source: Caselaw Access Project

license: Public Domain

text:
    SPITZER AKRON, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
    No. 74-1151.
    United States Court of Appeals, Sixth Circuit.
    Oct. 14, 1974.

      M. Alfred Roemisch, Donald N. Jaffe, Roemisch & Wright, Cleveland, Ohio, for petitioner.
    Elliott Moore, Deputy Asst. Gen. Counsel, Peter Nash, John Irving, Patrick Hardin, Paul Spielberg, Stephen D. Quinn, N. L. R. B., Washington, D. C., for respondent.
    Before PHILLIPS, Chief Judge, and McCREE and LIVELY, Circuit Judges.
   ORDER

This case is before the court on a petition to review and set aside the supplemental decision of the National Labor Relations Board of January 25, 1974 reported at 208 NLRB No. 80. Enforcement of a previous decision and order of the Board in this case was granted by this court in an order, reported at 470 F.2d 1000 (1972). Subsequently, upon application of the petitioner herein, the Supreme Court granted certiorari, vacated the judgment and remanded the case to this court “with instructions to remand case to the National Labor Relations Board for such further proceedings as may be appropriate in light of Burns International Security Services, Inc. v. NLRB, 406 U.S. 272, [92 S.Ct. 1571, 32 L.Ed.2d 61] (1972). FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 245-250, [92 S.Ct. 898, 31 L.Ed.2d 170] (1972); SEC v. Chenery Corp., 318 U.S. 80, 87-88, [63 S.Ct. 454, 87 L.Ed. 626] (1943); Bachrodt Chevrolet Co. v. NLRB, [411 U.S.] 912, [93 S.Ct. 1547, 36 L.Ed.2d 304 (1973)]; Denham v. NLRB, [411 U.S.] 945, [93 S.Ct. 1925, 36 L.Ed.2d 407 (1973)].” 411 U.S. 979, 93 S.Ct. 2272, 36 L.Ed.2d 955 (1973). In compliance with the mandate of the Supreme Court, on August 15, 1973 this court entered an unreported order remanding to the Board “for such further proceedings as may be appropriate” in light of the cases cited in the order of the Supreme Court.

The Board proceeded to reconsider the case without notifying the petitioner Spitzer Akron that the case had been re-docketed or affording it an opportunity to participate in any way. Thereafter the Board issued it's supplemental decision in which it adhered to its previous finding that Spitzer Akron had violated Section 8(a)(5) of the National Labor Relations Act and determined that “[N]othing in Burns requires the Board to change these findings.” The supplemental decision reaffirmed “the findings, conclusions, and remedy” of the original decision and order.

Implicit in the instructions accompanying the remand of the case to the Board was a requirement that the petitioner be given notice of the reconsideration of the case by the Board with an opportunity to present its views on the meaning of the Supreme Court opinions referred to therein and applicability to the facts of this case thereto, together with the right to petition to reopen proof in the case if it desires to do so. By not affording petitioner an opportunity to be heard and to participate in the reconsideration, the Board has failed to comply with the mandate of this court.

The petition for review is granted, and the cross-application for enforcement filed by the Board is denied. The supplemental decision and order of the Board entered on January 25, 1974 is set aside and the case is remanded to the Board for further proceedings consistent with the provisions of this order.


author: WEBSTER, Circuit Judge. PAUL X WILLIAMS, District Judge

text:
    William M. RICHARDSON, Appellant, v. KELLEY LAND AND CATTLE COMPANY, a corporation, Appellee.
    No. 74-1162.
    United States Court of Appeals, Eighth Circuit.
    Submitted May 17, 1974.
    Decided Oct. 21, 1974.
    Paul X Williams, J., filed a dissenting opinion.
    Newell E. Krause, Mobridge, S. D., for appellant.
    Terence A. O’Keefe, Aberdeen, S. D., for appellee.
    Before GIBSON, Chief Judge, WEBSTER, Circuit Judge and WILLIAMS, District Judge.

       The Honorable Paul X Williams, United States District Judge, Western District of Arkansas, sitting by designation.

   WEBSTER, Circuit Judge.

This is an appeal from the dismissal of an action to collect a real estate broker’s commission. We affirm. The following facts, as related in appellant’s brief, support our holding:

On May 13, 1971, William M. Richardson and Kelley Land and Cattle Co. entered into an exclusive listing contract in St. Paul, Minnesota. The listing contract entitled Richardson to a real estate broker’s commission provided he produced before May 1, 1972 a purchaser for the Katy Hereford Ranch, located in Brown and McPherson Counties in South Dakota. The listing contract specified that the purchaser pay $400,000 cash and that the date of possession of the ranch was “to be agreed upon.”

