author: EDWARDS, Circuit Judge.

text:
    NORTHEAST THEATRE CORPORATION, Plaintiff-Appellee, v. William W. WETSMAN and Jack Zide, Defendants-Appellants. NORTHEAST THEATRE CORPORATION, Plaintiff-Appellee, v. L & L CONCESSION COMPANY, Defendant-Appellant. NORTHEAST THEATRE CORPORATION, Plaintiff-Appellee, v. TWILITE THEATRE COMPANY and W. Dean Gersell, Defendants-Appellants.
    Nos. 72-1931, 72-1932 and 72-1933.
    United States Court of Appeals, Sixth Circuit.
    Argued Oct. 1, 1973.
    Decided Feb. 27, 1974.
    James M. Wienner and Frederick Steinhardt, Detroit, Mich., for appellants ; Katcher, Feldman & Wienner, Detroit, Mich, on briefs for William M. Wetsman and Jack Zide.

      Walter Shapero, Shapero, Shapero & Cohn, Detroit, Mich, on briefs for L & L Concession Co.
    Travis, Warren, Nayer & Burgoyne, Detroit, Mich., for Twilite and Gersell, by Frederick D. Steinhardt and Harry M. Nayer, Detroit, Mich.
    Eugene Driker, Detroit, Mich., for ap-pellee; Barris, Sott, Denn & Driker, by James A. Simpson, Detroit, Mich, on brief for Northeast Theatre Corp.
    Before PHILLIPS, Chief Judge, EDWARDS, Circuit Judge and KRUPANSKY, District Judge.

       Honorable Robert B. Krupansky, United States District Judge for tlie Northern District of Ohio, sitting by designation.

   EDWARDS, Circuit Judge.

Appellants appeal from a judgment entered by a District Judge in the United States District Court for the Eastern District of Michigan, Southern Division after trial to the court. The judgment granted to plaintiff-appellee Northeast Theatre Corporation specific performance of a contract to purchase four thea-tres from defendant-appellant Twilite Theatre Company and for an award for lost profits of $204,553. Jurisdiction is founded on diversity of citizenship.

The facts developed in a six-day trial show that Twilite, desiring to sell four drive-in theatres in Michigan, made a proposal on April 13, 1970, to Northeast to buy said theatres. The -proposal recited that the purchase price would be $1,400,000 on a 7% contract, with 29% down in 1970. It also provided, “the length of time on the balance would have to be mutually agreed upon.”

Appellee Northeast contends, and the District Judge in detailed findings of fact agreed, that after some oral negotiations, which included a definition of pay-out terms and an oral agreement by Northeast and Twilite to keep the offer open until April 30 when they were to talk again, appellee Northeast sent a written acceptance on April 30, 1970, which completed the contract. Appellant Twilite, however, on April 29, 1970, had already made a conditional agreement to sell the four theatres to appellants Wets-man and L & L Concession Company if Wetsman and L & L could obtain the 25% interest of a Twilite partner named Gersell. This agreement was finally consummated in formal contract documents signed on July 9, 1970, under which Wetsman and L & L took possession of the theatres and have been operating them ever since.

Appellants contend that there never was an offer and an acceptance which served to take the Northeast transaction out of the statute of frauds. They also contend that the District Judge’s findings of fact pertaining to the oral agreement by Twilite to extend the offer to April 30 and to accept Northeast’s payout schedule were based on the wrong standard of proof and that the evidence was insufficient to uphold them. Lastly, appellants contend that the District Judge’s computation of damages was incorrect as a matter of law. We shall discuss these three issues in order.

1. The Statute of Frauds Issue

The Michigan Statute of Frauds provides in applicable part:

Same; contract for interest in lands other than one year lease; sales at auction

Sec. 8. Every contract for the leasing for a longer period than 1 year, or for the sale of any lands, or any interest in lands, shall be void, unless the contract, or some note or memorandum thereof be in writing, and signed by the party by whom the lease or sale is to be made, or by some person thereunto by him lawfully authorized in writing. . . . Mich.Comp. Laws Ann. § 566.108 (1967).

The offer and acceptance relied upon by the District Judge are set out fully hereafter:

April 13, 1970

Mr. Sumner Redstone Northeast Theatre Corporation Thirty-One St. James Street Boston, Massachusetts 02116

Dear Sumner:

After meeting with my partners, we have to come to this decision. We have decided to take $1,500,000.00 cash or $1,400,000.00 on a seven per cent contract with twenty-nine per cent down in 1970. The length of time on the balance would have to be mutually agreed upon. You would, also, have to assume the L & L Concession leases on three theatres, one being expired at this time.

As for a breakdown, the attached schedule should give you the information required. For me to give you a further breakdown of each theatre would be almost impossible under our bookkeeping set up.

Our admission prices in all four thea-tres are $1.75 Sunday through Thursday and $2.00 Friday and Saturday. Sincerely yours,

TWILITE THEATRE COMPANY /s/ W. DEAN GERSELL W. Dean Gersell

April 30, 1970

Mr. Richard J. Ashmun and Mr. W. Dean Gersell, Twilite Theatre Company Ashmun Theatres Strand Theatre Building Caro, Michigan Dear Dick and Dean:

As per conversation with you, I had expected to hear from you by today. I realize that you may be tied up in a split meeting, but as I explained to you, we have had a choice between two deals and I have to make a decision; and my deadline on the other deal is today.

After talking it over, we have decided to let the other deal go and accept your offer, although I do feel the price is high and the interest rate is high. However, frankly, we have no time for negotiating in view of the necessity for a decision today. Accordingly, we are accepting your offer to sell, as outlined in your letter of April 13 and reaffirmed by you in our phone conversations on Tuesday, April 28. We agree to pay for the four the-atres $1,400,000.00 “on a 7% contract with 29% down in 1970”. In your telephone conversations, you indicated you desired a ten-year payout, and we are agreed to that.

This is the substance of the transaction, and the rest are all details. We are assuming, of course, as you indicated, that you do have good record and marketable title; and the title is insurable.

So far as the closing date goes, you indicated you could turn over the the-atres almost immediately. We are certainly not inflexible on the date. I would think that thirty days would give enough time for the title check. I congratulate you both. I understand that Dean wants to stay on, and we are looking forward to the possibility of his working for us.

Incidentally, you made no request for a deposit, but I am enclosing a check for $25,000.00 which, of course, would be deducted from the 29% on closing. Kindest personal regards.

Sincerely yours,

Sumner M. Redstone

SMR:TB

$25,000.00 check enclosed

Absent any other contentions — and there are several — these two documents would in our eyes constitute clear and convincing evidence of a legally binding and enforceable contract under the Michigan Statute of Frauds. That Statute, as interpreted by the Supreme Court of Michigan in an early case, provides that the written memorandum “must be certain and definite as to the parties, property, consideration, premises and time of performance.” Cooper v. Pierson, 212 Mich. 657, 660, 180 N.W. 351, 352 (1920). These two documents taken together appear to us to meet each of the criteria of Cooper. This view is enforced by the fact that the trend of interpretation of Michigan law pertaining to satisfaction of the Statute of Frauds in more recent years has been toward somewhat less rigidity. See Goldberg v. Mitchell, 318 Mich. 281, 28 N.W.2d 118 (1947); Gedvick v. Hill, 333 Mich. 689, 53 N.W.2d 583 (1952); Duke v. Miller, 355 Mich. 540, 94 N.W.2d 819 (1959); and Goslin v. Goslin, 369 Mich. 372, 120 N.W.2d 242 (1963).

SI. The Disputed Findings of Fact

The principal other contentions of appellants concerning this transaction pertain to circumstances surrounding the offer and acceptance above. As to these appellants contend 1) that, assuming Twilite’s letter dated April 13, 1970, was an offer, it was legally revoked by a counteroffer made by plaintiff Northeast Theatre through its president Red-stone in telephone conversations with Ashmun, the spokesman for the Twilite partnership; 2) that, assuming Twilite’s letter dated April 13 was an offer, Ash-mun, for Twilite, never agreed orally on April 28 to keep Twilite’s offer open until April 30 and to call Redstone back on April 30 as claimed by Redstone; 3) that, if Twilite’s letter of April 13 was an offer, it was revoked before acceptance by Northeast Theatre by a contract for sale of the theatres made on April 29 between Twilite and appellants Wetsman and L & L Concession Company, and that Northeast had notice of this contract through an agent, Clark, before April 30, and 4) that Redstone’s letter of acceptance, dated April 30, was not actually mailed on April 30, 1970.

The trouble with these contentions is that the record is so replete with contradictory testimony (particularly from the principal witnesses, Red-stone for Northeast Theatre and Ash-mun for Twilite), that decision upon each such fact issue depends entirely upon which witness is telling the truth and which is not. The District Judge resolved the credibility issues with specific findings of fact in favor of Northeast Theatre and Redstone. He accepted Redstone’s version of his telephone conversations with Ashmun concerning the price as being inquiries rather than a counteroffer. As to holding the offer open, he specifically found that it was “agreed by Redstone and Richard Ash-mun that no action would be taken by either party until they again spoke on Thursday, April 30, 1970.” As to the April 29 oral agreement between Twilite and Wetsman and L & L Concession Company, he found that Clark had not been informed of it and, in any case, was not an agent of Northeast Theatre. He also found that Redstone’s letter of acceptance, dated April 30, 1970, had been mailed on April 30.

Under Rule 52(a) of the Federal Rules of Civil Procedure, we cannot set aside a District Judge’s findings of fact unless they are “clearly erroneous.” We have weighed all of the counterevidence and argument of appellants and we cannot find in this record a basis for setting any one of them aside as “clearly erroneous.” The most troublesome one is the question of just when Redstone’s letter was mailed. As to it, we note that while there is certainly evidence to support appellants’ contention that it was not actually mailed on April 30— equally certainly there is strong evidence that it was. Under these circumstances we understand Rule 52(a) to command acceptance of the trial judge’s findings — particularly when they rest, as here, in large measure on determinations of credibility of witnesses.

S. Damages

Specific performance for ■ breach of contract is certainly no novel remedy, nor is the award of damages suffered by the offended party during the period of the breach. Goslin v. Goslin, supra; Milner Hotels, Inc. v. Ehrman, 307 Mich. 347, 11 N.W.2d 914 (1943); Restatement of Contracts § 384.

The judgment of $204,553 was calculated from appellants Wetsman and L & L Concession Company’s own books and we see no basis for setting it aside. We do, however, agree that the profits lost by Northeast Theatre ought to be offset by interest upon the down payment which was retained by Northeast during the breach. Presumably appellants Wetsman and L & L will seek to recoup their down payment, likewise with interest.

The judgment of the District Court is affirmed as modified above, and the case is remanded for further proceedings consistent with this opinion.

