Petition — Bullock v. United States

Supreme Court brief1976

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1975

RAY K. BULLOCK, Petitioner

UNITED STATES OF AMERICA, Respondent

Petition For A Writ Of Certiorari To The

United States Court Of Appeals

For The Fifth Circuit

RANDY SCHAFFER

RICHARD HAYNES

711 Fannin, Suite 610

Houston, Texas 77002

Attorneys for Petitioner

Alpha Law Briej Co., One Main Plaza, No. 1 Main St., Houston, Texas 77002

INDEX

Page

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DEE DudUGnk db bb nedadendde cebededéducnéeceecea 2

GIN DUNNE ccccccssveccsscccscccsccccccsecnce 2

Constitutional and Statutory Provisions ................. 2

EE «Wh OWewhoedeendensesénteccnricecccesececsces 3

Reasons for Granting the Writ ................eeeee0e: 5

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BE ©. 6 e666 dehe eee ddsiescecicncnccescoccccscees 21

BEE © hsddccccccccccccccsctecesecsocssccnncesss 42

PE Ue 60.88 66060 h ks ase sesddonescdecnsiceeseaes at

EE ia 6b d6 bb db he ded ss cccecenceeuesecesss 46

SEE UF ORS SU heheh hte dddeeadwodecensctccedsceces 53

EEE Wid eddbndedeewakedddd daeds Geeseeensseceds 62

CITATIONS

CASES Page

Aetna Ins. Co. v. Kennedy, 301 U.S. 389 (1937)......... 18

Barker v. Wingo, 407 U.S. 514 (1972) ..............45. 19

Carnley v. Cochran, 369 U.S. 506 (1962) ............... 18

Fong Foo v. United States, 369 U.S. 141 (1962)........ 5,9, 10, 13

Illinois v. Allen, 397 U.S. 337 (1970) ...............4... 19

Illinois v. Somerville, 410 U.S. 458 (1973) .............. 16, 17

Johnson v. Zerbst, 304 U.S. 458 (1938) ................ 18

Marchetti v. United States, 390 U.S. 39 (1968) ......... 18

McCarthy v. United States, 394 U.S. 459 (1969) ........ 18

Ohio Beil Tel. Co. v. Public Utilities Comm’n, 301 U.S. 292

STE Sccbendddsencecnecenssducdencadbucntesceoes 18

Serfass v. United States, 420 U.S. , 95 S.Ct. 1055, 43

PD GE CE Kecbaonsicbecacesdescéesecacas 6, 14, 15, 16

United States v. Jaramillo, 510 F.2d 808 (8th Cir. 1975).. 12

United States v. Jenkins, 420 U.S.__, 95 S.Ct. 1006, 43

Pe Ge GONE o6ensdevnscccncascsacesonas 8,9, 13, 14, 15

United States v. Jorn, 400 U.S. 470 (1971) ............. 10

United States v. Kehoe, 365 F.Supp. 920 (S.D. Tex. 1973) 1,4,7

CASES Page

United States v. Sanges, 144 U.S. 310 (1892) ........... 6

United States v. Sisson, 399 U.S. 267 (1970) ........ 5, 6, 7, 10, 13

United States v. Weinstein, 452 F.2d 704 (2d Cir. 1971),

cert. denied, 406 U.S. 917 (1972) ..............0055. 11,12

United States v. Weissman, 266 U.S. 377 (1924) ....... 9,10

United States v. Wilson, 420 U'S. , 95 S.Ct. 1013, 43

Re See GED eudeueucsaessdeabaeasanaes besos 14

CONSTITUTION AND STATUTES

Sh eee Ss Oe, ED bcc devas atedeenecascees 2,3,4,7, 11,17

Pee ees ES We, SOUNEED vbccckccsccoccckesusweane 3,11,17

i Cet eabbbeeditecokcesedkedecke caees 3,8, 16

TE ALE ALR 4

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I i a a 2

ee I cnnc cde cac ces ddensensedencsns 2

MISCELLANEOUS

Comment, 41 BROOKLYN L. REV. 1092 (1975)........ 12

IN THE

Supreme Court of the United States

OCTOBER TERM, 1975

RAY K. BULLOCK, Petitioner

UNITED STATES OF AMERICA, Respondent

Petition For A Writ Of Certiorari To The

United States Court Of Appeals

For The Fifth Circuit

Petitioner prays for a writ of certiorari to review the

judgment of the United States Court of Appeals for the

Fifth Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App. A., infra,

pp. 21-41) is not yet reported. The judgment and oral

findings of the district court (App. D, infra, pp. 46-

52) are not reported. An earlier opinion of another

district court in a prior proceeding related to this petition

is reported at 365 F.Supp. 920 (App. E, infra, pp. 53-

61).

JURISDICTION

The judgment of the court of appeals (App. B, infra,

pp. 42-43) was entered on July 16, 1975. A petition for

rehearing was denied on October 1, 1975 (App. C, infra,

pp. 44-45). The jurisdiction of this Court is invoked under

28 U.S.C. § 1254(1).

QUESTIONS PRESENTED

1. Whether the trial court, in granting an acquittal

under Federal Rule of Criminal Procedure 29, considered

evidence presented, and thereby went beyond the face

of the indictment in its ruling, so as to preclude an appeal

by the Government under 18 U.SC. § 3731.

, 2. Whether a defendant who is afforded an oppor-

tunity to obtain a determination of a legal defense prior

to trial, yet who allows himself to be placed in jeopardy

before raising the defense, thereby waives the protection

of the double jeopardy clause.

CONSTITUTIONAL AND STATUTORY

PROVISIONS

The Fifth Amendment to the Constitution of the United

States, which provides in pertinent part:

- . - Mor shall any person be subject for the same

offense to be twice pst in jeopardy of life or limb;

18 U.S.C. § 3731, which provides in pertinent part:

In a criminal case an appeal by the United States

shall lie to a court of appeals from a decision, judg-

ment, or order of a district court dismissing an in-

dictment or information as to any one or more

counts, except that no appeal shall lie where the

double jeopardy clause of the United States Consti-

tution prohibits further prosecution.

Fep. R. Crim. P. 12(b)(2):

Defenses and objections based on defects in the

institution of the prosecution or in the indictment

or information other than that it fails to show

jurisdiction in the court or to charge an offense may

be raised only by motion before trial. The motion

shall include all such defenses and objections then

available to the defendant. Failure to present any

such defense or objection as herein provided consti-

tutes 2 waiver thereof, but the court for cause shown

may grant relief from the waiver. Lack of jurisdiction

or the failure of the indictment or information to

charge an offense shall be noticed by the court

at any time during the pendency of the proceeding.

Fep. R. Crim. P. 29(a):

Motions for directed verdict are abolished and

motions for judgment of acquittal shall be used in

their place. The court on motion of a defendant or

of its own motion shall order the entry of judgment

of acquittal of one or more offenses charged in the

indictment or information after the evidence on

either side is closed if the evidence is insufficient

to sustain a conviction of such offense or offenses.

If a defendant’s motion for judgment of acquittal at

the close of the evidence offered by the government

is not granted, the defendant may offer evidence

without having reserved the right.

STATEMENT

Petitioner was indicted in 1973 under 18 U.S.C. § 657

for the offense of embezzling real property. The case

proceeded to trial on October 29, 1973, before the United

States District Court for the Southern District of Texas,

the Honorable Carl O. Bue, Jr., presiding.

After the jury was selected and sworn, petitioner was

arraigned and the Government presented its case-in-

chief, concluding on October 30, 1973. At this time,

petitioner moved for a judgment of acquittal under Rule

29 of the Federal Rules of Criminal Procedure on several

grounds, one being that the indictment failed to charge

an Offense. Petitioner argued that real property could

not be embezzled and that no case of embezzlement of

any property had been established by the Government’s

evidence. On November 1, 1973, the court granted the

motion for acquittal, agreeing with petitioner on both

points. The court filed an informal written opinion in

chambers on November 1, 1973 (App. F, infra, pp. 62-

63). The court filed a formal written opinion on Novem-

ber 8, 1973, and it is reported at 365 F.Supp. 920

(App. E, infra, pp. 53-61). Final judgment was entered

on January 16, 1974.

A second indictment was then obtained charging pe-

titioner with fraudulently receiving the benefits of a

federally insured savings association transaction in vio-

lation of 18 U.S.C. § 1006. This indictment related to the

identical criminal misconduct alleged in the prior indict-

ment, and the evidence to have been offered was also the

same. Petitioner moved to dismiss this second indictment

on the grounds that jeopardy had attached in the prior

proceeding. This motion was granted by the district

court (App. D, infra, pp. 46-52).

The Government appealed to the United States Court

of Appeals for the Fifth Circuit, and contended that the

judgment of acquittal in the first proceeding was in fact

a dismissal of the indictment for failure to charge an

offense. The Government argued that Judge Bue did

not reach the merits of the case, that there was no verdict

in favor of petitioner, and that jeopardy did not attach.

The court of appeals, over vigorous dissent, sustained the

position of the Government and reversed the decision of

the district court. The majority opinion held that peti-

tioner allowed himself to be placed in jeopardy for tactical

reasons, and as a result was not entitled to claim the

protection of the double jeopardy clause. (App. A, infra,

pp. 21-41).

Petitioner filed a petition for rehearing in the court of

appeals, and same was denied, also over dissent, on

October 1, 1975 (App. C, infra, pp. 44-45). The court of

appeals did grant a stay of the mandate pending applica-

tion to the Supreme Court for a writ of certiorari.

REASONS FOR GRANTING THE WRIT

This case involves important questions of criminal law.

The court below, in holding that Judge Bue did not con-

sider facts outside the indictment, and thus did not act-

ually acquit petitioner, has misinterpreted the written

opinion of Judge Bue, and attributed to him a result that

he did not intend. This result is contrary to the decisions

of this court in Fong Foo v. United States, 369 U.S. 141

(1962), United States v. Sisson, 399 U.S. 267 (1970),

and their progeny.

After the determination was made that Judge Bue did

not grant an acquittal, but instead granted, in effect, a

motion to dismiss the indictment, the court below then

held that petitioner had allowed himself to be placed

in jeopardy for tactical reasons and thereby waived pro-

tection of the double jeopardy clause. This presents

a decision on an important question of constitutional law

which has not been decided by this couri, but which was

expressly reserved in the recent decision of Serfass v.

United States, 420 U.S. ___ , 95 S.Ct. 1055, 43 L.Ed.2d

265 (1975). |

The Trial Court, in acquitting Petitioner, con-

sidered evidence presented outside the indictment, so

as to preclude an appeal by the Government.

ARGUMENT AND AUTHORITIES

The Government may appeal an adverse judgment in

a criminal case only when authorized by statute. United

States v. Sanges, 144 U.S. 310 (1892). 18 U.S.C. § 3731

provides that:

In a criminal case an appeal by the United States

shall lie to a court of appeals from a decision,

judgment, or order of a district court dismissing

an indictment or information . . . except that no

appeal shall lie where the double jeopardy clause

of the United States Constitution prohibits further

prosecution.

