author: BUTZNER, Circuit Judge: BOREMAN, Senior Circuit Judge

text:
    Paris REIZAKIS, Appellant, v. Albert E. LOY, Appellee.
    No. 73-2402.
    United States Court of Appeals, Fourth Circuit.
    Argued May 9, 1973.
    Decided Jan. 22, 1974.

      Boreman, Senior Circuit Judge, dissented in an opinion.
    Thomas J. Harrigan, Arlington, Ya. (Harrigan, Morris & Artz, Arlington, Va., on brief), for appellant.
    Richard H. Lewis, Fairfax, Va. (Brault, Lewis, Geschickter & Palmer, Fairfax, Va., on brief), for appellee.
    Before BOREMAN, Senior Circuit Judge, and BUTZNER and RUSSELL, Circuit Judges.
   BUTZNER, Circuit Judge:

Paris Reizakis appeals from an order dismissing his action against Albert E. Loy with prejudice. Because the circumstances disclosed by this record do not justify the sanction imposed by the district court, we reverse.

Reizakis, alleging that he was a citizen of Canada, instituted this diversity action on April 16, 1971, and in due course, Loy filed his answer. On December 16, 1971, Loy moved to dismiss the action on the ground that Reizakis had not answered interrogatories propounded five months earlier. The same day, Reizakis’ counsel filed the answers, and the motion to dismiss was promptly withdrawn. Attorneys for both parties met- with the court for the initial pretrial conference on December 17. At the request of Reizakis’ counsel for a continuance of the conference, the district court rescheduled it for June 15, 1972 and directed that all discovery should be completed by February 1, 1972. On December 20, Loy gave notice to take Reizakis’ deposition on January 25, and the deposition was filed March 2, 1972.

During these proceedings, Reizakis was represented by Peter A. Chaconas, of Washington, D. C., and Rudolph N. D’Agaris, of Maryland. Because neither were residents of Virginia with offices in the state, they were prohibited by a local rule of the district court from representing Reizakis without being associated with a Virginia attorney who had been admitted to practice in the court. Reizakis’ Virginia attorney was Robert C. Watson. In the latter part of May, Watson, with Reizakis’ consent, prepared an order to permit D’Agaris and him to withdraw. At the June pretrial conference, the court denied withdrawal until Watson was replaced by another Virginia lawyer and set the case for trial on Tuesday, September 12, 1972. Notwithstanding the denial of his motion to withdraw, Watson took the position that Reizakis had released him in May. He notified Reizakis of the trial date, but apparently neither he nor D’Agaris did anything further to prepare for trial.

Sometime after the middle of August, Chaconas satisfied himself that the doctors who were to be Reizakis’ witnesses would be available for the September trial. However, he did not obtain subpoenas for them. In the meantime, acting on behalf of Reizakis, he made several unsuccessful attempts to engage local counsel to replace Watson, but not until the first week of September did he succeed in obtaining a new Virginia associate.

On Thursday, September 7, five days before the scheduled trial, Thomas J. Harrigan, the replacement for Watson, and Richard H. Lewis, attorney for Loy appeared before the district court. They were accompanied by Watson who moved for a continuance of the trial so that Harrigan could have a reasonable time to prepare the case. The record does not indicate that Lewis offered any objection at this time. The court, however, denied the continuance, and Harri-gan declined to enter a formal appearance because he believed he could not prepare adequately in the short time remaining. Harrigan promptly told Cha-conas of the court’s ruling, and although he had not entered a formal appearance, he nevertheless said that if the witnesses were available he would attempt to prepare the case. The next day, Friday, Chaconas told Harrigan that the doctors were available and that the case was ready. Harrigan studied the file over the week end, but when he telephoned the doctors on Monday, September 11, he learned that none of them could be present. By this time it was too late to subpoena them.

On the day of trial, Tuesday, September 12, Reizakis, Chaconas, Watson, D’Agaris, and Harrigan appeared in the district court. Chaconas, citing the absence of the doctors, moved for a contin-uanee. Lewis, noting the inconvenience to Loy’s witnesses, objected, and the court denied the motion. Chaconas then stated that the witnesses who were to testify on the issue of liability were present, and he moved to have the trial proceed on this issue and for a continuance of the damage issue only. Again, Lewis objected, and the court denied the motion. Chaconas then conceded that in view of the court’s rulings it was impossible to proceed, and Lewis moved to dismiss the case for lack of prosecution. The court granted the motion and assessed the costs, including jury fees, mileage, and per diem against Reizakis. It then granted Watson’s and D’Agaris’ motion to withdraw.

A district court unquestionably has authority to grant a motion to dismiss for want of prosecution. Fed. R.Civ.P. 41(b). Indeed, as the Supreme Court held in Link v. Wabash R.R., 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962), the trial court can take such action on its own motion. But courts interpreting the rule uniformly hold that it cannot be automatically or mechanically applied. Against the power to prevent delays must be weighed the sound public policy of deciding cases on their merits. See generally, Wright & Miller, Federal Practice and Procedure: Civil §§ 2369, 2370 (1971). Consequently, dismissal “must be tempered by a careful exercise of judicial discretion.” Durgin v. Graham, 372 F.2d 130, 131 (5th Cir. 1967). While the propriety of dismissal ultimately turns on the facts of each case, criteria for judging whether the discretion of the trial court has been soundly exercised have been stated frequently. Rightfully, courts are reluctant to punish a client for the behavior of his lawyer. Edsall v. Penn Central Transportation Co., 479 F.2d 33, 35 (6th Cir. 1973). Therefore, in situations where a party is not responsible for the fault of his attorney, dismissal may be invoked only in extreme circumstances. Industrial Building Materials, Inc. v. Interchemical Corp., 437 F.2d 1336, 1339 (9th Cir. 1970). Indeed, it has been observed that “[t]he decided cases, while noting that dismissal is a discretionary matter, have generally permitted it only in the face of a clear record of delay or contumacious conduct by the plaintiff.” Durham v. Florida East Coast Ry. Co., 385 F.2d 366, 368 (5th Cir. 1967). Appellate courts frequently have found abuse of discretion when trial courts failed to apply sanctions less severe than dismissal. See e, g., Richman v. General Motors Corp., 437 F.2d 196, 199 (1st Cir. 1971); Flaksa v. Little River Marine Construction Co., 389 F.2d 885, 887 (5th Cir. 1968); Dyotherm Corp. v. Turbo Machine Co., 392 F.2d 146, 148 (3d Cir. 1968). And generally lack of prejudice to the defendant, though not a bar to dismissal, is a factor that must be considered in determining whether the trial court exercised sound discretion. Pearson v. Dennison, 353 F.2d 24, 28 (9th Cir. 1965).

It is in the light of the foregoing interpretation of Rule 41(b) that we must consider the circumstances of this case. The facts do not depict “a drawn out history” of “deliberately proceeding in dilatory fashion,” as in Link v. Wabash R.R., 370 U.S. 626, 633, 82 S.Ct. 1386, 1390, 8 L.Ed.2d 734 (1962). Moreover, Reizakis was not shown to be personally responsible for any of the incidents that delayed the case. While he knew that Watson wished to withdraw, he not unreasonably expected his principal counsel, Chaconas, to arrange for a local associate to comply with the rules. Furthermore, he apparently knew nothing about the failure to subpoena the doctors. To the contrary, it appears that he advanced money for witness fees and expected the case to be tried as scheduled. His attorneys were unable to proceed either because they failed to give the doctors adequate notice, or because Chaconas relied on his understanding that the doctors would be available without taking the precaution of subpoenaing them. In selecting an appropriate sanction for this dereliction, the district court did not consider measures less drastic than dismissal, such as imposing a fine or costs against Reizakis’ attorneys. Finally, it does not appear that a continuance would have prejudiced Loy’s defense. Of course, Loy, his witnesses, and his attorney would have been subjected to extra expenses and inconvenience if the case had been rescheduled, but monetary sanctions were available to rectify this harm as well. Moreover, inconvenience to some of the witnesses could have been prevented by trying the issue of liability as suggested by Reiza-kis’ counsel.

The District Court for the Eastern District of Virginia is exceptionally busy, and the demands on the time of its judges and its jurors are great. Its judges properly are diligent in bringing litigation to trial without delay. But the interpretation of Rule 41(b) found in the well reasoned cases cited above bars dismissal for the circumstances disclosed by this record. Available to the district court were lesser sanctions sufficient to assure prompt disposition of this case and to discourage similar conduct in the future. Additionally, the liability issue could have been tried, and if Reizakis lost, the case would have ended without further delay.

The judgment is reversed, and this case is remanded with directions that it be reinstated.

