author: Mr. Justice Marshall Me. Justice Douglas,

text:
    UNITED STATES v. DAVIS et ux.
    No. 282.
    Argued January 12, 1970
    Decided March 23, 1970

      Solicitor General Griswold argued the cause for the United States. With him on the brief were Assistant Attorney General Walters, Matthew J. Zinn, and William L. Goldman.

      William Waller argued the cause for respondents. With him on the brief was Robert G. McCullough.

   Mr. Justice Marshall

delivered the opinion of the Court.

In 1945, taxpayer and E. B. Bradley organized a corporation. In exchange for property transferred to the new company, Bradley received 500 shares of common stock, and taxpayer and his wife similarly each received 250 such shares. Shortly thereafter, taxpayer made an additional contribution to the corporation, purchasing 1,000 shares of preferred stock at a par value of $25 per share.

The purpose of this latter transaction was to increase the company’s working capital and thereby to qualify for a loan previously negotiated through the Reconstruction Einance Corporation. It was understood that the corporation would redeem the preferred stock when the RFC loan had been repaid. Although in the interim taxpayer bought Bradley’s 500 shares and divided them between his son and daughter, the total capitalization of the company remained the same until 1963. That year, after the loan was fully repaid and in accordance with the original understanding, the company redeemed taxpayer’s preferred stock.

In his 1963 personal income tax return taxpayer did not report the $25,000 received by him upon the redemption of his preferred stock as income. Rather, taxpayer considered the redemption as a sale of his preferred stock to the company — a capital gains transaction under § 302 of the Internal Revenue Code of 1954 resulting in no tax since taxpayer’s basis in the stock equaled the amount he received for it. The Commissioner of Internal Revenue, however, did not approve this tax treatment. According to the Commissioner, the redemption of taxpayer’s stock was essentially equivalent to a dividend and was thus taxable as ordinary income under §§301 and 316 of the Code. Taxpayer paid the resulting deficiency and brought this suit for a refund. The District Court ruled in his favor, 274 F. Supp. 466 (D. C. M. D. Tenn. 1967), and on appeal the Court of Appeals affirmed. 408 F. 2d 1139 (C. A. 6th Cir. 1969).

The Court of Appeals held that the $25,000 received by taxpayer was “not essentially equivalent to a dividend” within the meaning of that phrase in § 302 (b)(1) of the Code because the redemption was the final step in a course of action that had a legitimate business (as opposed to a tax avoidance) purpose. That holding represents only one of a variety of treatments accorded similar transactions under § 302 (b)(1) in the circuit courts of appeals. We granted certiorari, 396 U. S. 815 (1969), in order to resolve this recurring tax question involving stock redemptions by closely held corporations. We reverse.

I

The Internal Revenue Code of 1954 provides generally in §§ 301 and 316 for the tax treatment of distributions by a corporation to its shareholders; under those provisions, a distribution is includable in a taxpayer’s gross income as a dividend out of earnings and profits to the extent such earnings exist. There are exceptions to the application of these general provisions, however, and among them are those found in § 302 involving certain distributions for redeemed stock. The basic question in this case is whether the $25,000 distribution by the corporation to taxpayer falls under that section — more specifically, whether its legitimate business motivation qualifies the distribution under § 302 (b)(1) of the Code. Preliminarily, however, we must consider the relationship between §302 (b)(1) and the rules regarding the attribution of stock ownership found in § 318 (a) of the Code.

Under subsection (a) of § 302, a distribution is treated as “payment in exchange for the stock,” thus qualifying for capital gains rather than ordinary income treatment, if the conditions contained in any one of the four paragraphs of subsection (b) are met. In addition to paragraph (l)’s “not essentially equivalent to a dividend” test, capital gains treatment is available where (2) the taxpayer’s voting strength is substantially diminished, (3) his interest in the company is completely terminated, or (4) certain railroad stock is redeemed. Paragraph (4) is not involved here, and taxpayer admits that paragraphs (2) and (3) do not apply. Moreover, taxpayer agrees that for the purposes of §§ 302 (b)(2) and (3) the attribution rules of § 318 (a) apply and he is considered to own the 750 outstanding shares of common stock held by his wife and children in addition to the 250 shares in his own name.

Taxpayer, however, argues that the attribution rules do not apply in considering whether a distribution is essentially equivalent to a dividend under § 302 (b)(1). According to taxpayer, he should thus be considered to own only 25 percent of the corporation’s common stock, and the distribution would then qualify under § 302 (b)(1) since it was not pro rata or proportionate to his stock interest, the fundamental test of dividend equivalency. See Treas. Reg. 1.302-2 (b). However, the plain language of the statute compels rejection of the argument. In subsection (c) of § 302, the attribution rules are made specifically applicable “in determining the ownership of stock for purposes of this section.” Applying this language, both courts below held that § 318 (a) applies to all of § 302, including § 302 (b)(1)— a view in accord with the decisions of the other courts of appeals, a longstanding treasury regulation, and the opinion of the leading commentators.

Against this weight of authority, taxpayer argues that the result under paragraph (1) should be different because there is no explicit reference to stock ownership as there is in paragraphs (2) and (3). Neither that fact, however, nor the purpose and history of § 302 (b)(1) support taxpayer’s argument. The attribution rules— designed to provide a clear answer to what would otherwise be a difficult tax question — formed part of the tax bill that was subsequently enacted as the 1954 Code. As is discussed further, infra, the bill as passed by the House of Representatives contained no provision comparable to § 302 (b) (1). When that provision was added in the Senate, no purpose was evidenced to restrict the applicability of § 318 (a). Rather, the attribution rules continued to be made specifically applicable to the entire section, and we believe that Congress intended that they be taken into account wherever ownership of stock was relevant.

Indeed, it was necessary that the attribution rules apply to §302 (b)(1) unless they were to be effectively eliminated from consideration with regard to §§ 302 (b)(2) and (3) also. For if a transaction failed to qualify under one of those sections solely because of the attribution rules, it would according to taxpayer’s argument nonetheless qualify under §302 (b)(1). We cannot agree that Congress intended so to nullify its explicit directive. We conclude, therefore, that the attribution rules of § 318 (a) do apply; and, for the purposes of deciding whether a distribution is "not essentially equivalent to a dividend” under § 302 (b)(1), taxpayer must be deemed the owner of all 1,000 shares of the company’s common stock.

II

After application of the stock ownership attribution rules, this case viewed most simply involves a sole stockholder who causes part of his shares to be redeemed by the corporation. We conclude that such a redemption is always “essentially equivalent to a dividend” within the meaning of that phrase in § 302 (b)(1) and therefore do not reach the Government’s alternative argument that in any event the distribution should not on the facts of this case qualify for capital gains treatment.

The predecessor of §302 (b)(1) came into the tax law as § 201 (d) of the Revenue Act of 1921, 42 Stat. 228:

“A stock dividend shall not be subject to tax but if after the distribution of any such dividend the corporation proceeds to cancel or redeem its stock at such time and in such manner as to make the distribution and cancellation or redemption essentially equivalent to the distribution of a taxable dividend, the amount received in redemption or cancellation of the stock shall be treated as a taxable dividend ...

Enacted in response to this Court’s decision that pro rata stock dividends do not constitute taxable income, Eisner v. Macomber, 252 U. S. 189 (1920), the provision had the obvious purpose of preventing a corporation from avoiding dividend tax treatment by distributing earnings to its shareholders in two transactions — a pro rata stock dividend followed by a pro rata redemption — that would have the same economic consequences as a simple dividend. Congress, however, soon recognized that even without a prior stock dividend essentially the same result could be effected whereby any corporation, “especially one which has only a few stockholders, might be able to make a distribution to its stockholders which would have the same effect as a taxable dividend.” H. R. Rep. No. 1, 69th Cong., 1st Sess., 5. In order to cover this situation, the law w:as amended to apply “(whether or not such stock was issued as a stock dividend)” whenever a distribution in redemption of stock was made “at such time and in such manner” that'it was essentially equivalent to a taxable dividend. Revenue Act of 1926, § 201 (g), 44 Stat. 11.

This provision of the 1926 Act was carried forward in each subsequent revenue act and finally became § 115 (g)(1) of the Internal Revenue Code of 1939. Unfortunately, however, the policies encompassed within the general language of §115 (g)(1) and its predecessors were not clear, and there resulted much confusion in the tax law. At first, courts assumed that the provision was aimed at tax avoidance schemes and sought only to determine whether such a scheme existed. See, e. g., Commissioner v. Quackenbos, 78 F. 2d 156 (C. A. 2d Cir. 1935). Although later the emphasis changed and the focus was more on the effect of the distribution, many courts continued to find that distributions otherwise like a dividend were not “essentially equivalent” if, for example, they were motivated by a sufficiently strong nontax business purpose. See cases cited n. 2, supra. There was general disagreement, however, about what would qualify as such a purpose, and the result was a case-by-case determination with each case decided “on the basis of the particular facts of the transaction in question.” Bains v. United States, 153 Ct. Cl. 599, 603, 289 F. 2d 644, 646 (1961).

