of constitutional dimension. (Bayless v. United States (9th Cir. 1967) 381 F.2d 67, 71. See also Adams v. United States ex rel. McCann (1942) 317 U.S. 269, 279, 63 S.Ct. 236, 87 L.Ed. 268 (“The right to assistance of counsel and the correlative right to dispense with a lawyer’s help are not legal formalisms. . . . [T]he Constitution does not force a lawyer upon a defendant.”); Arnold v. United States (9th Cir. 1969) 414 F.2d 1056, 1058, cert. denied (1970) 396 U.S. 1021, 90 S.Ct. 593, 24 L.Ed.2d 514 (“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.”); Reynolds v. United States (9th Cir. 1959) 267 F.2d 235; Duke v. United States (9th Cir. 1958) 255 F.2d 721, cert. denied, 357 U.S. 920, 78 S.Ct. 1361, 2 L.Ed.2d 1365. But cf. People v. Sharp (1972) 7 Cal.3d 448, 103 Cal.Rptr. 233, 499 P.2d 489.

Since the right to proceed pro se is bottomed on the Constitution, the defendant need not show prejudice in order to secure reversal of a conviction. (United States v. Pike (9th Cir. 1971) 439 F.2d 695.) Although it is not error for the court to require counsel to be present and prepared to give advice, such counsel may not interfere with the defendant’s presentation of the case and may give advice only upon request. (Bayless v. United States, supra.) The court may not deny a defendant the right to represent himself because he lacks expertise or professional capabilities. When a proper request is made, the only question for the court is whether the defendant has the capacity to decide intelligently and to understand what he is doing, i. e., can the defendant make a valid waiver of his right to counsel? (Hodge v. United States (9th Cir. 1969) 414 F.2d 1040.)

We assume that the right to proceed pro se is not unlimited (e. g., United States v. Private Brands (2d Cir. 1957) 250 F.2d 554, cert. denied, 355 U.S. 957, 78 S.Ct. 542, 2 L.Ed.2d 532; United States v. Bentvena (2d Cir. 1963) 319 F.2d 916), but our circuit has not expressly decided what limitations, aside from timeliness (United States v. Pike, supra, 439 F.2d at 695), should be imposed. We need not delineate the margins of the right in this case because nothing in Coffey’s record suggests a basis for qualifying it.

The Government argues that Coffey’s outburst at the threshold of trial justified denial of his right to proceed pro se. (Cf. Illinois v. Allen (1970) 397 U.S. 337, 90 S.Ct. 1057, 25 L.Ed.2d 353.) The incident occurred when Coffey, who is black, learned that there were no blacks on the jury panel. The court admonished Coffey, and he thereafter behaved in a manner that moved the court to commend him for good conduct. However, we have no occasion to decide whether Coffey’s initial conduct would have warranted a denial of his right to represent himself, because the district court did not purport to place its ruling on that ground. Rather, the court denied the motion because it believed that Coffey did not have the skills adequately to defend himself. We recognize that the court was motivated by its concern for Coffey's welfare. We are also aware that pro se representation is usually inadequate and often unconducive to the orderly administration of a criminal trial. But the law of the circuit forbids denial of the right based on these considerations. (E. g., United States v. Pike, supra, 439 F.2d 695; Bayless v. United States, supra, 381 F.2d 67; Arnold v. United States, supra, 414 F.2d 1056.)

Alternatively, the Government argues that the motion was appropriately denied because it was not timely. Here, again, the denial was not placed on that ground. The motion was made before the jury was sworn. The record contains no hint that the motion was a tactic to secure delay, and there is nothing that suggests that any delay would have attended the granting of the motion. We reject the Government’s contention that Coffey’s motion was untimely as a matter of law.

III.