BOREMAN, Senior Circuit Judge

(dissenting):

With all due regard and respect for the opinion of my brothers, somewhat reluctantly I state this note of disagreement. Naturally, our sympathies are with any litigant who suddenly discovers that the results of his counsel’s inattention, indifference, lack of diligence, or negligence, are visited upon him in terms of the dismissal of his case and the loss of an opportunity to be compensated in damages for personal injuries; but sympathy can have no place in the decision process. Each case properly is to be considered on its own peculiar facts and circumstances.

“The first sentence of Rule 41(b) [Fed.R.Civ.P.] provides for the dismissal ‘of an action or of any claim’ for failure of the plaintiff to prosecute. The quoted language is comprehensive” and the Rule “clearly places dismissal for failure to prosecute in the district court’s discretion.” 5 Moore’s Federal Practice ¶ 41.11 [2], pp. 1114-1115. What constitutes “failure to prosecute” depends, of course, on the facts of the particular situation presented to the court and, in exercising its sound discretion, the court should consider all the pertinent circumstances. However, the law is clear that an order of dismissal for failure to prosecute will not be disturbed on appeal unless there has been a clear abuse of discretion.

The majority opinion undertakes to recite the facts which were before the district court at the time of the dismissal for failure to prosecute.

In the margin is set forth an excerpt from the transcript of the proceedings before the court when the case was called for trial. Summarizing, the present action was instituted on April 16, 1971, and the defendant’s answer was timely filed. Interrogatories propounded to the plaintiff on July 15, 1971, were not answered until five months later and then in response to the threat of a motion which had been filed by the defendant to dismiss the action for failure to answer the interrogatories. The first pretrial conference, scheduled for December 17, 1971, was continued on motion of plaintiff’s counsel and an order was entered at that time providing that all discovery should be completed by February 1.

On December 22 notice was given by the defendant to take plaintiff’s discovery deposition but the deposition was not filed until March 2, 1972, and the reason for this delay does not appear in the record. On June 15, 1972, the case came on for formal pretrial and at that time the court was definite and positive in ordering that the case should be tried on September 12, 1972, before a jury. Attempts on the part of plaintiff’s counsel to obtain a continuance were made on September 7, five days before the trial date, but the request was denied and the court reminded counsel that at the pretrial conference on June 15, the case had been definitely set for jury trial beginning on September 12. On the morning of September 12 further efforts were made to secure a continuance and the details of the proceedings appear in the transcript thereof set forth ante in footnote 1.

The local rules of the district court provide that an out-of-state attorney may not engage in litigation in the Eastern District of Virginia unless he has associated himself with local counsel. Mr. Watson, local counsel, appeared in the case, instituted the action and, with other counsel, signed the complaint. Approximately one year following the institution of the action a request was made of the court to permit Mr. Watson and Mr. D’Agaris, a Maryland attorney, to withdraw as counsel for the plaintiff. The reason for the request for permission to withdraw is not disclosed by the record. The court refused the request unless other local counsel should enter an appearance to replace Mr. Watson. Not until September 7 did Mr. Harrigan, a local attorney, appear and a motion for a continuance was made so that on the very eve of the trial new counsel could prepare. The court insisted that in June the trial date had been definitely fixed as September 12 and denied the request for continuance, at which time Mr. Harrigan declined to formally enter an appearance. On the trial date the motion for continuance was made by plaintiff’s counsel on the ground that they had been unable to secure the attendance of medical witnesses, but it was certainly apparent to the court that the witnesses had not been subpoenaed and that no serious effort had been made by counsel to procure their attendance. It was stated to the court that late in the night preceding the trial date local counsel determined that no doctors would be available for trial and “I informed Mr. Chaconas, informed the Clerk the monies were available for the Doctor’s fees. . . . ” The time when the so-called fees were made available and the amount thereof are not disclosed.

No citation of authority is needed to support the premise that district courts must have control of their dockets without disruption or interference in order to assure the orderly conduct of the court’s business. I take judicial notice of the fact that the Eastern District of Virginia is an extremely busy district; the dockets of the Alexandria Division, in which this litigation arose, are overburdened with cases involving litigants who are often anxiously and impatiently awaiting the opportunity to have their “turn at bat” — to have their day in court. The rapidly developing policy of the judicial system looks with disfavor upon counsel’s lack of diligence or negligence in preparing cases for trial. The court is in position to get the “feel” of the case and to appraise the attitude of counsel toward the diligent prosecution of the litigation.

In Vindigni v. Meyer, 441 F.2d 376 (2 Cir. 1971), the Court of Appeals, in effect, reversed the district court’s dismissal of the plaintiff’s action for failure to prosecute. Understandably, the reversal there was grounded upon the unusual fact of the complete disappearance of plaintiff’s attorney. The court said, at page 378,

“In reversing the order in this case, we do not depart from the regular course of our decisions upholding discretionary orders of dismissal for failure to prosecute. [Cited cases omitted.] The facts here are readily distinguishable from the facts in those decisions.”

The court, in States Steamship Company v. Philippine Air Lines, 426 F.2d 803, 804 (9 Cir. 1970), had this to say:

“Whether the judge misused or abused his discretion, of necessity, depends upon the facts of each case. This court has never attempted to fix guidelines, although a good rule of thumb might be to follow Judge Ma-gruder’s oft-quoted phrase in In Re Josephson, 218 F.2d 174, 182 (1st Cir. 1954), that the exercise of discretion of the trial judge should not be disturbed unless there is ‘a definite and firm conviction that the court below committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors.’ it

In Thompson v. Fleming, 402 F.2d 266 (5 Cir. 1968), the court found no abuse of discretion on the part of the district judge who dismissed plaintiff’s action. There an attorney, who had filed a written notice of appearance for plaintiff, moved for a continuance on the ground that other counsel who had signed the complaint and who had taken the deposition had not been able to prepare for trial due to pressing business matters. It was held that the action of the trial court, in denying a motion for continuance, in directing that the trial proceed, in dismissing the action, albeit without prejudice, when plaintiff’s counsel declined to proceed, was not an abuse of discretion.

In an action for damages for personal injuries, Link v. Wabash Railroad Co., 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1961), it appears that after extended pretrial proceedings which delayed the maturing of the case the trial court, on September 29, 1960, scheduled a pretrial conference for one o’clock on October 12, 1960, and notified counsel for both sides. Late in the morning of October 12 plaintiff’s counsel telephoned the judge’s secretary that he was otherwise engaged in another city, that he could not attend the conference at the appointed hour but that he would be there on the afternoon of October 13 or anytime on October 14 if the pretrial conference could be reset. When plaintiff’s counsel failed to appear on October 12 the court, sua sponte, dismissed the action for failure of counsel to appear and for failure to prosecute. The Court upheld the action of the trial court, even in the absence of a motion to dismiss, and at pages 633 and 634, 82 S.Ct. at page 1390 stated:

“On this record we are unable to say that the District Court’s dismissal of this action for failure to prosecute, as evidenced only partly by the failure of petitioner’s counsel to appear at a duly scheduled pretrial conference, amounted to an abuse of discretion. It was certainly within the bounds of permissible discretion for the court to conclude that the telephone excuse offered by petitioner’s counsel was inadequate to explain his failure to attend. And it could reasonably be inferred from his absence, as well as from the drawn-out history of the litigation, . that petitioner had been deliberately proceeding in dilatory fashion.”
“There is certainly no merit to the contention that dismissal of petitioner’s claim because of his counsel’s unexcused conduct imposes an unjust penalty on the client. Petitioner voluntarily chose this attorney as his representative in the action, and he cannot now avoid the consequences of the acts or omissions of this freely selected agent. Any other notion would be wholly inconsistent with our system of representative litigation, in which each party is deemed bound by the acts of his lawyer-agent and is considered to have ‘notice of all facts, notice of which can be charged upon the attorney.’ Smith v. Ayer, 101 U. S. 320, 326, 25 L.Ed. 955.”

Lack of diligence of plaintiff and his counsel in the preparation of the instant case and in complying with the court’s orders and directions is evident. We have no satisfactory information as to the problems confronting the court with respect to granting a continuance, but I venture the statement that if every plaintiff-litigant requested a continuance on the date fixed for the trial of his case and refused to proceed any attempt by the court to maintain the orderly control of its business would be an exercise in futility. No court can succeed if it permits the lawyers, officers of the court, to control the dockets and the court’s business.

In the case at bar it is argued, and the majority holds, that the negligent conduct of plaintiff’s counsel should not operate to the disadvantage and prejudice of their client. However, the distinct court noted that the plaintiff himself was not blameless:

“THE COURT: In June when I set this case for trial Mr. Watson then said that he was then requesting to withdraw. I wouldn’t let him withdraw. I told him he would have to tell his client that the case was definitely going to be tried on September 12, and that if he had to get other counsel that there were two months left for him to get counsel at least, three months, and so the Plaintiff, insofar as counsel is concerned, is not blameless in this matter.
“He has known for some time that the case was going to be tried today with or without Mr. Watson, and there was no reason that he could not have notified his Doctors as early as June and ascertained then their availability.” (Fn. 1 ante.)

