author: OAKES, Circuit Judge:

text:
    Edwin F. KRIST and Marion R. Krist, Appellees, v. COMMISSIONER OF INTERNAL REVENUE, Appellant.
    No. 792, Docket 73-1058.
    United States Court of Appeals, Second Circuit.
    Argued May 21, 1973.
    Decided Aug. 21, 1973.

      William A. Friedlander, Washington, D. C. (Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Elmer J. Kelsey, Janet R. Spragens, Attys., Tax Div., Dept, of Justice, of counsel), for appellant.
    John J. Barnosky, Mineóla, N. Y., for appellees.
    Before KAUFMAN, Chief Judge, and KILKENNY  and OAKES, Circuit Judges.

       Of the Ninth Circuit Court of Appeals, sitting by designation.

   OAKES, Circuit Judge:

This appeal from the Tax Court presents the single question whether a first grade teacher’s sabbatical travel expenses abroad were deductible as "ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business,” within the meaning of § 162(a) of the Internal Revenue Code of 1954. We hold that they were not.

Section 162(a) provides that a deduction shall be allowed for “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” To the extent education and travel expenses fall into this category, a deduction is permitted. Treas.Reg. § 1.162-5 (1967). Rev.Rul. 64-176, 1964-1 Cum.Bull. 87.

Treasury Regulations § 1.162-5, first promulgated in 1958, provided that to deduct the expenses of travel while on sabbatical leave, a taxpayer had to establish that (1) the primary purpose of the travel was to maintain or improve employment skills, and (2) the travel had a direct relationship to the conduct of the individual’s trade or business. The old regulations treated sabbatical leave travel “as primarily personal in nature and therefore not deductible.” Treas.Reg. § 1.162-5(c) (1958). These were liberalized by the Commissioner, however, to permit deduction for sabbatical leave travel even of the “broadening, cultural type” provided it “has a direct relationship to the conduct of the individual’s trade or business.” See Rev. Rui. 64-176, 1964-1 Cum.Bull. 87. In 1967 the Regulations themselves were revised, effective after January 1, 1968, and the subjective “primary purpose” test was eliminated. The amended Regulations require only that the travel have a direct relationship with the taxpayer’s employment or other trade or business. Treas.Reg. § 1.162-5 (d) (1967). Cf. Carroll v. Commissioner, 418 F.2d 91, 94 (7th Cir. 1969); Furner v. Commissioner, 393 F.2d 292, 293 (7th Cir. 1968). For the taxable year here in question the taxpayer may utilize the somewhat more liberal 1967 Regulations, which apply retroactively even though they were not effective until 1968. Rev. Rul. 68-191, 1968-1 Cum.Bull. 67; Furner v. Commissioner, supra; Stanley Marlin, 54 T.C. 560, 563-565 (1970); Burke W. Bradley, Jr., 54 T.C. 216, 219 (1970).

Thus the sole question in this case is whether and to what extent Mrs. Krist’s sabbatical trip bore a direct and specific relationship to her skills as a teacher. Expenses which relate primarily to a taxpayer’s self-improvement,. rather than improvement of employment skills, are not deductible. Carroll v. Commissioner, supra, 418 F.2d at 95. Even as thus liberalized, the regulations place a substantial burden on the taxpayer to demonstrate that the travel provided direct and specific training helpful in the taxpayer’s job. The Tax Court below held that “the petitioner’s primary purpose in taking the trip was to maintain or improve her skills and that the majority of her activities were directly related to her teaching job.”

The appellee, Mrs. Marion R. Krist, is an elementary school teacher. In 1967 and for seven years prior to that date she taught the first grade of the Barn-urn Woods School in the East Meadow District of Long Island. Mrs. Krist was a general classroom teacher who taught the usual first grade subjects which included reading, writing, arithmetic, science and social studies. The curriculum was integrated so that the various subjects overlapped. For example, the material for teaching reading often included social studies information. There is nothing in the record to suggest that the first grade curriculum here involved is substantially different from that of most first grades.

In 1967 Mrs. Krist applied to her superiors to take a sabbatical leave from September 1, 1967, to June 30, 1968, for travel. Paragraph 14(a), Article VI of the Administrative Code for the East Meadow Schools, Long Island, New York, provides that a sabbatical leave may be granted for “Approved travel that will broaden the background of the teacher’s experience (itinerary submitted in advance).” When she applied for sabbatical leave, Mrs. Krist discussed her trip with her supervisor and told him of her plans. She was granted permission to take sabbatical leave by the school district and on September 22, 1967, she began her trip from New York City. Her itinerary and the cost alloca-ble to her various activities as prepared by the petitioner are set forth in the margin. The Tax Court allowed 80 per cent of the original deduction claimed for the tax year 1967.

Taxpayer, with her husband, took a 12-day freighter trip from New York to Belgium. They both had two-day visits in Brussels, Dublin and Limerick. After her husband left her on October 14, 1967, she went to Galway where she spent four days planning the remainder of her trip. She spent five more days in Ireland and 23 days in England followed by four days in France. In the course of 21 days of tours in Germany, Austria, Liechtenstein and Italy, she did visit Switzerland, one of her “social studies” countries, and while there visited a one-room school in Lucerne. She then spent a month in Spain and Portugal, with a ten-day side trip to Madeira, and took another freighter around the African Coast to Manila, Hong Kong and Korea, and finally reached her second social studies country, Japan. There she visited five cities and two schools, one large and one small, the latter of which she happened on “quite by accident.” To be sure, she had visited a school in Galway and two in London, and she had seen an education film in Manchester.

There is no indication that the travel activities engaged in any of the countries were, except as above stated, other than those that any traveler would engage in. Taxpayer did not arrive at Japan until 1968, after the tax year in question. Other activities after leaving Japan give no indication of being in any way related to her teaching position. Her total time spent visiting schools on her own testimony was about five days out of six months; so far as appears she may have visited two or three families in Japan (albeit in 1968), and while she visited families in other countries those countries were not related to her teaching.

Appellee claims that if she had been on vacation, as opposed to a business trip, she would not have used freighters, would have stayed at better hotels, and her activities would have been geared to swimming and skating rather than the travel and visits she made which she said tired her each day. But the fact that she used a freighter for travel and didn’t go to “the best hotels” doesn’t indicate a thing one way or the other as to whether her travel was related to her teaching. Economy travel and travel accommodations are as consistent with a personal as with an educational trip. She was six weeks on one freighter trip itself, and while there did no specific reading directed toward her teaching although she did read Louis Nizer and How to Tour Japan on Five Dollars a Day.

When Mrs. Krist returned from her trip she did use in her teaching some of the pictures, costumes, dolls and games that she had acquired during the trip. She also acquired one technique abroad, the use of an individual slate and abacus at each child’s desk, which she learned in Japan. Mrs. Krist was also required to write a report and make a presentation to the faculty regarding her trip on her return. The superintendent of the district certified that Mrs. Krist had “completed the program for which she was granted leave” and that “[t]he travel was undertaken for professional improvement in order to enhance her teaching skills.”

We agree with Mrs. Krist that in certain cases travel abroad may be “directly related” to the teaching duties of the individual. The main consequence of the travel, however, must be to develop or improve a specific skill or area of knowledge which is of central importance to accomplishing the taxpayer’s job. For example, in Gladys M. Smith, 26 CCH Tax Ct. Mem. 1281 (1967), the Tax Court held that a French and Latin teacher who took a Mediterranean cruise was entitled to a deduction. There the ship’s crew was French. The teacher spent almost the entire time while aboard ship speaking French and attended many lectures in French. She also visited many sites important to French and Roman literature and history. Thus, though the form of travel indicated that it was personal — a Mediterranean cruise is, of course, generally a tourist holiday — almost every day the teacher developed specific skills and knowledge which were highly relevant to the performance of her teaching duties. See also Rev.Rul. 64-176, 1964-1 Cum.Bull, at 89; Stanley Marlin, supra, 54 T.C. at 566-567. Contrariwise, only the other day the Tax Court held that a second grade teacher on a sabbatical could not deduct her expenses visiting New Zealand, Australia, Asia, and Mediterranean and European countries as well as the Soviet Union and Canada; this was true although she visited schools in New Zealand and Australia and tried to visit them in Yugoslavia and the Soviet Union, and although she took photographs and purchased items which she donated to the school district. Carol J. Cochran, CCH Tax Ct.Rep. Dec. 31, 959(m), 32 CCH Tax Ct. Mem. 466 (1973).

In order for a § 162(a) deduction to be allowed for travel expenses, there must be an identification of the particular job skills that are improved through the travel. It is this crystallization of the job-related benefit which flows from the travel that permits a deduction under § 162(a) of the Code, and removes the travel expenses from the category of non-deductible § 262 personal expenses.

Out of a six-month trip, taxpayer visited schools for part or all of only five days. Taxpayer’s visits to her social studies countries constituted but a small fraction of the total time on her trip. A general cultural broadening does not meet the test of the regulations. Carol J. Cochran, supra, 32 CCH Tax Ct. Mem. at 469; cf. Carroll v. Commissioner, supra, 418 F.2d at 95; Cross v. United States, 336 F.2d 431, 434 (2d Cir. 1964). Here taxpayer’s activities on her travels varied little from that of any tourist except that she spent more time on ships and perhaps more time with families than many would.

