author: BRIGHT, Circuit Judge.

text:
    Gary L. ROUSE, Appellee, v. CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD COMPANY, Appellant, v. SUPERIOR COOPERATIVE ELEVATOR COMPANY. Gary L. ROUSE, v. CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD COMPANY, Appellee, v. SUPERIOR COOPERATIVE ELEVATOR COMPANY, Appellant.
    Nos. 72-1124, 72-1161.
    United States Court of Appeals, Eighth Circuit.
    Submitted Oct. 19, 1972.
    Decided March 1, 1973.

      B. A. Webster, Des Moines, Iowa, for Chicago, Rock Island and Pacific Railroad Co.
    William F. Fanter, Des Moines, Iowa, for Superior Cooperative Elevator Co.
    Francis Fitzgibbons, Esterville, Iowa, for Rouse.
    Before LARAMORE, United States Court of Claims Senior Judge, BRIGHT and ROSS, Circuit Judges.

       Sitting by designation.

   BRIGHT, Circuit Judge.

Gary L. Rouse, while serving as a brakeman for the Chicago, Rock Island and Pacific Railroad Company (Railroad), lost part of his leg when he struck a loading dock encroaching near a spur track and fell from a train, rolling beneath its wheels. Rouse brought this FELA action against the Railroad, which in turn sought indemnity or contribution in a third-party complaint against Superior Cooperative Elevator Company (Elevator) under terms of a lease agreement with the Elevator. The Railroad alleged that the lessee-Elevator’s failure to create adequate clearances between its loading dock and the spur track caused Rouse to sustain his injuries. A jury, by special verdict, awarded Rouse $273,125 on his claim against the Railroad. Thereafter the trial judge rejected the Railroad’s claim to full indemnity but entered judgment in favor of the Railroad for contribution from the Elevator.

The Railroad has appealed contending that the district court erred (1) in rejecting the Railroad’s right to recover full indemnity from the Elevator under the lease, (2) in refusing to grant a new trial or remittitur because of the exeessiveness of the verdict, (3) in refusing to instruct the jury that an award to plaintiff would not be subject to state and federal income taxes, and (4) in refusing an instruction relating to future pain and suffering and medical expenses.

The Elevator has appealed urging that the district court erred in refusing to submit the question of its liability for contribution to a jury and in declining to grant a new trial for errors committed during trial. The Elevator also attacks the amount of the verdict as excessive.

We deny these appeals and affirm the verdict and judgment entered in the main action and the third-party proceedings.

The lease provisions required that no structure be erected or ■ maintained by the Elevator within a minimum of six feet from the center line of the track. The evidence established that the Elevator’s loading dock lay within six feet of the center line in violation of the lease as well as track clearance regulations of the Iowa State Commerce Commission. Testimony established that Rouse struck the loading dock and fell beneath the wheels of the train while attempting to release a handbrake on a grain car. The testimony further indicated that supervisory railroad employees had been aware that the loading dock unlawfully encroached upon the tracks.

The lease agreement stipulated that should the Elevator fail to observe clearance requirements it “will assume all liability therefor and agrees to indemnify and save harmless the Lessor * * * against any and all claims for loss, damage, injury or death resulting therefrom.” A general provision of the lease further provided for indemnity for claims arising out of injury or death of the parties and their employees or other persons while on or about the leased premises and stipulated that “if any claim or liability due to some other cause than fire shall result from the joint or concurring negligence of both parties hereto it shall be borne by them equally.”

The trial court determined as a matter of law that the Railroad had acquiesced in the encroachment and therefore was barred from obtaining full indemnity from the Elevator. The Railroad, however, contended that the fact that it knew of the existence of a dangerous condition did not bar indemnity under Iowa law.

The facts and the provisions of the lease here in question are almost identical to those before this court in Missouri Pacific R.R. Co. v. Arkansas Oak Flooring Co., 434 F.2d 575, 577 (1970). In that case we recognized the doctrine of acquiescence as a defense to the lessor-railroad’s claim for indemnity against its lessee. The Railroad, here, has referred us to no decision of the Iowa Supreme Court which is inconsistent with our decision in Arkansas Oak Flooring. Accordingly, on the authority of that decision, which we believe enunciated a proper general rule in the construction of lease agreements such as the one before us, we affirm the ruling of the district court denying indemnity but awarding contribution to the Bailroad.

The Bailroad next alleges that the jury verdict was “so excessive as to shock the conscience and indicates passion and prejudice * * * .” The limitation upon the scope of review of a damage award has been enunciated frequently by this court and needs no elaboration here. See Scoville v. Missouri Pacific R.R. Co., 458 F.2d 639, 647-649 (8th Cir. 1972), and cases cited therein. The court will only intervene where there is “plain injustice or a monstrous or shocking result.” Novak v. Gramm, 469 F.2d 430, 434 (8th Cir. 1972).

Bouse was 31 years old when the accident occurred and 34 at the time of trial. As a result of the accident, he had suffered an amputation of his left leg at a point five inches below the knee. He offered medical testimony that further amputation might be necessary. He had already undergone 12 operations, had incurred in excess of $11,000 in medical expense, and had sustained lost earnings of about $900 per month total-ling $14,400.

Considering Bouse’s life expectancy, his past and anticipated future pain and suffering, his prior earning capacity, and the nature of his disability in general, we cannot say that the verdict, although very substantial, was so shocking as to require our intervention. See Grunenthal v. Long Island R.R. Co., 393 U.S. 156, 161-162, 89 S.Ct. 331, 21 L.Ed.2d 309 (1968); Greco v. Seaboard Coast Line R.R. Co., 464 F.2d 496, 497 (5th Cir. 1972), and compare Perry v. Bertsch, 441 F.2d 939, 945 (8th Cir. 1971).

As a second prong of its attack on the verdict, the Bailroad argues that tax-conscious juries mistakenly assume that awards will be subject to taxation and therefore increase awards sufficiently to compensate for such imaginary taxes. Upon this hypothesis, the Bailroad urges that the trial court erred in refusing to instruct that “plaintiff would not be required to pay state or federal income tax on any award granted him in this case.”

Courts and legal commentary disagree on the appropriateness of such an instruction. See, e. g., Domeracki v. Humble Oil & Refining Co., 443 F.2d 1245, 1249 nn. 5-6, 1252 n. 16 (3d Cir. 1971); Annot. 63 A.L.R.2d 1393 (1959); Comment, 56 Minn.L.Bev. 503 (1972). We do not propose to resolve this controversy in these proceedings. We recently said in Raycraft v. Duluth, Missabe and Iron Range Ry. Co., 472 F.2d 27 (8th Cir. 1973):

In view of the state of the law and the record in the instant case, this Court will not pass on the issue at the present time. Even if this panel were to adopt the instruction, this panel would do so only prospectively. Therefore, such a holding is not necessary for resolution of the instant case. The question is more properly left open for future consideration and perhaps for en banc determination by the entire Court. [472 F.2d at 33 (footnote omitted).]

We make a similar response to the issue in this case. See Greco, supra, 464 F.2d 496, rehearing en banc denied, 468 F.2d at 823.

We similarly find no error in the trial court’s instruction relating to future pain and suffering and medical expenses which admonished that these items must be proved with “reasonable certainty.” The trial court did not give the instruction in the exact language requested by the Railroad, but its instruction was similar in substance. No exception was taken by appellant-Railroad to the damage instruction as given by the court and, thus, no basis for error was preserved on the record. Rule 51, Fed.R.Civ.P.