As the late Judge Sobeloff, in considering a motion under Federal Rules of Civil Procedure 60(b)(1) to set aside a summary judgment, wrote in Universal Film Exchanges, Inc. v. Lust, 479 F.2d 573, 577:

“Our decision does not leave a client without remedy against the negligent attorney. Lawyers are not a breed apart. Where damages are inflicted upon innocent clients by other professionals, such as doctors or dentists, the remedy is a suit for malpractice. The same is true where damage is inflicted upon a client through an attorney’s professional negligence. Indeed, the Supreme Court explicitly pointed out in Link, supra, 370 U.S. 626, 82 S.Ct. 1386 at n. 10, that if the attorney’s conduct was substantially below what was reasonable under the circumstances, the client’s remedy was a suit for malpractice. See, also, Schwarz v. United States, 384 F.2d 833 (2 Cir. 1967).”

Upon this record I am not convinced that there was a clear abuse of the court’s discretion in granting the defendant’s motion to dismiss under Rule 41(b).

      . The court acted under Fed.R.Civ.P. 41(b), which provides in part:
      “For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move dismissal of an action or of any claim against him .... Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision . . . operates as an adjudication upon the merits.”
      The statute of limitations also bars reassertion of Reizakis’ claim.

      . Reizakis brought suit to recover damages for personal injuries arising out of an automobile accident on April 13, 1970. He claims medical expenses in excess of $6,700, other special damages, and compensation for some permanent disability.

      . There is no record of events that took place between the pretrial conference, June 15, 1972, and the trial date, September 12, 1972 other than the colloquy between court and counsel on September 12, 1972. The court apparently credited the statements of all counsel, for it made no contrary findings.

      . MR. CHACONAS: At this moment, Your Honor, I would like to make a motion.
      THE COURT: All right, sir.
      MR. CHACONAS: I would like to make an oral motion to ask for a continuance in this case due to the fact that our expert witnesses are not available at this moment. We do not know when they will be, and if your Honor does not grant us the motion, therefore, I ask that the case will not be submitted to this Court at this time.
      THE COURT: The case has been set for trial since June 15. Ample time has been had to prepare the case. If there was a question of the unavailability of any witnesses, that should have been ascertained from depositions taken. There was ample time for those depositions.
      MR. CHACONAS: For the record, I would like also to state that these Doctors are not available because they are performing their duties in the medical profession as we are attempting here to perform our duties in the legal profession.
      I do respect the Court’s opinion in denying me the motion for a continuance, but I want the record to clearly show that there was an attempt by the Attorneys for the Plaintiff to obtain and retain these Doctors to appear here today, and I want the record to clearly state that.
      THE COURT: Were subpoenas issued?
      MR. CHACONAS: There were not subpoenas issued. There were telephone conversations and telegrams to ascertain the presence of these Doctors, but unfortunately, apparently, their emergencies were above their presentation here for the purposes of their patients, I suppose.
      THE COURT: Can you tell me when you first ascertained that they would not be available?
      MR. CHACONAS: Well, we began three and four weeks ago and as of Friday we ascertained that one of the Doctors would be available today, but he is out of town, and through secretaries or answering service or whatever it may be, but the point is that they were contacted through their agencies or agents or through the answering bureau or the Medical Bureau, and they were put on notice and we have taken our position that they were put on notice.
      THE COURT: Three or four weeks ago when you ascertained that some of them might be unavailable was any effort made—
      MR. CHACONAS: No, your Honor, we were not put on that notice. We were put on notice that they would be in contact and be available, and that is where we stand. I don’t think that a legal profession should be running around on a horse looking for Tonto or something like that. These people are owed money. They have for two years been taking care of Mr. Reizakis. I don’t know what it is. It is just a situation that is difficult for our profession, and I do hope you sympathize with our position that we just cannot put these people in line to just come in sometimes, and it is not a question that they are being denied their fee because the fees are available; they are income, and I do believe that the client — and the client is not a citizen of this country. This is the unfortunate part about it.
      Your Honor, the client has a right to be represented and he has a right to be represented in the sense that we do have available people to testify for him, and the surety of the situation is with professionism, whatever it may be.
      I am not trying to put on a speech. They are just not here, and we did our duty as officers of the court, and that is all we can do.
      MR. HARRIGAN: Your Honor, since my name has been mentioned, I would like to explain the situation for the record if it does go to the Court of Appeals.
      Last week, a week ago, I was first contacted. The file was brought into my office. . . . I told counsel for the Plaintiff that I would attempt to contact the various parties and came into court last Thursday, which was five days ago, and move for a continuance and with Mr. Watson, who had a motion to withdraw, I came in and requested in fact that if the case would be continued Mr. Watson could be allowed to withdraw and then I could go on record, and I was not on record at that time.
      The Court denied that. I did not go on record. I notified Mr. Chaconas that same day of the Court’s ruling and told him to immediately notify the Doctors and that if he got his witnesses together I would be glad to help out and attempt to get' in the case and try it for him.
      Friday of last week, three days ago, he notified me he contacted the Doctors and that they were available, the ones that were needed, that the case was prepared.
      I prepared the case over the weekend. Yesterday I contacted the Doctors for the purpose of finding out — telling them what time I would have them on call, and when I contacted them all of them said, “I couldn’t be there,” they had to be somewhere else.
      One was out of town, and late last night —and at that point it was too late to issue any subpoena for anyone, and it was only late last night that I determined that no Doctors would be available whatsoever, and I informed Mr. Chaconas, informed the Clerk the monies were available for the Doctor’s fees, and right up to that point I was assured that there would be medical testimony and that there would be liability testimony, and that was the posture of the ease this morning, and I told Mr. Chaconas that based on the fact that I assumed they would have the medical testimony here and I found out they did not, that there was not any reason for me to go on record in this case, and that is how my name came into this case.
      THE COURT: In June when I set this case for trial Mr. Watson said that he was then requesting to withdraw. I wouldn’t let him withdraw. I told him he would have to tell his client that the case was definitely going to be tried on September 12, and that if he had to get other counsel that there were two months left for him to get counsel, at least, three months, and so the Plaintiff, insofar as counsel is concerned, is not blameless in this matter.
      He has known for some time that the case was going to be tried today with or without Mr. Watson, and there was no reason that he could not have notified his Doctors as early as June and ascertained then their availability.
      MR. CHACONAS: .... We have tried in this ease to get counsel. We have tried for the medical testimony but circumstances or events have just come about that it was an impossible situation. That is why we made our motion for a continuance.


source: Caselaw Access Project

author: BARNES, Circuit Judge:

license: Public Domain

text:
    In the Matter of VENTURA-LOUISE PROPERTIES, a Limited Partnership, composed of Robert M. Myers and Victor T. Koozin, General Partners. GREAT WEST LIFE ASSURANCE COMPANY, Petitioners-Appellants, v. Don M. ROTHMAN, Trustee-Appellee.
    No. 71-2624.
    United States Court of Appeals, Ninth Circuit.
    Jan. 3, 1974.
    Richard M. Moneymaker, Tiernan & Moneymaker, Los Angeles, Cal. (Argued) , for petitioners-appellants.
    Alan S. Pitt, Beverly Hills, Cal. (Argued), for trustee-appellee.

      Before CHAMBERS and BARNES, Circuit Judges, and KING, District Judge.

       The Honorable Samuel P. Kang of the District of Hawaii, sitting by designation.

   OPINION

BARNES, Circuit Judge:

This is an appeal from a final judgment of the United States District Court for the Central District of California affirming an Order, made by the Referee in Bankruptcy denying appellant’s claim, as a trust deed beneficiary, for recovery of rents collected and held by appellee, Trustee in Bankruptcy.

The relevant facts can best be summarized in outline form in a chronological time sequence.

Great West Life Assurance Company of Winnipeg, Canada, appellant herein, is hereinafter referred to as “Lender”. A. J. Bumb and Dan M. Rothman, Ap-pellee (who succeeded Bumb as Trustee), are hereinafter referred to as “Trustee”. Ventura-Louise Properties, Inc., the bankrupt corporation, is hereinafter referred to as “Debtor”.

8/26/63 Debtor executed a deed of trust in favor of Lender on real estate located in Los Angeles County, near the intersection of Ventura Boulevard and Louise Street to secure a loan of $1,600,000.00. Rents paid to Debtor. Trust Deed recorded.
5/1/64 Debtor executed a second deed of trust on the same property and also included a seconnd parcel in the Palm Springs area, Sunrise Estates (in effect a first deed of trust on this parcel, see Appellee’s Brief, pp. 6-7) in favor of Manufacturer’s Bank to secure an additional loan of $850,000. Lender relies upon the “assignment of rents” clause in this second trust deed for its claim to the rents. (Ex. 9 second document)
6/1/66 Lender filed, recorded its Notice of Breach and Default, and Election to Sell, on the second trust deed. (Ex. 11)

Prior to 6/2/66 both loans were in default.

