text:
    LOCAL UNION NO. 251 affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, etc., Plaintiff-Appellee, v. TOWN LINE SAND & GRAVEL, INC., Defendant-Appellant.
    No. 74-1252.
    United States Court of Appeals, First Circuit.
    Argued March 3, 1975.
    Decided March 14, 1975.
    Raymond R. Coia, Providence, R. L, for defendant-appellant.
    Bruce G. Tucker, Providence, R. L, with whom Dennis J. Roberts, II, and Roberts & Wiley Inc., Providence, R. I., were on brief, for plaintiff-appellee.
    Before COFFIN, Chief Judge, McENTEE and CAMPBELL, Circuit Judges.
   PER CURIAM.

Appellee commenced an action in the district court to recover from appellant funds allegedly due as employer contributions to a Health and Welfare Fund and a Pension Fund. On October 26, 1973 appellee requested that appellant produce certain employment records pursuant to Fed.R.Civ.P. 34, and later filed a motion to compel production when appellant neither responded nor objected to the request. A hearing on the motion was held January 28 before a magistrate, and an order was entered directing appellant to make the documents available within 30 days. When compliance was not forthcoming, appellee asked that the court enter a conditional order of default judgment.

The motion came on for a hearing April 26, the Friday before the Monday on which trial was to commence. Counsel for appellant did not dispute the allegations contained in the motion that the discovery order had been entered, that appellant had additionally agreed at an April pretrial conference to allow inspection of the materials, and that appellee’s representative had nonetheless been refused access to them. Appellant’s counsel reported that his client simply refused to go along with the advice that he comply with the court order. The district judge thereupon held appellant in default “because he has intentionally and deliberately violated the order entered on January 28, 1974.” A hearing was held the next week to establish the amount of the claim, and at that time appellant presented an oral motion that the default judgment be vacated. The motion was denied, and leave granted to refile it, along with supporting memoranda, after final judgment was entered. The motion was not renewed.

Seeking reversal of the default, appellant argues that the sanction went beyond the court’s authority. None of the arguments offered by appellant merit extended discussion. Federal Rule 37 empowers a district court to make such orders as “are just” when a party fails to comply with a discovery order, placing the court’s handling of such matters beyond appellate review when there has been no abuse of discretion. Atlantic Cape Fisheries v. Hartford Fire Insurance Co., 509 F.2d 577 (1st Cir. 1975). The entry of default on the issue of liability was a reasonable sanction under the circumstances, especially since appellant not only failed, but wilfully refused, to comply. Appellant’s obstinacy stretched over a period of months, and the district judge demonstrated Job-like patience in extending his offer, not acted upon, to consider a postjudgment motion to vacate.

We can ascribe no significance to the fact that the attorney who represented appellant at the time default was entered, and also on this appeal, did not become attorney of record until March 27, 1974. It is clear that he was in fact representing appellant in this matter at least as far back as October 1973, and in any case a change of attorneys would not suffice to excuse a client’s noncompliance absent a showing of special circumstances.

We also reject the suggestion that it was improper for the district court to enter a general default after receiving a motion from appellee which requested that a conditional default be entered giving appellant seven additional days in which to comply. One possible response would be that in asking for “a default judgment” at the hearing, appellee broadened its request enough to encompass the relief actually granted. But that fact is almost irrelevant, since the Federal Rules commit to the district judge, not to the parties, the responsibility for fashioning the sanctions utilized in cases of noncompliance.

Affirmed. Costs for appellee.


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    UNITED STATES of America, Appellee, v. Willie Foster SELLERS, Appellant.
    No. 74-1772.
    United States Court of Appeals, Fourth Circuit.
    Argued Feb. 4, 1975.
    Decided Feb. 18, 1975.

      Martin L. Brackett, Jr., Charlotte, N. C. (Allen A. Bailey, Charlotte, N. C., [Court-appointed counsel], on brief), for appellant.
    Michael S. Scofield, Asst. U. S. Atty. (Keith S. Snyder, U. S. Atty., on brief), • for appellee.
    Before WINTER, CRAVEN and WIDENER, Circuit Judges.
   PER CURIAM:

After examining the record and briefs and hearing oral argument, we see no merit in this appeal. The principal point urged is that defendant’s fourth amendment rights were violated when the police made a warrantless seizure of two firearms in the trunk of defendant’s motor vehicle, and one of the firearms was used as the basis for the prosecution for illegal possession of an unregistered automatic rifle in violation of 26 U.S.C. §§ 5861(d) and 5871. The firearms were seized when the operator of a wrecking service, to whom possession of defendant’s car had been entrusted, opened the trunk, concededly not under instructions by the police, observed the firearms and summoned the police to examine them. We are persuaded that a warrantless seizure was permissible under the plain view doctrine. Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971).

Affirmed.

       These facts distinguish the instant case from Cash v. Williams, 455 F.2d 1227 (6 Cir. 1972), on which defendant places heavy reliance. In Cash, the police officers participated in the warrantless search.


author: HUFSTEDLER, Circuit Judge:

text:
    Sang Chul BARK, Petitioner, v. IMMIGRATION AND NATURALIZATION SERVICE, Respondent.
    No. 72-3143.
    United States Court of Appeals, Ninth Circuit.
    Feb. 5, 1975.

      Donald L. Ungar of Phelan, Simmons & Ungar, San Francisco, Cal., for petitioner.
    James L. Browning, Jr., U. S. Atty., William B. Spohn, Asst. U. S. Atty., Chief, Civil Div., Bernard J. Hornbach, Sp. Asst. U. S. Atty., for respondent.
    Before MERRILL, HUFSTEDLER, and CHOY, Circuit Judges
   OPINION

HUFSTEDLER, Circuit Judge:

Petitioner was denied adjustment of status from student visitor to permanent resident, pursuant to section 245 of the Immigration and Nationality Act (“the Act”) (8 U.S.C. § 1255), and he seeks review. Respondent has conceded that the denial was based solely on the Immigration Judge’s conclusion, affirmed by the Board of Immigration Appeals, that petitioner was ineligible for adjustment of status because the marriage upon which he based his application was a sham.

Petitioner and his wife had been sweethearts for several years while'they were living in their native Korea. She immigrated to the United States and became a resident alien. Petitioner came to the United States in August, 1968, initially as a business visitor and then as a student. They renewed their acquaintance and were married in Hawaii in May 1969. Petitioner’s wife filed a petition on his behalf to qualify him for status as the spouse of a resident alien pursuant to sections 203(a)(2) and 204 of the Act (8 U.S.C. §§ 1153(a)(2), 1154). Petitioner thereafter filed his own application for adjustment of status under section 245 of the Act.

Petitioner and his wife testified at the hearing on his application that they married for love and not for the purpose of circumventing the immigration laws; they admitted quarreling and separating. Their testimony about the time and extent of their separation was impeached by evidence introduced by the Service. The Immigration Judge discredited their testimony and held that the marriage was a sham, relying primarily (perhaps solely), on the evidence of their separation. In affirming the Immigration Judge’s decision, the Board of Immigration Appeals stated: “Investigation revealed that [petitioner] and his wife lived in separate quarters. While both testified that their marriage was ‘a good marriage,’ their testimony as to how much time they actually spent together was conflicting.”

Petitioner’s marriage was a sham if the bride and groom did not intend to establish a life together at the time they were married. The concept of establishing a life as marital partners contains no federal dictate about the kind of life that the partners may choose to lead. Any attempt to regulate their life styles, such as prescribing the amount of time they must spend together, or designating the manner in which either partner elects to spend his or her time, in the guise of specifying the requirements of a bona fide marriage would raise serious constitutional questions. (Cf. Roe v. Wade (1973) 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147; Graham v. Richardson (1971) 403 U.S. 365, 91 S.Ct. 1848, 29 L.Ed.2d 534; Griswold v. Connecticut (1965) 381 U.S. 479, 85 S.Ct. 1678, 14 L.Ed.2d 510.) Aliens cannot be required to have more conventional or more successful marriages than citizens.

Conduct of the parties after marriage is relevant only to the extent that it bears upon their subjective state of mind at the time they were married. (Lutwak v. United States (1953) 344 U.S. 604, 73 S.Ct. 481, 97 L.Ed. 593.) Evidence that the parties separated after their wedding is relevant in ascertaining whether they intended to establish a life together when they exchanged marriage vows. But evidence of separation, standing alone, cannot support a finding that a marriage was not bona fide when it was entered. The inference that the parties never intended a bona fide marriage from proof of separation is arbitrary unless we are reasonably assured that it is more probable than not that couples who separate after marriage never intended to live together. (Cf. Leary v. United States (1969) 395 U.S. 6, 36, 89 S.Ct. 1532, 23 L.Ed.2d 57.) Common experience is directly to the contrary. Couples separate, temporarily and permanently, for all kinds of reasons that have nothing to do with any preconceived intent not to share their lives, such as calls to military service, educational needs, employment opportunities, illness, poverty, and domestic difficulties. Of course, the time and extent of separation, combined with other facts and circumstances, can and have adequately supported the conclusion that a marriage was not bona fide.

The administrative record discloses that the Immigration Judge and B.oard of the Immigration Appeals did not focus their attention on the key issue: Did the petitioner and his wife intend to establish a life together at the time of their marriage? The inquiry, instead, turned on the duration of their separation, which, as we have pointed out, is relevant to, but not dispositive of the intent issue. Moreover, the determination may have been influenced by the irrelevant fact, cited by respondent to support the Service, that “the wife could and did leave as she pleased when they were together.” The bona fides of a marriage do not and cannot rest on either marital partner’s choice about his or her mobility after marriage.