Errors alleged on appeal by the Elevator as third-party defendant in this action are equally unavailing. The Elevator argues that the issue of its liability for contribution should have been submitted to a jury rather than directed, since the evidence did not conclusively establish that the brakeman struck that part of the platform lying within six feet of the center line of the track in violation of the lease. The simple response is that the jury’s verdict in the principal action established the Railroad’s liability for failing to provide appellee-Rouse with a safe place to work. That finding triggered the Elevator’s liability under the lease since it was undisputed that the encroaching structure had been built and maintained by the Elevator in violation of that agreement. Because of this violation, the Elevator became contractually obligated to indemnify the Railroad. See Scherff v. Missouri-Kansas-Texas R. R. Co., 449 F.2d 23, 28-30 (5th Cir. 1971); Minneapolis-Moline Co. v. Chicago, M., St. P. & P. R. Co., 199 F.2d 725, 729 (8th Cir. 1952). Indemnification, of course, which was required in the cited cases, is not applicable here since, as we noted earlier, the defense of acquiescence served to bring the contribution clause of the lease agreement into play, limiting the Elevator’s contractual liability to 50 percent of the verdict against the Railroad. Arkansas Oak Flooring, supra, 434 F.2d 575, at 581; Erie Avenue Warehouse, supra, 302 F.2d 843, at 849. See Anthony, supra, 316 F.2d 858, at 866.

We have also examined the Elevator’s contention that the district court should have granted it a new trial for errors in the conduct of the jury trial in the principal action. Since the liability of the Elevator rested on contractual principles applicable to undisputed facts, it is difficult to perceive prejudice to the Elevator from the admission of evidence in Rouse’s case against the Railroad or from the refusal to allow the Elevator to participate in final argument in the principal action, notwithstanding the Elevator’s participation in the trial under Rule 14(a), Fed.R.Civ.P. We have reviewed the alleged errors and find no prejudice to the Elevator in these rulings of the district court nor in its denial of the Elevator’s motion for a new trial.

Affirmed.

      . We distinguished an earlier decision, Anthony v. Louisiana & Arkansas Ry. Co., 316 F.2d 858 (8th Cir.), cert. denied, 375 U.S. 830, 84 S.Ct. 74, 11 L.Ed.2d 61 (1963), on the ground that the lease in that case contained a clause specifying that the railroad’s knowledge of an obstruction did not waive its right to indemnification from its lessee for damages arising out of a violation of the lease.

      . For fuller discussion of acquiescence as a defense to the obligation to indemnify under a railway spur track agreement, see Arkansas Oak Flooring, supra, 434 F.2d at 577-580; Pennsylvania R. R. Co. v. Erie Avenue Warehouse Co., 302 F.2d 843, 848-849 (3d Cir. 1962).

      . While we do not pass on the issue of a prospective instruction here, we add this comment. We know of no evidence in this case or empirical data demonstrating that this jury or juries in general regularly increase damage awards because of a mistaken belief that the state and federal governments share in the award through income taxes. Furthermore, if a cautionary instruction should be given the jury to dissuade it from improperly increasing an award for income tax purposes, tlien perhaps other cautionary instructions should also be given on other collateral matters which conceivably affect the amount of damages awarded by a jury. For example, a jury might be instructed not to increase or decrease an award because one or both parties must pay attorney’s fees in the action. See McWeeney v. New York, New Haven & Hartford R. R. Co., 282 F.2d 34, 37-38 (2d Cir. 1960).
      Regardless of the appropriateness of an income tax instruction, the cure for excessive verdicts usually rests with the trial court which, in appropriate cases, should exercise its powers of remittitur.


source: Caselaw Access Project

author: GROOMS, District Judge:

license: Public Domain

text:
    CRENSHAW COUNTY PRIVATE SCHOOL FOUNDATION, etc., d/b/a Crenshaw Christian Academy, Plaintiff-Appellant, v. John B. CONNALLY, Jr., Secretary of the Treasury of the U. S., et al., Defendants-Appellees.
    No. 72-2775.
    United States Court of Appeals, Fifth Circuit.
    March 14, 1973.
    Rehearing and Rehearing En, Banc Denied
    Charles J. Kettler, Jr., Luverne, Ala., for plaintiff-appellant.

      Ira DeMent, U.- S. Atty., Kenneth E. Vines, Asst. U. S. Atty., Montgomery, Ala., Scott P. Crampton, Asst. Atty. Gen., Tax Div., Meyer Rothwacks, Carolyn R. Just, Leonard J. Henzke, Jr., Attys., U. S. Dept, of Justice, Washington, D. C., for defendants-appellees.
    Before BELL and THORNBERRY, Circuit Judges, and GROOMS, District Judge.
   GROOMS, District Judge:

This is an appeal by the plaintiff-appellant, a non-profit private school foundation, from an order of the District Court of the Middle District of Alabama, 343 F.Supp. 495, granting a motion to dismiss its complaint for an injunction against the Secretary of the Treasury and the Commissioner of Internal Revenue.

The action was dismissed on two grounds. The lower court held that (1) relief was barred by 26 U.S.C.A. § 7421(a), and (2) that plaintiff had an adequate remedy at law in view of the fact that it was not threatened with irreparable injury.

Since our decision is posited on the first ground, we pretermit a decision on the second.

Appellant was incorporated on July 15, 1965, as a non-profit religious educational corporation under the laws of Alabama, including the provisions of Title 10, §§ 124-132, Code of Alabama, 1940, as amended. It began full operation as the Crenshaw Christian Academy on September 30, 1968, allegedly “for students and parents who object to the constitutional inhibitions against prayer, Bible reading, religious study, and other activities of the Christian faith in public schools.”, Succinctly stated, the claimed purpose of the Academy is “to provide the children of the area an opportunity to obtain a quality education in a wholesome Christian atmosphere.” Appellant avers that the Academy is nondenominational and is open to all adherents of the Christian faith, that its membership and student admission policy has never included any reference to race or color, and that there does not exist any officially recognized anti-racially discriminatory admission policy. It concedes that it has never received an application from a non-white, and consequently has never denied an application for admission from a non-white.

On September 17, 1968, appellant applied to the Internal Revenue Service for tax-exempt status under Title 26, § 501(c)(3). On January 8, 1969, the Service issued its determination letter and letter of advance assurance ruling that appellant was exempt from Federal income tax under that section of the Revenue Code and that donors could deduct contributions to appellant as provided by Section 170, Title 26 U.S.C.A.

“ . . . [N]o suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.”

However, the letter contained conditions reading;

“The conclusions in this ruling are based on the Service’s understanding that the operations of your school do not involve state action constituting a violation of the Constitution or laws of the United States. Further, in the event of legislative developments, or judicial interpretations — constitutional or otherwise — respecting the legality or educational qualification of your purposes or manner of operation which affect your elegibility under section 501(c)(3) of the Code, this ruling shall cease to be of effect.”

Following the three-judge decision in Green v. Kennedy and Thrower, D.C., 309 F.Supp. 1127 (January 12, 1970), the Service issued a news release on July 10, 1970, wherein it was announced it could

“no longer legally justify allowing tax-exempt status to private schools which practice racial discrimination nor can it treat gifts to such schools as charitable deductions for income tax purposes . . . where a school fails to establish that it has a racially non-discriminatory admission policy, an outstanding ruling of exemption will be withdrawn. . . ”

On July 19, 1970, the Service amplified the release of July 10, 1970, by stating that its statement of position on racially non-discriminatory policies “would be applicable to all private schools, whether church related or not.”

On June 18, 1971, the Internal Revenue Service wrote appellant requesting that it comply by establishing “a policy one way or the other,” and by publicly advertising through the local news media a racially non-discriminatory policy.

Following further correspondence and conferences, appellant declined to accede to the request for compliance, and upon the threatened withdrawal of its tax-exempt status and advance assurance of deductibility of contributions, it instituted this action.

The Supreme Court has interpreted the provisions of Section 7421(a) to mean that the tax assessment and collection processes are not subject to injunctive interference unless the complainant shows (1) that “it is clear that under no circumstances could the Government ultimately prevail,” and (2) that equity jurisdiction otherwise exists because of the absence of a legal remedy. Enochs v. Williams Packing Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292.

“[T]he question of whether the Government has a chance of ultimately prevailing is to be determined on the basis of the information available to it at the time of suit. Only if it is then apparent that, under the most liberal view of the law and the facts, the United States cannot establish its claim, may the suit for an injunction be maintained.” Id.

Thus judged, the exceptions are seen to be quite narrow and complainant’s burden a most onerous one indeed.