There is no question that if the ruling by Judge Bue

constituted an acquittal, further prosecution is barred

by the double jeopardy clause. Once a case has terminated

in favor of a defendant based upon factual conclusions

adduced at trial which go beyond the face of the indict-

ment, principles of double jeopardy control. As this court

noted in United States v. Sisson, 399 U.S. 267 (1970):

The court below clearly went beyond the ‘face of

the record’ in reaching its decision. As ncted earlier,

the opinion explicitly relies on the evidence adduced

at the trial, including demeanor evidence, for its

findings that Sisson was ‘sincere’ and that he was

‘as genuinely and profoundly governed by his con-

science’ as a religious conscientious objector.

399 U.S. at 283.

Judge Bue relied upon evidence adduced at trial in

determining to grant an acquittal under Fep. R. CRIM.

P. 29(a) at the close of the Government’s case-in-chief.

The critical language of the opinion rendered by Judge

Bue is as follows:

This court was aware of and concerned with the

fine distinctions being made when the motion for

judgment of acquittal was urged by the defendants

at the close of the Government’s case. Had the

evidence shown that the property was sold by and

for the benefit of Surety Savings with the defendants

in their fiduciary capacities diverting the considera-

tion of such sale for their own benefit, an indictment

alleging embezzlement might have been proper. How-

ever, the circumstances of this case, accepted as true

for purposes of this motion, showed that the alleged

consideration never was intended to flow to Surety

but only to the defendants. Although the defendants

ostensibly deprived Surety Savings of real estate

holdings, no funds, credits or securities belonging

to Surety were taken. While this distinction is a fine

one, it is one that is critical to the offense of ‘em-

bezzlement.’

(Emphasis added).

365 F.Supp. at 924.

Thus, the language of his opinion indicates that Judge

Bue found the Government had not introduced sufficient

evidence to sustain a conviction of embezzlement, since

embezzlement could not be of real property and the

Government failed to show that any personal property

had been taken in the transaction. Of course, even had

Judge Bue determined that funds, credits, securities or

other personal property were taken, a motion for judgment

of acquittal would have been granted due to the fatal

variance between the pleadings and proof.

The majority opinion below interpreted this language

as a hypothetical situation posited by Judge Bue in

which the defendants could properly have been indicted

under 18 U.S.C. § 657. Petitioner submits that Judge

Bue’s reference to “the circumstances of this case” indi-

cates that he did go beyond the four corners of the indict-

ment, and used facts developed in the trial in connection

with his decision. In United States v. Jenkins, 420 U.S.

—_., 95 S.Ct. 1006, 43 L.Ed.2d 250 (1975), this

court determined that the rule providing that jeopardy

attaches when a defendant is put to trial before the trier

of facts includes a case where an indictment is dismissed

by utilizing facts developed in that trial in connection

with the dismissal. This court noted in Jenkins that it was

unclear whether or not the judgment of the trial court

resolved factual issues against the Government. Yet, it

sufficed for double jeopardy purposes that further pro-

ceedings would be required on reversal and remand to

resolve facts, thus subjecting the defendant to the sub-

sequent risk of conviction. 420 U.S. at ___., 95 S.Ct.

at 1013, 43 L.Ed.2d at 259.

Even assuming that it is unclear whether Judge Bue

terminated the trial based solely upon legal as opposed

to factual conclusions, he still, as did the trial judge in

Jenkins, apparently relied at least in part upon the facts

as developed, and thereupon concluded the trial. Thus,

Jenkins controls the resolution of the double jeopardy

issue.

The majority opinion below reasoned that Judge Bue

made no conclusion on guilt or innocence, hence there

was no acquittal. Our jurisprudence teaches, however,

that even an “erroneous” acquittal, or one given for the

wrong reason, has as much dignity as a “correct” ac-

quittal. The power of a trial judge to acquit defendants

properly before him is absolute. For instance, in United

States v. Weissman, 266 U.S. 377 (1924), the jury

had been selected but the trial court found that the

indictment failed to charge an offense, so it granted an

acquittal. This court rejected the Government’s contention

that the judgment should be treated as one merely quash-

ing the indictment. This court held that there had been

a verdict of acquittal, whether right or wrong, and even

had the trial court erred in directing an acquittal rather

than quashing the indictment, it had the power to do so,

though the effect of same was to avoid appellate juris-

diction. More recently, in Fong Foo v. United States,

369 U.S. 141 (1962), this court addressed a situation

where, after three witnesses testified for the Government

in a jury trial and a fourth was on the stand, the trial

court directed a verdict of acquittal due to improper

conduct of the prosecutor and a lack of credibility of the

Government witnesses. The Supreme Court held that even

though the trial court had erroneously directed an

acquittal, the judgment could not be set aside, nor could

the defendant be retried for the same offense on the same

evidence. The trial court had jurisdiction over the person

and subject matter, and the trial did not terminate prior

to entry of the judgment of acquittal.

No conclusion was reached on the issue of guilt or

innocence in Weissman or Fong Foo, yet that did not

dilute the effect of the acquittal. The underlying principle

in those cases, which should be adopted here, is that if

the trial court exercises its power to grant an acquittal,

the inquiry should end fe: all time, and another court

should not substitute its opinion concerning what the trial

court intended to do. But for the judgment of acquittal

granted by Judge Bue, the jury may have returned a

verdict of acquittal. See United States v. Jorn 400 USS.

470, 484 (1971).

Congress simply did not contemplate review of verdicts

of acquittal, no matter how erroneous the legal theory

underlying the decision. United States v. Sisson, supra,

at 299. The Sisson court quoted Senator Knox, who said

of the bill that was to become the Criminal Appeals Act:

Mark this: It is not proposed to give the Government

any appeal under any circumstances when the de-

fendant is acquitted for any error whatever com-

mitted by the court.

* * * * * * &

The Government takes the risks of all the mistakes

of its prosecuting officers and of the trial judge in

the trial, and it is only proposed to give it an appeal

upon questions of law raised by the defendant to

defeat the trial.

The defendant gets the benefit of all errors in the

trial which are in his favor, and can challenge all

errors in the trial which are against him.

41 Cong. Rec. 2752.

(Emphasis added)

399 U.S. at 289.

Even should this court conclude that Judge Bue erred

in categorizing his ruling as an acquittal, or that he

erroneously acquitted petitioner, sound policy dictates

against overturning his judgment of acquittal. Had the

jury returned a verdict of acquittal, no one would sug-

gest that such a verdict could be impeached should the

jurors later admit that they acquitted for some reason

other than on the facts. In like manner, had Judge Bue

simply granted the motion for judgment of acquittal and

not stated any reason therefor, or not written an opinion,

no one would suggest that his mental processes could be

examined to determine his basis for granting the ac-

quittal. Yet, because Judge Bue wrote an opinion which

created some ambiguity on the question of the legal basis

for granting same, the Government now attempts to

undermine the effect of his ruling by subscribing to it

a result that he did not intend.

Judge Bue, in announcing his informal opinion in open

court, stated that he was fully aware of the thrust of Rule

29 as well as the significance of Rule 12(b)(2) of the

Federal Rules of Criminal Procedure, and that both had

been carefully considered in his decision to grant a judg-

ment of acquittal (App. F, infra, pp. 62-63). Judge Bue

said that he was acquitting petitioner pursuant to Feb. R.

Crim. P. 29(a). He obviously intended to do so, and it

would totally thwart and frustrate his intent to sustain

the contention of the Government that he merely dis-

missed the indictment without resorting to facts outside

the indictment, and in essence declared a mistrial.

The intent of a trial court in making a ruling, especially

in this situation, should not be disregarded. In United

States v. Weinstein, 452 F.2d 704 (2d Cir. 1971), cert.

denied, 406 U.S. 917 (1972), the defendant argued that

the trial court had granted the functional equivalent of

an acquittal, even though he did not expressly denominate

his ruling as such. The Second Circuit, in rejecting this

contention, noted:

[T]o characterize the judge’s order dismissing the

indictment as one of acquittal would be to attribute

to him a purpose he repeatedly and rightly dis-

claimed. . . . 452 F.2d at 713.

It would be a far cry . . . to hold that the order here

in question was a judgment of acquittal, which the

judge repeatedly said he did not intend to enter,

could not rightly have entered and, in all probability,

had lost the power to enter.

452 F.2d at 714.

The verdict of a jury will always be as unambiguous as it

is unexplicated. But, findings of a judge may manifest

ambiguity or incompleteness. A rule that would permit

an appeal in the case at bar ultimately could have the

effect of permitting an appeal in every judge-tried criminal

case where the trial court specifically applied an erroneous

rule of law in deciding to acquit. This would permit

potential retrials of court-acquitted defendants while

sparing jury-acquitted defendants from the same ordeal.

This would discourage the court trial of criminal cases,

and frustrate many goals of judicial economy. See United

States v. Jaramillo, 510 F.2d 808 (8th Cir. 1975);

Comment, 41 BROOKLYN L. REv. 1092, 1105-07 (1975).

Should the decision of the court of appeals be allowed

to stand, this will become the first reported case in which

a ruling expressly denominated as an acquittal by the trial

court, and entered prior to a jury verdict but after jeop-

ardy attached, was overturned on appeal. The majority

opinion below suggests that the characterization by the

trial judge of his own action cannot control the classifi-

cation of the action for purposes of appellate jurisdiction.

This rationale derives from the decision in Sisson, wherein

the entry by the trial court of an “arrest in judgment” was

subsequently determined to be an acquittal because it was

bottomed on factual conclusions not found in the indict-

ment, made on the basis of evidence adduced at trial.

However, it does not comport with principles of consti-

tutiozal law to hold that a ruling expressly denominated

as an acquittal, and entered after jeopardy attached but

prior to jury verdict, may be reclassified on appeal and

determined to be something other than an acquittal. Such

a result would clearly overrule Fong Foo and would be

constitutionally impermissible.

Petitioner submits that Judge Bue did grant a “true”

acquittal, bottomed in part upon factual conclusions be-

yond the indictment. Even should this court conclude

that he was incorrect in doing so, or that he erroneously

denominated his ruling as an acquittal, jeopardy has

attached and such a ruling should not be disturbed on

appeal. The trial, which could have resulted in conviction,

has long since terminated in favor of petitioner. To allow

the Government appeal and uphold the decision of the

court of appeals would thwart the main protection of

the double jeopardy clause, by allowing repeated attempts

to convict petitioner, subjecting him to embarrassment,

expense and ordeal, and compelling him to live in a

continuing state of anxiety and insecurity. United States

v. Jenkins, supra.

Petitioner did not waive the protection of the

Double Jeopardy clause by allowing himself to be

placed in jeopardy before raising a legal defense

capable of determination prior to trial.

ARGUMENT AND AUTHORITIES

The majority opinion below concludes that because

petitioner could have challenged the indictment prior to

trial, his delay in waiting until the close of the Govern-

ment’s case-in-chief to do so constituted a waiver of his

constitutional right to be free from being placed twice in

jeopardy for the same offense. This conclusion is un-

sound, both under the reasoning of the recent Supreme

Court trilogy of cases concerning double jeopardy and

under traditional concepts of waiver of constitutional

rights.

The important consideration, for jeopardy purposes,

of United States v. Wilson, 420 U.S. ____ , 95 S.Ct. 1013,

43 L.Ed.2d 232 (1975), United States v. Jenkins, supra,

and Serfass v. United States, 420 US. , 9S SAX.

