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

text:
    UNITED STATES of America, Appellee, v. Albert Sander BRICK, Appellant. UNITED STATES of America, Appellee, v. Harry John McCUTCHEON, Appellant. UNITED STATES of America, Appellee, v. George WEIDLICH, Appellant. UNITED STATES of America, Appellee, v. Joseph SAMELSON, Appellant. UNITED STATES of America, Appellee, v. Ronald Garold WEINBERG, Appellant.
    Nos. 73-1162 to 73-1164, 73-1186 and 73-1192.
    United States Court of Appeals, Eighth Circuit.
    Submitted Sept. 14, 1973.
    Decided Aug. 15, 1974.
    Bright, Circuit Judge, concurred and filed opinion.

      Murry L. Randall, St. Louis, Mo., for McCutcheon.
    Robert J. Roster and Arthur S. Mar-gulis, St. Louis, Mo., for Weinberg.
    Irwin L. Ruzicka, St. Louis, Mo., for Samuelson.
    Daniel J. O’Toole, Jr., St. Louis, Mo., for Weidlich.
    Richard L. Daly and Robert A. Hampe, St. Louis, Mo., for Brick.
    Donald J. Stohr, St. Louis, Mo., Thomas M. Vockrodt, Sp. Atty., Strike Force, St. Louis, Mo., Robert L. Keuch, Peter M. Shannon and Robert H. Plaxico, Attys., Dept, of Justice, Washington, D. C., for appellee.
    Before GIBSON and BRIGHT, Circuit Judges, and TALBOT SMITH, Senior District Judge.

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

   TALBOT SMITH, Senior District Judge.

This case involves an alleged violation of 18 U.S.C. § 1955 (conducting an illegal gambling business) and conspiracy with respect thereto. The case, presented upon a stipulation of facts, resulted in a finding of guilt. We affirm.

Viewing the facts and opinions stipulated in the light most favorable to the Government, and in more detail infra as required, it appears that the defendants, together with Aaron Singer and Harry Safren were engaged in the business of accepting bets on various horse races and athletic contests. Singer was the center of the enterprise. He telephoned the “lines” on particular sporting events to Safren and the defendants who, in turn, disseminated the lines to their various betting customers. Safren, and defendants Brick, Samuelson, and Weinberg then relayed to Singer the bets from their customers. It was agreed that each would receive 50 per cent of any profits generated by the bets he relayed, and, in addition, each was guaranteed the payment of any losses sustained in receiving the wagers. Weinberg, additionally, was paid an extra $50 per week by Singer whether or not any profits were made from his relayed bets. Defendants McCutcheon and Weidlich, having received bets from their customers, would “lay off” wagers with Singer. The telephone conversations between Singer and defendants pertained to the discussion of lines, to the arranging of receipts of bets and lay offs, and to their accounts with Singer and with various customers. The conversations frequently involved mention of the activities of various of the defendants.

Much of the evidence relied upon by the Government was obtained from the defendants’ telephone conversations with Singer, intercepted pursuant to court order of January 8, 1971. Defendants challenge the order for non-compliance with the requirements of 18 U.S.C. § 2518(1)(a); specifically, the deficiencies charged are that the application for the order “stated therein that Will Wilson was the authorizing official,” such authorization resting upon a letter purportedly from Wilson granting such authority, actually, however, having been signed by Henry Petersen, then Deputy Assistant Attorney General, Criminal Division. The Court’s order of interception, however, stated that the Attorney General was the authorizing authority and thus, argue defendants, the application and the order “were in direct conflict” and in violation of § 2518(1)(a) which requires that the application shall contain the identity of the officer so authorizing.

There is no doubt that we are confronted with contradictory facial representations. Unless we are to elevate form over substance, however, our inquiry focuses upon whether or not there has been a subversion of the congressional scheme. The intent of the statute, in view of its manifest intrusion upon the privacy of the individual which results from the approval of a wiretap, was to provide a safeguard in order to prevent abuse. To this end Congress “intentionally restricted the category of federal officials who could give such approval to only the Attorney General himself or any Assistant Attorney General he might specially designate for that purpose.”

The record before us discloses that the Attorney General himself (according to the affidavit of his Executive Assistant, Mr. Sol Lindenbaum) approved the request for the interception order, and personally initialed the memorandum dated January 8, 1971 to Will Wilson designating him to authorize Attorney Vock-rodt to apply for the interception order. Such a memorandum, in substantially identical terms, was construed in United States v. Chavez, supra note 5, 94 S.Ct. at 1852, as “intended to reflect notice of approval by the Attorney General, though on its face it suggested that the decision whether to authorize the particular wiretap application would be made by Assistant Attorney General Wilson.” It is clear also that the signing of Wilson’s name by his Deputy Assistant, here Henry Petersen, was regarded as simply a “ministerial act” in view of Wilson’s authorization to his Deputies to execute letters of authorization in every case in which he had been specially designated to authorize the applicant to make the application.

Upon the record before us, then, we have no more than a cosmetic blemish. The application recited that Will Wilson was the authorizing official, whereas in truth (and as recited in the District Court’s order) it was the Attorney General. Such misidentification, regrettable though it is, does not render interceptions conducted under the order unlawful in any respect. As the Supreme Court held in Chavez, supra note 5, 94 S.Ct. at 1853, “We agree with those other courts of appeal [citing, among others, United States v. Cox, 462 F.2d 1293, 1300 (8th Cir. 1972)] that misidentifying the Assistant Attorney General as the official authorizing the wiretap application to be made does not require suppression of wiretap evidence when the Attorney General himself has actually given the approval ; * * There were no grounds upon the facts presented justifying the granting of a motion to suppress the wiretap evidence.

With respect to the pen register employed, the defendants argue that its installation was unauthorized by Title III. Actually, as the legislative history of the act shows, the use of pen registers was not prohibited by Title III. Nor is such use controlled by 47 U.S.C. § 605, as amended. In this situation it has been held that a pen register order based upon a showing of probable cause, even if considered to be a “search ’ is not constitutionally offensive. Mr. Justice Powell’s statement in concurrence and dissent in United States v. Giordano, 416 U.S. 505, 94 S.Ct. 1820, 1845, 40 L.Ed.2d 341 (1974) to the effect that “[b]ecause a register device is not subject to the provisions of Title III, the permissibility of its use by law enforcement authorities depends entirely on compliance with the constitutional requirements of the Fourth Amendment” [footnote omitted], had earlier expression in United States v. Focarile, 340 F.Supp. 1033, 1038-1040 (D.Md.1972) (Giordano, supra, in the District Court); United States v. Escandar, 319 F.Supp. 295, 303-304 (S.D. Fla.1970), remanded on other grounds sub nom. United States v. Robinson, 472 F.2d 973 (5th Cir. 1973) (en banc).

The affidavit submitted to the Court in the application of the Government for an order authorizing the interception of wire communications bears upon two issues before us, namely, probable cause under the Fourth Amendment for the wire interception and the use of the pen register as well as the “need” for the order prayed.

The affidavit presented, that of Robert J. Wilkinson, Special Agent of the F.B.I., set forth in detail his personal observations concerning the investigations conducted, as well as those of two unnamed informants, one of whom had provided reliable information for several years to Special Agents “on a continuous basis concerning gambling matters.” The affidavit described in detail the operations of the gamblers, and named certain of the persons involved, together with their places of meetings, movements and conversations. In addition it was stated that the informants, noted above, would not testify, nor, as evidenced by past experience, would the gambler’s customers; that gambling raids had in the past proved ineffective, as had the telephone toll records.

The above representations in the affidavit, in conjunction with others more detailed contained therein, furnished ample probable cause for the order entered and were sufficient to demonstrate on a factual basis, as distinguished from a mere conclusion, that “other procedures reasonably appear unlikely to succeed.” The statute does not require more.

The Act before us, 18 U.S.C. § 1955(b) (1)(ii), violation of which is charged, defines an “illegal gambling business” as one “involv[ing] five or more persons who conduct, finance, manage, supervise, direct or own all or part of such business.” It is the position of the defendants in this respect that the proofs must establish that “the alleged violator knew that the activity engaged in was composed of five or more.” There is no merit to such contention. The Congress, in enacting the legislation under consideration, sought to differentiate between “illicit gambling business [es] of major proportions” and “those whose operations are relatively small.” The line was drawn as defined in § 1955 of the Act, those operations being deemed to be of a magnitude sufficient to furnish the required nexus for the application of the commerce clause. The accused’s knowledge, or lack of knowledge, of the congressional determination of the required nexus does not comprise an essential element of the crime' charged. United States v. Smaldone, 485 F.2d 1333, 1348 (10th Cir. 1973) cert. denied, 416 U.S. 936, 94 S.Ct. 1934, 40 L.Ed.2d 286 (1974); United States v. Ianelli, 477 F.2d 999, 1002 (3rd Cir. 1973), cert. granted, 417 U.S. 907, 94 S.Ct. 2602, 41 L.Ed.2d 211 (1974).

We reject defendants’ further contention, in effect, that they conducted five separate bookmaking businesses each involving less than five persons. The record shows that each defendant, through his transactions with Singer, became involved in a network of gambling activity of substantial proportions. Although defendants argue that they are independent businessmen, it is evident that the success of their individual operations was dependent upon the success of its various related components, e.g., on their ability to pool their bets with Singer (either through lay-offs or profit sharing agreements) and to share line information through him. The degree of interdependence and interrelation thus shown negates the concept of independence urged upon us. United States v. Sacco, 491 F.2d 995, 1003 (9th Cir. 1974) (en banc). As well put in United States v. Hunter, 478 F.2d 1019, 1022 (7th Cir. 1972) cert. denied, 414 U.S. 857, 94 S.Ct. 162, 38 L.Ed.2d 107 (1973): “we are satisfied that the three entrepreneurs had a sufficient common interest in the development of sales, the maintenance of security, the efficient performance of services, and the solvency of all three ventures, to make it proper to regard them as a single criminal enterprise for the purposes of the statute here involved.”

Defendants Weinberg, Brick and Weidlich also urge, relying on Woosley v. United States, 478 F.2d 139 (8th Cir. 1973) (en banc), that the sentences imposed on them for a variety of reasons (relative sizes of fines ihiposed, health considerations, since a condition of probation was gainful employment, as well as others) all “constitute an abuse of the court’s discretion.”