Appellant insists that Section 7421(a) is inapplicable. Its insistence is premised on the position that the suit is not for the forbidden purpose proscribed by the section because (1) the administrative acts which it seeks to enjoin do not constitute an “assessment or collection” of a tax, and (2) because the purpose of the contested tax policy is not to raise revenue, but to compel compliance with the Government’s policy respecting racial integration in the nation’s schools. Initially it grounded its primary reliance upon the authority of Bob Jones University v. Connally, 341 F.Supp. 277 (D.C. 1971). That decision was reversed by the Fourth Circuit on January 19, 1973, 472 F.2d 903. While still insisting that the lower court was correct it now insists that the decision of the Circuit Court for the District of Columbia in “Americans United” Inc. v. Walters (1973) 477 F.2d 1169, should control. The court in the latter case, citing as sustaining authority the decision of the lower .court in Bob Jones, reached a conclusion contrary to that of the Fourth Circuit on its review of the Bob Jones case.

Appellant to a lesser extent also relies on Green v. Connally, D.C., 330 F.Supp. 1150, aff’d per curiam sub nom. Coit v. Green, 404 U.S. 997, 92 S.Ct. 564, 30 L.Ed.2d 550. That was a class action by Negro federal taxpayers of Mississippi to enjoin U.S. Treasury officials from according tax-exempt status and deductibility of contributions to private schools which discriminated against Negroes. That decision resolves the merits against appellant, but sustains the grant of an injunction without specific reference to Section 7421(a). In Green the court held that in light of the settled federal policy against racial discrimination the Internal Revenue Code must be construed to prohibit exemptions and deductions which extend tax benefits to racially discriminatory private schools. The court further held that the Internal Revenue Service can demand evidence of non-discrimination in admission policies in the nature of the evidence here requested before the institution of this suit.

We disagree with appellant’s contention that Section 7421(a) is inapplicable because the suit did not seek to enjoin an “assessment or collection” of any tax.

The administrative proceedings were directed to a withdrawal of tax-exemption and deductibility-assurance rulings of the Internal Revenue Service. Those proceedings are directly involved with the assessment and collection of taxes from appellant and those making contributions to it. If those rulings are withdrawn, appellant will be liable for taxes on any net income realized by it and contributors to it will not be permitted to deduct from their gross income the amount of their contributions. Either event will result in an increase in taxes. On the contrary, if the injunction issues, any assessment or collection of such increased taxes will be prohibited. Section 7421(a) is directed against that result.

We agree with the Fourth Circuit in Bob Jones University that the Government’s policy with respect to racial discrimination is irrelevant to the proper disposition of this case.

In view of the decisions in Green v. Connally, aff’d sub nom. Coit v. Green, supra, and Green v. Kennedy and Thrower, supra, we cannot conclude that “under no circumstances” could the Internal Revenue Service prevail in withdrawing its tax-exemption and deducti-bility-assurance rulings. -

Considering all the averments presented by the complaint, we do not consider the charge by way of conclusion that the Internal Revenue Service is interfering with appellant’s constitutional guarantee of religious liberty sufficiently substantial to merit an adjudication with respect to that issue.

Congress has barred the side door to actions “with respect to Federal taxes”' under the Declaratory Judgment Act, 28 U.S.C.A. § 2201, and, subject to the noted exceptions, has also barred the front by Section 7421(a). We are of the opinion and so hold that the lower court correctly ruled that Section 7421(a) constitutes a bar to the maintenance of this action. Consequently it did not err in dismissing the action on that ground. Its action is affirmed.

      . Subject to exceptions not here applicable § 7421(a) provides that:

      . Section 501. Exemption from tax on corporations, certain trusts, etc.

      (c) List of exempt organizations.— The following organizations are referred to in subsection (a) :
      (3) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office.

      . Section 170. Charitable, etc., contributions and gifts

      (a) Allowance of deduction.—
      (1) General rule. — There shall be allowed as a deduction any charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary or his delegate.
      (c) Charitable contribution defined. —For purposes of this section, the term “charitable contribution” means a contribution or gift to or for the use of—
      (2) A corporation, trust, or community chest, fund, or foundation—
      (B) organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals;

      . The suit of the individuals involved dollars contributed by them to American United. The claim of the latter did not involve its own tax-exempt status but the deductibility of contributions to it. The court held that the suit' could not be maintained by the former since “the relief sought by the individual appellants direct-. ly ranged within the ambit of § 7421(a).” Amercan United was permitted to maintain its action.

      . See Fourth Circuit opinion in Bob Jones University.

      . See Bailey v. George, 259 U.S. 16, 42 S.Ct. 419, 66 L.Ed. 816 (1922), where the court upheld the application of the predecessor of Section 7421(a) and reversed the lower court which had granted an injunction against the Collector of Internal Revenue from collecting the Child Labor Tax in face of the argument that the tax was not for the purpose of raising revenue, but was penal and for the purpose of regulating child labor. See also, Singleton v. Mathis, 284 F.2d 616 (8 Cir.), where the court affirmed the denial of an injunction against the Director who was proceeding to collect a gaming tax of $250.00 each on pinball machines where it was obvious that the purpose of the tax was not to raise revenue but to control gambling.


author: PER CURIAM. O’SULLIVAN, Senior Circuit Judge

text:
    Gregory N. ALDRIDGE, Plaintiff-Appellee, v. Andrew MULLINS, Defendant-Appellant.
    No. 72-1681.
    United States Court of Appeals, Sixth Circuit.
    Argued Dec. 6, 1972.
    Decided March 6, 1973.
    O’Sullivan, Senior Circuit Judge, dissented and filed opinion.
    James H. Harris, III, Metropolitan Atty., Nashville, Tenn., on brief, for defendant-appellant.
    Lionel R. Barrett, Jr., Nashville, Tenn., on brief, for plaintiff-appellee.
    Before KENT, Circuit Judge, and Mc-ALLISTER and O’SULLIVAN, Senior Circuit Judges.
   PER CURIAM.

This is an appeal after a trial to the Court without a jury which resulted in a judgment for the plaintiff-appellee for $10,000 compensatory damages and $3,-000 punitive damages. The parties will be referred to as in the court below.

Suit was brought by the plaintiff after he suffered a gunshot wound on September 30, 1970. The facts are in dispute, but viewing the evidence in the best light for the plaintiff it appears that he and some other young people, some less than and some more than 21, were engaged in some horse play at about 11:00 p. m. on the day in question. The defendant is a police officer in the Metropolitan Police Department of Nashville and Davidson County, Tennessee. Defendant and his partner were cruising in a motor vehicle when they saw some individuals, never identified, in the vicinity of a closed office building. They had no report or evidence that any crime had been committed. Defendant and his partner stopped their cruiser, the individuals ran, and shortly thereafter defendant saw the plaintiff in a field in the area. Plaintiff claims that he was shot at this time. This is denied by the defendant, although the defendant admits that he fired his gun. There was no evidence of any other shooting of any gun involving or near the plaintiff at any other pertinent time.

In his appeal the defendant claims the trial court’s findings of fact were clearly erroneous when the Court concluded that the plaintiff was shot by the defendant, that the circumstances of said shooting amounted to a breach of the plaintiff’s Constitutional and Civil Rights in violation of Title 42 U.S.C. § 1983. The defendant also asserts that the trial court was in error in awarding punitive awards.

After full consideration of the record, the briefs and arguments of counsel, we are satisfied that the trial court’s findings of facts are not clearly erroneous and that únder the circumstances surrounding this shooting, where the defendant had no reason to believe that a crime had been committed and no justification for drawing his gun, and certainly no justification for firing his gun, the award of punitive damages was not error. We find no other allegations of error which require discussion.

The judgment of the District Court is affirmed.

O’SULLIVAN, Senior Circuit Judge

(dissenting).

Respectfully, I dissent. I do so because the evidence that the bullet removed from the plaintiff’s leg had not been fired from the gun of the defendant police officer was uncontroverted. Plaintiff put in testimony by a ballistics expert who examined the bullet in question. His testimony included the following:

“A. The bullet in question, of course I identified as being of .38 Special cali-bre. It contained a copper covering, or copper coating. By weight, it weighed 152.56 grains, which would identify it as being a standard 158 grain bullet. The rifling, or type of rifling on there was right-handed five groove. The bullet found to be actually under microscopic examination to be too deformed for any type of comparison examination other than to note the land and groove widths were of approximately the same width as those on the known bullets.”