In June, 1971, Richardson learned that Deraid and Karen Holt were interested in buying the ranch. On April 24, 1972, Deraid Holt submitted a “uniform purchase agreement,” whereby he deposited $10,000 with Richardson and promised to pay to Kelley the remainder of the purchase price by December 1, 1972; the possession date named in this offer was May 5, 1972. 2Following Kelley’s rejection of this offer, Richardson arranged a meeting between Holt and James Kelley (President and Treasurer of defendant corporation), to be held in Aberdeen, South Dakota, on April 30, 1972, the last day on which Richardson could perform under the listing contract. No contract of sale was executed at that meeting; however, soon after Kelley had left to return to St. Paul, Holt decided that he could agree to a deferred possession date of December 1, 1972, a term upon which Kelley had insisted at the meeting. Richardson drafted a letter to this effect, which he mailed to Kelley on the same day. ' Subsequently, Richardson drew up a “uniform purchase agreement” incorporating the December 1, 1972 possession date specified in the letter and designating a closing date of June 1, 1972. The “uniform purchase agreement” further stated that $10,000 had been deposited with Richardson, that $30,000 would be payable on June 1, 1972, and that the final balance of $360,000 would be payable December 1, 1972. Kelley refused to accept this offer, contending it was “not a cash offer,” and this lawsuit followed.

Following a trial to the court, Judge Axel Beck dismissed the action on the ground that the offer procured by Richardson, as evidenced by the “uniform purchase agreement” drawn up after the meeting, did not satisfy the “cash sale” terms of the listing contract but instead specified deferred payments. We agree. The authorities cited in appellant’s own brief state that a “cash sale” is one wherein payment and delivery are concurrent. See 6 Words and Phrases 444-445 (1966) ; Huber v. Mul-lan, 246 F.Supp. 8, 16 (D.Md.1964), aff’d, 350 F.2d 872 (4th Cir. 1965). “Delivery,” however, refers not to the date on which possession is transferred, as Richardson implicitly argues, but rather to the closing date or the date on which the deed to the property is transferred. See 26 C.J.S. Deeds § 42 at 687 (1956): “[I]n determining whether the grantor intended delivery, the test is not whether the grantor has retained possession or control of the property conveyed, but rather whether he has retained possession or control of the deed.”

We cannot accept Richardson’s argument that the letter drafted on April 30 is alone determinative of the case. That letter, which referred to a $400,000 bid by the Holts and a possession date of December 1, 1972, expressly provided that a “Purchase Agreement” would be forthcoming. Thus, whatever the significance of this letter, it must be considered in the context of the “uniform purchase agreement” which followed. That document clearly states that payment of $360,000 of the purchase price would be deferred until the possession date, six months after the closing date. Moreover, the evidence of the negotiations contained in the record before us indicates that the Holts never intended to pay the full price in cash concurrent with or prior to the transfer of title.

In order to meet the “cash sale” terms of the exclusive listing contract, the Holts must have offered to .tender the full $400,000 on June 1, 1972, the date they had designated to close the purchase. Having failed to produce a purchaser ready, willing and able to comply with those exact terms, Richardson was entitled to no commission. See Larson v. Syverson, 84 S.D. 31, 166 N. W.2d 424, 426 (1969); Rossum v. Wick, 74 S.D. 554, 56 N.W.2d 770 (1953).

Affirmed.

PAUL X WILLIAMS, District Judge

(dissenting).

I respectfully dissent.

The undisputed facts in this case show that the landowner, by written contract, listed lands for sale with the broker. The listing required that the broker on or before a designated day produce a buyer who was ready, able and willing to buy the land for the price and according to the terms of the listing. In my opinion the undisputed facts show that the broker produced such a buyer within the prescribed time and therefore is entitled to his commission.

It must be borne in mind that the written listing by the landowner did not require the landowner to sell. It obligated him to pay the broker a commission if and when the broker produced a qualified buyer on or before the prescribed date.

The language of the written listing is not in dispute. The fact that a ready, willing and “anxious” buyer was produced by the broker is not in dispute. In my opinion, the “ability” of the buyer to buy for cash was amply demonstrated and nothing in the trial Judge’s opinion indicated to the contrary. This is all that the broker was required to do to entitle him to his commission.

The trial court and the majority here hold that because a contract of sale between the landowner and the prospective buyer was not executed within the exclusive listing period and the cash selling price paid within that period the broker did not produce a ready, able and willing buyer and is not entitled to his pay. But the facts are to the contrary. They show that the listing recited a cash selling price with a delivery of possession date “to be agreed upon.” No obligation to pay the cash price would arise until a delivery of possession date was agreed upon because either actual delivery of possession or a contractual substitute for such delivery is essential to a sale of land. It is elementary that the buyer has no obligation to pay an agreed cash selling price unless and until the seller agrees to sell.

In this case the landowner, for reasons satisfactory to himself, began to equivocate just as soon as he realized the broker had produced a buyer ready, able and willing to buy. And he had the right to retain his land — certainly he had not obligated himself to sell it.

But the actual contract for the sale of the land is not before the Court. The contract before the Court is the listing contract where the landowner contracted to pay a broker’s commission when a ready, able and willing buyer was produced within the prescribed time.