7/21/66 Pursuant to its “assignment of rents” clause, Lender gave written notice to each tenant on the property, notifying them that Lender was exercising its right to collect rents under its assignment of the rents and demanded that all rents be paid to it. (Ex. 5)
9/8/66 Debtor filed a Chapter XII petition in bankruptcy and A. J. Bumb was appointed Trustee in Bankruptcy. (Finding of Fact No. 1).
On or about 9/16/66 Trustee notified all tenants of Ventura-Louise property to pay all rents to him as Trustee in Bankruptcy. (Finding of Fact No. 17). Lender in order to avoid nonpayment of rent by tenants because of conflicting demands agreed that A. J. Bumb could so collect the rents. (Finding of Fact No. 18). A. J. Bumb did collect rents from all tenants until 6/25/68, the date of the foreclosure sale. (Finding of Fact No. 19). Neither Lender, nor any of its officers or agents, took any steps during the pendency of the bankruptcy proceeding to either (A) collect any of the rents on the subject property; (B) obtain an order of the Court to sequester said rents; (C) obtain an order of the Court for the Trustee to collect rent for them; or (D) secure permission of the Court to foreclose until an order was entered on June 20, 1968, upon application of the Trustee herein. (Finding of Fact No. 21).
7/17/67 Order entered in the Bankruptcy Proceeding entitled “Order Adjudging Debtor a Bankrupt and Directing That Bankruptcy Be Proceeded With.”
6/20/68 Referee in Bankruptcy upon Trustee’s application entered Order permitting foreclosure upon the realty. (Finding of Fact No. 11). Lender bid in the subject realty for $2,200,068.20. (Finding of Fact No. 12). At the time of foreclosure sale, there was due and owing on Lender’s first deed of trust of August 26, 1963, the sum of $2,103,625.57 (Ex. 1) and upon the note secured by the second trust deed the sum of $461,622.79 (Ex. 9). Thus, the foreclosure left a deficiency owing in excess of $364,180.08 (Ex. 15).
9/16/66-6/25/68 Trustee collected rents in excess of $75,000.00, the balance he now holds. Lender demands these monies in satisfaction of its deficiency.

Both parties agree on this appeal, and we find, that the rights of the Lender to the rents are determined by the law of California. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Tower Grove Bank & Trust Co. v. Weinstein, 119 F.2d 120 (8th Cir. 1941).

But two issues are before us for determination. First, what is the legal effect of the “assignment of rents” clause —(a) an absolute assignment of rents to the Lender contingent only upon the occurrence of a default, or (b) an assignment for security purposes only, in which case the rents could inure to the Trustee in Bankruptcy? Secondly, if we hold the latter (i. e., that the clause is an assignment for security purposes only), we must determine whether the Lender perfected its rights to the rents collected by the Trustee.

The “assignment of rents” clause in question reads in pertinent part as follows :

“B. Should Trustor fail or refuse to make any payment or do any act which he is obligated hereunder to make or do, at the time and manner herein provided, then Trustee and/or Beneficiary each in its sole discretion, it being hereby made the sole judge of the legality thereof, may, without notice to or demand upon Trustor, and without releasing Trustor from any obligation hereof:
“1. Make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, either Trustee or Beneficiary being authorized to enter upon or take possession of said property for such purpose; . . . ”
******
“3. Beneficiary is authorized either by itself or by its agent to be appointed by it for that purpose, to enter into and upon and take and hold possession of any or all property covered hereby and exclude the Trustor and all other persons therefrom; and may operate and manage the said property and rent and lease the same and collect any rents, issues, income and profits therefrom, and from any personal property located thereon, the same being hereby assigned and transferred for the benefit and protection of the Beneficiary . . .” (Ex. 9, second sec., para. B, subsec. 1 and 3). (emphasis added)

Where a mortgage includes the rents as a portion of the property pledged to secure the debt (additional security as alleged by appellee here), only a security interest passes, and until the mortgagee (Lender) obtains lawful possession, the mortgagor (Debtor) in possession may collect the rents as they fall due. To perfect a claim to the rents thereto, the mortgagee must actually acquire possession of the mortgaged property by consent or lawful procedure, or secure the appointment of a receiver. Kinnison v. Guaranty Liquidating Corp., 18 Cal.2d 256, 261, 115 P.2d 450, 455 (1941).

Provisions granting to the mortgagee the right to collect rents in event of default may be attached to a mortgage or trust deed. Such an agreement can provide for an absolute assignment of rents upon default. “It has been held that such a provision, rather than pledging the rents as additional security, operates to transfer to the mortgagee, the mortgagor’s right to the rentals upon the happening of a specified condition.” Id. at 261, 115 P.2d at 453. The California rule is:

“. . . that the parties to a mortgage or deed of trust may contract respecting the right to rentals and that" such agreements will be enforced in accordance with the expressed intention of the parties. (Citations omitted.) Whether the agreement between the parties is incorporated in the mortgage or deed of trust or whether it is in the form of a separate instrument is not controlling; the decisive question is whether the parties contemplated an assignment of the rentals or merely a pledge of the rentals for security purposes." Id. at 262, 115 P.2d at 453 (emphasis added).

The Kinnison case held that the beneficiary under a trust deed, who, in addition, held an assignment of rents, was entitled to the rents collected and deposited in the bank by the debtor ahead of an existing creditor of the debtor.

The Trustee attempts to distinguish the facts in Kinnison with those here by contending that since the “assignment of rents” clause in Kinnison was not contingent on default, but executed after default, and was an unconditional assignment, therefore all assignments of rent must be unconditional and contemplate' an immediate transfer of rents. (Appellee’s Brief, p. 13). Kinnison, however, recognizes an absolute assignment of rents can occur upon the happening of a contingency; a default. Id. at 261, 115 P.2d 450. Also, an absolute assignment does not, of necessity, contemplate an immediate transfer of rents.

“There is a marked difference between a pledge for additional security and an assignment. Ordinarily a pledge is considered as a bailment and delivery of possession, actual or constructive, is essential, but transfer of title is not. On the other hand, by assignment, title is transferred although possession need not be.” Paramount Building & Loan Ass’n v. Sacks, 107 N.J.Eq. 328, 152 A. 457, 458 (1930).

Appellee apparently confuses this distinction in relying on the clause in In the Matter of Hotel St. James, Inc., 65 F.2d 82 (9th Cir. 1933) which read in part:

“If one or more of the events of default shall happen, the Trustee shall enter . . . and take . . . possession of the trust estate . . . and may operate . . . the estate, and conduct the business thereof to the best advantage of the holders of the bonds secured thereby .
“The Trustee shall be entitled to the appointment of a receiver of the trust estate and of the earnings, rents, dividends, income, interest and profits thereat . . .”

In Hotel St. James the beneficiary’s claim for rents was disallowed because there was no attempt to take possession, or to sequester rents, or to have a receiver appointed. However, a finding that the clause created a pledge for additional security necessitated inquiry into the question of who was in possession. Here the “assignment of rents” clause does not require possession. Here the terms “authorized to enter” and “may operate and manage” are used as distinguished from the Hotel St. James’ clause which uses the term “shall”, — connotating a condition for perfecting the security interest by entering into possession.

The clause in Hotel St. James fails to use the word “assignment” or “transfer” or any term indicating an “assignment”, whereas the clause here in question specifically uses the term “assigned” without making any express limitation such as the term “additional security” used in the clause in Malsman v. Brandler, 230 Cal.App.2d 922, 924, 41 Cal.Rptr. 438 (1964), in which the court concluded the language was persuasive that the parties intended a security interest and not an absolute assignment. Id. at 925, 41 Cal. Rptr. 438.

In Associated Co. v. Greenhut, 66 F.2d 428 (3rd Cir. 1935), a mortgage expressly assigned the rent to the mortgagee upon default. The Third Circuit (in holding that the rents collected between the mortgagor’s bankruptcy adjudication and foreclosure sale belong to mortgagee on his deficiency claim, not the trustee in bankruptcy), stated that “the assignment, though conditional, became absolute, effective, and enforceable upon the default which admittedly occurred. The mortgaged premises constituted part of the assets of the bankrupt estate, subject to the prior liens of the mortgage, and so the appointment of a receiver to collect the rents was not a prerequisite to the mortgagee’s right to rents.” Id. at 429. Similarly here, possession is not a prerequisite to the Lender’s right to the rents Upon default under the absolute assignment in the clause used by the parties to the mortgage. We therefore agree with the court in Kinnison which said, 18 Cal.2d at page 262,115 P.2d at page 453:

“In the present ease we do not see how it can be said that the parties contemplated merely the transfer of a security interest in the rentals.”

