text:
    Patrick RESENDIS, Tony Escobedo, Wilburn White, Arturo Rodriguez and Elias Gonzales, Plaintiffs-Appellants, v. LEE WAY MOTOR FREIGHT, INC., et al., Defendants-Appellees.
    No. 73-2322.
    United States Court of Appeals, Fifth Circuit.
    Nov. 25, 1974.

      Ruben Montemayor, Harry A. Nass, Jr., San Antonio, Tex., for plaintiff s-appellants.
    Theo F. Weiss, San Antonio, Tex., Paul Scott Kelly, Jr., Raymond F. Beagle, Jr., Kansas City, Mo., for Lee Way.
    Edward W. Penshorn, Bradford F. Miller, San Antonio, Tex., for Local 657.
    G. William Baab, Hal K. Gillespie, L. N. D. Wells, Jr., Dallas, Tex., for Southern Conference.
    Before WISDOM, AINSWORTH and GODBOLD, Circuit Judges.
   WISDOM, Circuit Judge:

Like its companion Title VII cases, Rodriguez v. East Texas Motor Freight, 5 Cir. 1974, 505 F.2d 40, and Herrera v. Yellow Freight System, Inc., 5 Cir. 1974, 505 F.2d 66, this appeal involves claims of discrimination in the exclusion of minority persons from the sought-after road driving jobs in the trucking industry. Plaintiffs Resendis, Escobedo, and Gonzales are Mexican-American city drivers for Lee Way Motor Freight, Inc. in San Antonio, Texas. Plaintiff Rodriguez was formerly a regular over-the-road driver in San Antonio for Lee Way, but was discharged after four and one-half years as a line driver. Plaintiff White is a Negro “casual” city driver for Lee Way in San Antonio. The same district judge who decided Rodriguez and Herrera found that the plaintiffs had failed to prove a case of discrimination against any of the defendants under Title VII. We affirm in part and reverse in part and remand.

Prior to January 1, 1966, Lee Way domiciled only city drivers in San Antonio. At that time, Lee Way acquired three-fourths of the assets of Texas-Arizona Motor Freight, Inc., which included an over-the-road terminal in San Antonio. Upon the acquisition, the 25 or 30 white/anglo road drivers domiciled there became the employees of Lee Way. Since then, Lee Way has hired approximately six white/anglo line drivers, and one Mexican-American line driver at the San Antonio terminal. The sole Mexican-American road driver is the plaintiff-appellant Antonio Rodriguez, who was discharged in 1972. Lee Way has never employed a Negro line driver in San Antonio. Of 44 city drivers for Lee Way in San Antonio, 26 or 28 are Mexican-American, four are black, and the remainder are white/ anglo. Especially in light of the contrast in the percentage of minority employees between Lee Way’s city and road driving fleets, we hold that these statistics establish a prima facie case of discrimination in the past hiring of road drivers.

This discrimination has been continued by Lee Way’s,no-transfer policy, and by the maintenance of separate seniority rosters through the action of Lee Way, Local 657, and the Southern Conference. Lee Way abandoned its no-transfer policy in 1971, but the perpetuation of past hiring discrimination was continued through the refusal of the defendants to permit minority city drivers to carry over their competitive status seniority to road driver jobs.

The prima facie case of employment discrimination by Lee Way, the Southern Conference, and Local 657 against Resendis, Escobedo, and Gonzales has not been effectively answered. We reverse the lower court’s judgment with regard to these plaintiffs, and remand for consideration of the appropriate remedy in accordance with our opinion in Rodriguez. The district court should require that Lee Way consider these plaintiffs for road driver positions as vacancies occur, and the court should supervise closely the standards used by Lee Way in determining whether the drivers qualify for transfer. If any of the plaintiffs qualifies for a road driver position, he should be awarded seniority carryover based on a “qualification-date” formula. See Bing v. Roadway Express, Inc., 5 Cir. 1973, 485 F.2d 441, 451, That Lee Way did not acquire a road driver terminal in San Antonio until 1966 is irrelevant to the proper computation of seniority. No hardship will be inflicted upon Lee Way or the union defendants by adjusting the plaintiffs’ seniority to dates prior to the time Lee Way domiciled road drivers in San Antonio. To the extent that returning these drivers to their “rightful place” works a hardship at all, it will work it on those white drivers for Lee Way who will find their seniority expeditions altered. But, as the Court said in United States v. Bethlehem Steel Corp., 2 Cir. 1971, 446 F.2d 652, 663: “Assuming ar-guendo that the expectations of some employees will not be met, their hopes arise from an illegal system. Moreover, their seniority advantages are not indefeasibly vested rights but mere expectations derived from a bargaining agreement subject to modification.” See also Vogler v. McCarthy, Inc., 5 Cir. 1971, 451 F.2d 1236, 1238-1239. If Reseñáis, Escobedo, or Gonzales proves qualified to transfer to the road, he should be awarded back pay. See Pettway v. American Cast Iron Pipe Co., 5 Cir. 1974, 494 F.2d 211, 251-263; Johnson v. Goodyear Tire & Rubber Co., 5 Cir. 1974, 491 F.2d 1364, 1376-1380; Bing v. Roadway Express, Inc., 485 F.2d at 452-455.

Arturo Rodriguez served as a line driver for Lee Way in San Antonio until he was fired on October 29, 1972. The district court found that Lee Way discharged Rodriguez “because of a poor driving record involving at least two accidents within the one year period immediately preceding his dismissal.” Rodriguez’s dismissal was upheld through union grievance procedures. He introduced no convincing evidence at trial that his dismissal was in any way improper. We conclude that the district court’s finding of no discrimination in Rodriguez’s dismissal is supported in the record.

Nor can we disagree with the district court’s finding that Wilburn White failed to prove a case of discrimination against him by any of the defendants. White began working as a city driver in a “casual” status in 1967. He complains that Lee Way has refused to accord him “regular” status because he is a Negro. But in 1967, when White first began driving for Lee Way, there were four Negro city drivers on “regular” status. Since 1967 Lee Way has hired seven regular city drivers — four Mexican-American, one anglo, and two Negro. These statistics establish no prima facie case of discrimination against blacks by Lee Way in its hiring of city drivers in San Antonio. Moreover, there was testimony at trial that White had suffered in the past from an “attitude problem.” Although there was also testimony that White’s attitude had improved, this factor alone provides an insufficient basis to doubt the correctness of the district court’s finding that none of the defendants discriminated against White.

Affirmed in part; reversed in part, and remanded.

      . “Casual” drivers have no seniority. They are not required to work only for one company, but may take jobs as casuals with a number of trading companies in the area.

      . We find no violation of Title VII by tlie defendant Teamsters International. See Herrera v. Yellow Freight System, Inc., 5 Cir. 1974, 505 F.2d 66, n. 2.

      . The operation of no-transfer policies and separate seniority rosters is fully described in Rodriguez v. East Texas Motor Freight, 5 Cir. 1974, 505 F.2d 40.

      . William Blood, Director of Personnel for Lee Way testified that the company had undertaken recently an affirmative action program to increase its hiring of minority road drivers. While wo find this program commendable, it does not excuse either Lee Way’s past record or its present practices with regard to minority city drivers locked into their jobs by their inability to transfer seniority. See Rowe v. General Motors Corp., 5 Cir. 1972, 457 F.2d 348, 356.

      . We note that John Reaves, terminal manager for Lee Way in San Antonio, testified that in his opinion Resendis is qualified as a road driver and that Gonzales “could probably qualify” as a road driver.

      . Compare Rodriguez v. East Texas Motor Freight, 5 Cir. 1974, 505 F.2d 40 and the cases cited there, 505 F.2d at 54 and n. 17.

      . Even White himself seems unsure that his inability to obtain a regular city driving job is the result of racial, rather than personal, animus. The following colloquy took place at trial during White’s cross-examination:
      Q. Now, have you ever told Mr. Shafer down at the Union that Lee AVay has been discriminating against you personally?
      A. Yes, sir.
      Q. And did you tell him that the way you felt they were discriminating against and was because they weren’t giving you as an individual a job?
      A. As an individual?
      Q. Yes, sir, give you, Wilburn White, a job.
      A. Yes, I told him that they could have given me more work. They ’could give me more work but they wasn’t doing it.
      Q. You have never complained to Mr. .Shafer of the Union about Lee Way discriminating against Negroes as a race, have you?
      A. No, sir.
      Q. Just, against you personally?
      A. Yes, but I am a Negro.


source: Caselaw Access Project

author: TALBOT SMITH, Senior District Judge. BRIGHT, Circuit Judge

license: Public Domain

text:
    UNITED STATES of America, Appellee, v. Mark A. SALAZAR, Appellant.
    No. 74-1337.
    United States Court of Appeals, Eighth Circuit.
    Submitted Sept. 11, 1974.
    Decided Nov. 5, 1974.

      R. Steven Brown, Asst. Federal Public Defender, Springfield, Mo., for appellant.
    Donald R. Cooley, Asst. U. S. Atty., Springfield, Mo., for appellee.
    Before MATTHES, Senior Circuit Judge, BRIGHT, Circuit Judge, and TALBOT SMITH Senior District Judge.

       TALBOT SMITH, Senior District Judge, Eastern District of Michigan, sitting by designation.

   TALBOT SMITH, Senior District Judge.

The appellant (hereafter defendant) was tried for striking Nurse Newby, on duty at the United States Medical Center, Springfield, Missouri, in violation of 18 U.S.C. § 113(d). He was found guilty of the charge and sentenced to six months imprisonment, consecutive to the sentence he was then serving.

He appeals to us upon two grounds. The first is that he did not, indeed “could” not have struck the nurse, due to his restraint at the time. The incident out of which the charge arose occurred in connection with the post-operative treatment of the defendant. He had played a great deal of football and had developed a knee condition which required surgery. Following the operation he had initially been given morphine for pain but as time passed this was “worked down” to Demerol and then to Talwin, drugs of lesser potency for the control of pain.