In my opinion the undisputed proof shows that the broker in apt time produced such a buyer and the Court should order the landowner to pay the contracted commission. The workman is worthy of his hire.

      . The closing date named was also May 5, 1972. •

      . Richardson filed this action in state court in South Dakota. Defendant Kelley removed the case to the United States District Court for the District of South Dakota. Federal jurisdiction was based on diversity of citizenship, 28 U.S.C. § 1332.

      . Richardson contends that the letter constituted a binding acceptance of Kelley’s offer to sell. It was Kelley’s position that the letter, together with the purchase agreement to which it referred, constituted a counteroffer because it changed or qualified the terms of the original offer.

      . We reject the argument that “closing date” meant something other than the date for transfer of title. The date of possession is a matter of contract, and may be deferred, but the transfer of title is of the essence of the sale of real property and an agreement to sell is “closed” on the date that sale is consummated by transfer of title.


author: HILL, Circuit Judge. WILLIAM E. DOYLE, Circuit Judge

text:
    Richard Brian SERMAN, Plaintiff-Appellant, v. UNIGARD MUTUAL INSURANCE COMPANY et al., Defendants-Appellees.
    No. 73-1814.
    United States Court of Appeals, Tenth Circuit.
    Oct. 18, 1974.
    William E. Doyle, Circuit Judge, dissented and filed opinion.
    W. Brent Wilcox, Salt Lake City, Utah, for plaintiff-appellant.
    H. Wayne Wadsworth, Salt Lake City, Utah, for defendants-appellees.
    Before HILL, MOORE and DOYLE, Circuit Judges.

       Of the Second Circuit, sitting by designation.

   HILL, Circuit Judge.

Richard Serman brought this declaratory judgment action against Unigard Mutual Insurance Company (Unigard) seeking a declaration that it was liable under a landlord-tenant liability insurance policy for injuries inflicted upon Serman by an insured landlord’s agent. The United States District Court for the District of Utah directed a verdict in favor of Unigard at the close of all the evidence, and Serman appeals therefrom.

Appellant Serman is a resident of Salt Lake City, Utah. Appellee, Unigard, formerly Northwestern Mutual Insurance Company, is a Washington corporation licensed to do business in the State of Utah. The relevant facts may be summarized as follows.

Herbert McArthur is the absentee landlord owner of a triplex apartment in Salt Lake City, Utah. He and his wife are the named insureds under an owners’, landlords’ and tenants’ liability insurance policy covering the rental premises. The policy obligates Unigard, the insurer, to:

pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
A. bodily injury, or
B. property damage
to which this insurance applies, caused by an occurrence and arising out of the ownership, maintenance or use of the insured premises and all operations necessary or incidental thereto ...

In addition to covering the named insureds, the policy also provided coverage to

any person (other than an employee of the named insured) or any organization while acting as real estate manager for the named insured

In January, 1971, McArthur employed Roger Mellies, a tenant, to take care of the premises in exchange for a monthly reduction in rent. Mellies’ duties were those of a handyman. He was to maintain the lawn, make minor repairs, keep the sidewalks free from snow and ice, and take out the garbage.

Mellies performed his duties without incident until August 27, 1971. Early in the morning on that date Serman was walking his dog past McArthur’s apartment complex. As he passed by his dog ran onto a driveway on adjoining property owned by one Schvaneveldt. Ser-man walked onto the driveway to retrieve the dog. At the same time Mel-lies was returning home from an evening out. Observing a man (Serman) and a dog on Schvaneveldt’s property, he entered his apartment, got his pistol, told his wife there was a prowler on the premises, and went outside.

At this time Mellies observed that Serman was now farther back on Schva-neveldt’s property. He told Serman to stop, said he had a gun, and asked Ser-man who he was and what he was doing. Although Serman testified that he replied, “Hey, I’m just getting my dog,” Mellies testified that Serman said nothing. Mellies then pointed the gun in Serman’s direction and pulled the trigger on an empty chamber. Serman started to leave, and walked toward the corner of the Schvaneveldt building. Mellies then fired a shot into the building and pursued Serman.

Upon rounding the corner of the building Serman found that he was virtually boxed in by the surrounding building and fences. When Mellies rounded the corner Serman jumped him and a fight ensued. During the scuffle the pistol discharged, striking Serman in the chest.

He instituted suit against Mellies in the District Court of Salt Lake County, Utah. Unigard was notified of the suit but refused to defend on the grounds Mellies was not a real estate manager under the policy, and therefore not an insured. Serman subsequently obtained a $56,058.25 judgment against Mellies.

On September 11, 1972, Serman instituted this declaratory judgment action against Unigard in the United States District Court for the District of Utah. The complaint requested that Mellies be declared an insured Under Unigard’s policy and that Unigard be declared liable for the judgment Serman obtained against Mellies.

Unigard answered and contended, inter alia, that Mellies was not a real estate manager within the terms of the policy and that Serman’s judgment against Mellies was procured by collusion. Additionally, Unigard contended that it had not received timely notice of Serman’s claim. Serman subsequently obtained a partial summary judgment on the issues of collusion and notice, and the case proceeded to trial.