We decline to speculate about the conclusion that would have been reached if the Service had confined itself to evidence relevant to the parties’ intent at the time of their marriage. The Service will have an opportunity on remand to develop the record in accordance with the views herein expressed.

Reversed and remanded.

      . E. g., Lutwak v. United States, supra, 344 U.S. 604, 73 S.Ct. 481, 97 L.Ed. 593, which involved criminal prosecutions stemming from an elaborate scheme to secure entry into the United States for two brothers and the former wife of one of them under the “War Brides Act.” Female veterans were hired to marry the brothers, and the brothers’ nephew (also a veteran) married the former wife. The parties agreed beforehand to separate as soon as possible, and none of them ever cohabited.
      In United States v. Sacco (9th Cir. 1970) 428 F.2d 264 the defendant claimed derivative citizenship based on his mother’s marriage to a citizen. His mother’s marriage was found a sham because she married solely to legitimate a child. She did not marry to circumvent the immigration laws, but the evidence was clear that she and her husband never intended to live together after marriage.
      Other cases holding the marriages sham disclose circumstances almost as unusual as Lutwak. (E. g., Johl v. United States (9th Cir. 1966) 370 F.2d 174; Scott v. INS (2d Cir. 1965) 350 F.2d 279, rev’d on another point sub nom. INS v. Errico (1966) 385 U.S. 214, 87 S.Ct. 473, 17 L.Ed.2d 318; United States v. Pantelopoulos (2d Cir. 1964) 336 F.2d 421; United States v. Abdel-Khaleq (7th Cir. 1965) 354 F.2d 642; cf. Espinoza Ojeda v. INS (9th Cir. 1969) 419 F.2d 183.)


author: EUGENE A. WRIGHT, Circuit Judge:

text:
    In the Matter of Earl L. CARTER, d/b/a Highland Farms, Bankrupt. WELLS FARGO BANK, Petitioner-Appellant, v. Earl L. CARTER, d/b/a Highland Farms, Debtor-Appellee.
    No. 72-3215.
    United States Court of Appeals, Ninth Circuit.
    Feb. 26, 1975.
    Stephen A. Mazurak (argued), of Bro-beck, Phleger & Harrison, San Francisco, Cal., for petitioner-appellant.
    J. Roderick Jarrett (argued), Fresno, Cal., for debtor-appellee.

       Of the Northern District of California.

   OPINION

Before BROWNING and WRIGHT, Circuit Judges, and PECKHAM, District Judge.

EUGENE A. WRIGHT, Circuit Judge:

This is an appeal from a district court order affirming the decision of a referee in bankruptcy denying Wells Fargo’s claim for a deficiency owed on a tomato harvester.- We affirm.

The debtor, Earl L. Carter, had purchased the harvester under an equipment sale contract and security agreement which covered a secured balance of $8,000. The seller assigned the contract to Wells Fargo. Carter failed to make the first payment due under the contract and subsequently filed a petition for an arrangement pursuant to Chapter XI. Wells Fargo filed a claim which included the $8,000 balance owed by Carter, and the bankruptcy judge approved a stipulation allowing repossession.

Shortly thereafter, the bank sent notice of foreclosure sale by certified mail, return receipt requested, to Carter at his residence. The notice was returned unclaimed before the sale. Wells Fargo made no further attempt to notify the debtor, although its officers knew his whereabouts and had business dealings with him through a branch office.

The harvester was sold for $2,250 and Wells Fargo claimed a deficiency for the $5,750 balance. Carter objected on the ground that he had not been notified of the sale.

The bankruptcy judge found that the bank had not satisfied the notice requirements of § 9504(3) of the California Commercial Code, and was therefore precluded from asserting a deficiency claim. The district court affirmed that order upon a petition for review. We affirm.

Section 9504(3) of the Uniform Commercial Code as adopted by California requires the lienholder to notify the borrower of a foreclosure sale either by personally delivering the notice or by depositing it in the United States mail, postage prepaid, addressed to the debtor. This section of the California Code differs from the Uniform Commercial Code which requires only “reasonable notice.” By substituting a definite standard California hoped to avoid controversy in each case as to whether the notice was reasonable.

Wells Fargo argues that, having mailed a certified letter addressed to the debtor, return receipt requested, it has more than complied with the California provisions, and that the statutory presumption of receipt should apply.

The presumption that a letter duly mailed was received by an addressee is not conclusive, but rebuttable by satisfactory evidence to the contrary. Tremayne v. American SMW Corp., 125 Cal.App.2d 852, 271 P.2d 229 (1959); Berger v. Limón, 214 Cal.App.2d 149, 29 Cal. Rptr. 483 (1963). Consequently, where, as here, there is uncontradicted evidence that the letter mailed was not received, the presumption of receipt is overcome.

The notice requirement is for the protection of the debtor. Its purpose is to permit the debtor to bid at the foreclosure sale or to otherwise assure that the sale was conducted in a commercially reasonable manner. Mallicoat v. Volunteer Fin. Co., 57 Tenn.App. 106, 415 S.W.2d 347, 350 (1966). Here that purpose has been frustrated by the failure of the bank to attempt a second delivery when it knew the notice had not been received by the debtor.

An officer of one branch of Wells Fargo had waited upon Carter at the branch office during the period prior to the sale and knew of Carter’s whereabouts. Generally, a bank is chargeable with knowledge acquired by the manager or officers of a branch bank in the course of their duties. Harter v. People’s Bank of Buffalo, 221 App.Div. 122, 223 N.Y.S. 118 (1927); Bank of United States v. Cooper-Bessamer Corp., 146 Misc. 20, 261 N.Y.S. 687 (1932).

Section 1103 of the California Commercial Code provides that, unless displaced by particular provisions of the Code, the principles of law and equity, including the law merchant will supplement its provisions. Prior to the adoption of the Commercial Code, California law clearly provided that a creditor who disposed of property without following the notice requirement was barred from recovering a deficiency judgment. Atlas Thrift Co. v. Horan, 27 Cal.App.3d 999, 104 Cal.Rptr. 315, 318 (1972). Metheny v. Davis, 107 Cal.App. 137, 290 P. 91 (1930).

Neither party contends that this prior law has been displaced by a particular provision of the Code. It is still in effect, and applies here to bar Wells Fargo from recovering a deficiency judgment. Atlas Thrift, supra. Further, although Wells Fargo could be said to have technically complied with the notice provision, § 1203 of the California Commercial Code requires “good faith” in the performance of every contract or duty within the code. Proceeding to sale with knowledge that the debtor had received no notice can scarcely be said to be in good faith.

We conclude that failure by Wells Fargo to take proper steps to notify the debtor of the foreclosure sale after being put on notice that the letter had not been received, precludes it from recovering a deficiency judgment.

Affirmed.

      . Sixth Progress Report to the Legislature by Senate Fact Finding Committee on Judiciary (1959-1961) Part 1, The Uniform Commercial Code, p. 587.


text:
    UNITED STATES of America, Appellee, v. John Robert OWENS, Appellant.
    No. 74-2211.
    United States Court of Appeals, Fourth Circuit.
    Argued Feb. 7, 1975.
    Decided Feb. 26, 1975.
    Certiorari Denied June 16, 1975.
    See 95 S.Ct. 2629.
    James R. Van Camp, Carthage, N. C. (H. F. Seawell, Jr., Seawell, Pollock, Fullenwider, Van Camp & Robbins, Carthage, N. C., and Mitchell McEntire, Harris & McEntire, Graham, N. C., on brief), for appellant.
    N. Carlton Tilley, Jr., U. S. Atty. for the Middle District of N. C. (Benjamin H. White, Jr., Asst. U. S. Atty. on brief), for appellee.
    Before WINTER, BUTZNER and RUSSELL, Circuit Judges.
   PER CURIAM:

John Robert Owens appeals from his conviction of violating 26 U.S.C. § 7212(b), forcibly rescuing certain vehicles which had been seized by Internal Revenue Service agents.

The evidence presented against Owens was circumstantial. However, we conclude that it was sufficient for the jury to find beyond a reasonable doubt that Owens had committed the crime. Cf., United States v. Chappell, 353 F.2d 83, 84 (4th Cir. 1965). We find no cause for reversal in Owens’ other assignments of error.

Judge Russell, believing the evidence insufficient to sustain a conviction, dissents.

Affirmed.


author: OPINION JAMES M. CARTER, Circuit Judge:

text:
    In the Matter of WONDERFAIR STORES, INC. OF ARIZONA, Debtor. Sam JONAS, Trustee-Appellant, v. WALGREEN ARIZONA DRUG CO., Petitioner-Appellee. WALGREEN ARIZONA DRUG CO., Plaintiff-Appellant, v. Mary Ann LEVITT et al., Defendants-Appellees.
    Nos. 73-1712, 73-2055.
    United States Court of Appeals, Ninth Circuit.
    Feb. 6, 1975.

      Jerry R. Cahan (argued), Pasadena, Cal., for appellant.
    Raymond Wallenstein (argued), Los Angeles, Cal., for appellee.

       Honorable William H. Orrick, United States District Judge, Northern District of California, sitting by designation.

   OPINION

Before DUNIWAY and CARTER, Circuit Judges, and ORRICK, District Judge.