All travel has some educational value, but the test is whether the travel bears a direct relationship to the improvement of the traveler’s particular skills. Such a relationship must be substantial, not ephemeral; the trip must be more than the “sightseeing” which both the old and new Regulations denote as “personal activity.” See Treas.Reg. § 1.162-5(d) (1958); Treas.Reg. § 1.-162-5(e) (1967). See also Adelson v. United States, 342 F.2d 332 (9th Cir. 1965); Stanley Marlin, supra, 54 T.C. at 566; Leo J. Roy, 28 CCH Tax Ct. Mem. 607 (1969). We do not have to say here whether a trip abroad or two-thirds around the world for a first grade teacher could ever directly and substantially relate to educational skills. Suffice it to say here that taxpayer’s trip in 1967 was not sufficiently so related as a matter of law.

We reverse the judgment below.

      . Internal Revenue Code of 1954 (26 U.S.C. § 162(a)) :
      (a) In General. — There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business ....

      . Treas.Reg. § 1.162-5 (1967) provides:
      (a) General rule. Expenditures made by an individual for education (including research undertaken as part of his educational program) which are not expenditures of a type described in paragraph (b) (2) or (3) of this section are deductible as ordinary and necessary business expenses (even though the education may lead to a degree) if the education—
      (1) Maintains or improves skills required by the individual in his employment or other trade or business, or
      (2) Meets the express requirements of the individual’s employer, or the requirements of applicable law or regulations, imposed as a condition to the retention by the individual of an established employment relationship, status, or rate of compensation.
      (b) Nondeductible educational expenditures — (1) In general. Educational and expenditures described in subpara-graphs (2) and (3) of this paragraph are personal expenditures or constitute an inseparable aggregate of personal and capital expenditures and, therefore, are not deductible as ordinary and necessary business expenses even though the education may maintain or improve skills required by the individual in his employment or other trade or business or may meet the express requirements of the individual’s employer or of applicable law or regulations.
      (2) Minimum educational requirements.— (i) The first category of nondeductible educational expenses within the scope of subparagraph (1) of this paragraph are expenditures made by an individual for education which is required of him in order to meet the minimum educational requirements for qualification in his employment or other trade or business ....
      (3) Qualification for new trade or business. — (i) The second category of nondeductible educational expenses within the scope of subparagraph (1) of this paragraph are expenditures made by an individual for education which is part of a program of study being pursued by him which will lead to qualifying him in a new trade or business
      (c) Deductible educational expenditures.— (1) Maintaining or improving skills. — The deduction under the category of expenditures for education which maintains or improves skills required by the individual in his employment or other trade or business includes refresher courses or courses dealing with current developments as well as academic or vocational courses provided the expenditures for the courses are not within either category of nondeductible expenditures described in paragraph (b) (2) or (3) of this section.
      (d) Travel as a form of education.— Subject to the provisions of paragraph (b) and (e) of this section, expenditures for travel (including travel while on sabbatical leave) as a form of education are deductible only to the extent such expenditures are attributable to a period of travel that is directly related to the duties of the individual in his employment or other trade or business. For this purpose, a period of travel shall be considered directly related to the duties of an individual in his employment or other trade or business only if the major portion of the activities during such period is of a nature which directly maintains or improves skills required by the individual in such employment or other trade or business. The approval of a travel program by an employer or the fact that travel is accepted by an employer in the fulfillment of its requirement for retention of rate of compensation, status or employment, is not determinative that the required relationship exists between the travel involved and the duties of the individual in his particular position.
      (e) Travel away from home. — (1) If an individual travels away from home primarily to obtain education the expenses of which are deductible under this section, his expenditures for travel, meals, and lodging while away from home are deductible. However, if as an incident of such trip the individual engages in some personal activity such as sightseeing, social visiting, or entertaining, or other recreation, the portion of the expenses attributable to such personal activity constitutes nondeductible personal or living expenses and is not allowable as a deduction. If the individual’s travel away from home is primarily personal, the individual’s expenditures for travel, meals and lodging (other than meals and lodging during the time spent in participating in deductible education pursuits) are not deductible. Whether a particular trip is primarily personal or primarily to obtain education the expenses of which are deductible under this section depends upon all the facts and circumstances of each case. An important factor to be taken into consideration in making the determination is the relative amount of time devoted to personal activity as compared with the time devoted to educational pursuits. The rules set forth in this paragraph are subject to the provisions of section 162(a) (2), relating to the deductibility of certain traveling expenses, and section 274 (c) and (d), relating to allocation of certain foreign travel expenses and substantiation required, respectively, and the regulations thereunder.
      (Emphasis supplied.)

      . The curriculum of taxpayer’s first grade ' class included a topic of study in social studies which used a textbook entitled Families and Social Needs. Some of the headings of the book are as follows: Unit One Families in Our Country
      Unit Two Where Families Live
      Unit Three Maps and Clothes
      Unit Four Families in Other Lands
      (a) In Japan
      (b) In Switzerland
      (c) In India
      Unit Five Houses in Other Lands
      (a) In Japan
      (b) In Switzerland
      (c) In India
      Mrs. Krist spent a brief amount of time in Switzerland and Japan, and none in India. Her trip did not concentrate on Switzerland and Japan.

      . Date Travel Details Amount

      9/22/67 Belgian Line “SS Brenghel” .................. $ 209.00
      10/4/67 Antwerp to Brussels — train ................... 1

      10/6/67 10/8/67 Air Brussels to London) Air London to Dublin) 46.00
      10/11/67 Train Dublin to Limerick ..................... ?
      10/14/67 10/19/67 & Bus to Galway and Cong and return to Galway ... 13.00
      10/20/67 Bus to Cahir, Waterford and train to Dublin .... 14.00
      10/23/67 Air Dublin to London......................... 18.20
      10/4-27/67 Hotels ...................................... 230.00
      10/4-27/67 Tours, sightseeing, factories, museums, etc...... 60.00
      10/27/67 Air London to Paris.......................... 26.32
      10/27-30/67 Travel, hotels in Paris, Loire Valley, Pherims .... 50.00
      10/31/67-11/20/67 Hotels, travel, tours through Cologne, Stuttgart, Munich, Vienna, Liechtenstein, Switzerland, Northern Italy, Genoa ...................... 200.00
      11/20/67 Air Nice to Barcelona to Madrid............... 51.00
      11/20-22/67 Pension tours ................................ 15.00
      11/23/67 Train to Lisbon from Madrid.................. 9.00
      11/23-30/67 Travel, tours, hotels in and about Lisbon, Portugal 60.00
      11/30/67 S/S Funchal to Madeira return trip to Lisbon 12/10/67 .............. 44.00
      12/10-19/67 Further travel, tours, hotels Lisbon, Portugal ........................... 45.00
      12/19/67 S/S Tourens Freighter Wilhelmsen Lines leaving Lisbon proceeding around African Coast to Manila, Hong Kong, Korea, Japan......... 672.98
      Total $1,763.50


source: Caselaw Access Project

author: BREITENSTEIN, Circuit Judge. BARRETT, Circuit Judge

license: Public Domain

text:
    Yvonne A. ADAMS et al., Plaintiffs-Appellants, v. CAMPBELL COUNTY SCHOOL DISTRICT, Campbell County Wyoming, et al., Defendants-Appellees.
    No. 72-1669.
    United States Court of Appeals, Tenth Circuit.
    Aug. 10, 1973.

      Jerry D. Anker, Washington, D. C., (Norman L. Blumenfeld, Lichtman, Abeles & Anker, Washington, D. C., Ronald W. Hofer, and Leimback, Aspinwall & Hofer, Casper, Wyo., on the brief), for plaintiffs-appellants.
    R. R. Bostwick, Casper, Wyo., and Wade Brorby, Gillette, Wyo. (Murane, Bostwick, McDaniel, Scott & Greenles, Casper, and Morgan & Brorby, Gillette, Wyo., on the brief), for defendants-ap-pellees.
    Before BREITENSTEIN, BARRETT and DOYLE, Circuit Judges.
   BREITENSTEIN, Circuit Judge.

We have here three school teacher cases which were consolidated for appeal. The district court granted summary judgment for the defendants in each case and plaintiffs appeal. We reverse.

None of the plaintiffs claim tenure. Each alleges reasonable expectancy of continued employment and a termination of service by nonrenewal of contract without hearing in violation of First and Fourteenth Amendment rights. Adams alleges that she was wrongfully accused of participating in the publication of a student “underground newspaper,” of membership in subversive organizations, and of jeopardizing a proposed bond issue. Wiseman says that he was terminated because of the length of his hair, allegedly subversive teachings, and jeopardy to the bond issue. Brooks avers that he was terminated because of length of hair, sympathy with young revolutionaries, participation in a peace march, press releases, subversive conduct, and jeopardy to the bond issue.

In each case defendants filed a motion to dismiss for failure to state a claim on which relief could be granted. The motions were supported by affidavits of the school superintendent and the school principal who said that the plaintiffs were initial contract teachers; that they were served with notice of nonrenewal of their contracts; that plaintiffs had not requested a hearing and had not been denied a hearing; and that the School District had complied with the state administrative procedure act.

In the Adams and Wiseman cases the complaints were filed on December 20, 1971, and the motions to dismiss with supporting affidavits on January 24, 1972. In the Brooks case the complaint was filed on February 23, 1972, the motion to dismiss on March 1, and a supporting affidavit on July 18. On July 3 the motions to dismiss were set for hearing on July 24. On July 21 each plaintiff tendered an amended complaint. In Adams and Brooks, but not in Wiseman, the tender was supported by an affidavit of counsel based on information and belief.