At the close of all the evidence Uni-gard moved for a'directed verdict in its favor. The trial court found, inter alia, that even if Mellies was a real estate manager that he was not acting within the course of his authority as such at the time of the shooting and therefore was not an insured under the policy. Accordingly, Unigard’s motion was granted.

On appeal, Serman argues that the trial court erred in granting Unigard’s motion for a directed verdict because it misconstrued the nature of the action as one resting upon the principles of agency rather than insurance policy construction and coverage. The dispositive issues, Serman contends, were whether Mellies was an additional insured within the meaning of the policy terms and, if so, whether his injurious act, in the language of the policy, arose “out of the ownership, maintenance or use of the insured premises and all operations necessary or incidental thereto . . . . ”

Unigard concedes, for the purpose of this appeal, that Mellies was a real estate manager, and thus an insured. It nevertheless argues, inter alia, that he was not acting in that capacity at the time Serman was injured.

Seeking to bring Mellies’ act within the ambit of a real estate manager’s duties Serman urges the general rule that the terms of an insurance policy are to be liberally construed in favor of the insured. This rule is good law but is inapplicable here. Admittedly, it would be helpful in determining whether or not Mellies was a real estate manager. But that is no longer an issue. The policy expressly provides that a real estate manager is insured only while acting in that capacity for the named insured. The paramount question- is not whether Mellies was a real estate manager, for that has been conceded, but whether he was acting in that capacity at the time of appellant’s injury. Such a determination depends upon the authority conferred upon him by Mc-Arthur under general agency principles.

Considering the evidence in the light most favorable to Serman, we cannot conclude that Mellies was authorized by McArthur to perform security functions. The record discloses that his duties were (1) maintenance and upkeep of the grounds, (2) making minor -repairs, (3) receiving minor complaints from other tenants, (4) taking out the garbage, and (5) maintaining the tools and equipment used by him in the performance of these duties. He did not collect rent, advertise vacancies or show apartments. He had a key to no apartment but his own, and he consulted McArthur before undertaking any task not already mentioned.

McArthur testified, at trial, that he had owned the apartment complex for thirty-five years and had never experienced problems with prowlers. He stated that he never told Mellies to perform security functions on the premises but instead would expect him to call the police. Anything else, McArthur testified, would be beyond his responsibility. This testimony was corroborated by Mel-lies, who said McArthur had never told him to perform security functions. Thus it is clear that Mellies was not expressly authorized to protect the premises from alleged prowlers.

Nor do we believe that Mellies had any implied authority. Although the record indicates that Mellies thought protection of the premises was one of his duties, an agent can confer no authority upon himself. 2A C.J.S. Agency § 143, p. 763 (1972).

The implied and incidental authority of an agent . . . may not be extended beyond its legitimate scope, and should be deemed to include only such powers as are practically indispensable and essential in order to carry out the duties actually delegated to the agent. In order that an implied or incidental authority may exist, it must appear that the act to be done is proper, necessary or usual in order to promote the duty or to carry out the purpose expressly delegated to the agent; it is not sufficient that the act of the agent is advantegeous to or convenient for his principal . 3 Am.Jur.2d Agency § 71 (1962).

We find no evidence in the record that Mellies was authorized to perform security functions and must conclude that he was acting outside the scope of his authority at the time of the encounter with Serman and not in his capacity as a real estate manager. He therefore was not an insured under Unigard’s policy. Accordingly, we find that the trial court did not err in directing a verdict in favor of Unigard.

Affirmed.

WILLIAM E. DOYLE, Circuit Judge

(dissenting).

I respectfully dissent.

The appellee insurance company does not dispute the fact that Mellies was a real estate manager and as such was within the coverage of the insurance policy in question. However, the trial court determined that Mellies was not acting within the scope of his authority as a real estate manager at the time of the shooting.

As I view it the issue is whether Mel-lies was acting as a real estate manager for McArthur. The ultimate issue is whether the facts are such as to create an issue of fact,' a question which is to be determined by the same standard in the appellate court as in the trial court. See Swearngin v. Sears Roebuck & Co., 376 F.2d 637 (10th Cir. 1967). This standard is whether reasonable minds could differ based upon a consideration of the evidence in a light most favorable to the party against whom the decision was made. See Taylor v. National Trailer Convoy, 433 F.2d 569 (10th Cir. 1970).

Mellies testified that his duties included mowing, trimming, fertilizing and watering the lawn, removal of garbage, shoveling snow, cleaning the premises, taking care of the yard, taking care of the tools and making minor repairs. He also testified that it was his belief that he was required to protect the people and property. See R. 35, 75, 76, 77. He stated that the manner of performing his duties was left largely to him. McArthur, the owner, agreed with this. McArthur said that he did not supervise the manner of doing the tasks; that Mellies took responsibilities very seriously.