JAMES M. CARTER, Circuit Judge:

These appeals were argued the same day and we consider them in one opinion. They each involve the same lease and the same legal issues.

Appeal No. 73-1712

This is an appeal from the Order of the District Court for the Central District of California, reversing in part and affirming in part the Order of the Referee in Bankruptcy in proceedings under Chapter X of the Bankruptcy Act. The controversy involves the validity of a purported lease of real property in a proposed shopping center, between appellee Walgreen Arizona Drug Co. (“Walgreen”) as “Tenant” and debtor Wonder-fair Stores, Inc. of Arizona (“Wonder-fair”) as “Landlord.” The Trustee, Sam Jonas, seeks to avoid or cause to be invalidated the lease so that he may sell the land involved free of encumbrances.

The effect of the district court’s Order is that the Agreement is held to be:

I. sufficiently definite and certain to be enforceable;
II. a lease, vesting present, enforceable property rights in the land in question, rather than an executory contract for a lease, providing for future rights to a building to be constructed;
III. not in violation of the rule against perpetuities; and
IV. superior to the interest of the Trustee, because although improperly recorded, it was sufficient to put the Trustee on inquiry notice.

The Trustee disputes this holding in all respects. We affirm.

FACTS

The petition for corporate reorganization under Chapter X of the Bankruptcy Act, 11 U.S.C. § 501 et seq., was filed by Wonderfair on March 15, 1967, and an order approving the petition, appointing a trustee, and referring the matter to a Referee and Special Master, was made the same day.

The principal asset of the debtor Wonderfair at the time of the institution of the Chapter X proceedings consisted of approximately 18.8 acres of land at the northeast corner of McDowell Road and Scottsdale Road in Scottsdale, Arizona (“Shopping Center Site”) as described in the Agreement between Walgreen and Wonderfair.

On April 6, 1965, Wonderfair and Walgreen executed a document denominated as a “lease” of a building to be constructed on part of the Shopping Center Site. The instrument was acknowledged that day before a notary public in Los Angeles, California. Also on the same day, Wonderbowl-Downey, Inc. executed and duly acknowledged a document attached to the Walgreen Lease, which provided in part: “to induce the execution by Walgreen ... of the attached lease” Wonderbowl-Downey, Inc., owner of the parcels outlined in green on the plan attached to the Walgreen Lease, “joins in the foregoing lease to indicate its agreement that said parcels shall be bound by the provisions of Article 9 thereof.” This document was recorded with the Walgreen “Lease”. At the same time, Walgreen Co., an Illinois corporation, executed and duly acknowledged a Guaranty of Walgreen of Arizona’s performance under the Lease. This document was recorded with the Lease and the Wonderbowl-Downey Agreement.

Between April 13 and August 16, 1965, Walgreen and Wonderfair agreed upon certain contractual modifications to reflect amendments made between Wonderfair and another prospective Shopping Center tenant (“Bob’s Big Boy”), and to correct several mathematical and typographical errors.

On August 16, 1965, new pages 4, 5, and 9 were prepared by Walgreen and the pages, reflecting the above modifications, transmitted to Wonderfair to be initialed and then returned to Walgreen for incorporation in the Lease. On October 4, 1965, Walgreen executed the Lease containing the substituted pages 4, 5, and 9 duly initialed by Wonderfair, returning one executed copy to Wonder-fair, together with the executed copies of the Wonderbowl Agreement and Walgreen Co. Guaranty, and retaining one copy which it forwarded to the County Recorder of Maricopa County, Arizona, and which was so recorded on October 19, 1965. The Lease was not re-acknowledged before a notary public.

DISCUSSION

I. The Lease is sufficiently definite and certain to be enforceable.

The Trustee contends that the inclusion in the Lease of conditions precedent (as yet unperformed by either party) and terms to be agreed upon in the future, renders the Agreement unenforceable as too uncertain and indefinite. We disagree.

We are guided by the general principle that “the law does not favor but leans against the destruction of contracts because of uncertainty; and it will, if feasible, so construe agreements as to carry into effect the reasonable intentions of the parties if that can be ascertained.” Wong v. Di Grazia, 60 Cal.2d 525, 539, 35 Cal.Rptr. 241, 251, 386 P.2d 817, 827 (1963). See also Henderson v. Jacobs, 73 Ariz. 195, 239 P.2d 1082 (1952). On February 18, 1966, Wonder-fair submitted to Walgreen the architectural drawings, etc., and Walgreen transmitted its plans and specifications to Wonderfair, as required under 5(b) of the Lease. All of the other allegedly uncertain and indefinite terms relate to provisions in 5(a) and (b) for plans, designs, contractors, etc., “as is acceptable to Tenant.”

Although on the face of the lease such provisions are uncertain, good faith on the part of the parties may be inferred “to carry into effect the reasonable intentions of the parties.” Wong, supra, 60 Cal.2d p. 539, 35 Cal.Rptr. p. 251, 386 P.2d p. 827. This view has been adopted by most courts which have considered the issue. The validity of such “on approval” or “satisfaction” clauses is exemplified by Mattei v. Hopper, 51 Cal.2d 119, 124, 330 P.2d 625, 627 (1958), where the California Supreme Court stated:

“[T]he secondary authorities are in accord with the California cases on the general principles governing ‘satisfaction’ contracts. ‘It has been questioned whether an agreement in which the promise of one party is conditioned on his own or the other party’s satisfaction contains the elements of a contract — whether the agreement is not illusory in character because conditioned upon the whim or caprice of the party to be satisfied. Since, however, such a promise is generally considered as requiring a performance which shall be satisfactory to him in the exercise of an honest judgment, such contracts have been almost universally upheld.’ (3 Williston, Contracts (rev. ed. 1936) § 675A, p. 1943; see also 3 Corbin, Contracts (1951), §§ 644, 645, pp. 560-572.)”

Since the proper plans, specifications, and drawirigs had been exchanged and “reasonableness” or “good faith” may be inferred with respect to the terms which must be “acceptable to Tenant”, we hold that the contract is sufficiently definite and certain.

II. The Lease conveyed a presently enforceable interest in the underlying land and was not merely an executory contract to enter into a lease of a building to be constructed in the future.

The Trustee contends that Walgreen was primarily interested in leasing a building to be built in the future. If the building was not completed or if some of the other conditions (e. g., occupancy of 80% of the area in all of the buildings and the installation of a Bob’s Big Boy and a Mayfair Markets’ El Rancho supermarket in the Shopping Center) could not be met, there would be no duty upon Walgreen to pay rent. These factors, the Trustee argues, indicate an ex-ecutory contract for a lease and not a lease itself, and therefore no estate or right of possession in the land itself ever vested in Walgreen. We agree with the district court that the agreement constituted “a valid transfer of a leasehold estate, not merely a contract to make a lease.”

As stated in 51C C.J.S. Landlord & Tenant § 185, at p. 495: “The controlling consideration in determining whether an instrument is a present demise or merely ' an agreement to lease is the intention of the parties, collected from the whole instrument and, in case of ambiguity, from the surrounding circumstances.” That Wonderfair and Walgreen intended their agreement to be a lease rather than a contract to make a lease is evident from the terms of the agreement itself.

First, the agreement uses the present tense, “hereby leases”, with respect to the “premises” which are being conveyed, although the building is “to be erected” in the future. The use of the present tense contemplates that something was being contemporaneously conveyed, and the only thing that could have been so conveyed was the “premises” or underlying real estate. Further, the agreement reserves to Walgreen certain rights in sidewalks and parking areas in addition to the building to be constructed.

Second, Article 19 of the agreement gives Walgreen the right to enter upon the land and perform any act or acts required of Wonderfair and which Wonderfair has failed to perform for thirty days after receipt of notice from Walgreen. The Trustee concedes that this provision would give Walgreen the right to construct its own building on the land should Wonderfair fail to do so, and deduct the cost from the rent. This right indicates a possessory interest in the land itself.

Third, Article 25 provides that the Lease “shall also bind and benefit, as the case may require, the heirs, legal representatives, assigns and successors of the respective parties, and all covenants, conditions and agreements herein contained shall be construed as covenants running with the land.” The effectiveness of these covenants running with the land is not postponed until the completion of the building, but occurs at the time of the signing of the agreement. The covenants immediately became burdens and benefits on the leasehold estate and the reversion in the land itself, regardless of who the owners of such estates may be. As Tenant under the lease and covenantee of the covenants running with land expressly created by the lease, Walgreen had an interest in the underlying land and rights affecting the landlord’s reversion. “[A]ny interest . which takes away a part of the sum total of rights, powers, privileges, and immunities which go to make up a fee simple absolute is an existing interest.” I American Law of Property, § 4.1, at p. 407.

The Trustee’s reliance on the Minnesota case of Target Stores, Inc. v. Twin Plaza Co., 277 Minn. 481, 153 N.W.2d 832 (1967), is misplaced. In Target Stores, supra, the plaintiff (Buyer) undertook to acquire a twenty-three acre parcel from the defendant (Seller). The Buyer sought to recover its downpayment and damages for fraudulent misrepresentation when it discovered that two years earlier the Seller had entered into three unrecorded agreements with retail concerns. At that time, the Seller had attempted to develop a shopping center. When the shopping center fell through, all parties had lost interest in the lease agreements, and the Seller had not indicated them to the present Buyer. The Buyer, however, believed the three lease agreements to represent a cloud upon the Seller’s title to the property. Besides seeking damages, the Buyer rescinded the sales agreement and purchased other land. The Seller secured releases from the “lessees” under the unrecorded agreements, tendered performance to the Buyer, and counterclaimed for specific performance. The Minnesota Supreme Court held that the failure of the Seller to disclose the unrecorded agreements did not constitute fraud since the agreements did not create an interest in the land, but because the issue was close, the Buyer was entitled to rescind the sales agreement because the Seller’s title had reasonably been in doubt.