On the evening in question he was in pain and requested Mr. Kennedy, a senior correctional officer specialist, that he be given morphine. This was refused. Not only because “we cannot give him the shot unless it is time for it” (he was some thirty minutes early in his request), but also, according to the nurse, because the Officer of the Day (the doctor on call), when not a surgeon, “will not change the surgeon’s orders.” Thus, explained the nurse, it would do no good to call the Officer of the Day. The defendant replied that if he did not get medication he was going to take his cast off, which he later proceeded to do, tearing chunks off the cast and throwing them about the room. Nurse Newby and Officer Kennedy were summoned. Officer Kennedy administered a tranquilizer and attempted to place restraints (leather straps attached to the frame of the bed) on the defendant. One of the restraints, a cuff, was too big and, as Nurse Newby slid it up the arm to demonstrate its looseness, she states that defendant doubled up his fist and struck her with such force that she suffered a hernia, required surgery, and was out of work for approximately two months. She also submitted a claim for compensation. Officer Kennedy’s account was corroborative. He says that as the nurse sought to move the cuff the defendant characterized her as a “damned bitch,” doubled up his fist, and struck straight from the shoulder.

The defendant denies the striking. He testified that, due to his restraints, he “couldn’t do it, even if I wanted to.” Three inmates who claimed to be present supported defendant by testifying that they did not see any blow struck. Officer Kennedy and Nurse Newby acknowledged that defendant’s arm movement was restricted and disagreed on whether the scope of the allowable movement was a matter of feet or inches. It is clear, however, that the cuff was loose, as noted above, and its “purpose was not to restrain him to where he couldn’t move at all, only to keep him from removing the cast from his leg.” Defendant urges that reversal is required because the “weight of the evidence * * indicate[s] that [he] could not have hit Nurse Newby due to the restraints which limited movement of [his] arms.” But it is not our function to weigh the evidence; the resolution of this conflicting testimony, involving, as it does, a question of the witnesses’ credibility, and of the range of movement necessary for a football player’s blow to cause injury to a five foot three or four inch nurse weighing about 122 pounds, was peculiarly for the trier of fact. On the record before us, we cannot say that the trial judge’s finding that defendant struck Mrs. New-by was unsupported by substantial evidence. United States v. Rischard, 471 F.2d 105, 107 (8th Cir. 1973); see United States v. May, 419 F.2d 553, 554-555 (8th Cir. 1970).

We find no real issue of intent. Although not raised directly, however, it may lurk in the questions asked Mr. Kennedy by defense counsel, to one of which he responded “Sometimes they [patients] are very violent when you are trying to put restraints on them.” In addition, the defendant himself testified, as we noted in part, that he didn’t strike her, that he “couldn’t do it, even if I wanted to,” since due to his restraints his permissible arm movement was limited, and at the most “I heard her voice and I jerked my arm.”

Even should we consider the issue as raised from the above, defendant’s further testimony disposes of it. For, whatever “jerking” may have oecured was away from the nurse. We are confronted again with the bald contradiction between defendant’s story, that he withdrew his arm from the nurse’s touch, and that of the Government witnesses, that he delivered a blow with his doubled fist straight at the nurse, who was (to him) a “damned bitch,” with such force as to cause a rupture requiring surgical repair. We cannot say the trial court erred in rejecting defendant’s story by concluding “The defendant’s act of striking Mrs. Newby was due entirely to his anger, and was violent and intentional.”

We would not be understood as being insensitive to the situation of the defendant. He was unquestionably in pain, and, in his judgment, the prescribed medicine was inefficacious. To one in such a situation a refusal to take any steps to alleviate the pain because the hour had not struck and a surgeon was unavailable would seem needlessly rigorous. We are satisfied that the Medical Center will review its procedures in the light of this incident and within the context of its heavy medical and security obligations, particularly with a view to the avoidance of unnecessary hazards, not only to the staff, but to the inmates. We do not, it is hardly necessary to add, condone such conduct as we here review, despite the circumstances presented.

Defendant’s second issue on appeal is that the sentence imposed constituted double jeopardy since he had lost sixty-seven days earned “good time” through administrative disciplinary action as a result of the offense. This charge is repeatedly made in institutional situations and is repeatedly rejected. Hutchison v. United States, 450 F.2d 930 (10th Cir. 1971) (and cases cited therein); see Pagliaro v. Cox, 143 F.2d 900 (8th Cir. 1944). We find no merit to defendant’s attempt to distinguish the decided cases on the ground that they involve “more serious” offenses for which administrative action is inadequate, whereas here defendant’s offense was merely “petty,” 18 U.S.C. § 1(3).

BRIGHT, Circuit Judge

(concurring):

I concur in the perceptive opinion of Judge Smith. However, I retain some reservations as to the sufficiency of the Government’s proof on the issue of intent. The testimony of various witnesses, including the two witnesses for the Government, conclusively establishes that Salazar experienced severe pain at the time of the incident. In my view of the record, Salazar’s tearing of his cast represented an attempt to alleviate the pain and swelling secondary to his surgery rather than an act of insubordination. The torture of unremitting and unrelieved pain can and often does produce bizarre reactions upon human behavior.

An inference of intent supporting the assault charge comes from the defendant’s utterance of the expletive “You bitch,” at approximately the same time Ms. Newby was struck. Yet, even the inference of intent to be drawn from this statement is tempered by Salazar’s ready concession of this statement and other evidence that Salazar repeatedly used profane language during the entire incident. We might note that peddler’s French rather than king’s English is the likely argot within prison walls. Cf. United States v. Barcley, 452 F.2d 930, 933-934 (8th Cir. 1971). An additional factor mitigating intent is the concession of a Government witness that patients are sometimes “very violent when you are trying to put restraints on them.”

If I were the factfinder in this case, I would acquit. The Government’s failure to present persuasive evidence relating to Salazar’s intent to harm Nurse New-by coupled with the extenuating circumstances recited above leads me to doubt whether the blow struck was intentional. But, the prerogative of determining credibility and drawing inferences from conflicting evidence rests with the trier of fact — judge or jury. In his evaluation of the evidence, Judge Collinson ruled for the Government. I am unable to say that this decision is so completely unsubstantiated by the evidence as to warrant reversal.

Although I agree to an affirmance, I deem very appropriate Judge Smith’s critical comments on the Medical Center’s procedures for responding to a patient’s request for relief from pain. If a surgeon is officer of the day (OD), a request by a surgical patient for an effective pain killer is routinely transmitted to the OD. However, if the OD happens to be a nonsurgeon medical officer, as was the case on the day in question, the surgical patient’s request is not forwarded to the OD. Thus, whether a prisoner-patient’s request for a more adequate pain killer comes to the attention of a doctor depends not on his medical condition, but on which type of physician has drawn OD duty. The logic of this procedure for the care of prisoner-patients at the Federal Medical Center escapes me. I am quite certain that such a procedure would not be tolerated in a hospital in a nonprison setting. I am unable to perceive why, merely because a sick person is a federal prisoner, he should be subject to unnecessary suffering for long periods of time without recourse merely because of a highly dubious hospital administrative procedure.

The trial court sentenced Salazar to serve an additional six months in prison, the maximum authorized under 18 U.S. C. § 113(d). In light of our comments above focusing upon Salazar’s unrelieved suffering at the time of the incident in question, in part related to a denial to him of the opportunity for medical attention, the trial court may wish to consider whether these circumstances justify mitigation of punishment or probation. Without intending any encroachment upon the sentencing prerogatives of the trial judge, I would suggest reconsideration of this sentence under Fed.R. Crim.P. 35.

Affirmed.

      . 18 U.S.C. § 113 provides in part:
      Whoever, within the special maritime and territorial jurisdiction of the United States, is guilty of an assault shall be punished as follow^:
      * * * >s *
      (tl) Assault by striking, beating, or wounding, by fine of not more than $500 or imprisonment for not more than six months, or both.

      . (Questioned by Government counsel) :
      Q. * * * [I)Jid they slap you?
      A. No, I say I feel somebody touch me, all right? Okay. I heard her voice and 1 just jerked my arm away.
      Q. Jerked it away?
      A. Yes, sir.
      Q. * * * Did you ever push your hand towards Maureen Newby?
      A. No, sir, I did not push my hand towards Mrs. Newby.
      Q. Did you do anything other than just jerk your hand back from her?
      A. Yes, sir.
      Q. What else did you do?
      A. I probably cussed.
      Q. I mean physical in your movements.
      A. No, sir, I can’t do nothing.
      Q. Then Maureen and Mr. Kennedy are both mistaken?
      A. Well, like I tell you, I can’t comment on that, you know. I know I didn’t hit her, right?

      . 18 TJ.S.C. § 4105 provides:
      If (luring the term of imprisonment a prisoner commits any offense or violates the rules of the institution, all or any part of his earned good time may be forfeited.

      . Salazar is serving a three-year sentence for possession of heroin. He testified that he became addicted .to narcotics while in the Armed Forces.

      . The record reflects that the medication which had been prescribed for Salazar on the day in question was Talwin, a drug slight-, ly more effective than aspirin.


author: PER CURIAM:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. W. M. LUNDY, Defendant-Appellant.
    No. 74-2517
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Dec. 13, 1974.
    Certiorari Denied March 31, 1975.
    See 95 S.Ct. 1449.

      William P. Dulaney, Tunica, Miss. (Court appointed), for defendant-appellant.
    H. M. Ray, U. S. Atty., Faltón 0. Mason, Jr., Alfred E. Moretón, III, Asst. U. S. Attys., Oxford, Miss., for plaintiff-ap-pellee.
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, Circuit Judges.

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

   PER CURIAM:

Lundy stands convicted of buying food stamps face-valued at $100.00 or more for cash, in violation of 7 U.S.C.A. § 2023(b). The only issue which warrants discussion on his appeal from that conviction is whether the District Court erred in permitting the jury to consider the felony charge. We hold it did not.

Mrs. Dawson, a Government “investigative aide” testified she received $115.-00 (face value) in food stamps from Mr. Rowe, a full time Special Agent for the Department of Agriculture. Mr. Rowe directly corroborated this much of her testimony. On direct examination, Mrs. Dawson positively testified she sold all those stamps to the defendant. On cross-examination, however, Mrs. Dawson’s recollection of the incident was less clear. To refresh her memory, she used a memorandum on which she had written the serial numbers of the books she was taking into Lundy’s store.

First, she testified her books were in 10 and 30 dollar denominations. Second, her memo contained three entries. From this the defense deduced the maximum value Mrs. Dawson could have taken into the store was $70.00 (2-$30’s and 1-$10). When questioned by counsel, she conceded that must have been so. Tr. at 33. The Government asked no questions in rebuttal — indeed, it does not discuss this point in its appellate brief.