By the time of the general revision resulting in the Internal Revenue Code of 1954, the draftsmen were faced with what has aptly been described as “the morass created by the decisions.” Ballenger v. United States, 301 F. 2d 192, 196 (C. A. 4th Cir. 1962). In an effort to eliminate “the considerable confusion which exists in this area” and thereby to facilitate tax planning, H. R. Rep. No. 1337, 83d Cong., 2d Sess., 35, the authors of the new Code sought to provide objective tests to govern the tax consequences of stock redemptions. Thus, the tax bill passed by the House of Representatives contained no “essentially equivalent” language. Rather, it provided for “safe harbors” where capital gains treatment would be accorded to corporate redemptions that met the conditions now found in §§ 302 (b) (2) and (3) of the Code.

It was in the Senate Finance Committee’s consideration of the tax bill that §302 (b)(1) was added, and Congress thereby provided that capital gains treatment should be available “if the redemption is not essentially equivalent to a dividend.” Taxpayer argues that the purpose was to continue “existing law,” and there is support in the legislative history that §302 (b)(1) reverted “in part” or “in general” to the “essentially equivalent” provision of § 115 (g)(1) of the 1939 Code. According to the Government, even under the old law it would have been improper for the Court of Appeals to rely on “a business purpose for the redemption” and “an absence of the proscribed tax avoidance purpose to bail out dividends at favorable tax rates.” See Northup v. United States, 240 F. 2d 304, 307 (C. A. 2d Cir. 1957); Smith v. United States, 121 F. 2d 692, 695 (C. A. 3d Cir. 1941); cf. Commissioner v. Estate of Bedford, 325 U. S. 283 (1945). However, we need not decide that question, for we find from the history of the 1954 revisions and the purpose of §302 (b)(1) that Congress intended more than merely to re-enact the prior law.

In explaining the reason for adding the “essentially equivalent” test, the Senate Committee stated that the House provisions “appeared unnecessarily restrictive, particularly, in the case of redemptions of preferred stock which might be called by the corporation without the shareholder having any control over when the redemption may take place.” S. Rep. No. 1622, 83d Cong., 2d Sess., 44. This explanation gives no indication that the purpose behind the redemption should affect the result. Rather, in its more detailed technical evaluation of § 302 (b)(1), the Senate Committee reported as follows:

“The test intended to be incorporated in the interpretation of paragraph (1) is in general that currently employed under section 115 (g)(1) of the 1939 Code. Your committee further intends that in applying this test for the future . . . the inquiry will be devoted solely to the question of whether or not the transaction by its nature may properly be characterized as a sale of stock by the redeeming shareholder to the corporation. For this purpose the presence or absence of earnings and profits of the corporation is not material. Example: X, the sole shareholder of a corporation having no earnings or profits causes the corporation to redeem half of its stock. Paragraph (1) does not apply to such redemption notwithstanding the absence of earnings and profits.” S. Rep. No. 1622, supra, at 234.

The intended scope of § 302 (b)(1) as revealed by this legislative history is certainly not free from doubt. However, we agree with the Government that by making the sole inquiry relevant for the future the narrow one whether the redemption could be characterized as a sale, Congress was apparently rejecting past court decisions that had also considered factors indicating the presence or absence of a tax-avoidance motive. At least that is the implication of the example given. Congress clearly-mandated that pro rata distributions be treated under the general rules laid down in §§301 and 316 rather than under § 302, and nothing suggests that there should be a different result if there were a “business purpose” for the redemption. Indeed, just the opposite inference must be drawn since there would not likely be a tax-avoidance purpose in a situation where there were no earnings or profits. We conclude that the Court of Appeals was therefore wrong in looking for a business purpose and considering it in deciding whether the redemption was equivalent to a dividend. Rather, we agree with the Court of Appeals for the Second Circuit that “the business purpose of a transaction is irrelevant in determining dividend equivalence” under § 302 (b)(1). Hasbrook v. United States, 343 F. 2d 811, 814 (1966).

Taxpayer strongly argues that to treat the redemption involved here as essentially equivalent to a dividend is to elevate form over substance. Thus, taxpayer argues, had he not bought Bradley's shares or had he made a subordinated loan to the company instead of buying preferred stock, he could have gotten back his $25,000 with favorable tax treatment. However, the difference between form and substance in the tax law is largely problematical, and taxpayer’s complaints have little to do with whether a business purpose is relevant under § 302 (b)(1). It was clearly proper for Congress to treat distributions generally as taxable dividends when made out of earnings and profits and then to prevent avoidance of that result without regard to motivation where the distribution is in exchange for redeemed stock.

We conclude that that is what Congress did when enacting § 302 (b)(1). If a corporation distributes property as a simple dividend, the effect is to transfer the property from the company to its shareholders without a change in the relative economic interests or rights of the stockholders. Where a redemption has that same effect, it cannot be said to have satisfied the “not essentially equivalent to a dividend” requirement of § 302 (b)(1). Rather, to qualify for preferred treatment under that section, a redemption must result in a meaningful reduction of the shareholder’s proportionate interest in the corporation. Clearly, taxpayer here, who (after application of the attribution rules) was the sole shareholder of the corporation both before and after the redemption, did not qualify under this test. The decision of the Court of Appeals must therefore be reversed and the case remanded to the District Court for dismissal of the complaint.

It is so ordered.

Me. Justice Douglas,

with whom The Chief Justice and Mr. Justice Brennan concur,

dissenting.

I agree with the District Court, 274 F. Supp. 466, and with the Court of Appeals, 408 F. 2d 1139, that respondent’s contribution of working capital in the amount of $25,000 in exchange for 1,000 shares of preferred stock with a par value of $25 was made in order for the corporation to obtain a loan from the RFC and that the preferred stock was to be redeemed when the loan was repaid. For the reasons stated by the two lower courts, this redemption was not “essentially equivalent to a dividend,” for the bona fide business purpose of the redemption belies the payment of a dividend. As stated by the Court of Appeals:

“Although closely-held corporations call for close scrutiny under the tax law, we will not, under the facts and circumstances of this case, allow mechanical attribution rules to transform a legitimate corporate transaction into a tax avoidance scheme.” 408 F. 2d, at 1143-1144.

When the Court holds it was a dividend, it effectively cancels § 302 (b)(1) from the Code. This result is not a matter of conjecture, for the Court says that in the case of closely held or one-man corporations a redemption of stock is “always” equivalent to a dividend. I would leave such revision to the Congress.

       References in this opinion to “taxpayer” are to Maclín P. Davis. His wife is a party solely because joint returns were filed for the year in question.

       Only the Second Circuit has unequivocally adopted the Commissioner’s view and held irrelevant the motivation of the redemption. See Levin v. Commissioner, 385 F. 2d 521 (1967); Hasbrook
        v. United States, 343 F. 2d 811 (1965). The First Circuit, however, seems almost to have come to that conclusion, too. Compare Wiseman v. United States, 371 F. 2d 816 (1967), with Bradbury v. Commissioner, 298 F. 2d 111 (1962).
      The other courts of appeals that, have passed on the question are apparently willing to give at least some weight under §302 (b)(1) to the business motivation of a distribution and redemption. See, e. g., Commissioner v. Berenbaum, 369 F. 2d 337 (C. A. 10th Cir. 1966); Kerr v. Commissioner, 326 F. 2d 225 (C. A. 9th Cir. 1964); Ballenger v. United States, 301 F. 2d 192 (C. A. 4th Cir. 1962); Heman v. Commissioner, 283 F. 2d 227 (C. A. 8th Cir. 1960); United States v. Fewell, 255 F. 2d 496 (C. A. 5th Cir. 1958). See also Neff v. United States, 157 Ct. Cl. 322, 305 F. 2d 455 (1962). Even among those courts that consider business purpose, however, it is generally required that the business purpose be related, not to the issuance of the stock, but to the redemption of it. See Commissioner v. Berenbaum, supra; Ballenger v. United States, supra.

       See, e. g., Commissioner v. Gordon, 391 U. S. 83, 88-89 (1968). Taxpayer makes no contention that the corporation did not have $25,000 in accumulated earnings and profits.

       Section 318 (a) provides in relevant part as follows:
      “General rule. — For purposes of those provisions of this sub-chapter to which the rules contained in this section are expressly made applicable—
      “(1) Members of family.—
      “(A) In general. — An individual shall be considered as owning the stock owned, directly or indirectly, by or for—
      “(i) his spouse (other than a spouse who is legally separated from the individual under a decree of divorce or separate maintenance), and
      “ (ii) his children, grandchildren, and parents.”
      In § 318 (b) the rales contained in subsection (a) are made specifically applicable to “section 302 (relating to redemption of stock).”

       See Levin v. Commissioner, 385 F. 2d 521, 526-527 (C. A. 2d Cir. 1967); Commissioner v. Berenbaum, 369 F. 2d 337, 342 (C. A. 10th Cir. 1966); Ballenger v. United States, 301 F. 2d 192, 199 (C. A. 4th Cir. 1962); Bradbury v. Commissioner, 298 F. 2d 111, 116-117 (C. A. 1st Cir. 1962).

       See Treas. Reg. 1.302-2 (b).

       See B. Bittker & J. Eustice, Federal Income Taxation of Corporations and Shareholders 292 n. 32 (2d ed. 1966).

       Of course, this just means that a distribution in redemption to a sole shareholder will be treated under the general provisions of § 301, and it will only be taxed as a dividend under § 316 to the extent that there are earnings and profits.

       The Government argues that even if business purpose were relevant under §302 (b)(1), the business purpose present here related only to the original investment and not at all to the necessity for redemption. See cases cited, n. 2, supra. Under either view, taxpayer does not lose his basis in the preferred stock. Under Treas. Reg. 1,302-2 (c) that basis is apphed to taxpayer's common stock.