The following was part of the expert’s cross-examination:

“Q. Are you familiar with the brand of ammunition called Super Vel?
“A. Yes, I am.
* * * *' * *
“THE WITNESS: The actual weight of the unknown bullet, 152.56, which a bullet doesn’t come in that weight. It would come in 158 grain. So judging from the appearance of the bullet, it would initially have been a 158 grain bullet.
***** *
“Q. Mr. Goodwin, what is the weight of the bullet in the Super Vel cartridge ?
“A. 110 grains.
******
“Q. Now, based on your examination, are you able to tell whether the bullet that was removed from Gregory Al-dridge’s leg was a Super Vel bullet? “A. I would say in my opinion it is not a Super Vel bullet.
* * * * * *
“Q. Do you have known bullet specimens of 110 and 200 grain cartridges of the type we talked about with you?
“A. At the time these items were submitted, there was submitted two Super Vel bullets and two 200 grain Western bullets.
******
“Q. Now, I believe you testified that the slug removed, or the bullet removed from Gregory Aldridge’s leg, in your opinion, was not a 110 grain Super Vel bullet. Is that correct?
“A. That’s correct.
******
“Q. So, for all practical purposes, the slug identified as a plaintiff’s exhibit is intact?
“A. Yes.
“Q. An accurate representation of a 158 grain slug?
“A. Yes, Sir.”

The defendant testified that the only bullets in his gun at the time he fired two warning shots in the air were 110 grain Super Vel type. There was unchallenged evidence that at the time of the involved event the only bullets used by, or issued to, the officers of the Metropolitan Police Department of Nashville were 110 grain Super Vel. Heavier bullets, 158 grains, formerly used by such department, had been discontinued prior to 1960. The shooting here involved occurred on September 30, 1970, some ten years after the use of the heavier bullets was discontinued. Thus, the evidence that the only bullets fired by defendant were 110 grain Super Vel and that the bullet which was extracted from plaintiff’s leg was not such a bullet, was in no way impeached nor was its probative worth impaired. The District Judge’s contrary factual finding was, in my view, clearly erroneous. The reasoning by which the District Judge attempted destruction of this clear evidence is set out in his memorandum opinion as follows:

“7. Although police records were available, no records were introduced to show the kind and the amount of ammunition defendant requisitioned after the incident in question. Such records of ammunition requisitioned, being available to defendant and in the custody and control of defendant’s employer, would have constituted the best evidence of the ammunition requisitioned by defendant.

Respectfully, I submit that such reasoning was invalid. There had been no inquiry of defendant or anyone else as to the actual requisitioning by defendant of bullets to replace those fired at the time of the incident in question. The Captain York referred to in footnote 4 testified as to the procedure for the requisitioning of bullets to replace those fired by an officer, and said:

“[T]he Chief of Police’s secretary prepares a little three by five card which she sends to me, since I maintain ammunition supplies, and when I receive that notification that they have been notified of a round expended, then I am authorized to issue to the officer.
“Q. Would it be fair to say that every bullet is accounted for in this manner?
“A. Yes, Sir.”

I cannot read the foregoing as in any way supporting an inference that Officer Mullins had used other than the only authorized ammunition when he fired two shots from his revolver. Neither does it support an inference that defendant had fired more than two shots, nor that he requisitioned more than two bullets to replace those fired. Plaintiff’s evidence included the claim that three shots were heard at or about the time plaintiff and two others ran away following, or as part of, the “horseplay” referred to in the majority opinion. If there was a third shot which struck plaintiff’s leg, it did not come from defendant’s gun. Plaintiff’s two companions were identified but neither of them was produced. Plaintiff said that as to one of them he last heard of him as being in San Francisco. A stipulation was entered as to the other (Dorris M. Victory) that if called he would testify that at about 11:00 o’clock on the evening in question he was in the company of the plaintiff, and at that time:

“[He], and Gregory Aldridge became separated and he observed Gregory Aldridge run into some tall weeds on an overgrown vacant lot. He lost sight of Aldridge in the weeds and proceeded on his way. Very shortly thereafter he heard two shots fired and he immediately left the area.” (Emphasis supplied.)

This corroborates defendant’s testimony that he fired only two shots. At trial plaintiff testified:

“We wasn’t going nowhere. I mean nowhere particular. We just ran down through the back of the yard over here at the Maxwell’s house and went down the alley and then we just stopped down there behind a car lot down below my house.
******
“Now, when did you cross Nolensville Road? How many minutes had elapsed from the time you left the Maxwell’s house until you crossed No-lensville Road?
“A. Oh, about two to three minutes.
“Q. Were wou walking or were you running ?
“A. We were running.
“Q. And why were you running?
“A. We was just running from my brother.
“Q. And why were you running from your brother?
“A. Because we were just running from him. There wasn’t no reason. He just asked us to come home. We were just cutting up with him.”

There was a further stipulation that the plaintiff Aldridge “was convicted on two counts of robbery with a deadly weapon on 26 October, 1970,” and that “for these crimes he was sentenced to serve two concurrent sentences of ten (10) years each in the State Penitentiary.” The record does not disclose when plaintiff Aldridge had committed the above felonies — whether before or after his alleged deprivation of civil rights in the incident of September 30, 1970.

My own reading of the total factual story would leave me in grave doubt that it justified conviction of defendant of the misconduct which the District Judge found and which prompted him to award punitive damages. My view of the above discussed, and unchallenged, exculpatory proofs makes it unnecessary, however, that I consider whether the District Judge’s findings were otherwise clearly erroneous.

I would reverse the District Court judgment and direct entry of a judgment of no cause of action.

      . According to Captain York’s testimony, such evidence would have consisted of a card filled out by the police chief’s secretary which approved such a requisition of replacement ammunition.”


author: GEWIN, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. David MARDER, Defendant-Appellant.
    No. 72-2390.
    United States Court of Appeals, Fifth Circuit.
    Feb. 7, 1973.

      Max B. Kogen, Miami, Fla., for defendant-appellant.
    Robert W. Rust, U. S. Atty., Miami, Fla., Robert B. Patterson, U. S. Dept, of Justice, Washington, D. C., for plaintiff-appellee.
    Before GEWIN, SIMPSON and RO-NEY, Circuit Judges.
   GEWIN, Circuit Judge:

David Marder appeals from his conviction for using a wire communication facility to transmit wagering information in interstate commerce while being engaged in the gambling business in violation of 18 U.S.C. § 1084. He was convicted on September 30, 1971 on three counts of violating the statute and sentenced to eight months imprisonment under each count and fined $5,000. The sentences under each count are to run concurrently. He presents two issues to this court for review. First, he alleges that the evidence was insufficient for his conviction. Secondly, he asserts that the testimony of certain government witnesses should have been excluded because the identity of these witnesses was obtained as a result of an illegal government wiretap.

Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined not more than $10,000 or imprisoned not more than two years, or both.

Although we find merit in appellant’s second contention, we conclude the failure of the trial court to exclude the testimony of certain witnesses, assuming arguendo that their identity was discovered by an illegal government wiretap, was harmless error beyond a reasonable doubt and therefore affirm. Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967).

We summarize the relevant facts. Government agents, who were stationed at adjacent telephone booths, overheard Marder making calls from a pay telephone booth in the lobby of a Las Vegas, Nevada hotel to a telephone in Miami, Florida. There is no need to relate the specific content of these conversations since each fairly obviously involved wagering information relative to sporting events. There was sufficient evidence introduced by the government to prove that Marder committed the first element of the offense charged which forbids the use of a wire communication facility for the transmission in interstate commerce of wagering information. In addition the burden was on the government to establish that Marder was in the business of gambling or in common parlance, was a “bookie”. See, Cohen v. United States, 378 F.2d 751 (9th Cir. 1967); Truchinski v. United States, 393 F.2d 627 (8th Cir. 1968). To prove this essential element of the offense, the government relied on four major witnesses.