Nevertheless, we think the dollar-amount question was fully and properly presented to the jury. By choosing among alternative special verdicts — a procedure we approved in a similar case, United States v. Devall, 5 Cir., 1972, 462 F.2d 137 — they specifically found the defendant bought stamps face valued at $100.00 or more.

We hold the jury could so have found beyond a reasonable doubt. Each book of stamps was marked with a serial number, which number was borne by ,,each stamp in the book. Mr. Rowe testified to the serial numbers of the food stamp coupons. The jury could reasonably conclude that Mrs. Dawson’s list may have merely combined the serial numbers of books (1) and (2) and books (3) and (4), separating them only at the end where the digits diverge.

Whether or not we would hold this proof of value beyond a reasonable doubt had this been her testimony on direct is not the question. The question is whether this explanation, together with the other positive testimony that all five books were sold to Lundy, is — as a matter of law — enough to serve as a basis for the jury’s verdict. Drawing those inferences most favorable to the Government from this evidence, and if the jury believed Mrs. Dawson’s direct testimony, they could reasonably have concluded Lundy was guilty beyond a reasonable doubt.

Affirmed.

      . Purchase of less than $100.00 of food stamps Is a misdemeanor. 7 U.S.C.A. § 2023(b).

      . Mr. Rowe’s testimony was that Mrs. I)aw-son had 3-$25 and 2-$20 books, totaling $115.00.

      . (1) E00001002A, (2) E00001005A, (3) E17162394A, (4) E17162395A, (5) E10637387A. Tr. at 49.

      . Her list reads as follows: (a) E00001002A-5, (b) E17162394A-5, (c) E10637387A. Tr. at 17.


author: CLARK, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Nemia BOSCH, Defendant-Appellant.
    No. 74-1752.
    United States Court of Appeals, Fifth Circuit.
    Dec. 16, 1974.
    Lawrence R. Metsch, Miami, Fla., (Court-appointed), for defendant-appellant.
    Robert W. Rust, U. S. Atty., Michael P. Sullivan, Donald L. Ferguson, Asst. U. S. Attys., Miami, Fla., for plaintiff-appellee.
    Before DYER, SIMPSON and CLARK, Circuit Judges.
   CLARK, Circuit Judge:

In criminal trials, any encroachment upon the broad right to a jury’s general verdict of guilty or not guilty is fraught with danger. In the bright light of appellate hindsight, we can see that what appeared below as an efficacious and unexceptional procedure masked instead the path to error. The special interrogatories which were used to narrow the issues for the jury may have required them to return a verdict of guilty even though they found that all elements of the offense had not been proved. This possibility requires reversal despite the express acquiescense of the court appointed counsel for the defendant in the defective procedure.

Nemia Bosch was indicted in a single count charging her with conspiracy to possess, with the intent to distribute, marijuana, in violation of 21 U.S.C. § 841(a)(1) and § 846. The prosecution was based upon evidence that Bosch delivered 100 pounds of marijuana to Giovanni Felipe under an agreement that Felipe would attempt to find a buyer for it. During the course of this trial Bosch, who did not speak English and testified through an interpreter, took the stand and admitted that she delivered the marijuana to Felipe. Apparently, the trial judge and counsel for both Mrs. Bosch and the government construed her testimony as admitting not merely a delivery to Felipe, but participation in a conspiracy to distribute the marijuana. It is altogether likely that this misconception was due to the substantial proof adduced from other sources that Bosch was a principal participant in the abortive sales scheme.

Bosch further testified that soon after her apprehension an individual claiming to be a federal agent attempted to extort money from her. It is undisputed that she promptly complained about this attempt to United States narcotics officials. She further swore that this complaint led to an agreement with these persons that she would cooperate with the government to identify and apprehend the extortionist in exchange for immunity from prosecution on the conspiracy charge.

In addition to evidence of Bosch’s participation in a conspiracy to distribute the marijuana, the United States introduced testimony negating Bosch’s claim that a promise of immunity was extended. The grant of immunity vel non became so much the focus of the trial that, at the commencement of the charge conference, the trial judge stated:

“Before we proceed with the charge conference, let me discuss this case and analyze it with you.
It seems to me — and I would like to hear from both of you — that this defendant has admitted the offense charged in the Indictment by way of a confession, and relies upon a promise by the Government of immunity from prosecution.
MR. PORTER (Counsel for Defendant) : Yes, sir.
THE COURT: I think, actually, that is the only issue at this point to be submitted to the jury and for them to decide. Because if the jury believes that she has been promised immunity from prosecution by the Government in return for the information that she gave, then certainly the Government should be estopped from prosecuting her and she should be acquitted.
On the other hand, if they don’t believe that, then they have to believe that she gave the marijuana to Felipe and that she knew all the time.
MR. PORTER: She candidly admitted that.
THE COURT: —that Felipe was dealing and what was going to be done with it.
It seems that is the only question.
Do you gentlemen disagree with that?”

No negative response is recorded. The court thereupon suggested that a special interrogatory be developed asking the jury to decide whether an agent of the federal government promised Bosch immunity from prosecution. The charge conference concluded with this exchange :

“THE COURT: I don’t normally do it, and I wouldn’t do it now unless counsel agree that is the thing to do. But I just suggest that so that you might get some idea of either a special charge or a special interrogatory for the jury to answer.
MR. PORTER: I think, considering the fact that any special charge will be given along with the other charges, the special interrogatory would be better, because I think it will narrow the issue, would be briefer and would be clearer and easier for the jury.
THE COURT: If you agree on an interrogatory, then at that point I am not going to even read the indictment to the jury. I am going to tell them that there remains one question in this case for them to decide and it is in the form of a special interrogatory which will be submitted to them; and I will read it to them. And along with the verdict forms I will have the clerk hand the jury the interrogatory. They will have to find one way or the other. And by the way they answer the question will determine what they find.
MR. SULLIVAN (Assistant United States Attorney): I wouldn’t put it past the jury to answer the question “no” and acquit her, or answer the question “yes” and find her guilty.
THE COURT: If they do, then they will have to be sent back.”

In its instructions, the court gave the jury several general charges outlining their function and duties, including charges on the presumption of innocence and that the burden of proving defendant guilty beyond a reasonable doubt rested throughout the trial upon the government. Consistent with the agreed upon procedure, the elements of the offense of conspiracy were not defined. Only the special interrogatory was cast in terms specifically related to the issues raised in the case. The court stated:

“A form of special interrogatory and a general verdict has been prepared for your convenience.
You will take these forms to the juryroom.
I will direct your attention first to the form of special interrogatory. It is styled in the cause, and it is called “Special Verdict” and then under here it says “Special Interrogatory”, and it reads:
“Did an agent of the United States Government promise the defendant Nemia Bosch that she would not be prosecuted for the offense charged in Count I of the indictment?”
I have written the date in and the place. Then below that it reads:
“We, the jury, find that the answer to the special interrogatory is
ft
And there is a (yes) and a (no), so say we all, and there is a line with the word “foreman” under it.
You are to give a unanimous yes or no to this question. And when you have reached a unanimous decision or finding as to that fact, you will have your foreman sign it.
The general verdict is dated February blank, 1974, Miami, Florida, and it reads:
“We, the jury, find the defendant Nemia Bosch . . . ”
and there is a blank line .
“as to Count I as charged in the indictment.”
Under that line are the words “(not guilty) or (guilty).” But that is merely advisory.
You will take these forms with you to the jury room together with any evidence or exhibits that you may desire. And, if you find from the testimony that an official of the Federal Government promised immunity from prosecution to Nemia Bosch in exchange for her cooperation in their investigation, then you should find the defendant not guilty.
You are specifically requested first to determine if, as a matter of fact, such immunity was given, and you should make this finding of fact.
If your answer to this special inquiry is yes, then you should find the defendant not guilty. .If your answer is no, then you should find the defendant guilty.”

Through different counsel appointed for this appeal, Bosch asserts that the district court erred in failing to instruct on the elements of the offense, in submitting the immunity issue to the jury on special interrogatories, and in directing that a negative answer to the issue mandated a verdict of guilty. Fed.R.Crim.P. 52(b) provides that “[p]Iain errors or defects affecting substantial rights may be noticed although they were not brought to the attention of the court.” The asserted errors here were not merely unassigned, defense counsel participated and acquiesced in each of the actions challenged. To reach such points on this appeal, we must first conclude that they are within the category of errors that affect substantial rights.

The background against which this decision must be made has been adequately summarized. See C. Wright, Federal Practice and Procedure: Crim. §§ 854-6. The outcome in such cases depends a great deal more upon an intuitive sense of justice 'than upon a search for precedent. Stare decisis is of little importance — the rule is essentially ad hoc, e. g., United States v. Barcenas, 498 F.2d 1110 (5th Cir. 1974); United States v. Morales, 477 F.2d 1309 (5th Cir. 1973); cf. United States v. Fernandez, 496 F.2d 1294 (5th Cir. 1974); United States v. Devall, 462 F.2d 137 (5th Cir. 1972).

Whether we think Bosch guilty or innocent is not a proper concern here— that is a jury’s function. Indeed, more is at stake in the present appeal than just her substantial rights, though they must weigh heavily in the decisional equation.

In determining whether to notice these errors, a more important consideration is the over-all impact upon the system of criminal justice of allowing a conviction to flow from a jury’s verdict which has been limited by judicially fashioned blinders to a single specified fact issue. This procedure is so fraught with danger for the defendant in particular and for the system in general that we review it here despite the fact that the attorney for the defendant did not comply with the salutary commands of Fed.R.Crim.P. 30. Not only because the errors affect substantial rights, but because they also squarely place the integrity of the judicial process at hazard, they must be reviewed. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940); United States v. Atkinson, 297 U.S. 157, 56 S.Ct. 391, 80 L.Ed. 555 (1936); United States v. Vaughn, 443 F.2d 92 (2d Cir. 1971).

As is predictable from the fact that they emanate from a single action of the district court in this case, the errors asserted here are essentially intertwined. The failure to instruct on all of the elements of the offense occurred because the trial judge and counsel considered that only a single issue remained for jury resolution. The result of this one-issue instruction was to direct a verdict of guilt on the unresolved, uninstructed question of conspiratorial conduct.