       See Bittker & Eustice, supra, n. 7, at 291: “It is not easy to give § 302 (b) (1) an expansive construction in view of this indication that its major function was the narrow one of immunizing redemp-tions of minority holdings of preferred stock.”

       This rejection is confirmed by the Committee’s acceptance of the House treatment of distributions involving corporate contractions — a factor present in many of the earlier “business purpose” redemptions. In describing its action, the Committee stated as follows:
      “Your committee, as did the House bill, separates into their significant elements the kind of transactions now incoherently aggregated in the definition of a partial liquidation. Those distributions which may have capital-gain characteristics became they are not made pro rata among the various shareholders would be subjected, at the shareholder level, to the separate tests described in [§§ 301 to 318]. On the other hand, those distributions characterized by what happens solely at the corporate level by reason of the assets distributed would be included as within the concept of a partial liquidation.” S. Rep. No. 1622, supra, at 49. (Emphasis added.)


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    ARNOLD TOURS, INC., et al. v. CAMP, COMPTROLLER OF THE CURRENCY, et al.
    No. 128.
    Decided March 23, 1970

      Timothy J. Murphy for petitioners.

      Solicitor General Griswold, Assistant Attorney General Ruckelshaus, and Alan S. Rosenthal for Camp, and Douglas L. Ley for South Shore National Bank, respondents.
   Per Curiam.

The petition for a writ of certiorari is granted and the judgment of the United States Court of Appeals for the First Circuit is vacated. The case is remanded to that court for further consideration in light of Association of Data Processing Service Organizations v. Camp, ante, p. 150, and Barlow v. Collins, ante, p. 159.


text:
    HOGAN v. JAMES et ux.
    No. 1055.
    Decided March 23, 1970
   Per Curiam.

The appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    MAKAH INDIAN TRIBE v. WASHINGTON
    No. 922.
    Decided March 23, 1970

      Robert J. Pirtle and Alvin J. Ziontz for appellant.

      Slade Gorton, Attorney General of Washington, and Jane Dowdle Smith and Steven C. Way, Assistant Attorneys General, for appellee.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of a substantial federal question.


text:
    MARKS v. CHIEF OF POLICE OF THE CITY OF LOS ANGELES et al.
    No. 1107.
    Decided March 23, 1970

      Burton Marks, appellant, pro se.

      Roger Arnebergh for appellees.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    FRIEDMAN v. NEW YORK
    No. 1137.
    Decided March 23, 1970

      Marx Leva, Alexander B. Hawes, and Richard E. Nolan for appellant.

      Louis J. Lejkowitz, Attorney General of New York, Ruth Kessler Toch, Solicitor General, and Jeremiah Jochnowitz, Assistant Attorney General, for appellee.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of a substantial federal question.


text:
    OHLSON et al. v. PHILLIPS et al.
    No. 1182.
    Decided March 23, 1970

      William F. Reynard for appellants.

      Duke W. Dunbar, Attorney General of Colorado, and Michael T. Haley, John P. Holloway, and John E. Bush, Assistant Attorneys General, for appellees.
   Per Curiam.

The motion to affirm is granted and the judgment is affirmed.


text:
    GINGER v. KELLEY, ATTORNEY GENERAL OF MICHIGAN, et al.
    No. 1374,
    Misc.
    Decided March 23, 1970

      Aloysius J. Suchy for appellees Buback et al.
   Per Curiam.

The appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    NIEDER v. FULLERTON, TRUSTEE, et al.
    No. 1403,
    Misc.
    Decided March 23, 1970

      Alfred C. Clapp for appellees.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


author: Per Curiam. Mr. Chief Justice Burger, Mr. Justice Harlan,

text:
    CAIN et al. v. KENTUCKY
    No. 347.
    Decided March 23, 1970

      Edmund C. Grainger, Jr., and James E. Thornberry for appellants.

      John B. Breckinridge, Attorney General of Kentucky, and John B. Browning, Assistant Attorney General, for appellee.
   Per Curiam.

The judgment is reversed. Redrup v. New York, 386 U. S. 767.

Mr. Chief Justice Burger,

dissenting.

In my view we should not inflexibly deny to each of the States the power to adopt and enforce its own standards as to obscenity and pornographic materials; States ought to be free to deal with varying conditions and problems in this area. I am unwilling to say that Kentucky is without power to bar public showing of this film; therefore, I would affirm the judgment from which the appeal is taken.

Mr. Justice Harlan,

dissenting.

If this case involved obscenity regulation by the Federal Government, I would unhesitatingly reverse the conviction, for the reasons stated in my separate opinion in Roth v. United States, 354 U. S. 476, 496 (1957). Even in light of the much greater flexibility that I have always thought should be accorded to the States in this field, see, e. g., my dissenting opinion in Jacobellis v. Ohio, 378 U. S. 184, 203 (1964), suppression of this particular film presents a borderline question. However, laying aside my own personal estimate of the film, I cannot say that Kentucky has exceeded the constitutional speed limit in banning public showing of the film within its borders, and accordingly I vote to affirm the judgment below.


text:
    SANCHEZ v. UNITED STATES
    No. 943,
    Misc.
    Decided March 23, 1970

      Alfred M. Carvajal for petitioner.

      Solicitor General Griswold for the United States.
   Per Curiam.

The motion for leave to proceed in forma pauperis is granted. Upon consideration of the suggestion of the Solicitor General and upon examination of the entire record, the petition for a writ of certiorari is granted insofar as it seeks review of the judgment of the United States Court of Appeals for the Fifth Circuit affirming petitioner’s conviction on Count 3 of the indictment charging a violation of 26 U. S. C. § 4704. The judgment of the Court of Appeals with respect to Count 3 is vacated and the case is remanded to the United States District Court for the Southern District of Florida with directions to dismiss Count 3 of the indictment. The petition for a writ of certiorari is otherwise denied.


text:
    CAPITAL SOUTHWEST CORP. et al. v. CALVERT, COMPTROLLER OF PUBLIC ACCOUNTS OF TEXAS, et al.
    No. 1130.
    Decided March 23, 1970

      J. Sam Winters, Henry D. Akin, Jr., and William D. Powell for appellants.

      Crawford C. Martin, Attorney General of Texas, pro se, Nola White, First Assistant Attorney General, Alfred Walker, Executive Assistant Attorney General, John R. Grace and William Edward Allen, Assistant Attorneys General, and William B. Hilgers, Special Assistant Attorney General, for appellees.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of a substantial federal question.


text:
    UNITED STATES v. KEY, TRUSTEE IN BANKRUPTCY
    No. 402.
    Argued January 21, 1970
    Decided March 30, 1970

      Lawrence G. Wallace argued the cause for the United States. On the brief were Solicitor General Griswold, Assistant Attorney General Walters, Peter L. Strauss, and Crombie J. D. Garrett.

      Sigmund J. Beck argued the cause for respondent. With him on the brief was Edward B. Hopper II.

   Mr. Justice Marshall

delivered the opinion of the Court.

In this case the United States challenges the treatment given to its claim for unpaid taxes against an insolvent corporation in reorganization under Chapter X of the Bankruptcy Act, 11 U. S. C. §§ 501-676. Under the reorganization plan approved by the District Court, the debtor, Hancock Trucking, Inc., will sell its chief asset, its Interstate Commerce Commission operating rights, to Hennis Freight Lines, Inc., for $935,000. The sale contract provides for a $300,000 down payment, with the balance to be paid in 78 monthly installments. Under the reorganization plan, the down payment will be used to satisfy certain wage and state and local tax claims in full, to satisfy 20% of the claims of the unsecured creditors, and to satisfy about 10% of the United States’ tax claim of $375,386.55. The remainder of the United States’ claim will be paid out of the monthly installments. The plan, an atypical one for a corporate reorganization, does not contemplate the continued existence of the debtor as a going concern, but amounts in substance to a liquidation.

The United States objects to that aspect of the plan that provides for partial or complete payment of the claims of unsecured creditors and state and local government units before full payment of the federal tax claims. This, the Government urges, violates the command of § 3466 of the Revised Statutes, 31 U. S. C. § 191, that “[w]henever any person indebted to the United States is insolvent . . . the debts due to the United States shall be first satisfied.” Respondent urges that § 3466 does not apply to Chapter X proceedings, but that the United States is entitled only to “payment” of its tax claim, as provided by § 199 of the Bankruptcy Act, 11 U. S. C. § 599.

The Court of Appeals accepted respondent’s theory, and affirmed the order of the District Court approving the plan. 407 F. 2d 635 (C. A. 7th Cir. 1969). We granted certiorari, 396 U. S. 874 (1969), and we reverse.

Since the earliest days of the Republic, § 3466 and its predecessors have given the Government priority over all other claimants in collecting debts due it from insolvent debtors. The present statute has existed almost unchanged since 1797, and its historical roots reach back to the similar priority of the Crown in England, an aspect of the royal prerogative, founded upon a policy of protecting the public revenues. The same policy underlies the federal statute, United States v. State Bank of North Carolina, 6 Pet. 29, 35 (1832), and it is established that the terms of § 3466 are to be liberally construed to achieve this broad purpose. Beaston v. Farmers’ Bank, 12 Pet. 102, 134 (1838); Bramwell v. United States Fidelity Co., 269 U. S. 483, 487 (1926).