      . The District Judge in his Memorandum Opinion and Order dealt with and rejected appellants’ contention that the oral agreement of April 29 between Twilite and L & L Concession and Wetsman revoked Twilite’s prior offer to Northeast. We agree that, for the reasons given by the District Judge, revocation was not accomplished:
      “One who has made an offer to sell property has no power to revoke it merely by making a sale of the property to a third person. Such a power can be expressly reserved; but the offeree must know of the reservation. A sale to a third person may make it hard for the of-feror to perform as offered; but the of-feree has power of acceptance even after the property has already been sold, if he is ignorant of such sale.” 1 A. Corbin, Contracts, § 39, at 164 (1963). (Footnote omitted.)

      . Appellants contend that Redstone’s letter of acceptance dated April 30 was not mailed until May 4. The envelope actually has an April 30 date marked by the postage meter and a May 4 postmark. If (contrary to what we have written above) we were to assume that appellants were correct in when this letter was mailed, we do not believe such a conclusion would change the result in this case. Redstone also sent a telegram on May 1 to Ashmun which constituted an acceptance of Twilite’s offer prior to any notice of cancellation or withdrawal of the offer had been conveyed to Redstone.


source: Caselaw Access Project

author: McENTEE, Circuit Judge.

license: Public Domain

text:
    Angel L. LEBRON-ROSARIO, Petitioner, Appellant, v. UNITED STATES of America, Respondent, Appellee.
    No. 73-1032.
    United States Court of Appeals, First Circuit.
    Argued Feb. 5, 1974.
    Decided March 13, 1974.

      Horacio R. Subirá Hijo, Santurce, P. R., by appointment of the Court, for appellant.
    Jorge Rios Torres, Asst. U. S. Atty., with whom Julio Morales Sanchez, U. S. Atty., was on brief, for appellee.
    Before COFFIN, Chief Judge, McEN-TEE and CAMPBELL, Circuit Judges.

      . In its brief, the government cites material indicating that petitioner was released from custody on March 24, 1972. If so, his motion to vacate sentence can still be treated as a petition for writ of error coram nobis. Wallace v. United States, 457 F.2d 547 (9th Cir. 1972) (per curiam) ; cf. United States v. Nickerson, 124 F.Supp. 35, 37 (D.Mass. 1954).

   McENTEE, Circuit Judge.

On September 13, 1968, petitioner was indicted on six counts charging violations of various narcotics statutes. He initially pleaded not guilty to all counts. On January 17, 1969, upon advice of counsel and after apparent plea-bargaining, petitioner pleaded guilty to two of the counts, each charging that on specified dates he purchased quantities of cocaine not in or from their original stamped package, in violation of former 26 U.S.C. § 4704(a) (1964). Upon the government’s motion, the other four counts were dismissed. Before accepting petitioner’s guilty pleas on the two § 4704(a) counts, the court complied with Fed.R.Crim.P. 11 by questioning appellant as to the voluntariness of his pleas and his understanding of the consequences. The court also asked petitioner if he was in fact guilty of the crimes alleged in these two counts. Petitioner responded affirmatively to all of these inquiries. He was then sentenced on April 3, 1969, to four years’ imprisonment on each count, the sentences to run concurrently.

Former § 4704(a) made unlawful the purchase, sale, dispensing or distributing of narcotic drugs not in or from the original stamped package. This section also provided that “the absence of appropriate taxpaid stamps from narcotic drugs shall be prima facie evidence of a violation of this subsection by the person in whose possession the same may be found.” In Turner v. United States, 396 U.S. 398, 90 S.Ct. 642, 24 L.Ed.2d 610 (1970), the Supreme Court held that when the narcotic drug in question was cocaine the “prima facie evidence” provision in § 4704(a) constituted an invalid presumption because of the reasonable possibility that a possessor of cocaine lacking the appropriate stamps had obtained possession in some way other than by purchase. Id. at 423-424, 90 S.Ct. 642. Consequently, the Court reversed the jury’s conviction for violation of § 4704(a) as not supported by sufficient evidence, where the government had presented evidence at trial showing only that the defendant possessed cocaine lacking the appropriate stamps and the trial court had instructed the jury in terms of the statutory presumption. Id. at 424, 90 S.Ct. 642.

On November 1, 1971, petitioner filed a pro se motion to vacate his sentence pursuant to 28 U.S.C. § 2255 (1970), contending in effect that his guilty pleas, entered prior to the Turner decision, had been involuntary because at the time he expected that if his case came to trial the government would rely upon the statutory presumption later held to be invalid. The district court denied the motion. We affirm.

This court has already held that Turner applies retroactively to § 4704(a) convictions in prior jury trials. Martone v. United States, 435 F.2d 609 (1st Cir. 1970). However, the instant case, unlike both Turner and Martone, does not involve conviction after a jury trial in which the government actually relied upon the invalid statutory presumption. Here the petitioner pleaded guilty prior to trial and the government was never put to its proof. Other than petitioner’s unsupported speculation, we have no way of knowing whether the government in this case would have relied on the presumption.

In McMann v. Richardson, 397 U.S. 759, 90 S.Ct. 1441, 25 L.Ed.2d 763 (1970), the Supreme Court considered a similar situation. There, three New York prisoners sought habeas corpus claiming that their guilty pleas were involuntary because they believed that allegedly coerced confessions would be introduced into evidence against them if their cases had gone to trial. After their pleas, the Supreme Court held in Jackson v. Denno, 378 U.S. 368, 84 S.Ct. 1774, 12 L.Ed.2d 908 (1964), that New York’s system of allowing the jury to determine the voluntariness of confessions was unconstitutional. The Mc-Mann Court rejected the claim that the pre-Jackson guilty pleas were involuntary, holding, inter alia, that a guilty plea based on reasonably competent advice is an intelligent plea not open to attack on the ground that counsel may have misjudged the admissibility of the defendant’s confession. 397 U.S. at 770, 90 S.Ct. at 1441. “Whether a plea of guilty is unintelligent and therefore vulnerable when motivated by a confession erroneously thought admissible in evidence depends as an initial matter, not on whether a court would retrospectively consider counsel’s advice to be right or wrong, but on whether that advice was within the range of competence demanded of attorneys in criminal cases.” Id. at 770-771, 90 S.Ct. at 1449; accord, Brady v. United States, 397 U.S. 742, 757, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1970).

Given this standard, we cannot say that the failure of petitioner’s attorney to predict the Turner decision and on that basis advise his client to plead not guilty constituted advice beyond the range of competence demanded of attorneys. This is particularly true because of the plea-bargaining aspect of this case. Even after Turner, petitioner might have wisely pleaded guilty on the § 4704(a) counts to avoid prosecution on the other four counts. If anything, the McMann case was a stronger one for petitioners than the instant case. In McMann, the alleged government error —coerced confessions — had already occurred before the entry of the guilty pleas. In the instant case, it is entirely possible that no error at all would have occurred if petitioner’s case had gone to trial.

Moreover, this court has considered and rejected a claim quite similar to petitioner’s in United States v. Karger, 439 F.2d 1108 (1st Cir.), cert. denied, 403 U.S. 919, 91 S.Ct. 2230, 29 L.Ed.2d 696 (1971) (defendant who pleads guilty cannot challenge presumption in 18 U.S. C. § 2315). See also Morales-Guarjardo v. United States, 440 F.2d 775 (5th Cir. 1971) (dealing with another presumption held invalid in Turner).

In arguing to the contrary, petitioner relies on United States v. Liguori, 430 F.2d 842 (2d Cir. 1970), cert. denied, 402 U.S. 948, 91 S.Ct. 1614, 29 L.Ed.2d 118 (1971). However, as the district court concluded, that case is inapposite. In Liguori, the court vacated a conviction upon a guilty plea because of the Supreme Court’s holding in Leary v. United States, 395 U.S. 6, 89 S.Ct. 1532, 23 L.Ed.2d 57 (1969), that a timely assertion of the privilege against self-incrimination is a complete defense to prosecution under former 26 U.S.C. § 4744(a) (1964) (rendering unlawful the possession of marijuana without payment of requisite transfer tax). The Liguori court emphasized that the issue it was considering was not whether the guilty plea was voluntary, but whether in so pleading defendant intended to waive the complete defense to the prosecution later established in Leary. 430 F.2d at 848-849 (distinguishing Mc-Mann). In contrast, the only issue in the instant case is the voluntariness of petitioner’s guilty plea. The standards established in McMann are controlling.

Affirmed.

      . Section 4704(a) was repealed and replaced by the Comprehensive Drug Abuse Prevention and Control Act of 1970, Pub.L. 91-513, tit. Ill, § 1101, 84 Stat. 1292 (codified at 21 U.S.C. § 801 et seq. (1970)).

      . The Court said that a possessor of cocaine could also have stolen it or obtained it from another party who stole it. 396 U.S. at 423-424, 90 S.Ct. 642. It reached this con-elusion after reviewing a sizable amount of factual material on the manufacture and distribution of various narcotic drugs. In contrast to 'the holding on cocaine, the Turner Court also held that the presumption in § 4704(a) was valid when the narcotic drug in question was heroin, finding from its factual review that most heroin users may be presumed to purchase what they use. Id. at 421-422, 90 S.Ct. 642.


author: PER CURIAM.

text:
    Glenn Allen BRYANT, Appellant, v. Dr. P. J. CICCONE, Director, United States Medical Center for Federal Prisoners, Springfield, Missouri, Appellee.
    No. 73-1726.
    United States Court of Appeals, Eighth Circuit.
    Submitted Feb. 12, 1974.
    Decided Feb. 15, 1974.
    Rehearing and Rehearing En Bane Denied March 15, 1974.
    David R. Freeman, Federal Public Defender, and Ray C. Conrad, Jr., Asst. Federal Public Defender, Springfield, Mo., for appellant.
    Bert C. Hurn, U. S. Atty., and Frederick O. Griffin, Jr., Asst. U. S. Atty., Kansas City, Mo., for appellee.
    Before HEANEY and BRIGHT, Circuit Judges, and WANGELIN, District Judge.

       WANGELIN, District Judge, Eastern District of Missouri, sitting by designation.

   PER CURIAM.

Petitioner, Glenn Allen Bryant, is an inmate at the United States Medical Center for Federal Prisoners, Springfield, Missouri. He is incarcerated pursuant to a sentence imposed for a 1971 conviction in the United States District Court for the Western District of Arkansas. We are asked on this appeal to reverse the District Court’s denial of Bryant’s habeas corpus petition which challenged the validity of the Medical Center’s regulation pertaining to the mailing of letters by federal inmates to state court judges.