Though our decisions in this area of the law may, at first blush, appear to lack total harmony, they do follow a pattern. 'Three overriding principles emerge. (1) The court should define the crime charged and specify its essential elements. A mere reference to the indictment is insufficient. United States v. Musgrave, 444 F.2d 755 (5th Cir. 1971); Merrill v. United States, 338 F.2d 763 (5th Cir. 1964); see Lott v. United States, 218 F.2d 675, 680 n. 7 (5th Cir. 1955). (2) A court should never direct a verdict of guilt, in whole or in part. United States v. Womack, 454 F.2d 1337 (5th Cir. 1972), cert. denied, 414 U.S. 1025, 945 S.Ct. 450, 38 L.Ed.2d 316 (1973); United States v. Musgrave, supra, (3) Special interrogatories should not be used in criminal trials. United States v. James, 432 F.2d 303 (5th Cir. 1970), cert. denied, 403 U.S. 906, 91 S.Ct. 2214, 292 L.Ed.2d 682 (1971).

As with every generic statement, exceptions exist to these three. In United States v. Urbana, 412 F.2d 1081 (5th Cir. 1969), cert. denied, 400 U.S. 821, 91 S.Ct. 39, 27 L.Ed.2d 49, (1970), this court, while noting in dicta that the trial court’s failure to instruct on all essential elements of the offense might have been harmless, held that no plain error had been demonstrated because the single unresolved factual issue in the case (identity of the defendant as the culprit) was submitted to the jury. It is significant to note, however, that the court directed all essential elements of the case to be charged on retrial.

In United States v. Harper, 460 F.2d 705 (5th Cir. 1972), we held that where defense counsel stipulated in open court that all allegations in the indictment were true and where the entire record disclosed that sanity was the only fact issue, the court’s charge to the jury to this effect was not reversible error.

In United States v. McCracken, 488 F.2d 406 (5th Cir. 1974), a case in which the trial court had authorized the use of the “not guilty by reason of insanity” form of verdict in addition to the usual “guilty” and “not guilty” forms, we recognized that a special verdict or special question, though posing a danger, would not inevitably produce reversal. We held in that case that the facts were such that the defendant’s guilt, aside from his sanity, was not in issue and, therefore, was not prejudiced by this form of presentation.

The thread of consistency that is woven through these decisions can only be seen from a collective view. When an after-the-fact review of the entire transcript discloses that only a single issue truly remained for the jury consideration and that no prejudice to the defendant’s rights could have resulted from narrowing the jury’s ambit to the one question posed, a plain error reversal of a court’s curtailment of the jury’s consideration is not required.

The thrust of our decision today is that this sort of game is not worth the candle. Harmless error is nevertheless error to be avoided by trial courts. In today’s case it was not harmless, so this cause must go back to the trial court with direction to instruct on all of the elements of the offense charged and to refuse the use of all forms of special interrogatories and special verdicts in the retrial of this case. This practice may at times seem the longest way around, but adherence to these precepts is always the surest, if not the shortest, way through the procedural thicket.

The order of judgment and commitment appealed from is reversed and the cause is remanded for a new trial.

Reversed and remanded.

      . Bosch’s full testimony in this regard on direct examination by her counsel was as follows. The subject was not mentioned in cross examination.
      “Q. Do you know Giovanni Felipe?
      A. Yes, I have known him for the last year and a half or two years.
      Q. Tell us how you met him.
      A. He went over to the house once to visit with another man.
      Q. Did you ever deliver him some marijuana somewhere around the 5th of October?
      A. Yes. I gave it to him. That belonged to Lamanzares.
      Q. Is that the man who turned up dead some time later?
      A. Yes.
      Q. Where did you get the marijuana?
      A. lie took it over and he knew I had it in the house.
      Q. Who is “he”?
      A. Germen Lamanzares.
      Q. And you gave it to Mr. Giovanni for what purpose?
      A. Well, because I gave it to him.”

      . Notwithstanding the action of the court in initiating the suggestion for this procedure at tiie charge conference, counsel’s agreement and hearty endorsement of this course well might justify the classification of invited error. See Dennis v. United States, 341 U.S. 494, 500 n. 2, 71 S.Ct. 857, 862 n. 2, 95 L.Ed. 1137 (1951); United States v. Pentado, 463 F.2d 355 (5th Cir. 1972), cert. denied, 409 U.S. 1079, 93 S.Ct. 698, 34 L.Ed.2d 668, and 410 U.S. 909, 93 S.Ct. 963, 35 L.Ed.2d 271 (1973). Our concern for the integrity of the judicial process, as hereinafter explained, indicates that faulting appointed trial counsel is not the proper basis for resolving the issues presented.

      . We know from the record, despite the misapprehension of the court and counsel at trial as to the extent of Bosch’s confession, that an unresolved fact issue remained. It is entirely conjectural as to what this jury’s action might have been if their deliberation had not been limited to the promise of immunity issue. If not so. restrained, they may even have chosen to pardon Bosch, though believing her a conspirator. See United States v. Ragsdale, 438 F.2d 21 (5th Cir.), cert. denied, 403 U.S. 919, 91 S.Ct. 2231, 29 L.Ed.2d 696 (1971). In the instant case, the judge made it clear that if the jury found that no promise of immunity was made, he would refuse to receive a verdict of not guilty.

      . Compare Hattaway v. United States, 416 F.2d 1178 (5th Cir. 1969).


author: RONEY, Circuit Judge:

text:
    Leroy CALLAHAN, Plaintiff-Appellant, v. H. M. PRICE, etc., et al., Defendants-Appellees.
    No. 74-1029.
    United States Court of Appeals, Fifth Circuit.
    Dec. 13, 1974.

      Fred L. Banks, Jr., Jackson, Miss., for plaintiff-appellant.
    Wm. B. Compton, Meridian, Miss., Harold W. Davidson, Carthage, Miss., for defendants-appellees.
    Before COLEMAN, CLARK and RONEY, Circuit Judges.
   RONEY, Circuit Judge:

Leroy Callahan, a white, nontenured school principal in Leake County, Mississippi, after three one-year contracts as principal and seven one-year contracts as assistant principal, was not reemployed for the school year 1973-74. He asserts that the nonrenewal of his contract is violative of his First and Fourteenth Amendment rights to freedom of speech and association and to his right to be free from arbitrary and capricious governmental action. He first claims that the community opposition which triggered the refusal of the Board to rehire him was grounded on his unpopular enforcement of court-ordered desegregation. He then asserts that in any event, community opposition alone, whatever its basis, is an insufficient ground for nonrenewal of his contract absent a showing that the school or his performance as principal is undermined. Finally he argues that nonrenewal under these circumstances makes the governmental action arbitrary and capricious, and otherwise violates his constitutional rights.

We affirm the district court’s decision, not by deciding the serious legal questions posed by Callahan, but on the ground that the findings of the district court are not clearly erroneous and the facts do not support Callahan’s claim that he was dismissed for constitutionally impermissible reasons. The key to any possible relief claimed by plaintiff lies in the reason for the community opposition to him and its effect. In a case of this kind, the burden of proof is on the plaintiff to show that the conduct of the school authorities was unconstitutional.

The facts found by both the school board after extensive hearings, and the district court after evidentiary hearings and examination of the transcript before the school board, show that the plaintiff failed to prove that the community opposition was based on his enforcement of court-ordered desegregation. The record also shows that he failed to prove that the Board was wrong in finding that his nonrenewal was in the best interests of the school and the students.

Callahan brought this action against the Superintendent of Education and the members of the Board of Education of Leake County, Mississippi, pursuant to 42 U.S.C.A. § 1983 and § 2000d and the First and Fourteenth Amendments. He sought injunctive and other relief requiring the defendants to rehire him, to reimburse him all back pay, and to pay him actual and punitive damages.

Throughout the course of this litigation Callahan has argued that his dismissal was based on his stand in favor of compliance with a federal court order requiring integration of Leake County schools. The Superintendent and the Board take the position that the best interests of the school necessitated that Callahan not be rehired because of community opposition, which resulted primarily from his attempt to remove a popular football coach. This differing interpretation of the underlying reason for the failure to rehire Callahan makes it necessary for us to develop the factual background of this case in detail.

The Edinburg Attendance Center was one of the last schools in Leake County to experience integration, finally admitting its first black student in January 1970 after the ruling of this Court in United States v. Hinds County School Board, 417 F.2d 852 (5th Cir. 1969), cert. denied, 396 U.S. 1032, 90 S.Ct. 612, 24 L.Ed.2d 531 (1970). From the beginning there was difficulty between the white students and the newly arrived black faculty members, described by witnesses as attempts on the part of the white students to “run-off” the black teachers. At the time the school was first integrated Callahan served as an assistant principal, a position which he had occupied for seven years. With the beginning of the 1970-71 school term, Callahan became principal of the Edinburg Attendance Center under the first of three successive one-year written contracts.

According to Callahan, it was at this time that he decided to “back his black teachers” and to comply with both the letter and spirit of the court order unitizing the Leake County school system. He set about to assure equal participation in all of the school’s activities by placing blacks on the cheerleader squad in representative numbers, by allowing blacks to participate fully in homecoming and fund raising activities, and by placing blacks on the local board of trustees. These actions incurred the wrath of several of the white patrons of the school. Callahan was referred to in derogatory terms, signs were painted along the route he traveled to his farm each day, and, on occasions, threats were passed along to him and to his friends and supporters.

In spite of this opposition to Callahan he was reemployed for the 1971-72 school term. During this year Callahan’s unpopularity was exacerbated by his failure to recommend certain teachers for reemployment for the 1972-73 term, particularly a popular football coach and assistant principal, John Mc-Cloud. Under the provisions of Section 37-9-17 of the Mississippi Code of 1972, the attendance center principal is given discretion and responsibility to initiate recommendations for teaching personnel within his attendance center. Callahan had accused McCloud of pilfering $5.19 from the school activity fund. McCloud was very popular with the students and in the community. In response to Callahan’s action, petitions began to circulate and meetings were held in support of the football coach. Certain students at Edinburg Attendance Center threatened and attempted a walk-out in support of the football coach, but were persuaded to return to their classrooms by McCloud.