We hold that the present clause provides for an absolute assignment thus entitling the Lender to the rents.

We therefore reverse the District Court’s order affirming the Referee’s order, and remand for the entry of judgment in accordance with the foregoing opinion.

      . Although we need not meet the perfection issue we do note that a demand for possession would have been sufficient for the Lender to perfect its security interest. Freedman’s Savings and Trust Co. v. Shepherd, 127 U.S. 494, 8 S.Ct. 1250, 32 L.Ed. 163 (1888) ; Accord: Webster Factors, Inc. v. United States, 436 F.2d 425, 428, 193 Ct. Cl. 892 (1971). Here the Lender’s demand for the rents (Findings of Fact No. 17) was tantamount to a demand for possession under the language of Mortgage Guarantee Co. v. Sampsell, 51 Cal.App.2d 180, 124 P.2d 353 (1942). There the court discussed the general rules at 187-188, 124 P.2d 353, citing and quoting from In re Clark Realty Co., 234 F. 576, 582 (7 Cir. 1916) where the Court says:
      “This clause in the mortgage did not give to the mortgagees an absolute right to the rents until there was a default and until the mortgagees made some claim or demand for the rents, they belonged to the, mortgagor. . . . Under those authorities the decision of the referee and the District Court, giving to the mortgagees the rents from and after the time they made claim for them and denying the rents accruing prior to such claims was correct.”
      The court in Sampsell went on to show that the general rule announced in Clark Realty is followed by the California courts in Bank of America v. Bank of Amador County, 135 Cal.App. 714, 721, 28 P.2d 86 (1933). Id., 51 Cal.App.2d at 188,124 P.2d 353.


author: MARIS, Circuit Judge.

text:
    Virginia T. LOUCKS, Appellant, v. Richard ELLINGTON.
    No. 73-1042.
    United States Court of Appeals, Third Circuit.
    Argued Dec. 4, 1973.
    Decided Jan. 28, 1974.

      William A. Pallme, Pallme & Anduze, St. Thomas, V. I., for appellant.
    Richard E. Grunert, Grunert, Stout, Hymes & Mayer, St. Thomas, V. I., for appellee.
    Before SEITZ, Chief Judge, and MARIS and GIBBONS, Circuit Judges.
   OPINION OF THE COURT

MARIS, Circuit Judge.

This is an action in which the plaintiff originally sought specific performance of the covenant for further assurance of title contained in a deed dated May 19, 1961 from the defendant and his wife to the plaintiff and her husband (since deceased), which conveyed a lot of land in the town of Cruz Bay, St. John, upon which the plaintiff and her husband later erected a dwelling house. It subsequently became clear that specific performance was impossible and the action thereupon proceeded for damages for breach of that covenant and of the covenants of seisin and warranty of title.

It appeared that the defendant had included in the conveyance a 60 feet wide parcel of land which belonged to the Government of the Virgin Islands. This parcel of land lies at the northern end of the land conveyed, between the portion which was owned by the defendant and a public road to the north and the beach and shoreline beyond. At the time of the conveyance of 1961 this northern 60 'feet wide parcel of land was subject to an easement of access to the public road and the beach which had been granted in a deed dated July 26, 1944 from the Municipality of St. Thomas and St. John to the defendant’s predecessors in title for the benefit of the land conveyed by that deed. The land conveyed by the defendant and his wife to the plaintiff and her husband in 1961 was that part of the land thus conveyed in 1944 which abuts on the northern 60 feet wide parcel of land involved in the present controversy. The land of the plaintiff and her husband was, therefore, entitled to the enjoyment of the easement over that parcel of land which had been granted by deed of July 26, 1944. It also appeared that this northern 60 feet wide parcel of land was subject to an additional overlapping easement of undefined extent granted by the Government of the Virgin Islands to the owners of the property adjoining the plaintiff’s lot on the east to connect their existing driveway with the public road.

It thus appears that by the conveyance of 1961 the plaintiff and her husband did not receive title to the northern 60 feet wide parcel of land adjacent to the public road which purported to be included in the conveyance of 1961 to them, but merely an easement of passage over it to the road and the beach beyond, the enjoyment of which was subject, at least in part, to an overlapping easement owned by their neighbor to the east. The defendant, after the bringing of this suit, succeeded in obtaining for the plaintiff a deed from the Government conveying title to her to a triangular portion of the parcel in question lying south of a retaining wall and adjoining her other land, but subject to the same two easements of access to the public road. Upon this showing the defendant did not contest the fact of breach of the covenants of title and the case was tried on the question of damages. The district court held that damages for a breach of covenants of title may not be recovered in excess of the purchase price of the land without regard to any subsequent improvements or increase in market value, that where only a portion of the conveyance is invalid, the damages must be apportioned to reflect the relative value of the portion lost to the price, and that where, as here, an easement is involved the damages constitute the difference in value with and without the defect, determined as of the time of conveyance. Applying this measure of damages the court entered judgment for the plaintiff in the sum of $1,000.00 with interest from the date of the conveyance, together with costs and an attorney’s fee. The plaintiff thereupon took the present appeal.

On this appeal the sole question presented by the plaintiff is as to the proper measure of damages. She strongly urges that the district court erred in the measure of damages which it applied. While not denying that the measure of damages which was applied by the court is supported by the great weight of authority in the United States, she urges that it is illogical and unjust and that the measure of damages which is applied in the case of the breach of an ordinary contract should be applied in the case of the breach of the covenants of seisin, warranty of title and further assurances contained in a deed of conveyance of land. We cannot agree. While there may be a certain logic to the plaintiff’s position, the contrary rule as to the measure of damages for the breach of such covenants is firmly settled in American jurisprudence. Griffin v. Reynolds, 1855, 17 How. (U.S.) 609, 15 L.Ed. 229; Campbell v. Gallentine, 1927, 115 Neb. 789, 215 N.W. 111, 61 A.L.R. 1; North v. Brittain, 1927, 154 Tenn. 661, 291 S.W. 1071, 61 A.L.R. 6; Burton v. Price, 1932, 105 Fla. 544, 141 So. 728; Reed v. Rustin, 1965, 375 Mich. 531, 134 N.W.2d 767; 6 Powell, Real Property, 1973 ed., §§ 904 et seq.; 20 Am.Jur.2d, Covenants, Conditions, and Restrictions, §§ 133, 134, 144, 145; 21 C.J.S. Covenants § 142d; Annotations 61 A.L.R. 10, 24, 89-91; 100 A.L.R. 1194. The prevailing rule which is applicable to the present case is well stated in 20 Am.Jur.2d, Covenants, Conditions, and Restrictions, under the heading “Partial Breach”, as follows:

§ 144. Generally.
“As a general rule, where the title is invalid as to a part of the land conveyed, resulting in a loss of this portion of the land, the damages recoverable for the breach of a covenant of title contained in the conveyance are to be measured by the loss actually sustained by the eviction of the grantee from that part of the land as to which the title is invalid. The usual means resorted to in ascertaining the amount of damages is to award such proportion of the whole consideration as the value of that part of the land as to which the title failed bore to the value of the whole tract at the time the transaction was consummated. Thus, in the case of a partial breach of a covenant of warranty by reason of a failure of title to a portion of the estate conveyed resulting in eviction from that portion of the premises, the measure of damages is the relative value which the part as to which the title failed bears to the purchase price or consideration of the whole estate. - A similar rule applies where the action is based upon the covenant of seisin or right to convey; in such case the covenantee recovers pro tanto only. The application of these rules is subject, however, to proof by the parties that the part lost was of greater or less value because of peculiar advantages or disadvantages.
“If an encumbrance or defect amounts to less than total failure of title, the measure of damages for breach of a covenant of title is the diminished value of the title conveyed, on account of such encumbrance or defect. That is, the grantee is entitled to recover the difference between the value of the whole tract, if the title were good, and its value as depreciated by the encumbrance, not, however, to exceed the purchase price of the whole tract, with interest thereon. This is an application of the rule of damages that if one is bound to warrant, he warrants the entirety; but he shall render value only for that which was lost.
“In estimating the extent of damages for breach of a covenant of title based on a partial failure of title, the value of the land at the time of the conveyance forms the basis for computing the proportionate part of the consideration. But the loss is to be based upon the purchase price of the land, and the fact that the land was actually worth much more, or less, than the purchase price cannot be taken into consideration. If the sale was for a gross sum without any specific valuation on any particular tract, then the deduction must be in proportion to the relative value, when taken in connection with the entire tract.”