The petition was filed in the United States District Court for the Western District of Missouri. The petition alleged :

On December 20, 1972, Petitioner placed a sealed letter in the PMB Mailbox addressed to the Judge of the State Circuit Court of Rock Island, Illinois. Thereafter, on December 21, 1972, Respondent’s employee Mr. Darrell Hines removed this letter from the mail, opened the letter, and wrote on the flap “Not PMB Mail”. Thereafter, Mr. Hines turned this letter over to Mr. Farrell asking that he return it to Petitioner. This interference resulted in the delay and obstruction of legal matters pertaining to Petitioner.
******
The actions of Respondent in opening, reading, obstructing, delaying and censoring Petitioner’s mail directed to the Court constitutes a denial of access to the Court and a denial of due process in violation of the Fifth Amendment United States Constitution.

The petitioner asked the District Court to

* * * order the Respondent [to] institute new procedures whereby inmate mail directed to the Courts and to their attorneys remain strictly confidential. And that the respondent be ordered to immediately institute new mailing procedures which will ensure that Petitioner’s Legal correspondence will not be delayed, censored, or restricted in the future. [Citation omitted.]

The District Court referred the matter to the United States Magistrate at Springfield, Missouri, for processing pursuant to Local Rule 26. See, Bridwell v. Ciccone, 490 F.2d 310 (8th Cir. 1973). The magistrate examined the petition and promptly filed a report and recommendation that the writ be denied with the District Court on June 14, 1973. The magistrate correctly read the petition as contending that the regulation, on its face, was unconstitutional. He concluded that the petition should be dismissed because the denial of a federal right had not been stated. He reasoned that while the petitioner’s access to the state courts may have been hampered, it was not denied. The magistrate also reasoned that the petition should be dismissed because only one instance of interference was alleged and not a continuing violation. Furthermore, he interpreted the regulation as granting Medical Center officials the discretion to allow uncensored mail to be sent to state court judges upon request by federal inmates and observed that the petitioner had not made such a request.

The District Court adopted the magistrate’s findings of fact and conclusions of law, and dismissed the writ as the magistrate recommended. In addition, the court noted that the problem of access to state courts by the federal prisoners at the Medical Center “need not recur” because “[pjresently two assistants of the Federal Public Defender are stationed in Springfield and available to prepare and mail petitions and motions to state courts for federal prisoners.”

We affirm the denial of the petition on the narrow alternative ground stated by the District Court — i. e., that public defenders at the Medical Center will receive and send all federal prisoner mail directed to state courts. We think this is a reasonable method of handling such mail and the regulation thus construed does not impinge on the prisoners’ constitutional rights. We decline to use this opinion as an occasion to review all regulations with respect to prisoner mail. We note only that:

* * * while control of the mails may be a proper function of penal administration, overly broad regulations which permit the opening and inspection of legal mail cannot be generally approved. * * *

Moore v. Ciccone, 459 F.2d 574, 578 (8th Cir. 1972) (concurring opinion).

Affirmed.

      . The specific regulation questioned is: Policy Statement H-7300.19C, December 7, 1972 — Prisoners Mail Box (PMB) Mail Processing.


text:
    UNITED STATES of America, Appellee, v. Melvin JAMES, Appellant.
    No. 729, Docket 73-2561.
    United States Court of Appeals, Second Circuit.
    Argued Jan. 31, 1974.
    Decided March 18, 1974.
    Jeffrey I. Glekel, Asst. U. S. Atty. (Paul J. Curran, U. S. Atty. for the S. D. N. Y., and John D. Gordan III, Asst. U. S. Atty., on the brief), for appellee.
    Gilbert Epstein, New York City, for appellant.

      Before WATERMAN and MULLIGAN, Circuit Judges, and BRYAN, District Judge.

       Frederick vP. Bryan, of the Southern District of New York, sitting by designation.

   FREDERICK van PELT BRYAN, District Judge:

Melvin James appeals from a judgment of conviction entered in the United States District Court for the Southern District of New York after a jury trial before Judge Pollack. The jury found James guilty on two counts of attempted bank robbery by force and violence and of committing that offense by assault with a dangerous weapon in violation of 18 U.S.C.A. § 2113(a) and (d). He was sentenced to concurrent terms of 15 years’ imprisonment, which he is now serving. At a previous trial the jury had disagreed.

On this appeal, James does not question the sufficiency of the evidence at the trial to sustain his conviction; neither does he claim that any errors were committed at the trial. The sole contention on this appeal is that the court below erred in denying motions to dismiss the indictment made by James prior to his first trial and renewed prior to his second. James urges that the indictment should have been dismissed because he was compelled to testify before the Grand Jury which indicted him in violation of his Sixth Amendment rights.

At pre-trial hearings on the motions to dismiss the indictment, the following facts were developed.

On May 29, 1973 Magistrate Harten-stine, in the Southern District of New York, issued a warrant for the arrest of James and one Ramseur, on a complaint charging attempted robbery of the Manufacturers Hanover Trust Company branch on Soundview Avenue in the Bronx. James was speedily apprehended in the District of Columbia. After a preliminary hearing before a United States Magistrate there on June 5, 1973, he was ordered removed to the Southern District of New York. He arrived in New York on June 6, 1973 and was placed in the West Street Federal House of Detention.

On July 13, 1973, over a month after his arrival here, James was brought from West Street to the United States Courthouse and was taken before the Grand Jury which was investigating the attempted bank robbery with which he had been charged in the complaint. He had no counsel and no attempt had been made to have counsel assigned to him.

At the outset of his appearance before the Grand Jury, the examining Assistant United States Attorney advised James that he was a target of the Grand Jury proceedings and that the Grand Jury might indict him for the bank robbery. The Assistant then gave him the warnings required by Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), including his rights to remain silent, to consult counsel, and to have counsel appointed if he could not afford one.

The assistant then proceeded to question him. After some 20 questions had been asked and answered, primarily concerning “pedigree” but including á question as to whether he knew Ramseur, who was charged in the complaint with participating in the robbery, the following colloquy took place:

A. You said I have the right to remain silent unless counsel —I wish to have counsel.

Q. You desire to consult with counsel ? A. Right.

Q. Mr. James, let us proceed in this fashion. If we reach a question where you desire counsel, tell me or if there is a question, tell me. Do you understand ? A. Yes.

Q. But I have the right to ask you the questions and if you desire to con-suit with an attorney or if you remain or want to remain silent, so advise me. Do you understand? A. Yes.” (App. 1 at 5)

The Assistant then proceeded to question James at length for some six additional pages of the transcript on such subjects as whether he had any knowledge of the robbery, his acquaintance with those who appeared to be involved, his whereabouts at the time, and whether four bank surveillance photographs were pictures of him. James answered the questions without demur. He denied any knowledge of or connection with the robbery and stated that while the four bank surveillance photographs looked like him, he was not certain whether they were pictures of him. In the midst of this questioning the Assistant made a passing reference to James’ right to counsel, without any reaction from James. The questioning went on to a conclusion without further reference to the subject.

The Grand Jury also heard the testimony of an FBI agent through whom the bank surveillance photographs were introduced, and that of two eyewitnesses, who described the attempted robbery and identified James from a photographic spread as one of the participants. The Grand Jury returned the bank robbery indictment against James about an hour after James had testified.

At the conclusion of his testimony, James was returned to custody and was not taken before a Magistrate until July 19, six days later, when counsel was finally appointed to represent him.

In the court below the prosecution took the position on the motions to dismiss the indictment that James had been given his full constitutional rights before the Grand Jury. On the basis of the pre-trial hearings on the motions, Judge Pollack found James had been accorded his constitutional rights and that the indictment had been based on evidence before the Grand Jury independent of that given by James. Judge Pollack denied the pre-trial motions to dismiss on these grounds.

On this appeal, in contrast to the position taken below, the prosecution concedes that “the record is insufficient to support a finding that James voluntarily waived his right to consult counsel following his request”. (Government brief, p. 6.)

There is no doubt that James did not waive his right to counsel. Once he asked for and stated his desire to consult with counsel, all questioning should have ceased until he was assigned counsel and given an opportunity for full consultation. “If the individual states that he wants an attorney, the interrogation must cease until an attorney is present”, Miranda v. Arizona, supra, 384 U.S. at 474, 86 S.Ct. at 1628.

However, there is more here than lack of waiver of right to counsel. When James was summarily brought before the Grand Jury he had been held in West Street for some 40 days on the robbery charge alleged in the complaint which was the subject of the Grand Jury inquiry. New York was not his home city and he was plainly of limited education. Though entitled to counsel promptly after his removal here on the charge made in the complaint, Kirby v. Illinois, 406 U.S. 682, 688-689, 92 S.Ct. 1877, 32 L.Ed.2d 411 (1972), he was kept in custody without counsel and no effort was made to have counsel assigned to him.

The Assistant conducting the Grand Jury proceedings must have known all this when he had James transported from West Street to the Courthouse. No effort was made to obtain counsel for him or to give him an opportunity to consult counsel before he was brought into the Grand Jury room. He was advised of his constitutional rights only when he was put on the stand before the Grand Jury.

In the light of the circumstances, the continued questioning after James had requested counsel, with the suggestion that “if we reach a question where you desire to consult with counsel, tell me”, can only be viewed as a cunning and successful device to induce him to answer all questions the examiner wished to put to him, in disregard of his Fifth and Sixth Amendment rights.

The question, then, is whether James was entitled to have the indictment dismissed because of the testimony he was thus compelled to give before the Grand Jury, in violation of his Fifth and Sixth Amendment rights. We conclude that the motions to dismiss were properly denied.

An indictment, valid on its face, is not rendered invalid merely because evidence otherwise inadmissible was presented to the Grand Jury, United States v. Calandra, 414 U.S. 338, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974); Costello v. United States, 350 U.S. 359, 76 S.Ct. 406, 100 L.Ed. 397 (1956); United States v. Jordan, 399 F.2d 610, 615 (2d Cir.), cert. denied, 393 U.S. 1005, 89 S.Ct. 496, 21 L.Ed.2d 469 (1968); see also United States v. Estepa, 471 F.2d 1132, 1136 (2d Cir. 1972); United States v. Ramirez, 482 F.2d 807, 811-813 (2d Cir.), cert. denied, 414 U.S. 1070, 94 S.Ct. 581, 38 L.Ed.2d 475 (1973); even if, as the Supreme Court has several times said by way of dictum, such evidence was obtained in violation of the Fifth Amendment rights of the accused, United States v. Blue, 384 U.S. 251, 255 & n. 3, 86 S.Ct. 1416, 16 L.Ed.2d 510 (1966); Lawn v. United States, 355 U.S. 339, 78 S.Ct. 311, 2 L.Ed.2d 321 (1958); see also Holt v. United States, 218 U.S. 245, 31 S.Ct. 2, 54 L.Ed. 1021 (1910). Whether under these cases, including the recent dictum in Calandra that “an indictment valid on its face is not subject to challenge . . . even on the basis of information obtained in violation of a defendant’s Fifth Amendment privilege against self-incrimination” (414 U.S. at 345, 94 S.Ct. at 618), an indictment is wholly immune to challenge on the basis of any constitutional exclusionary rule may still be doubtful. See Goldberg v. United States, supra, 472 F. 2d at 516; United States v. Dornau, 491 F.2d 473, 481, n. 15 (2 Cir. 1974). But we need not decide that question here. It is clear that “[w]e will not upset a conviction founded on an indictment based on sufficient, legal and probative evidence because other evidence of doubtful admissibility was also before the grand jury.” United States v. Piccini, 412 F.2d 591, 593 (2d Cir. 1969), cert. denied, 397 U.S. 917, 90 S.Ct. 923, 25 L.Ed.2d 98 (1970); United States v. Tane, 329 F.2d 848, 853-854 (2d Cir. 1964); see Goldberg v. United States, supra, 472 F.2d at 516, n. 4.

