author: ADAMS, Circuit Judge.

text:
    Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Appellant, v. CORNING GLASS WORKS, a corporation, Appellee.
    No. 72-1590.
    United States Court of Appeals, Third Circuit.
    Argued May 21, 1973.
    Decided June 28, 1973.

      Richard F. Schubert, Sol. of Labor, Carin Ann Clauss, Associate Sol., Donald S. Shire, Helen W. Judd, Isabelle R. Cappello, Sylvia S. Ellison, Attys., U. S. Dept. of Labor, Washington, D. C., Louis Weiner, Philadelphia, Pa., Regional Sol., for appellant.
    Scott F. Zimmerman, Walter P. DeForest, Reed Smith Shaw & McClay, Pittsburgh, Pa., Robert F. Cox, Cox, Wilcox, Owlett & Lewis, Wellsboro, Pa., for appellee.
    Before KALODNER, ALDISERT and ADAMS, Circuit Judges.
   OPINION OF THE COURT

ADAMS, Circuit Judge.

This action was commenced by the Secretary of Labor to enjoin claimed violations of the equal pay provisions of the Fair Labor Standards Act and to restrain the withholding of wages allegedly due certain female employees. The broad issue presented for the Court’s judgment is whether Corning Glass Works engaged in wage discrimination violative of the Equal Pay Act by paying more to night inspectors than to day inspectors at its Wellsboro, Pennsylvania plant.

The basic factual pattern involved in this case implicates the Equal Pay Act because, for reasons that will be fully explained, infra, before October 16, 1966, night inspection work was performed exclusively by males and day inspection work largely by females. Thus, the Secretary asserts, in essence, that Corning paid male night inspectors more than female day inspectors for “equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. . ” The district court disagreed, and the case is now here on appeal.

I.

The pay practices at the heart of this' controversy developed over a period spanning more than forty-five years. Before 1925, Corning operated its Wellsboro Plant only during the day, finding it either unnecessary or undesirable to employ a night shift. All inspection work at that time was performed by women. The introduction of automated production equipment between 1925 and 1930, however, made it necessary or desirable for the first time to use night shifts.

Until 1947, Pennsylvania law absolutely prohibited the employment of women between the hours of midnight and 6:00 A.M., and thus, in order to fill inspector positions on the new steady night shift, Corning had to hire men. These night inspectors, selected from male employees within the plant, were paid for their night inspection work the individual rates thay had previously been receiving. Such wages were higher than the rates paid to women engaged as inspectors on the day shift. A situation thus developed in which male inspectors worked at night, female inspectors during the day, and the male employees were paid at higher rates.

This wage differential was reinforced when, in 1944, the American Flint Glass Workers’ Union organized the production and maintenance employees of Coming’s Wellsboro Plant and negotiated a collective bargaining agreement providing, for the first time, a plant-wide night shift differential. Despite this new shift differential, serving as a premium for night work, the pre-existing wage difference between night shift inspectors and day shift inspectors continued in effect.

In 1947, Pennsylvania law was amended to permit women to work at night conditioned upon the approval of the State Department of Labor. Under the applicable regulations, however, Corning could have employed women at night only if it would provide them transportation or if Wellsboro had public transportation. It was not economically feasible for Corning to furnish transportation to its female employees, and public transportation was unavailable. The 1947 state regulations were later amended in July, 1965 to permit night work for those women who had regular, private transportation.

Since October 16, 1966, by mutual agreement between the union and Corning, women have been permitted to exercise their seniority, on the same basis as men, to claim steady night shift jobs when vacancies occur. A considerable number of female employees have availed themselves of this opportunity to take the higher-paying night shift inspection jobs. In addition, several new female employees, as well as a new male employee, have been hired to work as night inspectors.

Thus, after October 16, 1966, female and male employees worked as inspectors on both the day and night shifts.

Male and female inspectors working the same shift have been and are paid at the same base hourly rate. Moreover, under the Corning Glass Works Plan of job evaluation installed on January 20, 1969, all employees hired after that date are paid the base wage rate for their job regardless of their sex or whether they work on the day or night shifts. The Corning Plan also provides for a “red circle” rate paid to persons employed before January 20, 1969, when working as night inspectors. Thus, all inspectors, male or female, who were employed before the date of the Corning Plan and who work on the steady night shift receive a higher base wake rate (“red circle”) than their counterparts, male or female, of comparable seniority, working on the day shifts.

II.

After finding the relevant facts, which were largely undisputed, and in any event mostly stipulated by the parties, the district court held 'that the Secretary of Labor had not established that Corning violated the Equal Pay Act because he had “failed to sustain its burden of proof that the male inspectors on the night shift and the female inspectors on the day shift performed their work ‘under similar working conditions,’ within the meaning of that phrase under the Equal Pay Act. The district court reasoned that “time of day worked is a working condition,” and that “night work has a significant sociological, psychological and physiological impact on most workers.”

Urging reversal of the district court’s judgment, the Secretary contends primarily that: (1) in view of the legislative history of the Equal Pay Act and controlling judicial precedents, shift differences are not properly classified as “working conditions” under the statute’s equal work standards; and (2) the work performed by men and women is “substantially” equal.

Needless to say, Corning disagrees with the Secretary’s arguments as to “working conditions” in every respect. Moreover, the company seeks affirmance of the judgment of the district court on a number of additional, alternative grounds: (a) if shift differentials are not “working conditions,” within the meaning of the Act, they represent a “factor other than sex” upon which wage differentials may legally be based; (b) even assuming a prior violation of the equal pay provisions, Corning achieved compliance with the Act by opening all inspection jobs to both sexes in October, 1966; and (c) its allegedly unlawful conduct occurred prior to the period of the statute of limitations and cannot make illegal action within the period of the statute that is otherwise legal.

III.

Initially, the Court must determine whether the day and night inspection jobs constitute “equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.” Upon this issue the Secretary, carries the burden of proof, and in determining whether the district co'urt erred in concluding that such burden was not met, we must keep in mind that the Equal Pay Act does not contemplate that the Secretary of Labor and the courts will engage in job evaluation for the purpose of deciding what is a proper wage differential for unequal work.