1055, 43 L.Ed.2d 265 (1975), is whether a remand to

the trial court would require further proceedings to resolve

factual issues going to elements of the offense charged.

In Wilson, reversal on appeal would result only in re-

instatement of the jury verdict of guilty, and would not

require another trial, so there was no double jeopardy

bar. In Jenkins, however, the trial court judgment dis-

charged the defendant, although it was unclear whether

or not the factual issues were resolved against the Gov-

ernment. Thus, a reversal on appeal would entail further

proceedings devoted to resolution of factual issues going

to elements of the offense charged. The double jeopardy

clause operated as a bar to the Government appeal.

The majority opinion below, to avoid application of

Jenkins to the case at bar, interpreted Jenkins to be lim-

ited to its facts, based upon the reservation of a hypotheti-

cal question by this court in Serfass. Serfass merely held

that the double jeopardy clause did not bar a Government

appeal from a pre-trial order dismissing an indictment,

since the defendant had not been put to trial before the

trier of facts. Serfass had not waived a jury trial, so

the court had no power to determine his guilt or inno-

cence. The result derived simply from the operative fact

that jeopardy had never attached. The word “acquittal”

has no significance unless jeopardy has once attached

and an accused has been subjected to the risk of convic-

tion. 420 U.S. at ___, 95 S.Ct. at 1064, 43 L.Ed.2d

at 276. Serfass is readily distinguishable from the instant

case, where petitioner moved for judgment of acquittal

after jeopardy attached, asking in effect that the trial

court become the trier of fact, take the case away from

the jury, and g.ant an acquittal.

The court in Serfass specified that it expressed no

opinion on the question of whether a similar ruling by

the trial court after jeopardy had attached would have

been appealable. Nor did the court express an opinion

concerning the case of a defendant who was afforded an

opportunity to obtain a determination of a legal defense

prior to trial and nevertheless knowingly allowed himself

to be placed in jeopardy before raising the defense. The

majority opinion below assumes that the reservation of

these questions means Jenkins does not apply, or else this

court would have so stated. Petitioner submits that this

view misconstrues the reserved questions in Serfass.

Clearly it would have been unnecessary dicta for this

court to decide questions in Serfass that were not properly

before the court or necessary to the decision. This court

simply did not reach the issue of whether delay could

operate as a bar to the jeopardy defense.

The majority opinion below concludes “hat petitioner

used the trial tactic of deliberate delay to cause jeopardy

to attach. This perhaps goes too far. It was far from

clear, as noted by Judge Bue in his informal opinion,

whether or not real property could be the subject of

embezzlement under 18 U.S.C. § 657. Judge Bue asserted

that the legal area in question was considerably difficult,

and that he made an intensive search of annotations,

legislative history, and even a call to the Library of Con-

gress prior to arriving at his decision, and even then he

could find no applicable federal authority (App. F, infra,

pp. 62-63). Furthermore, because the legal footing on

the issue of the interpretation of 18 U.S.C. § 657 was

unsure, defense counsel chose to view the Government’s

evidence prior to raising the question concerning the

indictment, because of a belief that the Government would

not be able to prove that petitioner embezzled any

property.

Reliance on Illinois v. Somerville, 410 U.S. 458

(1973) to support the position of the Government is

misplaced. In Somerville, the trial court declared a mis-

trial after the jury was empanelled and sworn, but prior

to any testimony, because the indictment had an incur-

able jurisdictional defect. Using an_ interest-balancing

approach, this court held that where a mistrial implements

a reasonable state policy and aborts a proceeding that at

best would have produced a verdict that could have been

upset at will by one of the parties, the defendant's in-

terest in proceeding to verdict is outweighed by the com-

peting and equally legitimate demand for public justice.

410 U.S. at 471. The court of appeals applied Somerville

on the theory that the effect of the ruling by Judge Bue

was to declare a mistrial, dismiss the indictment, and

bring about a new prosecution. Somerville, however, can

clearly be distinguished from the case at bar. The trial

court in Somerville heard no evidence, so he could not

have based his ruling on any facts beyond the face of

the indictment. Judge Bue, however, did have the benefit,

in making his ruling, of having heard the entire case-in-

chief of the Government. Furthermore, the trial court in

Somerville did not intend to grant an acquittal or prevent

further prosecution of the defendant. Judge Bue, as pre-

viously discussed, obviously did have such an intent.

When petitioner filed his motion for judgment of ac-

quittal, numerous grounds were urged in support thereof.

One of those grounds concerned the question of whether

the indictment charged an offense. At this point, the

sufficiency of the evidence was drawn into issue with

respect to the validity of the indictment. Had Judge Bue

felt that petitioner was dilatory in raising this issue, he

could have applied that portion of Fep. R. Crim. P. 12(b)

(2) which states that such an objection to the indictment

is waived if not raised prior to trial, although the court

may grant relief from the waiver (Emphasis added).

Judge Bue did not apply the waiver doctrine, however,

and in fact based his ruling specifically on Fep. R. CRIM.

P. 29(a).

Rule 12(b)(2) states that the failure of an indictment

to charge an offense shall be noticed by the court at any

time during the pendency of the proceeding. Assuming

arguendo that Judge Bue did not grant a “true” acquittal,

the final issue to be resolved is whether petitioner, by

moving for judgment of acquittal at the close of the

Government’s case-in-chief, has waived by implication

his constitutional right to be free from being placed twice

in jeopardy for the same offense.

The fifth amendment guarantee against double jeopardy

is without question a valuable, fundamental constitutional

right. A waiver of a constitutional right must be viewed

cautiously. The Supreme Court has defined waiver as

“an intentional relinquishment of a known right or privi-

lege.” Johnson v. Zerbst, 304 U.S. 458 (1938). Courts

should “indulge every reasonable presumption against

waiver,” Aetna Ins. Co. v. Kennedy, 301 U.S. 389

(1937), and should “not presume acquiescence in the

loss of fundamental rights.” Ohio Bell Tel. Co. v. Public

Utilities Comm'n, 301 U.S. 292 (1937). Presuming

waiver from a silent record is impermissible. For instance,

with regard to the right to counsel, “the record must show,

or there must be an allegation and evidence which show

that an accused was offered counsel but intelligently and

understandingly rejected the offer. Anything less is not

waiver.” Carnley v. Cochran, 369 U.S. 506 (1962). This

court has cautioned against giving credence to implied

or uninformed waivers without a “most deliberate exami-

nation of the circumstances surrounding them.” Marchetti

v. United States, 390 U.S. 39 (1968).

Thus, in considering the voluntariness of a guilty plea,

this court held that if the plea is not voluntary and

knowing, it has been obtained in violation of due process

and is void, and it cannot be truly voluntary unless the

defendant possesses an understanding of the law in re-

lation to the facts. McCarthy v. United States, 394 U.S.

ala

459 (1969). In like manner, a defendant can waive his

right to be present at trial only after he has been warned

by the judge that he will be removed if he continues his

disruptive behavior, and he disregards the ruling of the

court. Illinois v. Allen, 397 U.S. 337 (1970). And,

waiver of the right to a speedy trial will not be implied

because a defendant fails to demand one. Barker v.

Wingo, 407 U.S. 514 (1972).

In the case at bar, petitioner did not intentionally or

voluntarily waive his right to claim the protections of

double jeopardy. At the close of the Government's case,

defense counsel simply moved for a judgment of acquittal,

on numerous grounds. The court granted same. Nothing

was said about a waiver of a constitutional right, and it

is difficult to see how moving for an acquittal could ex-

pressly or impliedly constitute the intentional relinquish-

ment of a known right.

CONCLUSION

For the reasons stated it is respectfully submitted that

the petition for a writ of certiorari shouJd be granted.

kit,

DY HAFFER

RICHARD HAYNES

Attorneys for Petitioner

October 1975

APPENDICES

Opinion of Court of Appeals

Judgment of Court of Appeals

Order of Court of Appeals denying Pe-

tition for Rehearing

Judgment, Findings of Fact and Con-

clusions of Law of Judge Seals

Opinion of Judge Bue

Informal Opinion of Judge Bue

APPENDIX A

UNITED STATES OF AMERICA,

Plaintiff-A ppellant,

Vv.

Cornelius J. KEHOE and Ray K. Bullock,

Defendants-A ppellees.

NO. 74-2353.

UNITED STATES COURT OF APPEALS,

FIFTH CIRCUIT

July 16, 1975.

Defendants were charged with embezzling certain land

from a savings association in violation of federal statutes.

After the government had presented its case-in-chief, a

motion for “judgment for acquittal” on the ground that

the indictment failed to charge an offense against the

United States in that real property could not be the subject

of an embezzlement was granted by judgment expressly

denominated an acquittal rather than a dismissal of in-

dictment. Defendants were thereafter indicted for the

same transaction, but for violation of a federal statute

making it illegal to make faise entries in the records of, or

mishandling of property of, certain enumerated federal

credit institutions, with intent to defraud the United

States. A double jeopardy contention was sustained by

the United States District Court for the Southern District

of Texas at Houston, Woodrow B. Seals, Jr., and the

United States appealed. The Court of Appeals, Thorn-

berry, Circuit Judge, held that a defendant who for

reasons of trial tactics delays until mid-trial a challenge

to indictment that could have been made before trial, and

before jeopardy has attached, is nei entitled to claim pro-

tection of the double jeopardy clause when his objections

to indictment are sustained.

Appeal from the United States District Court for the

Southern District of Texas.

Before BELL, THORNBERRY and GEE, Circuit

Judges.

THORNBERRY, Circuit Judge:

Presented for decision in this § 3731 appeal is a

question expressly left open by the Supreme Court in

its recent double jeopardy trilogy. In Serfass v. United

States, 1975, ___. U.S. ___., 95 S.Ct. 1055, 43 L.Ed.2d

265, the Court declined to “intimate any view concerning

the case put by the Solicitor General, of ‘a defendant who

is afforded an opportunity to obtain a determination of a

legal defense prior to the trial and nevertheless knowingly

allows himself to be placed in jeopardy before raising the

defense.” ___. U.S. at ___, 95 S.Ct. at 1065, 43 L.

Ed.2d at 277. In this case we conclude, first, that Kehoe

and Bullock allowed themselves to be placed in jeopardy

for tactical reasons, and second, that because of their

decision they are not entitled to claim the protection of

the double jeopardy clause. Accordingly, we assume

jurisdiction of the appeal and reverse the judgment of

the district court.

On January 18, 1973 the grand jury named appellees

in an eleven-count indictment charging a number of per-

sons with participation in an alleged loan kickback

scheme. On May 14, 1973 a superseding eleven-count

indictment was handed down by the grand jury. This

indictment, as well as the one that it superseded, alleged

violations of 18 U.S.C. § 1006° Also on May 14, how-

ever, Kehoe and Bullock alone were charged in a single

count indictment with embezzling certain land from a

Savings association in violation of 18 U.S.C. § 657.°

Appellees pleaded not guilty to the euibezzlement charge,

and on October 29, i973 a jury was empanelled and trial

began. After the government had presented its case-in-

chief, appellees moved for a “judgment of acquittal” on

1. Section 1006 renders illegal the making of false entries in the

records of, or the mishandling of the property of, certain enumerat-

ed federal credit institutions, with the intent to defraud the United

States.