He said that he had not spoken to Mellies about trespassers since he had never had any. He said, however, that if a trespass had taken place requiring something to be done, Mellies would have done it. He stated further that he trusted Mellies and relied on his sense of responsibility. McArthur refused to testify as to whether Mellies would have been expected to protect the tenants from molestation.

One incident was mentioned at the trial in which McArthur was told about a problem. But on that occasion Mellies settled the dispute. This pertained to actions of a tenant which interfered with watering the lawn. McArthur did not object to Mellies’ handling of this.

Mellies testified that he had pursued plaintiff because of fear for his wife’s safety as well as because of concern for the property and safety of the other tenants, expecially the property stored in the garage which was near where the plaintiff was standing when Mellies first saw him on the night in question. The garage contained not only the property of the tenants, it contained tools and other property of McArthur.

The circumstances to my mind, at least, clearly warranted submission of the case to the jury since Mellies’ functions were not specifically restrictive.

I am of the opinion that the court erred in concluding as a matter of law that Mellies was not acting within the course and scope of his authority as a real estate manager and, secondly, in concluding that his pursuit of Serman was not an occurrence which arose out of the ownership and maintenance of the premises of the insured. Under the evidence, it was not possible for the court to conclude as a matter of law that Mel-lies was not acting as manager of the property in question but was engaged in some unrelated frolic of his own. Similarly, the activity was a probable consequence of his employment.

Restatement of Agency 2d § 228 contains a definition of implied authority and declares that the conduct must be of the kind the servant is employed to perform and must be substantially within the time and space limits; it must be actuated, at least in part, for the purpose of serving the master, and if force is intentionally used by the servant, its use must not be so foreign to the occupation as to be unexpectable by the master.

In reaching its conclusion as a matter of law the trial court predicated its ruling on the view that Mellies was merely a handyman. However, Mellies performed a vast variety of functions, whereby the jury could have concluded that protection was within his authorization. Furthermore, it is to be remembered that Mellies was the sole representative of the owner living on his property, and thus it would not be practical for him to seek out the advice of the owner in a situation calling for immediate protection. Indeed, whére this is the condition an agent is entitled to do what he reasonably believes to be necessary in order to prevent a substantial loss to the principal. See Restatement of Agency 2d § 47.

A case quite similar to ours is Guillen v. Kuykendall, 470 F.2d 745 (5th Cir. 1972). The jury was there allowed to determine whether a ranch owner’s teen-age son, who customarily protected ranch cattle from coyotes with a rifle, had authority to shoot at or over the head of trespassers on the land.

Finally, the trial court here placed emphasis on the fact that the incident occurred on adjacent property. This, however, is not a valid issue where the location is in close proximity to the property and is arguably related to it. See Restatement of Agency 2d § 234.

I do not suggest the proper outcome of this case or what I consider to be a proper determination of the issues, presented. I merely recognize that the evidence raises conflicting inferences and that the plaintiff was entitled to have his cause submitted to and determined by the jury.

      . Mellies testified that his actions were prompted by recent burglaries and rapes in the area.


author: JOHN W. PECK, Circuit Judge.

text:
    In re ESTATE of Herbert R. PENNEY, Deceased. Milton H. PENNEY, Executor, Petitioner-Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
    No. 73-1618.
    United States Court of Appeals, Sixth Circuit.
    Argued April 1, 1974.
    Decided Sept. 20, 1974.

      John C. Elam, William W. Ellis, Jr., Richard R. Stedman, Robert E. Leach, Vorys, Sater, Seymour & Pease, Columbus, Ohio, on briefs, for petitioner-appellant.
    Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Loring W. Post, Charles E. Anderson, Attys., Tax Div., Dept, of Justice, Washington, D. C., on briefs, for respondent-appellee.
    Before PHILLIPS, Chief Judge, and EDWARDS and PECK, Circuit Judges.
   JOHN W. PECK, Circuit Judge.

The issue involved in this appeal is whether the Tax Court properly applied Ohio law to the facts herein when it required that decedent’s transfers to his surviving spouse and charities in his will and revocable trust must be charged, in the absence of a clearly expressed intention to the contrary, with their pro rata share of the federal estate tax liability generated by his estate.

The facts are undisputed. Decedent, Herbert R. Penney, died testate on March 2, 1966 in Columbus, Ohio, leaving a probate estate valued at $4,722,687.00. For the purposes of this appeal the pertinent provisions of decedent’s will are:

“ITEM THREE: In the event that iny said wife, Anna Cornelia Penney, survives the date of my death, then and in that event I give and bequeath to her that part or portion of my estate which shall be equal to fifty per cent (50%) of the value of my adjusted gross estate as finally determined for Federal Estate Tax purposes, less the value of the property • which I have herein given my wife and less the aggregate amount of marital deduction, if any, allowed or allowable by reason of interests in property, including insurance proceeds, passing or which shall have passed to my said wife, Anna Cornelia Penney, otherwise than by the terms of this Will. Only such properties as shall qualify for the marital deduction, as such term is defined by the United States Federal Revenue Laws, shall be distributed to my said wife under the terms and provisions of this Item of my Will.
“ITEM FOUR: I hereby give and bequeath to the following named charitable organizations and institutions the amount set opposite the respective name of each to be used by such organizations or institutions at the discretion of their respective governing bodies for the general, public charita-
ble work now being carried on by said respective organizations and institutions, viz:
The Salvation Army of Columbus, Ohio
—Twenty-five thousand Dollars .. . ($25,000.00) Aladdin Crippled Children's Hospital Association, Inc., an Ohio Corporation of 34 North Fourth Street, Columbus, Ohio — Twenty-five thousand
Dollars ....................... ( 25,000.00)
The Florence Crittenden Home of Columbus, Ohio — Three Thousand Dollars .......................... ( 3,000.00)
The Hannah Nell Mission of Columbus,
Ohio — Three Thousand Dollars .... ( 3,000.00)
The Methodist Children's Home of The Ohio Conference, Worthington, Ohio
—Three Thousand Dollars ........ ( 3,000.00)
The Masonic Home, Springfield, Ohio —Five Thousand Dollars ......... ( 5,000.00)
* * * * -x- *
“ITEM TEN: All the rest, residue and remainder of my property and Estate of every kind and character, both real and personal, and wheresoever the same may be situated, including the portion of my estate hereinbefore in ITEM TWO of this my Last Will and Testament given and bequeathed to my wife Anna Cornelia Penney, should she predecease me I give, devise and bequeath to The Huntington National Bank of Columbus, Ohio, to be added by said Bank to the property and funds now constituting the principal of a Trust Estate held by the said The Huntington National Bank of Columbus, Ohio, as Trustee under the terms of and referring to a Trust entitled ‘Second Amended Trust Agreement’ dated September 30, 1948 by and between The Huntington National Bank of Columbus, Ohio and me; and to manage, control, and dispose of said property in all respects in accordance with the terms, provisions and conditions of said ‘Second Amended Trust Agreement’ in like manner as if said property had been a part of the initial Trust Estate.”

The trust referred to in Item 10 was valued at $9,765,372.00 at the date of decedent’s death, and was included in his gross estate for federal estate .tax purposes because he had retained both the right to receive income and the right to revoke the trust. By its terms, one half of the trust property was to be set aside in a separate trust for his widow as soon as possible after his death, and the other half was to be divided into three separate trusts for decedent’s children. The widow was to receive the income from her separate trust and had the right, which she later exercised, to withdraw the entire corpus of her trust at any time. Neither the will nor the trust agreement contained any provision regarding the allocation of the federal estate tax burden among decedent’s various beneficiaries and successors. As hereinafter appears, it was this circumstance that the Tax Court regarded as critical.

The executor (hereinafter Taxpayer) timely filed an estate tax return and paid the tax shown due thereon after obtaining a contribution from the trustee for the amount of the tax liability attributable to the inclusion of the trust assets in decedent’s estate. On the estate tax return Taxpayer claimed a charitable deduction for the full amount paid to charities from both the probate estate and the non-probate trust assets. He also claimed the maximum allowable marital deduction based upon the one half of the trust property set aside for, and subsequently paid to, decedent’s widow, plus the balance paid to her pursuant to Item 3 of decedent’s will. On audit, the Commissioner of Internal Revenue (hereinafter Commissioner) refused to apply Ohio's doctrine of equitable apportionment, and thus would not permit the distribution of the tax liability between the probate estate and the non-probate assets. He thus disallowed substantial portions of the marital and charitable deductions on the grounds that the probate estate contained insufficient assets to pay the bequests after payment of the estate tax generated by decedent’s estate. Since this interpretation would cause failure of the bequests in the will as well as an estate tax deficiency, the Taxpayer appealed to .the Tax Court.

The Tax Court held that apportionment of the estate tax liability was required by Ohio’s doctrine of equitable apportionment as set out in McDougall v. Central Nat’l Bank, 157 Ohio St. 45, 104 N.E.2d 441 (1952). The Tax Court held further that in the absence of decedent’s clear expression to the contrary in either his will or trust, the Ohio Supreme Court’s decisions in Campbell v. Lloyd, 162 Ohio St. 203, 122 N.E.2d 695 (1954), and Hall v. Ball, 162 Ohio St. 299, 123 N.E.2d 259 (1954), required that the marital and charitable transfers in the will and trust bear their pro rata share of the federal estate tax liability. This holding resulted in an increased estate tax liability since the allowable deductions must be reduced by the amount of the federal estate tax charged against them. The Taxpayer has perfected his appeal from this latter holding only.

It is well settled that how the ultimate impact of federal estate taxes will be borne is a question to be determined according to the law of the state of the decedent’s residence. Riggs v. Del Drago, 317 U.S. 95, 63 S.Ct. 109, 87 L.Ed. 106 (1942); Doetsch v. Doetsch, 312 F.2d 323 (7th Cir. 1963). Therefore, since Ohio has no apportionment statute, the Tax Court properly considered, and we must examine, the relevant state case law. United States v. Traders Nat’l Bank, 248 F.2d 667 (8th Cir. 1957).