Section 3466 applies literally to the situation here. The debtor is concededly insolvent, and it is established that a tax debt is a “debt due to the United States” within the meaning of the statute. Price v. United States, 269 U. S. 492, 499 (1926). No provision of Chapter X explicitly excepts corporate debtors in reorganization from the application of § 3466, and so the only remaining question is whether the legislative scheme established in Chapter X, either by logical inconsistency or other manifestation, of congressional intent, implies such an exception.

In approaching a claim of an implied exception to § 3466, we start with the principle, noted above, that the statute must be given a liberal construction consonant with the public policy underlying it. Applying that principle to an earlier claim that a statutory scheme implicitly excluded § 3466, this Court held that “[o]nly the plainest inconsistency would warrant our finding an implied exception to the operation of so clear a command as that of § 3466.” United States v. Emory, 314 U. S. 423, 433 (1941).

Here the Court of Appeals discerned an intent not to apply § 3466 to Chapter X proceedings from § 199 of the Bankruptcy Act, which forbids the approval of any reorganization plan which does not provide for the “payment” of taxes or customs due to the United States, unless the Secretary of the Treasury accepts “a lesser amount.” The Court of Appeals further supported its inference of exclusionary intent from §§ 216 (7) and 221 of the Act, 11 U. S. C. §§ 616 (7) and 621. Section 216 (7) provides that where a class of creditors dissents from a reorganization plan, the District Court shall provide “adequate protection for the realization by them of the value of their claims against the property” in any of four ways, the last and most general of which is by “such method as will, under and consistent with the circumstances of the particular case, equitably and fairly provide such protection.” Section 221 merely sums up the applicable tests for a valid reorganization plan by providing that “[t]he judge shall confirm a plan if satisfied that” § 199 has been complied with and that “the plan is fair and equitable, and feasible.”

The Court of Appeals reasoned from these provisions to the implied exclusion of the operation of § 3466 as follows:

“Within Chapter X, §§199, 216 and 221 are inter-related statutes and part of a studied statutory plan. Section 199 outlines the nature of the government’s tax claim 'priority,’ and the two other sections establish an equitable standard to govern the method of payment. If, as the government would have us hold, § 3466 creates an absolute right to first payment in addition to full payment, there would be little need for §§ 199, 216 (7) and 221. These sections apply specifically to Chapter X proceedings and should control over the more general and conflicting direction of § 3466.” 407 F. 2d, at 638.

In our view these provisions are not logically inconsistent with the terms of § 3466, nor would they be rendered redundant if the older statute applied, nor does their language or legislative history reveal a purpose incongruous with its application.

In the first place, § 216 (7) has nothing to do with the priorities of different classes of claimants under Chapter X. That section merely provides that where an affected class of creditors (and here the United States itself constitutes the whole of such a class) dissents from a plan, their claims are to be dealt with in one of the four ways specified, one of which is that those claims must be disposed of “equitably and fairly.”

This Court has long held that these words, along with the words “fair and equitable” in § 221, in no way authorize a District Court to ignore or erode priorities otherwise granted by law, and it follows that this language cannot be taken to exclude by implication an explicit statutory priority, such as that granted the United States by § 3466. In short, the words “fair and equitable” in Chapter X are terms of art, and no plan can be “fair and equitable” which compromises the rights of senior creditors in order to protect junior creditors. Case v. Los Angeles Lumber Co., 308 U. S. 106, 115-116 (1939); Consolidated Rock Co. v. Du Bois, 312 U. S. 510, 527-529 (1941).

We turn then to the argument upon which respondent chiefly relies for his claim that § 3466 does not reach to Chapter X proceedings — the alleged inconsistency between application of the “first satisfied” requirement and the terms and purposes of § 199. As already noted, § 199 provides that the United States shall have “payment” of its tax claims in Chapter X proceedings unless the Secretary of the Treasury accepts “a lesser amount.” Respondent argues and the Court of Appeals held that this establishes by negative implication that Congress did not mean the United States to be able to insist upon the more onerous remedy of payment first in time.

As a matter of logic, we see no inconsistency between a requirement of payment and a requirement of first satisfaction. Congress surely could have provided that the United States receive payment out of a limited fund at the expense of other claimants, and quite consistently provided that when the wherewithal to make such payment became available in installments over time the United States should also have the right to claim the first of those installments and each succeeding one until its debt was satisfied. Separate provisions to this effect in the same statute could certainly be read in harmony with each other, and there is no reason why § 3466 should not be read to supplement the requirement of payment contained in § 199 in the same fashion.

Nor is § 199 redundant if § 3466 applies in Chapter X proceedings on the ground that a requirement of first satisfaction necessarily implies a requirement of payment. Section 3466 applies only to insolvent debtors. Yet Chapter X proceedings are not open merely to corporations that are insolvent, in that their liabilities exceed their assets, but also to those that are solvent in the bankruptcy or asset-liability sense and yet are unable to meet their obligations as they mature. Bankruptcy Act § 130 (1), 11 U. S. C. § 530 (1). Thus § 199 does not merely give the Government rights already granted by implication in § 3466, but extends the Government’s priority, for tax claims at least, to solvent corporations in Chapter X reorganization.

Thus, on the face of the statute, no inconsistency arises from applying both § 3466 and § 199 to Chapter X proceedings, much less the “plain inconsistency” required if respondent is to prevail under the test of United States v. Emory, supra. That in itself strongly suggests that § 3466 should apply here, and our examination of the background and legislative history of § 199 and of Chapter X generally does not reveal a contrary intent on the part of Congress.

Before the reorganization legislation of the 1930’s, the principal method of reorganizing corporations that were unable to meet their debts was the equity receivership. This judge-made device was designed to preserve the debtor business as a going concern by cancelling claims against it, in return for which cancellation the claimants received debt or equity interests in a new corporation, which then acquired the assets of the old corporation in a judicial sale. See T. Finletter, The Law of Bankruptcy Reorganization 1-17 (1939). By 1926, it was established that § 3466 applied to give the United States an absolute priority for payment of debts due it from insolvent corporations in equity receivership. Price v. United States, 269 U. S., at 502-503; and see Blair, The Priority of the United States in Equity Receiverships, 39 Harv. L. Rev. 1 (1925).

In 1933, Congress enacted § 77 of the Bankruptcy Act, 47 Stat. 1474, providing a statutory procedure for the reorganization of railroads. Section 77, as well as later corporate reorganization statutes discussed below, was designed to follow the general format of the equity receivership. As one of the early commentators on the federal statutes has noted, “[t]he principles of the equity receivership underlie nearly every substantive provision of the [reorganization acts].” Finletter, supra, at 3. These statutes were not, of course, mere codifications of the law governing equity receiverships. They were designed in part to correct abuses and inefficiencies that had existed under the prior regime. Duparquet Co. v. Evans, 297 U. S. 216, 218-219 (1936). However, the problems of the equity receivership that led to the legislative intervention did not include the Government’s priority under § 3466, a relatively uncontroversial aspect of the receivership procedure.

Nothing in § 77 casts any doubt on the continued priority of the United States under § 3466. Indeed the only provision in the new statute affecting the claims of the United States was § 77(e), which provided in pertinent part:

“If the United States of America is directly a creditor or stockholder, the Secretary of the Treasury is hereby authorized to accept or reject a plan in respect of the interests or claims of the United States.” 47 Stat. 1478.

The purpose of this provision was to overcome the effect of two prior rulings of the Attorney General that the Secretary of the Treasury lacked authority to compromise claims of indebtedness owed to the Government by the railroads, 33 Op. Atty. Gen. 423 (1923), 34 Op. Atty. Gen. 108 (1924).

In 1934, Congress enacted § 77B of the Bankruptcy Act, 48 Stat. 911, which provided a reorganization scheme for corporations generally, closely modeled on the railroad reorganization scheme of § 77; § 77B (e) (1) granted the Secretary of the Treasury power to compromise federal claims, in language almost identical with that of § 77 (e). 48 Stat. 918. There is no language in the statute, and nothing in its history, to suggest any intention to alter the established priority of the United States under § 3466.

In 1935, the Secretary of the Treasury called the attention of Congress to the fact that the courts were construing § 77B (e)(1) to include the United States among the general creditors in reorganization proceedings, so that plans disapproved by the Secretary for failure to satisfy a federal claim could nevertheless be confirmed if the necessary majority of general creditors approved. S. Rep. No. 953, 74th Cong., 1st Sess. (1935). The Secretary proposed an amendment, which, after some weakening in the House, see S. Rep. No. 1386, 74th Cong., 1st Sess. (1935), was adopted. 49 Stat. 966 (1935). In its relevant provisions, the amendment was identical with present § 199, and the 1938 revisions which culminated in the replacement of § 77B by present Chapter X did not affect it.

Thus § 199 is derived from an enactment designed to grant the Government the power to compromise its claims against debtors, and an amendment designed to ensure priority for federal claims over the claims of general creditors. Nothing in this background lends any support to respondent’s claim that the draftsmen of Chapter X meant to provide an exception to the operation of § 3466 for reorganization proceedings under the new statute. Indeed the established practice of applying § 3466 to equity receiverships, the acknowledged predecessor of the Chapter X proceeding, combined with the failure to indicate in any way an intent to alter that practice in the new statutes, supports the conclusion that Congress affirmatively meant § 3466 to' apply to statutory reorganization.