The indictment in this case fully meets this test. It is plain from the minutes of the grand jury that ample evidence was presented to that body to support the indictment, independent of and quite apart from anything James said while he was before it.

James has not shown that he was in any way prejudiced by the violations of either his Fifth Amendment privilege to remain silent or his Sixth Amendment right to counsel before the Grand Jury, or otherwise. He was assigned competent counsel shortly after the indictment, who represented him thereafter. None of this testimony before the Grand Jury was used or referred to at the trial. The evidence at the trial was ample to sustain this conviction and there is no discernible taint.

The judgment of conviction is affirmed.

      . The record of the preliminary hearing in the District of Columbia is not before us, though the Government’s brief states that James was represented by counsel at that hearing.

      . James denied knowing Ramseur.

      . Different Assistants handled the appeal.

      . We view the failure to have counsel assigned to James during the some forty days he spent at West Street and what occurred when he was brought from West Street and taken before the Grand Jury, with concern and disapproval, and we caution against repetition of such conduct.
      There is also at least a question as to the propriety and possible consequences of bringing James before the Grand Jury under the circumstances here. Under such cases as United States v. Winter, 348 F.2d 204 (2d Cir.), cert. denied, 382 U.S. 955, 86 S.Ct. 429, 15 L.Ed.2d 360 (1965), the privilege against self-incrimination does not protect against being called to appear before a Grand Jury. But, as Chief Judge Friendly pointed out in Goldberg v. United States, 472 F.2d 513, 516 (2d Cir. 1973), serious problems may arise where the Government is seeking an indictment of one who is called before the Grand Jury to testify. Chief Judge Friendly further said, 472 F.2d at 516, n. 4:
      Despite Lawn v. United States, 355 U.S. 339, 350, 78 S.Ct. 311, 2 L.Ed.2d 321 (1958), and United States v. Blue, 384 U. S. 251, 255 & n. 3, 86 S.Ct. 1416, 16 L.Ed.2d 510 (1966), we do not take it to be settled that an indictment would not be subject to dismissal if a defendant could establish that it was obtained on the basis of testimony compelled from him after a proper assertion of his privilege. See Jones v. United States, 119 U.S.App.D.C. 284, 342 F.2d 863, 871-873 (1964) (en banc).
      Cf. the dictum of Judge Medina in United States v. Scully, 225 F.2d 113, 116 (2d Cir.), cert. denied, 350 U.S. 897, 76 S.Ct. 156, 100 L.Ed. 788 (1955).
      . . . [0]ne would suppose that, as a matter of ethics or fair play or policy, a prosecutor would in all cases refrain from calling as a witness before a Grand Jury any person who is de jure or de facto an accused.

      . The contention that James was deterred from taking the stand in his own defense because the Government could impeach his credibility by equivocal answers he made before the grand jury and thus was prejudiced, is without merit in the light of Harris v. New York, 401 U.S. 222, 91 S.Ct. 643, 28 L. Ed.2d 1 (1971).


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Leroy Frank COLLIER, Defendant-Appellant.
    No. 73-1796.
    United States Court of Appeals, Sixth Circuit.
    Argued Feb. 8, 1974.
    Decided March 27, 1974.
    Neil H. Fink, Detroit, Mich., for appellant; Liberson, Fink, Feiler, Crystal & Burdick, Detroit, Mich., on brief.
    William C. Ibershof, Asst. U. S. Atty., for appellee; Ralph B. Guy, Jr., U. S. Atty., Detroit, Mich., on brief.
    Before WEICK and LIVELY, Circuit Judges, and ROSENSTEIN, Senior Customs Judge.

       Senior Judge Samuel M. Rosenstein, United States Customs Court, sitting by designation.

   PER CURIAM.

Appellant Collier was convicted after jury trial on the following counts: Count I, conspiracy to import cocaine in violation of 21 U.S.C. § 963; Count II, engaging in a continuing criminal enterprise relating to a conspiracy to import and possess cocaine in violation of 21 U. S.C. § 848; Count III, possession of cocaine with intent to distribute in violation of 21 U.S.C. § 841(a)(1). Of the numerous issues raised on this appeal, only the two challenging the constitutionality of 21 U.S.C. § 848, and the sufficiency of the affidavit underlying the search warrant involved herein merit extended discussion. We affirm.

The facts are substantially as follows: In May, 1972, Douglas R. Kapp and Kathy Lucas, a/k/a Casey Lucas, were arrested at Miami International Airport, Miami, Florida, as they attempted to pass through customs when it was discovered that they were transporting six pounds of unadulterated cocaine. Shortly thereafter, complying with a request to cooperate, they informed customs officials that they had been hired by Collier to pick up the cocaine in South America and transport it to Detroit, Michigan, where they were to contact him at his home for delivery instructions.

Based on this information, customs officials decided to conduct a controlled delivery of the cocaine. Accordingly, Kapp and Lucas were flown to Detroit where Kapp made the prearranged telephone contact with Collier concerning the delivery of the cocaine. The ensuing exchange occurred during this conversation:

Kapp: I got hung up down there a little.

Collier: But you’re cool?

Kapp: Yeh.

Collier: Okay beautiful. Tomorrow send Casey by with that and I’ll send her back, send something back for you with her.

Thereafter, customs agent Back, in quest of a warrant for the search of Collier’s home, submitted an affidavit which included the following statement:

“On May 31, 1972, at 1:25 a. m., a telephone call was placed by Kapp per his pre-arranged instruction with cocaine consignee, identified as Leroy Collier to telephone number (313) 355-2199. Kapp was instructed by Collier to have Kathy Sue Lucas deliver the cocaine to his house later on this date. Collier instructed Kapp that his address was 18470 George Washington St., Southfield, Michigan. At approximately 12:00 noon, May 31, 1972, Lucas will deliver the cocaine to Collier’s address in the company of Agents of U.S. Customs.”

On the basis of the affidavit, a Magistrate issued a warrant authorizing the search of Collier’s home for the specified cocaine and any means and instru-mentalities used for possessing or dispensing of such. Thereafter, agents permitted Lucas to deliver the cocaine to Collier at his home. After she departed, they entered the premises, conducted a thorough search and seized evidence including the controlled delivered cocaine.

Appellant claims that the statements contained in the affidavit to the effect that he told Kapp to have Lucas deliver “cocaine” to his house and also advised him of his address were totally erroneous. Inasmuch as this recital “struck at the heart of probable cause” and was the primary basis for the issuance of the search warrant, Collier alleges that the lower court erred in overruling his motion to suppress all the evidence seized during the search of his home.

While it is undisputed that Collier did not specifically utter the word “cocaine” or announce his address during the telephone conversation with Kapp, judging from the events leading up to that conversation, we do not feel that these references were erroneous. Rather, they appear to be the only reasonable interpretation of what was said. Admittedly, agent Back could have been more precise ; however, when considering the sufficiency of an affidavit, the following guidelines must be applied:

“The Fourth Amendment’s commands, like all constitutional requirements, are practical and not abstract. If the teachings of the Court’s cases are to be followed and the constitutional policy served, affidavits for search warrants, such as the one involved here, must be tested and interpreted by magistrates and courts in a commonsense and realistic fashion. They are normally drafted by nonlawyers in the midst and haste of a criminal investigation. Technical requirements of elaborate specificity once exacted under common law pleadings have no proper place in this area. A grudging or negative attitude by reviewing courts toward warrants will tend to discourage police officers from submitting their evidence to a judicial officer before acting.” United States v. Ventresca, 380 U.S. 102, 108, 85 S.Ct. 741, 746, 13 L.Ed.2d 684 (1965); United States v. Harris, 403 U.S. 573, 577, 91 S.Ct. 2075, 29 L.Ed.2d 723 (1970).

In light of the above, we conclude that the affidavit was sufficient to establish probable cause for issuance of the search warrant.

With regard to the issue challenging the constitutionality of 21 U.S. C. § 848, appellant maintains that this provision is vague on its face, thus depriving him of liberty and property without due process of law. We disagree with this assertion and concur in the recent Second Circuit case of United States v. Manfredi, 488 F.2d 588 (1973), in which it was stated:

“ . . . the statute might have been more artfully drawn, but no language has occurred or has been suggested to us that better expresses the congressional purpose. To sustain appellant LaCosa’s position would force us to hold that words cannot be devised to make it an offense to engage in the continuous sale and trafficking in heroin with a number of other people and with substantial sums of money changing hands; we feel that not to be the case and that, as applied to the conduct with which Joseph LaCosa was charged, see Broadrick v. Oklahoma, 413 U.S. 601, 93 S.Ct. 2908, 37 L.Ed.2d 830 (1973), is not unconstitutionally vague.”

All other issues tendered in appellant’s brief do not warrant discussion.

Affirmed.


author: LEVIN H. CAMPBELL, Circuit Judge.

text:
    Francisco Torres RAMOS, Plaintiff, Appellant, v. CONTINENTAL INSURANCE COMPANY, Defendant, Appellee.
    No. 73-1042.
    United States Court of Appeals, First Circuit.
    Argued Feb. 6, 1974.
    Decided March 20, 1974.

      Gustavo A. Gelpi, San Juan, P. R., with whom Nachman, Feldstein & Gelpi, San Juan, P. R., was on brief, for plaintiff, appellant.
    Alberto Santiago-Villalonga, Rio Pied-ras, P. R., with whom Hartzell, Ydrach, Mellado, Santiago, Perez & Novas, Hato Rey, P. R., was on brief, for defendant, appellee.
    Before COFFIN, Chief Judge, Mc-ENTEE and CAMPBELL, Circuit Judges.
   LEVIN H. CAMPBELL, Circuit Judge.