McCloud and several of the other teachers not recommended for reemployment requested a hearing before the Board of Education upon the charges asserted against them by Callahan. This request was granted and the Board resolved the charges in favor of the teachers. Both Callahan and McCloud were then requested to appear before the Board which expressed to both its concern that, in view of the circumstances then apparent, it would not be in the best interest of Edinburg Attendance Center for either of them to remain. Neither Callahan nor McCloud chose to resign and the Board subsequently entered into one-year written contracts for the 1972-73 school term with each of them. Thus the 1972-73 school term began at Edinburg Attendance Center with Callahan serving as principal and with McCloud serving as a teacher, instead of assistant principal.

During the fall of 1972, Superintendent Price became aware that this undercurrent of discontent in the Edinburg Attendance Center was increasing. Petitions advocating Callahan’s removal were circulated and, on occasion, Price and members of the Board had to go to the school in efforts to calm the student body and faculty.

Superintendent Price determined that there was in fact substantial opposition to Callahan and that it would not be in the best interest of the school to recommend Callahan as attendance center principal for the 1973-74 school term. Section 37-9-15 of the Mississippi Code of 1972 gives the Superintendent discretion and responsibility to initiate recommendations for the employment of attendance center principals. Price wrote Callahan a letter on January 18, 1973, advising him that he would not be recommended and giving the reasons for his decision:

As you know, I am greatly concerned about the educational system of Leake County, including Edinburg Center, it’s staff, pupils and patrons.
I have given the situation that exists there very much thought and consideration, and have decided that it is for the best interest of the school and the children that I should not recommend you to the Leake County School Board for re-employment as Principal, after your present contract expires, for the 1973-74 school term.
My reason for not recommending you is that under the conditions that exist at the Edinburg Center, tensions are so high among patrons, teachers and students, that you cannot have the type of school and education that the pupils of the community are entitled to and deserve.
This decision was made entirely for the best interest of the school and for no other reasons.

Callahan then brought this suit in April 1973 at a time when he was still serving as attendance center principal at Edinburg. The defendants immediately obtained from the district court a stay for the purpose of conducting a board hearing. The Board thereupon gave Callahan a full hearing as to the reasons for the nonrenewal of his contract. He was given a statement of the reason for the Superintendent’s action, the names and nature of the expected testimony of the witnesses to be called by the Superintendent, and an opportunity to cross-examine^'the Superintendent’s witnesses and to present evidence of his own. It is not questioned that this hearing afforded Callahan all of the procedural due process contemplated by the Fourteenth Amendment. Ferguson v. Thomas, 430 F.2d 852, 856 (5th Cir. 1970); cf. Dixon v. Alabama State Board of Education, 294 F.2d 150 (5th Cir.), cert. denied, 368 U.S. 930, 82 S.Ct. 368, 7 L.Ed.2d 193 (1961).

The Board then filed its findings and conclusions with the district court. The Board was explicit in its findings as to why Callahan was not rehired for the 1973-74 school term:

There was and is substantial opposition among the parents of children attending the Edinburg Attendance Center to the re-employment of Mr. Leroy Callahan as attendance center principal for the 1973-1974 scholastic year which begins July 1, 1973; and, that this substantial opposition to Mr. Leroy Callahan as attendance center principal is not in the best interests of the public school at Edinburg Attendance Center; and, that these are the two sole reasons why Mr. H. M. Price, as Leake County, Mississippi, Superintendent of Education, did not recommend Mr. Leroy Callahan to the Leake County, Mississippi, Board of Education for the position as attendance center principal at Edinburg Attendance Center for the 1973-1974 scholastic year. We find that there is very little, if any, racial hostility in the Edinburg school community directed toward Mr. Leroy Callahan; and, that this was not a factor in the decision of Mr. H. M. Price not to recommend Mr. Leroy Callahan as attendance center principal.
We further find that the administration of Edinburg Attendance Center by Mr. Leroy Callahan on a fully unitary non-discriminatory basis was not the reason for the substantial opposition to Mr. Callahan in the Edin-burg Attendance Center community.

Callahan was allowed to complete his contract which expired by its own terms on June 30, 1973.

A school board hearing procedure which is conducted in accordance with the dictates of procedural due process is entitled to great weight. If substantial evidence appears to support the school board’s action that should end the matter. The court should never substitute its judgment for that of the Board. Toups v. Authement, 496 F.2d 700 (5th Cir. 1974); Thompson v. Madison County Board of Education, 476 F.2d 676 (5th Cir. 1973). On this appeal, our review is limited to examining the record to ascertain whether there was substantial evidence to support the finding of the Board and the district court that the nonrenewal of Callahan’s contract was due to substantial community opposition which was unrelated to his efforts to comply with court-ordered desegregation.

At the Board’s hearing, Callahan had the burden of proving that he was not rehired for constitutionally impermissible reasons. Fluker v. Alabama State Board of Education, 441 F.2d 201 (5th Cir. 1971). He attempted to meet the burden by presenting evidence that the Superintendent’s decision was based on community opposition resulting from Callahan’s full faith compliance with federal court-ordered desegregation. The Superintendent countered with evidence showing that the decision not to rehire was grounded on community opposition resulting from Callahan’s disagreements with football coach McCloud. The Board resolved this conflict in favor of the Superintendent, and like the district court, we agree that there was substantial evidence to support its findings.

In its report to the district court the Board noted that it had not

. attempted to analyze the testimony of each witness and find separately findings of fact as to the testimony of each witness. There were numerous witnesses in this lengthy hearing and much of the testimony was contradictory in nature. This simply, points up and emphasizes our finding that there is substantial opposition to Mr. Callahan in the Edin-burg school community and that Mr. Callahan is the center of the controversy.

Likewise we do not feel it would be helpful, or that it is necessary, to pull from the record testimony supporting the Board’s and district court’s findings. We agree with plaintiff that there was some opposition to him which was racially motivated. Considering that the Edinburg Attendance Center was first integrated in 1970, this opposition was not surprising or unusual. There had been such opposition since Callahan became principal in 1970, yet this opposition did not prevent Superintendent Price from recommending that Callahan be reemployed in 1971 and in 1972. It was only after the McCloud controversy in the spring and fall of 1972 that Price decided the community opposition to Callahan was such that it would not be in the best interest of the school for Callahan to be reemployed for the 1973-74 school term. The record contains substantial evidence to support the findings that, despite such racially motivated op-. position, Superintendent Price’s decision not to reemploy Callahan was based on considerations and opposition unrelated to any efforts of the principal to comply with court-ordered desegregation.

Plaintiff simply failed to satisfy his burden of proving that the community opposition and the Superintendent’s decision not to reemploy him was due to his interest in maintaining an integrated school. On appeal, plaintiff contends that even if this be so, the Superintendent’s decision was arbitrary and capricious and in violation of the Fourteenth Amendment absent a showing that his performance as principal of Edinburg Attendance Center was undermined as a result of the opposition. He points to a good and improved school record during his principalship. Callahan argu'es that there was no showing that the opposition had any effect on his ability to run the school and therefore, defendants’ decision that he not be rehired was wholly unsubstantiated and ran afoul of his right to substantive due process. Unless plaintiff can show that the nonrenewal of his contract was for a constitutionally impermissible reason, however, there is no basis for us to invalidate the Superintendent’s action. The finding by the Board that it was not in the best interest of the school to rehire Callahan removes from the decision the arbitrary and capricious characteristics asserted by plaintiff. We have continually reiterated the view that matters of school policy are best resolved in the local community and within the institutional framework of the school system. Ferguson v. Thomas, supra. The findings and conclusions of the district court are supported by substantial evidence and are not clearly erroneous under F.R.Civ.P. 52(a).

Affirmed.


author: BOOTLE, District Judge:

text:
    UNITED STATES PIPE AND FOUNDRY COMPANY, Plaintiff-Appellant, v. UNITED STATES FIDELITY AND GUARANTY CO., Defendant-Appellee.
    No. 73-3770.
    United States Court of Appeals, Fifth Circuit.
    Dec. 13, 1974.

      Lyman H. Harris, Birmingham, Ala., for plaintiff-appellant.
    S. R. Starnes, Ralph B. Tate, Birmingham, Ala., for defendant-appellee.
    Before GODBOLD and MORGAN, Circuit Judges, BOOTLE, District Judge.
   BOOTLE, District Judge:

United States Pipe and Foundry Company [hereinafter referred to as U. S. Pipe] filed suit seeking a declaration that it possessed certain rights under an insurance policy issued by United States Fidelity and Guaranty Company [hereinafter referred to as USF & G] or under a certificate of insurance issued incident to the policy. The district court, sitting without a jui'y, found that no rights accrued to U. S. Pipe as a result of either the policy or the certificate. We affirm.

William P. Reed leased certain land from U. S. Pipe. The lease was for a one year term commencing January 1, 1970, and would automatically be renewed from year to .year until terminated pursuant to its terms. Under the lease, Reed was to procure liability insurance. USF & G issued a policy to “William P. Reed DBA Southern Packaging Company” and sent a certificate of insurance to U. S. Pipe. A printed provision on the certificate stated that USF & G “will make every effort to notify the holder of this Certificate of any material change in or cancellation of these policies, but assumes no responsibility for failure to do so.” A typed provision stated: “A ten day notice will be given to the holder of this certificate, in event of cancellation.” Approximately six months later, Southern Packaging was incorporated as Southern Packaging Company, Inc. The insurance policy was renewed in December 1970, and another certificate of insurance, identical to the first one, was sent to U. S. Pipe.

On April 26, 1971, USF & G notified Reed that it was cancelling the policy. No notice of cancellation was ever sent to U. S. Pipe. An explosion occurred on the leased property on July 25, 1971; there was extensive damage to surrounding property, and approximately 1100 lawsuits were filed against U. S. Pipe. On the day after the explosion, USF & G mailed a premium refund check to William P. Reed.

U. S. Pipe filed suit for declaratory judgment. The district court entered its findings of fact and conclusions of law, ruling that USF & G was in no way liable to U. S. Pipe. U. S. Pipe then appealed to this court.