There is much language in Target Stores that would appear to be applicable to the present case. Also, the lease agreements in Target Stores and the Wonderfair-Walgreen lease are very similar. However, we believe that the present case is distinguishable in significant ways from Target Stores, and that the agreement between Walgreen and Wonderfair did in fact create an interest in the underlying land.

While recognizing that “the fact that a term is to commence in futuro does not prevent the instrument from operating as a present demise, 51 C.J.S. Landlord and Tenant § 185, p. 788,” and that “a valid term for years may be created to begin in futuro. Id. § 28,” the court in Target Stores found that both the lease itself and the actions of the parties indicated that they intended an agreement to lease a building when it was built. The court noted the following factors:

1) The agreements referred only to “buildings” and made no reference to an interest in land being passed.

2) No rights or liabilities on the part of either party arose until the completion of the buildings.

3) Not only were the buildings never built, but the plans were “not in sufficient detail to be used as a basis for accurate directions to build.”

4) No rights or obligations arose until “Lessor shall execute leases with and complete buildings for at least (7) other bona fide tenants in the shopping center,” and such leases had never been obtained nor would be obtained.

5) The leases were unrecorded.

6) Inaction by the “lessees” for three years and their willingness to sign releases indicated that they did not believe themselves to have an interest in the land itself.

These factors are not present in the instant case.

1) In the Wonderfair-Walgreen Lease, there are many references to the “premises,” and Article 25 specifically refers to covenants running with the land. And, in any case, “[t]he general rule is that the lease of an entire building eo nomine is a lease of the land on which the building stands . . .. Where the lease is of the ‘premises,’ with no qualifying words, it is generally held that ‘premises’ means land and the buildings thereon . . .51C C.J.S. Landlord and Tenant § 289, at p. 741. See Bachenheimer v. Palm Springs Management Corp., 116 Cal.App.2d 580, 588, 254 P.2d 153, 157-158 (1953), and authorities cited therein.

2) Rights and liabilities arose prior to the completion of the building. For example, Walgreen had the right to build the store itself, if the Lessor failed to do so.

3) The plans and specifications had already been exchanged “in sufficient detail to be used as a basis for accurate directions to build.”

4) Only two (not seven) other tenants were required to sign leases; and, instead of being unable to achieve this result (as in Target Stores), the Lessor did consummate such leases and at least Bob’s Big Boy Restaurant has been built and installed in the shopping center.

5) As discussed infra, the “Lease” was properly recorded as a lease of realty.

6) Walgreen has at all times expressed interest in the construction of the building. The delay appears to be due to Wonderfair’s postponements because of a “tight money market” and not Walgreen’s abandonment of the whole idea.

We conclude therefore, that the district court properly found that the parties in the present case intended their agreement to be a lease (not an executory contract to make a lease) of both the building and the land on which it was to be constructed.

III. The Lease does not violate the rule against perpetuities.

Ariz.Rev.Stat. § 33-261.01 makes the common law rule against perpetuities applicable to all property. The rule provides: “No interest is good unless it must vest if at all, not later than 21 years after some life in being at the creation of the interest.” Gray, Rule. Against Perpetuities § 201, at p. 191 (4th ed. 1942). Under a strict interpretation of this rule, the present Lease would fail, since there is a possibility that the building would not be completed within 21 years, and hence Walgreen’s contingent estate would not actually vest in possession until possibly after that period. The Trustee contends that this strict construction is mandated by the Arizona statute, thus voiding Walgreen’s leasehold estate. We disagree.

As discussed supra, we hold that the Lease vested a leasehold estate in the underlying land (the “premises”) immediately upon the signing by both parties. Rights and liabilities arose, regardless of the future completion of the building. However, even if, as contended by the Trustee, an essential element of the estate — the building — must also vest within 21 years, the Wonderfair-Walgreen Lease does not violate the rule.

Wong v. Di Grazia, supra, 60 Cal.2d 525, 35 Cal.Rptr. 241, 386 P.2d 817 (1963) is right on point. There, the California Supreme Court stated: “Both the California cases, and those of a majority of other states, hold that a document should be interpreted if feasible to avoid the conclusion that it violates the rule against perpetuities.” 60 Cal.2d at 539-540, 35 Cal.Rptr. at 251, 386 P.2d at 827 (footnotes omitted). The court indicated (pp. 530-536, 35 Cal.Rptr. 241, 386 P.2d 817) the many ways that courts have devised to avoid the harsh effect of the rule in its most strict interpretation, and then specifically held that the lease of a building to commence “upon completion of said building” and “upon approval of completed plans and specifications”, does not violate the rule against perpetuities. 60 Cal.2d at 527 and 538, 35 Cal.Rptr. 241, 250, 386 P.2d 817, 826.

Simply by interpreting the lease to require completion and approval within “a reasonable time”, and “a reasonable time” to be less than 21 years, the court was able to uphold the lease agreement. The court cited extensive legal authority for this interpretation (60 Cal.2d at 537; 35 Cal.Rptr. 241, 386 P.2d 817), and it is clearly proper.

Although the Arizona courts have never decided this issue, there is no reason to assume that they would choose the strict, outdated approach rejected by the majority of jurisdictions, particularly since they have never voided any real property interest as being in violation of the rule against perpetuities. See generally, Mason v. American Emery Wheel Works, 241 F.2d 906 (1 Cir. 1957).

The Trustee contends, however, that the Wonderfair-Walgreen Lease, unlike the lease in Wong, supra, does not require the construction of the building to “commence forthwith.” Although of some weight, this difference is not crucial. As noted supra, if Wonderfair fails to construct the building, Walgreen has the right under the Lease to commence construction itself or to cancel the Lease. It would be utterly unreasonable for Walgreen neither to exercise its option to cancel the Lease nor opt to commence construction within 21 years.

The court in Wong rejected a similar argument, stating: “[W]e are not willing to predicate a transgression of the rule on the theory that agreements must be presumed to be broken and parties unwilling to enforce their rights.” 60 Cal.2d at 538, 35 Cal.Rptr. at 250, 386 P.2d at 826. We are no more willing to find a transgression of the rule in the present case.

IV. The Lease is superior to the interest of the Trustee, because both properly recorded, and sufficient to put the Trustee on inquiry notice.

The Trustee’s final contention is that even if the Lease is valid as between ■ Walgreen and Wonderfair, it was improperly recorded under Arizona law and therefore is subordinate to the rights of the Trustee in bankruptcy.

Ariz.Rev.Stat., § 33-411 provides in part:

“A. No instrument affecting real property is valid against subsequent purchasers for valuable consideration without notice, unless recorded as provided by law in the office of the county recorder of the county in which the property is located.
“B. An instrument shall not be deemed lawfully recorded unless it has been previously acknowledged in the manner prescribed in this chapter Í1

There has never been any substantial argument that the Lease in the form originally acknowledged by Wonderfair was not recorded at all. But after the April 6, 1965, acknowledgment, pages 4, 5, and 9 were substituted and, although initialed by Wonderfair and inserted with its express consent, there was no re-acknowledgment before a notary public prior to recording. The Trustee, , who stands in the shoes of hypothetical secured creditors at the time of bankruptcy (§ 70c of the Bankruptcy Act, 11 U.S.C. § 110c), contends that the agreement was thus improperly recorded, depriving it of priority under Arizona law.

There are two answers to this contention. The first is that the recording statute requires only that the agreement be “previously acknowledged.” The additions, initialed by Wonderfair and acknowledged (although not before a notary public) by Walgreen were quite minor and in no way affected the leasehold transferred in the agreement. The Lease was duly recorded with the County Recorder and placed of record in the official indices of Lessees and Lessors. The failure to re-acknowledge was not apparent from the instrument. Since the purpose of proper recordation is to give notice of encumbrances, it is difficult to see how the Trustee was in any way prejudiced- — even if a technical violation could be found.

Further, the failure to re-acknowledge before a notary public was not evident on the face of the recorded Lease; nor was it evident that three pages had been inserted subsequent to proper acknowledgment. The majority rule is that a latent defect in the acknowledgment of an instrument required for recordation does not prevent the recordation from affording constructive notice to persons who may be affected by the transaction recorded. See Annotation, 59 A.L.R.2d § 25, at p. 1316; 1 C.J.S. Acknowledgments § 18, at p. 799. None of the alterations of previously acknowledged documents in the cases cited by the Trustee were nearly as trivial or in so full compliance with proper formalities as the Lease in the present case.

The Trustee’s contention must fail for yet another reason. An admittedly improperly recorded instrument is not void as to a creditor or subsequent purchaser for value unless that person was “without notice” of the instrument. Ariz.Rev.Stat. § 33-411(A). The district court found that the Trustee was put on inquiry notice with respect to the Wonderfair-Walgreen Lease. We agree.

Throughout the period in issue (several years), a 35-foot sign stating that Walgreen was a tenant of the East Gate Shopping Center was conspicuously situated on the property in question. This sign should have been “sufficient to excite the attention of a person of ordinary prudence” to make further inquiry as to possible encumbrance of the property. 45 Am.Jur. Records § 133, at p. 498. See Davis v. Kleindienst, 64 Ariz. 251, 258-259, 169 P.2d 78, 83 (1946).