This appeal is one more effort by plaintiff, a resident of Puerto Rico, to recover under federal maritime standards for injuries sustained in 1963 while working as a longshoreman aboard the S.S. DETROIT in San Juan harbor. Soon after the accident, he unsuccessfully sued Beauregard, the vessel’s owner, and Sea-Land, its demise charterer. Ramos v. Beauregard, Inc., 423 F.2d 916 (1st Cir.), cert. denied, 400 U.S. 865, 91 S.Ct. 101, 27 L.Ed.2d 104 (1970). The claim against Sea-Land based upon the vessel’s alleged unseaworthiness was held to be barred by Puerto Rico’s exclusive workmen’s compensation remedy. Recovery from Beauregard was denied because it did not control the vessel; and an in rem claim was dismissed because neither the charterer'nor owner' were personally liable. Id. at 917-918.

On May 3, 1971, plaintiff brought the present action against Continental, a New York based insurer of Sea-Land. He alleged that pursuant to Title 26 of the Laws of Puerto Rico, §§ 2001, 2003, “an insurer is absolutely liable to third parties for damages and injuries caused by the negligence of its insured.” He then repeated his maritime claim against Sea-Land, to wit, that he was injured while doing traditional seamen’s work aboard the S.S. DETROIT, and that his injury was due to the failure of Sea-Land, operator of the DETROIT, to supply a seaworthy vessel. While plaintiff seemed to be invoking diversity jurisdiction in order to pursue a direct action claim created under Puerto Rico law, he alleged in the complaint that “all and singular, the premises are true and within the admiralty and maritime jurisdiction of the United States and this Honorable Court.”

Defendant moved for summary judgment, and the district court ruled that the one year prescription in 31 L.P.R.A. § 5298 was a complete bar to the action. Fraticelli v. St. Paul Fire & Marine Insurance Co., 375 F.2d 186 (1st Cir. 1967).

We held in Fraticelli that Puerto Rico’s direct action legislation created “a separate cause of action”, tying together an insured’s contract rights against his insurer with a third party’s tort rights against the insured. While the action was “created by reason of the insurance contract”, id. at 188, it was based “on the same factual situation” as was the legal liability of the insured. We reasoned that a direct action was not a contract action but rather one in which damages arose from the commission of a tort — hence subject to Puerto Rico’s one year tort prescription rather than the 15 year contract prescription. As injuries in Fraticelli arose from an automobile accident, there was, of course, complete identity between the prescription applicable to the underlying tort and the direct action itself. We noted this, saying it would be “illogical to provide two different periods of limitation — one year and fifteen years” for the two actions. Id. at 189.

Plaintiff sees the instant case as a test of the latter logic since here the underlying claim, a federal maritime cause for unseaworthiness, is not subject to Puerto Rico’s one year tort prescription, but rather is measured by the equitable doctrine of laches. Gardner v. Panama R.R., 342 U.S. 29, 72 S.Ct. 12, 96 L.Ed. 31 (1951). If the logic of Fraticelli requires the direct action to be prescribed identically to the underlying tort, then the laches measure should apply.

The Supreme Court of Puerto Rico, agreeing with our holding in Fraticelli, stated,

“Since both actions, that which is brought against the insured as well as the one which is filed against the insurance company, have the same origin and since both depend on the same evidence, there is no justification to establish different periods of prescription.” Ruiz Millan v. Maryland Casualty Co., No. R-72-43 (P.R. Mar. 13, 1973).

We think the rationale of both Fraticelli and Maryland Casualty require that when the underlying tort is a federal maritime tort, the timeliness of the direct action be determined by the doctrine of laches. Had plaintiff originally chosen to sue Continental, or both Sea-Land and Continental together, the timeliness of his action against Continental should plainly be measured by the same standard as that against Sea-Land. Any other result would be inconsistent with the purpose of the direct action statute, which is to allow rights against the insurer generally co-extensive with a third-party’s rights against the insured. As. the Maryland Casualty court said, “There is no justification to establish different periods of prescription.” While for land-based torts, the one year statute of limitations applies to the direct action, for federal maritime torts the laches standard will apply.

We are not sure where this holding will leave the plaintiff ultimately, although at the moment it requires us to remand. “[T]he existence of laches is a question primarily addressed to the discretion of the trial court. . ” Gardner, supra at 30 of 342 U.S., at 13 of 72 S.Ct. Upon remand, the district court will be faced with deciding whether laches is a bar. Although not conclusive, Puerto Rico’s one year tort statute of limitations will be relevant to the district court’s ruling. Czaplicki v. The Hoegh Silvercloud, 351 U.S. 525, 533, 76 S.Ct. 946, 100 L.Ed. 1387 (1956). Plaintiff’s failure to file suit until after expiration of the analogous one year period creates an inference that the delay has been both inexcusable and prejudicial. Cities Service Oil Co. v. Puerto Rico Lighterage Co., 305 F.2d 170 (1st Cir. 1962); Oroz v. American Lines Ltd., 259 F.2d 636 (2d Cir. 1958), cert. denied, 359 U.S. 908, 79 S.Ct. 584, 3 L.Ed.2d 572 (1959).

Aside from the legal presumption created by the running of the analogous local statute, plaintiff may face a formidable challenge as eight years have passed between the occurrence of the accident and the bringing of this suit. Parties are not ordinarily permitted to litigate claims seriatim. Continental, whose lawyers defended Sea-Land and Beauregard throughout the original litigation, is now confronted with a suit which could have been resolved earlier in consolidated proceedings. Although we do not decide the question, Continental would seem to be prejudiced by the increased expense of these protracted proceedings, and it may be difficult to prepare a defense and locate witnesses so many years after the accident.

Moreover, on the record before us, plaintiff’s delay is arguably inexcusable. In the main, his claim is identical to that first brought in 1964 against Sea-Land. The difficulties of recovery by an insured employee under maritime law were well known in Puerto Rico at the time of the accident. See Fonseca v. Prann, 282 F.2d 153 (1st Cir. 1960), cert. denied, 365 U.S. 860, 81 S.Ct. 826, 5 L.Ed.2d 822 (1961). To the extent the present case is a further ingenious attempt to avoid these impediments, the need for ingenuity was no less apparent in 1963 than now. That plaintiff may not fully have appreciated his legal posture until 1971 is not a justifiable excuse. Morales v. Moore-McCormack Lines, Inc., 208 F.2d 218 (5th Cir. 1953).

Plaintiff tries to avoid the problem by comparing this action to a timely suit to reach insurance proceeds after a successful judgment against an insured. Such suits are specifically permitted under the direct action statute. 26 L.P.R. A. § 2003(2). The period of limitations obviously does not begin until the case against the insured is over. However, the instant cause of action, if any, is based not upon a recently acquired judgment running in plaintiff’s favor but upon the 1963 accident itself. Accordingly the question of laches must take into account the entire eight year period. The prior unsuccessful suit in no sense “tolled” the running of laches.

Reversed and remanded to the district court.

      . Sea-Land was an insured employer, and appellant received benefits and compensation. Section 21 of 11 L.P.R.A. provides in part, “Where an employer insures his workmen or employees in accordance with this chapter, the right herein established to obtain compensation shall be the only remedy against the employer.” See Salas Mojica v. Puerto Rico Lighterage Co., 492 F.2d 904 (1st Cir. 1974).

      . The quoted language misstates Puerto Rico’s statute, which allows a direct action to recover for a loss covered by a liability » policy to the extent of the insurer’s liability. 26 L.P.R.A.:
      “§ 2001. Liability insurer's liability absolute

      The insurer issuing a policy insuring any person against loss or damage through legal liability for the bodily injury, death, or damage to property of a third person, shall become absolutely liable whenever a loss covered by the policy occurs, and payment of such loss by the insurer to the extent of its liability therefor under the policy shall not depend upon payment by the insured of or upon any final judgment against liim arising out of such occurrence. —Ins. Code § 20.010.”
      “§ 2003. Suits against insured, insurer

      (1) Any individual sustaining damages and losses shall have, at his option, a direct action against the insurer under the terms and limitations of the policy, which action he may exercise against the insurer only or against the insurer and the insured jointly. The liability of the insurer shall not exceed that provided for in the policy, and the court shall determine, not only the liability of the insurer, but also the amount of the loss. Any action brought under this section shall be subject to the conditions of the policy or contract and to the defenses that may be pleaded by the insurer to the direct action instituted by the insured.
      (2) If the plaintiff in such an action brings suit against the insured alone, such shall not be deemed to deprive him of the right, by subrogation to the rights of the insured under the policy, to maintain action against and recover from the insurer after securing final judgment against the insured. — Ins. Code § 20.030.”

      . A libel may, indeed, be dismissed on motion where it appears on its face that the analogous local statute of limitations has run and, as in the instant case, no facts are pleaded which would indicate that libellant may be able to prove absence of laches. See e. g., Hays v. Port of Seattle, 251 U.S. 233, 239, 40 S.Ct. 125, 64 L.Ed. 243 (1920); Redman v. United States, 176 F.2d 713 (2d Cir. 1949) ; Kane v. U. S. S. R., 189 F.2d 303 (3d Cir. 1951), cert. denied, 342 U.S. 903, 72 S.Ct. 292, 96 L.Ed. 676 (1952) ; Doherty v. Federal Stevedoring Co., 198 F.Supp. 191 (S.D.N.Y.1961). He may be allowed to proceed if he is able to amend to allege facts justifying the delay and- indicating an absence of prejudice to the defendant.

      . One might then ask why it is not barred by a collateral estoppel. See 12 G. Cough, Cyclopedia of Insurance Law § 45.923 (Anderson 2d ed. 1965). Presumably plaintiff intends to litigate the novel contention that the duty of the insurer is greater than that of Sea-Land, relying on cases holding that personal defenses of an insured, such as insolvency, limitation of liability, and sovereign immunity, are not available to an insurer. Torres v. Interstate Fire & Casualty Co., 275 F.Supp. 784 (D.P.R.1967). To that extent, plaintiff may hope to show that his claim is different from the one already decided against him, and thus to avoid an es-toppel. As the issue is not before us, we do not now pass upon the merit of any such contention.


author: BIGGS, Circuit Judge.

text:
    R. Glen FENSTERMACHER, Appellant, v. PHILADELPHIA NATIONAL BANK and Carson Investment Company.
    No. 72-2134.
    United States Court of Appeals, Third Circuit.
    Argued Sept. 13, 1973.
    Decided Feb. 7, 1974.
    Rehearing Denied April 8, 1974.

      Morris R. Brooke, Drinker, Biddle & Reath, Philadelphia, Pa., for appellant.
    Gregory M. Harvey, Philadelphia, Pa., for appellee Philadelphia Nat. Bank.
    John P. Mason, Dechert, Price & Rhoads, Philadelphia, Pa., for appellee Carson Investment Co.