We turn to the claimed error in sentencing defendants. We cannot determine from the face of the record whether the district court declined to apply young offender treatment or early parole eligibility provisions to defendants because it thought that they would not benefit from it or because it thought that resort to the Federal Youth Corrections Act and section 4208(a)(1) was foreclosed by the mandatory sentencing language of 18 U.S.C. § 2114. In United States v. Beverley (9th Cir. 1969) 416 F.2d 263, we characterized the twenty-five-year sentence prescribed by section 2114 as mandatory, but we did not consider the issue here presented. In Thurman v. United States (9th Cir. 1970) 423 F.2d 988, we upheld the district court in suspending execution of a twenty-five-year sentence of an offender convicted for a violation of 18 U.S.C. § 2114 and in placing him on probation, pursuant to section 4208(a)(2), without specifically addressing ourselves to the mandatory language problem. We now clarify the law of the circuit by holding that the mandatory terminology of section 2114 does not preclude the district court from exercising the discretion committed to it by the Youth Corrections Act or section 4208(a)(1). We are persuaded to this view by the legislative history of sections 4208, 4209, explicated by the reasoning of Judge (now Justice) Blackmun in Jones v. United States (8th Cir. 1969) 419 F.2d 593.

The judgment against Price is vacated and the cause is remanded for further proceedings on the grand jury recordation issue and on sentencing; the judgment against Coffey is reversed and the cause is remanded for further proceedings consistent with the views herein expressed.

District Judge DAVID W. WILLIAMS dissented without opinion.

      . “[A] stenographer or operator of a recording device may be present while the grand jury is in session . . . .”

      . E. g., United States v. Parker (9th Cir. 1970) 428 F.2d 488, cert. denied, 400 U.S. 910, 91 S.Ct. 155, 27 L.Ed.2d 150; Loux v. United States (9th Cir. 1968) 389 E.2d 911, 916, cert. denied, 393 U.S. 867, 89 S.Ct. 151, 21 L.Ed.2d 135.

      . The frequency of instances in which denial of preindictment motions lias been brought to our attention suggests that the district court’s misapprehension of the principle is not uncommon.

      . The Court: “Finally, Mr. Coffey, with respect to your motion to proceed in pro se, the Court has some misgivings about granting that motion for this reason: The Court has no knowledge of your ability or legal background, except what was brought up in the bail review, to properly defend yourself or proceed without an attorney. . . ’ . Mr. Zumwalt is a member of the State Bar of California and a member of the Federal Bar and has been practicing in this Court, as well as other Federal Courts for some period of time. He is a skilled Defense Attorney; at least I feel so and I am sure that all other Judges in the Court feel so.
      “The Court at this time, without a further showing, I think, is disposed to deny your motion. I think Mr. Zumwalt can adequately handle your case, and I think that if I am wrong in my decision you will have your opportunity before the Circuit Court to test the decision that I have made thus far.”

      . 18 U.S.C. § 4208(a)(1) provides:
      “(a) Upon entering a judgment of conviction, the court having jurisdiction to impose a sentence, when in its opinion the ends of justice and best interests of the public require that the defendant be sentenced to imprisonment for a term exceeding one year, may (1) designate in the sentence of imprisonment imposed a minimum term at the expiration of which the prisoner shall become eligible for parole, which term may be less than, but shall not be more than one-third of the maximum sentence imposed by the court, or (2) the court may fix the maximum sentence of imprisonment to be served in which event the court may specify that the prisoner may become eligible for parole at such time as the board of parole may determine.”
      18 U.S.C. § 4209 provides:
      “In the case of a defendant who has attained his twenty-second birthday but has not attained his twenty-sixth birthday at the time of conviction, if, after taking into consideration the previous record of the defendant as to delinquency or criminal experience, his social background, capabilities, mental and physical health, and such other factors as may be considered pertinent, the court finds that there is reasonable grounds to believe that the defendant will benefit from the treatment provided under the Federal Youth Corrections Act (18 U.S.C. Chap. 402) sentence may be imposed pursuant to the provisions of such act.”

      . “Whoever assaults any person having lawful charge, control, or custody of any mail matter or of any money or other property of the United States, with intent to rob, steal, or purloin such mail matter, money, or other property of the United States, or robs any such person of mail matter, or of any money, or other property of the United States, shall, for the first offense, be imprisoned not more than ten years ; and if in effecting or attempting to effect such robbery he wounds the person having custody of such mail, money, or other property of the United States, or puts his life in jeopardy by the use of a dangerous weapon, or for a subsequent offense, shall be imprisoned twenty-five years.”