It was Woosley holding that “we possess the power to review the severity of a criminal sentence within narrow limits where the court has manifestly or grossly abused its discretion,” 478 F.2d at 147. It was pointed out in the Woosley opinion that the trial court had followed a given “policy” in the type of case there involved (selective service) and thus there had been no exercise of discretion in any realistic sense, 478 F.2d at 143-144. The present case offers no parallel, nor does it fall within any other ground fairly comprehended within the term “abuse” of discretion. The court obviously apportioned the sentences with care, employing varying degrees of severity. The fact that such apportionment does not coincide with that urged by the defendants will not be taken as an abuse of discretion. We find no abuse.

Affirmed.

«

BRIGHT, Circuit Judge

(concurring):

I concur in Judge Smith’s excellent opinion but add an additional comment relating to the legal status of the “approval” of this wiretap by the Attorney General.

This record discloses that Attorney General Mitchell placed his initials on a memorandum directed to Assistant Attorney General Will Wilson designating him to authorize the prosecuting attorney to apply for an order authorizing the wiretap. Mitchell has not filed any affidavit in this action explaining the significance of these initials but his executive assistant, Sol Lindenbaum, filed an ex post facto affidavit stating that “the Attorney General approved” the request for authority for the wiretap with his “personally initialed memorandum.” Further, an affidavit of Assistant Attorney General Henry Petersen states that he signed Will Wilson’s name to the wiretap authorization letters in accordance with “standard procedures of the Criminal Division.”

I retain great doubt as to who, if anyone, actually considered the merits of the wiretap authorization. The Attorney General initialed a memorandum authorizing Will Wilson to act on the application. Will Wilson did not do so but Assistant Attorney General Henry Petersen signed Wilson’s initials signifying an approval of the request, a procedure not sanctioned by the wiretap statute. United States v. Giordano, 416 U.S. 505, 94 S.Ct. 1820, 40 L.Ed.2d 341 (1974). Were I free to exercise my own judgment, I would remand this case to the district court to require an explanation of this “standard procedure” by the Department. I think it highly questionable whether the ex post facto conclusionary statement of Executive Assistant Sol Lindenbaum that Mitchell had “approved” the wiretap is sufficient to show Mitchell’s actual approval when that same affidavit recites that Mitchell had assigned this task of approval to Will Wilson. Yet, notwithstanding this reservation, I vote for affirmance because I believe the question has been effectively foreclosed by the Supreme Court’s decision in the Chavez opinion.

In Chavez, the majority stated:

While the Attorney General had apparently refrained from designating any Assistant Attorney General to exercise the authorization power under § 2516(1), form memoranda were routinely sent from his office, over his initials, to Assistant Attorney General Wilson, stating that “with regard to your recommendation that authorization be given” to make application for a court order permitting wire interception, “you are hereby specially designated” to exercise the power conferred on the Attorney General by § 2516 “for the purpose of authorizing” the applicant attorney to apply for a wiretap order. [94 S.Ct. at 1852.]

The Court further commented:

Evidently this form was intended to reflect notice of approval by the Attorney General, though on its face it suggested that the decision whether to authorize the particular wiretap application would be made by Assistant Attorney General Wilson. In fact, as revealed by the affidavits of Wilson’s then Deputy Assistants filed in opposition to respondents’ suppression motions, “Wilson did not examine the files or expressly authorize the applications” for either the February 18 or February 25 interception orders, and they signed his name “in accordance with [his] authorization . . . and the standard procedures of the Criminal Division” to the respective letters of authorization to the applicant attorney, which were made exhibits to the applications. The signing of Wilson’s name was regarded as a “ministerial act” because of Wilson’s authorization to his Deputies “to sign his name to and dispatch such a letter of authorization in every instance in which the request had been favorably acted upon in the Office of the Attorney General.” [94 S.Ct. at 1852.]

I read Chavez as construing the existence of the Attorney General’s initials on form memoranda to Will Wilson and the subsequent affidavits of Sol Lind-enbaum or Mitchell himself stating that those initials signified approval for the authorization to be sufficient to establish the wiretap authority, without more. The existence of these initials is not a matter of dispute and the conclusion of approval follows from the affidavit. The procedure followed here was substantially identical to that in Chavez. I take it that the Supreme Court has placed its imprimatur of legal validity to that standard procedure. Thus, under Chavez, I believe we must affirm. If the question of actual authorization by the Attorney General were still open, I would remand this case to the district court for an evidentiary hearing by way of further affidavits on whether the Attorney General’s initials signified an actual approval of the wiretap.

Affirmed.

      . 18 U.S.C. § 1955 provides in pertinent part:
      (a) Whoever conducts, finances, manages, supervises, directs, or owns all or part of an illegal gambling business shall be fined not more than $20,000 or imprisoned not more than five years, or both.
      (b) As used in this section—
      (1) “illegal gambling business” means a gambling business which—
      (i) is a violation of the law of a State or political subdivision in which it is conducted ;
      (ii) involves five or more persons who conduct, finance,' manage, supervise, direct, or own all or part of such business; and
      (iii) has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single day.
      (2) “gambling” includes but is not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein.
      (3) “State” ,means any State of the • United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States.

      . A line is utilized to equalize competing teams and to attempt to insure approximately equal distribution of bets. A line, it was stipulated, “is an addition to or subtraction from the anticipated point scoring potential of each of the two participating teams which is designed to equalize the betting propositions and thereby to induce the placement of bets by customers on both teams.”

      . Lay off, it was stipulated, “is a bet or wager placed by one bookmaker with another bookmaker which is necessitated by the influx of an imbalance of bets and wagers on a given sporting event and which has the effect of distributing the said bets and wagers, thus minimizing risk of substantial loss.”

      . 18 U.S.C. § 2518(1) (a) provides :
      (1) Each application for an order authorizing or approving the interception of a wire or oral communication shall be made in writing upon oath or affirmation to a judge of competent jurisdiction and shall state the applicant’s authority to make such application. Each application shall include the following information:
      (a) the identity of the investigative or law enforcement officer making the application, and the officer authorizing the application * * *.

      . United States v. Chavez, 416 U.S. 562, 94 S.Ct. 1849, 1854, 40 L.Ed.2d 380 (1974).

      . The Lindenbaum affidavit reads in part as follows:
      District) of Columbia:
      Sol Lindenbaum being duly sworn, deposes and says:
      I am Executive Assistant to the Attorney General of the United States.
      On January 8, 1971, the Attorney General approved a request for authority to apply for an interception order with respect to certain telephones in University City and St. Louis, Missouri, allegedly used by Steve Lekometros and others. Attached is a copy of his personally initialed memorandum of that date to Will Wilson, the Assistant Attorney General in charge of the Criminal Division, specially designating him to authorize Thomas M. Vockrodt to apply for an interception order.

      . Defendants suggest from the same dating of various documents before us that either the Government has exercised “an unbelievable degree of governmental efficiency” or the documents were issued “without the conscious reflection of a responsible officer.” The Government, in reply, urges its “technological efficiency” and refers us to United States v. Pisacano, 459 F.2d 259, 263 (2nd Cir. 1972), vacated, 417 U.S. 903, 94 S.Ct. 2597, 41 L.Ed.2d 208 (1974), wherein the routine procedures of the Department of Justice in a matter of this kind are discussed. We do not regard the defendants’ suggestion as impeaching the conclusions here reached.

      . The affidavit filed with the District Court states as follows:
      District of Columbia:
      Henry E. Petersen, being duly sworn, deposes and says:
      I am Acting Assistant Attorney General in charge of the Criminal Division, United States Department of Justice.
      I signed the name of Will Wilson, Assistant Attorney General, Criminal Division, to the following communications notifying Thomas M. Vockrodt that he was authorized to make court applications under Title 18, United States Code, Section 2518, for interception orders:
      a. An undated letter transmitted on January 8, 1971, relating to certain telephones iq University City and St. Louis, Missouri, 'allegedly utilized by Steve Leko-metros and others;
      b. A letter dated April 20, 1971, relating to certain telephones in St. Louis and St. Louis County, Missouri, allegedly used by Aaron Singer and others ; and
      c. A letter dated May 13, 1971, relating to certain telephones in St. Louis and St. Louis County, Missouri, allegedly used by Eugene Ilanon and others.
      At those times when I signed the above letters, I was a Deputy Assistant Attorney General in the Criminal Division and acted in accordance with the authorization of Will Wilson and the standard procedures of the Criminal Division. The signing of Will Wilson’s name was in conformity with the standard procedure of dispatching such a letter in every case in which Will Wilson liad been specially designated on an ad hoc basis to authorize the applicant to make the application.
      /s/ HENRY E. PETERSEN Acting Assistant Attorney General Criminal Division

      . A pen register is a mechanical device which records on tape the numbers dialed from a given line. See United States v. Giordano, 416 U.S. 505, 94 S.Ct. 1820, 1842 n. 1, 40 L.Ed.2d 341 (1974) (Powell, J., dissenting in part).

      . Title III of the Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. §§ 2510-2520.

      . S.Rep.No.1097, 90th Cong., 2nd Sess. 90 (1968) :
      [18 U.S.C. § 2510(4)] defines “intercept” to include the aural acquisition of the contents of any wire or oral communication by an electronic, mechanical, or other device. Other forms of surveillance are not within the proposed legislation. * * * The proposed legislation is not designed to prevent the tracing of phone calls. The use of a “pen register,” for example, would be permissible.

      . As originally enacted, 47 U.S.C. § 605 provided in part:
      No person receiving or assisting in receiving, or transmitting, or assisting in transmitting, any interstate or foreign communication by wire or radio shall divulge or publish the existence, contents, substance, purport, effect, or meaning thereof, except through authorized channels of transmission or reception * * * in response to a subpena [sic] issued by a court of competent jurisdiction, or on demand of other lawful authority; and no person not being authorized by the sender shall intercept any communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person * * *. [Emphasis added].
      Act of June 19, 1934, cli. 652, § 605, 48 Stat. 1103.
      As amended in 1968, the statute now reads in part:
      Except as authorized by chapter 119, Title 18, no person receiving, assisting in receiving, transmitting, or assisting in transmitting, any interstate or foreign communication by wire or radio shall divulge or publish the existence, contents, substance, purport, effect or meaning thereof, except through authorized channels of transmission or reception, * * * (5) in response to a subpena [sic] issued by a court of competent jurisdiction, or (6) on demand of other lawful authority. No person not being authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person. [Emphasis added].