      Before BIGGS, ADAMS and RO-SENN, Circuit Judges.
   OPINION OF THE COURT

BIGGS, Circuit Judge.

The controversy sub judice arose from an attempt by appellee, Philadelphia National Bank [PNB], to sell 21,600 registered shares of Fidelity National Bank of Pennsylvania held as collateral on a loan. In furtherance of its plan to sell the collateral, PNB sent notices soliciting bids to a list of possible purchasers, including appellant R. Glen Fenster-macher. The shares were sold, however, to appellee, Carson Investment Company [CICO] other than pursuant to the announced bidding procedure.

Fenstermacher, as high bidder, commenced this action in the district court on November 10, 1972 alleging that the actions of both PNB and CICO violated section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5, and that PNB’s refusal to deliver the shares to the appellant constituted a breach of contract under applicable Pennsylvania law. Jurisdiction was predicated on 15 U.S.C. §§ 78(j) and 78aa, and 28 U.S.C. §§ 1331 and 1337. Four days later, a hearing was held following which the district court denied Fenstermacher’s request for preliminary relief and dismissed the action on the merits. 351 F.Supp. 1015 (E.D.Pa. 1972).

I.

Fenstermacher challenges the procedure followed by the district court in which the hearing on the application for preliminary injunction was consolidated with the final hearing on the merits. It is asserted that the consolidation was effected without adequate notice and served to deprive appellant of due process and his right to a jury trial.

At the termination of the hearing, counsel for PNB stated: “Just one point, it will only take a second. Since we have had all testimony, I assume that this will be a final hearing as well as a preliminary hearing.” The district judge responded as follows: “It is final and includes the preliminary hearing. It is complete. I hope we can come to an answer that will be complete for the time being.” At that time Fenstermacher voiced no objection to this characterization of the proceedings but now contends that the trial court’s statement was equivocal and untimely. It is less than pellucid from the record whether appellant was put on adequate notice of consolidation prior to this point in the hearing and given adequate opportunity to object. Assuming, however, that he was not, appellant’s subsequent actions make clear that he was aware of the import of the statement and waived any defects which may have inhered in the procedure which was followed.

Rule 65(a)(2), Fed.R.Civ.P. permits the trial j'udge to consolidate a hearing on an application for preliminary injunction with the trial of the action on the merits, on his own motion, either prior to or during the original hearing. The consolidation, however, must be accompanied by notice to the parties, either before or after the commencement of the hearings, sufficient to enable them to present all their evidence. See 7 J. Moore, Federal Practice j[ 65.-04[4] (2d ed.1973); 11 Wright & Miller, Federal Practice and Procedure: Civil § 2950 (1973). Hence, the fact that consolidation was not formally announced until after the commencement of the hearing is not per se improper. The district court, in its Memorandum Opinion, stated that “all the parties did agree that the hearing which was held on November 14, 1972 was all the evidence that would be introduced if there would be a trial on the merits.” This being the case, no error can be predicated on insufficiency of notice since its purpose had been served. Fenstermacher, however, disputes the existence of an agreement and asserts he has additional evidence to present.

Even had there been no agreement that all the evidence was presented, Fenstermacher waived any objection to the timeliness of the notice. At the conclusion of the November 14 hearing, the district judge requested briefs of counsel and on November 17, 1972 appellant submitted a brief and a proposed order which contemplated solely a final adjudication on the merits. Thus, it is manifest that appellant must have recognized the import of the district court’s statement no later than the time he filed his brief and proposed order. By failing to object to the consolidation at any time and, further, seeking to use it for his benefit by actively soliciting final, equitable relief, Fenstermacher acquiesced in the procedure followed in the district court. Although we do not find reversible error in this procedure, it would be advisable in the future for district courts, when contemplating consolidation of the trial of the action on the merits with the hearing of an application for a preliminary injunction, promptly to notify counsel and request affirmative, on the record, response, especially where jury trial rights may be involved.

By way. of challenging the expedited final hearing and in order to demonstrate that further evidence remains to be presented, Fenstermacher asserts as error the failure of the district court to permit certain depositions to be placed in evidence. Although Fenstermacher’s conduct waived defects in notice, failure to consider proper evidence would have been error. The depositions in question were those of Messrs. Robert H. Potts and Charles E. Pancoast, III who were, respectively, Vice-Chairman and Senior Vice-President of appellee PNB. The district court ruled these depositions inadmissible on the grounds that the deposed parties were present and had testified.

Rule 32(a)(2), Fed.R.Civ.P., provides that the deposition of an adverse party or an officer, director or managing agent thereof, may be used for any purpose at a trial or hearing if otherwise admissible under the rules of evidence. This remains the case even though the deposed party has testified at the hearing. See 4 A J. Moore, Federal Practice ¶ 32.04 (2d ed.1972). The district judge’s refusal to permit the introduction of the depositions into evidence was not prejudicial, however, since the depositions do not appear to add any information to that given in oral testimony by the deponents and otherwise developed at the hearing. See Pingatore v. Montgomery Ward and Co., 419 F.2d 1138 (6th Cir. 1969), cert. denied, 398 U.S. 928, 90 S.Ct. 1818, 26 L.Ed.2d 90 (1970); Zimmerman v. Safeway Stores, Inc., 133 U.S.App.D.C. 342, 410 F.2d 1041 (1969); Pursche v. Atlas Scraper and Engineering Co., 300 F.2d 467 (9th Cir. 1961).

Further, the district court was warranted in inquiring into the relevance of the proffered evidence. When questioned, counsel for appellant Fenstermacher said only: “To prove my case, your Honor.” The district court was justified in refusing introduction of the depositions into evidence on this offer of proof.

II.

Fenstermacher’s assertions with regard to the loss of his right to a jury trial are without merit. Although Rule 65(a)(2) preserves the right to jury trial and this right cannot be lost through determination of equitable claims, Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959), Fenstermacher effectively exercised a complete waiver. A waiver of such a fundamental right is not lightly implied. See Heyman v. Kline, 456 F.2d 123 (2d Cir.), cert. denied, 409 U.S. 847, 93 S.Ct. 53, 34 L.Ed.2d 88 (1972). Appellant, however, failed to request a jury trial or object to consolidation when he must have realized that final adjudication on the merits was taking place absent a jury. More significantly, appellant actively solicited such a final adjudication in his brief and proposed order. We have no difficulty in finding a waiver on these facts.

III.

Fenstermacher charges that the district court erred in denying the application for preliminary relief. Since, as stated ante, Fenstermacher consented to the consolidation of the hearing on application for preliminary injunction with the final hearing, the propriety of the denial of a preliminary injunction is moot. Appellant’s objections will be considered as going to the merits of the final adjudication.

Fenstermacher asserts manifest violation of section 10(b) of the Securities Exchange Act, Rule 10b-5 and Pennsylvania contract law. An understanding of the facts is necessary for determination of these substantive questions.

PNB announced the proposed sale and bidding procedure by notices distributed on October 26, 1972. These notices required that the bids be presented by noon of November 9 and expressly reserved to PNB the right to reject any and all bids. On October 27, 1972 ap-pellee CICO first approached PNB with the intention of purchasing the Fidelity stock outside the bidding process. Preliminary negotiations resulted in a tentative oral agreement that $991,000 would suffice as the selling price of the stock but such agreement was conditioned upon the contribution of part of the stated selling price by one of the underlying obligors and the further negotiation of various terms of sale. Subsequently, from November 3 to November 8, PNB advertised in various newspapers its intention to sell the stock. Bids were solicited in these advertisements in accordance with the notice of October 26.

On November 9, approximately forty-five minutes prior to the announced noon deadline on bids, CICO and PNB executed a written contract for the sale of the stock at the previously agreed upon price. At 11:55 Á.M. Fenster-macher’s bid for one million dollars was submitted. On November 10, PNB and CICO rescinded the instrument of the previous day and executed a new contract specifying the selling price as one thousand dollars in excess of the Fenster-macher bid. PNB promptly rejected all submitted bids in favor of its contract with CICO. ■

In its memorandum opinion, the district court found that no contract or scheme existed between the appellees that would give rise to a violation of the securities law. The court’s characterization of the October 27, 1972 meeting between CICO and PNB in which the price of $991,000 was agreed upon, as merely preliminary negotiations is not clearly erroneous. These negotiations culminated in a written contract on November 9, the day Fenstermacher s bid was received. At the time of the original bid solicitation, no sale of the stock outside the bidding process was in the offing. At the time the subsequent newspaper advertisements appeared, only preliminary negotiations were on-going. No contract existed which foreclosed sale to the highest bidder until November 9, 1972.

The district court found additional support for its position that there was no scheme violating the securities law in its finding that PNB’s conduct was consonant with reasonable commercial practice. Fenstermacher had, on October 17, 1972, expressed an interest in purchasing the stock in question for a maximum price of $40 per share. Moreover, on October 27, upon returning a telephone call from Fenstermacher, PNB was informed that Fenstermacher had gone to Florida. These circumstances, according to the district judge, led PNB to believe that no bid exceeding CICO’s October 27 offer of approximately $46 per share would be forthcoming. The market price of the stock at this time was approximately $34 to $35 per share. Further, PNB had reason to believe its conduct was reasonable since the notice soliciting bids contained unequivocal language to the effect that the bank could, in its discretion, reject any and all bids.

The district court’s finding that there was no fraudulent conduct forecloses recovery under Rule 10b-5 to the extent that Rule predicates liability on a device, scheme or artifice to defraud. Even assuming PNB’s refusal to deliver the stock to Fenstermacher amounted to a breach of contract, it is manifest that this will not suffice to establish liability on this theory of the securities law absent a showing of actionable fraud. See, e. g., Walling v. Beverly Enterprises, 476 F.2d 393, 397 (9th Cir. 1973); Richardson v. MacArthur, 451 F.2d 35, 40 (10th Cir. 1971); Allico National Corp. v. Amalgamated Meat Cutters, 397 F.2d 727, 729-730 (7th Cir. 1968); A. T. Brod & Co. v. Perlow, 375 F.2d 393, 398 (2d Cir. 1967). Fens-termacher has failed to meet his burden.

This does not, however, end our inquiry into possible violation of Rule 10b-5. Albeit the district court found no scheme, device, or intention to defraud, it did not consider the possibility that failure of PNB to disclose ongoing negotiations amounted to a material omission sufficient to establish liability under the Rule. It is clear that in a non-disclosure situation, any required element of scienter is satisfied where, as here, the defendant had actual knowledge of the material information. Rochez Bros., Inc. v. Rhoades, 491 F.2d 402 (3d Cir. filed Dec. 21, 1973).