2. Section 657 provides:

Whoever, being an officer, agent or employee of or con-

nected in any capacity with the Reconstruction Finance Cor-

poration, Federal Deposit Insurance Corporation, National Credit

Union Administration, Home Owners’ Loan Corporation, Farm

Credit Administration, Department of Housing and Urban De-

velopment, Federal Crop Insurance Corporation, Farmers’ Home

Corporation, the Secretary of Agriculture acting through the

Farmers’ Home Administration, or any land bank, intermediate

credit bank, bank for cooperatives or any lending, mortgage,

insurance, credit or savings and loan corporation or association

authorized or acting under the laws of the United States or any

institution the accounts of which are insured by the Federal

Savings and Loan Insurance Corporation or by the Adminis-

trator of the National Credit Union Administration, or any

small business investment company, and whoever, being a re-

ceiver of any such institution, or agent or employee of the re-

ceiver, embezzles, abstracts, purloins or wilfully misapplies any

moneys, funds, credits, securities or other things of value be-

longing to such institution, or pledged or otherwise intrusted

to its care, shall be fined not more than $5,000 or imprisoned

not more than five years, or both; but if the amount or value

embezzled, abstracted, purloined or misapplied does not ex-

ceed $100, he shall be fined not more than $1,000 or imprisoned

not more than one year, or both.

the ground, inter alia, that the indictment failed “to charge

an offense against the laws of the United States of

America since real property cannot be the subject of an

embezzlement under the provisions of Title 18, United

States Code, Section 657.” In a memorandum opinion

reviewing the permissible reach of § 657, Judge Bue

announced his decision to grant appellees’ motion “on the

grounds that the indictment failed to state an offense

against the United States of America.” * Shortly there-

after the government procured a new indictment against

appellees for the same transaction made the subject of

the previous indictment; this time, however, the grand

jury charged Kehoe and Bullock with a violation of 18

U.S.C. § 1006. Appellees promptly moved to dismiss this

indictment, arguing, inter alia, that Judge Bue had

acquitted tiicm in the earlier trial and that a second trial

arising out of the same transaction would put them twice

in jeopardy. After a hearing, Judge Seals sustained the

double jeopardy contention and dismissed the second

indictment. The United States now seeks to appeal that

ruling.

[1] The government may appeal an adverse judgment

in a criminal case only when authorized by statute. United

States v. Sanges, 1892, 144 U.S. 310, 12 S.Ct. 609, 36

L.Ed. 445. 18 U.S.C. § 3731 provides that:

In a criminal case an appeal by the United States

shall lie to a court of appeals from a decision, judg-

ment, or order of a district court dismissing an in-

dictment or information . . . except that no appeal

shall lie where the double jeopardy clause of the

United States Constitution prohibits further prose-

cution.

3. The correctness of this ruling is not before us.

Here Judge Seals dismissed the second indictment because

he felt that after Judge Bue’s ruling on the first indict-

ment, the double jeopardy clause barred further prosecu-

tion. Hence, our resolution of the double jeopardy issue

will control not only the jurisdictional question but the

merits as well.* With that in mind, we proceed to the

main issue on appeal: Does the double jeopardy clause

bar the government from further prosecuting Kehoe and

Bullock?

If.

[2] Judge Bue expressly denominated his judgment an

acquittal, rather than a dismissal of the indictment. Never-

theless, although “[i]t is, of course, settled that ‘a verdict

of acquittal ... is a bar to a subsequent prosecution

for the same offense.’ . . . . [t]he word [acquittal] . . . has

no talismanic qualities for purposes of the Double Jeop-

ardy Clause.” Serfass v. United States, supra, USS.

__., 95 S.Ct. at 1064, 43 L.Ed.2d at 276. In short, as

the Supreme Court noted in a related context, “the trial

judge’s characterization of his own action cannot control

the classification of the action for purposes of our appel-

late jurisdiction.” United States v. Jorn, 1971, 400 U‘S.

470, 478 n.7, 91 S.Ct. 547, 553 n.7, 27 L.Ed.2d 543,

552 n.7. It follows that we must examine Judge Bue’s

4. The case is in its present posture because the government,

rather than appealing Judge Bue’s ruling, chose to reindict ap-

pellees under a different statute. Hence, the constitutional double

jeopardy question that we would have addressed as a jurisdictional

matter had Judge Bue’s order been appealed was instead presented

to Judge Seals as an argument on the merits for dismissing the se-

cond indictment. Nevertheless, even Judge Seals’ judgment would

not be appealable if “the double jeopardy clause of the United

States Constitution prohibits further prosecution” of Kehoe and

Bullock. Hence, in this situation the merits and the jurisdictional

question merge.

ruling and properly characterize it for purposes of the

double jeopardy clause.

[3] Kehoe and Bullock were of course not acquitted

on the general issue by the jury. The primary factfinder

made no determination of their guilt or innocence. In

certain circumstances, however, the trial judge even in a

jury trial may find facts in a manner that will, by a doc-

trine similar to collateral estoppel, act as an acquittal.°

Thus, if Judge Bue based his ruling upon facts that

went to the general issue of the case, Kehoe and Bullock

were in substance, as well as in name, acquitted. The

constitutional rule against further prosecution after an

acquittal would then come into play to prevent us from

assuming jurisdiction.°

A reading of Judge Bue’s opinion reveals that except

perhaps for one brief passage he was clearly discussing

only the legal sufficiency of the indictment and not the

facts of the case before him. Hence, appellees’ argument

5. United States v. Sisson, 399 U.S. 267, 90 S.Ct. 2117, 26 L.

Ed.2d 608; United States v. Jorn, supra, 400 U.S. at 478 n.7, 91

S.Ct. at 553 n.7, 27 L.Ed.2d at 552 n.7. See also Note, Govern-

ment Appeals of “Dismissals” in Criminal Cases, 87 Harv.L.Rev.

1822 (1974).

Although the Supreme Court in United States v. Wilson,

US. , 95 S.Ct. 1013, 43 L.Ed.2d 232 read Sisson as a statutory

rather than a constitutional decision for purposes of reviewability

on appeal, Wison noted and apparently approved Sisson’s suggestion

(399 U.S. at 290 & n.18, 90 S.Ct. at 2129 & n.18, 26 L.Ed.2d at

624 & n.18) that the trial judge’s ruling in that case posed a con-

stitutional bar to further trial proceedings against Sisson.

USS. at , 95 S.Ct. at 1025-26, 43 L.Ed.2d at 246.

6. This case is not like Sisson or Wilson; reversal on appeal

would mean that appellees’ second trial could go forward. Thus, if

Judge Bue’s judgment was an acquittal, the double jeopardy clause

would prohibit further proceedings against Kehoe and Bullock, see

note 5 supra, and we would be required to dismiss the appeal.

on this point turns entirely on one ambiguous statement,

quoted below:

This Court was aware of and concerned with the

fine distinctions being made when the motion for

judgment of acquittal was urged by defendants at

the close of the Government’s case. Had the evidence

shown that the property was sold by and for the

benefit of Surety Savings with the defendants in

their fiduciary capacities diverting the consideration

of such sale for their own benefit, an indictment

alleging embezzlement might have been proper.

However, the circumstances of this case, accepted

as true for purposes of this motion, showed that the

alleged consideration never was intended to flow

to Surety but only to the defendants. Although the

defendants ostensibly deprived Surety Savings of

real estate holdings, no funds, credits or securities

belonging to Surety were taken. While this distinc-

tion is a fine one, it is one that is critical to the

offense of embezzlement.

App. at 265. Appellees apparently contend that Judge

Bue found that, if other evidence had been introduced,

the prosecution could have obtained a conviction under

the indictment as it then stood, despite the fact that it

alleged embezzlement of real property. The government

argues, on the other hand, that this passage was simply

a hypothetical situation posited by the trial judge in which

the defendants could properly have been indicted under

18 U.S.C. § 657. We think that the government is es-

sentially correct.

[4] First, it is doubtful whether the judge intended to

make findings of fact; he clearly states that certain facts

will simply be “accepted as true for purposes of this mo-

tion.” Second, Judge Bue concluded only that “an indict-

ment alleging embezzlement might have been proper,”

and not that an indictment alleging embezzlement of

land might be permissible. Therefore, even if he did

intend in this passage to make formal findings, the re-

sulting comments were not necessary to the stated ground

for granting appellees’ motion—i.e., that the indictment in

question failed to state an offense—and thus do not con-

stitute findings of fact binding on this court. Compare

United States v. Esposito, 7 Cir. 1974, 492 F.2d 6, 9,

cert. denied 414 U.S. 1135, 94 S.Ct. 879, 38 L.Ed.2d

760 (1974),’ with United States v. Sorenson, 7 Cir. 1974,

504 F.2d 406; United States v. Jaramillo, 8 Cir. 1975,

510 F.2d 808. In these circumstances Judge Bue’s ruling

can only be characterized as purely legal—and hence

not an acquittal. There was no conclusion on innocence

or guilt. Consequently, since the rule forbidding further

proceedings after an acquittal is inapplicable here, we

must now consider whether the double jeopardy clause

prohibits further prosecution of defendants who procure

the mid-trial dismissal of the indictment on the ground

that it fails to state an offense.

Ii.

The recent Supreme Court double jeopardy triology

does not supply a direct answer. In United States v. Wil-

7. “[I]t is clear from the order that the court concluded that

the fatal defect in the prosecution lay in the indictment’s

failure to state and the statute’s failure to require a nexus with

interstate commerce which would justify federal regulation. The

fact that the prosecution failed to prove such a connection,

though alluded to in the order, was of no significance to the

actual basis for the decision. The order was neither based upon

nor limited in application to the facts of the case. Appeal,

therefore, is not barred by the double jeopardy clause of the

fifth amendment” (emphasis added).

son, 1975, _.__. U.S. ___., 95 S.Ct. 1013, 43 L.Ed.2d

232, the trial judge dismissed the indictment on speedy

trial grounds after a jury had found Wilson guilty of

converting union funds to his own use. Relying on

United States v. Sisson, supra, the Court of Appeals

rebuffed the government’s attempt to appeal that ruling.

The Supreme Court reversed. Justice Marshall carefully

reviewed the legislative history of the new § 3731 and

concluded that “Congress was determined to avoid cre-

ating nonconstitutional bars to the Government’s right

to appeal.” ____ U.S. at _____ , 95 S.Ct. at 1019, 43 L.Ed.

2d at 239. Proceeding then to an examination of the scope

of the double jeopardy clause, the Court isolated “the

prohibition against multiple trials as the controlling con-

stitutional principle.” ____ U.S. at _____ , 95 S.Ct. at 1023,

43 L.Ed.2d at 243. Since in the case before it reversal

on appeal would result only in reinstatement of the jury

verdict and not in a new trial, the court concluded that

the double jeopardy clause would not be offended by per-

Mitting the appeal.

[5] In United States v. Jenkins, 1975, _.__ U.S. ___.,

95 S.Ct. 1006, 43 L.Ed.2d 250, the defendant was in-

dicted for xnowingly refusing to submit to induction into

the armed forces. After a bench trial the court “dismissed

the indictment” because the Board had—erroneously

under then-existing law—refused to entertain Jenkins’

“late-ripening” claim to conscientious objector status. The

government sought to appeal this ruling, claiming that

the district judge erred in refusing to give retroactive

effect to a Supreme Court decision that legitimated the

Board’s refusal but which was handed down after Jenkins

declined induction. The Court of Appeals dismissed for

lack of jurisdiction, and the Supreme Court affirmed.