Once the Secretary has met his burden of showing equal skill, effort, responsibility, and similar working conditions, the employer, in order to prevail on the merits, must demonstrate that the wage differential is made “pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv') a differential based on any other factor other than sex. ”

The basic issue over which the parties have waged their legal battle is whether” time of day worked may properly be classified as a “working condition” within the meaning of the Act. Here, the district court held that steady night work is not performed under “working conditions” similar to day work. However the Second Circuit recently concluded in Hodgson v. Corning Glass Works, a case remarkably similar to the present one, that, in view of the legislative history of the Act, time of day worked may be used by an employer to justify claimed wage discrimination only as “a differential based on any other factor other than sex,” but does not constitute a “working condition” so as to make the Act altogether inapplicable.

Writing for the court in Hodgson, Chief Judge Friendly, in concluding that a night shift is not a “working condition” relied in no small part upon the following statement from the Committee Report:

“Three specific exceptions and one broad general exception are also listed. It is the intent of this committee that any discrimination based upon any of these exceptions shall be exempted from the operation of this statute. As it is impossible to list each and every exception, the broad general exclusion has been also included. Thus, among other things, shift differentials, based on time of day worked, hours of work, lifting or moving heavy objects, differences based on experience, training, or ability would also be excluded. . . . ”

In quoting this statement, the Second Circuit opinion interlineated the words “differentials based on any other factor other than sex” in brackets after the words the “broad general exclusion” in the next to last sentence in the quoted paragraph, thus revealing its belief that a “factor other than sex” is the “broad general exclusion” referred to by the Committee. Although, in view of the context and language of the quoted statement, Chief Judge Friendly’s interpretation would appear to be correct, we do not conclude, as the Second Circuit apparently did, that the last sentence in the quoted paragraph, beginning with the word “Thus,” should therefore be construed as listing only examples of a “factor other than sex.”

The specific examples that the Committee Report, in the last sentence, states would be excluded are “shift differentials, restrictions on or differences based on time of day worked, hours of work, lifting or moving heavy objects., differences based on experience, training, or ability. . . . ” As a group, these examples cannot be interpreted as “factor[s] other than sex” for the simple reason that some of them clearly represent requisites to the applicability of the Act: skill, effort, responsibility, and working conditions. Thus, “lifting or moving heavy objects” is, beyond dispute, an example of “effort,” and “experience, training, or ability” are examples of “skill.” And “effort” and' “skill,” along with "working conditions” and “responsibility” are specifically listed requisites that would make the Equal Pay Act altogether inapplicable, and which cannot, therefore, logically be classified as “factor [s] other than sex” to be considered as matters of defense.

Of course, our interpretation of the Committee Report — that the examples set forth are not all “factor [s] other than sex” — does not by itself suggest the converse — that they are all examples of “skill, effort, and responsibility, and working conditions.” Thus, the listing made by the Committee Report may in fact be not simply a set of black-or-white illustrations taken exclusively from the Act’s requisites (i. e., effort, skill, responsibility, and working conditions) or solely from one of its defenses (“factor[s] other than sex”), but rather a chiaroscuro picture painted with brushes dabbed in both groups. The question, therefore, remains whether time of day worked is a “working condition” or a “factor other than sex.”

The only clear and unambiguous evidence concerning this point is the following statement made during the course of an explanation of the Act by Congressman Goodell, Who sponsored the bill and participated in redrafting it:

“Ninth. Although only the factors, skill, effort, responsibility, and working conditions are listed, such things as experience, ability, and training may be considered under the broad heading of skill. The usual factors of push, pull, lift, and carry .come under effort. Direction of others as well as value of commodity worked upon and overall importance of assignment may be considered as part of an employees’ job responsibility. Finally, standing as opposed to sitting, pleasantness or unpleasantness of surroundings, periodic rest periods, hours of work, dif ference in shift, all would logically fall within the working condition factor.” (Emphasis supplied)

Because of its interpretation' of the Committee Report, the Second Circuit discounted this explanation by Congressman Goodell, although it was made by the bill’s sponsor immediately before reading the Committee Report into the Congressional Record. In addition, it was proclaimed by Congressman Goodell as an example and guideline as to the intent of Congress. Whatever may be the merits of minimizing the views of a bill’s sponsor when a Committee Report is thought to be clear and contrary to the statements of individual legislators, this Court’s interpretation of the Committee Report suggests no basic conflict between the Report and Congressman Goodell’s statements. A comparison of the two demonstrates this:

Committee Report:
“Thus, among other things, shift differentials, restrictions on or differences based on time of day worked . . . would also be excluded . . .”
“Thus, among other things . . . lifting or moving heavy objects . would also be excluded.”
“Thus, among other things . . . differences based on experience, training or ability would also be excluded.”
Congressman Goodell:
“Ninth . . . Finally . . hours of work, differences in shift all would logically fall within the working condition factor.” (emphasis supplied)
“Ninth . . . The usual factors of push, pull, lift, and carry come under effort . . .” (emphasis supplied)
“Ninth . . . such things as experience, ability, and training may be considered under the broad heading of skill. . . .” (emphasis supplied)

Under these circumstances, where the ambiguous Committee Report and the statements by the sponsor of the legislation may reasonably be read not as conflicting but as complimentary and harmonious, giving emphasis to Congressman Goodell’s explanation would not appear inappropriate. Indeed, a sponsor’s views are entitled to great weight in any event. As this Court stated in Gartner v. Soloner:

“In attempting to extract the legislative purpose primary concern should always be given to the views expressed by the sponsors of the bill and in this respect the statements of Senator McClellan and Rep. Elliott should be looked to as representing the true spirit of Section 102.”

We conclude, then, that time of day worked is a “working condition” within the meaning of the Equal Pay Act and not merely a “factor other than sex” to be used by an employer as a matter of defense.

Therefore, in the circumstances of this case, the statute is inapplicable. Because of this conclusion, we need not and do not decide Coming’s other contentions, urged to support affirmance of the district court’s judgment.

IV.