Since U. S. Pipe was not a named beneficiary under the insurance policy, any coverage which it seeks to enjoy would have to arise from the certificate of insurance. A certificate issued to a lessor indicating that liability insurance has been acquired by the lessee does not constitute a contract between the lessor and the insurer. See McDowell v. United States Fidelity & Guaranty Co., 260 Ala. 412, 71 So.2d 64 (1954); Provident Life & Accident Insurance Co. v. Pressley, 37 Ala.App. 153, 64 So.2d 618 (1953); Skezas v. Safway Steel Products, Inc., 85 Ill.App.2d 295, 229 N.E.2d 781 (1967); Peacock & Peacock, Inc. v. Stuyvesant, 332 F.2d 499 (8th Cir. 1964). The certificate simply provides a method whereby a lessee can show that he has complied with a lease provision requiring that insurance be obtained by the lessee.

The provision regarding notification in the event of cancellation is a mere promise, unsupported by any consideration. Although forbearance can be a consideration, the district court found no such forbearance and found further that the provision with respect to a ten day notice was not supported by “any consideration in the legal sense by way of either detriment to U. S. Pipe nor an advantage to USF & G.” U. S. Pipe has not shown these findings to be clearly erroneous. Rule 52(a), Federal Rules of Civil Procedure. Because of the determination that there was no consideration to support any promises made in the certificate, we pretermit discussion of the effect of the typed upon the printed provision, specifically whether the typed provision had any effect upon the printed language “but assumes no responsibility for failure to do so” [i. e., to give notice of cancellation].

U. S. Pipe urges that it was a third-party beneficiary under the insurance policy. Under Alabama law, which is controlling under Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), for a contract to be considered made for the benefit of a third person “the contract must have been intended for the direct benefit of the third person, as distinguished from a mere incidental benefit to him.” Anderson v. Howard Hall Co., 278 Ala. 491, 493, 179 So.2d 71, 73 (1965). There is no evidence in this case to indicate that the insurance policy between Reed and USF & G was intended for the direct benefit of U. S. Pipe. Indeed the evidence is to the contrary. An employee of U. S. Pipe testified that the insertion of the insurance requirement in the lease was not intended to protect U. S. Pipe from liability.

U. S. Pipe seeks to analogize a certificate of insurance to a loss-payee clause, but the substantial differences outweigh any apparent similarities. A loss-payee clause is contained in the policy itself, and the interests of the loss-payee are identified in the policy. The clause itself “creates an independent agreement between the insurance company and the mortgagee for the latter’s benefit.” Levine v. Insurance Company of North America, 440 F.2d 679, 680 (5th Cir. 1971); see also United States Fire Insurance Co. v. Hecht, 231 Ala. 256, 164 So. 65 (1935). There was no provision in the insurance policy involved here referring to U. S. Pipe or giving it any rights whatsoever, and U. S. Pipe can find no solace in its attempted analogy.

Our determination that U. S. Pipe has no rights or benefits accruing to it under either the policy or the certificate makes it unnecessary for us to consider whether Reed or Southern Packaging Co., Inc. was the insured under the policy and whether the policy was properly cancelled .vis á vis the insured.

The decision of the district court is affirmed.


text:
    Glenn D. GREER, Individually, and as owner of the F/V MARIBO, Plaintiff-Appellant-Cross Appellee, v. UNITED STATES of America, Defendant-Appellee-Cross Appellant.
    No. 74-1864
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Dec. 13, 1974.

      Joseph P. Milton, Jacksonville, Fla., for plaintiff-appellant-cross-appellee.
    John L. Briggs, U. S. Atty., Manuel Menendez, Jr., Asst. U. S. Atty., Jacksonville, Fla., David V. Hutchinson, Stephen F. Eilperin, Attys., U. S. Dept, of Justice, Washington, D. C., for defendant-appellee-cross-appellant.
    Before BELL, SIMPSON and MORGAN, Circuit Judges.

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

   PER CURIAM:

This appeal follows a judgment in favor of Glenn Greer, owner of the fishing vessel MARIBO, for damages occasioned when the vessel collided with the south jetty at the entrance to the St. Johns River. The court found that the Coast Guard was negligent in failing to properly maintain a buoy marking the south jetty and that its negligence caused this incident to occur. The United States denies it was negligent and contends that appellant Greer was contributorily negligent. Greer, of course, agrees with the court’s decision and challenges only the propriety of the damage award, $20,000 for loss of his vessel.

The pertinent facts begin late in the day on February 8, 1973, when Greer was fishing some 60 miles northeast of the mouth of the St. Johns River in the Atlantic Ocean. Upon hearing that northeast storm conditions were predicted for the next day, Greer decided to return home. The MARIBO, accompanied by the F/V DORBESS, left for port early the next morning and arrived off the mouth of the St. Johns around 9:30 the evening of February 9.

Before proceeding into the river, Mr. Stoddard, master of the DORBESS, was advised that buoy 6, the north jetty buoy, had moved south of its charted position. The pilot boat operator advised the DORBESS that proceeding would be safe if it entered with buoy 6 on its port side. The MARIBO proceeded inshore passing buoy 7, the south jetty buoy on its port side and Greer turned the wheel to port intending to pass buoy 6 on his port side. The jetties were completely submerged by the northeaster condition of the seas. About the time Greer turned his wheel to port, his vessel's bow struck the south jetty rocks causing extensive damage to the hull and eventual total loss of the vessel.

The evidence revealed that buoy 7 was some 500 feet south of its charted position and this discrepancy from its charted position accounted for the fact that the MARIBO hit the south jetty. Displacement of Buoy 7 had occurred before. Coast Guard records show that it was found off its charted position four times from October, 1968 to April, 1972. The court heard testimony from the Coast Guard Chief of the Aids to Navigation Branch to the effect that the normal procedure for correcting a buoy found off its charted position several times is to add additional weight to give the buoy more stability. Despite the fact that an available Coast Guard vessel, the cutter SWEETGUM, was equipped to handle the additional weights and that such weights were available nearby, buoy 7 had not had the benefit of this procedure. Additional testimony established that a recommendation had been made to relocate buoy 7 so that even in extreme weather conditions it would not drift south. The recommendation resulted in only a slight relocation, leaving buoy 7 in generally the same area as before.

Given this factual basis, the court found that the Coast Guard was negligent. Since it had exercised its discretion to place a buoy marking the jetty location it had a duty to properly maintain it, including taking reasonable steps necessary to keep it on station once it had been discovered that it was not staying on station. Indian Towing Company v. United States, 1955, 350 U.S. 61, 76 S.Ct. 122, 100 L.Ed. 48. The government argues that Indian Towing places only an alternate duty on the Coast Guard, namely, to either properly maintain its equipment or to properly warn of a malfunction. We do not read Indian Towing as authority for absolving the Coast Guard of its duty to correct a potentially dangerous condition merely by giving notice that such a condition exists, although adequate warning may absolve the Coast Guard from liability in particular situations. See, e. g., De Bardeleben Marine Corp. v. United States, 5 Cir. 1971, 451 F.2d 140. Furthermore, we are not convinced that the warning which the government argues should be adequate here, is sufficient to relieve it of the responsibility to correct the recurrent dislocation of buoy 7. The burden the government carries in attacking the findings of the district court has not been met; adequate evidentiary support in the record and a correct view of the law compel our affirmance of the court’s action in this regard. Chaney v. City of Galveston, 5 Cir. 1966, 368 F.2d 774.

The government also objects because the court did not find Greer to be contributorily negligent. It contends Greer had other aids to navigation available to him and was on notice buoys 6 and 7 might be off station. While evidence exists in the record to help support the government’s position, substantial evidence also indicates it was prudent for Greer to attempt to enter the St. Johns River rather than remain at sea. It is not our function to retry the case but rather to decide whether the district court’s determination that Greer was not contributorily negligent has an adequate evidentiary basis. Smith v. United States, 5 Cir. 1961, 287 F.2d 299. That determination here is not clearly erroneous.

The sole remaining issue concerns the sufficiency of the damage award. Finding of Fact # 16 was as follows:

The Plaintiff bought the F/V “MARI-BO” in November, 1970, for a total consideration of approximately $8,000.-00. At that time the vessel was in fairly poor condition. Thereafter, particularly during 1972, the Plaintiff made extensive structural improvements to the hull, ribs, decking, housing, etc. and installed various items of equipment, such as replacing the engine, radio, loran system, etc. These improvements cost approximately $12,-000.00, excluding the Plaintiffs considerable labors involved in effectuating the structural repairs and installing the equipment, along with the labors of several of his friends. He further testified that the fair market value of his vessel immediately prior to the accident was between $40,000.00 and $45,000.00 (emphasis supplied)

Based thereon Greer was awarded damages in the amount of $20,000. Greer asserts that it was error for the lower court to consider only his out of pocket expenses without also considering the value of the ■ extensive labors it found he performed on the vessel in repairing it. We agree.

The amount of damages sustained by a party is a question of fact and a trial court’s findings of damages are not to be disturbed unless clearly erroneous. Union Oil Co. of California v. Tug Mary Malloy, 5 Cir. 1969, 414 F.2d 669; Neal v. Saga Shipping Co., S.A., 5 Cir. 1969, 407 F.2d 481; F.R.Civ.P. 52(a). The Supreme Court stated in a landmark admiralty case, McAllister v. United States, 1954, 348 U.S. 19, 20, 75 S.Ct. 6, 8, 99 L.Ed. 20: . . [A] finding is clearly erroneous when ‘although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.’ (cited cases omitted)” We are left with such a conviction here.

Whenever a vessel is lost as a result of a maritime collision, damages are customarily determined by a finding as to the vessel’s market value immediately preceding the collision. See Standard Oil Co. v. Southern Pacific Co., 1925, 268 U.S. 146, 45 S.Ct. 465, 69 L.Ed. 890; Delta Marine Drilling Co. v. M/V Baroid Ranger, 5 Cir. 1972, 454 F.2d 128. In situations where market value cannot readily be established, the court should consider any and all evidence before it to establish a fair valuation. See Carl Sawyer, Inc. v. Poor, 5 Cir. 1950, 180 F.2d 962. Having rejected sub silentio the only testimony before it as to market value, the plaintiff’s estimate of $40,000 to $45,000, the court erred when it excluded consideration of the fair value of Greer’s extensive personal labor in repairing the vessel. The judgment of the lower court is reversed as to damages only. We remand for a recomputation of the damages award, including the fair value of Greer’s labor.

