City of Waco, Tex. v. Bridges

• Decision Date: 28 July 1983
• Docket Number: No. 82-1138,82-1138
• Citation: 710 F.2d 220
• Parties: CITY OF WACO, TEXAS, et al., Plaintiffs-Appellees v. James Dean BRIDGES, et al., Defendants, James Dean Bridges, Percy Garcia and U.S.A., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 220

710 F.2d 220

CITY OF WACO, TEXAS, et al., Plaintiffs-Appellees v. James Dean BRIDGES, et al., Defendants James Dean Bridges, Percy Garcia and U.S.A., Defendants-Appellants.

No. 82-1138.

United States Court of Appeals Fifth Circuit.

July 28, 1983.

Rehearings and Rehearing En Banc Denied Sept. 16, 1983.

Kenneth R. Hannam, George W. Shaffer, Corpus Christi, Tex., Tony E. Duty, Waco, Tex., for Bridges.

Charles L. Barrera, Alice, Tex., for Garcia.

Glenn L. Archer, Jr., Asst. Atty. Gen., Michael L. Paup, Chief, Appellate Section, Carleton D. Powell, Libero Marinelli, Jr., Attys., Tax Div., Dept. of Justice, Washington, D.C., for U.S.

Keith Farr, Waco, Tex., for City of Waco.

Richard E. Gray, III, Asst. Atty. Gen., Austin, Tex., for State of Tex.

W.C. Haley, Waco, Tex., for McLennan County, Tex.

Appeals from the United States District Court for the Western District of Texas.

Before RUBIN, GARZA and WILLIAMS, Circuit Judges.

GARZA, Circuit Judge:

The City of Waco, Texas, brought this civil interpleader action to determine what party or parties were entitled to possession of some $500,000 cash unearthed on a ranch near Alice, Texas, and confiscated by Waco police following the arrest of appellant James Bridges, on January 31, 1977. The district court found that the money was payable to the McLennan County government pursuant to a Texas statute. We agree and affirm; however, in some respects, we affirm on different grounds. We address initially the facts of this unusual case.

The Buried Treasure

In January 1977, appellants, fifteen-year-old James Dean Bridges and sixteen-year-old Percy A. Garcia, together with a friend dug up an ice chest containing approximately $500,000 in cash on the ranch of Bridges' father, James Hiroms, near Alice, Texas. Bridges testified at trial that he had accidentally discovered the money without knowing who had buried it, but in earlier statements to government agents had said that he had seen his father burying the money and that he believed the money was connected with his father's trafficking in marihuana. After digging up the money, the boys transferred it to two suitcases and drove to an Alice bus station where Bridges and Garcia boarded a bus for Dallas.

In Dallas, they registered at a hotel and visited various Dallas nightspots where they became acquainted with a man named Gilbert Bailey. They asked Bailey to purchase an automobile in their names, paid him $1,000 and purchased a 1977 Thunderbird. The automobile's title was in Bailey's name and had temporary dealer license plates.

From Dallas, the boys had intended to travel north to Chicago, but became "confused" and instead began driving south. While proceeding through Waco, Texas, they were stopped by city police for going through an intersection on a red light. At the time, neither one possessed a valid driver's license, and neither was able to provide a satisfactory explanation for Bailey's title ownership nor for the temporary license plates. In addition, they provided the police with conflicting accounts as to their identities and places of residence.

Suspecting that the car was stolen, the police arrested the boys on charges of driving the automobile without an operator's license. Although record testimony is in dispute as to the timing, the police conducted an inventory search of the automobile, apparently at the police station, where they discovered the money. ¹ No search warrant nor consent had been obtained prior to the search.

On February 4, 1977, the Internal Revenue Service made a termination assessment for federal income tax in the amount of $330,705.00 against Bridges covering the period January 1 through February 1, 1977, pursuant to Sec. 6851 of the Internal Revenue Code (26 U.S.C.). In response, Bridges filed a petition for redetermination of the deficiency with the tax court, containing the factual allegation that the money had been stolen. Bridges later filed an amended petition from which the allegation concerning the theft of the money was excluded. On February 4, the IRS served a notice of levy to the Waco police requiring the police to deliver to it such part of the seized money as was equal to the amount of the assessment. At about the same time, representatives of the government for the State of Texas advised the City of Waco that the State was also claiming the money.