Recognizing that the pursuit of intent and meaning in the words of congressional committees and individual legislators may seem to some like exploring a quagmire or, perhaps, fathoming a mirage, we have been cautious against injecting whatever notions of public policy we might have into the interstices of the Equal Pay Act. Congress was careful not to make the equal pay provisions a “Bali Hai,” inviting either the Secretary of Labor or the courts to substitute their judgment for that of employers or to judge the merits of job systems. Rather, our task is merely to determine whether an employer has discriminated on the basis of sex by paying different wages “for equal work on jobs, the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions . . . ”

In terms of congressional intent, we cannot say that the district court erred in concluding that “a given job performed [by some at night and others during the day] is not performed under similar working conditions even though all other conditions are identical. Working at night is so significant a factor that the totality of the working conditions here were dissimilar; they were not ‘very much alike’ or ‘alike in substance or essentials.’ ”

The judgment of the district court will be affirmed.

      . 29 U.S.O. § 201 et seq.

      . The equal pay provisions were added to the Fair Labor Standards Act as an amendment to § 6(d) of the Act. Enacted by Congress in 1963 to correct certain conditions considered contrary to the country’s interest, the Equal Pay Act provides, in relevant part:
      No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system ; (ii) a merit system ; (iii) a system which measures earnings by quantity or equality of production; or (iv) a differential based on any other factor other than sex: Provided, That an employer who is paying a wage rate differential in violation of this subsection shall not, in order to comply with the provisions of this subsection, reduce the wage rate of any employee.
      29U.S.C. § 206(d) (1).

      . 29 U.S.C. § 206(d)(1).

      . Act of July 25, 1913, P.L. 1024.

      . After installation of the Stevenson, Jordon & Harrison wage evaluation plan in 1947, for example, the resulting wage differentials between the night and day shifts amounted to a high of 19 cents an hour, in addition to the shift differential of 4 cents an hour for the afternoon shift and 10 cents an hour for the night shift. By 1966, the highest base wage differential was 22% cents an hour.

      . See note 5, supra.

      . Act of May 21, 1943, P.L. 389, § 4.

      . CCH State Wage and • Hour Citator If 57,849.

      . They may also “bump” into such jobs during periods when the work force is being reduced,

        . The pai'ties stipulated that women filled 276 out of 395 openings on night inspection jobs between October 16, 1966 and June, 1970. Each of the 45 inspector jobs thus became available approximately 8 times during this four year period. No contention has been advanced that in filling these jobs Corning discriminated on the basis of sex.

      . Several females just hired on March 14, 1967 immediately began inspection work , on the steady night shift. In addition, some very junior male employees took steady night work. All qualified employees having greater seniority, whether male or female, could have claimed this work.

      . The parties entered into more than 100 stipulations.

      . E. g., Hodgson v. Corning Glass Works, 474 F.2d 226, 231 (2d Cir. 1973) ; Shultz v. American Can Co., 424 F.2d 356, 360 (8th Cir. 1970).

      . See 109 Cong.Rec. 9197-98, 9209 (1965). Indeed, in view of the exceptions to the Act, it is clear that “Congress thus intended to allow [certain] wage differentials even though the contrasted employers (sic) were performing equal work.” Hodgson v. Robert Hall Clothes, Inc., 473 F.2d 589, 594 (3d Cir. 1973).

      . 29 Ü.S.C. § 206(d) (1).

      . 474 F.2d 226 (2d Cir. 1973).

      . Id. at 232.

      . 109 Cong.Rec. 9210 (1963), U.S.Code Cong. & Admin.News, p. 689.

      . 474 F.2d at 232: “ ‘As it is impossible to list each and every exception, the broad general exclusion [“differentials based on any other factor other than sex”] has been also included.’ ”

      . 109 Cong.Ree. 9210 (1963).

      . 29 U.S.C. § 206(d)(1).

      . 109 Cong.Rec. 9209 (1963).

      . 474 F.2d at 232.

      . See Zuber v. Allen, 396 U.S. 168, 186, 90 S.Ct. 314, 24 L.Ed.2d 345 (1969) ; United States v. O’Brien, 391 U.S. 367, 385, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1967), involving situations of conflict between Committee reports and statements of legislators. Cf. American Airlines, Inc. v. C.A.B., 125 U.S.App.D.C. 6, 365 F.2d 939, 949 (1966).

      . See, e. (/., National Woodwork Mfgs. Ass’n v. N.L.R.B., 386 U.S. 612, 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967) ; Schwegmann Bros. v. Calvert Corp., 341 U.S. 384, 394, 71 S.Ct. 745, 95 L.Ed. 1035 (1951) ; Pan American World Airways, Inc. v. C.A.B., 380 F.2d 770, 782 (2d Cir. 1967), aff’d, 391 U.S. 461, 88 S.Ct. 1715, 20 L.Ed.2d 748 (1968). It should be noted that this Court has already given weight to Representative Goodell’s views concerning the Equal Pay Act. See Hodgson v. Robert Hall Clothes, Inc., 473 F.2d 589, 595 (3d Cir. 1973).

      . 384 F.2d 348, 353 (3d Cir. 1967), cert. denied, 390 U.S. 1040, 88 S.Ct. 1633, 20 L.Ed.2d 302 (1968).

      . The Wage and Hour Administrator’s regulations agree with the Second Circuit’s treatment of time of day worked as a “factor other than sex” and not a “working condition,” 29 C.F.B.. §§ 800.100, 800.145. Although such administrative interpretations are entitled to some deference, we cannot pay such homage to them so as to blind ourselves to the meaning of the legislative history as we read it.

      . For example, we need not address attention to Coming’s assertion that the actual work performed by night inspectors and day inspectors is essentially unequal in terms of skill, effort, and responsibility, see Shultz v. Wheaton Glass Co., 421 F.2d 259 (3d Cir.), cert. denied, 398 U.S. 905, 90 S.Ct. 1696, 26 L.Ed. 2d 64 (1970), since, as we hold, the night inspectors and the day inspectors were not working “under similar working conditions.”


source: Caselaw Access Project

author: RONEY, Circuit Judge:

license: Public Domain

text:
    In the Matter of TEXAS CONSUMER FINANCE CORPORATION, Debtor. FIRST SOUTHWEST CORPORATION et al., Appellants, v. TEXAS CONSUMER FINANCE CORPORATION, Appellee.
    No. 72-2663.
    United States Court of Appeals, Fifth Circuit.
    June 22, 1973.