author: LEWIS R. MORGAN, Circuit Judge:

text:
    Annie Jean HABECKER, Plaintiff-Appellant, v. Earl W. YOUNG, as Administrator of the Estate of Elizabeth T. Poppell, Deceased, Defendant-Appellee, Herman Tedder and Bartow Tedder, Intervenors.
    No. 72-2241.
    United States Court of Appeals, Fifth Circuit.
    March 27, 1973.
    Marion R. Shephard, Jacksonville, Fla., for plaintiff-appellant.
    W. Dexter Douglass, Tallahassee, Fla., Byron Butler, Perry, Fla., for Young.
    John H. Cotten, Tallahassee, Fla., John Weed, Perry, Fla., for Tedders.
    Before JOHN R. BROWN, Chief Judge, and THORNBERRY and MORGAN, Circuit Judges.
   LEWIS R. MORGAN, Circuit Judge:

Appellant Annie Jean Habecker, plaintiff below, brought suit in the District Court for the Northern District of Florida seeking specific performance of a contract to adopt. The defendant is the administrator of the alleged foster mother’s estate. The intervenors are brothers of the alleged foster mother and are her heirs at law. The district court entered summary judgment for the defendant. We reverse and remand for a trial on the merits.

I

We have determined that summary judgment in this case came too quickly and that more evidence is necessary to avoid possible injustice to any concerned party. The justification for this action is an equitable one, grounded on the theory that what should have been done will be done.

The basic facts are set forth by the pleadings and affidavits in the record. Appellant Habecker alleges' that she was the beneficiary of a contract to adopt entered between her natural father, James Freeman, and Andrew and Elizabeth Poppell. Elizabeth Poppell died intestate in 1970. This action is basically a contest over the property of the deceased Elizabeth Poppell pitting the alleged “adopted” daughter against the brothers of the deceased who would take under the Florida intestacy statute. The cause of action is often referred to as “virtual adoption” or “equitable adoption” and has been recognized in Florida for several years. Sheffield v. Barry, 153 Fla. 144, 14 So.2d 417 (1943) and Roberts v. Caughell, 65 So.2d 547 (1953). The facts in the record tend to show that the appellant was raised as a daughter by Andrew and Elizabeth and was recognized as such in the community. Virtually all of her youth was spent in the care of Andrew and Elizabeth until she married and left their home. James Freeman, natural father of appellant, is alive and allegedly was to testify as to the events surrounding the transfer of custody of the child in the mid 1930s. In the record before this court it is not clear exactly what this testimony would have precisely been. The opinion of the district court speaks of the representation of counsel that Freeman would testify to an arrangement concerning the child but that the word “adopt” was never used between the parties. This was apparently a significant point to the district judge in granting summary judgment.

We are of the opinion that the full testimony of Freeman is desirable and that it is extremely important to view the entire transaction or understanding between the parties in order to ascertain what the true arrangement was. We are not convinced that a sufficient agreement could not be shown even though the word “adopt” was never used.

We find no Florida ease where the state court has passed on the necessity for the word “adoption” to be used by the parties in forming the “contract” later enforced by a court of equity. Other states have held that the failure to use the term “adopt” when assuming responsibility over the child is not fatal to imposition of the equitable doctrine. See Holloway v. Jones, 246 S.W. 587 (Mo.1922); Taylor v. Coberly, 327 Mo. 940, 38 S.W.2d 1055 (1931); Toler v. Goodin, 200 Ga. 527, 37 S.E.2d 609 (1946). In light of Forida’s acceptance of the broad equitable notion of virtual adoption, we do not feel that the state courts would decide the issue solely on the technical ground that the word “adopt” was not used by the parties. Other language, evaluated with due regard for the parties involved and surrounding circumstances, could be sufficient to establish the necessary contract. Furthermore, in our consideration of the case it has appeared that there is some conflict as to exactly what the representations of counsel which the district court took note of were. They are not in the record and the parties seem to dispute the exact content of any such statements. To avoid injustice and to allow for adequate review, we feel that a full and complete record of all relevant testimony is desirable.