The Second Circuit had characterized the district court’s

judgment as an acquittal. The Supreme Court was less

sure, and noted the difficulty in bench trials of determining

whether a judgment discharging the defendant rested

upon factual or legal grounds. Nevertheless, the Court

was reasonably certain that the trial judge had not found

all factual issues against the defendant. Thus, the case

before them was not, like Wilson, where reversal and

remand would lead only to reinstatement of a guilty

verdict. In deciding that the double jeopardy clause would

forbid further proceedings against Jenkins the Court

articulated this standard:

Here there was a judgment discharging the defend-

ant, although we cannot say with assurance whether

it was, Or was not, a resolution of the factual issues

against the Government. But it is enough for pur-

poses of the Double Jeopardy Clause, and therefore

for the determination of appealability under 18

U.S.C. § 3731, that further proceedings of some

sort, devoted to the resolution of factual issues going

to the elements of the offense charged, would have

been required upon reversal and remand.

___. U.S. at ___. , 95 S.Ct. at 1013, 43 L.Ed.2d at 259.

At first glance the broad rule stated here would appear to

require dismissal of the present appeal. We have before

us a judgment discharging the defendants, and if it is

reversed, further proceedings devoted to resolution of

factual issues going to the elements of the offense charged

will be necessary." Nonetheless, the final case of the double

8. For purposes of the double jeopardy clause it is of no signi-

ficance that appellees were originally indicted under 18 U.S.C. § 657

and are now under indictment for violation of 18 U.S.C. § 1006.

Both indictments arise out of the same factual setting; all that has

changed is the prosecution’s legal theory.

jeopardy trilogy strongly implies that the Jenkins standard

is not as sweeping as it first appears.

In Serfass v. United States, supra, the district court,

granted the defendant's pre-trial motion to dismiss the in-

dictment on the legal ground that the Selective Service

Board had erred in its handling of Serfass’s claim to

conscientious objector status. The Court of Appeals de-

cided that the government could appeal this order and

reversed on the merits. The Supreme Court affirmed,

holding that since Serfass had never waived his right to

@ jury trial, the district judge had made his ruling before

Serfass had been placed in jeopardy and hence the double

jeopardy clause had no application. Most significant for

present purposes, however, the Court reserved two ques-

tions not necessary to decision of the case before it: (1)

“whether a similar ruling [to the one actually made in

Serfass| by the district court after jeopardy had attached

would have been appealable,” (emphasis added), and

(2) whether appeal would be barred from a mid-trial

ruling discharging the defendant on a legal ground that

could have been raised by the defendant before trial.

__._ U.S. at ____ , 95 S.Ct. at 1065, 43 L.Ed.2d at 277-

78. The implication that these might be open issues is

important, because both hypothetical cases seem to fall

directly within the Jenkins rule. If a legal bar to further

proceedings is raised by the defendant after jeopardy

has attached, a judgment sustaining the objection would

result in the defendant’s discharge, and upon reversal

and remand new factual inquiries would perforce be

made. Yet the Supreme Court treated the Serfass hypo-

theticals as controversies for another day and not as

cases clearly controlled by Jenkins. Consequently, it seems

likely that the Court intended Jenkins to be limited to its

facts: a bench trial terminated by a ruling that—since

it may have been one in fact—must be treated as an

acquittal for purposes of the double jeopardy clause.”

Thus, none of the recent Supreme Court cases controls

here.

[6-8] Accordingly, we must make an independent

analysis of whether the double jeopardy clause prohibits

further proceedings against appellees. Double jeopardy

considerations first come into play when jeopardy at-

taches; in a jury trial attachment occurs when the jury

is empanelled and sworn. Serfass v. United States, supra,

____ US. at ____ , 95 S.Ct. at 1062, 43 L.Ed.2d at 274.

In this jury case jeopardy had clearly attached: the trial

judge ruled on the indictment at the close of the govern-

ment’s case-in-chief. Nevertheless, “the conclusion that

jeopardy has attached begins, rather than ends, the in-

quiry as to whether the Double Jeopardy Clause bars

retrial.” Illinois v. Somerville, 1973, 410 U.S. 458, 467,

93 S.Ct. 1066, 1072, 35 L.Ed.2d 425, 433, quoted in

Serfass v. United States, supra. See also United States v.

Sisson, supra, 399 U.S. at 303, 90 S.Ct. at 2137, 26

L.Ed.2d at 631; United States v. Pecora, 3 Cir. 1973,

484 F.2d 1289, 1294 n.7; Note, supra note 5, at 1836.

Of course, once jeopardy has attached, a judgment that

either is or may be, an “acquittal on the merits” bars

further proceedings. The Supreme Court has already

weighed the various considerations raised in this context

and come down on the side of the defendant. United States

v. Wilson, supra, __. U.S. at ___. , 95 S.Ct. at 1026,

43 L.Ed.2d at 246. We have determined, however, that

Judge Bue’s ruling in this case was not an acquittal. What

we must decide, then, is whether a judgment discharging

9. But see United States v. Means, 8 Cir. 1975, 513 F.2d 1329.

the defendant after jeopardy has attached on the ground

that the indictment is incurably defective poses the same

constitutional obstacle to a second trial that is supplied

by an actual or an apparent acquittal.

[9] The Supreme Court case most nearly resembling

this one is Illinois v. Somerville, supra. In Somerville

the trial judge had declared a mistrial when the prosecu-

tion discovered, after the jury had been empanelled and

sworn but before any testimony had been taken, that the

indictment contained an incurable jurisdictional defect.

Distinguishing, inter alia, an earlier defective indictment

case’® on the basis that there the first trial had resulted

in a verdict of acquittal by the jury, the Court held that

“where the declaration of a mistrial implements a reason-

able state policy and aborts a proceeding that at best

would have produced a verdict that could have been upset

at will by one of the parties, the defendant’s interest in

proceeding to verdict is outweighed by the competing

and equally legitimate demand for public justice.” 410

U.S. at 471, 93 S.Ct. at 1074, 35 L.Ed.2d at 435. Despite

the different terminology used to abort the first trial in

Somerville and the first trial here, the effect was the

same—-the dismissal of the indictment and the bringing

of a new prosecution—and we believe that the interest-

balancing approach employed in that case is also ap-

propriate in this one.’ See United States v. Mayes, 6 Cir.

10. United States v. Ball, 1896, 163 U.S. 662, 16 S.Ct. 1192,

41 L.Ed. 300.

11. In United States v. Jenkins, supra, the Supreme Court ex-

pressly disapproved the reasoning of the dissenting judge in the

Court of Appeals, who argued that Sommerville-type balancing is

appropriate even in cases where the defendant has been acquitted:

“We disagree with this analysis because we think it is of critical

importance whether the proceedings in the trial court terminate in a

1975, 512 F.2d 637, 651-52; Comments, Double Jeop-

ardy and Government Appeals of Criminal Dismissals,

52 Texas L.Rev. 303, 342 & n. 180; cf. Note, supra note

5, at 1838—40.

[10-13] Two factors make this case stronger for the

defendants that Somerville. First, Kehoe and Bullock sat

through a full day of trial, at which the prosecution pre-

sented its evidence against them. Second, the trial judge

termed his decision an acquittal, rather than a mistrial,

and the defendants could reasonably have believed that

the government was barred from proceeding further a-

gainst them; the possible psychological shock of being re-

indicted is not immaterial to traditional double jeopardy

considerations. What we think controlling for double

jeopardy purposes, however, is the manner in which

this case is Jess strong for the defendants than Somerville.

In the latter case the defendant objected strenuously to

the termination of the first trial. Here, on the other hand,

the defendants themselves challenged the indictment, but

only after the jury had been sworn and the government

had presented its case-in-chief. At oral argument counsel

for appellees stated that he waited to make his “motion

for acquittal” because he wanted an opportunity to view

the government’s evidence. We believe that a defendant

who for reasons of trial tactics delays until mid-trial a

challenge to the indictment that could have been made be-

fore the trial—and before jeopardy has attached—is not

entitled to claim the protection of the double jeopardy

mistrial as they did in the Somerville line of cases, or in the de-

fendant’s favor, as they did here.” US. at n.7, 95 S.Ct.

at 1010 n.7, 43 L.Ed.2d at 256 n.7. Read in context, it seems plain

that this language refers only to cases where the defendant was, or

may have been, acquitted on the merits. We have already decided

that ours is not such a case.

clause when his objections to the indictment are sus-

tained.’* Cf. United States v. Serfass, supra, ___USS.

at ___., 95 S.Ct. at 1065, 43 L.Ed.2d at 277-78; United

States v. Jenkins, 2 Cir. 1973, 490 F.2d 868, 880. The

Senate Report on the bill to amend old § 3731 reveals

that Congress believed that the double jeopardy clause

would not bar further proceedings in this type of case.

S.Rep. No. 91-1296, 91st Cong., 2d Sess., 7, 8-12 (1970).

See also United States v. Wilson, supra. In fact, the old

statute’s failure to permit a government appeal in cases

like this one appears prominently in the Report as a

reason for amendment. Under the flexible, interest-bal-

ancing approach of Illinois v. Somerville we think that

the double jeopardy clause does not forbid further pro-

ceedings against appellees; the new § 3731 thus achieves

one of the intended purposes. Accordingly, the judgment

of the district court is reversed and the case is remanded

for proceedings consistent with this opinion.**

Reversed and remanded.

12. Fed.R.Crim.P. 12(b)(2) is not violated by this holding.

That rule states, in pertinent part: “Lack of jurisdiction or the

failure of the indictment or information to charge an offense shall

be noticed by the court at any time during the pendency of the

proceeding.” Although the rule removes the threat of procedural

waiver with regard to jurisdictional defenses, it does not purport

to prohibit courts from attaching other unfavorable consequences to

the decision to withhold a motion until the middle of the trial.

13. There is no merit in appellees’ additional contention that

the pattern of government behavior toward them constitutes bad

faith harassment in violation of the due process clause. See United

States v. McGough, 5 Cir. 1975, 510 F.2d 598, 603-05.

BELL, Circuit Judge (dissenting):

Being of the view that jeopardy attached by virtue of

the judgment of acquittal entered in the prior trial of de-

fendants, and that Rule 12(b)(2), F.R.Crim.P., pre-

vents defendants from being barred from claiming double

jeopardy because of their delay in challenging the in-

dictment, I would dismiss the government’s appeal. I

therefore respectfully dissent.

Defendants-appellees Kehoe and Bullock were indicted

in 1973 under 18 U.S.C.A. § 657 for the offense of em-

bezzling real property. The case proceeded to trial and at

the close of the government’s case-in-chief both defend-

ants moved for a judgment of acquittal under Rule 29

F.R.Crim.P. on several grounds, one being that the in-

dictment failed to charge an offense. They argued that

real property could not be embezzled and that no case of

embezzlement of any property had been established by

the government’s evidence. The district court granted this

motion, agreeing with defendants on both punts.