      Bill F. Bogle, Fort Worth, Tex., for appellants.
    Atwood McDonald, Fort Worth, Tex., for appellee.
    Before COLEMAN, MORGAN and RONEY, Circuit Judges.
   RONEY, Circuit Judge:

Does a Bankruptcy Court have jurisdiction in a Chapter XI proceeding to order the surrender for cancellation of the outstanding preferred stock of the bankrupt corporation? We answer this question in the negative and reverse the order of the District ..Court.

In this proceeding under Chapter XI of the Bankruptcy Act, 11 U.S.C.A. § 701 et seq., Texas Consumer Finance Corporation, a Texas corporation, is the Debtor. The subject securities, 800 outstanding shares of preferred stock in Texas Consumer, are owned by First Southwest Corporation, an Oklahoma corporation, and John W. Grissom and Charles R. Grissom, as Trustees of First Southwest’s Employees Savings and Stock Plan Funds A and B. The Plan of Arrangement, funded by Colonial Commercial Corporation and approved by the Bankruptcy Court, had as a condition precedent to its effectiveness the provision that all shares of Texas Consumer preferred stock be submitted for cancellation. Although consummation of the Plan was conditioned upon such cancellation, the Plan did not require the owners to turn in such preferred shares.

Subsequently, after a hearing pursuant to a show cause order, the Referee entered an order requiring First Southwest and the Trustees to surrender their preferred stock for cancellation. The District Court affirmed the Referee’s order.

The controlling question presented by this appeal is whether the Referee had jurisdiction to enter the order. Although our review of the record indicates that the Referee might have had sufficient reasons for granting the relief set forth in the order, that order cannot stand if he did not have jurisdiction over the preferred shares and the preferred shareholders.

A brief review of the facts will show why the Referee sought control over the preferred shareholders.

John R. Grissom, a member of the Creditors Committee which recommended the Plan of Arrangement, was president of First Southwest, which owned 641 shares of Texas Consumer’s preferred stock, and, with his brother, was a Trustee of First Southwest’s Employees Funds, which owned 159 shares. He was also president of Lincoln Bank, an unsecured creditor of Texas Consumer with a note for $75,000. Although Grissom initially cast an affirmative vote in committee for the Plan, he later changed his vote at that meeting and subsequently maintained the position that the Creditors Committee was not the proper forum for discussion of the preferred stock.

Lincoln Bank accepted the Plan, but First Southwest and the Trustees refused to surrender their preferred shares. Grissom then offered Colonial, which was to fund the Plan, a “package” deal by which the Lincoln claim would be satisfied in full and the preferred shares would be surrendered for payment of $155,000.

Compliance with Grissom’s proposal would have resulted, the Referee found, in Lincoln’s receiving 100 percent of its claim while other creditors would have received only 56 percent of their claims and in First Southwest’s and the Trustees’ receiving 100 percent of the stated redemption price for their shares, which would have been

valueless in the event of an adjudication in bankruptcy and only worth twenty percent of redemption value in the event they had been surrendered for cancellation.

The Referee’s finding that Grissom’s conduct was “inequitable, unconscionable, or illegal” rested on several particulars, including

(1) his active participation in the Creditors Committee’s formulation of the Plan and subsequent refusal to comply;
(2) his failure to disclose to the Committee that First Southwest and the Trustees would not deliver their preferred shares for cancellation;
(3) his non-disclosure to the Court of his conflict of interest as a member of the Creditors Committee;
(4) his failure to disclose his change of vote to fellow Committee members;
(5) his failure to disclose his “package” during consideration of the Plan and his later insistence on its sale for $155,000 in apparent violation of 18 U.S.C.A. § 152;
(6) the fraud and breach of fiduciary duty occasioned by these failures to disclose. Woods v. City Nat’l Bank & Trust Co. of Chicago, 312 U.S. 262, 61 S.Ct. 493, 85 L.Ed. 820 (1941).

Having found that “Grissom’s wrongful conduct has tainted all the entities associated with him,” the Referee concluded that First Southwest, the Trustees, and Lincoln “can and will be forced to do equity.”

Grissom’s conduct, the Referee concluded, “shock [ed] the conscience of the Court”:

Grissom intended to withhold his Preferred shares from redemption unless he and his companies were paid in full for all their claims. He decided to “hold out” and “hold up.” He made no disclosure of his decision until after acceptance and confirmation of the Plan. In fact he took all steps possible to conceal his true intention from the other members of the Creditors Committee and the Court.

Because of this conduct, consequently, the Referee ordered the surrender of the preferred shares for cancellation. The basis of liability was an implied agreement made by the preferred shareholders through Grissom that the preferred shares would be submitted for cancellation in order to obtain approval of the Plan. The Referee found that Grisson was estopped to deny the agreement and also imposed on Lincoln’s claim certain conditions not in question on this appeal. The District Court adopted the Referee’s findings of fact and conclusions of law and accepted his reasoning to justify the Court’s authority to order this remedy.

Although the Trustee in Bankruptcy might prevail in a plenary action on the implied agreement found by the Referee, the merits of which we have not considered, the claim cannot be asserted in summary proceedings against the shareholders unless the Referee had jurisdiction to administer the preferred shares. • We find that the Referee confused his equitable powers to deal with matters and persons properly before him with his statutory jurisdiction. He asserted the equitable character of Bankruptcy Courts, see Bank of Marin v. England, 385 U.S. 99, 87 S.Ct. 274, 17 L.Ed.2d 197 (1966); Pepper v. Litton, 308 U.S. 295, 60 S.Ct. 238, 84 L.Ed. 281 (1939); Local Loan Co. v. Hunt, 292 U.S. 234, 54 S.Ct. 695, 78 L.Ed. 1230 (1934); DeMet v. Harralson, 399 F.2d 35 (5th Cir. 1968); Spach v. Bryant, 309 F.2d 886 (5th Cir. 1962), and, relying on these authorities, noted that “[t]he Court’s equitable powers are based as the circumstances of the case require, and their application demonstrates considerable ingenuity by the higher courts.” For example,