The cases cited by the plaintiff in support of her contention are distinguishable since they involve breaches of ordinary contracts and not covenants of title. Perhaps the closest of these cases is Sandler v. N. J. Realty Title Ins. Co., 1962, 36 N.J. 471, 178 A.2d 1, a suit upon a title insurance policy for damages suffered by reason of a defect in the insured title. In that ease, however, the suit was against the insurer for breach of the title insurance contract not against the grantor for breach of a covenant of title, and the court quite properly held the measure of damages for the breach of an ordinary contract to be applicable.

Under 1 V.I.C. § 4 we are obligated to apply as the rule of decision in the Virgin Islands the rules of the common law as generally understood and applied in the United States, and where restated in the Restatements of the American Law Institute, as stated therein. Since the Restatements of the American Law Institute have not dealt with this question we are required to follow and apply the rule as to the measure of damages generally applied in the United States in such eases. This, as we have seen, is the rule that was applied by the district court in the present case. The plaintiff urges that since damages have been awarded for breach of the covenant for further assurances in lieu of the equitable remedy of specific performance, those damages should be computed as of the time specific performance would have been decreed rather than as of the time of conveyance. However, we see no basis for engrafting such an exception onto the general rule as to the measure of damages which is applicable here.

We note that the defendant, while in agreement with the measure of damages applied by the district court, urges upon us that the damages actually awarded are excessive. However, since the defendant did not appeal we do not consider this contention.

The judgment of the district court will be affirmed.


author: WEIS, Circuit Judge.

text:
    Chester S. SCHREFFLER, Appellant, v. BIRDSBORO CORP., Defendant-Appellee, v. BETHLEHEM STEEL CORPORATION.
    No. 73-1338.
    United States Court of Appeals, Third Circuit.
    Argued Oct. 29, 1973.
    Decided Jan. 24, 1974.

      S. Robert Levant, Richter, Syken, Ross & Levan, Philadelphia, Pa., for appellant.
    Theodore W. Flowers, Thomas Rae-burn White, Jr., White & Williams, Philadelphia, Pa., for defendant-appellee.
    Before HASTIE, ALDISERT and WEIS, Circuit Judges.
   OPINION OF THE COURT

WEIS, Circuit Judge.

We are concerned in this case with the claim of error in the entry of a directed verdict for the defendant in a personal injury suit brought on the theory of defective design of industrial equipment. While the legal principles are not particularly complicated, the highly specialized nature of the machinery and manufacturing operations involved require a somewhat extended discussion of the factual background.

Appellant Chester S. Schreffler, an employee of Bethlehem Steel Corporation, was severely injured at its Steel-ton, Pennsylvania plant when a fellow employee caused a load of hot steel billets to be pushed against Mr. Schreffler, squeezing him against the side of the machine on which he was working. The accident occurred on March 13, 1965 as the appellant was fastening chains around a load of billets resting on a “transfer table” preparatory to having a crane lift them to a nearby railroad car.

In the course of his duties as a “cra-dleman,” it was necessary for Schreffler to stand upon the “transfer table” which was located between the “straightener” (a component utilized to straighten some of the rolled steel products manufactured in the mill) and the “shear” (a machine used to cut steel). The steel exiting from the “straightener” would be carried forward by a set of rollers, then moved in a reverse direction by a second set of rollers into the “shear” mechanism.

The “table” consisted generally of rollers in two parallel series separated by a number of parallel steel rails roughly twenty feet long and spaced five feet apart, running perpendicular to the line of direction of the rollers and at the same level above ground. A “rope drag” or “rope transfer,” consisting of multi-pie depressible dogs pulled by chains, slid the various steel products over the rails from one series of rollers to the other. In addition to its function of facilitating the change of direction of the material being manufactured, the area between the rollers where the rails were located was intended to act as a temporary storage area for material being processed.

When Schreffler stepped onto a wire grating platform located between two of the rails, there were already two stacks of billets lying side-by-side on the surface of the rails. He had put the chain around the first stack of billets and was continuing his work when the accident occurred.

The rope drag operator had started an additional billet over the table from the first set of rollers to add to the second “load” when his attention was distracted by another billet coming out of the straightener. He was concerned about being struck by this billet, forgot that the billet on the table was continuing its progress toward the plaintiff, and consequently did not stop the machine in time.

The table was one of a number of items of mill equipment which had been manufactured by the defendant Birds-boro and installed in 1959 by the third-party defendant, Bethlehem.

Birdsboro, at the request of Bethlehem, had originally .submitted a proposal to manufacture and sell the equipment in 1957, but the plan for a new mill was not carried through to fruition at that time. Bethlehem later revived the project, and with minor variations of the original plans and specifications, Birds-boro furnished the equipment in 1958 and early 1959.

The specifics of the machinery had been agreed upon after consultation between Birdsboro and Bethlehem engineers and to a great extent represented a joint effort of the two companies. It was understood that not all of the existing equipment in the Bethlehem plant was to be replaced, nor was Birdsboro given carte blanche to set up a complete mill. Bethlehem determined what new machinery and equipment it wanted and undertook the work of installation with its own employees. For example, while Bethlehem at one time had thought that it would extend its “cooling bed” and asked for a quotation from Birdsboro, that part of the project was never carried through, and Birdsboro was not asked to manufacture that item.

Although Bethlehem was to install the machinery, the contract did provide that Birdsboro was to have an erector on the scene to furnish technical advice. However, he was given no authority over anyone at Bethlehem. When the work was completed in March of 1959, the Birdsboro representative left the premises.

The installation of the transfer table, which measured 90 feet by 30 feet and had a gross weight of approximately 500,000 pounds, was a substantial undertaking and required the excavation of a foundation so that the table could be properly positioned. As originally designed, the spaces between the rails of the transfer table were left open, thus leaving a gap between the rails through which objects could fall to the floor several feet below. However, at the time of installation, Bethlehem placed solid steel plates between four of the sets of the rails, at a depth of 16 to 18 inches below their top surfaces.

The record does not disclose what use of these solid steel plates was contemplated at the time of their installation, but it is known that during the period between the time production of billets began in December, 1960 and the accident in 1965, the solid steel plates were utilized as walk-ways or platforms by the “cradlemen” who worked on the transfer table to unload billets.

The testimony was somewhat imprecise, but it seems that about a year or two after installation of the table, Bethlehem placed sheets of open steel grating in three or four of the remaining open spaces between the rails in a position similar to that of the solid steel plates. This was done in order to prevent falling accidents by the cradlemen working on the table. No evidence indicates any knowledge on the part of Birdsboro that this additional modification had been performed.

The machinery which Birdsboro had furnished is part of a “merchant mill” which produces such specialty steel items as rails, cutting edges, tractor shoes, guard rails, curb facing, and other products in addition to “billets” and “rounds” (rounded equivalents of billets).

Before the renovation, the mill had produced billets which were about 2 inches by 2 inches in cross section. But it was not until December of 1960, about a year and a half after delivery of the Birdsboro equipment, that Bethlehem began to manufacture billets using the new machinery.

Though it was not necessary for billets to be put through the “straightener,” the practice was to adjust this device in such a fashion that the billets could pass through it, a procedure called “dummying.” After being taken from the rollers by the rope drag, the billets were lifted to a railroad car by a crane hooking onto the chains fastened around the loads by the cradlemen.

Although there were billet discharge points at prior locations in the line of production, they had not been utilized because experience had shown that the billets did not cool sufficiently in the old cooling beds. The new equipment, being more efficient, produced more billets in any given period of time than the old mill. Consequently the old cooling beds were not able to cope with the increased capacity of the new equipment. Therefore when the billets, not yet sufficiently cooled, were dropped into the cradles, warpage and bending occurred. To correct this problem, Bethlehem then began to take billets from the production line at the transfer table. Only billets were unloaded from this point, other products being taken from the line elsewhere.

In 1962 a safety analysis was prepared by Bethlehem experts recommending that steel “safety stops” be used on the transfer table at appropriate times to assure that the billets, moving from the first set of rollers, would not be moved all the way over to the other edge of the table where the cradlemen were working. These devices would prevent movement of a billet against a man if he remained in the area between the safety stop and the edge of the table. However, the company never adopted this safety measure, and it seems clear that if it had done so, the plaintiff would not have been injured.

The record does not show that Birds-boro was ever informed of the use of the transfer table as an unloading point, nor was it told about the recommendation of the Bethlehem safety experts, nor indeed was there any evidence that the defendant knew that workmen would be on the table while hot steel products were being moved across it.

Bethlehem did not produce billets in the mill every day but usually did so only once or twice a month.

The plaintiff based his suit on theories of both strict liability under Section 402A of the Restatement of Torts and common law negligence. He contends that Birdsboro knew or should have known that Bethlehem would produce billets and that the only place they could be removed from the production line without bending was at the transfer table. He argues, therefore, that Birdsboro had a duty to plaintiff and the other workmen in the plant to provide that the unloading process could be done in safety. The trial court, however, finding that there was a lack of proof of essential elements to support this theory and, in addition, that Bethlehem’s conduct was a superseding cause, dismissed the ease at the conclusion of the evidence which plaintiff presented at the trial.