Normally, it would be for the district court to determine when, if ever, the negotiations between CICO and PNB became sufficiently substantial so that the obligation devolved on the seller of the stock to disclose the conduct, potentially abortive of the bidding process. In making this determination, the established doctrine of materiality must, of course, be considered. See Affiliated Ute Citizens v. United States, 406 U.S. 128, 153-154, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1971); Rochez Bros., Inc. v. Rhoades, supra, 491 F.2d at 408.

However, assuming, without deciding, that at some point in the bidding process PNB failed to reveal material information to the potential bidders, specifically including Fenstermacher, we fail to see how he would be entitled to relief. Fenstermacher failed to show an inadequate remedy at law justifying equitable relief. Clearly expenses incident to submitting his bid could be recovered if the assumed violation of Rule 10b-5 were, in fact, proved. Additionally, there was no showing that the stock could not be purchased on the open market. The testimony established that no attempt was made to purchase the stock in this manner. Having failed to establish the necessity of equitable relief, Fenstermacher would be limited to a recovery of money damages and these, as discussed below, were not proved. Hence, the failure of the district court to make findings concerning the liability of appellees under non-disclosure standards was harmless.

IV.

Fenstermacher asserts that the district court erred in denying him relief under Pennsylvania law. This contention is premised upon the theory that PNB’s solicitation of bids was an offer which Fenstermacher accepted by submitting the highest bid. The district judge found, however, that the notice soliciting bids and subsequent newspaper advertisements were merely invitations to make an offer. This finding was premised on the language of the original notice, stating: “The Bank reserves the right ... to reject any and all bids.”

Appellant relies on the Pennsylvania decision of Jenkins Towel Service, Inc. v. Fidelity-Philadelphia Trust Co., 400 Pa. 98, 161 A.2d 334 (1960), to demonstrate that a contract resulted despite the terminology indicated. In that case the Pennsylvania Supreme Court construed a letter requesting bids as an offer which was accepted by the plaintiff in submitting the highest bid. The offer contained the caveat that: “The Trustees of course, reserve the right to approve or disapprove of any and all offers, or to withdraw the properties from the market.” This clause was deemed to create an ambiguity in view of the tenor of the notice in its entirety which contemplated a complete offer. The Court deemed positive language such as: “[B]ids will be opened and an Agreement of Sale tendered to the highest acceptable bidder provided the offer is in excess of $92,000 cash, free and clear of any and all brokerage commissions,” and the inclusion of the terms of the Agreement of Sale, inconsistent with an unfettered right to disregard any and all bids. Having determined the existence of an ambiguity, the Court focused on the surrounding circumstances in which the notice was sent and interpreted the notice most strongly against the sender. 400 Pa. at 104-106, 161 A.2d at 337-338.

There is no such ambiguity in the notice of proposed sale sent to Fens-termacher. Acceptance of the bid by PNB is made expressly subject to the reserved right to reject any and all bids submitted. Further, the surrounding circumstances are insufficiently compelling to warrant deviation from the ordinary Pennsylvania rule that an invitation to bid does not constitute an offer. See, e. g., Fraim v. Lincoln University, 428 Pa. 436, 239 A.2d 305 (1968); In re Hilliard Estate, 383 Pa. 63, 117 A.2d 728 (1955); Leskie v. Haseltine, 155 Pa. 98, 25 A. 886 (1893).

V.

One further contention of appellant merits brief discussion. It is asserted that the district court ignored various claims for damages stated in Fenstermacher’s amended complaint. There is more than surface appeal to the assertion that having been requested to submit a bid, ah individual is at least entitled to have his bid considered, albeit without guarantee of success. To the extent claims for expenses of preparing a bid are not foreclosed by the necessary implications of the district court opinion, Fenstermacher’s actions in that court preclude recovery of money damages. Having requested such relief in his complaint, appellant presented no evidence whatsoever on the issue of money damages. The costs of preparing and submitting a bid were not disclosed, and Fenstermacher testified that he made no attempt to purchase the stock on the open market. Additionally, in his brief and proposed order, no relief by way of money damages was requested with the exception of costs of the action. No error was committed by the district court in failing to directly address issues neither substantiated by the presentation of evidence nor pressed by counsel.

The judgment of the district court will be affirmed.

      . The original amount of the loan was $1,043,000, which was subsequently reduced to $1,018,000.

      . This list was supplied by the obligors on the underlying loan who had earlier attempted to sell the collateral.

      . Fenstermacher additionally requested a temporary restraining order to prevent PNB from transferring the stock. The restraining order issued but was ineffective since the stock had already been delivered to CICO.

      . Fenstermacher’s claims under the Securities Exchange Act are sufficiently substantial to establish federal jurisdiction and standing. Appellant has alleged facts, such as solicitation and entry into a completed contract by PNB with the secret reservation not to perform, sufficient to maintain an action under traditional or modified requirements of the purchaser-seller limitation; the doctrine requiring that plaintiff must have either purchased or sold a security. See, e. g., Walling v. Beverly Enterprises, 476 F.2d 393 (9th Cir. 1973) ; Mount Clemens Indus. Inc. v. Bell, 464 F.2d 339 (9th Cir. 1972); Richardson v. MacArthur, 451 F.2d 35 (10th Cir. 1971); Allico Nat’l Corp. v. Amalgamated Meat Cutters, 397 F.2d 727 (7th Cir. 1968) ; A. T. Brod & Co. v. Perlow, 375 F. 2d 393 (2d Cir. 1967) ; Ashton v. Thornley Realty Co., 346 F.Supp. 1294 (S.D.N.Y. 1972) ; Commerce Reporting Co. v. Puretec, Inc., 290 F.Supp. 715 (S.D.N.Y.1968). Additionally, it is manifest that, at least in this circuit, the purchaser-seller requirement is not invariably the sine qua non of an action under Rule 10b-5, at least where equitable relief may prove appropriate. Kahan v. Rosenstiel, 424 F.2d 161 (3d Cir.), cert. denied, 398 U.S. 950, 90 S.Ct. 1870, 26 L.Ed.2d 290 (1970).

      . The Rule provides in pertinent part:
      Before or after the commencement of the hearing of an application for a preliminary injunction, the court may order the trial of the action on the merits to be advanced and consolidated with the hearing of the application. . . . This subdivision (a) (2) shall be so construed and applied as to save to the parties any rights they may have to trial by jury.

      . Appellant’s brief and proposed order, in substance, requested the district court to direct: redelivery of the shares by CICO to PNB; sale and transfer of the shares by PNB to Fenstermacher for the sum of $1,000,000; and that CICO and PNB be enjoined from taking any action to impede transfer of the shares to Fenstermacher and registration of the shares in his name in Fidelity’s books and records. Costs of the action and reasonable attorneys’ fees were also sought.

      . These depositions were not transcribed as of the hearing in this case, but counsel for appellant was present at the taking of the depositions the previous day and expressed no lack of recollection of their content.

      . Rule 38(b), Fed.R.Civ.P. requires that the demand for jury trial be filed within ten days after the service of the last pleading directed to issues to be heard by the jury. Since, apparently appellees did not formally answer the complaint, this time has not yet elapsed.

      . See, infra, note 15.

      . OI CO insisted that the shares not be exposed to an open bid.

      . The following is illustrative of the newspaper advertisements:
      NOTICE OF PROPOSED SALE OF STOCK
      The Philadelphia National Bank, Broad and Chestnut Streets, Philadelphia, Pa. proposes to entertain sealed bids for the purchase of 21,600 shares of the capital stock of Fidelity National Bank of Pa., Williamsport, Pa. to be received at the desk of Daniel H. Ort at the Philadelphia National Bank not later than noon on Thursday, November 9, 1972. All bids must be submitted on forms provided by the Philadelphia National Bank stating the conditions of sale and will be subject to those conditions. Copies of the bid forms and the conditions of sale may be obtained by calling Daniel H. Ort, (215) 629-3622 or by writing to him at the Philadelphia National Bank, Philadelphia, Pa. 19101.
      The Philadelphia National Bank

      . The actual bidding process produced only two bids, viz., Fenstermacher’s and CICO’s, which confirmed PNB’s belief these would be the only interested parties.

      . As is pointed out by the appellees, many of the cases involving frustrated purchasers of stock focus on the necessity of proving fraudulent intent in order to bring a defendant’s action within the purview of Rule 10b-5. It would appear that quite often proof of intention to defraud correspondingly proves the material omission. For example, proof that a party entered into a contract with limited intention of performing demonstrates both the fraud, rising over and above mere breach of contract, and the failure to disclose an intention contrary to that manifested by that party in dealing with the plaintiff. Cf. Walling v. Beverly Enterprises, supra. In the instant case, however, there is conduct viz., negotiation outside the bidding process, plainly inconsistent with the announced auction, non-disclosure of which might violate Rule 10b-5, independent of an express finding of fraudulent intent.

      . Had PNB disclosed the ongoing negotiations with CICO at the outset, it is far from certain that Fenstermacher could have successfully obtained the stock. As a result of the information Fenstermacher might have decided to withhold his bid, proceed with submitting his bid or enter into negotiations outside the bidding process. The first alternative would certainly have relieved the appellant of some of the costs of submitting a bid and the second would leave him in his present position. The outcome of the third alternative is highly speculative but at least would have avoided the costs of making a nugatory bid although probably substituting the costs involved in open negotiation.
      It is not without significance that Fenster-macher did not suggest in his testimony that he would have entered negotiations outside the bidding process had he been so informed.