As we noted at the outset, § 3466 must apply according to its terms except where expressly superseded, or where excluded by a later enactment “plainly inconsistent” with it. Here the statute literally applies, and no plain inconsistency with the scheme of Chapter X appears. The terms of § 3466 are clearly not satisfied by the reorganization plan here in question, which provides payment in part to general creditors and other nonpre-ferred claimants before satisfaction of the federal tax claim. Therefore the judgment upholding the plan must be reversed, and the case remanded to the Court of Appeals for further proceedings consistent with this opinion.

Reversed.

Me. Justice Douglas,

concurring.

I join the opinion of the Court. As it holds, the Chandler Act provides the standard for treatment of claims of the United States as “a secured or unsecured creditor” of the debtor. Those are the words of § 199, 52 Stat. 893, 11 U. S. C. § 599. Section 199 goes on to provide that “no plan which does not provide for the payment” of the claims of the United States for taxes or customs duties shall be “confirmed” by the judge, “except upon the acceptance of a lesser amount by the Secretary of the Treasury.”

The question therefore is what kind of “payment,” as used in § 199, the claim of the United States must receive in a Chapter X proceeding.

There is no doubt but that the claim of the United States has priority by reason of § 3466 of the Revised Statutes, 31 U. S. C. § 191.

Section 216 of the Chandler Act provides the standards for dealing with the priorities among creditors. Section 216 (7) says that where “any class of creditors” affected by the plan does not accept the plan, those claims can be dealt with in several ways, including a method which “equitably and fairly” protects them. And § 221 (2). of the Act provides that the judge shall confirm the plan if satisfied that it is “fair and equitable, and feasible.”

The words “'fair and equitable” are words of art; we have made unmistakably clear that compromising the rights of senior creditors to protect junior creditors is not “fair and equitable” treatment. Case v. Los Angeles Lumber Co., 308 U. S. 106, 115-116; Consolidated Rock Co. v. Du Bois, 312 U. S. 510, 527-529. We said in the Du Bois case:

"[I]t is plain that while creditors may be given inferior grades of securities, their 'superior rights’ must be recognized. Clearly, those prior rights are not recognized, in cases where stockholders are participating in the plan, if creditors are given only a face amount of inferior securities equal to the face amount of their claims. They must receive, in addition, compensation for the senior rights which they are to surrender. If they receive less than that full compensatory treatment, some of their property rights will be appropriated for the benefit of stockholders without compensation. That is not permissible.” Id., at 528-529.

The present plan is likewise infirm because it provides junior creditors with immediate, partial payment, while making the United States with a prior claim accept delayed and therefore discounted payment of its claim with all the attendant risks. If the United States is to forgo the right to be paid out of the first available funds, it must receive equivalent compensation in return. The Court of Appeals thought that it contradicted § 216 and § 221 to apply § 3466 to a Chapter X plan. Today we take the contrary view. Section 3466 is relevant in defining the priority; § 216 and § 221 are relevant in providing how that priority shall be honored.

       See, e. g., Act of July 31, 1789, § 21, 1 Stat. 42; Act of August 4,1790, § 45,1 Stat. 169.

       See Act of March 3, 1797, § 5, 1 Stat. 515, as amended by Act of March 2, 1799, § 65, 1 Stat. 676.

       See 33 Hen. 8, c. 39, §74 (1541); 13 Eliz. 1, c. 4 (1570).

      Section 199 provides:
      “If the United States is a secured or unsecured creditor or stockholder of a debtor, the claims or stock thereof shall be deemed to be affected by a plan under this chapter, and the Secretary of the Treasury is authorized to accept or reject a plan in respect of the claims or stock of the United States. If, in any proceeding under this chapter, the United States is a secured or unsecured creditor on claims for taxes or customs duties (whether or not the United States has any other interest in, or claim against the debtor, as secured or unsecured creditor or stockholder), no plan which does not provide for the payment thereof shall be confirmed by the judge except upon the acceptance of a lesser amount by the Secretary of the Treasury certified to the court: Provided, That if the Secretary of the Treasury shall fail to accept or reject a plan for more than ninety days after receipt of written notice so to do from the court to which the plan has been proposed, accompanied by a certified copy of the plan, his consent shall be conclusively presumed.” 11 U. S. C. § 599.

       The Government argues in the alternative that even if § 3466 does not apply to claims against debtors in Chapter X, the plan here is defective even under the § 199 requirement of “payment” alone, since the deferment of payment of the Government’s tax claim while the cash flow from the installment contract is used to satisfy the claims of lower ranking creditors means that the Government is receiving a “lesser amount,” which § 199 in its terms contrasts with “payment,” than what it would receive if it had first claim on all cash as it came in. The argument is premised on the fact that the Government cannot collect post-petition interest on its claim. City of New York v. Saper, 336 U. S. 328 (1949); United States v. Edens, 189 F. 2d 876 (C. A. 4th Cir. 1951), aff’d per curiam, 342 U. S. 912 (1952). Because of our determination that § 3466 applies here and requires payment first in time, we need not reach this contention.

       In the normal Chapter X reorganization no provision need be made for priority in time of different claims. Claimants receive debt or equity interests in a going concern in the usual situation, and the priority of one claimant over another means only that if there is insufficient going-concern value to satisfy both claims, the claimant with priority must receive value equivalent to his full claim if the other claimant is to receive anything. Here a second sense of priority is involved: when cash becomes available to pay off outstanding claims only over a period of time, the claimant with “priority” in this second sense receives his cash first in time; the nonpriority claimant may receive full payment, but receives it later. In its literal language — “first satisfied” — § 3466 provides this kind of priority, and respondent has not argued that it should not be so construed if it applies here.

       It seems to § 3466 meant insolvent in the bankruptcy sense, and this Court clearly so held in United States v. Oklahoma, 261 U. S. 253, 260-261 (1923).

       See Senate Committee on the Judiciary, Criticisms and Suggestions Relating to H. R. 14359 and S. 5551, Amending the Bankruptcy Act 19-20, 72d Cong., 2d Sess. (Comm. Print. 1933).

       The Secretary had proposed that he be given a veto over plans that failed to provide for “payment” of any federal claim. See S. Rep. No. 953, supra. The House imposed the “payment” requirement only upon tax and customs claims, possibly intending to leave the Government in the position of a general creditor with respect to other claims, see S. Rep. No. 1386, supra, and this was the form in which the amendment was adopted. Section 199 preserves this apparent distinction between tax and other claims, see text at n. 4, supra. However the courts, relying on the strong presumption against implied exceptions to § 3466, have not treated the Government as a general creditor in its nontax claims, but rather have held that it has priority under § 3466. United States v. Anderson, 334 F. 2d 111 (C. A. 5th Cir. 1964); In re Cherry Valley Homes, Inc., 255 F. 2d 706 (C. A. 3d Cir. 1958); Reconstruction Finance Corp. v. Flynn, 175 F. 2d 761 (C. A. 2d Cir. 1949).
      If, as appears from the present case, § 3466, if applicable, may, in some instances, give the Government .greater protection than § 199, it would be anomalous to deny that protection to Government tax claims while granting it to nontax claims, since Congress clearly intended that tax claims should have greater protection.

       The leading authorities agree that § 3466 applies to Chapter X proceedings. Finletter, supra, at 388-393; 6A Collier on Bankruptcy 269 n. 11 (14th ed. 1969).

       This case does not raise the question, never decided by this Court, whether § 3466 grants the Government priority over the prior specific liens of secured creditors. See United States v. Gilbert Associates, 345 U.S. 361, 365-366 (1953).


text:
    CRAYCROFT v. FERRALL et al.
    No. 718,
    Misc.
    Decided March 30, 1970

      John Caughlan for petitioner.

      Solicitor General Grisioold for respondents.
   Per Curiam.

The motion for leave to proceed in forma pauperis is granted.

Upon consideration of the suggestion of the Solicitor General and upon an examination of the entire record, the petition for a writ of certiorari is granted, the judgment of the United States Court of Appeals for the Ninth Circuit is vacated and the case is remanded to that court.

The Solicitor General concedes that the administrative remedies that the Court of Appeals held should first be exhausted by the petitioner, have either been exhausted or are nonexistent. The sole remaining question therefore seems to be whether petitioner’s failure to seek relief in the Court of Military Appeals precludes consideration of petitioner’s claims by the federal courts. While the Solicitor General concedes that resort to that judicial remedy does not preclude consideration of petitioner’s claim by the federal courts, there is a conflict among the circuits. It is for consideration of that question, or alternatively the merits, that the case is remanded.


text:
    JOHNSTON et al. v. HAWAII
    No. 1381,
    Misc.
    Decided March 30, 1970

      Norman Dor sen for appellants.
   Per Curiam.

The appeal is dismissed for want of a substantial federal question.


author: Mr. Justice Black Mr. Justice Brennan, Me. Justice Douglas.

text:
    ILLINOIS v. ALLEN
    No. 606.
    Argued February 24, 1970
    Decided March 31, 1970

      Joel M. Flaum, Assistant Attorney General of Illinois, argued the cause for petitioner. With him on the briefs were William J. Scott, Attorney General, and James R. Thompson, Morton E. Friedman, and Thomas J. Immel, Assistant Attorneys General.