Had the Trustee so investigated he would have discovered not only the Lease, but also the Walgreen Guaranty and Wonderbowl-Downey Agreement, both properly recorded therewith. There is no question but that these documents together (two recorded, one unrecorded (defective)) would have provided unequivocal notice of Walgreen’s interest. See, e. g., Barringer v. Lilley, 96 F.2d 607 (9 Cir. 1938); Phoenix Title and Trust Co. v. Stewart, 337 F.2d 978, 984 (9 Cir. 1964). There is in the present case at least as strong a basis for holding that signs constitute a recognized means of asserting a possessory claim to property thus requiring further inquiry, as there was in Natural Resources, Inc. v. Wineberg, 349 F.2d 685, 690 (9 Cir. 1965).

The district court’s order is affirmed.

Appeal No. 73 — 2055

This is an appeal from the Order of the District Court for the District of Arizona, denying plaintiff Walgreen Arizona Drug Co.’s (“Walgreen’s”) motion for summary judgment and granting defendants Mary Ann Levitt, et al.’s (“the Levitts’ ”) motion for summary judgment. With minor exceptions, not here controlling, the controversy involves the validity of the same Lease which we upheld in Appeal No. 73-1712.

The Trustee in bankruptcy, Sam Jonas, sold the property in question to the Levitts, subject to any encumbrances. In Appeal No. 73-1712, the District Court for the Central District of California held that the Lease between Wonderfair and Walgreen was a valid transfer of a leasehold estate and had priority over the interest of the Trustee. We affirmed that decision. In the present case, the District Court for the District of Arizona held that the same agreement did not give Walgreen priority over the Levitts, who purchased the land from the Trustee.

For the reasons stated in our affirmance in Appeal No. 73-1712, supra, we reverse the decision of the district court below and remand with instructions that the court enter an order for summary judgment against the Levitts and in favor of Walgreen.

      . The Trustee has already sold and conveyed title to. (subject to encumbrances or obligations of record) the land upon which the building to be occupied by Walgreen was to be erected. Walgreen filed an action in Arizona to protect its interest in the property. The Arizona district court granted summary judgment against Walgreen, and the appeal, No. 72-2055, is presently before this court and is considered infra.

      . The Wonderfair-Walgreen Lease provides in pertinent part:
      1. “Landlord hereby leases to Tenant, and Tenant hereby rents from Landlord, for the term commencing January 1, 1966, and continuing to and including December 31, 1985, subject to prior termination as hereinafter provided, the premises located in [the Shopping Center Site] being a rectangular area containing 21,000 square feet on the first floor (all as shown on plan(s) hereto attached and made part hereof) . . . and together with all improvements, appurtenances, easements and privileges belonging thereto, in the new one story . . building to be erected and completed by Landlord as part of East Gate Shopping Center . . . being the area shown as outlined in red on said plan.”
      2. “Tenant shall pay as rent for the leased premises, as follows:
      (a) A fixed rent of $2,887.50 per month, commencing either on the date Tenant opens its store for business in the leased premises, or as provided in Article 6, whichever is the earlier;”
      3. “(a) If the rent shall not have begun to accrue on the date shown specified for the commencement of the term of the lease, then the term shall not commence until the date on which the rent begins to accrue and shall continue for twenty years thereafter;
      4. “Landlord shall put Tenant into simultaneous exclusive physical possession of the leased premises on January 1, 1966, or as soon as possible thereafter, and in any case not later than January 1, 1967. ... If possession is not delivered by the latest date above mentioned, Tenant may cancel this lease. . . ”
      5. “(a) Before delivering possession of the leased premises to Tenant, Landlord shall erect and complete the aforesaid new building containing the leased premises, which new building shall be a modern one story . structure. That portion of said new building containing the leased premises shall be of such exterior and structural design and character as is acceptable to Tenant. The leased premises shall be erected and completed by Landlord, and shall contain Tenant’s specific requirements for the operation of Tenant’s business, which requirements will include among other things, the items and installations listed in Exhibit “A” hereto attached and made part hereof . . . . All such work by Landlord shall be done by contractors selected by Landlord and acceptable to Tenant and shall comply with the requirements of public authorities. . . . ”
      “(b) Landlord shall furnish to Tenant architectural drawings and full details and information relative to said new building, so that Tenant may be enabled to prepare and furnish to Landlord . . Tenant[’s] plans and specifications covering Tenant’s specific requirements. . . ”
      6. “Tenant shall open its store for business in the leased premises within a reasonable time, but not later than three months after Landlord has completed all construction and has delivered possession as above provided
      8. “(a) It is expressly understood and agreed that the installation in said Shopping Center of—
      (1) A Mayfair Markets’ El Rancho super food market with a floor area of at least 21,-000 square feet .
      (2) A Bob’s Big Boy Restaurant with a floor area of at least 4,300 square feet . are each primary inducements to Tenant in entering into this lease and agreeing upon the rentals herein reserved. Therefore, it is a further express condition of this lease that Landlord shall furnish and deliver to Tenant, at or before the time for giving of the notice of possession provided for in Article 4, evidence reasonably satisfactory to Tenant, that leases, each for a term of at least ten years firm, and commencing not later than January 1, 1966, have been consummated for the installation and operations of all of the business above mentioned . ..”
      “(b) Anything in this lease to the contrary notwithstanding, Tenant shall not be obligated to open its store for business in the leased premises, nor shall any rent accrue under this lease, prior to the time when—
      (i) Occupants of 80% of the area in all of the buildings . . . (including all of the businesses described in Section (a) hereof which shall be at the respective stated locations), which buildings shall contain not less than 70,000 square feet of floor area, are open for business, and,
      (ii) All of the buildings shown within the area outlined in red on said attached plan, which buildings shall contain not less than 70,000 square feet of floor area, are substantially completed, and,
      (iii) All of the parking and other facilities described in Article 7 have been completed, paved and lighted are available for use.”
      13. “Landlord shall not grant any rights in the sidewalk around the leased premises without Tenants written consent. . . . ”
      19. “If Landlord shall from time to time fail to perform any act or acts required of Landlord by this lease and if such failure continues for thirty days after receipt of notice from Tenant, Tenant shall then have the right, at Tenant’s option to perform such act or acts and the full amount of the cost and expense so incurred shall immediately be owing by Landlord to Tenant, and Tenant shall have the right and is hereby irrevocably authorized and directed to deduct such amount from the rent. No delay on the part of either party in enforcing any of the provisions of this lease shall be considered as a waiver thereof.”
      25. “ . . . This instrument shall also bind and benefit, as the case may require, the heirs, legal representatives, assigns and successors of the respective parties, and all covenants, conditions, and agreements herein contained shall be construed as covenants running with the land.”


author: PER CURIAM.

text:
    REX CHAINBELT, INC., Plaintiff-Appellee, v. Claude S. BRINEGAR, Secretary, Department of Transportation, et al., Defendants-Appellants.
    No. 74-1309.
    United States Court of Appeals, Seventh Circuit.
    Argued Feb. 11, 1975.
    Decided March 10, 1975.

      Thomas S. Moore, Atty., App. Section, Civ. Div., U. S. Dept, of Justice, Washington, D. C., for defendants-appellants.
    Andrew O. Riteris, Edward W. Mentzer, Milwaukee, Wis., for plaintiff-appellee. ¡
    Before PELL, Circuit Judge, TONE, Circuit Judge, and JAMESON, Senior District Judge.

       Senior Judge William J. Jameson of the District of Montana is sitting by designation.

   PER CURIAM.

The sole issue on this appeal is whether the judgment of the district court on remand is in accordance with the opinion of this court in Rex Chainbelt, Inc. v. Volpe, 486 F.2d 757 (7 Cir. 1973).

Rex Chainbelt, Inc., plaintiff-appellee, is engaged in the manufacture of concrete mixers which are designed to be mounted on truck chassis-cabs. Rex sells the mixers and normally installs the mixer on a chassis which is purchased by the customer from a manufacturer other than Rex.

In 1971 the National Highway Traffic Safety Administration (NHTSA) issued regulations under the authority of the National Traffic and Motor Vehicle Safety Act of 1966 dealing with motor vehicles manufactured in two or more stages. Regulation 49 C.F.R. § 568.6(b) required Rex, as the final stage manufacturer (49 C.F.R. § 568.3), to certify that the entire vehicle — chassis-cab and mixer — conformed to all applicable federal motor safety standards.

In Rex Chainbelt, Inc. v. Volpe, supra at 761-762, this court concluded that the “Secretary has power under the Act to require manufacturers not working through distributors and dealers to certify their vehicles or their equipment,” but that “to the extent that the regulations require Rex to make the sole certification of compliance of the entire vehicle they must be declared invalid.” On remand, the district court entered the following judgment:

“Ordered and adjudged that Section 568.6(b) of Part 568 of Title 49 of the Code of Federal Regulations is invalid because it contravenes the language of the National Motor Vehicle Safety Act of 1966 ... to the extent that said Section is interpreted to require that a final stage manufacturer, as a concrete mixer manufacturer or his dealer or distributor, certify the compliance of the chassis-cab and its components to motor vehicle safety standards in those instances where the final-stage manufacturer mounts the mixer on a chassis-cab which has been purchased by the mixer customer from a source other than the final-stage manufacturer.”