At the July 24 hearing the trial court granted leave to amend and heard all three cases as if consolidated. Defense counsel asked that the motions to dismiss be treated as motions for summary judgment. Plaintiffs’ counsel objected and asked for time to submit opposing affidavits. At the conclusion of the hearing the trial court took the cases under advisement. On the next day, July 25, the court filed a decision treating the motions to dismiss as motions for summary judgment, commenting that the defense affidavits were unopposed, holding that plaintiffs had been deprived of no Fourteenth Amendment rights, and granting summary judgment for the defendants in each case.

The summary judgments cannot stand. Rule 56(c), F.R.Civ.P., provides that a motion for summary judgment shall be served at least 10 days before the hearing date and before that date the adverse party may serve opposing affidavits. Noncompliance with the time provision of the rule deprives the court of authority to grant summary judgment. Mustang Fuel Corp. v. Youngstown Sheet & Tube Co., 10 Cir., 480 F.2d 607, opinion filed June 12, 1973.

Rule 12(b) says that if a motion to dismiss asserts failure to state a claim on which relief can be granted and matters outside the pleading are presented to and not excluded by the court “the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.” To consider a motion to dismiss as a motion for summary judgment without giving the adverse party an opportunity to present pertinent material is error. Dale v. Hahn, 2 Cir., 440 F.2d 633, 638; Harris v. Pate, 7 Cir., 440 F.2d 315, 318-319; and Costen v. Pauline’s Sportswear, Inc., 9 Cir., 391 F.2d 81, 85, n. 5. Ryan v. Scoggin, 10 Cir., 245 F.2d 54, 57, is not to the contrary. That case recognizes that a Rule 12(b)(6) motion supported by material outside of the pleadings can be treated as a Rule 56 motion. It says nothing about the Rule 12(b) provision that if such material is not excluded by the court all parties shall be given “a reasonable opportunity” to present pertinent material. The fact that defense affidavits in two of the cases had been on file for about six months is of no moment. Plaintiffs were confronted with a motion to dismiss for failure to state a claim. A motion to dismiss is not a responsive pleading within the meaning of Rule 15(a), Hanraty v. Ostertag, 10 Cir., 470 F.2d 1096, 1097, and under that rule a plaintiff may amend his pleading once as a matter of course at any time before a responsive pleading is filed. The presence of the affidavits in the file was not notice to plaintiffs that the motion would be treated as one for summary judgment. Under Rule 12(b) the court could have excluded the affidavits from consideration.

The difficulty here is that after defendants requested that the motions to dismiss be treated as summary judgment motions and after plaintiffs asked for time to submit affidavits, the court recessed the hearing without ruling on either request and on the next day filed a “Summary Judgment, With Findings.” Therein, the court said that it was treating the motions to dismiss as motions for summary judgment, that the defense affidavits were unopposed, and that summary judgment for defendants was granted. The action of the trial court deprived plaintiffs of an adequate opportunity to be heard and denied them the right to present controverting material and the right to ámend. In so acting the trial court violated both the spirit and the mandates of the applicable rules. The grant of summary judgment was improper.

We express no opinion on the merits of any of the cases. They must be determined in the light of the decisions of the United States Supreme Court, and of this court, bearing on the question of termination of employment of nontenured teachers.

The judgment in each case is reversed and each case is remanded for such further proceedings as may be appropriate.

BARRETT, Circuit Judge

(concurring specially):

I specially concur in my Brother Brei-tenstein’s opinion. In doing so, I am compelled to note that the trial court’s treatment of the motion to dismiss with attached affidavits which were on file for six months prior to hearing without any responsive or opposing affidavits having been filed or tendered by the plaintiffs, has been interpreted both by the Wyoming State courts and the United States District Court for the District of Wyoming and this writer as constituting authority, without further or other notice, by the court to treat the motion as one for summary judgment. The filing of uncontroverted affidavits attached to the motion to dismiss — unanswered for a period of six months prior to the hearing — has, in Wyoming practice, been treated and considered as the “reasonable opportunity to present all material made pertinent to such a motion by Rule 56,” thus eliminating any need on the part of the trial court to give a specific notice of its intention to treat the motion as one for summary judgment. This practice, it seems to me, is in keeping with this Court’s language in Parkinson v. California Company, 233 F.2d 432 (10th Cir. 1956), reading in pertinent part:

“The prior pleadings in support of the motions were not only identified by affidavit, but were shown to have been verified by plaintiff himself. Granted that plaintiff would have had the right on summary judgment to explain this record or to deny its effect by counter-affidavit, he did not elect to do so. Generally speaking, the allegations of a complaint may be pierced by uncontradicted evidentiary matter and in such event, will not be deemed sufficient to raise a genuine fact issue.” (Citations omitted). 233 F.2d at 438.

I would also note that under either a motion to dismiss or one for summary judgment, the relief sought is the same. See Ryan v. Scoggin, 245 F.2d 54 (10th Cir. 1957); National War Labor Board v. Montgomery Ward & Co., 79 U.S. App.D.C. 200, 144 F.2d 528 (1944), cert. denied 323 U.S. 774, 65 S.Ct. 134, 89 L.Ed. 619 (1944). It is difficult to perceive any prejudice in the trial court’s treatment.

In the interest of uniformity of practice throughout our Circuit I specially concur. I do not agree with the majority opinion’s observation that the trial court violated both the spirit and mandates of the applicable rules.


author: WISDOM, Circuit Judge:

text:
    G. B. HOWELL d/b/a Howell Breeding & Training Farm, Plaintiff-Appellee-Cross Appellant, v. AMERICAN LIVE STOCK INSURANCE COMPANY, Defendant-Appellant-Cross Appellee.
    No. 73-1770.
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 6. 1973.

      Stephen B. Tatem, Jr., Schuyler B. Marshall El Paso, Tex., for defendant-appellant-cross appellee.
    William J. Derrick, Chris A. Paul, El Paso, Tex., for plaintiff-appellee-cross appellant.
    Before WISDOM, AINSWORTH and CLARK, Circuit Judges.

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

   WISDOM, Circuit Judge:

The plaintiff-appellee, G. B. Howell, sued American Livestock Insurance Company on a livestock insurance contract to recover for the death of Riches I Seek — a two year old thoroughbred horse. The trial concerned the “actual cash value” of the colt as of its death. The jury returned a verdict for the plaintiff for $25,000, the maximum amount payable under the policy. On appeal the insurance company attacks the judgment on the ground that the trial judge abused his discretion in refusing to permit the company to introduce certain evidence aimed at proving bias on the part of one of the witnesses who corroborated the plaintiff’s estimate of the horse’s value. The plaintiff cross appeals on grounds that his recovery should have included a statutory penalty and a reasonable attorney’s fee. We affirm on both of these issues.

Riches I Seek died of a kidney infection on November 27, 1971. Howell, d/b/a Howell Breeding and Training Farms, had purchased the horse, then a yearling, a year earlier for $6,000 with the intention of training him to be a race horse. Howell felt that the pedigree of Riches I Seek was “not the greatest”, but he was familiar with the colt sire and had bred ten mares to him. Howell was impressed with the colt’s conformation, and he thought that Riches I Seek resembled the sire. Shortly after the purchase, however, the horse sustained aa injury” to his foot which never properly healed. As a result of the injury, Howell eventually decided that the horse could never race, but could be used only for stud.

Howell and the insurance company stipulated at trial that the death of the horse was a risk insured against loss under the policy between them. The testimony at the trial centered on determining the value of the horse. Howell sought to prove that at the time of the injury the horse was worth more than $25,000, the limit the Schedule in the policy allowed as recovery for Riches I Seek. The insurance company sought to prove that the horse was worth no more than $3,500. Three of the plaintiff’s witnesses ventured estimates of the value of the horse. The plaintiff testified that he would not have considered selling Riches I Seek for less than $100,000; that the colt possessed unlimited potential for breeding with quarter mares. Charles W. Cascio had been the plaintiff’s trainer during 1970 and 1971 and, .according to his testimony, had been on a list of the top ten trainers for ten of the preceding twelve years. Cas-cio had accompanied Howell at the time the horse was purchased, and Howell had consulted him with regard to the amount of insurance to be carried. Cas-cio testified that he had never seen a colt that equaled Riches I Seek in appearance and conformation. He felt that he could have found a buyer of Riches I Seek for $25,000; that the horse was worth this much because of its value as a stallion. The third witness was S. E. Heatley, a neighbor of the plaintiff, who was also engaged in raising horses. Heatley testified that he estimated the horse’s value at the time of its death at between $20,000 and $30,000.

The defendant produced only one witness who estimated the value of the horse. This was Mrs. Sandra Dunn Clark, a woman from Kentucky who serves as the Director of Research fo* the Cromwell Blood Stock Agency. She testified that her duties in that capacity involved primarily keeping statistics and preparing pedigree analyses on literally thousands of horses for use by the Agency’s international clientele. This witness testified that she had conducted a pedigree analysis of Riches I Seek, which included a detailed survey of the racing records of all of the foals sired by Riches and Honor and the foals out of Eye Sultry. Riches and Honor, the sire, had entered only one official race; he won it, but the race was at a minor racetrack in Ireland. Eye Sultry, the dam, had entered seven races, but had never finished in the money. Based on Mrs. Clark’s analysis, she estimated that Riches I Seek, an unproven horse with undistinguished ancestors, was worth no more than $3,500.