      H. Reed Harris argued the cause and filed a brief for respondent.
   Mr. Justice Black

delivered the opinion of the Court. The Confrontation Clause of the Sixth Amendment to the United States Constitution provides that: “In all criminal prosecutions, the accused shall enjoy the right ... to be confronted with the witnesses against him We have held that the Fourteenth Amendment makes the guarantees of this clause obligatory upon the States. Pointer v. Texas, 380 U. S. 400 (1965). One of the most basic of the rights guaranteed by the Confrontation Clause is the accused’s right to be present in the courtroom at every stage of his trial. Lewis v. United States, 146 U. S. 370 (1892). The question presented in this case is whether an accused can claim the benefit of this constitutional right to remain in the courtroom while at the same time he engages in speech and conduct which is so noisy, disorderly, and disruptive that it is exceedingly difficult or wholly impossible to carry on the trial.

The issue arose in the following way. The respondent, Allen, was convicted by an Illinois jury of armed robbery and was sentenced to serve 10 to 30 years in the Illinois State Penitentiary. The evidence against him showed that on August 12, 1956, he entered a tavern in Illinois and, after ordering a drink, took $200 from the bartender at gunpoint. The Supreme Court of Illinois affirmed his conviction, People v. Allen, 37 Ill. 2d 167, 226 N. E. 2d 1 (1967), and this Court denied certiorari. 389 U. S. 907 (1967). Later Allen filed a petition for a writ of habeas corpus in federal court alleging that he had been wrongfully deprived by the Illinois trial judge of his constitutional right to remain present throughout his trial. Finding no constitutional violation, the District Court declined to issue the writ. The Court of Appeals reversed, 413 F. 2d 232 (1969), Judge Hastings dissenting.

The facts surrounding Allen’s expulsion from the courtroom are set out in the Court of Appeals’ opinion sustaining Allen’s contention:

“After his indictment and during the pretrial stage, the petitioner [Allen] refused court-appointed counsel and indicated to the trial court on several occasions that he wished to conduct his own defense. After considerable argument by the petitioner, the trial judge told him, Til let you be your own lawyer, but I’ll ask Mr. Kelly [court-appointed counsel] [to] sit in and protect the record for you, insofar as possible.’
“The trial began on September 9, 1957. After the State’s Attorney had accepted the first four jurors following their voir dire examination, the petitioner began examining the first juror and continued at great length. Finally, the trial judge interrupted the petitioner, requesting him to confine his questions solely to matters relating to the prospective juror’s qualifications. At that point, the petitioner started to argue with the judge in a most abusive and disrespectful manner. At last, and seemingly in desperation, the judge asked appointed counsel to proceed with the examination of the jurors. The petitioner continued to talk, proclaiming that the appointed attorney was not going to act as his lawyer. He terminated his remarks by saying, 'When I go out for lunchtime, you’re [the judge] going to be a corpse here.’ At that point he tore the file which his attorney had and threw the papers on the floor. The trial judge thereupon stated to the petitioner, 'One more outbreak of that sort and I’ll remove you from the courtroom.’ This warning had no effect on the petitioner. He continued to talk back to the judge, saying, ‘There’s not going to be no trial, either. I’m going to sit here and you’re going to talk and you can bring your shackles out and straight jacket and put them on me and tape my mouth, but it will do no good because there’s not going to be no trial.’ After more abusive remarks by the petitioner, the trial judge ordered the trial to proceed in the petitioner’s absence. The petitioner was removed from the courtroom. The voir dire examination then continued and the jury was selected in the absence of the petitioner.
“After a noon recess and before the jury was brought into the courtroom, the petitioner, appearing before the judge, complained about the fairness of the trial and his appointed attorney. He also said he wanted to be present in the court during his trial. In reply, the judge said that the petitioner would be permitted to remain in the court-^xroom if he ‘behaved [himself] and [did] not interfere with the introduction of the case.’ The jury was brought in and seated. Counsel for the petitioner then moved to exclude the witnesses from the courtroom. The [petitioner] protested this effort on the part of his attorney, saying: ‘There is going to be no proceeding. I’m going to start talking and I’m going to keep on talking all through the trial. There’s not going to be no trial like this. I want my sister and my friends here in court to testify for me.’ The trial judge thereupon ordered the petitioner removed from the courtroom.” 413 F. 2d, at 233-234.

After this second removal, Allen remained out of the courtroom during the presentation of the State’s case-in-chief, except that he was brought in on several occasions for purposes of identification. During one of these latter appearances, Allen responded to one of the judge’s questions with vile and abusive language. After the prosecution’s case had been presented, the trial judge reiterated his promise to Allen that he could return to the courtroom whenever he agreed to conduct himself properly. Allen gave some assurances of proper conduct and was permitted to be present through the remainder of the trial, principally his defense, which was conducted by his appointed counsel.

The Court of Appeals went on to hold that the Supreme Court of Illinois was wrong in ruling that Allen had by his conduct relinquished his constitutional right to be present, declaring that:

“No conditions may be imposed on the absolute right of a criminal defendant to be present at all stages of the proceeding. The insistence of a defendant that he exercise this right under unreasonable conditions does not amount to a waiver. Such conditions, if insisted upon, should and must be dealt with in a manner that does not compel the relinquishment of his right.
“In light of the decision in Hopt v. Utah, 110 U. S. 574 . . . (1884) and Shields v. United States, 273 U. S. 583 . . . (1927), as well as the constitutional mandate of the sixth amendment, we are of the view that the defendant should not have been excluded from the courtroom during his trial despite his disruptive and disrespectful conduct. The proper course for the trial judge was to have restrained the defendant by whatever means necessary, even if those means included his being shackled and gagged.” 413 F. 2d, at 235.

The Court of Appeals felt that the defendant’s Sixth Amendment right to be present at his own trial was so “absolute” that, no matter how unruly or disruptive the defendant’s conduct might be, he could never be held to have lost that right so long as he continued to insist upon it, as Allen clearly did. Therefore the Court of Appeals concluded that a trial judge could never expel a defendant from his own trial and that the judge’s ultimate remedy when faced with an obstreperous defendant like Allen who determines to make his trial impossible is to bind and gag him. We cannot agree that the Sixth Amendment, the cases upon which the Court of Appeals relied, or any other cases of this Court so handicap a trial judge in conducting a criminal trial. The broad dicta in Hopt v. Utah, supra, and Lewis v. United States, 146 U. S. 370 (1892), that a trial can never continue in the defendant’s absence have been expressly rejected. Diaz v. United States, 223 U. S. 442 (1912). We accept instead the statement of Mr. Justice Cardozo who, speaking for the Court in Snyder v. Massachusetts, 291 U. S. 97, 106 (1934), said: “No doubt the privilege [of personally confronting witnesses] may be lost by consent or at times even by misconduct.” Although mindful that courts must indulge every reasonable presumption against the loss of constitutional rights, Johnson v. Zerbst, 304 U. S. 458, 464 (1938), we explicitly hold today that a defendant can lose his right to be present at trial if, after he has been warned by the judge that he will be removed if he continues his disruptive behavior, he nevertheless insists on conducting himself in a manner so disorderly, disruptive, and disrespectful of the court that his trial cannot be carried on with him in the courtroom. Once lost, the right to be present can, of course, be reclaimed as soon as the defendant is willing to conduct himself consistently with the decorum and respectInherent in the concept of courts and judicial proceedings.

It is essential to the proper administration of criminal justice that dignity, order, and decorum be the hallmarks of all court proceedings in our . country. The flagrant disregard in the courtroom of elementary standards of proper conduct should not and cannot be tolerated. We believe trial judges confronted with disruptive, contumacious, stubbornly defiant defendants must be given sufficient discretion to meet the circumstances of each case. No one formula for maintaining the appropriate courtroom atmosphere will be best in all situations. We think there are at least three constitutionally permissible ways for a trial judge to handle an obstreperous defendant like Allen: (1) bind and gag him, thereby-keeping him present; (2) cite him for contempt; (3) take him out of the courtroom until he promises to conduct himself properly.

I

Trying a defendant for a crime while he sits bound and gagged before the judge and jury would to an extent comply with that part of the Sixth Amendment’s purposes that accords the defendant an opportunity to confront the witnesses at the trial. But even to contemplate such a technique, much less see it, arouses a feeling that no person should be tried while shackled and gagged except as a- last resort. Not only is it possible that the sight of shackles and gags might have a significant effect on the jury’s feelings about the defendant, but the use of this technique is itself something of an affront to the very dignity and decorum of judicial proceedings that the judge is seeking to uphold. Moreover, one of the defendant’s primary advantages of being present at the trial, his ability to communicate with his counsel, is greatly reduced when the defendant is in a condition of total physical restraint. It is in part because of these inherent disadvantages and limitations in this method of dealing with disorderly defendants that we decline to hold with the Court of Appeals that a defendant cannot under any possible circumstances be deprived of his right to be present at trial. However, in some situations which we need not attempt to foresee, binding and gagging might possibly be the fairest and most reasonable way to handle a defendant who acts as Allen did here.

II

In a footnote the Court of Appeals suggested the possible availability of contempt of court as a remedy to make Allen behave in his robbery trial, and it is true that citing or threatening to cite a contumacious defendant for criminal contempt might in itself be sufficient to make a defendant stop interrupting a trial. If so, the problem would be solved easily, and the defendant could remain in the courtroom. Of course, if the defendant is determined to prevent any trial, then a court in attempting to try the defendant for contempt is still confronted with the identical dilemma that the Illinois court faced in this case. And criminal contempt has obvious limitations as a sanction when the defendant is charged with a crime so serious that a very severe sentence such as death or life imprisonment is likely to be imposed. In such a case the defendant might not be affected by a mere contempt sentence when he ultimately faces a far more serious sanction. Nevertheless, the contempt remedy should be borne in mind by a judge in the circumstances of this case.