Strictly speaking, the judgment is in accordance with this court’s order on remand. It appears, however, that it can be clarified to satisfy all the parties to this litigation. At oral argument counsel for the respective parties agreed that this court’s holding in Rex Chainbelt, Inc. v. Volpe “should be interpreted to mean that the Act requires that in instances where the customer purchases a chassis-cab from its manufacturer and thereafter the mixer from the mixer manufacturer, the ‘entire vehicle’ must be certified via two certifications, with the chassis-cab manufacturer certifying its chassis-cab, and with the mixer manufacturer certifying its mixer and the effect of the mounting, if any, to thus obtain effective certification of the ‘entire vehicle.’ ”

We agree and remand to the district court to add to the judgment the clarifying provision acceptable to the parties.


text:
    SECURITIES AND EXCHANGE COMMISSION, Plaintiff-Appellee, v. NORTH AMERICAN RESEARCH AND DEVELOPMENT CORP. et al., Defendants-Appellants.
    Nos. 531, 798, Docket Nos. 74-1750, 74-1831.
    United States Court of Appeals, Second Circuit.
    Argued Feb. 13, 1975.
    Decided Feb. 24, 1975.
    Sidney Schreiberg, New York City, for defendants-appellants White and North American Research and Development Corp.
    Alfred Blumberg, pro se.
    Richard E. Nathan, Asst. Gen. Counsel, S. E. C., Washington, D. C. (Lawrence E. Nerheim, Gen. Counsel, David Ferber, Sol., Richard O. Patterson, Atty., Washington, D. C., on the brief), for appellee.
    Before HAYS and FEINBERG, Circuit Judges, and HOLDEN, District Judge.

       Of the United States District Court for the District of Vermont, sitting by designation.

   PER CURIAM:

In this action brought by the Securities and Exchange Commission (SEC), appellants White, Blumberg and North American Research and Development Corp. were enjoined by an order of the United States District Court for the Southern District of New York, Edward Weinfeld, J., from committing further violations of various registration and anti-fraud provisions of the securities laws in connection with the offer and sale of shares in North American or any other securities. Judge Weinfeld wrote a thorough opinion, 375 F.Supp. 465 (1974), detailing the fraudulent practices appellants had engaged in. We would affirm on the basis of that opinion alone, were it not for the claims pressed before us that appellants were denied due process by the application of Fed.R. Civ.P. 65(a)(2) in this case.

Appellants contend that they did not know at the time of the hearing at which preliminary injunctive relief was granted that the evidence then adduced would be used against them at the trial on the merits. But Rule 65(a)(2) itself gives notice that this may be done. Judge Weinfeld also gave appellants adequate notice before the trial that he would rely on the preliminary hearing evidence. Appellants thus had the opportunity to object to inadmissible items, to recall and cross-examine SEC witnesses, to call defense witnesses, and otherwise to present a defense.

Appellants’ most substantial argument is that the five-year time lapse and change in judges between the hearing on the preliminary injunction and the trial on the permanent injunction necessitated a de novo trial or at least a formal reading into the record of the transcript of the preliminary hearing. The 1966- Advisory Committee Note to the amendment of Rule 65 states that “some repetition of testimony may be called for where the trial is conducted by a judge who did not hear the application for the preliminary injunction.” It is clear, however, that the decision on whether to have repetition of testimony is one for the sound discretion of the trial judge. Judge Weinfeld did not abuse his discretion.. The parties were given “a full opportunity, to present evidence in the case.” 7 J. Moore, Federal Practice ¶ 65.04' [4] at 65-66 (2d ed. 1948). Due process requires no more.

Affirmed.

      . That the SEC was required to meet a heavier burden at the trial on the merits than it did to obtain a preliminary injunction does not mean, as appellants contend, that the evidence which supported issuance of the latter is an insufficient basis for a permanent injunction. We agree with Judge Weinfeld that the evidence fully supports issuance of the permanent injunction.

      . After a seven-day hearing before then District Judge Mansfield, he granted a preliminary injunction against White and North American but denied it as to Blumberg. 280 F.Supp. 106 (S.D.N.Y.1968). This court affirmed as to the former, but reversed as to Blumberg and remanded for further proceedings. 424 F.2d 63 (2d Cir. 1970). Thereafter, a preliminary injunction was entered against Blumberg. The SEC then sought to make the . injunction against appellants permanent by moving for summary judgment. This was denied by Judge Motley, 59 F.R.D. Ill (S.D.N.Y. 1972); see note 4 infra.

      . Rule 65(a)(2) provides that even when consolidation of the preliminary injunction hearing and the trial on the merits is not ordered (it was not here), “any evidence received upon an application for a preliminary injunction which would be admissible upon the trial on the merits becomes part of the record on the trial and need not be repeated upon the trial.”

      . Judge Motley’s opinion denying summary judgment, see note 2 supra, was based primarily on due process considerations and construction of Rule 65(a)(2). She did not allow the preliminary hearing testimony to be used as the basis for granting summary judgment against appellants, although she pointed out that the SEC was free under Rule 65(a)(2) to use that evidence at the trial on the merits. Now that the SEC has followed that suggestion, the due process considerations are completely different, since appellants have had the opportunity to litigate fully all issues of fact and law. As Judge Motley wrote, “defendants were rightfully entitled to expect that they would have a further day in court” after the preliminary injunction hearing. 59 F.R.D. at 114. Appellants now have had their trial before Judge Weinfeld. It is no denial of due process if they chose not to present any evidence there.


text:
    Clyde Stanley BERNHARDT, Jr., Appellant, v. AMERICAN AIRLINES, INC., and Allied Pilots Association, Appellees.
    No. 73-2726.
    United States Court of Appeals, Ninth Circuit.
    March 3, 1975.
    Jay S. Bulmash (argued), Kirsch, Arak & Bulmash, Beverly Hills, Cal., for appellant.
    Patrick MacFarland (argued), Los Angeles, Cal., for appellee Allied Pilots Assn.
    George Christensen, Los Angeles, Cal., for appellee American Airlines, Inc.
    Before CHAMBERS and ELY, Circuit Judges, and ANDERSON, District Judge.

       The Honorable J. Blaine Anderson, United States District Judge, District of Idaho, sitting by designation.

   OPINION

PER CURIAM:

Bernhardt, discharged from his position as a pilot for American Airlines, Inc., (American) sought the assistance of the Allied Pilots Association (APA), a union of which he was then a member. APA, at Bernhardt’s request, filed a grievance with American in line with a collective bargaining agreement between the union and American, dated June 1, 1970. Following the filing of the grievance, a hearing concerning the propriety of the discharge was conducted by a Pilot System Board of Adjustment. The grievance procedure and the adjustment Board had, through collective bargaining, been established under the requirements of the Railway Labor Act, 45 U.S.C. § 151 et seq. The Adjustment Board’s five members consisted of two representatives of APA, two representatives of American, and a neutral arbitrator. After a full hearing, the Adjustment Board sustained Bernhardt’s discharge, concluding:

“The charges made by the Company in its letter of discharge were established. The incidents involved were clearly in violation of the Company rules. Bernhardt’s conduct, his attempt to cover them up, his failure to seek professional aid at any time, all reflects not only on his conduct but his judgment, as it may relate to the duties and responsibilities of a pilot.”

Thereafter, Bernhardt instituted suit against American and APA in the District Court. The complaint was drawn in five counts, but essentially, Bernhardt’s claims were that his rights under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2, had been violated; that his equal protection rights under the Constitution had been infringed by a “private conspiracy” between American and APA, 42 U.S.C. § 1985(3); and that there had been fraud or corruption on the part of the Adjustment Board or certain members thereof.

The courts have held that decisions of Pilot System Adjustment Boards are, like Adjustment Boards in respect to railroads (see Andrews v. Louisville & Nashville Railroad Co., 406 U.S. 320, 325, 92 S.Ct. 1562, 32 L.Ed.2d 95 (1972)), final and conclusive and that such decisions may not be retried on the merits in an independent judicial proceeding. See, e. g., Rosen v. Eastern Air Lines, Inc., 400 F.2d 462 (5th Cir. 1968), cert. denied, 394 U.S. 959, 89 S.Ct. 1307, 22 L.Ed.2d 560 (1969), reh. denied, 395 U.S. 917, 89 S.Ct. 1741, 23 L.Ed.2d 232 (1969); Northwest Airlines, Inc. v. Air Line Pilots Ass’n, Int’l, 373 F.2d 136 (8th Cir.), cert. denied, 389 U.S. 827, 88 S.Ct. 77, 19 L.Ed.2d 83 (1967). As we view the record, such re-litigation was precisely that which Bernhardt sought in the case at Bar. It is true that one such as Bernhardt, unsuccessful in proceedings before an Adjustment Board, may challenge the Board’s action by Petition for Review in a District Court. But under 45 U.S.C. § 153(q), a challenge lies only “for failure of the division [of the Adjustment Board] to comply with the requirements of this chapter [Title 45, Chapter 8.— Railway Labor], for failure of the order to conform, or conform itself, to matters within the scope of the division’s jurisdiction, or for fraud or corruption by a member of the division making the order.”

In carefully reviewing the whole record, including, especially, the documents pertaining to the appellees’ motions for summary judgment, we find no adequate basis, under the applicable statute and controlling authorities, for Bernhardt’s attempt to obtain judicial review of the Adjustment Board’s decision.