No doubt to the surprise of the Jockey Club and the American Quarter Horse Association, the jury returned a verdict for the plaintiff for $25,000. The plaintiff then filed a claim asserting that he was entitled to an additional 12 percent of the recovery and a reasonable attorneys fee under article 3.62 of the Texas Insurance Code V.A.T.S. The trial judge overruled the plaintiff’s claim, holding that New Mexico law applied to the case. This appeal and the cross appeal followed.

I.

The defendant’s appeal rests entirely on the refusal of the trial judge to allow the insurance company to introduce evidence which the company believed would demonstrate bias on the part of Charles Cascio, the horse’s former trainer. The defendant sought to introduce evidence concerning the settlement of a suit between Cascio and the plaintiff. The defendant’s counsel first mentioned the suit in the jury’s presence, during his cross-examination of Cascio. He had opened a line of questioning by asking Cascio whether Howell had instituted a suit against him, and whether the suit had been for an accounting of funds. Cascio had answered yes to both questions. The trial judge at that point intervened, on his own motion, to prevent the defendant’s counsel from pursuing the line of questioning any further.

The defendant filed a bill of exceptions to the judge’s ruling, and a hearing on that bill was held out of the presence of the jury. Both Howell and Cas-cio testified about the suit between them. Their testimony established that Howell had instituted suit against Cas-cio on August 15, 1971, some seven months before the filing of the complaint in this suit, and some fifteen months before the trial. His claim had been for about $35,000. Cascio apparently filed a counterclaim in the suit, although neither he nor Howell described the specific nature of the counterclaim. Cascio testified that he had given a deposition in the suit in November 1971 and that Howell’s deposition in that suit was never taken. Both Cascio and Howell testified that they had discussed the suit together informally on occasions scattered throughout the spring and summer months of 1972, that their lawyers had not participated in those discussions, and that it was during those discussions that they came to an understanding about dismissing their claims against each other. Howell testified that to the best of his recollection they had reached agreement by August 1972. Howell testified that the suit had not been dismissed by the time of his testimony, on October 26, 1972, because the lawyers for the two men had been negligent in dismissing the suit; he attributed the negligence in particular to the involvement of one of Cascio’s attorneys in some form of political activities, the specific nature of which he did not describe. Cascio testified that Howell had notified him in late September or early October that he, Howell, had instructed his lawyers to dismiss the suit. In any event, the suit was finally dismissed at 9:31 a. m. on October 27, 1972, the final day of the trial in this case.

Both Cascio and Howell emphatically denied that they had ever discussed Riches I Seek or the suit against the insurance company during the discussions of the settlement. Cascio testified that Howell had first asked him to testify in this suit about two weeks before the trial, and that -Howell had said that if Cascio refused to testify voluntarily he would be subpoenaed. Cascio said he had agreed to testify because he thought .the position of the insurance company “wrong”.

The trial judge refused to permit any of this testimony to be introduced before the jury. We conclude that his refusal did not constitute an abuse of judicial discretion.

The extent to which a witness may be cross-examined for .the purposes of showing bias rests on the sound discretion of the trial judge. See, e. g., Alford v. United States, 1930, 282 U.S. 687, 696, 51 S.Ct. 218, 75 L.Ed. 624. The task of the trial judge is to balance the probative value of the evidence sought to be introduced against the risks its admission may entail. The potential risks may include the possibility of undue prejudice, embarrassment, or harassment, either to the witness or to a party ; the possibility of misleading or confusing the jury; or the possibility of undue delay or waste of time. See, e. g., United States v. 412.93 Acres of Land, 3 Cir. 1972, 455 F.2d 1242, 1247; Rule 403, Proposed Federal Rules of Evidence (1972).

In the present case we are unable to say that it was not within the discretion of the trial judge, when he invoked these considerations, to conclude that the risks involved in admitting the evidence outweighed any possible benefits admitting it might have had. When we look at one side of the balance, we find that there were grounds on which the judge might well have decided that the evidence would have had little probative value. In the first place, the tendency of the evidence to prove that there was any connection between the settlement of the suit and Cascio’s appearance as the plaintiff’s witness here was, to say the least, slight. Perhaps more important, there were at least two grounds on which the judge might reasonably have concluded that the proffered testimony was wholly unnecessary. First, there was other evidence in the record which went to the general issue of Cascio’s reliability: the jury heard that Cascio and Howell had been acquainted since childhood, for fifteen or twenty years; that Howell had employed Cascio as a trainer; and, most important, that there had been a suit between them for an accounting. Second, the material part of Cascio’s testimony — his estimate of the value of the horse — was corroborated by two other witnesses. His testimony was by no means so critical that the trial judge should have been alert to let the jury hear every piece of evidence, however fragile, which might have influenced the jury’s estimate of his credibility.

When we look at the other side of the balance, we find grounds on which the trial judge might have concluded that introducing this evidence entailed any of three of the risks we mentioned above. In introducing the evidence, the defendant would have been implying that Cas-cio and Howell were guilty of conspiring to deceive the court; certainly the trial judge might have found this involved the possibility of undue prejudice, harassment, or embarrassment, either to Cascio or to the plaintiff. Considerations of time and judicial economy might also have entered the trial judge’s calculation. It is unlikely that the contest over the issue of Cascio’s credibility could have stopped with the limited testimony which the judge had heard on the bill of exceptions. Howell undoubtedly would have wished to produce evidence to rebut the defendant’s charge, and he would have been entitled to do so. The possibility that the trial would become involved in a lengthy wrangle over a side issue was not absent. Finally, reviewing Cascio’s and Howell’s testimony on the bill, and noting the little it contains establishing any real connection between the settlement and Cascio’s appearance, we can understand how the trial judge could have concluded that admitting the evidence would run the risk of misleading or confusing the jury.

In sum, then, while we are not prepared to say that we find the proffered evidence wholly irrelevant, or even that it clearly appears that it should have been excluded, at the same time we are unable to say that the district judge roamed beyond the bounds of his discretion in ruling as he did. In consequence, we cannot disturb the judgment rendered at trial.

II.

The appellee’s cross appeal is predicated upon article 3.62 of the Texas Insurance Code. This article provides that whenever an insurance company fails to pay any policyholder any amount due under a life, health, or accident insurance policy within thirty days of demand, the insurance company is liable for damages of 12 percent of the amount due, as well as for a reasonable attorneys fee sustained in the collection of the amount.

The plaintiff makes a delicate argument for the applicability of this provision to the facts of this case. He notes that Klaxon v. Stentor Electric Mfg. Co., 1941, 313 U.S. 487, 61 S.Ct. 1020, 85 L. Ed. 1477, requires that we apply Texas choice of law rules to determine what law is applicable. He then points to another provision of the Texas Insurance Code, article 21.42, as constituting the Texas choice of law rule requiring application of Texas law. Article 21.42 provides by its terms that any contract of insurance between a Texas resident and any insurance company which is doing business in Texas is to be governed by Texas law. The plaintiff, Howell, is a citizen of Texas, although his farm, the Howell Breeding and Training Farm, is located in New Mexico. The defendant did business in Texas as well as New Mexico. Thus, if we pay attention only to the express terms of article 21.42, the plaintiff appears to present us with an airtight case for his recovery of the penalty and attorneys fees.

The Supreme Court of Texas, however, has taken the view that article 21.-42 is not to be applied in cases such as the one before us. Austin Building Co. v. National Union Fire Ins. Co., Tex.1968, 432 S.W.2d 697, held that the statute was not to be given extraterritorial effect. In that case the Court said that such statutes as article 21.42 cannot

“ . . . be given extraterritorial effect so as to apply to a policy or bond written or executed by a foreign insurer in another state, even though the insured was a citizen or resident of the state which had adopted the statute in question, and even though the foreign insurer also did other business within that state.”

432 S.W.2d at 701, quoting 2 Couch on Insurance § 16:20 at 31 (1959). The Texas Court read article 21.42 as designed only to assure that Texas law will apply to contracts made between Texas citizens and insurance companies doing business in Texas, when and only when those contracts are made in the course of the company’s Texas business. Otherwise, the law to be applied was to be the law the parties intended to apply, which, in the absence of any contrary indication, was presumed to be the law of the state where the contract was made.

In Austin Building Co., a contract made and executed in Kansas covered property situated in Kansas, The Texas Court held that Kansas law should be applied. Here, the contract was made and executed in New Mexico. Riches I Seek was kept on Howell’s farm in New Mexico from the time he was first transported there immediately after Howell had purchased him in 1970. It is fair to assume, in the circumstances this case presents that the parties intended New Mexico law to apply. Under the principle of the Austin Building Co. case, the district judge was correct in applying New Mexico law.

The judgment is affirmed.

      . This provision is quoted in full at note 2.