Mr. Jellison, a government agent who had appellant under surveillance, testified that he saw appellant discard a packet into a trash can about one block away from his home. This packet, and two others retrieved on two subsequent Mondays, after major weekend sporting events, contained torn up bits of paper. Each packet contained evidence which linked its contents directly to Marder. Other government evidence introduced established that the writing on the papers contained within each packet was made by the same person and the terminology used was definitely that of a bookmaker.

The government introduced testimony of three other witnesses to establish that Marder was engaged in the business of betting or wagering. Each of these witnesses, Kasselman, Popper, and Greene, testified that they had made numerous bets and wagers with the appellant over an extended period of time.

Prior to trial, the appellant moved to suppress evidence obtained from a wiretap which had been placed on his phone in November and December of 1970, approximately 60 to 90 days after the telephone calls alleged in the indictment. His motion was denied on the assertion by the government that no evidence obtained from the wiretap would be used against the defendant. Consequently, the trial court did not rule on the propriety of the government wiretap or the nature or content of the evidence found by its use. It is against this confined background that we must confront appellant’s contentions on appeal.

The government’s first witness in their attempt to establish that Marder was engaged in the business of gambling was Benjamin Kasselman. Kasselman testified that he had several encounters with appellant in which he placed bets and made wagers. In response to a subsequent question on cross-examination inquiring whether he had told the grand jury about placing bets with appellant, Kasselman replied, “yes, sir, because I was informed that it was on the tapes, when I was calling Mr. Marder.” When Kasselman responded that he had originally been approached by the government in January or February of 1971, counsel for Katz, a co-defendant who was also on trial with Marder but was acquitted, immediately requested a voir dire examination of him so he could determine whether the government had learned of his identity as a result of the wiretaps. The court denied counsel’s request and stated:

. You cannot, because if you do, you get a terrific fine from me, because you are abusing the province of the law. . . I am awfully tired of people not trying a law suit according to the rules. . . . We all know wiretapping is going on. Do not bring it into this case.

We have no way of knowing with certainty the basis of the trial court’s ruling in denying counsel’s requested voir dire examination. The court may have determined that its original denial of the motion to suppress was conclusive on this issue, continuing to rely on government assurances that no evidence elicited from the wiretaps were being used. However, the lower court may have erroneously concluded that the identification of key government witnesses from wiretaps, even if they were illegal, was not fruit of the poisonous tree.

Since the trial court never ascertained the propriety of the government wiretapping, we approach the issue presented here under the assumption that such intrusions were illegal. Conceding an illegal search, the issue presented to this court is whether a witness who could not have been located but for the illegal search, must not be permitted to testify because he is also the fruit of the poisonous tree.

This circuit has followed the general rule that if the identity of a government witness and his relationship to the defendant are revealed because of an illegal search and seizure, the testimony of such witness must be excluded. Williams v. United States, 382 F.2d 48 (5th Cir. 1967). In Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319 (1920), Justice Holmes reiterated the general exclusionary rule:

The essence of a provision forbidding the acquisition of evidence in a certain way is that not merely evidence so acquired shall not be used before the Court but that it shall not be used at all. Of course this does not mean that the facts thus obtained become sacred and inaccessible. If knowledge of them is gained from an independent source they may be proved like any others, but the knowledge gained by the Government’s own wrong cannot be used by it in the way proposed.

Id. at 392, 40 S.Ct. at 183 (Emphasis added). This rather extensive explanation of the exclusionary rule has been qualified somewhat by the “attenuation rule.” In Wong Sun v. United States, Justice Brennen explicated this recognized qualification when he stated:

. not . . .all evidence is “fruit of the poisonous tree” simply because it would not have come to light but for the illegal actions of the police. Rather, the more apt question in such a case is “whether, granting establishment of the primary illegality, the evidence to which instant objection is made has been come at by exploitation of that illegality or instead by means sufficiently distinguishable to be purged of the primary taint.”

371 U.S. 471, 487-88, 83 S.Ct. 407, 417, 9 L.Ed.2d 441 (1963). Therefore, once it is demonstrated that the identity of a key government witness was discovered by an illegal search and seizure, his testimony must be excluded unless the government can show: (1) the identity of the witness originated from an independent source; see, United States v. Holsey, 437 F.2d 250, 253 (10th Cir. 1970); (2) the identity of the witness discovered from the original illegal seizure has become so attenuated as to remove the original taint.

We do not adopt a per se rule which would ipso facto preclude the utilization of all testimony of a witness identified as a consequence of an illegal search. Many extenuating circumstances may affect the appropriateness of the introduction of such testimony, which would not pertain to an inanimate object seized by an illegal search.

However, the same basic rule of exclusion follows from an illegal search, whether the evidence be animate or inanimate, tangible or intangible. Rogers v. United States, 330 F.2d 535, 540-541 (5th Cir. 1964). Any other conclusion would be totally inconsistent with the fundamental purpose of the exclusionary rule; to instill respect in government officers for a citizen’s fourth amendment rights.

Nevertheless, the type of evidence seized will undoubtedly determine the circumstances that must be considered in determining whether the original taint has been so attenuated, that its exclusion is no longer mandated. Several factors should be considered in deciding whether the attenuation rule is applicable to “live testimony.” The unpredictability of the human will, which is necessarily involved in the use of a witness to prove essential elements of a crime, forecloses the adoption of any rigid rules. “Thus, each case must be examined on an ad hoc basis, considering the particular facts presented, rather than on any sweeping general concept of ‘live testimony’ as such.” See, United States v. Evans, 454 F.2d 813, 818 (8th Cir. 1972).

Proof that the witness would have come forward by his own volition, regardless of his identification by the illegal search, would be extremely relevant to a determination of attenuation. United States v. Hoffman, 385 F.2d 501, 504 (7th Cir. 1967). Likewise, evidence that the witness was completely uncooperative when originally discovered by the illegal search but later changed his attitude and supplied the necessary information, would tend to prove the attenuation of the original taint. See, Smith & Bowden v. United States, 324 F.2d 879, 882, 117 U.S.App.D.C. 1 (1963). This, is certainly not an exhaustive list of the factors to be considered. Only reasoned judgment will determine whether the necessary circumstances exist which call for the application of the attenuation rule to so called “live testimony.”

This explication is in complete conformity with the general rule adopted by this court in Williams v. United States, 382 F.2d 48 (5th Cir., 1967). In Williams we found that a close nexus existed between the illegal seizure of the inanimate evidence and the identification of the key government witness. We concluded that “but for” the illegal seizure, the government would have never discovered the relationship of the witness to Williams. This was true even though the witness never identified the defendant until two years after the original illegal seizure. We stated the general rule to be:

. the significance of the nexus between an illegal search and challenged evidence is one of common sense, see Nardone v. United States, 308 U.S. 338, 60 S.Ct. 266, 84 L.Ed. 307 (1939), to be considered under the facts and circumstances of the particular case. Suffice it to say that the road from the illegal search to the testimony of Mrs. Thomas, (the government witness) although a little long, was not a winding one. United States v. Tane, 329 F.2d 848 (2d Cir. 1964). 382 F.2d at 51.

Our decision today, does no more than refine our original pronouncement in Williams.

Although the district court should have permitted appellant to conduct a voir dire examination of Kasselman who testified that he.had made bets with appellant, we find such failure harmless error. After a careful review of the record, we conclude there were only two possible witnesses, Kasselman and Greene, whose identities could have conceivably been discovered by the illegal wiretap. Nothing in the record reveals how the government happened to discover the identity of these witnesses and their relationship to appellant.

However, agent Jellison testified that he saw Popper and Marder together on September 8, 1970. This clearly establishes that the government learned of Popper’s identity over two months before the allegedly illegal wiretaps. Therefore the evidence clearly shows that Popper’s testimony that he had extensive dealings with appellant was untainted.

We conclude that evidence of the packets discarded by Marder and the testimony of Popper clearly established that appellant was in the business of gambling. The case against Marder was irrefragable. There was more than ample evidence that he committed the substantive offenses charged. The admission of the testimony of Kasselman and Greene, could have had only a de minimis bearing on the question of guilt or innocence when viewed in light of the overwhelming evidence of guilt from other sources.