There is no suggestion of non-compliance with Chapter 8 of Title 45, and it is obvious that the challenged Order falls within the scope of the Adjustment Board’s jurisdiction. The only possible basis for Bernhardt’s allegation of fraud and corruption is the fact that he and his attorney met informally with the two APA members of the Board prior to the time of the hearing before the Board. We think that the occurrence of that meeting cannot be equated with the “fraud or corruption” contemplated by Congress in its enactment of 45 U.S.C. § 153(q). Even if we assume, arguendo, to the contrary, Bernhardt was unable to specify, despite the District Court’s invitation for him to do so, wherein any prejudice had accrued to Bernhardt as a result of the meeting.

The District Court was clearly correct in rejecting Bernhardt’s Title VII claim because of Bernhardt’s failure to exhaust the available administrative remedies. See, e. g., Love v. Pullman Co., 404 U.S. 522, 92 S.Ct. 616, 30 L.Ed.2d 679 (1972).

Finally, there is no more than the barest conclusory allegation — insufficient on its face — to support the claim of conspiratorial, class-based, discrimination that Bernhardt sought to establish under 42 U.S.C. § 1985(3). Cf. Griffin v. Breckenridge, 403 U.S. 88, 102-03, 91 S.Ct. 1790, 29 L.Ed.2d 338 (1971).

Applying the controlling legislation and judicial precedents, as did the District Court, we are impelled to the conclusion that the challenged determinations of the District Court must be, and they hereby are

Affirmed.

      . The provisions of 45 U.S.C. § 153(q) apply both to Railroad and Pilot System Boards of Adjustment. 45 U.S.C. §§ 181, 182.


text:
    Winnie Mae KNUCKLES et al., Plaintiffs-Appellants, v. Caspar WEINBERGER, Secretary of Health, Education and Welfare, Defendant-Appellee.
    No. 73-3207
    United States Court of Appeals, Ninth Circuit.
    Jan. 2, 1975.
    Marjorie Gelb, Legal Aid Society of Alameda, Oakland, Cal., for plaintiffs-appellants.
    Kathryn H. Baldwin and James C. Hair, Jr., Dept, of Justice, Washington, D. C., for defendant-appellee.
    Before BARNES and SNEED, Circuit Judges, and MILLER, Judge, Court of Customs and Patent Appeals.

       Honorable Jack R. Miller, United States Court of Customs and Patent Appeals, Washington, D. C., sitting by designation.

   ORDER

There are two matters before this panel as of the hearing date, (1) the motion of the appellee to dismiss the appeal as moot (filed on November 27, 1974); and (2) the appeal on the merits from the trial court’s dismissal of plaintiffs’ cause of action based on lack of jurisdiction.

As to the Motion to Dismiss, it is based upon the Social Security Administration decision (made subsequent to the district court’s decision below), that it should and did sustain the claims of Mrs. Knuckles and Mrs. Johnson and restored them to full benefit status before the briefs were filed on this appeal.

However, after a hearing, Mrs. As-bury’s claim has been denied, as shown by the documents filed December 5, 1974, in support of said motion filed November 27, 1974.

Such documents also show that Mrs. Asbury’s case before the Administration is not final, and was not on December 13, 1974 (the hearing date), because she has until 60 days after October 17, 1974, to request the Appeals Council of the Administration to review it.

For this reason, we decline to grant or approve the motion to dismiss as to appellant Asbury.

Nor do we hold the issue is moot as to any appellant.

A case is not moot if it is “capable of repetition, yet evading review.” Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 515, 31 S.Ct. 279, 283, 55 L.Ed. 310 (1911); Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973); Moore v. Ogilvie, 394 U.S. 814, 816, 89 S.Ct. 1493, 23 L.Ed.2d 1 (1969); see also United States v. W. T. Grant Co., 345 U.S. 629, 633, 73 S.Ct. 894, 97 L.Ed. 1303 (1953), Aurora Education Association v. Board of Education, 490 F.2d 431, 435 (7th Cir. 1974).

The proponent of mootness has the “heavy burden of persuasion.” United States v. Concentrated Phosphate Export Association, Inc., 393 U.S. 199, 203, 89 S.Ct. 361, 21 L.Ed.2d 344 (1968). This is alleged to be a class action suit and there appears that to many possible members of this class, there exists a reasonable expectation that the wrong alleged may be repeated. That expectation is not clearly “a mere speculative contingency.” De Funis v. Odegaard, 416 U.S. 312, 94 S.Ct. 1704, 40 L.Ed.2d 164 (1974).

The motion to dismiss the appeal is denied.

As to the merits, we have the problem whether plaintiffs have the right to challenge the constitutionality of the summary ex parte suspension of their social security payments by the appellee, Secretary of Health, Education and Welfare, Caspar Weinberger, without affording proper notice and a prior evidentiary hearing.

The district judge dismissed the action for lack of subject matter jurisdiction. He found that jurisdiction was not appropriate under 28 U.S.C. § 1361 because “the nature and scope of the duties sought to be compelled are not plainly and positively ascertained, and free from doubt.”

The court below relied on Wilbur v. United States ex rel. Kadrie, 281 U.S. 206, 218-219, 50 S.Ct. 320, 74 L.Ed. 809 (1930). More on point would have been a case cited at 219 of Wilbur, Roberts v. United States, 176 U.S. 221, 231, 20 S.Ct. 376, 44 L.Ed. 443 (1900), which held that the fact that a statute requires construction by the administrator or the court in order to determine what duties it creates does not mean that mandamus is not proper to compel the officer to perform the duty, once it is determined.

See also Carey v. Local Board No. 2, 297 F.Supp. 252, 254-255 (D.Conn.1969), aff’d 412 F.2d 71 (2nd Cir. 1969).

Plaintiffs in the case at bar argue that the Secretary is commanded to do a particular act, i.e., give proper notice and an evidentiary hearing, by virtue of a particular clause of the constitution: the due process clause. The situation is the same as that in Roberts and Carey: once the court interprets the law, the defendant’s duty will be clear;. the court is not telling the defendant how to exercise his discretion.

Jarrett v. Resor, 426 F.2d 213, 216 (9th Cir. 1970) is inapposite. That case did not involve an attack on a procedure as unconstitutional on its face.

We, of course, express no opinion as to the merits of the appellants’ position. We hold that the issues raised must be determined by the trial court. We therefore reverse and remand for further proceedings.


author: FEINBERG, Circuit Judge:

text:
    MORGAN ASSOCIATES, a Joint Venture of Terminal Construction Corporation, et al., Plaintiff-Appellant, v. UNITED STATES POSTAL SERVICE et al., Defendants-Appellees, NAB-Lord Associates, a Joint Venture of NAB Construction Corp. and Lord Electric Co., Inc., Intervenor-Appellee.
    No. 790, Docket 75-7058.
    United States Court of Appeals, Second Circuit.
    Argued Feb. 10, 1975.
    Decided Feb. 25, 1975.

      Allen Ross, New York City (M. Carl Levine, Morgulas & Foreman, Jerrold Morgulas, New York City, on the brief), for appellant.
    Patrick H. Barth, Asst. U. S. Atty. (Paul J. Curran, U. S. Atty., S. D. N. Y., Gerald A. Rosenberg, Asst. U. S. Atty., on the brief), for defendants-appellees.
    Eli Saul Cohn, New York City (McDonough, Schneider, Marcus Cohn & Tretter, Franklin E. Tretter, New York City, on the brief), for intervenor-appellee.
    Before HAYS and FEINBERG, Circuit Judges, and HOLDEN, District Judge.

       Of the United States District Court for the District of. Vermont, sitting by designation.

   FEINBERG, Circuit Judge:

Appellant Morgan Associates brought an action in the United States District Court for the Southern District of New York seeking to enjoin the United States Postal Service from awarding to intervenor-appellee Nab-Lord Associates a contract for the reconstruction and mechanization of the Morgan Station Postal Facility in New York City. Morgan’s bid on the contract of $54,440,000 was second lowest; Nab-Lord, at a bid of $51,480,000, was lowest. On January 20, 1975, Judge Milton Pollack dismissed Morgan’s complaint, concluding that Morgan lacked standing to challenge the Postal Service’s imminent award of the contract. This appeal was promptly taken and expedited. We affirm the judgment of the district court but on a different theory.

The basis of Morgan’s suit is that an award to Nab-Lord would violate the general spirit of competitive bidding on Postal Service contracts and is specifically prohibited by section 18-511 of the Interim Regulations for the Procurement of Construction contained in the Postal Facilities Contracting Bulletin, which provides:

No contract for construction of a project shall be awarded to a firm or person that designed the project, except with the approval of the Assistant Postmaster General, Real Estate and Buildings Department or his authorized designee.

In support of this legal claim, Morgan alleges substantially the following in its complaint and supporting documents. Nab-Lord’s subcontractor for the mechanized mail-handling portion of the construction will probably be Rohr-Plessey Corporation. The president of Rohr-Plessey is Paul Hendrickson, who was until 1970 the Director of Operations of the Department of Research and Engineering of the old Post Office Department. In that capacity, Hendrickson was privy to information regarding the initial planning of the Morgan Station renovation. Also associated with Hendrickson and perhaps with Rohr-Plessey are Knight and Cargill, two of his former subordinates at the Post Office; the latter two were apparently employed by the firm that developed the final design specifications for the mechanization work. It is further alleged that Hendrickson told various persons where the Postal Service stood on their proposals involving the project; that Rohr-Plessey was actually going to be a member of a joint venture with Nab-Lord until shortly before the bidding deadline and thus would have worked closely on the bid; and that Morgan sought a quotation from Rohr-Plessey on the mechanization subcontracting but was ignored.