Reversed and remanded.


author: AINSWORTH, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Charles Norman CHRISTIAN and Teresa Hudson a/k/a Patricia Ann Barnett a/k/a Patty Barnett, Defendants-Appellants.
    No. 74-1798
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Dec. 13, 1974.

      William B. Seidel, Ft. Lauderdale, Fla. (Court-appointed), for defendants-appellants.
    Robert W. Rust, U. S. Atty., Dougald D. McMillan, Trial Atty., U. S. Dept, of Justice, Miami, Fla., for plaintiff-appel-lee.
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, Circuit Judges.

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

   AINSWORTH, Circuit Judge:

Appellants were convicted of importing 2,382 pounds of marihuana into the United States in violation of 21 U.S.C. § 952(a) and possession of this marihuana with intent to distribute in violation of 21 U.S.C. § 841(a). Two other code-fendants were acquitted. Christian was sentenced to two 4-year consecutive prison terms; Hudson to two 3-year concurrent terms. Both appellants received mandatory two-year special parole terms.

On appeal, Christian and Hudson contend that there was insufficient evidence to sustain their convictions, and that they cannot be validly convicted of knowingly and intentionally importing a controlled substance because at the time of apprehension their navigational course, if maintained, would have carried them away from the United States.

In determining the sufficiency of the evidence, the test is whether, taking the view most favorable to the Government, a reasonably minded jury could accept the relevant evidence as adequate and sufficient to support the conclusion of defendant’s guilt beyond a reasonable doubt. See United States v. Warner, 5 Cir., 1971, 441 F.2d 821, 825, cert. denied, 404 U.S. 829, 92 S.Ct. 65, 30 L.Ed.2d 58; Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1941). The evidence against appellants was sufficient for a jury to conclude that both Hudson and Christian had possession of the contraband with intent to distribute.

An examination of the record shows that: On November 2, 1973, federal agents observed the trimaran sailboat POMPERO off the western tip of Cuba, heading north. The POMPERO had departed Jamaica on an eight-day voyage on October 28. Two days into the voyage, the POMPERO met another boat at sea at which time a number of bags were loaded from this boat into the cabin of the POMPERO.

On November 6, the POMPERO was located twelve miles off the west coast of Florida, heading in a southeasterly direction toward the Coast. When the boat moved within two miles of the Florida Coast, customs agents and Drug Enforcement Administration agents travelling in two high-speed boats began an interception operation. As the government boats approached, agents identified themselves using a loudspeaker. When the vessel failed to stop, officers fired warning shots across the POMPE-RO’S bow. Appellant Christian was observed at the POMPERO’S conttols. The POMPERO finally collided with a government vessel and was halted some three hundred yards from shore.

Agents then called for everyone on board to come out. Hudson emerged from the cabin. Several minutes later, Christian came out. The only other persons aboard were two Jamaican laborers who had been hired by Christian to paint the boat. They were later acquitted of all charges.

Agents boarded the sailboat to conduct a customs search. Thirty-seven burlap sacks containing 2,382 pounds of marihuana were discovered in the cabin.

We have held that possession of, or dominion and control over, contraband may be proven by evidence that the defendant (1) was in control of a vessel (2) which he knew to contain contraband. See United States v. Lacouture, 5 Cir., 1974, 495 F.2d 1237. Christian was in control of the POMPERO, was aware of the huge quantity of marihuana aboard, and refused to stop when agents identified themselves. These factors provided the jury with an ample basis from which to infer its guilty verdict.

Hudson alleges that she comes within the “passenger exception” to the general rule that one who has dominion and control of a vehicle has possession of its contents. The passenger exception is based ■ on the concept that “mere presence is insufficient to prove possession”. See Williams v. United States, 5 Cir., 1966, 361 F.2d 280, 281. “However, where there is a rational basis for attributing an interest in the contraband to the passenger because of his relationship to the driver, his attitude, conduct or other probative circumstances, the trier of fact can infer sufficient knowledge to sustain a conviction for possession.”; United States v. Hood, 9 Cir., 1974, 493 F.2d 677, 681.

Hudson took an eight-day sailing trip with Christian and was identified as Mrs. Christian at the trial. The absence of any evidence that they were husband and wife at the time of the alleged offense tends to negate any infer* ence that Hudson was aboard the boat under marital obligation or compulsion. The large number of sacks of marihuana in plain view in the cabin provided the jury with an overwhelming basis for its conclusion that Hudson was more than a passenger and had the required relationship to the contraband sufficient to sustain her conviction for possession and importation. This Court has held that proof of a passenger’s knowledge of the presence of mazúhuana in a vehicle is sufficient to support a jury’s finding of possession. See United States v. Canada, 5 Cir., 1972, 459 F.2d 687. Thus, this is not a case where mere presence at or proximity to the location of illegal substances is the sole factor upon which a conviction was obtained. In addition to Hudson’s presence on the boat, the length of the voyage, the relationship between Chzústian and Hudson, and the large quantity of marihuana involved which made it indisputable that Hudson had knowledge of the contraband were factors the jury was entitled to consider in assessing guilt or innocence. Moreover, we note that the couz't gave an “aider and abettor” instznzction. 18 U. S.C. § 2. The jury could reasonably have concluded from the ciz'cumstances that she gave support and assistance to the commission of the crime. Under this view of the facts, Hudson is still punishable as a principal. 18 U.S.C. § 2(a).

Appellants’ second contention is likewise without merit. Appellants question the validity of their convictions on the ground that they were headed away from the United States when intercepted and had inadvertently navigated too close to shore.

However, the court cleazdy infoz'med the jury that impoz-tation must be knowing and intentional. The evidence shows that appellants made a long jouzmey from Jamaica, around Cuba, to the United States in a sailboat equipped with sophisticated navigation instruments. When the POMPERO reached a point some two miles offshore, it dropped its sails and temporarily came to a stop. These facts supply a solid basis for 'the jury’s conclusion that the POMPERO’S entry into Florida waters was intentional and not inadvertent.

The significant test is that the POMPERO — loaded with marihuana —entered the territorial waters of the United States before interception began. This is importation into the United States. See 18 U.S.C. § 5; “The term ‘United States’, as used in this title in a territorial sense, includes all the places and waters, continental or insular, subject to the jurisdiction of the United States, except the Canal Zone.”; United States v. Ingham, 5 Cir., 1974, 502 F.2d 1287.

Affirmed.

      . There is a discrepancy as to the correct spelling of the sailboat’s name. It appears throughout both the record and the briefs as either PAMPERO or POMPERO.


author: WISDOM, Circuit Judge:

text:
    ASSOCIATED BUILDERS, INC., Plaintiff-Appellant, v. ALABAMA POWER COMPANY, Defendant-Appellee.
    No. 73-3278.
    United States Court of Appeals, Fifth Circuit.
    Dec. 13, 1974.

      Phillip Henry Pitts, Joe T. Pilcher, Jr., Selma, Ala., for plaintiff-appellant.
    John Bingham, Thomas W. Christian, Birmingham, Ala., for defendant-appel-lee.
    Before WISDOM and CLARK, Circuit Judges, and GROOMS, District Judge.
   WISDOM, Circuit Judge:

Associated Builders, Inc. filed this class action suit in federal district court alleging that it had purchased three bonds in reliance on a prospectus which misrepresented the redemption provisions of the bonds. Associated Builders sought damages under Sections 12 and 17 of the Securities Act of 1933, 15 U. S.C. §§ 111 and 77q; Sections 18 and 10 of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78r and 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder. The district court mis-takingly treated the suit as an action for breach of contract and dismissed the complaint for failure to state a claim which would invoke federal jurisdiction. Because we conclude that a reasonable fact-finder could not find that the prospectus, appended to the complaint, was misleading, we agree with the district court that dismissal was appropriate. The appropriate ground for dismissal, however, is failure to state a claim, not want of federal jurisdiction. Accordingly, we vacate and remand the case for entry of an appropriate order of dismissal.

I.

The Facts

In November 1970, Alabama Power Company issued $60 million of first mortgage bonds, under a mortgage indenture between the company and the Chemical Bank as trustee. The bonds were to yield nine percent interest and to mature November 1, 2000. Underwriters purchased the entire issue, at prices slightly below par and sold the bonds at par to the public. In February 1971, Associated Builders, allegedly under the impression that the bonds were absolutely protected against call without premium until November 1, 1975, bought three $1,000 bonds in the after market from a broker. Associated paid $1,060 for each bond. In March 1972, Alabama Power notified bondholders of its intent to redeem roughly $7 million of the bonds at par, without premiums, chosen by lot by the trustee. The redemption notice listed two of the three bonds held by Associated Builders. One year later, Alabama sought to redeem an additional $8 million of the series 2000 bonds. The appellant’s third bond was not included in this call.

Associated Builders, after receiving the first redemption notice, wrote Alabama Power demanding an explanation, and contending that Alabama lacked authority to redeem the bonds without premium before November 1975. Alabama Power replied that consistent with the mortgage indenture and the prospectus, the redemptions were being made by operation of the sinking fund. It claimed the right, in accordance with the terms of the mortgage indenture, to redeem the bonds at any time, without premium, if the redemption were by operation of the sinking fund. On the other hand, if the redemption were otherwise than by operation of the sinking fund, Alabama could redeem the bonds only at stated premium prices, but could not redeem the bonds before November 1, 1975, for the purpose of refunding them at a lower interest rate.

Associated Builders, asserting that the redemption was unlawful, forwarded only one of its called bonds and retained the other. It sold the third bond, which had not been called, for $1,080, realizing a $20 profit.

II.

The Complaint

The complaint alleged that the prospectus “included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made in the light of the circumstances under which they were made, not misleading”. Specifically, Associated Builders cited three portions of the prospectus and concluded that the action seeking to redeem the bonds “was contrary to the representations made by the Defendant in the prospectus, in that no premium was paid upon the redemption and in that the redemption was sought to be accomplished at a regular redemption price prior to November 1, 1975, for the purpose or in anticipation of refunding at an effective interest cost of less than 9.07%.” In short, liberally and fairly read, the complaint charged, in the words of the appellant’s brief, “simply that the prospectus was misleading in that it erroneously suggested to purchasers that no such redemption could be made”.