For the foregoing reasons the judgment of the district court is affirmed.

      . 18 U.S.C. § 1084(a) provides:

      . The first packet contained a postcard addressed to Marder and his wife; the second, business envelopes used in Marker's dress shop; and the third, other correspondence addressed to Marder.

      . Accord, United States v. Tane, 329 F.2d 848 (2d Cir. 1964); Smith v. United States, 120 U.S.App.D.C. 160, 344 F.2d 545 (1965); Goodman v. United States, 285 F.Supp. 245 (D.C.Cal.1968).

      . For an excellent discussion of the attenuation rule and its application to “live testimony”, see, Ruffin, Out on a Limb of the Poisonous Tree: The Tainted Witness, 15 U.C.L.A. 32, 44 (1967).

      . The “but for" test is not to be applied in a ritualistic fashion. Subsequent intervening forces may break the casual connection between the alleged primary illegality and the evidence found. See, United States v. Fike, 449 F.2d 191, 193 (5th Cir. 1971); Nardone v. United States, 308 U.S. 338, 441, 60 S.Ct. 266, 84 L.Ed. 307 (1939).

      . There was strong circumstantial evidence that Greene might have furnished needed evidence by his own volition. Counsel for Marder cross-examined Greene rather thoroughly as to the circumstances surrounding his contact with agent Jellison. Greene testified that he met his attorney at the office of agent Jellison and at that time gave a sworn unsigned statement and agreed to appear and testify for the government. This occurred several months prior to trial but presumptively after the wiretaps. We have no way of knowing with detailed certainty the nature of the government’s activity in obtaining Greene’s testimony. Such speculation is useless because of our disposition of this case.


author: VAN DUSEN, Circuit Judge.

text:
    In the Matter of TIME SALES FINANCE CORPORATION and its wholly owned subsidiary corporations et al. Appeal of GRACE BUILDING CO., Inc.
    No. 19069.
    United States Court of Appeals, Third Circuit.
    Argued May 17, 1971.
    Decided July 7, 1971.

      Alfred I. Breinig, Jr., Jenkintown, Pa., for appellant.
    Sidney Chait, Adelman & Levine, Philadelphia, Pa., for Trustee.
    Before SEITZ, VAN DUSEN and ADAMS, Circuit Judges.
   OPINION OF THE COURT

VAN DUSEN, Circuit Judge.

This is an appeal from a district court order of April 22, 1970, which affirmed February 17 and 18, 1970, orders of a referee in bankruptcy holding certain Delaware County, Pennsylvania, treasurer’s tax sales void, and denying appellant’s motion to reopen the hearing on the validity of the treasurer’s tax sales.

This case arises in the context of arrangement proceedings under Chapter XI of the Bankruptcy Act initiated by Time Sales Finance Corporation (Time Sales) and its wholly-owned subsidiary, Marpoole, Inc. (Marpoole), by means of petitions for arrangement filed on April 5, 1968, and June 18, 1968, respectively. Among the assets of Marpoole on, and before, October 25,1966, were five duplex row houses in- Haverford Township, Delaware County, Pennsylvania. Interim school taxes levied on the five houses for the year 1963 were not paid. On October 24,1966, the five houses were sold for the delinquent school taxes by the treasurer of Delaware County at a tax sale. The houses were purchased by the appellant, Grace Building Co., Inc. (Grace). The statutory two-year redemption period, during which Marpoole could exercise a statutory right of equity of redemption to redeem the houses from the tax sale, expired on October 24, 1968. In November or December 1968, the receiver of Marpoole discovered the treasurer’s tax sale in the course of preparing to sell the five houses. On January 27, 1969, the receiver petitioned the referee in bankruptcy to hold the tax sale invalid, to approve the sale of the five houses, and to determine the respective rights of Marpoole, Grace, and the mortgagee to the proceeds of the sale.

After hearings on February 12 and February 24, 1969, the referee entered an order on March 12, 1969, authorizing the receiver to sell the five houses, and directing him to hold the proceeds in escrow pending determination of the rights of the parties to the proceeds. The referee commenced hearings on the respective rights of Marpoole, Grace, and the mortgagee on March 20, 1969. The key issue in these hearings was the validity of the tax sale, and resolution of that issue turned on whether or not Marpoole received notice of the tax sale. It was conceded that the official notice of the impending sale required by statute to be sent by registered or certified mail to the owner, Marpoole, was not sent to Marpoole, but was instead sent only to the title insurance company. Grace contends that Marpoole received notice of the sale from the title insurance company, and that actual knowledge of an impending tax sale prevents subsequent invalidation of the tax sale. The receiver for Marpoole contends that Marpoole did not receive notice of the sale from anyone. The receiver does not urge, however, on this appeal that the official notice required by statute is a prerequisite to a valid tax sale.

After hearing testimony on the respective rights of Marpoole, Grace and the mortgagee on March 20, 1969, the referee adjourned the hearings until April 9, 1969, in order to give Grace an opportunity to inspect the records of Marpoole pursuant to a discovery order issued by the referee on March 20, 1969. At the hearing on April 9, the receiver for Mar-poole produced by subpoena one witness, an officer of the mortgagee. Counsel for- Grace also produced by subpoena one witness, Samuel C. Nissenbaum, the alleged president and chief executive officer of both Marpoole and its parent, Time Sales. After giving his name and address, Mr. Nissenbaum asserted his fifth amendment privilege and refused to answer any and all questions put to him, including the questions whether he had been president and chief executive officer of both Marpoole and Time Sales and whether he had had actual knowledge of the tax sales before they took place, on the ground that the answers might tend to incriminate him. At the conclusion of Mr. Nissenbaum’s non-testimony, counsel for Grace requested a continuance, in order that he might (1) introduce letters from the files of Time Sales which opposing counsel had indicated that he would produce but which opposing counsel had left at his office (N.T. 411-12, 426), and (2) produce witnesses whose whereabouts were being sought as a result of the information found in the records of Marpoole, access to which had been ordered by the referee on March 20. A continuance until April 22, 1969, a date on which other matters relating to the Time Sales arrangement were to be heard before the referee, was granted. On April 22, counsel for Grace offered no testimony, and requested instead a further continuance in order to ascertain the whereabouts of witnesses. The referee denied the request for a further continuance, and ordered the hearings closed.

On June 17, 1969, counsel for Grace petitioned the referee to reopen the hearings so that Grace might offer the testimony of the former secretary of Mar-poole and Time Sales, one Barbara Rubin, who, according to the petition to reopen, would testify that Marpoole and Time Sales had received notice of the impending tax sales of the property in question. The petition recited that Grace was unable to locate the witness prior to the last hearing on April 22, and recited in considerable detail the sequence of events and the difficulties besetting Grace between the referee-ordered inspection of the Marpoole records and the ultimate discovery of the whereabouts of the witness. The referee set this motion down for a hearing on July 14, 1969. The newly-discovered witness was present at the July 14 hearing, ready to testify; and counsel for Grace indicated that direct examination of the witness would not require more than five or ten minutes. At the hearing, counsel for Grace gave a detailed summary of the reasons for delay in petitioning to reopen after the whereabouts of the witness was discovered, which consisted chiefly of the fact that the witness had initially refused to cooperate and then had vacillated between cooperation and non-cooperation, and counsel stated that the witness would verify these facts. The referee, operating under the misapprehension that he had already decided the issue of the validity of the tax sale, denied the petition to reopen at the close of the July 14, 1969, hearing.

The district court was petitioned to review this decision, as well as other decisions of the referee. On October 24, 1969, the district court held, inter alia, that the referee had not prior to the July 14 hearing determined the validity of the tax sale, but, on the contrary, had merely made a jurisdictional determination and a preliminary determination of the validity of the tax sale, without prejudice to Grace’s rights to the proceeds of the tax sale. Accordingly, the district court directed the referee to reconsider Grace’s petition to reopen, and to make a final determination of the validity of the tax sale and the rights of the respective parties to the proceeds. On February 17, 1970, the referee held the tax sale invalid, and ordered the proceeds of the sale of the property, after deduction of certain -counsel fees, apportioned between Marpoole and the mortgagee, according to their respective interests in the property. On February 18, 1970, the referee denied after reconsideration Grace’s June 17, 1969, motion to reopen the hearings. On April 22, 1970, the district court in a memorandum opinion affirmed both of these orders of the referee. We reverse.