There are other reasons why we think that summary judgment was improper in this case. Virtual adoption is an established doctrine usually invoked to avoid an unfair result from the application of intestacy statutes. Its underlying theories are drawn from the realm of contract law and the relevant elements include some showing of an agreement between the natural and adoptive parents, performance by the natural parents of the child in giving up custody, performance by the child by living in the home of the adoptive parents, partial performance by the foster parents in taking the child into the home and treating her as their child, and, finally, the intestacy of the foster parent. Sheffield v. Barry, supra. Much of each of these elements may have to be established by circumstantial evidence for often all parties but the child are deceased. For that reason, in virtual adoption cases it is essential to have as full a record as possible containing as much relevant evidence as possible. In this case the record is somewhat confused and disputed. Therefore, it appears to the court that a full evidentiary hearing would be helpful in establishing the true facts and the relationship between all the relevant parties.

II

It is difficult to discern from the district court’s order exactly what, if any, issues of law were felt to be controlling in this matter. As noted, we feel that under the record in this case it was premature to say that no agreement between the natural father and the foster parents had been shown. The facts stated in the district court’s order and the issues of law argued by the parties in their briefs suggest that there were two possible additional holdings in favor of defendants as a matter of law.

First, an affidavit from the natural mother, who is still living, asserts that she never consent.ed to any adoption by the Poppells. The allegations in the complaint tend to establish, however, that she and James Freeman were separated quite soon after the child’s birth, that sometime later the father, James Freeman, was given legal custody of the child following a divorce, and that for the past 30-odd years the natural mother has had little, if anything, to do with her child. We feel full development of these facts would be helpful in the resolution of this issue.

Secondly, appellees make an issue of the fact that Andrew and Elizabeth Pop-pell were not yet married when the child first came to live with Andrew Poppell and his aged father. On the other hand, the facts tend to show there was at least some “understanding” between Andrew and Elizabeth and that their marriage was being postponed only because of the objections of Andrew’s aged father. They were married soon after the father’s death and raised Annie Jean in their home. In the opinion of the district court it is not evident what, if any, weight this factor was given.

We note that on both these last issues the appellees have made arguments based on Florida adoption law and public policies concerning adoption. As we are remanding this case for further proceedings, we do not feel it necessary to pass at this time on these possible legal issues since we are not assured that they were relied on by the district court below nor are we satisfied that the factual record surrounding them has been adequately developed.

However, we desire to point out two factors which we feel may be relevant in future consideration of these issues below. Since virtual adoption cases generally arise after termination of the relationship because of death of the parents, state public policies relating to a legal adoption may not be weighed the same as they would be in a current adoption proceeding where the relationship is prospective in nature. Here the court is viewing what ought to be done in light of what has been done in the past, not what may happen in the future. Secondly, we think the court below, when and if it looks to state public policy on adoption, should take into consideration the adoption laws and attendant policies as they existed at the time the purported “contract” was made.

For reasons stated in this opinion, we feel that summary judgment was im-' proper and this case is reversed and remanded.

      . At one point in our consideration of this case, we sought aid of counsel in drawing up a proposed certificate to submit to the Florida Supreme Court for elucidation as to underlying Florida public policies which may be relevant to the ultimate resolution of this case. The difficulty of drafting an adequate certificate, coupled with the uncertainty as to what part, if any, policy resolutions were involved in the summary judgment below, have convinced this court that more complete findings of fact and law are necessary.

      . We note that the adoption laws in effect in Florida at the time this alleged “contract” was entered were quite simple. Fla.Stat.Ann. §§ 72.01-72.06 [Repealed, Laws 1943, c. 21759, § 20]. Basically, the law only required that a person publish an intention to adopt, that the proposed adoption be filed, and that a hearing be held before the proper circuit judge. Following the hearing the judge, in his discretion, could grant the petition and allow the adoption.
      Thus, even if it is ultimately decided that the contracting parties must be fully able to carry out a legal adoption, we feel that the statute in effect at the time of contracting is extremely relevant and the factual situation should be analyzed in light of it. It might be that under then existing law, the circuit judge could allow adoption by a single person or without the express permission of one parent.


author: PER CURIAM.

text:
    Kim JONES et al., Plaintiffs-Appellees, v. The BOARD OF EDUCATION CLEVELAND CITY SCHOOL DISTRICT et al., Defendants-Appellants.
    Nos. 73-1031, 73-1032.
    United States Court of Appeals, Sixth Circuit.
    Argued Feb. 12, 1973.
    Decided March 16, 1973.
    Charles F. Clarke, Cleveland, Ohio, for defendants-appellants; Richard B. Bowles, Squire, Sanders & Dempsey, Cleveland, Ohio, on brief.