      . 18 U.S.C. § 2518 (1) (c) provides:
      (1) Eaeli application for an order authorizing or approving the interception of a wire or oral communication shall be made in writing upon oath or affirmation to a judge of competent jurisdiction and shall state the applicant’s authority to make such application. Each application shall include the following information: * * * * *
      (cl a full and complete statement as to whether or not other investigative procedures have been tried and failed or why they reasonably appear to be unlikely to succeed if tried or to be too dangerous ❖ # *

      . United States v. Pacheco, 489 F.2d 554, 559 (5th Cir. 1974); United States v. Bobo, 477 F.2d 974, 982 (4th Cir. 1973); see United States v. Kahn, 415 U.S. 143, 94 S.Ct. 977, 983 n. 12, 39 L.Ed.2d 225 (1974). The provision of the statute in this respect is simply “that the showing be tested in a practical and commonsense fashion.” S. Rep.No.1097, 90th Cong., 2nd Sess. 101 (1968).

      . 116 Cong.Rec. 603 (1970) (remarks of Senator Allott). ■

      . The point is discussed in United States v. Sacco, 491 F.2d 995 (9th Cir. 1974) (en banc); concurring opinion of Judge Hufstedler at 1004; dissenting opinion of Judge Ely at 1004.

      . Relevant hereto is an issue frequently litigated under § 1955(b) (1) (ii), whether a minor functionary in a gambling operation should be counted as one who “conducts” part of the business. The courts have held that “all levels of personnel involved in operating an illegal gambling business and not merely the management level are to be included in determining whether five or more persons conduct such business * * *.” United States v. Meese, 479 F.2d 41, 43 (8th Cir. 1973); United States v. Manson, 494 F.2d 804 (7th Cir. 1974); United States v. Palmer, 465 F.2d 697 (6th Cir.), cert. denied, 409 U.S. 874, 93 S.Ct. 119, 34 L.Ed.2d 126 (1972); United States v. Becker, 461 F.2d 230 (2nd Cir. 1972), vacated on other grounds, 417 U.S. 903, 94 S.Ct. 2597, 41 L.Ed.2d 208 (1974); United States v. Harris, 460 F.2d 1041 (5th Cir.), cert. denied, 409 U.S. 877, 93 S.Ct. 128, 34 L.Ed.2d 130 (1972). In this connection it has been held that a bookmaker who makes “lay off” bets conducts the business of the gambling operation with which he places his bets, United States v. McHale, 495 F.2d 15, 18 (7th Cir. 1974); and that one who receives lay off bets from and gives line information to other bookmakers may be counted as conducting part of their business, United States v. Ceraso, 467 F.2d 653, 656 (3rd Cir. 1972).

      . See also United States v. Dace, 502 F.2d 897 (8th Cir. 1974).

      . Defendant Weinberg’s fine is attacked as excessive in comparison with the fines of the others. The government responds, with figures purporting to show “the greater magnitude of Weinberg’s share of the business.”

      . Defendants Brick, Samelson, and Weidlich were each fined $1,000 and sentenced to three years, Brick and Weidlich to serve six months of their sentences, Samelson one year, with the balance probation in each case. Defendant McCutcheon was fined $2,500 and sentenced to three years, one year to be served, the balance on probation. Defendant Weinberg was sentenced to three years, one year to be served, the balance on probation, and fined $10,000. Second Count sentences were identical with those on the first count, with the exception of the fines imposed. Probation for all defendants involved, among other conditions, a requirement of “gainful employment.”


source: Caselaw Access Project

author: ADAMS, Circuit Judge: CRAVEN, Circuit Judge

license: Public Domain

text:
    Eddie Lawrence PHILLIPS, Appellant, v. UNITED STATES of America, Appellee.
    No. 73-2516.
    United States Court of Appeals, Fourth Circuit.
    Argued April 2, 1974.
    Decided Aug. 13, 1974.
    Craven, Circuit Judge, filed a dissenting opinion.

      Alan P. Owens, Norfolk, Va., for appellant.
    J. Brian Donnelly, Asst. U. S. Atty., for appellee.
    Before CRAVEN, ADAMS  and RUSSELL, Circuit Judges.

       United States Circuit Judge for the Third Circuit sitting by designation.

   ADAMS, Circuit Judge:

This appeal calls for an application of the time-honored principle of collateral estoppel in a somewhat unusual factual setting.

I.

The appellant, Eddie Lawrence Phillips, was indicted under 18 U.S.C. §§ 2113(a) and (d), and charged with robbing a federally insured bank in Nanse-mond, Virginia. On April 16 and 17, 1973, Phillips was tried before a jury. At that trial, the government sought to prove that Phillips was one of four armed men who had entered the bank, perpetrated a robbery in the bank during which a gun was fired, and then made off with some $34,000 in bank funds. Phillips’ counsel sought to establish an alibi defense, and specifically challenged prosecution witnesses whose testimony tended to place Phillips in the bank during the robbery.

At the conclusion of the evidence, and after closing statements by counsel, the district judge proceeded to instruct the jury on, among other things, the necessary elements of the crimes charged. The jury retired to consider its verdict, but before concluding its deliberations posed the following query to the district judge:

“If we believe that Phillips was involved in the bank robbery but not at the bank at the time of the robbery is he considered guilty or not guilty ?”

(Emphasis added)

The district judge responded to the jury’s question with the following supplementary instruction:

“I specifically tell you that insofar as the question of robbery of the bank, if you do not believe, that Phillips was in the bank, he could not be found guilty of the crime of robbery of that bank. If you believe that the event, that his participation was not as one of those who were in the bank, I repeat, you could not find him guilty of robbery of that bank.” [Emphasis added]

However, the district court proceeded to instruct the jury that it might find Phillips guilty of possession of, or disposing of, what he knew to be the proceeds of the bank robbery. This offense was styled by the trial judge a “lesser included offense” under the indictment for bank robbery.

Ten minutes after the supplementary instruction was given, the jury returned the following verdict:

“We, the jury, find the defendant guilty of the lesser offense of possession of stolen money with knowledge that the money was stolen from the bank.”

On July 18, 1973, the district court set aside the conviction based on possession, on the grounds that it was not included in the indictment, and granted Phillips a new trial, “to proceed only upon the lesser included charge of possession of money, knowing the same to have been stolen in a bank robbery.” In September of 1973, the grand jury issued a new indictment, under U.S.C.A. § 2113(c), charging Phillips only with illegally possessing the money which he had earlier been indicted for stealing. On motion by the government, the earlier indictment for bank robbery was dismissed.

Phillips proceeded to trial upon the new indictment on November 14, 1973. Prior to the swearing in of the jury, Phillips' counsel moved the district court to prohibit the introduction of any evidence tending to show Phillips’ presence in the bank at the time of the robbery. The stated ground for this motion was that the issue of Phillips’ presence at the bank during the robbery had been adjudicated in Phillips’ favor at the first trial.

Counsel for Phillips maintained that the first jury, by having failed to convict him of bank robbery, the offense for which he was primarily charged in the first trial, had determined that he was not in the bank during the robbery. Phillips’ motion to exclude evidence showing his participation in the robbery was overruled.

The jury was sworn, the second trial proceeded, and the government, over continuing objection by Phillips’ counsel, proferred evidence tending to establish that Phillips participated in the robbery itself, and specifically that he had been in the bank. Government counsel made several statements to show that Phillips had taken an active part in the robbery. Before the jury returned, the district court gave the following instruction regarding the evidence of Phillips’ involvement in the robbery:

“Any evidence admitted at this trial concerning statements alleged to have been made by the defendant that he participated or had any connection with the bank robbery was admitted only on the question of knowledge of the defendant that if he possessed any money taken in the robbery he possessed it knowing it had been stolen.”

The jury found Phillips guilty of possession of the stolen money, with knowledge that it had been stolen.

On this appeal Phillips invokes the principle of collateral estoppel and contends, inter alia, that the district court erred in admitting evidence at the second trial that tended to prove he was present at the bank when the robbery took place. Phillips further contends that testimony as to what occurred in the bank at the time of the robbery prejudiced him, since it showed the use of force on bank personnel. Phillips asserts that because of the prejudicial nature of this evidence, he is entitled to a new trial. We agree, and reverse Phillips’ conviction.

II.

Collateral estoppel “means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit.” Considerations of judicial economy, conservation of public funds, and avoidance of multiple litigations underly the doctrine. Implicit, of course, in any limitation on relitigation of issues already determined in the criminal context is an appreciation of the substantial burdens, psychological as well as otherwise, placed on one who must defend against criminal prosecution. At least since 1916, collateral estoppel has been an acknowledged rule of federal criminal law. Since 1970, the rule has been recognized as an integral aspect of federal constitutional law as well, under the Fifth Amendment’s guarantee against double jeopardy. This Court, too, has heretofore signalled its acceptance of the general principle, and its readiness to apply it in an appropriate case.

Perhaps the most vexatious task facing a court in the application of collateral estoppel is the determination whether a particular factual issue has been settled by the prior adjudication. At common law, the inquiry was often an excruciatingly technical one, the court having to cull “ultimate fact” from “mediate data” with an almost thomistic exactitude. The federal courts, however, have exhibited a marked tendency to forego over-refined technique in favor of a more practical approach, at least in criminal cases. This modern attitude is articulated in Ashe v. Swenson, supra:

“The Federal decisions have made clear that the rule of collateral estop-pel in criminal cases is not to be applied with the hyper-technical and archaic approach of a 19th century pleading book, but with realism and rationality. Where a previous judgment of acquittal was based upon a general verdict, as is usually the case, this approach requires a court to ‘examine the record of a prior proceeding, taking into account the pleadings, evidence, charge, and other relevant matter, and conclude whether a rational jury could have grounded its verdict upon an issue other than that which the defendant seeks to foreclose from consideration.’ The inquiry ‘must be set in a practical frame and viewed with an eye to all the circumstances of the proceedings.’ Sealfon v. United States, 332 U.S. 575, 579, 68 S.Ct. 237, 240, 92 L.Ed. 180. Any test more mechanically restrictive would, of course, simply amount to a rejection of the rule of collateral estoppel in criminal proceedings, at least in every case where the first judgment was based upon a general verdict of acquittal.”