As the factual background makes clear, this is not a typical 402A ease for we are not concerned here with a standard production' item sold to the general public which malfunctioned or otherwise evidenced a manufacturing defect. Although he disclaimed such a theory at one point during the trial, it would seem that the plaintiff is in effect claiming a design defect.

The plaintiff’s position may fairly be stated to be that the defendant Birds-boro should have foreseen:

1. That Bethlehem would make billets ;
2. That the three existent discharge points were inefficient and would damage the billets;
3. That billets could only be removed expeditiously and in an undamaged state at the transfer table;
4. That unloading billets at that point would require men to get up on the table;
5. That Bethlehem would not install safety stops or other appropriate safety measure to protect its employees working on the table; and
6. That therefore Birdsboro should have manufactured the transfer table in a different design.

Assuming that Birdsboro might have expected that Bethlehem would make billets, it does not follow that the use of the transfer table for unloading purposes would be anticipated. As already noted, there was evidence that there were at least two discharge points for billets located in the line of production before the transfer table was reached. So far as the evidence showed, Birds-boro’s expectation of use of the transfer table was limited to that of a transfer mechanism and as a temporary storage place.

Plaintiff contends that the increased capacity and speed of the new mill equipment should have alerted the defendant to the fact that the steel would not be cooled sufficiently to be discharged at the pre-existing locations. But the decision as to the capacity needed for the cooling beds was made by Bethlehem, and it is sheer speculation to assume that Birdsboro was alerted to any potential deficiencies in the cooling process. This was an area where Bethlehem retained discretion, and there was no evidence that the defendant was to be concerned with it. It was Bethlehem’s decision, not Birdsboro’s, which resulted in the retention of that part of the facility.

It is undisputed that billet production requires the use of neither the “straightener” nor the “shear,” nor would it be expected that these steel products would be processed through the machines. Hence, there was nothing in the layout itself which would suggest that the billets would not be removed at some point in the production line before arriving at the straightener.

The plaintiff’s theory becomes even more attenuated in postulating that Birdsboro should have expected that men would be on the transfer table during unloading procedures. The design of the equipment as it was developed by Birdsboro would negative such a proposition. It will be recalled that the table as it left defendant’s plant consisted of an alternating series of rails and open spaces. That type of design would be unlikely to lead to belief that men would use the structure as a loading site. Standing with each foot on elevated rails five feet apart is hardly a normal or anticipated work position for heavy labor by steelworkers. Greco v. Bucci-coni Engineering Co., 407 F.2d 87 (3d Cir. 1969).

It was only after Bethlehem had installed the transfer table that it added walkways to some of the open spaces between the rails and only later, apparently about the time that the production of billets began, that steel mesh gratings were placed in some of the remaining voids. Again, this action was taken by Bethlehem and not by Birdsboro. It is not without significance that it was the presence of the plaintiff upon one of the steel gratings that furnished one of the operative conditions which had a bearing on the happening of the accident.

Indisputably, after the defendant relinquished control, the table was so substantially modified that it was then feasible to use the equipment in a manner different from that which would have been expected from observation of the original design. See Kaczmarek v. Mesta Machine Co., 463 F.2d 675 (3d Cir. 1972). Thus the plaintiff failed to prove a critical prerequisite that the product was in the same condition, so far as was relevant, on the day of the accident as it was at the time Bethlehem acquired possession. Speyer v. Humble Oil and Refining Co., 403 F.2d 766 (3d Cir. 1968), cert, denied 394 U.S. 1015, 89 S.Ct. 1634, 23 L.Ed.2d 41.

The plaintiff contends that the erector must have known that Bethlehem had installed walkways on the table before he left the job, but the significance of such knowledge is not apparent. As owner and possessor, Bethlehem was free to make any modifications it chose. Birdsboro had no power to prevent Bethlehem from using the machinery in any fashion it wished and adapting its operations to suit its preferences. The danger inherent in having men on the table in the rail area during production was glaringly obvious, and protective measures were recommended by Bethlehem’s safety department. Any further warnings by Birdsboro would have added nothing of value.

The transfer table had not been designed or constructed to be a takeoff point. Its utilization for this purpose was obviously an expedient adopted by Bethlehem to meet a situation which neither it nor Birdsboro had anticipated.

The plaintiff proposed to show through expert testimony that there could have been other provisions made for takeoff locations. This again is a familiar example of post facto reasoning with all the advantages of being able to focus on a specific problem, rather than being required to plan for a multitude of ill-defined future possibilities. ’ It does not require an engineering background to realize now that a more efficient and safer method of removing billets from the production line could have been designed. But there is no evidence that Bethlehem was aware of possible difficulties which might arise in this phase of its operations or that it consulted defendant about any problems when the renovation was in the planning stages.

The practical means to protect the working men at the plant was the use of safety stops. It was capable of implementation by Bethlehem without any advice, knowledge or assistance from Birdsboro.

It matters little whether the plaintiff’s claim be under Section 402A or negligence because a requirement under both theories is that the defendant’s conduct or the defect in its product or design be a proximate cause of the accident. Here it is clear that the test was not met. While it is generally true that proximate cause is a question for the jury, it is not invariably so. Where the critical facts are not in dispute and only their legal effect is in issue, the trial judge properly should rule on the question.

The district court was correct in its decision to grant a directed verdict because “ . . . the record is critically deficient of that minimum quantum of evidence from which a jury might reasonably afford relief.” Denneny v. Siegel, 407 F.2d 433, 439 (3d Cir. 1969).

In addition to his conclusion that the plaintiff had failed to prove a case of actionable conduct against the defendant, the learned district judge stated as an alternative ground that the negligence of Bethlehem was a superseding cause of the plaintiff’s injury.

There is an overlap of legal theories in some situations where lack of proximate cause is intertwined with superseding cause because the same facts may furnish the basis for either doctrine. In this event, it probably is immaterial which theory is espoused because the end result will be the same.

Here the negligence of Bethlehem did not actually concur with conduct on the part of Birdsboro to bring about the accident. The inattention of the operator of the rope transfer, the inexplicable failure of Bethlehem to implement its own safety recommendations, and its unilateral decision to modify the table are all factors which overwhelm and supplant any alleged dereliction of Birdsboro. Lending strength to the superseding cause theory is the evidence that there was an interval of six years between the date of sale and the accident, during which time Bethlehem was in sole possession and control of the equipment and, in view of its obligations as an employer, justifiably would be expected to take necessary steps for the safety of its employees. See Prosser, Torts 681 (4th ed. 1971). Restatement of Torts 2d § 452, comment f.

Thus, we hold that the action of the court below was correct on either ground.

We have examined the additional contentions by the plaintiff that the trial judge was incorrect in excluding the testimony of certain expert witnesses and made other improper rulings on evidence. We conclude that the rulings were within the discretion of the trial court and were not erroneous.

The judgment of the district court will be affirmed.

      . A “billet” was described in the testimony as an elongated square bar of steel which is an intermediate product, intended to be reheated and rolled again. Each billet measured 4" x 4" in cross section and was about 30 feet long. A “load” is a group of six hil-lets, lying side by side, one row high. Testimony indicated that two “loads” of billets were on the table at the time of the accident.

      . (a) The testimony of W. L. Hoy, a former supervisor, indicates that billets could be discharged at a “yard kickoff” point which is located in the line of production just after the “hotbed” and before the straightener roller line. It was further indicated that the “yard kickoff” existed before the mill renovation. Unloading billets here was discontinued at an unspecified date because the procedure was too slow for mill output and because billets became bent when pushed into the cradle.
      (b) A second kickoff point was found in the area just before the straightener. Discharge at this point also left billets badly bent.
      (c) A third kickoff point was found in the area immediately beyond the “shear.” This was abandoned because only one billet could be “dummied” through the “shear” at a time. The bending problem also occurred here.

      . A Bethlehem Steel Safety Bulletin issued in May, 1965, shortly after the plaintiff’s accident, said in part:
      “Six months previously a Job Safety Analysis had been made to cover this hooking-up job. The supervisor- had recognized the possibility that men might be caught between the billets and the roller line, and had established a recommended safe job procedure. His recommendation: three steel stops to prevent billets from reaching the actual point where the men stand for their hook-ups. It was a good analysis — but the ironic part of the story is that the stops were never made!
      “Another irony involved in the accident was this: The Job Safety Analysis for the operator of the transfer bed require that billets should not be moved when men were in a position to hookup a lift.” (Exhibit P-12)

      . This was adopted as the law in Pennsylvania in the case of Webb v. Zern, 422 Pa. 424, 220 A.2d 853 (1966).


author: HEANEY, Circuit Judge.

text:
    Isaac FLOYD et al., Piaintiffs-Appellants, v. E. D. TRICE, Superintendent of Schools of the Texarkana Public School District No. 7; and the Board of Education of the Texarkana, Arkansas, Public School District No. 7, Defendants-Appellees.
    No. 73-1474.
    United States Court of Appeals, Eighth Circuit.
    Submitted Nov. 15, 1973.
    Decided Jan. 14, 1974.
    Rehearing and Rehearing En Banc Denied Feb. 5, 1974.