      . V.A.T.S. Insurance Code, art. 3.62 (1951) provides in full:
      In all cases where a loss occurs and the life insurance company, or accident insurance company, or life and accident, health and accident, or life, health and accident insurance company liable therefor shall fail to pay the same within thirty days after demand therefor, such company shall be liable to pay the holder of such policy, in addition to the amount of loss, twelve (12%) percent damages on the amount of such loss together with reasonable attorney fees for the prosecution and collection of such loss. Such attorney fee shall be taxed as part of the cost of the case. The Court in fixing such fee shall take into consideration all benefits to the insured incident to the prosecution of the suit, accrued and to accrue on account of such policy.
      The cross appellee raises the question whether this statute applies to a livestock insurance contract such as the one involved here. We need not venture any answer to that question in view of our holding on the choice of law question.

      . V.A.T.S. Insurance Code, art. 21.42 (1951) provides in full:
      Any contract of insurance payable to any citizen or inhabitant of this State by any insurance or corporation doing business within this State shall be held to be a contract made and entered into under and by virtue of the laws of this State relating to insurance, and governed thereby, notwithstanding such policy or contract of insurance may provide that the contract was executed and the premiums and policy (in case it becomes a demand) should be payable without this State, or at the home office of the company or corporation issuing the same.
      The rationale for this assertion of lawmaking authority by Texas is given in the following section of the Insurance Code:
      The provisions of this Code are conditions upon which a foreign insurance corporation shall be permitted to do business within this state, and any such foreign corporation engaged in issuing contracts or policies within this staté shall be held to have assented thereto as a condition precedent to its right to engage in such business within this state.
      V.A.T.S. Insurance Code, art. 21.43 (1951).

      . The plaintiff cites three cases, one decided by this Court and the others by federal district courts sitting in Texas. He contends that these claims warrant the application of Article 21.42. Schroder v. John Hancock Mut. Life Ins. Co., 5 Cir. 1965, 349 F.2d 406; Zorn v. Aetna Life Ins. Co., E.D.Tex. 1965, 260 F.Supp. 730, aff’d, 5 Cir. 1965, 368 F.2d 1013; Wilburn Boat Co. v. Fireman’s Fund Ins. Co., E.D.Tex.1960, 199 F. Supp. 784, rev’d on other grounds, 5 Cir. 1962, 300 F.2d 631, cert. denied, 1962, 370 U.S. 925, 82 S.Ct. 1562, 8 L.Ed.2d 505. These cases are distinguishable. In each of these cases invoking article 21.42, the court applied Texas law to a contract actually “made” — in one sense or another of that word — out of state.

        Wilburn Boat Go. was a case where the application of Texas law was consistent with the approach of Austin Building Co. Wilburn Boat Co. was a suit to recover for the destruction by fire of a boat. The original insurance contract had been made between a California insurance company and two beneficiaries, one an Iowa resident and the other an Illinois resident. That contract had been transferred to two Texas residents who had purchased the boat, at the time of the purchase. The boat had been kept on a lake in Texas after its purchase, and the accident involved had occurred in Texas. Since the named beneficiaries were Texas residents, and since the insured boat was kept in Texas, there were grounds for concluding that the two parties who were parties to the contract after the transfer intended the contract to be governed by Texas law.

        Zorn and Schroder pose substantial difficulties which call for an explanation. The facts of the two cases are identical in all respects relevant to our purposes here. Both involved suits to recover benefits under group life insurance policies. In both cases, the major contract establishing the group policy had been made between a foreign insurance company and an employer resident in a state outside of Texas. The insurer was doing business in Texas, and the plaintiffs, beneficiaries on the group contracts, were residents of Texas. In both suits, the federal courts, following the interpretation of article 21.42 first made in Metropolitan Life Ins. Co. v. Wann, 1937, 130 Tex. 400, 109 S.W.2d 470, held that Texas law applied.
      The difficulty Wann, Zorn, and Schroder present is that they seem to assume a theory of article 21.42 that is basically contradictory to the theory implicit in the Austin Building Go. case, which we regard as controlling. Austin Building Go. interprets article 21.42 to mean that Texas law applies only when the insurance company has made the contract in question within the same course of “business done in Texas” which satisfies the statutory condition of its “doing business in Texas”. Wann and its progeny, on the other hand, permit a kind of “bootstrapping”, whereby the fact that the insurer does any business in Texas is sufficient to require that Texas law apply to any contract between it and a Texas resident, regardless of the intention or expectation of the parties. This “bootstrapping” logic is, of course, consistent with the literal language of the statute. This tension between Wann and Austin Building Co. does not appear ever to have been confronted by the Texas courts. The Texas Supreme Court decided Austin Building Co. in 1968, after the Wann rule had existed for over thirty years, without mentioning Wann.

      The Wann rule represents an exceptional rule designed only for the special case of group insurance contracts. The efforts of the Texas courts to apply article 21.42 to group insurance contracts have a very peculiar history, and the Wann rule can be understood only in light of that history. Prior to 1937, the Texas courts consistently held that when the group insurer issued and delivered the group policy to a Texas beneficiary, the insurer by the acts of issuance and delivery was “doing business” in Texas for the purposes of article 21.42. See, e. g., Metropolitan Life Ins. Co. v. Worton, Tex.Civ.App.1934, 70 S.W.2d 216; see Wann, 109 S.W.2d at 472. In 1937, however, in what Judge Friendly, writing for this Court in Schroder, called “one of the last gasps of Swift v. Tyson, 41 U.S. (16 Pet.) 1, 10 L.Ed. 865 (1842)”, the Supreme Court in a diversity suit refused to follow this interpretation of article 21.42. Boseman v. Connecticut Gen. Life Ins. Co., 1937, 301 U.S. 196, 57 S.Ct. 686, 81 L.Ed. 1036. Thereafter, the Texas Supreme Court, in “deference” to the views of the United States Supreme Court, abandoned the pre-1937 interpretation of the term “doing business”. But at the same time it adopted the Wann rule as a substitute theory for subjecting the claims of Texas beneficiaries of group policies to Texas law. See Wann, 109 S.W.2d at 472. The Wann rule has remained the law of Texas since 1937.
      One important thing to note about this history is that the pre-1937 rule, unlike the rule adopted in Wann, does not in any way imply a theory of article 21.42 that is at odds with the general theory implicit in the Austin Building Go. case. If one accepts the proposition that the issuance and delivery of the group policy constituted “doing business”, then the contract in a suit like Wann or Schroder will have been made in the same course of business which satisfies the statutory condition of “doing business in Texas”. The theoretical tension between Wann and Austin Building Go. thus emerges as little more than a vestige of the Swift era, and poses no real threat to the general theory of article 21.42 and provisions like it which we adopt here. That tension could be cured entirely if the Texas courts returned to the pre-1937 rule; and this Court has already once, in Schroder, noted “the possibility that Texas might determine to shrug off the shackles assumed in Wann in deference to the Supreme Court’s Boseman decision”, 349 F.2d at 408, in the wake of Erie R. R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188.
      In sum, the Wann rule, even as it now stands, does not affect the result in this case. Wann and Austin Building Co. continue to coexist, however uneasily, and Austin Building Co. governs cases outside the context of group insurance policies.


author: BROWNING, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Hal Findley MOORE, Defendant-Appellant.
    No. 72-3181.
    United States Court of Appeals, Ninth Circuit.
    Aug. 30, 1973.

      Robert J. Hirsh (argued), of Messing, Hirsh & Franklin, Tucson, Ariz., for defendant-appellant.
    Sarah Ann Bailey, Asst. U. S. Atty. (argued), William C. Smitherman, U. S. Atty., Tucson, Ariz., for plaintiff-appel-lee.
    Before BROWNING and GOODWIN, Circuit Judges, and TAYLOR, District Judge.

       Honorable Fred M. Taylor, United States Senior Judge, District of Idaho, sitting by designation.

   OPINION

BROWNING, Circuit Judge:

This is an appeal from convictions for possessing marihuana with intent to distribute (21 U.S.C. § 841(a)(1)), and for assaulting a federal officer in the course of his official duties (18 U.S.C. § 111). The prosecution stemmed from an “airport search” in which the marihuana was discovered in appellant’s luggage. Following discovery of the marihuana, appellant forcibly resisted the attempts of two federal Customs agents to arrest him. Appellant challenges his conviction for possession on the ground that the search violated his Fourth Amendment rights. He challenges his conviction for assault on the ground that he was privileged to use reasonable force to resist his allegedly unlawful arrest. We agree with the first contention, but reject the second.

I

The facts relevant to the lawfulness of the search are as follows.

Appellant approached the Continental Airlines check-in counter at Tucson International Airport with the apparent intention of boarding Flight 75. Mr. Kohlhoff, Continental’s ticket agent, observed that appellant was extremely nervous. When Mr. Kohlhoff asked for identification, appellant produced a medical care identification card, an identification card for federal food coupons, and half of a New York driver’s license, all bearing the name “Alan C. Mahoney.” Appellant’s air ticket was issued to “A. Mahoney.” None of the identification documents included information as to Mr. Mahoney’s height or weight, or the color of his hair or eyes. Appellant had no other identification. Mr. Kohlhoff asked Mr. Padalino, a Customs agent assisting in the check-in process, to help determine whether appellant was in fact Mr. Mahoney. In response to Agent Padalino’s questions, appellant stated that his birthdate was October 14, 1951, although the medical card showed Mr. Mahoney’s birthdate as “October 1950”; he said he did not know Mrs. Mahoney’s given name (“Catherine” on one of the identification cards), but recalled her “nickname”; and he correctly identified the city and street of Mr. Mahoney’s residence, but was unable to recall the street number. Agent Padalino told the Continental employees that in his opinion appellant was not Mr. Mahoney.