Among the “hyper-technical” devices to be eschewed under this view, then, is the notion that a general verdict of acquittal “may reflect only a belief that the Government had not met the higher burden of proof exacted in such cases . ” Each general verdict of acquittal must be examined carefully, to determine what facts, if any, can be deemed to have been adjudicated.

Pursuing this approach, and after reviewing the indictments, the trial transcripts, the various colloquys between court and counsel, the exchanges between the court and jury, the jury’s decision in the first trial to acquit Phillips of bank robbery, and setting the “inquiry into a practical frame,” we are convinced that the first jury effectively determined that Phillips was not in the bank at the time of the robbery.

Several circumstances support this conclusion. First, the jury inquired specifically whether a finding of presence in the bank was requisite to a conviction under the robbery statute. They were instructed, in no uncertain terms, that it was. A scant ten minutes after being so enlightened, they declined to return a verdict of guilty on the robbery charge. A “realistic and rational” appraisal. of these facts tends to show that the pivotal factual question in the jury’s deliberations was whether Phillips was present in the bank. The jury’s decision not to convict, following so closely upon the heels of clarifying instruction, leads almost inexorably to the conclusion that, at least in the jury’s eye, Phillips was not in the bank at the time of the robbery, or that the government had failed to prove that Phillips was in the bank at the time of the robbery. Any test more mechanically restrictive “might well amount to a rejection of the rule of collateral estoppel.”

The conclusion by the first jury that Phillips was not in the bank is buttressed by a secondary matrix of factual circumstances. None of the witnesses called by the prosecution at the first trial could positively identify Phillips as one of the bank robbers. Moreover, Phillips’ own witnesses testified that he was elsewhere at the time of the robbery. There thus existed a rationally supportive basis in the evidence for a conclusion by the jury that Phillips was not in the bank. Although it is possible, as the dissent suggests, to infer that the jury did not specifically determine the question whether Phillips was present at the bank, the evidence at the first trial, when taken together with the jury instructions and other factors, leaves little doubt concerning the significance of the jury’s failure to convict Phillips of robbery.

The dissent does not adopt the foregoing analysis for two reasons. First, it ascribes some weight to the fact that the jury did not affirmatively state that it found Phillips not guilty of bank robbery but, instead, convicted him of possession of stolen money while simply remaining silent with respect to the bank robbery count. The dissent correctly notes that the jury’s response to the bank robbery charge is somewhat ambiguous. But in light of the substantial interests of criminal defendants at stake, it would appear inappropriate to attach significance to the absence of an affirmative statement by the jury indicating its finding of not guilty when, for all practical purposes, the jury’s silence is to be treated in the same manner as an affirmative statement. For example, the defendant is entitled to a judgment of acquittal and, as the dissent acknowledges, the defendant receives full double jeopardy protection.

Second, the dissent suggests several explanations for the jury’s failure to convict Phillips of bank robbery which are not bottomed on the assumption that the jury unanimously agreed that Phillips was not present in the bank at the time of the robbery. This speculation does not seem particularly persuasive when juxtaposed against the jury’s question concerning the necessity of deciding that Phillips was in the bank in order to convict him of bank robbery, the judge’s response in the form of a supplemental instruction and the jury’s verdict shortly thereafter. Moreover, once a criminal defendant has undergone a trial and a favorable verdict, considerations of fairness and traditional judicial reluctance to explore the factors prompting jury decisions seem to dictate resolving doubts, at least under circumstances as here, in favor of the defendant.

Having ascertained that the result at the first trial established Phillips’ absence from the bank during the robbery, the government was thus foreclosed from relitigating the question of Phillips’ presence in the bank. The trial court’s limiting instruction, to the effect that evidence of presence in the bank was intended only to show Phillips' knowledge that the funds he received were stolen, was insufficiently protective.

At Phillips’ second trial, government counsel opened his case by telling the jury that he hoped to prove Phillips’ participation in the bank robbery. One government witness, the president of the bank, testified as to the aggravated nature of the robbery. Another, Joseph Warren, testified that Phillips had told him that he (Phillips) had robbed the bank, and had been inside it during the robbery. Finally, during his summation, government counsel again referred to Phillips’ participation in the robbery, particularly as evidenced by Warren’s testimony.

Thus, the government sought to prove precisely the same factual issue that had been foreclosed by the result in the first trial. Admission of evidence on this issue was erroneous. Moreover, government counsel’s reference to such evidence in his opening and closing statements compounded the error. Nor, after reviewing all the evidence introduced at Phillips’ second trial, can we say that the admission of evidence tending to show Phillips’ presence at the bank and the use of physical coercion during the robbery constituted harmless error. For example, the trial court permitted at the second trial, over defense counsel’s objections, testimony to the effect that there was a gunshot during the perpetration of the bank robbery. Once the first jury had refused to convict Phillips of bank robbery, such evidence, under the foregoing analysis, was inadmissible. The prejudicial impact of this testimony was potentially great, especially when the prosecutor also attempted to link Phillips with the bank robbery, and may not be overlooked on review. Nowhere in the record or in the briefs appears a justification for admission at the second trial on possession of testimony relating to events during the bank robbery. Such testimony would have been apposite only for a charge under 18 U.S.C. § 2113(d) but, at the second trial, no charge under this section was pending against Phillips.

Accordingly, the judgment of conviction will be reversed, and the case remanded to the district court for a new trial.

CRAVEN, Circuit Judge

(dissenting) :

I respectfully dissent from the decision to reverse Phillips’ second conviction for possessing stolen bank money. There are, I believe, two independent reasons why collateral estoppel should not apply in this case.

First, Phillips’ acquittal of bank robbery was only an implicit acquittal, arising by operation of law from the verdict of guilt on a lesser included offense. I would hold that such an implicit acquittal cannot be the basis for collateral estoppel because it leaves doubt whether the jury has made any factual determination in favor of the accused. For the purposes of subsequent prosecution for the greater offense, the jury’s silence is properly given the effect of an acquittal. It is unnecessary to speculate about the jury’s actual decision because the doctrine of double jeopardy does not require an actual verdict. See United States v. Jorn, 400 U.S. 470, 91 S.Ct. 547, 27 L.Ed.2d 543 (1971). When the jury has been impaneled and discharged under these circumstances, the exposure to conviction on the greater charge is enough to bar reprosecution. Green v. United States, 355 U.S. 184, 188, 78 S. Ct. 221, 2 L.Ed.2d 199 (1957). For collateral estoppel, however, an actual verdict is required, because the doctrine is premised on a factual determination in favor of the accused. The jury’s silence on the primary charge, coupled with conviction on a lesser offense, may suggest the kind of factual determination on which collateral estoppel is premised, but there is always a substantial likelihood that the jury reached no agreement at all on the primary charge. See United States ex rel. Hetenyi v. Wilkins, 348 F.2d 844, 856-857 (2d Cir. 1965), cert. denied, 383 U.S. 913, 86 S.Ct. 896, 15 L.Ed.2d 667 (1966).

If Phillips’ first jury had returned a clear verdict of acquittal ten minutes after the trial judge delivered the supplemental instruction, I would agree that the jurors had probably decided Phillips was not in the bank at the time of the robbery. But other aspects of this case cast substantial doubt on the jury’s decision. The supplemental instruction on presence in the bank and the instruction on the lesser included offense were both given in response to the jury’s question. The jury was not told that it had to find Phillips not guilty of bank robbery before it could find him guilty of possessing stolen money. As a result, the jury could have reached its verdict without ever deciding whether Phillips was in the bank. The jury’s question does indicate that some jurors believed Phillips was not in the bank, but I do not think it proves unanimity where the verdict is silent. An aiding and abetting instruction had been given in the original charge, and the jury may have hoped the judge would give them an instruction that would relieve them of deciding whether he was in the bank.

In summary, paraphrasing Ashe v. Swenson, 397 U.S. at 444, 90 S.Ct. 1189, 25 L.Ed.2d 469, I am convinced that a rational jury could have reached its verdict without deciding the issue which the defendant seeks to foreclose from consideration.

Second, even if I agreed that the implied acquittal could be set up as a collateral estoppel, I would not allow its use to restrict proof on retrial of the lesser charge. Retrial in cases like this one harbors none of the prosecutorial abuses that supplied the rationale of Ashe v. Swenson and its nonconstitutional forbears. See United States v. Kramer, 289 F.2d 909, 916 (2d Cir. 1961). The prosecutor cannot be accused of using the first trial as a practice run, of recasting the charge in slightly different form to get a second chance for conviction, or of harassing the defendant by repeatedly calling him to answer the same proof. Cf. Ashe v. Swenson, 397 U.S. at 445-447 & n. 10, 90 S.Ct. at 1195; United States v. Nash, 447 F.2d 1382, 1387 (4th Cir. 1971) (Winter, J., concurring); United States v. Davis, 369 F.2d 775, 780 (4th Cir. 1966), cert. denied, 386 U.S. 909, 87 S.Ct. 858, 17 L.Ed.2d 783 (1967). With or without collateral estoppel, the second trial will not be a replay of the first, and the second jury cannot be invited to convict the accused because he is guilty of the first crime. Evidence that tends to prove the first crime may not be used unless it is relevant to the second, and even then it may be excluded if the trial judge believes it more prejudicial than probative. See United States v. Woods, 484 F.2d 127, 134 (4th Cir. 1973), cert. denied, 415 U. S. 979, 94 S.Ct. 1566, 39 L.Ed.2d 875 (1974); United States v. Smith, 446 F.2d 200 (4th Cir. 1971).