In Pepper v. Litton, swpra, and DeMet v. Harralson, supra, inequitable conduct by corporate officers and directors who were also creditors brought about a subordination of their claims to full payment of the other creditors. In Bank of Marin v. England, supra, “equitable principles” led to a recasting of Section 70(d) (5) of the Bankruptcy Act in the face of its plain language and clear legislative history. In Local Loan v. Hunt, supra, “equitable principles” led the Court to affirm an injunction by the Bankruptcy Court of a State Court action to enforce a pre-bankruptcy assignment of wages which had been held by the Illinois Supreme Court to be an undischargeable lien

The Bankruptcy Court is guided by equitable doctrines and principles, but only insofar as they are consistent with the Bankruptcy Act. See American United Mutual Life Ins. Co. v. City of Avon Park, Florida, 311 U.S. 138, 61 S.Ct. 157, 85 L.Ed. 91 (1940); S.E.C. v. United States Realty Co., 310 U.S. 434, 60 S.Ct. 1044, 84 L.Ed. 1293 (1940); Taubel-Scott-Kitzmiller Co., Inc. v. Fox, 264 U.S. 426, 44 S.Ct. 396, 68 L.Ed. 770 (1923); In Re Ross Sand & Gravel Inc., 289 F.2d 311 (6th Cir. 1961); Evarts v. Elroy Gin Corp., 204 F.2d 712 (9th Cir. 1953). The equity jurisdiction conferred by the Act merely empowers the Referee to employ the principles of equity in the exercise of his statutory jurisdiction. Jurisdiction of the Bankruptcy Court is framed by statute according to the particular proceeding involved under the Bankruptcy Act, and the Bankruptcy Court’s exercise of its equitable powers must be strictly confined within the prescribed limits of the Bankruptcy Act.

Chapter XI, comprising the section of the Bankruptcy Act pertinent to the case at bar, is a statutory variation of the common law composition of creditors for relief to unsecured creditors only. The provisions of an arrangement permitted under Chapter XI include those

modifying or altering the rights of unsecured creditors generally or of some class of them, upon any terms and for any consideration.

11 U.S.C.A. § 756. Under Chapter XI, the Bankruptcy Court’s jurisdiction is limited to the “debtor and his property, wherever located.” 11 U.S.C.A. § 711. No provision of the Act permits an arrangement proposed under Chapter XI to deal with the rights of secured creditors or with the rights of stockholders. See 9 Collier on Bankruptcy, ¶ 8.01 at 155 (14th ed. 1940).

Although Chapter X is designed to provide detailed safeguards for investors’ interests, Chapter XI provides “merely a rudimentary system of creditor control designed for the corporation which has only trade and commercial creditors.” S.E.C. v. United States Realty Co., supra, 310 U.S. at 437, 60 S.Ct. 1044. Thus, a Chapter X reorganization plan may affect the securities of the debtor corporation, but only the rights of the debtor’s unsecured creditors may be arranged under Chapter XI. The status of the debtor’s securities may not be altered. See S.E.C. v. American Trailer Rentals Co., 379 U.S. 594, 85 S. Ct. 513, 13 L.Ed.2d 510 (1965); S.E.C. v. United States Realty Co., supra-, see also 8 Collier on Bankruptcy, supra, at ¶ 2.07, et seq.

The background and interrelationship of Chapter X and Chapter XI have been reviewed by the Supreme Court in S.E.C. v. American Trailer Sales, supra-,

As part of the same Act in which Chapter X was enacted Congress also, in 1938, enacted Chapter XI. . . . The contrast between the provisions of Chapter X, carefully designed to protect the creditor and stockholder interests involved, and the summary provisions of Chapter XI is quite marked . . . [While Chapter X affords judicial control over the entire proceedings and expert, impartial administrative assistance in corporate reorganization,] the entire Chapter XI proceeding, for all practical purposes is in the hands of the debtor, subject only to the requisite consent of a majority in number and amount of unsecured creditors, § 362, and the ultimate finding by the court that the plan is, inter alia, “for the best interests of the creditors.” § 366.

379 U.S. at 605-606, 85 S.Ct. at 520; see General Stores Corp. v. Shlensky, 350 U.S. 462, 76 S.Ct. 516, 100 L.Ed. 550 (1956); S.E.C. v. United States Realty Co., supra. The purpose of Chapter XI, therefore, is merely to provide “a quick and economical means of facilitating simple compositions among general creditors who have been deemed by Congress to need only the minimal disinterested protection provided by the Chapter.” 379 U.S. at 606-607, 85 S. Ct. at 520. Since the Bankruptcy Court, in Chapter XI proceedings, has jurisdiction of only the debtor and his property and the corporate debtor has no property interest in the shares of its stock owned by its stockholders, the Court has no jurisdiction to order or restrain disposal of their stock. See S.E.C. v. American Trailer Rentals Co., supra; S.E.C. v. United States Realty Co., supra; In Re Journal-News Corp., 193 F.2d 492 (2nd Cir. 1953).

First Southwest and the Trustees were stockholders, not creditors of Texas Consumer, and the Bankruptcy Act does not confer on the Bankruptcy Court jurisdiction of such parties. The summary procedure which is the main thrust of Chapter XI requires that the debt- or and unsecured creditors themselves, without the delay and expense involved in protracted Chapter X proceedings, insure continuation of the business under a self-determined arrangement. The cases relied upon by the Referee sustained the equitable power of the Court as directed against creditors of the Bankrupt, not stockholders.

The Referee’s jurisdictional claim also rested on his finding that First Southwest and the Trustees, by filing claims under the Plan, consented to jurisdiction of them as creditors. This conclusion is erroneous for two reasons.

First, First Southwest and the Trustees withdrew their claims as they were entitled to do as a matter of right. Scholl Mfg. Co. v. Rodgers, 51 F.2d 971 (8th Cir. 1931).

Second, although some cases hold that summary jurisdiction may be conferred by consent, see, e. g., Katchen v. Landy, 382 U.S. 323, 86 S.Ct. 467, 15 L.Ed.2d 391 (1966); In Re Behring and Behring, 445 F.2d 1096 (5th Cir. 1971), the consent issue there concerns whether the Court should proceed summarily rather than by plenary proceedings. It is the mode of procedure that is the subject of consent. Jurisdiction of subject matter must be established before this question may even be raised, and it cannot be conferred by consent, agreement, or other conduct of the parties. See Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167 (1939); Harllee v. City of Gulfport, 120 F.2d 41 (5th Cir. 1941).