Since appellant could not identify himself satisfactorily as the person to whom the airline ticket had been issued, Mr. Kohlhoff told him he would not be' allowed to board the plane. Agent Padali-no and Customs Agent Hemerka (who was also standing nearby) were told that appellant had been denied boarding.

Appellant demanded the return of his two suitcases. Mr. Kohlhoff left to retrieve them from the plane. According to the agents appellant became increasingly agitated: sweating, trembling, eyes dilated and “glassy,” speech slurred. Agent Padalino testified that appellant appeared to be under the influence of alcohol or drugs, or to be ill. Mr. Kohlhoff returned with the two suitcases. The agents noticed that masking tape had been applied around one of the bags and over the keyholes of the other. Appellant took the bags and left hurriedly. As he moved away, he dropped his still-refundable ticket. The agents followed, calling out that they had his ticket, but he did not stop.

The agents caught up with appellant and drew him aside to an unoccupied boarding area. They informed him his bags would have to be searched, and asked him to open them. Appellant produced a key. The agents unlocked one of the bags. Appellant then opened the bag and showed the agents the section containing clothing and personal effects. They asked him to open the other half of the suitcase. He declined, holding down the interior divider. Agent He-merka pushed him away, opened the compartment, and discovered the marihuana.

The agents then sought to place appellant under arrest. He resisted, assaulting Agent Padalino in a successful effort to free himself, and fled. He was soon recaptured.

Appellant’s bag was not searched as part of an administrative screening search of airline passengers’ carry-on luggage such as was approved in United States v. Davis, 482 F.2d 893 (9th Cir. 1973). Appellant did not seek to personally carry his bag aboard the plane, and clearly indicated his desire to relinquish the opportunity to board the flight before the search was made. Id. at 910.

The search cannot be justified as a permissible “stop-and-frisk” within the limits established by Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). The circumstances may have warranted stopping appellant to inquire into the possibility of criminal activity. It is less clear that the agents could justify a Terry “frisk” by pointing to “particular facts from which . . . [they] reasonably inferred that [appellant] was armed and dangerous.” Sibron v. New York, 392 U.S. 40, 64, 88 S.Ct. 1889, 1903, 20 L.Ed.2d 917 (1968). But even if a Terry “frisk” were warranted, it could extend no further than “a carefully limited search of the outer clothing of . [appellant] in an attempt to discover weapons which might be used to assault [the agents],” Terry v. Ohio, 392 U.S. at 30, 88 S.Ct. at 1885, and thus could hardly include an investigation of the contents of appellant’s locked suitcase. See United States v. Davis, supra, 482 F.2d at 907.

Finally, the record does not support the government’s theory that the agents had probable cause to arrest appellant, and that the search of his bag was therefore a lawful search incident to a valid arrest.

“Probable cause at the time of arrest is determined by examining ‘whether at that moment the facts and circumstances within . . . [the agents’] knowledge and of which they had reasonably trustworthy information were sufficient to warrant a prudent man in believing that the petitioner had committed or was committing an offense.’ ” United States v. Selby, 407 F.2d 241, 242-243 (9th Cir. 1969), quoting Beck v. Ohio, 379 U.S. 89, 91, 85 S.Ct. 223, 13 L.Ed.2d 142 (1964). Suspicious conduct is not enough. See, e. g., Henry v. United States, 361 U.S. 98, 101, 80 S.Ct. 168, 4 L.Ed.2d 134 (1959). Probable cause is lacking if the circumstances relied on are “susceptible to a variety of credible interpretations not necessarily compatible with nefarious activities.” United States v. Kandlis, 432 F.2d 132, 136 (9th Cir. 1970), quoting United States v. Sel-by, supra, 407 F.2d at 243.

Appellant’s conduct was no more than suspicious. His nervousness, confusion, and extreme forgetfulness were consonant with intoxication induced by alcohol or drugs, ill health, or extreme but innocent anxiety engendered by a discomforting personal confrontation with the airline employees and government agents. See, e. g., Valenzuela-Garcia v. United States, 425 F.2d 1170, 1172 (9th Cir. 1970); cf. Wong Sun v. United States, 371 U.S. 471, 482-484 & n. 10, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963); Rios v. United States, 364 U.S. 234, 255-256, 261-262, 80 S.Ct. 1431, 4 L.Ed.2d 1688 (1960). His lack of documentary identification containing a physical description did not contribute materially to an implication of guilt. See, e. g., Jones v. Peyton, 411 F.2d 857, 861 (4th Cir. 1969). The presence of the masking tape was odd, but scarcely sinister. Nothing in the record indicates that appellant knew he had dropped his ticket, or understood the agents’ efforts to inform him.

As we have said, appellant may have been a sufficiently “suspicious individual” that the agents might have stopped him briefly, “in order to determine his identity or to maintain the status quo momentarily while obtaining more information.” Adams v. Williams, 407 U.S. 143, 146, 92 S.Ct. 1921, 1923, 32 L.Ed.2d 612 (1972). But they lacked sufficient trustworthy information “to warrant a prudent man in believing that the petitioner had committed or was committing an offense.” Beck v. Ohio, supra, 379 U.S. at 91, 85 S.Ct. at 225.

The motion to suppress should have been granted; appellant’s conviction for possession of marihuana with intent to distribute cannot stand.

II

The right to resist an unlawful arrest was well established at common law. “If the officer have no right to arrest, the other party might resist the illegal attempt to arrest him, using no more force than was absolutely necessary to repel the assault constituting the attempt to arrest.” John Bad Elk v. United States, 177 U.S. 529, 535, 20 S.Ct. 729, 731, 44 L.Ed. 874 (1900). “One has an undoubted right to resist an unlawful arrest, and courts will uphold the right of resistance in proper cases.” United States v. DiRe, 332 U.S. 581, 594, 68 S.Ct. 222, 228, 92 L.Ed. 210 (1948).

We assume this principle remains valid, although much criticized of late. We also assume its availability as a defense to a prosecution under 18 U.S.C. § 111. Cf. United States v. Kartman, 417 F.2d 893, ,895 n. 5 (9th Cir. 1969); United States v. Grimes, 413 F.2d 1376, 1378-1379 (7th Cir. 1969). We conclude, nonetheless, that it is not applicable to this case.

The privilege asserted is available only if the arrest was “unlawful.” The parties agree that appellant was arrested after the agents discovered the marihuana in his suitcase. The agents then had probable cause to believe that a felony was being committed in their presence. The warrantless arrest was therefore lawful, in itself. It was “unlawful” only in the exclusionary-rule sense that it was “fruit” of the prior unlawful search.

We have been cited no authority, and have found none, that permits resistance to an arrest that is unlawful only in this derivative sense. We are unwilling to initiate such an extension of the privilege, at least where, as here, there is no claim of bad faith, unreasonable force, or provocative conduct on the part of the arresting officer. Cf. United States v. Vigil, 431 F.2d 1037, 1042-1043 (10th Cir. 1970).

The purposes of the privilege would not be served by doing so.

One such purpose is to deter abuses of police authority. The risk of possible physical resistance to a subsequent arrest can have little tendency to deter the prior unlawful search. The relationship is too remote to add measurably to the deterrent effect of the officers’ presumed knowledge that the arrest will be futile in any event since the evidence resulting, directly or indirectly, from the unlawful search will be suppressed. There may be a slightly greater possibility that the availability of the privilege would deter the arrest itself, but it is questionable whether it would be desirable to discourage an officer from making an arrest after a serach, albeit unlawful, has demonstrated that a felony is being or has been committed. At that point the resolution of often difficult issues relating to the lawfulness of the search are surely best left to subsequent court proceedings.

The second general purpose of the privilege is to preserve the sense of personal liberty and integrity inherent in our system of constitutional government by protecting from punishment persons who reasonably resist unlawful intrusions by government agents. But again, where a search has disclosed that a felony is or has been committed, a subsequent arrest for that offense is hardly a proper occasion for self-righteous resistance — excluding, of course, instances of bad faith, unreasonable force, or provocative conduct by the arresting officer.

The conviction under 21 U.S.C. § 841(a)(1) is reversed. The conviction under 18 U.S.C. § 111 is affirmed.

      . See, e. g., United States v. Ferrone, 438 F.2d 381, 389-390 (3d Cir. 1971) ; United States v. Vigil, 431 F.2d 1037, 1042 (10th Cir. 1970) ; United States v. Simon, 409 F.2d 474, 477 (7th Cir. 1969) ; United States v. Heliczer, 373 F.2d 241, 246 n. 3 (2d Cir. 1967) ; cf. Government of Virgin Islands v. Duvergee, 456 F.2d 1271, 1272-1273 (3d Cir. 1972). Other cases narrowing the right to resist include United States v. Martinez, 465 F.2d 79, 82-83 (2d Cir. 1972), and United States v. Beyer, 426 F.2d 773, 774 (2d Cir. 1970). But see Basista v. Weir, 340 F.2d 74, 82 & n. 7 (3d Cir. 1972) ; Abrams v. United States, 99 U.S. App.D.C. 46, 237 F.2d 42, 43 (1956) ; United States v. Moore, 332 F.Supp. 919, 920 (E.D.Va.1971). The commentators are divided. See, e. g., Note, Defiance of Unlawful Authority, 83 Harv.L.Rev. 626, 636-38, 644r-46 (1970) ; Note, The Right to Resist an Unlawful Arrest, 31 La.L.Rev. 120 (1970) ; Chevigny, The Right to Resist an Unlawful Arrest, 78 Vale L.J. 1128 (1969) ; Case Note, 7 Nat.Res.J. 119 (1967) ; Note, The Right to Resist an Unlawful Arrest: An outdated Concept?, 3 Tulsa L.J. 40 (1966) ; Warner, The Uniform Arrest Act, 28 Va.L. Rev. 315, 330-31 (1942).