Applying collateral estoppel to retrials like this one will serve none of the purposes of the doctrine, and I believe it will unjustifiably tip the balance in favor of the defendant. The acquittal operates as a complete bar to reprosecution on the bank robbery. That is enough. That the trial judge belatedly charged on the lesser included offense cuts both ways: it was the basis for vacating the conviction but also may have saved the defendant from a conviction for bank robbery. See United States v. Maybury, 274 F.2d 899 (2d Cir. 1960); Mayers & Yarbrough, Bis Vexari: New Trials and Successive Prosecutions, 74 Harv.L.Rev. 1, 16-28 (1960). If the defendant can also use the acquittal as collateral estoppel on retrial of the conviction, he may be able to keep the second jury from hearing evidence that helped persuade the first jury of his guilt. This result, in Judge Friendly’s words, “would convert the guarantee of double jeopardy from a shield into a sword.” United States v. Maybury, 274 F.2d at 905.

Ashe v. Swenson did not pretend to define the outer limits of collateral es-. toppel, since the Court there found a clear case for applying the doctrine. In concluding that collateral estoppel is embodied in the concept of double jeopardy, the Court said: “For whatever else that constitutional guarantee may embrace, it surely protects a man who has been acquitted from having to ‘run the gantlet’ a second time.” 397 U.S. at 445-446, 90 S.Ct. at 1195 (citations omitted). This principle should not be applied when its only effect is to help a person convicted of a lesser offense elude fair retrial on the charge. Collateral estoppel is a doctrine of fairness. It does not seem to me unfair to subject the appellant to retrial for a lesser offense of which he had been convicted. I think the defendant got more than he was entitled to when the first conviction was vacated. To set aside the second conviction is too much of a good thing.

      . The term “collateral estoppel” is itself of comparatively recent coinage. See Developments — Res Judicata, 65 Harv.D.Rev. 818, 840 (1952). However, the broader principle of res judicata — of which collateral estoppel is an aspect — has roots in Roman law, in early English practice, and in continental jurisprudence. Id. at 820. The policy rationales underlying the two doctrines are essentially the same. See Cleary, Res Judicata Reexamined, 57 Yale L.J. 339, 344 (1948).

      . 18 U.S.C. § 2113 (a) provides, in part, that:
      “Whoever, by force and violence, or by intimidation, takes, or attempts to take, from the person or presence of another any property or money . . . belonging to, or in the care, custody, control, management, or possession of, any [federally insured] bank ... or “Whoever enters, or attempts to enter any bank . . . with intent to commit in such bank . . . any felony affecting such bank ... or any larceny Shall be fined not more than $5000 or imprisoned not more than twenty years, or both.”
      18 U.S.C. § 2113(d) provides that:
      “Whoever in committing . . . any offense defined in subsections (a) and (b) of this section, assaults any person, or puts in jeopardy the life of any person by the use of a dangerous weapon or device, shall be fined not more than $10,000 or imprisoned not more than twenty-five years, or both.”

      . Tr. 342, trial of April 16, 17, 1973.

      . Tr. 346, trial of April 16, 17, 1973.

      . Tr. 346, trial of April 16, 17, 1973.

      . Tr. 349, trial of April 16, 17, 1973.

      . See 18 V.S.C. § 2113(c). The government’s attempt to obtain a new indictment on the possession charge stemmed, apparently, from its view that possession under the subsection, (c) is not a “lesser included offense” under subsection (a). We assume, with the government, that an offense under (c) is not a lesser included offense under (a). The dissent appears to make the contrary assumption.

      . Tr. 15, trial of Nov. 14, 1973.

      . Tr. 285, trial of Nov. 14, 1973.

      . Ashe v. Swenson, 397 U.S. 436, 443, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970) ; United States v. Nash, 447 F.2d 1382, 1385 (4th Cir. 1971).

      . Mayers and Yarbrough, Bis Vexnri: New Trials and Successive Prosecutions, 74 Harv. L.Rev. 1, 31 (1960).

      . See Mayers and Yarbrough, supra, at 31-32.

      . See United States v. Oppenheim, 242 U.S. 85, 37 S.Ct. 68, 61 L.Ed. 161 (1916).

      . See Ashe v. Swenson, supra, 397 U.S. at 445, 90 S.Ct. 1189. Since the contours of collateral estoppel in federal criminal cases seem to be coextensive with those established by the Double Jeopardy Clause, we perceive no need to rest our decision in this case on constitutional grounds. See Sealfon v. United States, 332 U.S. 575, 68 S.Ct. 237, 92 L.Ed. 180 (1948). Nonetheless, requiring Phillips to counter evidence introduced by the government tending to show his presence at the bank for a second time seems akin to the type of harassment against which the Double Jeopardy Clause was intended to protect. See Mayers and Yarbrough, supra, at 4-5.

      . United States v. Nash, supra.

      . See Mayers and Yarbrough, supra, at 33-39.

      . See, e. g., Judge L. Hand’s discussion in The Evergreens v. Nunan, 141 F.2d 927 (2d Cir. 1944).

      . 397 U.S. at 444, 90 S.Ct. at 1194 (footnotes omitted). See also United States v. Kramer, 289 F.2d 909 (2d Cir. 1961); United States v. DeAngelo, 138 F.2d 466 (3d Cir. 1943).
      The quoted language from Ashe indicates that, though the jury in this case returned no explicit “not guilty” verdict on the charge of bank robbery, its failure to return a verdict of guilty must be taken as an acquittal for all intents and purposes.

      . United States v. Kramer, supra, 289 F.2d at 913.

      . It appears that, to secure a conviction of bank robbery under 28 U.S.C. § 2113(a), the presence of a defendant in the bank is a requisite element of the offense. See Note 2, supra.

      . The dissent also attempts to buttress its position on purely policy grounds. In so doing, it cites language of Judge Friendly in U. S. v. Maybury, 274 F.2d 899 (2d Cir. 1960), Maybury, however, involved inconsistent verdicts rendered by a judge, sitting without a jury. To reach such verdicts, the judge was required to make a factual finding on one count for the defendant in the context of a particular dispute and to make a finding against the defendant on precisely the same issue in a second count. Thus, unlike this case, the same tribunal found both for and against the defendant on a particular issue. Refusal to apply collateral estoppel in May-bury, therefore, is not necessarily inconsistent with the application of the doctrine in this case. This conclusion may be supported by file fact that the appellate court carefully distinguished findings of fact by a judge from verdicts by a jury.

      . Tr. 15, trial of Nov. 14, 1973.

      . Tr. 64, trial of Nov. 14, 1973.

      . Tr. 120, trial of Nov. 14, 1973.

      . Tr. 257, trial of Nov. 14, 1973.

      . Concededly, the record in this case did not manifest the same type of prosecutorial “bad conduct” adverted to in Ashe, see 397 U.S. at 445-447 and n. 10, 90 S.Ct. 1189. Nonetheless, the principle enunciated in that case must be applied here, since there was no indication given by the Supreme Court that pros-ecutorial “bad conduct” is a prerequisite to application of collateral estoppel.

      . See Rule 52(a), Federal Rules of Criminal Procedure.

      . The following colloquy took place during the direct examination of the government's ' witness, Allen C. “Watson, the President of the First Virginia Bank of Nansemond:
      Q. Mr. Watson, you previously testified as to whether or not the individuals had weapons. Do you know whether or not any weapon was discharged in the bank?
      MR. OWENS [counsel for Phillips] : Objection, your Honor.
      The Court: Overrule the objection.
      MR. OWENS: It has nothing to do with our case.
      The Court: All right, I’ll overrule the objection.
      The Witness: AVhen I dashed into my office, I immediately heard a — what sounded like a gunshot.
      Tr. 69, trial of November 14, 1973.

      . The verdict is quoted on page 3 of the majority opinion. Like the majority, I find it unnecessary to decide whether possession of stolen bank money under 18 U.S.C. § 2113 (c) is included in the offense of bank robbery under § 2113(a). I have merely assumed, for purposes of this case, that it is.

      . Quoted at page 229 of the majority opinion.

      . The record of the first trial does not show why the jury was not instructed that Phillips could have aided and abetted the bank robbery without being present at the bank. I would be surprised if the law were otherwise. See United States v. Waters, 461 F.2d 248 (10th Cir.), cert. denied, 409 U.S. 880, 93 S.Ct. 207, 34 L.Ed.2d 134 (1972); Asher v. United States, 394 F.2d 424 (9th Cir. 1968); Tarkington v. United States, 194 F.2d 63 (4th Cir. 1952).

      . In Phillips’ ease the trial judge granted defendant’s motion for new trial, giving as his reason:
      [I]n an abundance of caution, it may be that the charge of the lesser offense, given as it was, after a time of deliberation, could have been unduly influencing upon the jury.

        App. 3. The trial judge had omitted the instruction on possessing stolen money from the original charge at the request of defense counsel who, in the judge’s words, “was willing to go whole hog or nothing.” Tr. 343, Trial of April 16, 17, 1973. The jury’s question persuaded the judge that withholding the instruction was error.

      . Only a few federal cases have applied collateral estoppel as between an acquittal and a conviction rendered at the same trial. United States v. Pappas (Appeal of Misclilicli), 445 F.2d 1194 (3d Cir.), cert. denied, 404 U.S. 984, 92 S.Ct. 449, 30 L.Ed.2d 368 (1971); Green v. United States, 426 F.2d 661 (D.C.Cir. 1970); Travers v. United States, 118 U.S.App.D.C. 276, 335 F.2d 698, 703 (1964) (dictum); Cosgrove v. United States, 224 F.2d 146 (9th Cir. 1954), modified on rehearing, 224 F.2d 157 (1955); United States v. Flowers, 255 F.Supp. 485 (E.D. N.C.1966). Compare United States v. Finnerty, 470 F.2d 78 (3d Cir. 1972); United State v. Carbone, 378 F.2d 420 (2d Cir.), cert. denied, 389 U.S. 914, 88 S.Ct. 242, 19 L.Ed. 2d 262 (1967). In United States v. May-bury, 274 F.2d 899 (2d Cir. 1960), a divided court reversed a conviction because it was inconsistent with an acquittal rendered at the same bench trial. Over Judge Lumbard’s dissent, Judge Friendly and Judge Hand held that collateral estoppel would not bar retrial of the conviction. Judge Friendly also expressed his opinion that collateral estoppel should not be allowed to restrict the evidence on retrial. Judge Hand did not address this final point, apparently because it was unnecessary for disposition of the immediate appeal.


author: CUMMINGS, Circuit Judge.

text:
    Keith SCHROEDER, a minor, etc., Plaintiff-Appellee, v. C. F. BRAUN & CO. et al., Appellees-Appellants, v. COOLING TOWER ERECTORS, INC., Third-Party-Defendant-Appellant.
    Nos. 73-1209 to 73-1213.
    United States Court of Appeals, Seventh Circuit.
    Heard May 23, 1974.
    Decided Aug. 22, 1974.