      Ronald Pollock, New York City, for plaintiffs-appelleesLloyd B. Snyder and Edward R. Stege, Jr., Cleveland, Ohio, on brief.
    Before PHILLIPS, Chief Judge, and WEICK and LIVELY, Circuit Judges.
   PER CURIAM.

The motion to vacate the stay order entered by a single Judge of this Court at a time when the Court was not in session and when exceptional circumstances existed, has been considered and is hereby denied.

The appeals were expedited by order of the Court and have been briefed and argued orally. We need not consider the appeal from a Memorandum of the District Court dated October 31, 1972, as this Memorandum did not constitute a final appealable order, although it was marked by the Clerk of the District Court as a judgment.

The appeal which we consider is from a partial summary judgment entered by the District Court on December 15, 1972, in which the Court ordered that the Board of Education of the Cleveland City School District, the Superintendent of Schools, and the Deputy Superintendent provide school lunch programs by January 8, 1973, for thirty public schools and for thirty additional' public schools by April 30, 1973, which shall comply with the requirements of the National School Lunch Act.

The Cleveland City School District consists of about one hundred seventy-eight schools. Free hot lunches are already being served in all but about fifty-four of such schools. The schools so served are especially the needy ones.

Funds to pay the cost and expense of serving the lunches are supplied largely by the Federal Government through the Department of Agriculture. These funds are channeled through state educational officials to the local school districts which agreed to participate in the programs. The state, as well as the local school districts, contribute to the cost of the programs.

Although the State of Ohio educational officials were made parties defendant to the action by the plaintiffs, the District Court made no' finding or order against them. The Department of Agriculture was not made a party defendant.

Depositions were taken of officials of the Department of Agriculture by counsel for the School Board. Their testimony was to the effect that the School Board had complied substantially with the Act and the applicable regulations. The depositions were filed with the Clerk of the District Court prior to the entry of the summary judgment, but the District Court declined to consider them.

The construction and interpretation of the statute and applicable regulations by the agency charged with their administration were entitled to be given great weight by the Court. Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971); Udall v. Tallman, 380 U.S. 1, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965); Bowles v. Seminole Rock Co., 325 U.S. 410, 65 S.Ct. 1215, 89 L.Ed. 1700 (1945). The District Court erred in not considering the testimony of these officials.

Since the Agriculture Department officials apparently have agreed with the School Board and not with the plaintiffs, it was imperative that the Department be made a party defendant in order to bind it by any judgment entered by the Court. The Act certainly did not contemplate that the School Board should bear the entire cost and expense of the school lunch program without contribution from either the state or federal governments. The School Board has been operating at a deficit.

It was the contention of the School Board that it was proceeding in good faith as rapidly as possible with the funds it had, to supply all needy children from families with - incomes below the national poverty level with free or reduced-cost hot lunches. • It was the contention of the plaintiffs that the Board should supply such lunches to all needy children, immediately, in the other fifty-four schools, either by providing cold lunch boxes in such schools where there are no facilities, or by contracting with commercial suppliers with mobile units to provide hot lunches.

The Board on July 7, 1972, made written application to the Department for an allowance of $700,000, to provide a central commissary and a satellite kitchen program for the schools, and to purchase trucks for transportation of the food. Subsequently it applied for $1,-300,000 for the same purposes. The Department has not acted on these applications.

It is not for us to act as a super Board of Education and to tell the duly elected Board members how to operate the public schools. It would seem to us anomalous for the Board to furnish hot lunches in the one hundred twenty-four schools now being served, and to serve cold lunches in the remaining fifty-four schools with which plaintiffs are concerned. We would question the authority of the Board' under the provisions of the Act to discriminate against any of the schools within its district. Nor should we instruct the Board to hire independent suppliers when it desires to perform the work with its own employees.

In our opinion it was error to enter summary judgment against the Board and its officials as there were disputed issues of both fact and law. S. J. Groves & Sons v. Ohio Turnpike Comm’n, 315 F.2d 235 (6th Cir.), cert. denied, 375 U.S. 824, 84 S.Ct. 65, 11 L.Ed.2d 57 (1963).