A second indictment was then obtained charging these

same defendants with fraudulently receiving the benefits

of a federally insured savings association transaction in

violation of 18 U.S.C.A. § 1006. This indictment related

to the same criminal misconduct alleged in the indictment

previously dismissed, and the evidence to have been of-

fered was also the same. Defendants moved to dismiss

this second indictment on the grounds that jeopardy had

attached in the prior proceeding. This motion was granted

and the government now appeals.

The government contends that the judgment of ac-

quittal in the first proceeding was in fact a dismissal of

the indictment for failure to charge an offense. It is ar-

+ cence

gued that the district court did not reach the merits of

the case, that there was no verdict in defendants’ favor,

and that therefore no jeopardy attached. I find no sub-

stance in these contentions. It appears that the district

court did consider the evidence presented and therefore

went beyond the face of the indictment in its ruling:

Recent United States Supreme Court decisions make it

clear that principles of double jeopardy bar subsequent

reprosecution once a case has terminated in defendant's

favor based upon factual conclusions not found in the

indictment but instead upon evidence adduced at trial.

United States v. Jenkins, 1974, _.__U.S..__., 95 S.Ct.

1006, 43 L.Ed.2d 250. See also Serfass v. United States,

1975, U.S , 95 S.Ct. 1055, 43 L.Ed.2d 265;

United States v. Wilson, 1975, _. U.S... 95 S.Ci.

1013, 43 L.Ed.2d 232. The first question then is whether

the trial court relied on such evidence in its determination.

The district court in the second proceeding answered this

question in the affirmative and I agree.

The critical language of the court in the first proceeding

is as follows:

This Court was aware of and concerned with the

fine distinctions being made when the motion for

judgment of acquittal was urged by defendants at

the close of the Government’s case. Had the evidence

shown that the property was sold by and for the

benefit of Surety Savings with the defendants in their

fiduciary capacities diverting the consideration of

such sale for their own benefit, an indictment alleging

embezzlement might have been proper. However, the

circumstances of this case, accepted as true for pur-

poses of this motion, showed that the alleged con-

sideration never was intended to flow to Surety but

only to the defendants. Although the defendants

ostensibly deprived Surety Savings of real estate hold-

ings, no funds, credits or securities belonging to

Surety were taken. While this distinction is a fine

one, it is one that is critical to the offense of “em-

bezzlement.” (Emphasis added)

Thus it appears that the court found that the govern-

ment had not put on sufficient evidence to sustain a con-

viction of embezzlement since embezzlement could not

be of real property and the government failed to show

that any personal property had been taken in the trans-

action.

Jenkins, supra, is controlling where, as here, facts ad-

duced after defendants were put on trial before a trier

of facts were considered in dismissing the indictment.

—___U.S. at__., 95 S.Ct. 1006, 43 L.Ed.2d at 259.

Jeopardy attaches, according to Serfass, when a defendant

is put to trial before the trier of the facts. ___U.S. at

—___., 95 S.Ct. 1055, 43 L.Ed.2d at 274. This rule, ac-

cording to Jenkins, includes a case where an indictment

is dismissed by utilizing facts developed in that trial in

connection with the dismissal although the trial did not

reach the point of a verdict or judgment. ___U/S. at

___, 95 S.Ct. 1006, 43 L.Ed.2d at 259. Such facts were

utilized here.’

The opinion prepared by Judge Thornberry, as I per-

ceive it, recognizes that Jenkins, without more, would

control the disposition of this appeal and require affirm-

1. In both Jenkins and the present appeal, it is unclear whether

the district judge terminated the trial based upon factual or legal

conclusions. In both cases, however, the judge apparently relied at

least in part upon the facts as developed, and thereupon concluded

the trial. The court in Jenkins held that retrial of the defendant in

such a posture would place him twice in jeopardy. I see the posture

of the present case as requiring an identical result.

SO ee me

ance. Jenkins is avoided, however, by deciding and apply-

ing the reserved hypothetical of Serfass, thus necessitating

a balancing test with the result of estopping defendants

from asserting a double jeopardy defense. This approach,

in my judgment, misconstrues the reserved question in

Serfass, decides it incorrectly as construed, and denies a

constitutional right because of delay in the face of Rule

12(b)(2).

The issue then is whether defendants are barred from

claiming double jeopardy under the circumstances because

they could have but did not challenge the indictment until

the close of the government’s case-in-chief. They could

have questioned the indictment before trial by a motion

to dismiss for failure to charge an offense under Rule

12(b)(2).? The same rule, however, provides that such

a failure may be noticed by the court at any time. De-

fendants chose to wait until the close of the government’s

case-in-chief to make their motion and the court took

notice of it. At that point, the sufficiency of the evidence

was drawn into issue with respect to the validity of the

indictment.

In Serfass, supra, the Supreme Court saved the question

of the government being denied a right to appeal by the

strategy of a defendant, although afforded an opportunity to

2. Rule 12(b)(2)—Defenses and Objections Which Must be

Raised.

Defenses and objections based on defects in the institution of the

prosecution or in the indictment or information other than that it

fails to show jurisdiction in the court or to charge an offense may

be raised only by motion before trial. The motion shall include all

such defenses and objections then available to the defendant. Failure

to present any such defense or objection as herein provided consti-

tutes a waiver thereof, but the court for cause shown may grant

relief from the waiver. Lack of jurisdiction or the failure of the in-

dictment or information to charge an offense shall be noticed by the

court at any time during the pendency of the proceeding.

do so prior to trial, knowingly allowing himself to be placed

in jeopardy before raising a legal defense. ___U.S. at___,

95 S.Ct. 1055, 43 L.Ed.2d at 277.* It must be remembered

that the question being considered was only that of the

right of the government to take an appeal under 18

U.S.C.A. § 3731. This statute permits an appeal by the

government unless further prosecution is prohibited by

the double jeopardy clause. The question saved went only

to this and not, as the majority opinion does, to the delay

being a bar of a jeopardy defense itself.

Whatever the Supreme Court meant by its reservation

of the question, I do not understand it as creating a

problem in this case. We have, in effect, entertained the

appeal to determine whether we have jurisdiction under

18 U.S.C.A. § 3731. Section 3731 provides that no appeal

shall lie where the double jeopardy clause of the Constitu-

tion prohibits further prosecution.‘ What the government

has in fact appealed is the question whether jeopardy had

attached. Thus we are in the position of having to take

jurisdiction to determine if the appeal will lie. By way

of analogy, cf. Bell v. Hood, 1946, 327 U.S. 678, 66

S.Ct. 773, 90 L.Ed. 939, which teaches that there are

cases where jurisdiction must be exercised for the purpose

of determining jurisdiction. This is such a case. If we

found no error in the district court’s conclusion that

jeopardy had attached, it would follow that the appeal

3. 18 U.S.C.A. § 3731 provides:

In a criminal case an appeal by the United States shall lie

to a court of appeals from a decision, judgment, or order of a

district court dismissing an indictment or information as to any

one or more counts, except that no appeal shall lie where the

double jeopardy clause of the United States Constitution pro-

hibits further prosecution.

4. Cf. United States v. McGough, 5 Cir., 1975, 510 F.2d 598,

602 n.2.

would be dismissed rather than affirmed. This was the

precise procedure followed in Jenkins, supra, in the Second

Circuit. United States v. Jenkins, 2 Cir., 1973, 490 F.2d

868, 880.

It must be conceded that the reservation in Serfass of

the deliberate delay question is perplexing. It purportedly

goes only to the right of appeal but, as expressed, it

could relate also to barring double jeopardy as a defense.

In any event, it is doubtful that the court would treat a

constitutional right in such an off-hand fashion.

‘The Supreme Court has not considered the question

whether the delay in attacking an indictment may bar a

double jeopardy defense. The law of this circuit is that

an indictment may be challenged for the first time on

appeal, and after trial and conviction. Walker v. United

States, 5 Cir., 1965, 342 F.2d 22, 26. It is also the law

in other circuits. United States v. Beard, 3 Cir., 1969,

414 F.2d 1014, 1017; United States v. Bailey, 7 Cir.,

1960, 277 F.2d 560, 562.

It is true that the delay was an admitted trial tactic but

experienced counsel were taking advantage of what is

expressly permitted by Rule 12(b)(2). They wished to

see the government’s case before they moved to strike the

indictment. The trial court could have ruled, but did not,

that the motion came too late. It happened that the court

(the trier of the facts) considered the facts in its ruling

and this gave rise to the double jeopardy claim.

The obtuse problem presented in this appeal is but

another example of the labyrinthian state of criminal law,

particularly in the trial stages. Although not without some

apprehension, I believe that defendants have the better

side of the case and I would, therefore, sustain the district

court judgment and dismiss the appeal.

APPENDIX B

UNITED STATES COURT OF APPEALS

For The Fifth Circuit

October Term, 1974

No. 74-2353

D. C. Docket No. CR-73-H-413

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

versus

CORNELIUS J. KEHOE and RAY K. BULLOCK,

Defendants-Appellees.

Appeal from the United States District Court for the

Southern District of Texas

Before BELL, THORNBERRY and GEE, Circuit Judges.

JUDGMENT

This cause came on to be heard on the transcript of the

record from the United States District Court for the

Southern District of Texas, and was argued by counsel;

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this Court that the judgment

of the said District Court in this cause be, and the same

is hereby, reversed; and that this cause be, and the same

is hereby remanded to the said District Court for pro-

ceedings consistent with the opinion of this Court.

July 16, 1975

BELL, Circi it Judge, dissenting.

Issued as Mandate:

APPENDIX C

UNITED STATES COURT OF APPEALS

Fifth Circuit

Office of the Clerk

Edward W. Wadsworth 600 Camp Street

Clerk New Orleans, La. 70130

Telephone 504-589-6514

October 1, 1975

TO ALL COUNSEL OF RECORD

No. 74-2353 — U.S.A. vs. Cornelius J. Kehoe and

Ray K. Bullock

Dear Counsel:

This is to advise that an order has this day been entered

denying the petition(s) for rehearing, and no member of

the panel nor Judge in regular active service on the Court

having requested that the Court be polled on rehearing

en banc (Rule 35, Federal Rules of Appellate Procedure;

Local Fifth Circuit Rule 12) the petition( ) for rehearing

en banc has also been denied.

See Rule 41, Federal Rules of Appellate Procedure for

issuance and stay of mandate.

Very truly yours,

EDWARD W. WADSWORTH,

Clerk

by /s/ CLARE F. SACHS

Deputy Clerk

cc: Mr. James R. Gough

Mr. Robert A. Hall

Messrs. Randy Schaffer

Richard Haynes

P.S. Judge Bell would grant the petition for rehearing

before the panel for the reasons stated in his dissent

to the majority opinion of the panel.

UNITED STATES COURT OF APPEALS

For The Fifth Circuit

NO. 74-2353

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

versus

CORNELIS J. KEHOE and RAY K. BULLOCK,

Defendants-Appellees.