      James T. Ferrini, Robert S. Soder-strom, Marvin Riman, Francis D. Mor-rissey, Chicago, 111., for appellees-appel-lants.
    Sidney Z. Karasik, Philip H. Corboy, Chicago 111., for plaintiff-appellee.
    Before SWYGERT, Chief Judge, CUMMINGS, Circuit Judge, and MATTHES, Senior Circuit Judge.

      . Senior Circuit Judge M. C. Matthes of the Eighth Circuit is sitting by designation.

   CUMMINGS, Circuit Judge.

In his second amended complaint, plaintiff sued four companies for injuries he suffered in Morris, Illinois, on April 20, 1971. The complaint contained appropriate allegations of diversity and jurisdictional amount under 28 U.S.C. § 1332.

Plaintiff was an employee of Cooling Tower Erectors, Inc. (“Cooling”). Defendant Northern Petrochemical Company (“Northern Petro”) had contracted with the general contractor, defendant C. F. Braun & Co. (“Braun”) for Braun’s construction of a polyethylene plant, including a water cooling tower, on Northern Petro’s premises at Morris, Illinois.

Braun thereafter entered into a subcontract with defendant Fluor Cooling Products Company (“Fluor”) to construct the cooling tower. Fluor then hired plaintiff’s employer, Cooling, to erect the structure according to blueprints and with a kit of parts supplied by Fluor. Defendant Northern Natural Gas Company (“Northern Natural”) allegedly provided supervisory personnel to defendant Northern Petro, its wholly owned subsidiary, in connection with the erection of the tower.

According to the complaint, the four defendants had charge of the erection and construction of the cooling tower within the meaning of the Illinois Structural Work Act (Ill.Rev.Stats.1973, ch. 48, §§ 60-69). They allegedly violated that Act by failing “to provide ladders which were reasonably necessary to give proper and adequate protection to the life and -limb of persons engaged” in work on this structure. Plaintiff claimed that his fall from the cooling tower was caused by this violation of the Structural Work Act. He sought $500,000 damages.

Northern Natural and Northern Petro filed cross-actions against Braun and Fluor and a third-party action against Cooling, alleging both contractual and common law indemnity.

Braun filed a cross-action against Fluor for contractual and common law indemnity, and an action against Cooling for common law indemnity. Fluor also filed an action against Cooling for contractual and common law indemnity.

The jury returned a verdict in plaintiff’s favor against all defendants in the sum of $252,106.20. Judgment was entered thereon.

The jury was instructed that if it found for any cross-claimants or third-party plaintiffs, it “should assess the damages in the same amount as [it] found for plaintiff.” In violation of this instruction, the jury apportioned its award to plaintiff among nine indemnity verdicts. The trial court impounded the erroneous verdicts returned on the indemnity claims and submitted new verdicts to the jury, directing it to return verdicts in the amount of $252,106.20 in favor of each indemnitee and against each indemnitor. The jury thereupon returned verdicts in favor of Northern Natural and Northern Petro against Braun, Fluor and Cooling. Verdicts were also returned in favor of Braun against Fluor and Cooling. A verdict was returned in favor of Fluor against Cooling. Judgments were entered on these nine verdicts, each for $252,106.20, resulting in this appeal by Cooling.

After the foregoing verdicts were returned, the district court heard the claims for contractual indemnity. Thereafter, it entered judgment on the contractual claims in favor of Northern Natural against Braun and in favor of Northern Petro against Braun, Fluor and Cooling in the amount of plaintiff’s verdict and for attorneys’ fees of $8,742.25 and costs; in favor of Braun and against Fluor in the amount of the plaintiff's verdict and $19,263.87 for attorneys’ fees, plus costs; and in favor of Fluor against Cooling in the amount of plaintiff’s verdict and $26,527.09 for attorneys’ fees, plus costs. Cooling has appealed from these judgments.

All defendants have filed appeals from the judgments in favor of plaintiff, although Cooling is the only party ultimately required to pay all damages, including attorneys’ fees and costs of all parties.

The cooling tower was to be about 45 feet tall, 35 feet wide and 60 feet long. The heated water was to be pumped to the top of the structure and then allowed to trickle through baffles within the structure to a cement basin at the ground level. A large fan was eventually installed at the top of the tower to cool the trickling water.

The tower was constructed from redwood beams and has been variously described as resembling a giant erector set or huge honeycomb when finished. The only walkway was at the top of the completed structure, running parallel with its length. Access to the top level was ultimately supplied by a staircase.

When the accident occurred, the tower had been erected to its full height. Plaintiff was told by his foreman to climb to the top of the tower to pass lumber to the carpenters. At that time there were two ladders reaching only 18 feet up either side of the tower. After leaving the ladder, a workman would have to climb from beam to beam. The evidence was conflicting, but at least some adjacent beams were six feet apart.

Plaintiff’s foreman later instructed him to descend to the ground to open crates. Plaintiff lowered himself from beam to beam at a point about 20 to 30 feet from one of the ladders. He lost his footing and fell to the ground about ten feet from the top of the tower.

One day after the accident, ladders had been placed on the tower reaching to its top. An architect and construction engineer testified for plaintiff that a hazard existed at the time of the accident because there were then no ladders going to the top of the tower. Additional facts are stated as they become relevant to the issues presented.

Whether Failure to Provide a Ladder Violates the Illinois Structural Work Act

Cooling and some defendants argue that the failure to supply the ladder necessary to safeguard the workers at this cooling tower does not violate the Illinois Structural Work Act, more commonly known as the Scaffolding Act. Section 1 of the Act provides in part:

“All scaffolds, hoists, cranes, stays, ladders, supports, or other mechanical contrivances, erected or constructed by any person, firm or corporation in this State for the use in the erection, repairing, alteration, removal or painting of any house, building, bridge, viaduct, or other structure, shall be erected and constructed, in a safe, suitable and proper manner, and shall be so erected “and constructed, placed and operated as to give proper and adequate protection to the life and limb of any person or persons employed or engaged thereon, or passing under or by the same, and in such manner as to prevent the falling of any material that may be used or deposited thereon.” (Ill.Rev.Stat.1973, ch. 48, § 60).

Under Louis v. Barenfanger, 39 Ill.2d 445, 236 N.E.2d 724 (1968), it is clear that a permanent structure such as plaintiff was working upon is included in the beneficent scheme of the Act. Barenfanger also holds that 'failure to furnish a protective scaffold is actionable under the Act. Since Section 1 specifically covers ladders as well, it is plain that the failure to furnish a vital ladder leading to the permanent part of the structure on which plaintiff was working violates the statute. It was for the jury to decide whether plaintiff would have used a ladder instead of climbing down the redwood beams. We cannot say that its proximate cause determination was an unreasonable one; it is fully supported by plaintiff’s testimony that when the accident occurred, he had planned to climb down to the level where the available ladder ended, and then travel horizontally at that lower level to the ladder.

Ignoring the fact that the top beam and part of a platform were already in place, Cooling argues vigorously that it was impossible to install a ladder until a complete platform had been built on top of the tower. The frivolity of the contention became manifest at oral argument, when it was admitted that the ladder could have been placed against the top of the tower; the platform would have been helpful only to give the workers a place to stand when they got off the ladder. But standing on top of the tower, and climbing on the side of it, are separate dangerous activities. Plaintiff did not fall for lack of a place to stand; he fell for want of a ladder.

Whether Defendants Were in Charge Under the Illinois Structural Work Act

Section 9 of the Scaffolding Act places the duty of compliance upon “Any owner, contractor, sub-contractor, foreman or other persons having charge of” the work. Ill.Rev.Stat.1973, ch. 48, § 69. Here the jury concluded that each of the four defendants was sufficiently in charge of the work to impose liability under the Act.

The Illinois Supreme Court has determined that the phrase “having charge of” in this statute is a generic term of broad import. It includes persons who have the right to control the work, whether or not they exercise that right, but it is not confined to such persons. The statutory phrase includes those who “care for” or “have the care of” the work. The court held that the phrase is of common usage and understanding so that there is no need to explain its meaning in instructing the jury. Larson v. Commonwealth Edison Co., 33 Ill.2d 316, 321-323, 211 N.E.2d 247 (1965). Consistently with the broad guidelines laid down by the Illinois Supreme Court, the eases hold that more than one person can be “in charge” of the work. Larson, supra; Gannon v. Chicago, M. St. P. & P. Ry., 22 Ill.2d 305, 175 N.E.2d 785 (1961); Clements v. Schless Constr. Co., 91 Ill.App.2d 19, 25, 234 N.E.2d 578 (1968); Crotty v. High-Low Foods, Inc., 78 Ill.App.2d 237, 240, 223 N.E.2d 442 (1966); Yankey v. Oscar Bohlin & Sons, Inc., 37 Ill.App.2d 457, 186 N.E.2d 57 (1962).

Despite this sweeping definition, Cooling and some of the defendants contend that the defendants were not in charge of the work and therefore were not liable under the statute. As to Northern Natural and its subsidiary Northern Petro, the parent sent its employee, engineer Russell Penrose, to the jobsite as resident representative of its subsidiary. Penrose testified that he had a dual loyalty to these two companies. His duties were to assure the Northern Companies that the plant met the appropriate standards. He inspected the quality of the work daily and hired eight inspectors, three of whom were paid by Northern Natural, to report to him. These inspectors went to the top of the cooling tower to check the bolt connections. Penrose reported to Northern Natural daily. The activities of Penrose and his staff are sufficient to show that the two Northern Companies were in charge of the work.