Finding that the Bankruptcy Court, albeit an equity court, has no jurisdiction of stockholders in Chapter XI proceedings, it is unnecessary for us to consider the merits of the District Court’s conclusion that First Southwest and Trustees were guilty of inequitable conduct.

Reversed.


author: AINSWORTH, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Robert Wayne ENGLAND, Defendant-Appellant.
    No. 72-3402
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    June 21, 1973.
    Rehearing Denied July 19, 1973.

      Randy Taylor, Dallas, Tex., for defendant-appellant.

      Frank D. McCown, U. S. Atty., Fort Worth, Tex., Charles D. Cabaniss, Asst. U. S. Atty., Dallas, Tex., for plaintiff-appellee.
    Before WISDOM, AINSWORTH and CLARK, Circuit Judges.

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

   AINSWORTH, Circuit Judge:

Robert Wayne England was indicted on ten counts of illegally using the mails to promote his intended scheme of defrauding various customers who paid fees for assistance in obtaining jobs overseas, in violation of 18 U.S.C. § 1341. Following a lengthy trial, the jury returned a verdict of guilty on all ten counts. On August 25, 1972, the district judge sentenced England to three years’ imprisonment on each count to run concurrently. Appellant principally contends that the district judge improperly excluded certain evidence relating to intent, failed to give jury instructions on good faith, and gave an .instruction which allowed the jury to return a verdict of guilty on less evidence than that required by the indictment. After reviewing these contentions as well as the other points of error raised in the appellant’s brief, we affirm.

England helped form World Wide Services, Inc., and served as its executive director and overseas correspondent. The corporation employed two other people who worked under him. During the short time that the corporation was in business from October 1970 until April 1971, it advertised promises of job placement in foreign locations. One typical customer, Matt Sims, responded to an advertisement placed in a Fort Worth newspaper in October. He was an instructor in refrigeration at an industrial training school. England told him of openings for a refrigeration specialist in Sydney, Australia, at a salary of $14,000 per year. Based on England’s further assurance that World Wide Services would arrange for the job to' start in January, Sims sent World Wide Services a check for $192.50 by certified mail. Subsequently, he received through the mail a contract which he signed and mailed back to World Wide Services. No job offers were forthcoming and World Wide Services did not refund the money.

I

The initial points of error relate to various evidentiary rulings by the district judge pertaining to appellant’s defense of good faith. First, appellant contends that the trial judge improperly excluded as hearsay the testimony of appellant and defense witness Aulda Helene Shields of a conversation England had with C. L. Harris of Harris International. This testimony would have told of representations by Harris to England that Harris had openings for one hundred people in jobs in Ecuador. Thus appellant contends that such evidence would have shown his good faith and that foreign jobs were in fact available. Although this evidence may arguably have been admissible under the state of mind exception to the hearsay rule, see McCormick’s Handbook of the Law of Evidence § 249, pp. 590-91 (2d ed. 1972) and Rules of Evidence for United States Courts and Magistrates 803(3), 56 F.R. D. 183, 300 (effectiveness suspended by Pub.L. 93-12, 93d Cong., 1st Sess., March 30, 1973, 87 Stat. 9), exclusion thereof by the Court was proper since it is clear that England did not promise any of the customers mentioned in the indictment that they would obtain employment in Ecuador.

Second, appellant contends that the district judge should not have excluded testimony about the contents of a letter England allegedly wrote to a prosecution witness advising him not to act hastily in selling his house in anticipation of employment abroad. However, England did not account for -loss of the copy of his letter from his files, other than to testify that the files “survived two. years, two kids, two dogs, and a house full of rats.” Because of such an •unsatisfactory explanation, the district judge properly excluded testimony about the contents of the letter as being contrary to the best evidence rule. See McCormick, supra, § 229, pp. 559-60 and Rules of Evidence, supra, 1002, 1004(1).

Third, appellant contends that the district judge should have permitted defense counsel to ask the victims who took the stand whether they would have dealt with England even if they had read newspaper articles based on the Dallas Better Business Bureau’s revelations of the fraudulent practices. The district judge correctly refused to allow such a hypothetical question which would have produced immaterial and subjective answers. See generally Shale v. United States, 5 Cir., 388 F.2d 616, 618, cert. denied, 393 U.S. 984, 89 S.Ct. 456, 21 L.Ed.2d 445 (1968).

In all of these evidentiary rulings the district judge acted within his discretion authorized by Rule 26 of the Federal Rules of Criminal Procedure.

II

Various jury charges relating to good faith were requested by the defendant and refused by the district judge. For example, one of defendant’s proposed instructions would have advised the jury that “the seller has the right to puff his property in an extravagant manner and to exault its value to the highest point,” and another instruction would excuse defendant’s false promises if they did not come true due to “business failure or for some other reason beyond Defendant’s control.” See generally United States v. Diamond, 5 Cir., 1970, 430 F.2d 688, 692; Green-hill v. United States, 5 Cir., 1962, 298 F.2d 405, 411; United States v. March, M.D.Pa. 1966, 251 F.Supp. 642, 645-646.

We agree with the district judge’s ruling which denied the requested instructions in the circumstances of this case, because the facts overwhelmingly refute any defense based on good faith. England did more than puff his services. He misrepresented among other things that 98 per cent of the applicants were successfully placed abroad.

III

The district judge instructed the jury in part as follows;

The Defendant is not on trial for errors in judgment; however, it is a principle of law that careless and false statements wilfully made without regard to whether they are true or false and put forth without reasonable basis for the purpose of obtaining money and property from another are also fraudulent.

This instruction varies somewhat from the indictment which charged England with making representations, “well knowing at the time that the pretenses, representations and promises, would be and were false when made.” Therefore, appellant contends that he was convicted on less evidence than that required by the indictment.

Recently, in United States v. Trexler, 5 Cir., 1973, 474 F.2d 369, we summarized the law relating to this issue and we noted that the Government need not prove all facts charged in the indictment as long as it proves other facts charged in the indictment which do satisfy the essential elements of the crime. See also United States v. White, 5 Cir., 1971, 451 F.2d 696, 698; Jackson v. United States, 1966, 123 U.S.App.D. C. 276, 359 F.2d 260, 262-265. Here an essential element according to the statute is intent “to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises,” and the indictment elsewhere did so charge the defendant. The passage in the indictment relied upon by appellant was mere surplusage. Accordingly, the district judge’s definition of “fraudulent” was consistent with the statute and the indictment.