It was also error to proceed without making the Department of Agriculture a party defendant, as it was an indispensable party to a determination of the issues. Gardner v. Nashville Housing Authority, 468 F.2d 480 (6th Cir. 1972); Boles v. Greeneville Housing Authority, 468 F.2d 476 (6th Cir. 1972). It was also error not to include in its judgment the state educational officials.

The judgment of the District Court is reversed and the cause is remanded with instructions to require the plaintiffs to file an amended complaint making the Department of Agriculture a party defendant; to conduct an evidentiary hearing; to adopt findings of fact and conclusions of law; and to enter judgment in accordance therewith.

Reversed.

      . 42 U.S.C. § 1751 et seq.


text:
    UNITED STATES of America and Peter B. Parish, Agent, Internal Revenue Service, Petitioners-Appellants, v. The CLEVELAND TRUST COMPANY, Respondent-Appellee, and John Miceli, Intervenor-Appellee.
    No. 72-1804.
    United States Court of Appeals, Sixth Circuit.
    Argued Feb. 2, 1973.
    Decided March 7, 1973.

      Carleton D. Powell, Tax Division, Department of Justice, Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, John P. Burke, Attys., Tax Division, Department of Justice, Washington, D. C., on brief, for petitioners-appellants; Frederick M. Coleman, U. S. Atty., of counsel.
    Takashi Ito and Robert J. Rotatori, Cleveland, Ohio, D. C. Armour, Cleveland, Ohio, on brief, for respondent-appellee.
    Gold, Rotatori, Messerman & Hanna, by Robert J. Rotatori, Cleveland, Ohio, for intervenor-appellee.
    Before WEICK, EDWARDS and KENT, Circuit Judges.
   PER CURIAM.

This is an appeal by the United States from an order of the United States District Court for the Northern District of Ohio denying judicial enforcement of a summons issued under the provisions of § 7602 of the Internal Revenue Code of 1954. 26 U.S.C. §§ 7602, 7402(b), 7604(a) (1970). The judgment of the District Court was entered some months before the United States Supreme Court decided Couch v. United States, 409 U.S. 322, 93 S.Ct. 611, 34 L.Ed.2d 548 (1973). In that case the Supreme Court held that enforcement should be granted in relation to a government summons of financial reports and data turned over by taxpayer to her accountant for preparation of her income tax returns.

We believe the fact situation in Couch, on the basis of which the taxpayer therein argued that material in her accountant’s hands was protected by her Fifth Amendment right of privacy, was somewhat stronger in support of that argument than is the fact situation in this case. In this case the data sought by the government consists of a financial report of the taxpayer submitted to the Cleveland Trust Company for the purpose of securing a commercial loan. We do not believe that one supplying such a report for such a purpose retains his constitutional right of privacy therein. It is our belief that the Couch case is authority for deciding this case in favor of the government, as far as the major legal argument presented to us on this appeal is concerned.

The District Judge, however, relied in his opinion upon Donaldson v. United States, where the Court said:

We hold that under § 7602 an internal revenue summons may be issued in aid of an investigation if it is issued in good faith and prior to a recommendation for criminal prosecution. Donaldson v. United States, 400 U.S. 517, 536, 91 S.Ct. 534, 545, 27 L.Ed.2d 580 (1971).

The District Judge then held as a matter of fact that the taxpayer here was being investigated solely for criminal purposes and that the revenue summons had not been issued “in good faith.”

On the total record of this case, we hold that these findings of the District Judge are clearly erroneous.

It is clear, of course, from the record in this case that the opening of a civil tax investigation into the tax returns of Miceli Dairy Products Co., Inc., in which John Miceli was a principal stockholder, was initiated by a representative of the Strike Force assigned in the Cleveland area to investigate organized crime on behalf of the Department of Justice of the United States. It appears to us that the District Judge’s bad faith finding was directly related to his view that there was something odious about the Strike Force’s recommendation of a civil audit. This court does not see why the transmission of information between two different units of the federal government pertaining to a possibility of tax liability should be the subject of judicial condemnation.