Historically, where a decedent has died testate without specifically designating which beneficiaries must bear the federal estate tax burden, Ohio has followed the law as stated in Y.M.C.A. v. Davis, 106 Ohio St. 366, 140 N.E. 114 (1922), aff’d, 264 U.S. 47, 44 S.Ct. 291, 68 L.Ed. 558 (1924). That case held that, in the absence of the testatrix’s expressed intention in her will or elsewhere, the federal estate taxes would be considered a charge against the general assets of her estate payable prior to the distribution of the estate among the residuary charitable legatees. Thus the residuary legatees had to bear the federal estate tax burden and the beneficiaries of the specific bequests were exonerated. This result was based on the rationale that, by specifically providing for certain individuals and designating others to partake of what remained, the testatrix manifested an intention that those specifically provided for had a priority or preference over her other beneficiaries with respect to satisfaction of her administration expenses, including federal estate taxes. The court reached this conclusion in spite of the fact that it resulted in the exoneration of the recipients of the asssets which generated the estate tax while charging the recipients of the assets which did not generate any part of the tax. The case has subsequently achieved the status of the majority rule in non-apportionment states, and Ohio has even applied it to charge a surviving spouse whose inheritance qualified for the marital deduction, with a pro rata share of the tax burden when she took as a residuary beneficiary of her deceased husband’s will. Foerster v. Foerster, 54 Ohio Op. 441, 122 N.E. 2d 314 (P.Ct.1954).

Adherence to the law as set out in Y.M.C.A. v. Davis has not completely precluded the emergence of a doctrine of equitable apportionment in Ohio. The principal statement of this doctrine appears in McDougall v. Central Nat’l Bank, supra, 157 Ohio St. 45, 104 N.E.2d 441. There the corpus of an inter vivos trust, which was to pass to the decedent’s sister in the absence of her contrary testamentary disposition, was included in the decedent’s gross estate when she died intestate. Rather than impose the entire federal estate tax burden upon the widower, the Ohio Supreme Court, after rejecting the contention that this was the result the decedent intended, required an equitable contribution from the trustee of the non-probate trust assets since those assets generated additional estate taxes and thus contributed to the common obligation imposed on the estate. It is the proper application of the law reflected in these cases that is the essence of this appeal.

In their resolution of the problems posed in applying Ohio law to the case at bar the Commissioner and the Tax Court place significant emphasis on the effect of Campbell v. Lloyd, supra, and Hall v. Ball, supra, on McDougall, and Y.M.C.A. v. Davis. In Campbell the Ohio Supreme Court reversed its prior decision in Miller v. Hammond, 156 Ohio St. 475, 104 N.E.2d 9 (1952), where it had exonerated from federal estate tax liability the share of the “net estate” a surviving spouse received under § 10503-4 of the Ohio General Code when she elected to take against the will. Faced with this situation again, this time after Mc-Dougall had been decided, the Campbell court decided that the term “net estate” in § 10504-55 of the Ohio General Code referred to the same property as the statute construed in Miller and described the amount of property which remained in the estate after the deduction of the federal estate taxes. Thus the share of the surviving spouse was no longer exonerated. In arriving at this decision the court, frankly motivated by the inequitable result permitted by the statutory interpretation in Miller, stressed that the statute would not permit an equitable apportionment. A short time later, in a per curiam opinion based only on Campbell, the Ohio Supreme Court decided Hall. Here it held that a charitable legatee, who had been bequeathed a percentage of the residue of the testatrix’s estate, took a percentage of the residue remaining after the deduction of the federal estate taxes, and thus was not exonerated.

On the basis of these decisions the Commissioner and the Tax Court take the position that there is no exoneration in Ohio absent a clear expression in decedent’s will that such is his intention. Taxpayer submits that this is an incorrect interpretation of Ohio law. He argues essentially that Y.M.C.A. v. Davis should control the allocation of the tax burden among the beneficiaries of decedent’s will, that McDougall should control the allocation of the tax burden among the recipients of the non-probate assets, and that Campbell and Hall have no effect on the position he advocates. We first consider the parties’ contentions concerning the law governing the non-probate assets.

With respect to Ohio Supreme Court cases, we remind that the law of the case is contained in the syllabus. Cassidy v. Glossip, 12 Ohio St.2d 17, 231 N.E.2d 64 (1967). The first syllabus of McDougall reads as follows:

“1. Where assets outside of the probate estate are included in a decedent’s taxable gross estate for estate tax purposes and such inclusion increases the federal estate tax and where -the decedent has expressed no intention by will or otherwise as to the ultimate impact of that tax, an equitable portion of the burden of the federal estate tax should be apportioned against such assets outside of the probate estate, in the absence of a state statute requiring a different result. if

This language clearly indicates that, in the absence of a clear expression of decedent’s intent on the subject, where the inclusion of non-probate assets in the decedent’s gross estate results in additional .tax liability, apportionment of the federal estate tax burden should be made. Conversely, it appears that if the non-probate assets do not generate any additional tax liability, no apportionment should be made. Syllabus 4 of McDougall sets out how the estate tax liability will be allocated when apportionment is proper under Syllabus 1.