      . The conditions of the solicitation letter were as follows:
      October 26, 1972
      CONDITIONS OF PROPOSED PRIVATE SALE OF 21,600 SHARES OF THE CAPITAL STOCK OF FIDELITY NATIONAL BANK OF PA.
      To Those Interested in the Proposed Private Sale by The Philadelphia National Bank of 21,600 Shares of the' Capital Stock of Fidelity National Bank of Pa., Williamsport, Pa.:
      You are hereby notified of the following conditions to be observed in connection with the proposed private sale by this Bank of the collateral pledged with it under a certain loan of February 25, 1971, being 21,600 shares of the capital stock of Fidelity National Bank of Pa.:
      1. This Bank will entertain sealed bids for the purchase of the shares. All such bids must be received at the desk of Charles E. Pancoast, III, Senior Vice President, at the Main Office of this Bank, Broad and Chestnut Streets, Philadelphia, not later than noon on Thursday, November 9, 1972.
      2. No bid for less than all of the 21,600 shares will be entertained.
      3. All sealed bids must be accompanied by a certified check payable to the order of this Bank in the amount of 10% of the bid. Said amount will constitute partial payment if the bid is accepted and the purchase completed ; will be returned if the bid is not accepted; and will be retained by this Bank as liquidated damages in the event that the bid is accepted but the bidder fails to complete his purchase in accordance with these conditions of sale.
      4. The high bidder meeting the foregoing conditions will, subject to paragraph 8 below, be promptly notified of acceptance of the bid; whereupon the remainder of the purchase price will be payable by receipt at this Bank as aforesaid, within five business days after such notification is given to the successful bidder, of a certified check payable to the order of this Bank in the amount of the unpaid balance.'
      5. Consummation of the contract of sale will be made immediately upon receipt of the full bid price by delivery of the single stock certificate for 21,600 shares and a blank stock power executed by all five registered owners of the stock, but without delivery of a bill of sale, without guarantee of signatures, without payment of any transfer or other tax, and without representation or warranty by this Bank. Reference is made to the Uniform Commercial Code (Sections 8-301 and 9-504) for a statement as to the rights received by the purchaser and the discharge of the security interest of this Bank.
      6. In accordance with the terms of the agreement between this Bank and its borrowers in the loan for repayment of which the stock has been pledged, this Bank has given notice to Fidelity National Bank of Pa. that this Bank has exercised its right to vote the shares. Should there be a meeting of the shareholders of Fidelity National Bank of Pa. for which the record date for determination of shareholders entitled to vote is a date prior to that of registration of the shares on the records of Fidelity National Bank of Pa. in the name of the successful bidder, this Bank will execute a proxy in favor of ox-in accordance with the written directions of the purchaser, provided that the purchaser has completed his purchase and received de-livex-y of the shares as mentioned above.
      7. By the act of submitting a bid the bidder waives any right to a statement by this Bank of such knowledge as this Bank may have concerning Fidelity National Bank of Pa.
      8. This Bank reserves the x-ight to waive any irregularity in a bid and to reject any and all bids submitted to it.
      9. All bids shall be submitted by filling in the appropriate blanks below and signing the fox-m in which they appear.
      THE PHILADELPHIA NATIONAL BANK Charles E. Pancoast Senior Vice President , 1972.
      The undex-signed hereby submits a bid of 8-, accompanied by certified check of 10% thereof, upon the foregoing stated conditions which have been read.
      (signature) ..................
      (print name) ..................
      (address) ..................


text:
    Thomas A. COLLINS, Petitioner-Appellant, v. Raymond J. BUCHKOE, Warden, Respondent-Appellee.
    No. 73-1693.
    United States Court of Appeals, Sixth Circuit.
    Argued Dec. 4, 1973.
    Decided March 27, 1974.

      William J. Dammarell, Cincinnati, Ohio (Court-appointed), for petitioner-appellant.
    Jann C. Ryan, Asst. Atty. Gen., Lansing, Mich., for respondent-appellee; Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., Lansing, Mich., on brief.
    Before CELEBREZZE, Circuit Judge, McALLISTER, Senior Circuit Judge, and WILSON, District Judge.

       The Honorable Frank W. Wilson, Chief Judge, United States District Court for the Eastern District of Tennessee, sitting by designation.

   PER CURIAM.

This is an appeal from the District Court’s dismissal of the appellant’s petition for a writ of habeas corpus. The appellant was convicted of rape in 1967 in a non-jury trial in the Circuit Court for Kalamazoo County, Michigan, and was sentenced to life imprisonment. His conviction and sentence was affirmed upon appeal. Peoples v. Collins, 16 Mich.App. 667, 168 N.W.2d 624 (1969) , leave to appeal to Michigan Supreme Court denied, 383 Mich. 777 (1970) .

The appellant’s, petition for federal habeas corpus relief sets forth some twelve alleged errors in his criminal trial. After conducting an evidentiary hearing and receiving argument of counsel, the District Court found that no constitutional right of the petitioner had been violated and dismissed the petition.

While the appellant continues to assert upon this appeal all matters complained of in his petition below, it is apparent on the face of the record that only two matters complained of present potential errors of constitutional dimension cognizable in a federal habeas corpus proceeding.

One such matter is the appellant’s contention that in the course of his non-jury trial the state trial judge received and considered a confidential document containing a false accusation of rape by another alleged victim. While this contention is adequate to assert a denial of a constitutional right to confrontation and due process, the District Court found that the contention was without basis in fact. We have examined the record and are in agreement with this finding. The trial transcript reflects that no such occurrence took place in the course of the criminal trial. An occurrence of this nature is reflected in connection with presentence documents submitted to the trial court at the time of sentencing, but these proceedings took place more than a month after the judgment of conviction. The contention is accordingly without merit.

In reference to these same general matters, the appellant further contends that due process was violated in the manner of his sentencing. The life sentence was imposed, so the appellant contends, as a consequence of the trial court having considered, without opportunity of refutation, a false statement regarding another alleged rape having been committed by the appellant.

The record reflects that just prior to sentencing, a chambers conference occurred between the trial judge and counsel. The appellant appears not to have been present at this conference, and no record was made of these proceedings. Sentencing proceedings were then held in open court, at which proceedings the appellant and his counsel were both present. A record of these proceedings was made, and it reflects that after extending an opportunity to the appellant and his counsel to make a statement, an opportunity which they declined, the Court then proceeded to pronounce sentence. In pronouncing sentence the Court, among other matters, stated:

“The presentence report is full and complete. In addition to the presen-tence report this Court has read a statement given by another alleged victim of this defendant, a student at the same educational institution as was the victim in this case. This Court is entirely satisfied that this defendant is possessed of an abnormal sex urge. This was evidenced by his own description, from the witness stand, of his acts, on the occasion of this offense, even though his description of those acts was greatly colored in his favor. This urge may be uncontrollable on his part, and it would seem that one would almost have to conclude that it was uncontrollable or he never would have done the things that he did do to satisfy his urge, even by his own statement from the witness stand, and we know that he did far more than that, not only with the girl who is the complainant in this case, but I am satisfied with other girls.”

On the basis of the above state of the record, the District Court, relying upon Williams v. New York, 337 U.S. 241, 246, 69 S.Ct. 1079, 93 L.Ed. 1337 (1949), concluded that the matters reflected as having been considered by the trial judge at the time of sentencing were not inappropriate to the imposition of sentence, that neither the right of confrontation nor the usual rules of evidence apply at the stage of the proceedings, and that no denial of due process was reflected in the record.

It is of course true, as noted by the District Court, that Williams v. New York, 337 U.S. 241, 69 S.Ct. 1079, 93 L. Ed. 1337 (1949) laid down the principle that “the due process clause should not be treated as a device for freezing the evidential procedure of sentencing in the mold of trial procedure trial,” and held that due process does not mandate either the right of confrontation or the usual rules of evidence at the sentencing stage. As recognized in Williams, it is desirable that the judge in passing sentence be provided with as much and as accurate information on the person to be sentenced as may be reasonably possible under the circumstances of the case. Accordingly, it is settled law that a trial judge in performing his sentencing function may appropriately consider any responsible information of a relevant nature, even though unsworn or derived from an out-of-court source, Williams v. Oklahoma, 358 U.S. 576, 79 S.Ct. 421, 3 L.Ed.2d 516 (1959), including evidence of criminal charges for which the defendant may never have been tried. See United States v. Metz, 470 F.2d 1140 (3rd Cir. 1972), cert. denied Davenport v. United States, 411 U.S. 919, 93 S.Ct. 1558, 36 L.Ed.2d 311 (1973). See also United States v. Weston, 448 F.2d 626 (9th Cir. 1971).

However, the reliability and truthfulness of the information considered in sentencing remains a matter of fundamental concern. While the discretion of the sentencing judge is broad with respect to the nature and source of information utilized by him in sentencing, there are nevertheless limitations imposed by the requirements of due' process. These limitations include the requirement that a defendant be afforded the opportunity of rebutting derogatory information demonstrably relied upon by the sentencing judge, when such information can in fact be shown to have been materially false.

This limitation was first enunciated by the United States Supreme Court in the case of Townsend v. Burke, 334 U.S. 736, 68 S.Ct. 1252, 92 L.Ed. 1690 (1948), wherein the Court stated:

“[T]his prisoner was sentenced on the basis of assumptions concerning his criminal record which were materially untrue. Such a result whether caused by carelessness or design is inconsistent with due process of law and such conviction cannot stand.”

The rule in the Townsend case was reaffirmed by the Supreme Court as recently as 1971 in the ease of United States v. Tucker, 404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592. The Court there restated with approval the rule in the Townsend case and in remanding the defendant for resentencing said:

“The record in the present case makes evident that the sentencing judge gave specific consideration to the respondent’s previous convictions before imposing sentence upon him. Yet it is now clear that two of these convictions were wholly unconstitutional..."

The due process limitation on sentencing information hereinabove referred to has been applied in a number of the other Circuits. See United States v. Myers, 374 F.2d 707 (3rd Cir. 1967); Baker v. United States, 388 F.2d 931 (4th Cir. 1968) ; United States v. Weston, 448 F.2d 626 (9th Cir. 1971); United States v. Picard, 464 F.2d 215 (1st Cir. 1972); and United States v. Espinoza, 481 F.2d 553 (5th Cir. 1973). The Court in the Weston case just cited in interpreting Toumsend, had this to say:

“Where a trial judge, in exercising his sentencing discretion, relies on evidence of prior convictions that is false, or mistakenly believes that the presentence report shows prior convictions when it does not, the defendant has been deprived of due process and the sentence must be vacated.”

In interpreting the more recent Supreme Court decision in the Tucker case, the Court in United States v. Espinoza, supra, had this to say:

“Implicit in the Court’s holding in Tucker is the principle that despite the broad discretion left in the trial judge in assessing background information for sentencing purposes a defendant retains the right not to be sentenced on the basis of invalid premises.” (Citations omitted)

It is of course a prerequisite to the granting of post-conviction relief under the circumstances here presented that the information demonstrably relied upon in sentencing be “materially false”. See Slovak v. United States, 447 F.2d 1358 (6th Cir. 1971).

The record in this case demonstrably reflects that in passing sentence the trial judge relied upon information that the appellant (defendant) had raped another victim. The record likewise reflects that the appellant was never accorded an opportunity to rebut this information. However, the record fails to reflect any finding with respect to the truth or falsity of this accusation. The appellant contends that it was false and so testified at the evidentiary hearing held before the District Court. No finding regarding this essential matter was ever made by the District Court. While it is clear that the appellant is not entitled to a new trial, this Court is unable to say whether the appellant is entitled to be resentenced in the absence of a finding of fact regarding the truth or falsity of the derogatory matter relied upon. The case will accordingly be remanded to the District Court for a resolution of this issue of fact. Should the District Court find that the information recited by the state trial judge in regard to a further rape having been committed by the appellant was false, habeas corpus relief will be granted by setting aside the appellant’s sentence and ordering his resentencing in the state court within a stated time or otherwise directing his release from custody.

This case will be reversed and remanded for further proceedings consistent with this decision.