      John W. Walker, Little Rock, Ark., for appellants.
    Ned A. Stewart, Jr., Texarkana, Ark., for appellee.
    Before GIBSON, LAY and HEANEY, Circuit Judges.
   HEANEY, Circuit Judge.

Seven black Texarkana students commenced a class action in the United States District Court for the Western District of Arkansas on behalf of themselves and other black students similarly-situated. The Superintendent of Schools and the Board of Education of Texar-kana Public School District No. 7 were named as defendants. The plaintiffs alleged that the defendants, acting under color of law, deprived them of rights secured by the Constitution and by the laws of the United States, particularly 42 U.S.C. §§ 1981, 1983, 1985, 1986 and 1988. They claimed that (1) the defendants deny black teachers an opportunity to hold positions of authority in the Texarkana secondary schools; (2) the defendants deny or restrict participation of black students in school activities because of race; (3) the defendants subject black students to discriminatory disciplinary rules and regulations; (4) the defendants permit the use of racial epithets by white students against black students. The plaintiffs then alleged that the stated “policies, practices, customs and usages” [hereinafter referred to as “policies”] violate plaintiffs’ right to equal educational opportunities and due process of law. They also alleged that they were fearful that if the defendants were permitted to operate the school under its current policies, the plaintiffs and other members of the class would be deprived of an equal opportunity to learn about and participate in the present and future environment.

The plaintiffs requested declaratory and injunctive relief. They asked the District Court to require the defendants to: (1) integrate the school staff, programs and activities; (2) establish policies which tend to reduce friction between students on the basis of race or color; (3) adopt and implement objective standards for discipline; (4) discontinue racially discriminatory practices relating to suspension, expulsion and discipline; and (5) eliminate all vestiges of racial segregation within the school system.

The District Court granted the defendants’ motion to dismiss on the ground that the complaint failed to state a claim upon which relief could be granted. It reasoned that:

(1) The plaintiffs’ failure to allege that the defendant Superintendent of Schools, Trice, was in any manner responsible for racially discriminatory practices was fatal to their claim against him.

(2) The plaintiffs’ failure to allege that they had been personally injured by the defendants’ policies made them ineligible to maintain a class action on behalf of those who may have been injured by such policies because they were not members of that class and no relief could be given to a class consisting of those who feared injury in the future.

(3) The plaintiffs’ allegation that black students were not represented proportionately in school activities and programs failed to allege the violation of a constitutional right.

(4) The plaintiffs’ allegation that black history was not being taught by black teachers failed to allege the violation of a constitutional right.

In appraising the sufficiency of the complaint, we follow the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that a plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Barnes v. Dorsey, 480 F.2d 1057 (8th Cir. 1973); Wilkerson v. City of Coralville, 478 F.2d 709 (8th Cir. 1973); Thomason v. Hospital T. V. Rentals, Inc., 272 F.2d 263 (8th Cir. 1959). We discuss the trial court’s findings in the light of this rule.

SUFFICIENCY OF THE COMPLAINT AS TO SUPERINTENDENT TRICE

The specific allegation in the complaint that E. D. Trice was the school district’s chief administrative officer and the more general allegations connecting all of the defendants with the alleged discriminatory policies are sufficient when read together to withstand the objection that the complaint fails to state a claim against him upon which relief can be granted. Indeed, the Superintendent of Schools is a proper party when it is alleged that the schools which he heads are guilty of discriminatory policies. Cooper v. Aaron, 358 U.S. 1, 15-16, 78 S.Ct. 1401, 3 L.Ed.2d 5 (1958). This is not to say that a school superintendent is ordinarily responsible for individual acts of discrimination committed by teachers or employees. It is only to say that when discriminatory policies are alleged, the plaintiffs must be given an opportunity to prove discrimination and that the defendant superintendent is wholly or partially responsible for the alleged violations of the Constitution and laws of the United States.

CLAIMED FAILURE TO ALLEGE PRESENT INJURY TO PLAINTIFFS

We read the complaint as alleging that present policies are discriminatory in nature and are inflicting present injury on the plaintiffs and other black students. We also read it as alleging that the discriminatory policies will have a further deleterious effect on the students after they graduate and move into the adult world. The latter allegation is supportive of the first and is entirely proper. It points to the fact that discriminatory policies perpetuate the kind of school system and the resulting lack of future opportunity dealt with by the Supreme Court in Brown v. Board of Education of Topeka, 347 U.S. 483, 493, 74 S.Ct. 686, 691, 98 L.Ed. 873 (1954):

Today, education is perhaps the most important function of state and local governments. Compulsory school attendance laws and the great expenditures for education both demonstrate our recognition of the importance of education to our democratic society. It is required in the performance of our most basic public responsibilities, even service in the armed forces. It is the very foundation of good citizenship. Today it is a principal instrument in awakening the child to cultural values, in preparing him for later professional training, and in helping him to adjust normally to his environment. In these days, it is doubtful that any child may reasonably be expected to succeed in life if he is denied the opportunity of an education. Such an opportunity, where the state has undertaken to provide it, is a right which must be made available to all on equal terms.

PROPORTIONATE REPRESENTATION AND BLACK HISTORY

The trial court held that the complaint failed to state a claim upon which relief could be granted insofar as it demanded that blacks be proportionately represented in all school offices, programs and activities. Apparently, the court reached the conclusion that proportionate representation was the essence of the plaintiffs’ claim from an examination of Appendix A attached to the complaint. That appendix set forth a list of grievances and demands previously presented to the Board of Education by parents who stated they were qualified voters in the school district. The petition demanded black teachers for black history classes, proportionate representation for blacks in class offices, student council and clubs and organizations. The petition also demanded that black teachers be hired in proportion to black students. We do not read the complaint as incorporating all of those specific demands. We rather read the complaint as requesting that school staff, programs and activities be fully-integrated, that policies tending to reduce friction between students of different races be implemented, that objective disciplinary standards be adopted and fairly applied, that racially discriminatory suspension, expulsion and disciplinary policies be discontinued, and that all vestiges of segregation be eliminated from the school system. Prior case law teaches that relief may be given for such claims. See, Plaquemines Parish School Board v. United States, 415 F.2d 817 (5th Cir. 1969); Henry v. Clarks-dale Municipal Separate School Dist., 409 F.2d 682 (5th Cir.), cert, denied, 396 U.S. 940, 90 S.Ct. 375, 24 L.Ed.2d 242 (1969); United States v. Jefferson County Board of Education, 380 F.2d 385 (5th Cir.), cert, denied, 389 U.S. 840, 88 S.Ct. 77, 19 L.Ed.2d 104 (1967). Cf., Clark v. Board of Education of Little Rock School Dist., 449 F.2d 493, 496 (8th Cir. 1971), cert, denied, 405 U.S. 936, 92 S.Ct. 954, 30 L.Ed.2d 812 (1972). Even if a complaint asks for relief beyond that ordinarily permissible, the appropriate action is to tailor the relief rather than to dismiss the complaint for failure to state a claim upon which relief can be granted if in fact cognizable claims are pleaded. It is for the trial court to fashion relief so as to give every student an equal opportunity to participate in all school activities, programs and offices and to eliminate every vestige of segregation within the school system.

Appellants’ request for attorneys fees on this appeal is denied. Costs will be taxed to the appellees.

Reversed and remanded.

      . Appellees also contend, as they did in the District Court, that the Board of Education is not a suable entity under Arkansas law. This contention may have merit. See, Arkansas Statutes, Annotated § 80-402 (1931) ; Blount v. Ladue School District, 321 F.Supp. 1245, 1250 (E.D.Mo.1970) ; Miller v. Board of Education of District of Columbia, 106 F.Supp. 988, 989 (D.D.C.1952). However, the District Court has not ruled on this contention, and we think it appropriate that it do so first.

      . The complaint, as we read it, states a cognizable claim that blacks are denied the opportunity to hold administrative positions within the school district. See, Kelley v. Alt-heimer, Arkansas Public School Dist. No. 22, 378 F.2d 483 (8th Cir. 1967).

      . The desegregation plans of the Texarkana School District are the subject of a legal action in the District of Columbia. See, Adams v. Richardson, 351 F.Supp. 636 (D.D.C.1972), 356 F.Supp. 92 (D.D.C.1973), aff’d with modification, 480 F.2d 1159 (D.C.Cir. 1973).