On February 8, confronted with the conflicting claims of the IRS and the State, as well as those of Garcia and Bridges, and soon after news accounts of the find appeared, the City of Waco commenced a civil interpleader action in state court to determine ownership of the seized money. In March, pursuant to the IRS' motion, the case was removed to the United States district court. After removal, McLennan County, the county in which the City of Waco is located, was allowed to intervene to assert a claim for the money. The City of Waco also filed an amended interpleader complaint joining Bridges' father as a defendant to which the father never responded.

The case proceeded to trial before a jury where the various parties each attempted to establish their entitlement to the money. Bridges and Garcia contended that they had discovered the money after digging in the spot where Bridges had previously observed an unknown person burying an ice chest. The boys argued that they were the last persons in lawful possession of the money, and their entitlement to it, therefore, was superior to anyone except the lawful owner who had not come forth. Characterizing the action as a criminal forfeiture proceeding, Bridges and Garcia challenged the admissibility of the money and their contradictory statements as to the origin of the money. The boys contended that the money had been discovered during an illegal search of the car and was, together with any other evidence obtained as a result of the illegal search, barred from introduction into the suit by the fourth amendment exclusionary rule.

The IRS took the position at trial "that the only issue before the Court [was] whether or not Mr. Bridges and Mr. Garcia were in lawful possession of the money." To this extent, the Government's claim was contingent upon a finding that Bridges and Garcia were entitled to the $500,000. On appeal, however, the IRS has proffered an additional argument, one not presented below, that even if Bridges and Garcia did not have lawful possession, they did have "a sufficient interest in the money for a tax lien to attach as a result of the assessment."

McLennan County and the State of Texas both took sides opposite Bridges, Garcia and the IRS below. Both contended that the boys never had lawful possession of the money, and thus, relying on separate Texas statutes, asserted diverse claims of entitlement. The State of Texas based its claim on the Texas escheat statutes, Tex.Rev.Civ.Stat.Ann. articles 3272 and 3272a (Vernon 1968), which provide that the State's right to possess and enjoy the property of an absent and unknown owner ripens after a period of seven years. The County urged that it was entitled to retain the funds pursuant to Tex.Code Crim.Proc.Ann. art. 18.17 (Vernon 1977) which provides that "all unclaimed or abandoned personal property ... seized by any state or county peace officer in the State of Texas" should accrue to the county until the true owner appears.

Upon conclusion of the trial, the jury determined that Garcia and Bridges had obtained possession of the money "without the consent of the true owner, knowing or believing that the owner could be found." On the basis of that finding, the district court ruled that the boys' possession was unlawful; and consequently, no part of the money was payable either to them or to the IRS. The court further held that as between the State and County, the money was payable to the County pursuant to the Texas statute conferring ownership of unclaimed property seized by "any state or county peace officer." The court also held that the search of the suitcase containing the money was unconstitutional, ² but that the exclusionary rule need not be applied if the police in good faith believed that their search did not violate constitutional requirements. The court ruled that the police, in opening the suitcases, had acted in good faith because state law precedent allowed inventory searches of suitcases, and at the time there was no contravening federal law precedent. These appeals followed. We now consider the claims of each of the parties.

Finders Keepers, Losers Weepers?

Turning first to the errors asserted by Bridges and Garcia, we must initially determine if the district court erred in its application of the exclusionary rule to this proceeding. For different reasons, we conclude that the court properly refused to exclude the evidence of the money and the boys' statements from introduction at trial.

Throughout this proceeding, Garcia and Bridges have characterized this action as more akin to a quasi-criminal forfeiture proceeding rather than a civil interpleader action. We disagree with this characterization.

Tex.Code Crim.Proc.Ann. art. 18.18 (Vernon 1977) provides for the forfeiture of contraband. In this case, however, neither the State of Texas, McLennan County, nor the City of Waco have ever claimed that the money in dispute was contraband nor have they instituted or taken any action pursuant to statute to forfeit the money. Indeed, only Garcia and Bridges have ever alleged the money to be contraband, a position which they later refuted. The record establishes that Bridges and Garcia, together with their possessions, were taken into police custody after the boys were arrested for various traffic violations. Only when the boys admitted shortly after arrest that the money was stolen did the Waco police take possession of the money by authority of Tex.Code Crim.Proc.Ann. art. 47.01 (Vernon 1979) which provides that "an officer who comes into custody of property alleged to have been stolen...