Affirmed.


author: TIMBERS, Circuit Judge:

text:
    Harold MARSH, Plaintiff-Appellant, v. William A. KITCHEN and Ray T. Zakovicli, Defendants-Appellees, and United States of America et al., Defendants.
    No. 822, Docket 73-1040.
    United States Court of Appeals, Second Circuit.
    Argued May 8, 1973.
    Decided June 18, 1973.
    Howard B. Weinreich, New York City (Harold Baer, Jr., Jay M. Rosengarten, and Guggenheimer & Untermyer, New York City, on the brief), for plaintiff-appellant.
    Frank H. Wohl, Asst. U. S. Atty., New York City (Whitney North Seymour, Jr., U. S. Atty., and A. W. Fargo, III, Asst. U. S. Atty., New York City, on the brief), for defendants-appellees.
    Before SMITH, MULLIGAN and TIMBERS, Circuit Judges.
   TIMBERS, Circuit Judge:

On this appeal from summary judgment entered in the Southern District of New York, Inzer B. Wyatt, District Judge, dismissing the action against three federal law enforcement officers stationed in Missouri and served there with process, the essential issue is the propriety of the district court’s holding that it did not have personal jurisdiction over the Missouri defendants pursuant to the New York long arm statute, CPLR § 302(a)(1) and (2) (McKinney 1972).

Since we agree with the district court’s application of the law to the undisputed facts, we affirm.

I.

In April 1971, plaintiff Harold Marsh, a resident of New York, made a trip to Missouri. He flew to Kansas City, Missouri, rented an automobile at the airport, and drove to St. Joseph, Missouri, where he remained for a time. He then returned to New York.

At about the time Marsh was in Missouri, defendant Ray T. Zakovich, a special agent of the United States Secret Service stationed in Kansas City, Missouri, was conducting an investigation involving the passing of counterfeit currency in Missouri. As a result of what turned out to be mistaken identification, Zakovich on April 21 swore to a complaint before a United States Commissioner in the Western District of Missouri charging Marsh with passing three counterfeit $20 notes in violation of 18 U.S.C. § 472 (1970). Defendant William A. Kitchen, an Assistant United States Attorney for the Western District of Missouri, authorized Zakovich to file the complaint.

On the same day, April 21, based on Zakovich’s complaint, the Commissioner issued a warrant for the arrest of Marsh. By this time Marsh had returned to New York; so the Secret Service office in Kansas City by teletype notified the Secret Service office in New York that the warrant had been issued. Later the same day, defendants James Coppola and Michael Reilly, Secret Service agents stationed in New York, arrested Marsh at his place of business at Lake Success, New York. He was arraigned the same day.'

On the next morning, April 22, Kitchen and Zakovich in Missouri discovered the mistake in identification. The complaint was immediately dismissed. They promptly communicated with the Secret Service office in New York in an attempt to prevent the arrest but it was too late. All proceedings against Marsh were terminated on the morning of April 22. On May 4, Kitchen wrote to Marsh’s attorney explaining how the mistake had occurred and apologizing for any embarrassment and inconvenience caused Marsh.

Ten months later, on March 16, 1972, Marsh commenced the instant action in the Southern District of New York to recover $200,000 damages claimed to have been sustained as the result of violations of his constitutional rights and violations of New York law. The corn-plaint named as defendants the United States and eight individuals. Of the latter, process was served personally on the three Missouri defendants at Kansas City, Missouri.

After the pleadings were closed and certain discovery was completed, the three Missouri defendants on October 6, 1972 filed a motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) on the grounds that the court lacked personal jurisdiction over them, that service of process on them was insufficient and that venue as to them was improper. Treating the motion as one for summary judgment since matters outside the pleadings were presented to and considered by the court, Judge Wyatt on November 27 filed an opinion granting summary judgment in favor of the Missouri defendants; dismissing the action against them on the ground that the court lacked personal jurisdiction over them; and directing that final judgment be entered as to them pursuant to Fed.R.Civ.P. 54(b).

II.

Not only are the controlling facts not in dispute, but the parties agree that CPLR § 302(a)(1) and (2), which deals with personal jurisdiction with respect to acts of non-domiciliaries, also is controlling.

The record establishes that neither Kitchen nor Zakovich ever entered New York. They therefore could not have transacted business or committed a tortious act within the state in person. Marsh so concedes. He nevertheless argues that appellees transacted business and committed tortious acts in New York through their agents, within the meaning of Section 302(a)(1) and (2). He argues that the government agents who arrested and processed him in New York were the personal agents of appellees. Therefore, so the argument goes, the actions of these New York agents are attributable to appellees and provide the basis for personal jurisdiction over appellees.

New York law is clear as to what constitutes an agency relationship for purposes of Section 302(a). In Parke-Bernet Galleries, Inc. v. Franklyn, 26 N.Y. 2d 13, 256 N.E.2d 506, 308 N.Y.S.2d 337 (1970), a decision relied on by both sides as determinative, the New York Court of Appeals held that a traditional agency relationship must exist between the non-domiciliary and the alleged agent. There a non-domiciliary arranged to “attend” a New York auction via telephone by having an employee of the auctioneer relay bids to the non-domiciliary and by placing any bids he chose to make. The Court of Appeals relied upon the common law doctrine of the “borrowed-servant” to hold that, while a person may be in the general employ of another (the auctioneer), he could be loaned, for a given instance, to another (the non-domiciliary) as his agent. Considering the lengths to which the court went in Parke-Bernet to spell out a traditional common law agency relationship, it is doubtful that an unconventional agency relationship such as that asserted by appellant in the instant case, with no support in precedent, would provide a basis for personal jurisdiction under Section 302(a). McLaughlin, Practice Commentaries to CPLR 302, at 66-68 (McKinney 1972).