Northern Petro’s being in charge of the work is further established by its contract with its prime contractor Braun, which gave Northern Petro the right to terminate the work at any time and without cause. It required Braun to comply with Northern Petro’s safety rules and with all laws and regulations pertaining to the performance of the work. Obviously, Northern Petro’s right to terminate the contract put it in a position to enforce these requirements. Northern Petro was given the right to inspect the construction, including work in progress. Therefore, it was in a position to effect compliance with the Scaffolding Act, the very test advocated here by Northern counsel.

Nowicki v. Union Starch & Ref. Co., 54 Ill.2d 93, 296 N.E.2d 321 (1973), cited by the Northern Companies, did not involve the Scaffolding Act, for the count alleging a violation of that Act was not before the Supreme Court. 54 Ill.2d 97, 296 N.E.2d 321.

In their reply brief, the Northern Companies urge that they did not have the authority to interfere with the means of doing the work and therefore were not in charge of the work within the Scaffolding Act. This ignores Northern Petro’s contractual right to terminate the work without cause and to enforce safety rules. While it is true that Braun had primary safety responsibility, Jack Murch, who ran Braun’s safety program, submitted accident reports to Mr. Penrose of the Northern Companies. Penrose also testified that he received confirmation from Braun’s project superintendent, Larry Lawrence, “that the safety program was reasonably effective.” Braun’s furnishing safety information to the Northern Companies’ representative shows that Braun was complying with the safety obligation imposed by Northern Petro and enforceable by Northern Petro’s termination right. To this extent, the Northern Companies were in charge of the work within the Scaffolding Act.

Since the Northern inspectors had to climb to the top of the tower to check the bolt connections, they had actual or constructive knowledge of the absence of ladders reaching to the top of the structure. This is sufficient to impose liability upon owners having charge of the work. Schmid v. United States, 273 F.2d 172, 175 (7th Cir. 1959); see also Fentress v. United States, 431 F.2d 824, 828-829 (7th Cir. 1970). We are unwilling to upset the jury verdict merely because Penrose and his inspectors concentrated on checking the quality of the work performance.

Cooling has submitted that Braun, the general contractor, was not in charge of the work either. However, ‘there was testimony that Braun personnel toured the jobsite every day and inspected for safety. Braun was contractually obligated to comply with safety rules and laws, and it imposed similar obligations on Fluor. Its subcontract with Fluor provided that Braun’s safety engineer would check Fluor’s “work area and operations frequently to insure compliance with safety rules.” The- Braun-Fluor contract listed safety requirements as one of the reasons Braun could stop the work. Braun’s safety rules required daily inspection tours of the job by its safety engineer or his deputy. The rules also required that ladders be provided for scaffolds more than five feet high, with a ladder to each upper platform. This evidence is "sufficient to •suppoi’t the jury’s verdict that Braun was also in charge of the work within the meaning of the Scaffolding Act. It is highly significant that Braun does not contend otherwise.

Although Cooling asserts that Braun could not have been guilty of a willful violation of the Act, as seen, liability is imposed thereunder when any danger is known or could have been known in the exercise of reasonable care. Schmid v. United States, 273 F.2d 172, 175 (7th Cir. 1959). Since Braun’s inspectors visited the jobsite daily and reported to Penrose of the Northern Companies, the jury could conclude that Braun had actual or constructive knowledge that there was no ladder leading to the top of the structure, even though a ladder was specifically required by Braun’s own safety rules.

Finally, Fluor explicitly retained overall responsibility for the erection of the cooling tower by Cooling. Fluor’s subcontract with Cooling gave Fluor access to the work ahd reserved to Fluor the right to inspect the job. Fluor’s contract with Braun required Fluor to comply with Braun’s and Northern Petro’s safety rules and applicable laws, and placed responsibility on Fluor to inspect and to observe safety precautions. Neither Fluor’s selection of Cooling to complete the work nor the absence of any Fluor employee at the worksite insulates it from liability. Buehler v. Toynan Constr. Co., 52 Ill.2d 214, 287 N.E.2d 691 (1972). There was sufficient evidence to enable the jury to find Fluor in charge of the work

Testimony about Violation of Illinois Health and Safety Act Rules and Other Standards

Cooling and the defendants assert that it was reversible error to permit witnesses Paul J. Campeggio and Harry L. Scoggin to testify about violations of the Illinois Health and Safety Act rules. However, Cooling’s counsel first introduced this subject in considerable detail during his recross-examination of Scog-gin, who testified that Part H, § 6, Rule 3(b) thereunder was inapplicable. Consequently, it was appropriate for plaintiff to bring out on redirect that Part I, § 3, Rule 30(a) thereunder required a ladder to run to scaffold platforms more than six feet above the ground where a stairway, runway or other safe means of access had not been provided. Subsequently, Campeggio was permitted to testify that his inspection of the cooling tower showed violations of the Act.

For two reasons, this evidence was admissible. First of all, the topic originated with Cooling rather than with plaintiff. Defendants did not object when Cooling first introduced the matter. Second, the Illinois Health and Safety Act Rules were admissible to establish the standard of care to be exercised by defendants. Cf. Darling v. Charleston Community Memorial Hospital, 33 Ill.2d 326, 330-332, 211 N.E.2d 253 (1965); Avery v. Moews Seed Corn Co., 131 Ill.App.2d 842, 848, 268 N.E.2d 61 (1971). The standards would aid the jury to determine if defendant had acted “in a safe, suitable and proper manner” as required by the Illinois Structural Work Act. It was also permissible to receive these witnesses’ expert testimony even when dealing with the ultimate issue of the case. Merchants Nat’l Bank v. Elgin, J. & E. Ry., 49 Ill.2d 118, 122, 273 N.E.2d 809 (1971); Coleman v. Illinois Central R. R., 13 Ill.App.3d 442, 444, 300 N.E.2d 297 (1973).

To support its argument that testimony about the Health and Safety Act should have been excluded, Braun relies on Jones v. S. S. and E. Corp., 112 Ill.App.2d 79, 250 N.E.2d 829 (1969). There the court decided only that an instruction was improper because it told the jury to take into account a violation of that Act in resolving whether the Scaffolding Act had been violated. Braun’s reply brief concedes that no such instruction was given here, but it complains that the court should have instructed the jury that the Health and Safety Act Rules were only admitted to establish the standard of care to be exercised by defendants. Since defendants did not tender such an instruction or object to the failure to give it, they may not now attack its absence. Rule 51, F. R.Civ.P. The court in Jones expressly refused to consider the point for which Braun cites the case.

Although defendants object to the admission in evidence of parts of two building codes and an accident prevention manual, all dealing with construction ladders, these materials were sufficiently qualified by witness Harry L. Scoggin, an architect and consultant engineer. Such evidence of industry standards was clearly admissible in this kind of case. Darling v. Charleston Community Memorial Hospital, 33 Ill.2d 326, 211 N.E.2d 253 (1965). We disagree with Cooling that building standards were irrelevant because this tower was not a structure. The photographs appended to plaintiff’s brief (his Exhibits 4 and 6) demonstrate that the cooling tower was a structure and- not merely a piece of mechanical equipment as belatedly asserted in Cooling’s reply brief.

Other evidentiary rulings assailed were at the most harmless error considering the overwhelming evidence that the Scaffolding Act had been violated. Likewise the court’s passing, jocular comment that perhaps defendants should have joined the organizations that devised standards for the performance of construction work could not have fatally prejudicied the jury in favor of plaintiff. No trial objection was even made to the comment.

Excessiveness of Verdict

Cooling, Braun and the Northern Companies assert that the $252,106.20 verdicts were excessive and include an award for future wage loss which has no evidentiary support. In his argument to the jury, plaintiff’s counsel never made the point that his client would lose wages or earning power in the future. This speculation for attacking the jury’s verdict is therefore without merit.

The testimony does show that plaintiff suffered substantial physical injuries and was forced to switch from his chosen future profession of animal science to agricultural economics. Further surgery will be necessary, and plaintiff will continue to have a disrupted sacroiliac joint which will prevent him from engaging in any heavy work or long standing. In this setting, it would be inappropriate for us to substitute our judgment for the jury’s. Raspar v. Clinton-Jackson Corp., 118 Ill.App.2d 364, 374, 254 N.E.2d 826 (1969).

Claims for Contractual Indemnity

Northern Natural secured a judgment against Braun based upon contract.

Northern Petro secured judgments against Braun, Fluor and Cooling based upon contract.

Braun secured a judgment against Fluor based upon contract.

Fluor secured a judgment against Cooling based upon contract.

The contract between Northern Petro and Braun provided that Braun would indemify Northern Natural and Northern Petro against any liabilities for injuries to any person “arising out of any act or omission of Contractor [Braun] or its Subcontractors in connection with, or incidental to any of the Work * * Braun asserts that the contract did not encompass sub-subcontractors such as Cooling. We do not agree that the contract was meant to relieve Braun of responsibility if its subcontractor Fluor should redelegate the responsibility. The term “subcontractor” reaches those who take a portion of a contract from a subcontractor. Baker & Conrad, Inc. v. Chicago Heights Constr. Co., 364 Ill. 386, 395, 4 N.E.2d 953 (1936); Hardware Mut. Cas. Co. v. Hilderbrandt, 119 F.2d 291, 297 (10th Cir. 1941). Therefore, the judgments of Northern Natural and Northern Petro on their contractual cross-claims against Braun were proper.

Northern Petro’s and Braun’s contractual indemnity cross-claims against Fluor depend upon the following clause in the Fluor-Braun contract:

“INDEMNIFICATION. Contractor [Fluor] shall indemnify and save Braun and Braun’s customer [Northern Petro] free and harmless of and from any and all costs, expenses, claims, demands, suits, actions or judgments made, brought or recovered against either Braun or Braun’s customer for personal injuries, death or property damage resulting in whole or in part from any act or omission of Contractor or his subcontractors or the agents, servants or employees of either, in connection with work covered by this subcontract.”

Fluor argues conditionally that if it is held not entitled to indemnity from Cooling, then it should not have to indemnify Braun and Northern Petro. Since we conclude below that Cooling must idemnify Fluor, this argument is waived. In any event, it is clear that Northern Petro and Braun were entitled to idemnity under the paragraph just quoted.