The issue in this case is whether the referee abused his discretion in refusing to reopen the hearings to hear the brief testimony of one newly-discovered witness. This is an issue that must be decided against the background of the procedural history and all of the facts and circumstances of the case. The factual context of the refusal to reopen must be considered in light of equitable principles, for bankruptcy courts are essentially courts of equity.

One of the chief purposes of the bankruptcy laws is “to secure a prompt and effectual administration and settlement of the estate of all bankrupts within a limited period.” Katchen v. Landy, 382 U.S. 323, 328, 86 S.Ct. 467, 472, 15 L.Ed.2d 391 (1966). Parties do not have an absolute right to reopen a hearing in order to introduce further testimony. On the contrary, a referee should not be expected to reopen a closed proceeding after the parties have had the normal opportunities to present evidence absent a special reason for permitting reopening. In this case a special reason, inability to locate an important witness despite diligent efforts, was advanced. Furthermore, the parties treated the subject matter to which the witness would testify as being of critical significance. In light of the fact that the referee did not finally decide the issue on which Grace sought to offer additional testimony until eight months had elapsed after Grace filed its petition to reopen the hearings, we hold that it was an abuse of discretion to refuse to reopen the hearings. Counsel for Grace represented that- direct examination of the newly-discovered witness would not require more than five or ten minutes. The witness was to testify to matters previously considered, therefore there was little reason to believe that voluminous responsive testimony would be forthcoming from the receiver. The additional testimony could have been received at the July 14, 1969, hearing on the motion to reopen, fully seven months prior to the referee’s final decision on the validity of the tax sale. Under these circumstances, the hearings should have been reopened. There is no substantial reason to believe that reopening the hearings would have delayed the ultimate disposition of this case.

Accordingly, the April 22, 1970, order of the district court will be reversed, and the case will be remanded with directions that a prompt hearing be held before the referee to receive the testimony of Barbara Rubin and for further proceedings consistent with this opinion.

      . 11 U.S.C. § 701 et seq. (Supp. Y, 1969).

      . 72 Pa.Stat.Ann. § 5971g (1968).

      . The decisions of the Supreme Court of Pennsylvania suggest that actual knowledge of an impending tax sale is sufficient to prevent subsequent invalidation of the tax sale, despite the failure of the county treasurer to send the official notice required by 72 Pa.Stat.Ann. § 5971g (1968). See In re York County Tax Claim Bureau, 404 Pa. 654, 660, 171 A.2d 765, 768 (1961); Watson v. Ciaffoni, 385 Pa. 16, 122 A.2d 56 (1956); Hess v. Westerwick, 366 Pa. 90, 99, 76 A.2d 745, 749 (1950); In re Ross, 366 Pa. 100, 76 A.2d 749, 752 (1950). The Pennsylvania trial courts have so held. See In re Lehigh County Tax Claim Bureau, 33 Lehigh Co.L.J. 279 (1969); Norton v. Tax Claim Bureau, 14 Chester Co.Rep. 142 (1966); Kimmons v. Aronauer, 13 Chester Co.Rep. 85 (1964). In the absence of the availability of Pennsylvania authorities contrary to the foregoing, if there is a valid finding that Marpoole had actual knowledge of the proposed tax sale, whatever is determined to be the net proceeds of the receiver’s sale should be awarded to Grace as opposed to the receiver of Marpoole.

      . In essence the petition recited that Barbara Rubin had moved twice after leaving the employ of Marpoole and Time Sales, and was discovered only after a certified letter was forwarded from the last known address that counsel for Grace was able to locate.

      . The referee held, as an additional reason for denying the petition to reopen, that Grace was guilty of laches. We have often noted that, aside from mere passage of time, two elements of laches are unreasonable delay in light of the equities of the case and undue prejudice to the opposing party. See, e. g., Ward v. Union Barge Line Corp., 443 F.2d 565 (3rd Cir., filed May 10, 1971); Burke v. Gateway Clipper, Inc., 441 F.2d 946 (3rd Cir., filed May 4, 1971); Mroz v. Dravo Corp., 429 F.2d 1156 (3rd Cir. 1970). There is no basis for a finding of inexcusable delay in this case, for counsel for the receiver observed that the chain of evidence leading to the discovery of the whereabouts of Barbara Rubin was probably not uncovered until the referee, after the hearings had commenced, ordered Marpoole to permit counsel for Grace to inspect the records of Marpoole (N.T. 500). Thus it appears that non-cooperation on tlie part of Marpoole was partially responsible for the delay, as was the refusal of Marpoole’s president to testify. Nor is there a basis for a finding of undue prejudice to the receiver as a result of the passage of time. When the referee asked counsel for the receiver at the April 9, 1969, hearing what harm would be suffered by the receiver or by the estate in the event that a continuance were granted, counsel for the receiver responded:
      “I thing it is the duty of counsel, sir, to move for expeditious determination of the case and the proceedings. We could have requests for continuance ad infinitum because the applicant may desire to find witnesses. I don’t think that is proper procedure.” (N.T. 433).
      The fact that the receiver had to pay interest to the mortgagee is not persuasive. First, there is no evidence that these interest charges were occasioned by Grace’s delay. The record suggests the contrary. Second, there is no indication that obligations to the mortgagee could not have been discharged pending resolution of the respective interests of Marpoole and Grace in the proceeds of the sale, nor is there any indication why the proceeds of the sale wore not utilized by the referee to earn interest to offset that due the mortgagee. The fact remains inescapable that the preferred testimony would not have occasioned appreciable delay, while the ultimate decision on the validity of the tax sale was not issued until seven months had elapsed after the refusal to reopen. No additional evidence was received during that seven-month period.

      . The referee awarded to Grace the sum it paid for the properties at the tax sale, plus interest at the rate of six percent from the date of the tax sale.

      . Katchen v. Landy, 382 U.S. 323, 327, 86 S.Ct. 467, 15 L.Ed.2d 391 (1966); Pepper v. Litton, 308 U.S. 295, 304, 60 S.Ct. 238, 84 L.Ed. 281 (1939); Local Loan Co. v. Hunt, 292 U.S. 234, 240, 54 S.Ct. 695, 78 L.Ed. 1230 (1934).

      . Quoting Ex Parte Christy, 44 U.S. (3 How.) 292, 312, 11 L.Ed. 603 (1845).

      . In re Booss, 154 F. 494 (E.D.Pa.1907); see California Airmotive Corp. v. Bass, 354 F.2d 453 (9th Cir. 1965).

      . See California Airmotive Corp. v. Bass, 354 F.2d 453, 455 (9th Cir. 1965); cf. N.L.R..B. v. Phaostron Instrument and Electronic Co., 344 F.2d 855, 858 (9th Cir. 1965). See also note 3 supra.


author: SIMPSON, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. John A. GARCIA et al., Defendants-Appellants. CITY OF AUSTIN et al., PlaintiffsAppellees, v. John A. GARCIA et al., Defendants-Appellants.
    No. 72-2823
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    March 12, 1973.
    Rehearing Denied May 10, 1973.

      John A. Garcia, M.D., pro se.
    William S. Sessions, U. S. Atty., Henry Valdespino, Asst. U. S. Atty., San Antonio, Tex., Winfred O. Craft, Asst. City Atty., Paul Jones, Austin, Tex., Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Atty., Tax Div., Dept, of Justice, Washington, D. C., for plaintiffs-appellees.
    Before JOHN R. BROWN, Chief Judge, and DYER and SIMPSON, Circuit Judges.

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

   SIMPSON, Circuit Judge:

The Garcias, defendants-appellants, are judgment debtors to plaintiff-appel-lee, the United States. On this appeal they object to their having been required — in order to satisfy their outstanding judgment — to sell realty at a private sale to the Urban Renewal Agency of Austin, Texas, for a price they contend to be a mere fraction of its true value had the property been placed on the open and free,market. Much of the confusion below and on this appeal arises from the fact that Dr. Garcia, a physician, is proceeding pro se in a field that would be troublesome for most attorneys. He is as clearly bewildered as an attorney would be attempting a complex surgical operation. We find no error in the manner by which the district -court disposed of the appellants’ debt and property. Accordingly we affirm.