No underlying facts are in dispute. The appellant did not allege in its complaint or on appeal that the redemption was inconsistent with the terms of the mortgage indenture. Nor has the appellant alleged at any point that the redemption was not by operation of the sinking fund. The only allegation is that the prospectus, appended to the complaint, was misleading on its face in allegedly suggesting that no bonds could be redeemed before November 1, 1975, without premium, if the redemption were for the purpose of or in anticipation of refunding at a lower interest rate. Because we conclude from the face of the prospectus that no such misleading representation was made, we hold that Associated Builders has failed to allege a claim on which relief can be granted under the federal securities laws. 15 U.S.C. § 771 and 77q; 78r and 78j (b); Rule 10b-5, 17 C.F.R. 240.10b-5.

This court does not favor judgments of dismissal. Such judgments, as we have noted elsewhere, have a high mortality rate. E. g., Thompson v. Allstate Insurance Co., 5 Cir. 1973, 476 F.2d 746. Nonetheless, complaints are not impregnable. “A [complaint] may be dismissed on motion if clearly without any merit; and this want of merit may consist in an absence of law to support a claim of the sort made, or of facts sufficient to make a good claim, or in the disclosure of some fact which will necessarily defeat the claim.” De Loach, v. Crowley’s, Inc., 5 Cir. 1942, 128 F.2d 378. See 2A Moore’s Federal Practice f[ 12.08 at 2271 (2d ed. Supp.1974). Judgments of dismissal and summary judgments, in proper cases, maintain the integrity of the law.

On a motion to dismiss, the well pleaded allegations of fact are taken as true. E. g. Campbell v. Beto, 5 Cir. 1972, 460 F.2d 765. Accordingly, for the purposes of our review of the judg-_ ment of dismissal, we accept as true that the bonds were redeemed without premium for the purpose of refunding the bonds at an interest rate lower than 9.07 percent. We do not, however, accept Associated Buildez’s’ conclusory allegation that the prospectus was materially misleading. Conelusoi'y allegations and unwarranted deductions of fact are not admitted as true, Ward v. Hudnell, 5 Cir. 1966, 366 F.2d 247, especially when such conclusions are contradicted by facts disclosed by a document appended to the complaint. If the appended document, to be treated as part of the complaint for all pui'poses under Rule 10(c), Fed. R.Civ.P., reveals facts which foreclose recovery as a matter of law, dismissal is appropriate. See Jacksonville Newspaper Printing Pressmen & Assistants’ Union No. 57 v. Florida Publishing Co., 5 Cir., 468 F.2d 824, cert. denied 411 U.S. 906, 93 S.Ct 1531, 36 L.Ed.2d 196. With these truisms in mind, we turn to the prospectus.

III.

The Prospectus

The prospectus dealt with the redemption provisions of the bonds in three different sections, all quoted in the complaint. Each of the three served a different function in the prospectus and presented a greater or lesser amount of detail accordingly.

On the cover page, an introductory description of the bonds included the following statement:

“The bonds are redeemable at the redemption prices set forth on page 27; however, no bonds may be redeemed at a regular redemption price prior to November 1, 1975 for the purpose of z'efunding at an effective intez'est cost of less than 9.07%”

Then at page 13, under the heading, “DESCRIPTION OF NEW BONDS”, there is a cross-i'eference to a subsection captioned “Redemption Provisions of New Bonds”. The ci'oss-i'efei'ence advised that this subsection “among other matter’s describes the terms of a limitation on the right of ALABAMA to redeem a new bond prior to November 1, 1975, if such redemption is for the purpose or in anticipation of the refunding of such bond”.

Finally, at page 27, the most complete description of the redemption provisions, referred to by both the above quoted sections, provided under the caption “REDEMPTION PROVISIONS OF NEW BONDS”:

“The new bonds are redeemable by ALABAMA in whole or in part at any time on SO days’ notice at the principal amount and accrued interest, together (a), if redeemed otherwise than by operation of the improvement (sinking) fund or the maintenance and replacement provisions of the Mortgage and otherwise than by the use of proceeds of released propei'ty, with a premium equal to a percentage of the principal amount thereof determined as set forth in the tabulation below under the heading ‘Regular Redemption Premium’, provided, however, that none of the new Bonds shall be so redeemed prior to November 1, 1975 if such redemption is for the purpose or in anticipation of refunding such new Bond through the use, directly or indirectly, of funds borrowed by ALABAMA at an effective interest cost to ALABAMA (computed in accordance with generally accepted financial practice) of less than 9.07% per annum, and (b), if redeemed by operation of the improvement (sinking) fund or the maintenance and replacement provisions of the Mortgage or by the use of the proceeds of released property, without premium
ii
(emphasis added)

This description of the redemption provisions of the bonds makes clear that Alabama Power retained the right to redeem the bonds “at any time”, “without premium”, if the redemption were by operation of the sinking fund, and that the call protection would apply only if the redemption were made otherwise than by operation of the sinking fund. The prospectus directs attention to this description in at least three cross-references: in the introductory statement on the cover page, in the table of contents at page 2, and in the general description of the new bonds at page 13. Only by the most cursory reading of the prospectus could the investor have been unaware of this full description of the redemption features of the bonds. Indeed, this description of the redemption provisions was reproduced on the face of the bonds themselves.

Although the introductory statement on the cover page was, taken by itself, incomplete, it did not purport to be either complete or self-explanatory. It did omit information that the call protection described was limited to redemp-tions made otherwise than by operation of the sinking fund, but that fact was supplied in the description set forth on page 27 of the prospectus. The investor was not required to search the prospectus to find the language at page 27 which qualified the introductory statement; the introductory statement itself explicitly directed him to it. Moreover, the call protection as described on the cover page did not purport to be self-explanatory. The investor was required to turn to the description at page 27 to learn what redemption prices were being offered. Without that information, the value of the call protection described could not be assessed.

In light of the disclosures made in the description of the redemption provisions on page 27 of the prospectus, purchasers of the bonds cannot make a good faith argument that the prospectus omits the material facts pertaining to those provisions. The complaint should not be read as alleging total non-disclosure; it alleges only inadequate disclosure — disclosure of material facts in such a way as to render the prospectus as a whole misleading.

We conclude, to the contrary, that the prospectus adequately disclosed the redemption provisions of the bonds. The statement on the cover page must be read in context, “in light of the circumstances in which it was made”. It was intended to be, and should have been, read in connection with the description at page 27. So read, it was not misleading, nor was the prospectus as a whole. Moreover, as Chief Judge Lumbard has pointed out, it is “reasonable [for the issuer] to assume that investors who [purchase] their bonds would familiarize themselves with the conditions under which they were issued, and particularly the terms of redemption, by reading the few short paragraphs on the face of the bonds”. Abramson v. Burroughs Corp., S.D.N.Y.1972, CCH Fed.Sec.L.Rep. ¶ 93, 456 at 92, 254.

On appeal, Associated Builders relies on other omissions not specifically stated in its complaint. The prospectus, in itself, refutes each of these additional allegations.

First, the appellant contends that the prospectus failed to inform investors that all payments into the sinking fund might be applied to retire the nine percent series, due in 2000. The description of the sinking fund, however, could not be more clear on that point:

“Any cash so deposited is to be used by the Trustee for the retirement of bonds of such series as may be designated by ALABAMA (except that, through 1974, retirement of the bonds of the Series due 1999 through operation of the improvement or sinking fund provisions is limited to the improvement fund requirement attributable to that series, i. e., $350,000 annually) .”

The appellant argues that the prospectus failed to caution investors about foreseeable increases in the sinking fund requirement. The prospectus, however, made no implied representation that requirements of the sinking fund would not increase. The prospectus stated that the mortgage required annual payments into the sinking fund equal to one percent of the bonds outstanding under the mortgage. Thus it was clear that each new issue of first mortgage bonds would increase the sinking fund requirement. There was no suggestion in the prospectus that new bonds would not be issued at some time in the future. Indeed, the prospectus specified that the mortgage indenture authorized issuance of new bonds.

In its brief, the appellant asserts, for the first time, that Alabama Power must have had reasonably firm plans for the issuance of additional bonds which would have the effect, when implemented, of increasing the sinking fund requirement, thereby increasing the number of bonds which could be redeemed without premium at a relatively early date. The appellant, however, does not allege that the redemptions complained of could not have been made out of a sinking fund of the size represented in the prospectus, even in the absence of an increased fund. This aside, it is unnecessary to consider any undisclosed plans for new bond issues. This alleged fact, outside the prospectus, was not pleaded, nor could it be inferred from the allegations in the complaint, which otherwise attacked the prospectus as misleading on its face.

Finally, Associated Builders contends that Alabama Power is chargeable with an actionable omission because it failed to inform potential investors that the indenture vested discretion in the trustee to determine the method of choosing which bonds to redeem within a given series. This so-called omission is not material and is worth only a bare mention. The prospectus explicitly advised that Alabama Power was authorized to make a complete redemption for sinking fund purposes. That, in the event of a partial redemption, the trustee could select by lot or other method the bonds to be redeemed is not, we hold, a fact of sufficient consequence to support a jury finding that a reasonable man “would attach importance to [it] in determining his course of action.’’ Smallwood v. Pearl Brewing Company, 5 Cir. 1974, 489 F.2d 579, 604.

IV.

Conclusion

We agree with the district court that the prospectus was not misleading, as a matter of law. The appropriate disposition of this case, however, is not dismissal for want of subject matter jurisdiction but dismissal for failure to state a claim under the federal securities laws. Rule 12(b)(6), Fed.R.Civ.P. Accordingly, we vacate and remand the case to the district court for entry of an order dismissing the appellant’s claim under that rule.

The complaint attacks the prospectus as misleading on its face. We leave to the district court the question whether Associated Builders should be permitted to amend its complaint.

Vacated and remanded with directions.

      . The plaintiff-appellant contends also that the prospectus violated the Public Utility Holding Company Act of 1935, 15 U.S.C. § 79p. ■

      . 15 U.S.C. §§ 771, 77q, 78r, and 78j(b) : Rule 10b-5, 17 C.F.R. 240.10b-5. Similarly, the pertinent section of the Public Utility Holding Company Act of 1935 provides for recovery of actual damages suffered by reason of statements which “at the time ami in the light of the circumstances under which it was made [was] false or misleading with respect to any material facts . . ..” 15 U.S.C. § 79p.