(Filed October 20, 1975)

ON CONSIDERATION OF THE APPLICATIONS

of the appellees in the above numbered and entitled cause

for a stay of the mandate of this Court therein, to enable

appellees to apply for and to obtain a writ of certiorari

from the Supreme Court of the United States. IT IS

ORDERED that the issuance of the mandate of this Court

in said cause be, and the same is stayed to and including

October 31, 1975, the stay to continue in force until the

final disposition of the case by the Supreme Court, pro-

vided that within the period above mentioned there shall

be filed with the Clerk of this Court the certificate of the

Clerk of the Supreme Court that certiorari petition has

been filed. IT IS FURTHER ORDERED that the Clerk

shall issue the mandate upon the filing of a copy of an

order of the Supreme Court denying the writ, or upon

the expiration of the stay granted herein, unless the above

mentioned certificate shall be filed with the Clerk of this

Court within that time.

/s/ HOMER THORNBERRY

United States Circuit Judge

APPENDIX D

[15-1]

JUDGMENT

(Caption Omitted)

(Filed April 19, 1974)

The Defendants’ Motion to Dismiss the Indictment is

GRANTED for the reasons the Court stated in its oral

findings from the bench,

Therefore, the Indictment in this case is hereby DIS-

MISSED.

The Clerk will file this Judgment and furnish counsel

for all parties with true copies.

Done at Houston, Texas, this 19th day of April, 1974.

WOODROW SEAL

United States District Judge

Aibeillities

ee ee ee

FINDINGS OF FACT AND CONCLUSIONS

OF LAW

The Court: United States of America vs. Cornelius J.

Kehoe and Ray K. Bullock, Criminal Number 73-H-213,

the following constitutes the findings of fact and conclu-

sions of law, and may be amended or supplemented at

a later time.

The Court accepts as true the testimony of all the de-

fendants’ witnesses.

.The Court accepts their version of the facts of this case

since they are not contested.

The Court finds that in 73-H-213 jeopardy has attached.

Criminal Number 73-H-413 is dismissed as to both

defendants because jeopardy has attached.

The government is barred from trying them again.

The Court finds that Judge Bue’s opinion was not based

on a Motion to Dismiss under Rule 12, but that the judg-

ment of acquittal was granted under the Federal Rule of

Criminal Procedure 29(A).

Rule 29(A) cites that judgment of acquittal shall be

granted if the evidence is insufficient to sustain a convic-

tion of such an offenses or offenses.

The motion which was filed at the conclusion of the

evidence in chief of the government’s case was a motion

and so called a motion for judgment of acquittal, which

is the way to raise the question of sufficiency of the evi-

dence.

I might point out in Judge Bue’s opinion the last para-

graph on Page 6, and I will read it:

“This Court was aware of and concerned with the fine

distinctions being made when the motion for judgment

of acquittal was urged by defendants at the close of the

government’s case. Had”—I emphasize had—"“had the

evidence shown that the property was sold by and for

the benefit of Surety Savings with the defendants in their

fiduciary capacities diverting the consideration of such

sale for their own benefit, and indictment alleging em-

bezzlement might have been proper. However, the cir-

cumstances of this case, accepted as true for purposes of

this motion, showed that the alleged consideration never

was intended to flow to Surety but only to the defend-

ants.”

That shows to me that Judge Bue not only was decid-

ing this case on whether or not the indictment stated an

offense which should have been raised by Rule 12 and,

of course, Rule 12 motions can be raised at any time,

but that this opinion that he wrote and signed on the 8th

day of November, 1973 did go to the sufficiency of the

evidence because it was before him and it was before the

jury and the judge had to dispose of it.

He could not dispose of part of it without disposing of

all of it.

That the government did not appeal from that decision.

If the government now contends that that judgment of

acquittal was really a motion to dismiss under Rule 12,

the Court ruled against the government and the govern-

ment had a duty to appeal a motion to dismiss if they

considered that now a motion to dismiss because the

indictment does not state an offense.

The way you raise the question of whether or not an

indictment states an offense is by Rule 12 and that gives

ee ee

the government the right to appeal if the judge rules

against the government.

Because of the doctrine of collateral estoppel and the

doctrine of due process of law, it would be unfair for

the government now to come in and say that this was a

motion to dismiss because the indictment did not state

an offense.

The language at the bottom of Page 6 and continued

on Page 7 I have read convinces me that since you had

a jury, that one of the reasons Judge Bue granted the

Motion for Judgment of Acquittal, and I emphasize that

that was before the Court then, a Motion for Judgment

of Acquittal, which under Rule 29 can only be granted

if the evidence is insufficient to sustain a conviction of

such offense or offenses.

That double jeopardy does attached in this case, even

if Judge Bue had made a mistake or if he himself was

confused in his opinion because the fact of the matter

is the defendants did plead not guilty and the government

Offered all the evidence that they could offer on the guilt

of the defendants and they did have a trial and the judg-

ment of acquittal under Rule 29 was granted.

That it would be manifestly unfair and unjust to sub-

ject these defendants to a trial on this case again in view

of the other facts which I have heard from the defendants

in this hearing, which I accept to be true.

I might further state that you don’t test the sufficiency

of an indictment by the proof that’s offered later on.

The sufficiency of the indictment is determined by the

face of the indictment.

It seems to me that this indictment, from what he says

at the bottom of Page 6 and beginning of Page 7, could

have well stated an offense and the government has carved

out of an offense and they have carved once and they

can’t carve it again.

Therefore, by the doctrine of carving as well as equi-

table collateral estoppel, they cannot try these defendants

on the same set of facts again.

I am not passing on whether or not there was bad

faith in the prosecution of this case because I have heard

no evidence to the contrary, but am not passing on it.

I am not passing on whether or not there was a mistake

or an accident in the government taking the position

that you can embezzle land, but from the record, it shows

the government pursued that theory that you can em-

bezzle land from the beginning, either through mistake

or not, and it was calculated to break or injure the de-

fendants, not only in their mental condition and anxiety

that they suffered, but also unnecessary expenses and also

time of the Court. That meant that the government has

taken up a long time in trying this case and now they

want to take up some more time to try it again under

what I would say is a mistake or accident.

The government did have the right to appeal this case.

If they now take the position that what Judge Bue did

was a granting of a Motion to Dismiss, when the Court

sustains a Motion to Dismiss and the government has a

right to appeal that, which they didn’t do, so they now,

because of due process of law and collateral estoppel,

they cannot now come into court and say that we think

it was a Motion to Dismiss that was granted because it

er Ne a oa aa

en ee

wee DO8 BAN Be oer) an hee De en eee tee 8

didn’t state an offense, but we didn’t appeal it, so we are

going to put the defendants to the expense of another

trial.

The defendants were tried before a jury, a Rule 29

judgment of acquittal was entered, and, although Judge

Bue must interpret his opinion differently from the way

I do, I am convinced that jeopardy is attached.

I finally would say that this does not extend to the

other two cases pending in Judge Hannay’s Court.

This decision is not based on the fact that those cases

have been pending a year, but I am persuaded somewhat

by the facts that I have heard in this case and they re-

inforce the reason that equity and inherent fairness and

due process of law compel this Court to grant the defend-

ants’ Motion to Dismiss because of double jeopardy.

Now, that disposes of this case as far as this Court is

concerned. I am sure that Mr. Novak will appeal this

decision, which he has a right to do, because it is a most

unusual case, and it’s a case that has caused this Court

a great deal of trouble because of the fact that I am pass-

ing somewhat on what another judge says, but, as I have

told the lawyers and as Mr. Novak told the Court, that

when the reindictment came down in 413, that Judge Bue

told Mr. Novak that he wanted the case not in his Court

and it wound up in my Court and I didn’t know that, of

course, but I went to Judge Bue in our regular conference

and brought it up to Judge Bue and the other judges.

Judge Bue asked me to keep the case.

Of course, I told Judge Bue that in effect I would be

passing upon his opinion, and I don’t mind doing that

because we have to pass on opinions and facts all the

time that are in dispute—some people can interpret it

differently and, of course, Judge Bue knows that, and

he knows that we all have to do our duty, as everyone

has done in this case, as far as I can see, their duty.

We will leave it up to the Court of Appeals to decide

if this Court was right or not.

Thank you very much.

WOODROW SEALS

APPENDIX E

UNITED STATES of America

Cornelius J. KEHOE and Ray K. Bullock.

Crim. No. 73-H-213.

United States District Court.

S. D. Texas,

Houston Division.

Nov. 8, 1973.

Defendants who were charged with embezzlement from

an institution the accounts of which were insured by

Federal Savings and Loan Insurance Corporation filed

motion for judgment of acquittal. The District Court,

Carl O. Bue, Jr., J., held that term “embezzlement” was

limited to items of personal property and, therefore, in-

dictment charging that defendants had conveyed land

belonging to financial institution of which they were

officers to third party in return for third party’s assump-

tion of note on which defendants were contingently liable

failed to charge an offense.

Motion granted.

Anthony J. P. Farris, U. S. Atty., Henry J. Novak, Jr.,

Asst. U. S. Atty., Houston, Tex., for plaintiff.

Robert A. Hall, Kennerly, Woodard, Hall, McCrory

& Henry, Houston, Tex., for defendant Kehoe.

Richard Haynes, Haynes & Fullenweider, Houston, Tex.,

for defendant Bullock.

MEMORANDUM AND OPINION

CARL O. BUE, Jr., District Judge.

Following completion of the Government’s case, the

defendants moved for judgment of acquittal under Fed.

R. Crim. P. 29(a) alleging several grounds in support

thereof. Of central importance to this Court’s decision

was the claim that the indictment failed to charge an

offense against the laws of the United States of America,

this being a non-waivable defense under Fed. R. Crim. P.

12(b)(2). In what is apparently a case of first impression

in the federal courts, this Court felt constrained to grant

defendants’ motion for the reasons set forth below.

The indictment charged that defendants Kehoe and

Bullock, President and Advisory Director, respectively, of

Surety Savings Association, an institution the accounts

of which are insured by the Federal Savings and Loan

Insurance Corporation, embezzled .3082 acres of land,

valued at $35,000, belonging to said institution, in viola-

tion of Title 18, United States Code, Section 657. Con-

Struing the evidence most favorably to the Government,

the defendants were essentially charged with having used

their fiduciary positions of authority to convey title to

the land from Surety Savings to a third party. The sole

consideration was alleged to have been the assumption

by that third party of a promissory note for $35,000 on

which the defendants were contingently liable. It was

alleged that no consideration flowed to Surety Savings

as a consequence of the conveyance of its property. The

defendants strongly contest these assertions and contend

that had they gone forward with the defense, they would

have shown full consideration flowing to Surety Savings

in an environment of bona fide, legal and legitimate busi-

ness negotiations.

The critical issue before this Court was whether or not

real property may be “embezzled” under this statute as

alleged in the indictment.

Section 657, Title 18, United States Code provides, in

pertinent part:

Whoever, being an officer... of . . . any institu-

tion the accounts of which are insured by the Federal

Savings and Loan Insurance Corporation . . . em-

bezzles, abstracts, purloins or willfully misapplies any

moneys, funds, credits, securities or other things of

value belonging to such institution, or pledged or

otherwise entrusted to its care, shall be fined . . . or

imprisoned ....