Another aspect of the contempt remedy is the judge's power, when exercised consistently with state and federal law, to imprison an unruly defendant such as Allen for civil contempt and discontinue the trial until such time as the defendant promises to behave himself. This procedure is consistent with the defendant’s right to be present at trial, and yet it avoids the serious shortcomings of the use of shackles and gags. It must be recognized, however, that a defendant might conceivably, as a matter of calculated strategy, elect to spend a prolonged period in confinement for contempt in the hope that adverse witnesses might be unavailable after a lapse of time. A court must guard against allowing a defendant to profit from his own wrong in this way.

Ill

The trial court in this case decided under the circumstances to remove the defendant from the courtroom and to continue his trial in his absence until and unless he promised to conduct himself in a manner befitting an American courtroom. As we said earlier, we find nothing unconstitutional about this procedure. Allen’s behavior was clearly of such an extreme and aggravated nature as to justify either his removal from the courtroom or his total physical restraint. Prior to his removal he was repeatedly warned by the trial judge that he would be removed from the courtroom if he persisted in his unruly conduct, and, as Judge Hastings observed in his dissenting opinion, the record demonstrates that Allen would not have been at all dissuaded by the trial judge’s use of his criminal contempt powers. Allen was constantly informed that he could return to the trial when he would agree to conduct himself in an orderly manner. Under these circumstances we hold that Allen lost his right guaranteed by the Sixth and Fourteenth Amendments to be present throughout his trial.

IV

It is not pleasant to hold that the respondent Allen was properly banished from the court for a part of his own trial. But our courts, palladiums of liberty as they are, cannot be treated disrespectfully with impunity. Nor can the accused be permitted by his disruptive conduct indefinitely to avoid being tried on the charges brought against him. It would degrade our country | and our judicial system to permit our courts to be i bullied, insulted, and humiliated and their orderly < progress thwarted and obstructed by defendants brought,.J before them charged with crimes. As guardians of the public welfare, our state and federal judicial systems strive to administer equal justice to the rich and the poor, the good and the bad, the native and foreign born of every race, nationality, and religion. Being manned by humans, the courts are not perfect and are bound to make some errors. But, if our courts are to remain what the Founders intended, the citadels of justice, their proceedings cannot and must not be infected with the sort of scurrilous, abusive language and conduct paraded before the Illinois trial judge in this case. The record shows that the Illinois judge at all times conducted himself with that dignity, decorum, and patience that befit a judge. Even in holding that the trial judge had erred, the Court of Appeals praised his “commendable patience under severe provocation.”

We do not hold that removing this defendant from his own trial was the only way the Illinois judge could have constitutionally solved the problem he had. We do hold, however, that there is nothing whatever in this record to show that the judge did not act completely within his discretion. Deplorable as it is to remove a man from his own trial, even for a short time, we hold that the judge did not commit legal error in doing what he did.

The judgment of the Court of Appeals is

Reversed.

Mr. Justice Brennan,

concurring.

The safeguards that the Constitution accords to criminal defendants presuppose that government has a sovereign prerogative to put on trial those accused in good faith of violating valid laws. Constitutional power to bring an accused to trial is fundamental to a scheme of “ordered liberty” and prerequisite to social justice and peace. History has known the breakdown of lawful penal authority — the feud, the vendetta, and the terror of penalties meted out by mobs or roving bands of vigilantes. It has known, too, the perversion of that authority. In some societies the penal arm of the state has reached individual men through secret denunciation followed by summary punishment. In others the solemn power of condemnation has been confided to the caprice of tyrants. Down the corridors of history have echoed the cries of innocent men convicted by other irrational or arbitrary procedures. These are some of the alternatives history offers to the procedure adopted by our Constitution. The right of a defendant to trial — to trial by jury — has long been cherished by our people as a vital restraint on the penal authority of government. And it has never been doubted that under our constitutional traditions trial in accordance with the Constitution is the proper mode by which government exercises that authority.

Lincoln said this Nation was “conceived in liberty and dedicated to the proposition that all men are created equal.” The Founders’ dream of a society where all men are free and equal has not been easy to realize. The degree of liberty and equality that exists today has been the product of unceasing struggle and sacrifice. Much remains to be done — so much that the very institutions of our society have come under challenge. Hence, today, as in Lincoln’s time, a man may ask “whether [this] nation or any nation so conceived and so dedicated can long endure.” It cannot endure if the Nation falls short on the guarantees of liberty, justice, and equality embodied in our founding documents. But it also cannot endure if we allow our precious heritage of ordered liberty to be ripped apart amid the sound and fury of our time. It cannot endure if in individual cases the claims of social peace and order on the one side and of personal liberty on the other cannot be mutually resolved in the forum designated by the Constitution. If that resolution cannot be reached by judicial trial in a court of law, it will be reached elsewhere and by other means, and there will be grave danger that liberty, equality, and the order essential to both will be lost.

The constitutional right of an accused to be present at his trial must be considered in this context. Thus there can be no doubt whatever that the governmental prerogative to proceed with a trial may not be defeated by conduct of the accused that prevents the trial from going forward. Over a half century ago this Court in Diaz v. United States, 223 U. S. 442, 457-458 (1912), approved what I believe is the governing principle. We there quoted from Falk v. United States, 15 App. D. C. 446 (1899), the case of an accused who appeared at his trial but fled the jurisdiction before it was completed. The court proceeded in his absence, and a verdict of guilty was returned. In affirming the conviction over the accused's objection that he could not be convicted in his absence, the Court of Appeals for the District of Columbia said:

“It does not seem to us to be consonant with the dictates of common sense that an accused person . . . should be at liberty, whenever he pleased, ... to break up a trial already commenced. The practical result of such a proposition, if allowed to be law, would be to prevent any trial whatever until the accused person himself should be pleased to permit it. . . . This would be a travesty of justice which could not be tolerated .... [W]e do not think that any rule of law or constitutional principle leads us to any conclusion that would be so disastrous as well to the administration of justice as to the true interests of civil liberty.
“The question is one of broad public policy, whether an accused person, placed upon trial for crime and protected by all the safeguards with which the humanity of our present criminal law sedulously surrounds him, can with impunity defy the processes of that law, paralyze the proceedings of courts and juries and turn them into a solemn farce, and ultimately compel society, for its own safety, to restrict the operation of the principle of personal liberty. Neither in criminal nor in civil cases will the law allow a person to take advantage of his own wrong.”

To allow the disruptive activities of a defendant like respondent to prevent his trial is to allow him to profit from his own wrong. The Constitution would protect none of us if it prevented the courts from acting to preserve the very processes that the Constitution itself prescribes.

Of course, no action against an unruly defendant is permissible except after he has been fully and fairly informed that his conduct is wrong and intolerable, and warned of the possible consequences of continued misbehavior. The record makes clear that respondent was so informed and warned in this case. Thus there can be no doubt that respondent, by persisting in his reprehensible conduct, surrendered his right to be present at the trial.

As the Court points out, several remedies are available to the judge faced with a defendant bent on disrupting his trial. He can have him bound, shackled, and gagged; he can hold him in civil or criminal contempt; he can exclude him from the trial and carry on in his absence. No doubt other methods can be devised. I join the Court’s opinion and agree that the Constitution does not require or prohibit the adoption of any of these courses. The constitutional right to be present can be surrendered if it is abused for the purpose of frustrating the trial. Due process does not require the presence of the defendant if his presence means that there will be no orderly process at all. However, I also agree with the Court that these three methods are not equally acceptable. In particular, shackling and gagging a defendant is surely the least acceptable of them. It offends not only judicial dignity and decorum, but also that respect for the individual which is the lifeblood of the law.

I would add only that when a defendant is excluded from his trial, the court should make reasonable efforts to enable him to communicate with his attorney and, if possible, to keep apprised of the progress of his trial. Once the court has removed the contumacious defendant, it is not weakness to mitigate the disadvantages of his expulsion as far as technologically possible in the circumstances.

Me. Justice Douglas.

I agree with the Court that a criminal trial, in the constitutional sense, cannot take place where the courtroom is a bedlam and either the, accused or the judge is hurling epithets at the other. A courtroom is a hallowed place where trials must proceed with dignity and not become occasions for entertainment by the participants, by extraneous persons, by modern mass media, or otherwise.

My difficulty is not with the basic hypothesis of this decision, but with the use of this case to establish the appropriate guidelines for judicial control.

This is a stale case, the trial having taken place nearly 13 years ago. That lapse of time is not necessarily a barrier to a challenge of the constitutionality of a criminal conviction. But in this case it should be.

There is more than an intimation in the present record that the defendant was a mental case. The passage of time since 1957, the date of the trial, makes it, however, impossible to determine what the mental condition of the defendant was at that time. The fact that a defendant has been found to understand “the nature and object of the proceedings against him” and thus competent to stand trial does not answer the difficult questions as to what a trial judge should do with an otherwise mentally ill defendant who creates a courtroom disturbance. What a judge should do with a defendant whose courtroom antics may not be volitional is a perplexing problem which we should not reach except on a clear record. This defendant had no lawyer and refused one, though the trial judge properly insisted that a member of the bar be present to represent him. He tried to be his own lawyer and what transpired was pathetic, as well as disgusting and disgraceful.