      . “Although a significant array of reasons exist for abolishing the right, there are numerous reasons for its retention. One such reason is that the proposed change might possibly foster conditions inherent in a police state. The new law could be an instrument of oppression. Armed with such a statute a policeman, even for reasons of prejudice or whim, could attempt to make a patently false and provocative arrest and thereby infuriate the average citizen into some form of resistance. Thereafter, the citizen could be charged with resisting arrest, which would be a crime regardless of the invalidity of the initial attempted arrest.” Note, The Right to Resist an Unlawful Arrest, 31 La.L.Rev. 120, 122-23 (1970). See Chevigny, The Right to Resist an Unlawful Arrest, 78 Yale L.J. 1128, 1128, 1138 (1969).

      . “The right to resist unlawful arrest memorializes one of the principal elements in the heritage of the English revolution: the belief that the will to resist arbitrary authority in a reasonable way is valuable and ought not to be suppressed by the criminal law. In the face of obvious injustice, one ought not to be forced to submit and swallow one’s sense of justice. More importantly, it is unconscionable to convict a man for resisting an injustice. This is indeed a value judgment, but the values are fundamental.” Chevigny, The Right to Resist an Unlawful Arrest, 78 Yale L.J. 1128, 1137-38 (1969).
      “The freedom to refuse to obey a patently unlawful arrest is essential to the integrity .of a government which purports to be one of laws, and not of men. Unless it is desirable to kill the imxiulse to resist arbitrary authority, the rule that such an arrest is a provocation to resist must remain fundamental.” Id. at 1147.


author: PER CURIAM:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. J. C. COSTELLO, aka J. M. Costello, Defendant-Appellant.
    No. 73-1808
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 17, 1973.

      John D. Buchanan, Jr., Tallahassee, Fla., for defendant-appellant.
    William H. Stafford, Jr., U. S. Atty., Robert L. Crongeyer, Jr., Asst. U. S. Atty., Pensacola, Fla., for plaintiff-ap-pellee.
    Before WISDOM, AINSWORTH and CLARK, Circuit Judges.

       Rule 18, 5th Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of N.Y., 431 F.2d 409, Part I (5th Cir. 1970).

   PER CURIAM:

This is an appeal from a conviction of possession of LSD in violation of 21 U. S.C. § 844(a) and of distributing LSD in violation of 21 U.S.C. § 841(a)(1). The appellant, James Costello, argues that the district court erred in three respects: (1) denying his motion for a bill of particulars, (2) failing to instruct the jury on the defense of entrapment, and (3) imposing consecutive sentences for a single criminal act. We affirm.

Costello, a college student, went to the apartment of his friend, Bob Heine. About the time Costello arrived Heine received a call from a person identified as Sue, now disclosed to have been acting as an undercover government informer. Heine interrupted his conversation with Sue to ask Costello if he “had heard of any drugs around.” Costello responded that he had heard of some “acid.” At Heine’s request, Costello talked briefly to Sue on the phone about the procurement of some LSD. At approximately 8 p.m. that same day undercover agents, Fallon, Eckard and the informer, Sue, visited Heine’s apartment. Costello met them there, took some money from the agents and returned approximately five mintues later with a plastic bag containing 50 tablets of LSD. At his trial Costello testified that he had acquired the LSD from a third person only for purposes of this sale, that he had no police record, and he had never sold drugs before or since.

Costello’s first two assignments of error are interrelated. He argues that the evidence presented was sufficient to require the court to instruct the jury on the law of entrapment, and that in the event it is held to be insufficient, such insufficiency resulted from the trial judge’s abuse of discretion in denying his motion to discover evidence necessary to prove entrapment.

Entrapment occurs “when the criminal design originates with the officials of the government, and they implant in the mind of an innocent person the disposition to commit the alleged offense and induce its commission in order that they may prosecute.”

Sorrells v. United States, 287 U.S. 435, 442, 53 S.Ct. 210, 212, 77 L.Ed. 413 (1932). The mere fact that the government provides the “opportunities or facilities for commission of the offense” is not sufficient. Sorrells, supra at 442, 53 S.Ct. at 212. There must be some inducement. The success of an entrapment defense is determinative of the guilt or innocence of an accused and as such is a jury question. In this circuit the initial burden of going forward with some evidence of inducement by law enforcement officials is on the defendant, and “ [i] f a defendant fails to carry the burden on the issue of entrapment forward, he is not entitled to submission of the issue to a jury.” United States v. Groessel, 440 F.2d 602, 606 (5th Cir. 1971); Pierce v. United States, 414 F. 2d 163, 167 (5th Cir. 1969), citing Snowden v. United States, 384 F.2d 357 (5th Cir. 1967).

A brief comparison of the instant case with our recent opinion in United States v. Workopich, 479 F.2d 1142 (5th Cir. 1973), should illustrate why the trial judge was correct in not instructing the jury on entrapment. In Workopieh the defendant, an addict, was approached not once but several times before he finally agreed to procure some heroin for undercover government agents. Additionally, it had been represented to him that the heroin was for addicts, like himself, who were experiencing the severe pains of withdrawal symptoms. In holding that the defendant was entitled to an instruction on entrapment the court noted that ultimately in making the sale “[t]he defendant was compliant but not eager.”

The instant case is altogether different. Costello himself testified that after a brief “social exchange” the party on the telephone, known to him only as Sue, asked him if he could get some “acid.” He replied that he had heard of some and agreed to “check on it.” Such testimony does not show the least reluctance on his part nor does it evince even an inference of inducement by Sue. According to Costello himself, Sue merely inquired. She never tried to persuade. The most any government agent did was provide him the opportunity for commission of the crime. In refusing to instruct on entrapment the trial judge aptly stated “[tjhere is no evidence that I can see of any inducement of any sort. I recognize the entrapment is an unusual matter and that I ought to be as lenient as possible with respect to giving that instruction, but I feel that in this case there is no evidence whatsoever of any inducement or persuasion representations of any kind in the record and I must deny that request.”

Any possible inference which might have been drawn from Costello’s prior good record that he may have been unwilling to sell or would have to be induced to commit a crime was more than rebutted by his own testimony. Thus, to fault the refusal of an entrapment instruction here would be to hold that such an instruction is required any time there is evidence of an initial approach by the government. Pierce v. United States, 414 F.2d 163 (5th Cir. 1969), rejected this very idea.

Moreover, since Costello did not testify that Sue or other government officials induced him to sell LSD he failed to demonstrate how the discovery he requested through his motion for a bill of particulars would have aided him in discharging his burden of going foward on inducement. This is far short of what he must show to demonstrate that the trial judge abused his discretion in denying his motion. See United States v. Baggett, 455 F.2d 476 (5th Cir. 1972) and United States v. Clark, 482 F.2d 103 (5th Cir. 1973).

Costello’s third asserted ground of error is also without merit. This circuit has long adhered to the so called “different evidence” test. United States v. Young, 482 F.2d 993 (5th Cir. 1973). Possession proscribed by § 844(a), which was complete when Costello received the drugs from the third party, and distribution in violation of § 841(a)(1), which occurred with transfer to the agents, are separate offenses under this standard, and conviction of both offenses in the instant case was proper.

Affirmed.

      . It shall be unlawful for any person knowingly or intentionally to possess a controlled substance unless such substance was obtained directly, or pursuant to a valid prescription or order, from a practitioner, while acting in the course of his professional practice, or except as otherwise authorized by this subchapter or subchapter II of this chapter. Any person who violates this subsection shall be sentenced to a term of imprisonment of not more than one year, a fine of not more than $5,000, or both, except that if he commits such offense after a prior conviction or convictions under this subsection have become final, he shall be sentenced to a term of imprisonment of not more than 2 years, a fine of not more than $10,000, or both.

      . Except as authorized by this subchapter, it shall be unlawful for any person knowingly or intentionally—
      (1) to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance;


author: RONEY, Circuit Judge:

text:
    Johnnie Lee JONES, a minor by and through his Mother, Legirtha Jones, as his parent, natural guardian and next friend, Plaintiff-Appellant, v. PETROLEUM CARRIER CORPORATION OF FLORIDA et al., Defendants-Appellees.
    No. 71-3433.
    United States Court of Appeals, Fifth Circuit.
    Aug. 20, 1973.
    Rehearing Denied Oct. 18, 1973.
    Charles M. Jones, Hinesville, Ga., for plaintiff-appellant.
    Julian C. Sipple, Savannah, Ga., for defendants-appellees.
    Before JOHN R. BROWN, Chief Judge, and MOORE  and RONEY, Circuit Judges.

       Hon. Leonard P. Moore, Senior Circuit Judge of the Second Circuit, sitting by, designation.

   RONEY, Circuit Judge:

Having before us a decision of a Georgia state court in a companion case arising out of the same accident which controls the law in this federal diversity case, we hold that the Georgia law of comparative negligence does not apply to the facts of this case and that the plaintiff is entitled to a new trial because the jury was charged on the comparative negligence doctrine.