As to Northern Petro’s and Fluor’s third-party claims against Cooling for contractual indemnity, the pertinent clauses of the Cooling-Fluor contract provide:

“10. CONTRACTOR does indemnify and save harmless F.C.P.C. and OWNER [Northern Petro], or either, from all claims, demands, causes of action or suits of whatever nature arising out of the services, labor, equipment and materials furnished by CONTRACTOR * * *.
“11. CONTRACTOR assumes entire responsibility and liability for all losses, expenses, damages, demands and claims in connection with or arising out of any injury * * * to persons or property sustained or alleged to have been sustained in connection with or to have arisen out of the performance of the WORK by CONTRACTOR * * * including losses, expenses or damages sustained by F. C.P.C. or OWNER, and herein indemnifies and holds harmless F.C.P. C. and OWNER * * * from any and all such losses, expenses, damages, demands and claims, and agrees to defend any suit or action brought against them, or any of them, based on any such alleged injury or damage, and pay all damages, costs and expenses, including attorney’s fees, in connection therewith or resulting therefrom.
“ ‘Injury’ or ‘damage,’ as these words are used in this Article 11, shall be construed to include, but not limited to, injury or damage consequent . upon the failure of or use or misuse by CONTRACTOR, its subcontractors, agents, servants or employees, of any hoist, rigging, blocking, scaffolding, or any and all other kinds of items of equipment, whether or not the same be owned, furnished or loaned by OWNER or F.C.P.C.”

This indemnity clause fits like a glove. It protects Fluor as a party to the contract, and Northern Petro as a specifically designated third party beneficiary. Cooling’s active misconduct caused plaintiff’s injuries, so that there can be no doubt that Fluor’s and Northern Petro’s liability arose “in connection with” or “out of the performance of the WORK by CONTRACTOR” Cooling.

Some of the indemnitors rely on the rule that “an indemnity contract will not be construed as indemnifying one against his own negligence, unless such a construction is required by clear and explicit language of the contract.” Westinghouse Elec. Elevator Co. v. LaSalle Monroe Bldg. Corp., 395 Ill. 429, 433, 70 N.E.2d 604, 607 (1946); Tatar v. Maxon Constr. Co., 54 Ill.2d 64, 67, 294 N.E.2d 272 (1973). They argue that since each indemnitee in this case was held liable to plaintiff for its own statutory violation sounding in negligence, none are entitled to indemnity.

Negligence includes a broad range of culpability, and it is clear that the in-demnitors here have ignored the facts of Westinghouse and Tatar and quoted the rule of those cases in a factual situation where it was never meant to apply. In both Westinghouse and Tatar, the victim was injured when an employee of the in-demnitee negligently allowed a heavy object to fall on him. This active negligence was the sole cause of the injuries; there is no indication that the indemni-tors were guilty of even passive negligence.

Cooling was the actively negligent party which caused this accident, and it is not an indemnitee. Westinghouse and Tatar do not apply to the more passive negligence of the defendants in not requiring Cooling to install a ladder, or in Fluor’s case, not supplying a ladder in the kit of parts.

“We are not here confronted by the situation where the [indemnitor] had no control over the operation which was the basis for the conservative approach in all of the cases cited by defendant * * *.
“We are not authorized to read into the indemnity an exception in the ease in which the indemnitee’s failure to act also created a situation which made the incidence of the situation more probable.” Fosco v. Anthony R. Delisi, Gen. Cont., Inc. 103 Ill.App.2d 457, 464, 243 N.E.2d 871, 875 (1968).

See also Spurr v. Acme Steel Co., 238 F.Supp. 606, 608-610 (N.D.Ill.1964) (collecting cases), affirmed sub nom. Spurr v. LaSalle Constr. Co., 385 F.2d 322, 330 (7th Cir. 1967).

Although Cooling argues to the contrary, the provisions for attorney’s fees “in connection with” the work in the various indemnity contracts cover fees incurred defending or prosecuting indemnity claims as well as fees incurred defending against plaintiff’s suit. Cf. United States Fidelity & Guar. Co. v. Virginia Eng’r Co., 213 F.2d 109 (4th Cir. 1954); Schroeder v. Pennsylvania R. R., 397 F.2d 452, 459 (7th Cir. 1968).

Accordingly, we sustain the six judgments for contractual indemnity. These judgments are duplicative of the six judgments for common law indemnity between the same pairs of parties, so that it appears unnecessary to resolve the issues tendered by the appeals from those judgments. Three other judgments for common law indemnity have been appealed: that of Northern Natural against Fluor, Northern Natural against Cooling, and Braun against Cooling. Although these judgments do not exactly duplicate other judgments, they appear to have no practical effect because all liability has been funneled down to Cooling by the chain of contractual indemnity. Accordingly, we will vacate the nine judgments for common law indemnity without considering the merits. If there is still a live controversy despite our affirmance of the other judgments in any of the disputes over common law indemnity, the parties may bring the matter to our attention on petition for rehearing. Cf. Spurr v. LaSalle Constr. Co., 385 F.2d 322, 332 (7th Cir. 1967).

All judgments for plaintiff and all judgments for contractual indemnity are affirmed; all judgments for common law indemnity are vacated; Cooling to bear all costs.

      . Tlie $19,236.87 covered the Northern Companies’ and Braun’s attorneys’ fees.

      . The $26,527.09 covered the Northern Companies’ and Braun’s and Fluor’s attorneys’ fees.


author: PER CURIAM. CARR, District Jiidge

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Charles Ray CONSIDINE, Defendant-Appellant.
    No. 73-1804.
    United States Court of Appeals, Ninth Circuit.
    Nov. 21, 1973.

      Nola McLane, McLane & McLane, Phoenix, Ariz., for defendant-appellant.
    Robert H. Filsinger, Asst. U. S. Atty., Chief Civil Div., San Diego, Cal., for plaintiff-appellee.
    Before CHAMBERS and CHOY, Circuit Judges, and CARR, District Judge.

       The Honorable Charles H. Carr, United States District Judge for the Central District of California, sitting by designation.

   OPINION

PER CURIAM.

Considine appeals from his conviction in a trial to the court on four counts of subscribing to false income tax returns for the years 1965, 1966, 1967 and 1969 under 26 U.S.C. § 7206(1). He was sentenced to custody of the Attorney General for eighteen months on each count concurrently. We affirm.

A practising certified public accountant since 1946, Considine has studied law and has taught accounting and taxation in the University of San Diego and San Diego State College. He has also conducted real estate seminars at Stanford University. He is well-versed in the niceties of federal tax law as he admits.

The district court ruled that the $30,000 of prepaid interest Considine received in 1965 and the $27,500 of prepaid interest he got in 1966 were in fact interest payments beyond a reasonable doubt, which he should have reported in his tax returns. We agree.

We are not impressed by Considine’s cleverly contrived contention that the interest payments were not really interest beyond a reasonable doubt under federal tax cases because they could by tortuous reasoning be regarded, e. g., as consideration paid for an option to purchase real properties, or payments of principal. The promissory notes which the maker executed called the payments interest and Considine himself treated the remittances as interest in his 1965 and 1966 income tax returns.

Nor do we find convincing Considine’s argument that there was no proof beyond a reasonable doubt that in 1969 he had an acceleration of gain from the disposition of an installment obligation (the $225,000 San Felipe note). The record amply supports the district court’s finding that the settlement of the Norris judgment in which the judgment creditor accepted that note occurred in 1969 and that the fair market value of the note was its face amount as reduced because of acreage variation. The settlement could not be closed till March, 1969 after the bank-which acted as escrow agent for the parties loaned Considine the cash required in addition to the $225,000 note to meet the settlement terms.

The government had no burden to show that beyond a reasonable doubt under federal tax cases the interest payments were interest and that the settlement resulted in an acceleration of gain in 1969. Its burden was to prove facts which beyond a reasonable doubt showed the nature of those financial transactions. The district court was satisfied with such proof. It was not clearly erroneous in its findings and conclusions.

Considine’s exoneration as to one. of the two alleged falsely claimed charitable deductions, but conviction on the other deduction, did not constitute a material variance from the indictment. No substantial rights of the accused were prejudiced — he. was informed of the charges against him and enabled to present his defense, and he would be protected against another prosecution for the same offense. Goldbaum v. United States, 204 F.2d 74, 78 (9th Cir. 1953), cert. denied, 346 U.S. 831, 74 S.Ct. 39, 98 L.Ed. 354, rehearing denied, 346 U.S. 880, 74 S.Ct. 119, 98 L.Ed. 387 (1953).

The district court’s finding that the $3,028.21 charitable deduction carry-over related to the falsely claimed contribution was not clearly erroneous.

We deem frivolous the contention that the government was required to prove that Considine himself filed or caused to be filed the tax returns underlying each of the four counts in the indictment. It was proved that Considine prepared and signed the returns and that the returns were on file with the Internal Revenue Service. The inference that he filed or caused to be filed the returns is clear and was uncontra-dicted.

Affirmed.

CARR, District Jiidge

(concurring in part and dissenting in part):

I concur in the affirmance of the judgment of conviction on Count One.

I am compelled to conclude that the Government’s case was insufficient to support the judgments of conviction respecting Counts Two, Three and Four. My main concern is with the issues of law in each of the three counts. Many interpretations of the Internal Revenue Code and the Treasury Regulations were required. A reading of the Reporter’s Transcript, as well as a study of the exhibits, compels me to conclude that the transactions involved in Counts Two, Three and Four are matters for the civil courts. The Government is required to prove every element of the offenses beyond a reasonable doubt.

It does not seem appropriate to resort to the concurrent sentence doctrine since Treasury will, in all probability, endeav- or to assess tax penalties upon the theory that the finding of guilt stamps the transactions as fraudulent. Benton v. Maryland, 395 U.S. 784, 89 S.Ct. 2056, 23 L.Ed.2d 707 (1969).

The distinction between tax avoidance and tax evasion is sometimes difficult to discern. As Judge Learned Hand said in Commissioner of Internal Revenue v. Newman (2nd Cir. 1947), 159 F.2d 848 at 850:

« ->:• •>:- * over an¿[ over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.”