No such traditional agency relationship existed between appellees and the New York-based government agents. Appellees and the Secret Service agents stationed in New York are agents of a common principal — the United States —and not of each other. Each of the individual defendants in the instant case was required as part of his official duties as an agent of the United States to seek out and arrest violators of federal law. Because in this ease the suspected perpetrator committed a crime in Missouri and then travelled to New York, it was necessary to use federal agents in both states to effect his capture.

In no way, however, did the New York officers become agents of appellees. The notification by teletype that an arrest warrant had been issued certainly did not create an agency relationship. Gildenhorn v. Lums, Inc., 335 F.Supp. 329, 334-35 (S.D.N.Y.1971). It merely served to inform the New York agents as to certain action that had been taken in Missouri by other federal agents that was of concern to the New York agents. Furthermore, the New York agents were not acting on behalf of and subject to the control of appellees. Appellees did not stand to benefit from the arrest of Marsh. See Leaseo Data Processing Equipment Corp. v. Maxwell, 319 F. Supp. 1256, 1260-62 (S.D.N.Y.1970), modified, 468 F.2d 1326 (2 Cir. 1972). Only the United States government acting in the public interest stood to benefit. The New York agents were under the control of the warrant, which commanded the arrest of Marsh, and of-their own superiors in New York, who directed how and when the arrest should be made. Under the circumstances, the Secret Service agents located in New York were not acting as agents of appellees in executing the warrant for the arrest of Marsh.

We hold that appellees did not transact business, nor did they commit tortious acts, in New York in person or though their agents within the meaning of Section 302(a)(1) or (2). The district court did not have jurisdiction over the persons of appellees. Accordingly, the action was properly dismissed against them.

Affirmed.

      . The warrant was the standard Commissioner’s Warrant of Arrest and set forth the following command:
      “To any U.S. Marshal or any other authorized officer:
      You are hereby commanded to arrest Harold Marsh, and bring him forthwith before the nearest available United States Commissioner to answer to a complaint charging him with passing and uttering and publishing falsely made obligation or other security of the United States ... in violation of U.S.C. Title 18, Section 472.”

      . The complaint alleges two groups of claims, each as a separate cause of action.
      As a first cause of action, the complaint alleges violation of Marsh’s constitutional rights: to be secure against unreasonable searches and seizures (Fourth Amendment) ; to be free from deprivation of liberty without due process of law (Fifth Amendment) ; to assistance of counsel (Sixth Amendment) ; and to privacy (Ninth Amendment). These claims are grounded on the principles established in Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971). Federal question jurisdiction is asserted pursuant to 28 U.S.C. § 1331(a) (1970).
      As a second cause of action, the complaint alleges slander, defamation of character, invasion of privacy, false arrest, abuse of process, and malicious prosecution — all in violation of the law of the State of New York. Pendent jurisdiction is asserted with respect to these state claims. United Mine Workers v. Gibbs, 383 U.S. 715 (1966).

      . The three Missouri defendants referred are Kitchen, Zaltovich and Burt O. Hurn, United States Attorney for the Western District of Missouri.
      The other named individual defendants are: Robert A. Morse, United States Attorney for the Eastern District of New York; A. E. Whitaker, Chief of the United States Secret Service in New York City; James Coppola, Michael Reilly and James D’Amelio, Secret Service agents stationed in New York City.

      . Plaintiff has not appealed from the judgment to the extent that it dismissed the action against defendant Hurn.

      . CPLR § 302(a) (1) and (2) provides in relevant part:
      “(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nondomiciliary, or his executor or administrator, who in person or through an agent:
      1. transacts any business within the state; or
      2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; ....’’

      . By now it is well recognized that in both diversity and federal question cases a district court is authorized, pursuant to Fed.R.Civ.P. 4(e) and (f), to look to state law to determine in what manner and under what circumstances a party not present in the forum state can be subjected to the jurisdiction of a federal district court. United States v. First National City Bank, 379 U.S. 378, 381 (1965) ; United States v. Montreal Trust Co., 358 F.2d 239, 242-44 (2 Cir. 1966), cert. denied, 384 U.S. 919 (1966) ; Olin Mathieson Chemical Corp. v. Molins Organizations, Ltd., 261 F.Supp. 436, 441 (E.D. Va.1966) ; Japan Gas Lighter Association v. Ronson Corp., 257 F.Supp. 219, 231 (D.N.J.1966) ; Hoffman Motors Corp. v. Alfa Romeo S.p.A., 244 F.Supp. 70, 78-80 (S.D.N.Y.1965) ; Metropolitan Sanitary District of Greater Chicago v. General Electric Co., 35 F.R.D. 131, 135-36 (N.D.Ill.1964).

      . The New York courts have rejected ingenious attempts, such as the instant one, to construct an agency relationship. In Inkelas v. Inkelas, 58 Misc.2d 340, 295 N.Y.S.2d 350 (Sup.Ct., Bronx Co., 1968), for example, an abandoned wife sued her non-domiciliary husband to recover money she had expended to purchase necessaries for herself and her children. She contended that, since the law implies a promise by the husband to pay for necessaries, she therefore was acting as his agent in purchasing the necessaries. The argument was rejected.

      . Although the parties have not raised the issue before us, since it is a jurisdictional matter we have considered whether federal law might authorize the district court to exercise personal jurisdiction over appellees. We recognize that Congress may provide for service of process anywhere within the United States. See, e. g., Mississippi Publishing Corp. v. Murphree, 326 U.S. 438 (1946) ; Robertson v. Railroad Labor Board, 268 U.S. 619 (1925) ; To-land v. Sprague, 37 U.S. (12 Pet.) 300 (1838). But in the absence of a federal statute, or a procedural rule having the force of a statute, authorizing service of process on non-domiciliaries, such service is unavailable. See, e. g., Beaty v. M. S. Steel Co., 401 F.2d 157, 161 n. 4 (4 Cir. 1968), cert. denied, 393 U.S. 1049 (1969) ; Heiser Ready Mix Co. v. Fenton, 265 F.2d 277, 279 (7 Cir. 1959) ; Connor v. Miller, 178 F.2d 755 (2 Cir. 1949). But see Lone Star Package Car Co. v. Baltimore & Ohio Railroad Co., 212 F.2d 147, 153-55 (5 Cir. 1954). We have not found any federal statute or procedural rule which, either expressly or upon proper interpretation, authorizes extraterritorial service of process under the circumstances of this case.