Seventeen-year old Johnnie Lee Jones was a guest passenger in an automobile owned and operated by J. R. O’Neal, when it collided with a tractor-trailer rig owned by defendant Petroleum Carrier Corporation of Florida and insured by defendant Employers Mutual Liability Company of Wisconsin. As a result, plaintiff, totally and permanently disabled, brought this suit against Petroleum Carrier, its insurer, and its driver. The claim against the driver was settled prior to trial. This suit does not involve the driver of plaintiff’s automobile, who apparently could not be found and did not testify at the trial.

The evidence showed that O’Neal’s car swerved across the highway’s centerline. The theory of plaintiff’s case is that the defendant’s truck driver was exceeding the lawful speed limit and failed to take the last clear chance to avoid the accident. Defendants deny any negligence on the part of the truck driver, contend that O’Neal was speeding, and allege as an affirmative defense that Jones, in entering and remaining in O’Neal’s vehicle after it was or should have been apparent to him that O’Neal was intoxicated, failed to exercise ordinary care for his own safety.

The Court charged the jury on comparative negligence:

If you find that this defendant was negligent and also that this young man was negligent in riding in a car with an allegedly drunken driver, at a high rate of speed, and failed to take any measures to avoid the consequences to himself, then you could recover under what we call the doctrine of comparative negligence.

Comparative negligence means that you compare the negligence of each party, of the defendant in the case and of the plaintiff in the case. If their negligence was equal, there cannot be any recovery. If the negligence of the plaintiff, in riding in the automobile under those circumstances, exceeded any negligence on the part of Mr. Grubbs [the truck driver] that night, then there cannot be any recovery, but if the negligence of Mr. Grubbs exceeded that of this young man [plaintiff], if he was negligent, then there can be a recovery, but you would reduce the recovery in proportion to the respective negligence of each party.

In other words, if you should find that one was 51% negligent, that is, the defendant, and that this young man [the plaintiff] was 49% negligent, then the recovery for the damages would be 51% of such damages. That’s what he would be limited to. If the negligence was equal, however, there cannot be any recovery whatsoever, and I’m not inferring, I’m not telling you that there was any negligence on the part of the young man in getting in the car and continuing in the car under the circumstances. That’s up to you to consider, but you’ll always keep in mind that regardless of whether he was negligent, regardless of whether he had any duty to get out of that car or not to get in it in the first place, if Mr. O’Neal’s negligence was the sole, proximate cause of this collision, then your verdict must be for the defendant.

In Petroleum Carrier Corp. of Florida v. Jones, 127 Ga.App. 676 (1972), 194 S.E.2d 670, cert. denied (Case No. 27755, April 13, 1973), Jones’ father sued the defendants in state court for medical expenses incurred as a result of the injuries to his son. Pleading comparative negligence as an affirmative defense, the defendants alleged that Johnnie Lee Jones failed to exercise ordinary care for his own safety in remaining in the O’Neal vehicle after it was or should have been apparent that O’Neal, because of his intoxication, was in no condition to be driving.

Ruling that the Georgia Superior Court properly struck that defense, the Georgia Court of Appeals established the law of Georgia regarding the applicability of that defense to the facts of this case. The Georgia Supreme Court denied certiorari. Petroleum Corp. of Florida, supra,. Carrier

The principal issue in this case is whether a guest passenger who undertakes to ride upon a highway with a driver whom he knows or should have known to be intoxicated is subject to the rule of comparative negligence as between him and the driver of another car. That is, should the negligence of the plaintiff be compared with that of the defendant under the factual situation with which we are herein presented ?

Petroleum Carrier Corp. of Florida, supra at 673. Announcing the comparative negligence rule, the Georgia Court of Appeals stated two principles:

(1) that the plaintiff is not precluded from recovering by knowledge that the driver of his vehicle is intoxicated, and (2) that the negligence of the plaintiff can be compared with that of the defendant only where the plaintiff’s negligence was a proximate cause of the injuries suffered. This latter principle has been aptly stated by Presiding Judge Eberhardt in his special concurrence in Brooks v. Williams, 127 Ga.App. 311, 193 S.E.2d 231, to wit: that the alleged independent negligence of the guest may not be used as comparative negligence against the driver of the other vehicle involved unless it appeared that such negligence was at least a part of the proximate cause of the event which brought about the injury.

Petroleum Carrier Corp. of Florida, supra at 674. The Georgia court having held that the comparative negligence rule was not applicable to the facts there presented, we think it clear that the charge should not have been given in this case involving the same accident and doubt that it would have been given, had the Georgia appellate decision been rendered before the trial of the federal case. Under Erie Ry. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), we must follow the Georgia decision. Although the appellee asserts that different witnesses testified in the two eases, we do not think that the facts that appeared at the trial of this case were so materially different from those in the state case as to preclude application of the same law to both cases.

As to the possible effect of the charge on the trial, it need only be noted that in the state court, where the charge was not given, the plaintiff’s father recovered damages, but in the federal court, where the charge was given, the plaintiff recovered nothing. This persuades us that the erroneous charge might well have affected the outcome of the case.

We do not read the Georgia court’s decision to preclude the admitting of evidence from which a jury might conclude that, once having accepted the ride, plaintiff failed to take reasonable measures which might have avoided the accident. In Georgia, the negligence of an host driver of a motor vehicle cannot be imputed to his guest passenger unless the passenger stands in such a relation of privity to his negligent host driver as to create the relation of principal and agent. Ga.Code Ann. Section 105-205 (1935). No such relationship was shown in this case. But if on retrial there should be evidence that the passenger’s own lack of ordinary care was a proximate cause of the accident, then his negligence can be compared with the defendant’s. See Ga. Code Ann. Section 105-603 (1935).

Plaintiff further contends that the District Court erred in admitting into evidence the entire State Patrol accident report, which is allegedly based on hearsay. Although the state patrolman observed neither the accident itself nor the speed of the vehicles, his report was based upon his personal observations. The trial court deleted from the report references obtained solely through hearsay. The greater portion of the report which was admitted and the testimony concerning it were not based upon hearsay, and the overruling of the objection made to the report in its entirety, therefore, was not error. Stubbs v. Daughtry, 115 Ga.App. 22, 153 S.E.2d 633 (1957).

In view of the remand for a new trial, it is not necessary for us to discuss the other errors raised on this appeal.

We deny the motion filed by appellees for additional oral argument.

Reversed and remanded.

JOHN R. BROWN, Chief Judge

(concurring) :

I concur fully in the opinion and result. I add only my frequent lamentation that our brothers of the District Court can take a page from the book of their brothers in Texas by using that remarkable tool, F.R.Civ.P. 49(a). Indeed, many across the Circuit are doing so effectively.

Now, a case that could be disposed of by a simple rendition had special interrogatories been employed, goes back for a second, and wholly needless trial. F. R.Civ.P. 49(a) is not only the “doubt eliminator”. See generally Brown, Federal Special Verdicts: The Doubt Eliminator, 1968, 44 F.R.D. 338. It is a waste eliminator. No one can remotely suggest that a system characterized as one of “justice” must afford two trials where one would do. The public interest compels that Judges exploit fully the mechanisms the law provides. American Oil Company v. Hart, 5 Cir., 1966, 356 F.2d 657, 659; Horne v. Georgia Southern and Florida Railway Co., 5 Cir., 1970, 421 F.2d 975, 980 (Brown, C. J. concurring); Little v. Bankers Life and Casualty Co., 5 Cir., 1970, 426 F.2d 509, 512 (Brown, C. J. concurring); Thrash v. O’Donnell, 5 Cir., 1971, 448 F.2d 886; Weymouth v. Colorado Interstate Gas Co., 5 Cir., 1966, 367 F.2d 84, 93 n. 31; E. L. Cheeney Co. v. Gates, 5 Cir., 1965, 346 F.2d 197, 200; Smoot v. State Farm Mutual Ins. Co., 5 Cir., 1962, 299 F.2d 525, 533; Burns v. Anehor-Wate Co., 5 Cir., 1972, 469 F.2d 730, 734 n. 8; In the Matter of: Double D Dredging Co., 5 Cir., 1972, 467 F.2d 468, 469 n. 3; Wolfe v. Virusky, 5 Cir., 1972, 470 F.2d 831, 837 (Brown, C. J. concurring); Boyce v. Pi Kappa Alpha Holding Corp., 5 Cir., 1973, 476 F.2d 447 [1973] (Brown, C. J. concurring).

      . Special Verdicts. The court may require a jury to return only a special verdict in the form of a special written finding upon each issue of fact. In that event the court may submit to the jury written questions susceptible of categorical or other brief answer or may submit written forms of the several special findings which might properly be made under the pleadings and evidence; or it may use such other method of submitting the issues and requiring the written findings thereon as it deems most appropriate. The court shall give to the jury such explanation and instruction concerning the matter thus submitted as may be necessary to enable the jury to make its findings upon each issue. If in so doing the court omits any issue of fact raised by the pleadings or by the evidence, each party waives his right to a trial by jury of the issue so omitted unless before the jury retires he demands its submission to the jury. As to an issue omitted without such demand the court may make a finding; or, if it fails to do so, it shall be deemed to have made a finding in ac-cord with the judgment on the special verdict.