We should not reach the merits but should reverse the case for staleness of the record and affirm the denial of relief by the District Court. After all, behind the issuance of a writ of habeas corpus is the exercise of an informed discretion. The question, how to proceed in a criminal case against a defendant who is a mental case, should be resolved only on a full and adequate record.

Our real problems of this type lie not with this case but with other kinds of trials. First are the political trials. They frequently recur in our history' and insofar as they take place in federal courts we have broad super-* visory powers over them. That is one setting where the question arises whether the accused has rights of confrontation that the law invades at its peril.

In Anglo-American law, great injustices have at times been done to unpopular minorities by judges, as well as by prosecutors. I refer to London in 1670 when William Penn, the gentle Quaker, was tried for causing a riot when all that he did was to preach a sermon bn Grace Church Street, his church having been closed under the Conventicle Act:

“Penn. I affirm I have broken no law, nor am I Guilty of the indictment that is laid to my charge; and to the end the bench, the jury, and myself, with these that hear us, may have a more direct understanding of this procedure, I desire you would let me know by what law it is you prosecute me, and upon what law you ground my indictment.
“Rec. Upon the common-law.
“Penn. Where is that common-law?
“Rec. You must not think that I am able to run up so many years, and over so many adjudged cases, which we call common-law, to answer your curiosity.
“Penn. This answer I am sure is very short of my question, for if it be common, it should not be so hard to produce.
“Rec. Sir, will you plead to your indictment?
“Penn. Shall I plead to an Indictment that hath no foundation in law? If it contain that law you say I have broken, why should you decline to produce that law, since it will be impossible for the jury to determine, or agree to bring in their verdict, who have not the law produced, by which they should measure the truth of this indictment, and the guilt, or contrary of my fact?
“Rec. You are a saucy fellow, speak to the Indictment.
“Penn. I say, it is my place to speak to matter of law; I am arraigned a prisoner; my liberty, which is next to life itself, is now concerned: you are many mouths and ears against me, and if I must not be allowed to make the best of my case, it is hard, I say again, unless you shew me, and the people, the law you ground your indictment upon, I shall take it for granted your proceedings are merely arbitrary.
“Rec. The question is, whether you are Guilty of this Indictment?
“Penn. The question is not, whether I am Guilty of this Indictment, but whether this Indictment be legal. It is too general and imperfect an answer, to say it is the common-law, unless we knew both where and what it is. For where there is no law, there is no transgression; and that law which is not in being, is so far from being common, that it is no law at all.
“Rec. You are an impertinent fellow, will you teach the court what law is? It is ‘Lex non scripta,’ that which many have studied 30 or 40 years to know, and would you have me to tell you in a moment?
“Penn. Certainly, if the common law be so hard to be understood, it is far from being very common; but if the lord Coke in his Institutes be of any consideration, he tells us, That Common-Law is common right, and that Common Right is the Great Charter-Privileges ....
“Rec. Sir, you are a troublesome fellow, and it is not for the honour of the court to suffer you to go on.
“Penn. I have asked but one question, and you have not answered me; though the rights and privileges of every Englishman be concerned in it.
“Rec. If I should suffer you to ask questions till to-morrow morning, you would be never the wiser.
“Penn. That is according as the answers are.
“Rec. Sir, we must not stand to hear you talk all night.
“Penn. I design no affront to the court, but to be heard in my just plea: and I must plainly tell you, that if you will deny me Oyer of that law, which you suggest I have broken, you do at once deny me an acknowledged right, and evidence to the whole world your resolution to sacrifice the privileges of Englishmen to your sinister and arbitrary designs.
“Rec. Take him away. My lord, if you take not some course with this pestilent fellow, to stop his mouth, we shall not be able to do any thing to night.
“Mayor. Take him away, take him away, turn him into the bale-dock.” The Trial of William Penn, 6 How. St. Tr. 951, 958-959.

The panel of judges who tried William Penn were sincere, law-and-order men of their day. Though Penn was acquitted by the jury, he was jailed by the court for his contemptuous conduct. Would we tolerate removal of a defendant from the courtroom during a trial because he was insisting on his constitutional rights, albeit vociferously, no matter how obnoxious his philosophy might have been to the bench that...tried him? Would we uphold contempt in that situation?

Problems of political indictments and of political judges raise profound questions going to the heart of the social compact. For that compact is two-sided: majorities undertake to press their grievances within limits of the Constitution and in accord with its procedures; minorities agree to abide by constitutional procedures in resisting those claims.

Does the answer to that problem involve defining the procedure for conducting political trials or does it involve the designing of constitutional methods for putting an end to them? This record is singularly inadequate to answer those questions. It will be time enough to resolve those weighty problems when a political trial reaches this Court for review.

Second are trials used by minorities to destroy the existing constitutional system and bring on repressive measures. Radicals on the left historically have used those tactics to incite the extreme right with the calculated design of fostering a regime of repression from which the radicals on the left hope to emerge as the ultimate victor. The left in that role is the provocateur. The Constitution was not designed as an instrument for that form of rough-and-tumble contest. The social compact has room for tolerance, patience, and restraint, but not for sabotage and violence. Trials involving that spectacle strike at the very heart of constitutional government.

I would not try to provide in this case the guidelines for those two strikingly different types of cases. The case presented here is the classical criminal case without any political or subversive overtones. It involves a defendant who was a sick person and who may or may not have been insane in the classical sense but who apparently had a diseased mind. And, as I have said, the record is so stale that it is now much too late to find out what the true facts really were.

       In a footnote the Court of Appeals also referred to the trial judge’s contempt power. This subject is discussed in Part II of this opinion. Infra, at 344-345.

       Rule 43 of the Federal Rules of Criminal Procedure provides that “[i]n prosecutions for offenses not punishable by death, the defendant’s voluntary absence after the trial has been commenced in his presence shall not prevent continuing the trial to and including the return of the verdict.”

       See Murray, The Power to Expel a Criminal Defendant From His Own Trial: A Comparative View, 36 U. Colo. L. Rev. 171-175 (1964); Goldin, Presence of the Defendant at Rendition of the Verdict in Felony Cases, 16 Col. L. Rev. 18-31 (1916).

       See n. 5, infra.

       From Spies v. People, 122 Ill. 1, 12 N. E. 865, involving the Haymarket riot; In re Debs, 158 U. S. 564, involving the Pullman strike; Mooney v. Holohan, 294 U. S. 103, involving the copper strikes of 1917; Commonwealth v. Sacco, 255 Mass. 369, 151 N. E. 839, 259 Mass. 128, 156 N. E. 57, 261 Mass. 12, 158 N. E. 167, involving the Red scare of the 20’s; to Dennis v. United States, 341 U. S. 494, involving an agreement to teach Marxism.
      As to the Haymarket riot resulting in the Spies case, see 2 J. Commons and Associates, History of Labour in the United States 386 et seq. (1918); W. Swindler, Court and Constitution in the Twentieth Century, cc. 3 and 4 (1969).
      As to the Pullman strike and the Debs case, see L. Pfeifer, This Honorable Court 215-216 (1965); A. Lindsey, The Pullman Strike, cc. XII and XIII (1942); Commons, supra, at 502-508.
      As to the Mooney case, see the January 18, 1922, issue of The New Republic; R. Frost, The Mooney Case (1968).
      As to the Sacco-Vanzetti case see Fraenkel, The Sacco-Vanzetti Case; F. Frankfurter, The Case of Sacco and Yanzetti (1927).
      As to the repression of teaching involved in the Dennis case, see 0. Kirchheimer, Political Justice 132-158 (1961).

       At Old Bailey, where the William Penn trial was held the baledock (or baildock) was “a small room taken from one of the corners of the court, and left open at the top; in which, during the trials, are put some of the malefactors.” Oxford Eng. Diet.

       As respects the strategy of German Communists vis-á-vis the Nazis in the 1930’s, see K. Heiden, Der Fuehrer 461, 462, 525, 551-552 (1944).

       In a 1950 pretrial sanity hearing, Allen was found tó be incompetent to stand trial. Approximately a year later, however, on October 19, 1957, in a second competency hearing, he was declared sane and competent to stand trial.
      Allen’s sister and brother testified in Allen’s behalf at the trial They recited instances of Alien’s unusual past behavior and stated that he was confined to a mental institution in 1953, although no reason for this latter confinement was given. A doctor called by the prosecution testified that he had examined Allen shortly after the commission of the crime which took place on August 12, 1956, and on other subsequent occasions, and that, in his opinion, Allen was sane at the time of each examination. This evidence was admitted on the question of Allen’s sanity at the time of the offense. The jury found him sane at that time and the Illinois Supreme Court affirmed that finding. See People v. Allen, 37 Ill. 2d 167, 226 N. E. 2d 1.
      At the time of Allen’s trial in 1957, the tests in Illinois for the defendant’s sanity at the time of the criminal act were the M'Naghten Rule supplemented by the so-called “irresistible impulse test.” People v. Carpenter, 11 Ill. 2d 60, 142 N. E. 2d 11. The tests for determining a defendant’s sanity at the time of trial were that “[h]e should be capable of understanding the nature and object of the proceedings against him, his own condition in reference to such proceedings, and have sufficient mind to conduct his defense in a rational and reasonable manner,” and, further, that “he should be capable of co-operating with his counsel to the end that any available defenses may be interposed.” People v. Burson, 11 Ill. 2d 360, 369, 143 N. E. 2d 239, 244-245.