Embezzlement has been defined for federal courts as

“the fraudulent appropriation of property by a person to

whom such property has been intrusted, or into whose

hands it has lawfully come”. Moore v. United States, 160

U.S. 268, 269-270, 16 S.Ct. 294, 295, 40 L.Ed. 422,

424 (1895); Woxberg v. United States, 329 F.2d 284,

290 (9th Cir. 1964); 29A C.J.S. Embezzlement § 1

(1965); 26 Am. Jur. 2d Embezzlement § 1 (1966). It

has been stated that embezzlement is a purely statutory

offense, not having been a crime at common law. Hughes

v. United States, 4 F.2d 686, 687 (10th Cir. 1925);

29A C.J.S. Embezzlement § 2 at 4-5 (1965); 26 Am.

Jur. 2d Embezzlement §1 at 549-50 (1966). Contra

United States v. Davenport, 266 F. 425, 431 (W.D. Tex.

1920), aff'd, 276 F. 803 (Sth Cir. 1921); United States

v. Cadwallader, 59 F. 677, 680 (W.D. Wis. 1893) [both

district courts citing 4 Bl. Comm. 231, an authority not

readily available to this court]. This Court’s necessarily

limited review of embezzlement and its history comports

fully with the following summary:

Embezzlement is purely statutory in its origin; it

was unknown at common law, which, insofar as per

sonal property was concerned, penalized only inter-

ferences with possession. Accordingly, at common

law, if the possession of personal property was law-

fully obtained in the first instance, its subsequent

appropriation by the possessor constitutioned no of-

fense. It was this failure of the common law to pro-

vide any criminal remedy for these breaches of trust,

incident to the multiplying affairs of business on the

part of servants, clerks, agents, bailees, trustees, and

other persons occupying fiduciary positions that led

to the enactment of the present Penal Code pro-

vision dealing with embezzlement. These provisions

were not, however, intended to provide against every

breach of duty or pecuniary obligation on the part

of agents and employees toward principals and em-

ployers. Accordingly, in applying those articles of

the Code to the various cases that may arise, careful

discrimination is required, for it is sometimes difficult

to draw with entire precision the line of demarcation

between acts punishable as crimes under the code

and those that are not within its purview, although

presenting instances of breach of trust.

21 Tex. Jur. 2d Embezzlement and Conversion § 2 at

579-80 (1961).

[1] The Government has contended that the statutory

language “other things of value” was sufficiently broad

to include real property. The defendants have contended

that the Court should apply the statutory rule of con-

struction denominated “ejusdem generis” wherein the

phrase should be construed to include only those things

of the same class or nature as those specifically enumer-

ated in the statute, this class being limited to items of

personal property.’

{[2, 3] While there are critical distinctions between

emblezzlement and the other offenses included within this

Statute, all are basically similar in nature to larceny. See

Morissette v. United States, 342 U.S. 246, 260-261, 72

S.Ct. 240, 96 L.Ed. 288, 299 (1951); Moore v. United

States, 160 U.S. 268, 16 S.Ct. 294, 40 L.Ed. 422 (1895);

United States v. Northway, 120 U.S. 327, 7 S.Ct. 580,

30 L.Ed. 664 (1887). Larceny is commonly defined as

“the felonious taking and carrying away of the personal

goods of another”. United States v. Turley, 352 U.S. 407,

412, 77 S.Ct. 397, 399, 1 L.Ed.2d 430, 434 (1957).

The elements of embezzlement are admittedly somewhat

different.

[Embezzlement] differs from larceny in that the fact

that the original taking of the property was lawful,

or with the consent of the owner, while in larceny

the felonious intent must have existed at the time

of the taking.

Moore v. United States, 160 U.S. 268, 269, 16 S.Ct. 294,

295, 40 L.Ed. 422, 424 (1895). See also United States

1. The rule of ejusdem generis, closely related to that of noscitur

@ soctis, remains a valid rule of construction. See United States v.

Standard Oil Co., 384 U.S. 224, 228, 86 S.Ct. 1427, 1429, 16 L.Ed.

2d 492, 495 (1966); Haberman v. Equitable Life Assurance Society

of United States, 224 F.2d 401, 405 (Sth Cir. 1955), reh. den., 225

F.2d 837, cert. denied, 350 U.S. 948, 76 S.Ct. 322, 100 L.Ed. 826

(1956). The proper application of these rules is thoroughly discussed

elsewhere. See 50 Am.Jur. Statutes §§ 249, 250 (1944). Most of the

United States Supreme Court cases discussing the application and

limits of these rules have been annotated. See Annot., 94 L.Ed.

464 (1949).

v. Powell, 294 F. Supp. 1353, 1355 (E.D. Va. 1968),

aff'd, 413 F.2d 1037 (4th Cir. 1969); 29A C.J.S. Em-

bezzlement §5 (1965). Notwithstanding this fact, and

notwithstanding the apparent majority view that “em-

bezzlement” is a purely statutory rather than a common

law offense, the term, nevertheless, has acquired a well

established connotation which approaches the sanctity of

a common law meaning. United States v. Northway, supra,

120 U.S. at 334, 7 S.Ct. at 584, 30 L.Ed. at 666. It is

limited to items of personal property, similar to the offense

of larceny after which embezzlement was patterned. Where

a federal criminal statute uses a common-law term of

established meaning without otherwise defining it, the

United States Supreme Court has held that the general

practice is to give that term its common-law meaning.

United States v. Turley, 352 U.S. 407, 411, 77 S.Ct. 397,

399, 1 L.Ed.2d 430, 433 (1957). This same practice

appears to be proper for established terms such as “em-

bezzlement”.

In 1896 the Supreme Court of California was con-

fronted with virtually the identical issue now before this

Court, the specific statute there under consideration being

one pertaining to “false pretenses”.

And the offense of false pretenses, under the English

statutes, has always been construed as largely anal-

ogous to, and closely bordering upon, that of larceny,

and as applying only to personal property, which was

capable of manual delivery, and the subject of the

latter offense, and has always been punishable in

much the same manner as larceny. Real property

under the English law was never the subject of the

offense either of cheating or of false pretenses. Being

incapable of larcenous asportation, it was not re-

garded as requiring at the hands of the criminal law

the same protectior. as personalty. Since it could not

be carried away and dissipated like chattels, although

a man might be deprived of his landed estate by

means of fraudulent practices and devices, yet the

property was bound to remain stationary, and ac-

cessible to the reach of the law, and he was relegated

to the civil courts for his redress of the wrong.

Our American statutes upon the subject have all

followed more or less closely those of England. As

indicated, there are slight differences in language,

but in substantive purpose and effect they are the

same.

People v. Cummings, 114 Cal. 437, 46 P. 284 (Sup. Ct.

1896). Other state cases which have been located reach

the identical conclusion for substantially the same reasons.

See State v. Clark, 60 Ohio App. 367, 21 N.E. 484

(1938); Manning v. State, 175 Ga. 875, 166 S.E. 658

(Sup. Ct. 1932); State v. Eno, 131 lowa 619, 109 N.W.

119 (1906). This Court has thoroughly reviewed federal

criminal statutes, and annotations relating thereto, similar

in nature to embezzlement, theft and larceny’ and has

been unable to find any legislative indication that Congress

has sought to modify the traditional definition and limita-

tions of larcenous-like offenses. The logic of People v.

Cummings, as applied in a federal context, appears to be

as valid now as it was in 1896. It was instructive to this

Court to note that the California legislature subsequently

amended the California statute at issue in Cummings.

The California Supreme Court thereafter held that it was

proper for the legislature to depart from the common law

by specifically including real property within the statute.

People v. Rabe, 202 Cal. 409, 416, 261 P. 303, 306

2. 18 US.C. 88 641-660.

(Sup. Ct. 1927). Since then real property in California

has been held to be properly the subject of embezzlement,

People v. Roland, 134 Cal. App. 675, 26 P.2d 517

(1933), as well as larceny. People v. Pugh, 137 Cal.

App. 2d 226, 289 P.2d 826 (1955), app. denied, 352

U.S. 885, 77 S.Ct. 141, 1 L.Ed.2d 83 (1956); People

v. Brunwin, 2 Cal. App. 2d 287, 37 P.2d 1072 (1934).

[4] This Court was aware of and concerned with the

fine distinctions being made when the motion for judg-

ment of acquittal was urged by defendants at the close

of the Government’s case. Had the evidence shown that

the property was sold by and for the benefit of Surety

Savings with the defendants in their fiduciary capacities

diverting the consideration of such sale for their own

benefit, an indictment alleging embezzlement might have

been proper. However, the circumstances of this case,

accepted as true for purposes of this motion, showed that

the alleged consideration never was intended to flow to

Surety but only to the defendants. Although the defendants

ostensibly deprived Surety Savings of real estate holdings,

no funds, credits or securities belonging to Surety were

taken. While this distinction is a fine one, it is one that

is critical to the offense of “embezzlement”.

Criminal statutes are to be construed strictly with an

eye to precedent, legislative history and common sense.

See United States v. Standard Oil Co., 384 U.S. 224, 225,

86 S.Ct. 1427, 1428, 16 L.Ed.2d 492, 494 (1966). This

Court has made every effort to do so and has found no

legislative indication that the traditional personal property

limitation of embezzlement has been abrogated by Con-

gress. For this Court to hold that real estate may be the

subject of embezzlement under this federal statute as

presently framed would not involve court interpretation,

but would constitute judicial legislation.

The restricted usage of the term embezzlement neces-

sitated the application of the doctrine of ejusdem generis

to the phrase “other things of value” contained in Title 18,

United States Code, Section 657. Properly interpreted, it

may include only items of personal property. For the

foregoing reasons, this Court granted defendants’ motion

for judgment of acquittal on the grounds that the indict-

ment failed to state an offense against the United States

of. America.

APPENDIX F

IN THE

UNITED STATES DISTRICT COURT

For the Southern District of Texas

Houston Division

UNITED STATES OF AMERICA

CORNELIUS J. KEHOE and RAY K. BULLOCK

CRIMINAL NO. 73-H-213

This Court has given close consideration to the De-

fendants’ argument and authorities in support of their

motion for judgment of acquittal as well as the Govern-

ment’s response, both as set forth in written legal memo-

randa as well as in conference in Chambers yesterday.

The legal area in question is not without considerable

difficulty. In a relatively brief but intensive search of

authorities which included a check of annotations, legisla-

tive history, and even a call to the Library of Congress,

this Court has found no federal authority discussing

whether or not embezzlement applies, or should apply, to

real property as alleged in the indictment against these

two defendants. This Court has located only a few cases

in state jurisdictions wherein the issue was considered.

It is the opinion of this Court that historically the term

embezzlement has been limited only to personal property.

In the absence of specific legislation reflecting a clear in-

tent to expand the term to cover real property, the more

persuasive view of the existing jurisprudence is that em-

—_— ees ~~

aien ~

“ a ee ea ee

bezzlement statutes were never intended by legislatures

to cover offenses relating directly to real property such

as is alleged in the indictment before this Court.

This is a criminal case in which the contents of an

indictment must necessarily be scrutinized with great

care. The Court is fully aware of the thrust of Rule 29

as well as the significance of Rule 12(b)(2) of the

Federal Rules of Criminal Procedure. These have been

carefully considered. Because the Government has not

met its burden of proof in demonstrating that the

indictment recites an offense for which prosecution may

be brought, a Judgment of Acquittal as to both defendants

will be entered. This Court will issue a memorandum

opinion within the next few days setting forth in greater

detail the legal basis on which this conclusion was

reached.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.