On January 20, 1970, this court affirmed a judgment in favor of the United States for unpaid income tax liabilities of the Taxpayer for the years 1954 through 1956 and 1958 through 1961. Garcia v. United States, 5 Cir. 1970, 421 F.2d 1231, cert. denied, 400 U.S. 945, 91 S.Ct. 251, 27 L.Ed.2d 251. Certain payments were subsequently credited toward the Taxpayer’s delinquent tax account but, according to the Internal Revenue Service, more than $61,000, with interest accruing daily, remained unpaid by October 1971. On October 15, 1971, the district court granted the Government’s request for the public sale of four parcels of land owned by John A. Garcia, of which three were located in Austin, Travis County, Texas, and the fourth was situated in Houston, Harris County, Texas. On December 17, 1971, the court amended its order so that only one of the four tracts, one of the Austin parcels, would be sold to satisfy the judgment and would be sold in a private sale to the Urban Renewal Agency of the City of Austin for the sum of $85,000 cash pursuant to Title 28, U.S.C., Section 2001.

As required by Section 2001(b), the court appointed three disinterested persons to appraise the property and file their valuations with the court. These appraisals were in the amounts of $105,000, $98,775 and $93,000, an average of $98,925 with $6,075 being the largest deviation. The district court further adhered to the requirements of Section 2001(b) by causing the terms of the proposed private sale to be published in a newspaper of general circulation for ten days along with the conditions for making offers higher than at least ten per cent (10%) over the minimum two-thirds value of the property as deter-mmed by the three court-appointed appraisers. A hearing on confirmation of the private sale was held on May 4, 1972, where, in the absence of higher offers, the court confirmed the private sale of the single Austin tract involved to the Urban Renewal Agency of Austin for $85,000 in cash. With the entry of the order for confirmation of sale, orders for partial distribution were filed which satisfied the Government’s judgment for federal income tax liabilities for the relevant years. Certain other claims against defendants-appellants were also satisfied from this source. The instant appeal was taken from the order confirming the sale.

Taxpayer argues that the property involved was worth far more than the $85,000 ultimately paid for it by the Urban Renewal Agency. He further alleges that private investors anxious to develop the property were available and willing to pay as much as $850,000 for the Austin parcel should it become available for purchase without the threat from the United States “or its agent, the Urban Renewal Agency of Austin”, to condemn it under the “Appellee’s Powers of Eminent Domain.” In addition to having his property taken without receiving Fifth Amendment “just compensation,” the Taxpayer asserts that since the United States currently claims more than $600,000 for alleged tax liabilities for the years 1961 through 1969, the tax debt will remain as an eternal burden upon him and his wife in spite of the foreclosure of their property, thus denying them the due process of law also guaranteed by the Fifth Amendment. In short, the Taxpayer envisages some sinister, concerted effort between the United States and the Urban Renewal Agency of Austin working to deprive him of his property and relegate him to a permanent status of debt- or. The outrage of this conspiracy, he urges, is intensified by the existence of prospective purchasers and investors who could and would purchase the property for a sum sufficient to satisfy all of their obligations if only the property were safely immunized from the threat of condemnation by “eminent domain” with which it is now plagued. Accordingly, he seeks an order providing that the property be sold at public auction to the highest bidder, “with all bidders secure in the knowledge that they are protected from Appellee’s powers under the Doctrine of Emminent (sic) Domain, that should the property be acquired by condemnation under that Doctrine, that the purchaser will be reimbursed the full amount paid plus a reasonable profit thereon.”

Of course, the United States has not attempted to exercise its power of eminent domain over the subject property. It merely seeks to be compensated by the Taxpayer for the tax liabilities already adjudged to be due and owing. The United States has simply elected to obtain that satisfaction by a judicial, sale of defendants-appellants’ property pursuant to Title 28, Section 2001. This being so, the identity of the prospective purchaser is an irrelevancy.

The district court scrupulously adhered to the statutory requirements of Title 28, U.S.C. Section 2001 for a judicial sale of realty. That court acted well within its discretionary bounds in approving the sale for $85,000, about 86% of the average appraisal figure, and approximately 80% of the highest appraisal figure, $105,000. The three disinterested court-appointed appraisers determined the property to be worth an average of $98,925. No other offers were forthcoming in response to the advertisement for bids, leaving the strong presumption that $98,925 represented the approximate market value.

The Taxpayer’s allegation that purchasers existed who were willing to refute the appraisal figures with a bona fide offer is completely unsupported. We refuse to find that the property was sold for a grossly inadequate price on a record which is convincingly to the contrary. See Weir v. United States, 8 Cir, 1964, 339 F.2d 82, 87; and American Trading & Production Corp. v. Connor, 4 Cir. 1940, 109 F.2d 871, 872 and 874.

The Taxpayer’s request that we, somehow, enjoin the state from exercising its sovereign power of eminent domain is supported by no authority whatsoever. And, as already noted, the private sale under Section 2001 does not involve the power of eminent domain in any sense. Western v. McGehee, D.Md. 1962, 202 F.Supp. 287, 293.

The Taxpayer also questions the district court’s decision to sell only one of the four properties at a private sale and leave the other three to be sold at a public auction should the need arise if subsequent liens against them are perfected. Here again, he fails to demonstrate any abuse of discretion by the district court in setting the terms and conditions of the judicial sale. United States v. Branch Coal Corp., 3 Cir. 1968, 390 F.2d 7, 10; and cases there cited.

Affirmed.

      . We refer throughout this opinion to John A. Garcia as the Taxpayer. The appellant Mary Sue Garcia is also a party because she signed joint tax returns with her husband for the taxable years involved.

      . Title 28, U.S.C., Section 2001: Sale of Realty Generally:
      (a) Any realty or interest therein sold under any order or decree of any court of the United States shall be sold as a whole or in separate parcels at public sale at the courthouse of the county, parish, or city in which the greater part of the property is located, or upon the premises or some parcel thereof located therein, as the court directs. Such sale shall be upon such terms and conditions as the court directs.
      Property in the possession of a receiver or receivers appointed by one or more district courts shall be sold at public sale in the district wherein any such receiver was first appointed, at the courthouse of the county, parish, or city situated therein in which the greater part of the property in such district is located, or on the premises or some parcel thereof located in such county, parish, or city, as such court directs, unless the court orders the sale of the property or one or more parcels thereof in one or more ancillary districts.
      (b) After a hearing, of which notice to all interested parties shall be given by publication or otherwise as the court directs, the court may order the sale of such realty or interest or any part thereof at private sale for cash or other consideration and upon such terms and conditions as the court approves, if it finds that the best interests of the estate will be conserved thereby. Before confirmation of any private sale, the court shall appoint three disinterested persons to appraise such property or different groups of three appraisers each to appraise properties of different classes or situated in different localities. No private sale shall be confirmed at a price less than two-thirds of the appraised value. Before confirmation of any private sale, the terms thereof shall be published in such newspaper or newspapers of general circulation as the court directs at least ten days before confirmation. The private sale shall not be confirmed if a bona fide offer is made, under conditions prescribed by the court, which guarantees at least a 10 per centum increase over the price offered in the private sale.
      (c) This section shall not apply to sales and proceedings under Title 11 or by receivers or conservators of banks appointed by the Comptroller of the Currency.

      . Whether the Urban Renewal Agency of Austin did intend to exercise its power of eminent domain if, indeed, it is so endowed, is of no moment here. Clearly, the Urban Renewal Agency is a creature of state statute, 2B Vernon’s Tex.Civil Stat.Ann., Art. 1269Í-3. The state, by virtue of its sovereignty, has the right to reassert, either temporarily or permanently, its dominion over any portion of the soil of the state on account of public exigency and for the public good. When and where the sovereign has exercised that power, it is against the source of that power at that time that any challenge to eminent domain must be asserted.