As we see this matter, the question is whether on this record there was in fact a good faith investigation of the civil liability of the Miceli Dairy and/or John Miceli individually, or whether the sole purpose of the investigation was the criminal prosecution of John Miceli. It is uncontested on this record that there had been at the time of the issuance of this summons neither an indictment concerning John Miceli nor a recommendation for prosecution. And we know of no reason why, if gross receipts of the corporation had been falsely understated, the fact that information was provided to the civil side of the Internal Revenue Audit Division by agents usually concerned with criminal prosecution should immunize the taxpayer corporation from investigation as to its civil liability for additional taxes. In United States v. Couch, supra, the Supreme Court said:

It is now undisputed that a special agent is authorized, pursuant to 26 U. S.C. § 7602, to issue an Internal Revenue summons in aid of a tax investigation with civil and possible criminal consequences. In Donaldson v. United States, 400 U.S. 517 [91 S.Ct. 534, 27 L.Ed.2d 580] (1971), the Court upheld such a summons, noting that:
“Congress clearly has authorized the use of the summons in investigating what may prove to be criminal conduct. . . . There is no statutory suggestion for any meaningful line of distinction, for civil as compared with criminal purposes, at the point of a special agent’s appearance. . . To draw a line where a special agent appears would require the Service, in a situation of suspected but undetermined fraud, to forgo either the use of the summons or the potentiality of an ultimate recommendation for prosecution. We refuse to draw that line and thus to stultify enforcement of federal law.” 400 U.S., at 535-536 [91 S.Ct., at 544], United States v. Couch, supra. (Footnotes omitted.)

The judgment of the District Court is vacated and the case is remanded for the purpose of enforcement of the summons.


text:
    J. Roland HAHN, Plaintiff-Appellant, v. WOODMEN ACCIDENT AND LIFE CO., Defendant-Appellee.
    No. 72-1852.
    United States Court of Appeals, Sixth Circuit.
    Argued Jan. 31, 1973.
    Decided March 6, 1973.
    Carl William Hinton, Findlay, Ohio, for plaintiff-appellant; Hinton, Noble & Bryant, Findlay, Ohio, on brief.
    Thomas B. Ridgley, Columbus, Ohio, for defendant-appellee; Vorys, Sater, Seymour & Pease, Columbus, Ohio, on brief.
    Before WEICK, EDWARDS and CELEBREZZE, Circuit Judges.
   PER CURIAM.

Appellant Hahn, in 1964, signed a contract with defendant life insurance company as a district manager and a salesman for said company of life and accident insurance. Defendant company terminated this contract by written notice on October 8, 1971. Invoking the diversity jurisdiction of the United States District Court for the Northern District of Ohio, appellant filed a very brief complaint, pleading breach of contract, seeking $350,000 damages and attaching a copy of the contract.

Defendant company thereupon filed a motion to dismiss, asserting that the complaint failed' “to state a claim upon which relief can be granted against defendant,” attaching thereto a copy of the company’s letter discharging appellant Hahn.

Appellant filed no response to the motion to dismiss as required by local court rule. The District Judge noted that the contract contained a clause which made it permissible for either party to terminate the contract upon written notice and interpreted this contract section to be uncontestable. He thereupon dismissed the complaint without prejudice to appellant’s refiling an action for accounting.

Since we believe the basic dispute between these parties was pled in general terms, yet with sufficient particularity to state a cause of action, we reverse. Appellant’s breach of contract complaint said in part:

Defendant is in breach of the agreement with the plaintiff in that it has failed to perform its covenants and promises; that the attempted termination of the contract by defendant was contrary to its provisions, unjust, unreasonable, and contrary to law.

The contract attached provided in considerable detail for the continued payments of commissions to appellant on policies which he had sold, unless the discharge was “for cause.” In the event he was discharged “for cause,” all payments under the contract would cease. The letter of discharge was “for cause.” We believe that the pleadings and the various motions filed served at least generally to pose the issue as to whether or not appellee company’s discharge “for cause” of appellant Hahn was valid under the language of the contract and the facts of this case.

While the complaint in this case was less than artfully drawn, and we agree completely with the District Judge that appellant should have responded to' the motion to dismiss, we do not think that anyone has been misled or that the interests of justice would be served by requiring this case to be started all over again.

On motion for reconsideration of the order of dismissal, appellant Hahn made all of the responses which he should have made to the motion to dismiss in the first instance. At that point we believe an order should have been entered allowing him to amend his bill of complaint. This can now be accomplished by our vacation of the order of the District Court and remand of this case for trial.

The judgment of the District Court is reversed and remanded for further proceedings consistent with the above.