As indicated, Judge Pollack never reached the merits of Morgan’s legal claim, holding that Morgan did not have standing under our decision in Edelman v. Federal Housing Administration, 382 F.2d 594, 597 (2d Cir. 1967). In dismissing the complaint, the judge also concluded that the Postal Reorganization Act, see note 2 supra, specifically made the Administrative Procedure Act inapplicable to Postal Service bidding procedures; the judge thought this reflected congressional intent to allow the newly established Postal Service to run its operations as a business would, free from delay caused by judicial scrutiny of bids.

The briefs on appeal understandably deal at length with the question of standing. We agree that the issue is a troublesome one in this case. Ordinarily we would feel constrained to decide, as Judge Pollack did, whether a plaintiff has standing to sue before considering the merits of its claim. But in this suit, time is of the essence. The bids have been extended twice, once during the district court proceeding and again, at our suggestion, after oral argument in this court. The bids will expire shortly, and we have been advised the low bid cannot be extended. No doubt construction costs are increasing daily. We know from experience that the Postal Service needs all the help it can get to speed its handling of the mails. In addition, there has been a significant development since Judge Pollack’s decision that completely undercuts appellant’s position. Because of this unusual need for a prompt decision, and because we consider appellant’s legal position on the facts before us so weak on the merits, we affirm the judgment for appellee without passing upon the standing issue.

Morgan’s ease on the merits is that the Postal Service has not complied with its own regulations. Morgan does not allege fraud or bribery. It does not claim violation of any other federal law. Its argument is, in essence, that appellee has violated section 18-511, quoted above. The Postal Service responds that the mechanization plans were not finalized until two years after Hendrickson left the Postal Service. It also argues that award of the contract to Nab-Lord in no way violates section 18-511 because Nab-Lord is not “a firm or person that designed the project” and neither Hendrickson nor Rohr-Plessey is the bidder to whom the contract is being awarded. Although this argument rests upon the letter, rather than the spirit, of the Regulation, an agency interpretation of its own regulation is certainly entitled to weight. Udall v. Tallman, 380 U.S. 1, 16-17, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965).

Much more significantly, however, appellee points out that section 18-511 is by its express terms permissive. Its ban may be waived if award of a contract to the designer is approved by the Assistant Postmaster General, Real Estate and Buildings Department. The Postal Service has filed an affidavit, sworn to on February 5, 1975, by Alfred C. Maevis, Assistant Postmaster General, Real Estate and Buildings Department, which sets forth all of the facts of the alleged relationship and concludes that an award to Nab-Lord would not violate “Postal Service policy.” More importantly, the Maevis affidavit states that even if the award were covered by section 18-511,

I authorize award to Nab-Lord Associates under the circumstances present in this case due to the great disparity in cost between Nab-Lord and the appellant, approximately three million dollars ($3,000,000).

This authorization clearly complies with the proviso of section 18-511. The reason given by Maevis is certainly a rational one and cannot be regarded as an abuse of discretion, even if we assume arguendo that the award by the Postal Service is judicially reviewable.

Thus, the Postal Service has fully complied with its own regulation. Morgan also argues that it was inequitable to allow waiver of section 18-511 after bids were submitted rather than advising bidders beforehand that the prohibition of the section would be waived. The argument is without merit. There is no claim that section 18-511 was secret; indeed, it is the basis of appellant’s case. By its terms, all bidders were put on notice that it might be waived. Section 18-511 makes clear that a bid may come from a firm with superior information and contemplates a discretionary decision by the Postal Service whether to award a contract to such a firm. At oral argument, appellant claimed that if the Postal Service knew that a particular firm with such knowledge might bid, it had a duty to advise bidders specifically of that fact. But section 18-511 does not so provide and its terms are clearly notice enough.

We do not suggest that the Postal Service should grant waivers too readily or that we approve of the kind of relationship between a government department and its former employees which allegedly occurred here. However, regulation of such possible conflicts of interest is for Congress. Now that the Postal Service has waived its Regulation, we can see no basis for prohibiting the award to Nab-Lord.

Affirmed.

      . Morgan Associates is a joint venture of four corporations.

      . By the Postal Reorganization Act of 1970, Congress abolished the Post Office Department and created the Postal Service. Pub.L. 91-375, 84 Stat. 719. It was intended that the Postal Service undertake rapid and major reorganization of both post office facilities and personnel, with particular emphasis on more businesslike operating practices. See, e. g., 2 U.S.Code Cong. & Admin.News, 91st Cong. 2d Sess. 1970 at pp. 3649-3654 (H.R. Rep. No. 91-1104).

      . As to standing, Morgan argues that Edelman, supra, is distinguishable and asks us to follow the rule enunciated in Scanwell Laboratories, Inc. v. Shaffer, 137 U.S.App.D.C. 371, 424 F.2d 859, 861-73 (1970). The Postal Service argues that Scanwell is inapplicable because (1) the statutory basis for standing in Scanwell was the Administrative Procedure Act, see 424 F.2d at 865, 869; (2) the Scan-well court recognized that explicit congressional preclusion of review would be effective, 424 F.2d at 866; (3) Postal Service operations are excluded from APA requirements by 39 U.S.C. § 410(a); and (4) no other provision of Title 39 indicates that disappointed bidders may seek judicial review. Appellant rejoins that § 410(a) does not exempt this case from the APA, and argues that in any event a court may exercise its general equitable powers rather than relying on a statutory grant to give a disappointed bidder standing. We refrain from entering these lists until a case more compelling on the merits comes before us.

      . See M. Steinthal & Co. v. Seamans, 147 U.S.App.D.C. 221, 455 F.2d 1289, 1301-06 (1971). Cf. United States ex rel. Schonbrun v. Commanding Officer, 403 F.2d 371, 374 (2d Cir. 1968), cert. denied, 394 U.S. 929, 89 S.Ct. 1195, 22 L.Ed.2d 460 (1969).


text:
    GEORGIA-PACIFIC CORPORATION, an Oregon Corporation, Plaintiff-Appellant, v. COLUMBIA RIVER CHAPTER OF PACIFIC LOG SCALERS ASSOCIATION, an unincorporated association and labor organization, Defendant-Respondent.
    No. 72-2529.
    United States Court of Appeals, Ninth Circuit.
    Feb. 3, 1975.

      David W. Morthland (argued), Portland, Or., for plaintiff-appellant.
    Paul T. Bailey (argued), of Bailey & Doblie, Portland, Or., for defendant-respondent.
    Before VAN OOSTERHOUT, BARNES and ELY, Circuit Judges.

       Honorable Martin D. Van Oosterhout, Senior Circuit Judge, Eighth Circuit, sitting by designation.

   OPINION

PER CURIAM:

This is an appeal from a judgment entered June 15, 1972, in the District Court of Oregon, Honorable Gus J. Solomon, Judge, wherein Judge Solomon found there was no unlawful secondary picketing by the defendant Union in violation of 29 U.S.C. § 158(b)(4)(i)(B) and (ii)(B) and 29 U.S.C. § 187, but only “lawful primary picketing” on the two days involved, March 24th and 25th, 1971.

While this was the sole issue involved, there were three subsidiary issues:

1. Were the picketing operations on a “common situs” of the labor dispute? The trial judge found they were.

2. If so, did the Union comply with the legal requirements in picketing there? The trial judge found that the Union did.

3. If both the above were so, was there still an alleged unlawful secondary objective in the Union so picketing? The trial judge held this was “not proven.”

It should first be noted that appellant, Georgia-Pacific Corporation, had no dispute with the Union defendant, but the Union has, and had, a dispute with the Columbia River Log Scaling & Grading Bureau, a corporation (herein “Bureau”).

It is true there was confusing, if not conflicting testimony, before the trial court concerning whether or not the Union had an unlawful secondary objective in its picketing of Georgia-Pacific. (See Tr., pp. 65-82 (Walton) and pp. 83 to 99 (Yoemans).)

The questioning of Walton continued until the court requested that Walton’s original deposition, a summary of which had been introduced in evidence, be itself introduced so that he might study it, and compare it with Walton’s testimony in court. The court, admittedly was confused by the distinctions drawn by Mr.. Walton.

“The Court: You were trying to prevent your own members from working then, weren’t you?
Mr. Walton: We were trying to prevent anyone from working who would be doing our work.” (Tr., p. 70, lines 9-12).

The deposition of Yeomans was likewise introduced.

The court finally decided that an illegal secondary objective on the part of the Union “was not proven.”

This panel has read the record; and re-read the testimony of witnesses Walton and Yeomans. While all the judges on the panel would not necessarily arrive at the same conclusions as did the trial judge, we cannot say that there does not exist sufficient substantial evidence in the record to support each of the trial court’s findings.

Based upon such findings, the trial court’s conclusion that all elements for lawful picketing required by Sailor’s Union of the Pacific AFL [Moore Dry Dock Co.], 92 NLRB No. 93 27 LRRM 1108 (1950) were established; that the Union’s required effort “to minimize the effect of picketing” was found to have existed, and that an alleged unlawful secondary objective in the Union was “not proven,” (see Georgia-Pacific Corporation v. Columbia River Chapter of Pacific Log Scalers Association, a labor organization, 386 F.Supp. 1199 (1975)) we therefore

Affirm.