“4. In determining the share of the common obligation represented by the estate tax which should be allocated to nonprobate assets, the value for estate tax purposes of nonprobate assets which had an effect in generating estate tax liability should be compared with the value for estate tax purposes of probate assets which had that effect. There should then be allocated on that basis to nonprobate and probate assets respectively their proportionate shares of the whole estate tax liability.”

From this it is clear that the portion of the total tax liability allocated to the non-probate assets depends not upon the value of all non-probate assets, but only upon the value of the non-probate assets that “had an effect in generating estate tax liability.” If some of the non-probate assets were deductible from the decedent’s gross estate they would not generate any additional taxes, would not result in any taxes being allocated against the non-probate assets, and thus it would seem that from an equitable viewpoint, they should not be charged with any part of the tax liability.

The Ohio Supreme Court did not reach this specific question in McDougall since all of the non-probate trusts assets involved in that case generated additional federal estate taxes. The Commissioner argues, and apparently the Tax Court agreed, that the result indicated by the language of McDougall quoted above and advocated by the Taxpayer is prohibited by a policy “disfavoring exoneration” emanating from Campbell and Hall.

Initially we note that the Commissioner’s interpretation of the law on this matter is inconsistent with the plain meaning of the above quoted language. But more importantly, even though such an interpretation does relieve the probate estate of that part of the liability it did not generate, it fails to accomplish the general purpose behind apportionment since the additional taxes assessed against the non-probate trust assets are not apportioned among the recipients of the various gifts or benefits in proportion to the amount of tax generated by each gift or benefit. Instead it results in recipients of gifts or benefits being charged with part of a burden to which they did not contribute, and ultimately results in a larger tax liability being imposed on the decedent’s estate and thus on all his benefactors. This is not the result achieved in McDougall, nor a result which is equitably justifiable, and it cannot be sustained absent a clear mandate from the Ohio Supreme Court that it is required.

As earlier noted, Syllabus 1 of Mc-Dougall specifically states that even if the prerequisites of the absence of the testator’s intent and an increased tax liability are met, apportionment is only applicable “in the absence of a state statute requiring a different result.” It is undisputed that such a statute was before the court in Campbell, and it clearly required the “different result” reached in that case. Moreover, the court specifically recognized this distinction:

“The widow further contends that ‘the concept of equitable apportionment " * * established’ in Miller v. Hammond, supra, was ‘restated and applied’ in McDougall, Admr. v. Central National Bank of Cleveland, Trustee, 157 Ohio St., 45, 104 N.E.2d, 441. That case dealt with apportionment of the estate tax between assets which were a part of the decedent’s estate under the law of this state (referred to therein as ‘probate assets’) and assets which were not but which were taxed by the federal government as though they were (referred to therein as ‘nonprobate assets’). There was no statute which was inconsistent with an equitable apportionment of the federal estate tax burden between the probate and the nonprobate assets. ...” 162 Ohio St. at 209, 122 N.E.2d at 698.

Thus Campbell cannot be considered decisive authority for the contention advanced by the Commissioner.

There was no statute involved in Hall inconsistent with an equitable apportionment. But that does not mean that as a result of being cited as the only authority for Hall, Campbell has been expanded so as to prohibit any exoneration otherwise indicated by McDougall. A careful comparison of these cases indicates both their consistency as well as their limitation.

While the source of the rights claimed by the spouse in Campbell was a statute, the source of the rights claimed by the legatee in Hall was the will of the testatrix. As the will was construed the charitable legatee was classified as a residuary beneficiary, traditionally the position of lowest priority with respect to the satisfaction of the testator’s debts. 2 C. Davies, Ohio Probate Practice 529 (6th ed. 1973). In the absence of decedent’s direction it would have been inconsistent to exonerate one beneficiary while charging the remaining beneficiaries who are identically situated, particularly when it is remembered that it was the pronouncement of the testatrix which classified the beneficiaries in the first place. Moreover, such a result would lead to an inequity similar to that which motivated the Campbell court, since the charitable legatee’s percentage of the residuary would be figured on a larger “net estate” than the percentages of the remaining residuary legatees. Simply stated, both cases relied upon by the Commissioner prohibit exoneration when it would be inconsistent with the source of the recipients’ rights, be it a statute or the will of the testator. However, they do not require that the clear language of McDougall should be ignored and transfers of non-probate assets should be charged where, as in McDougall and the case at bar, no statute or pronouncement of the testator requires such a result. Therefore, we conclude that, to the extent the transfers of non-probate assets involved herein do not generate tax, Ohio would not charge them, and the Tax Court decision to the contrary must be reversed.

Next we turn to the probate aspect of this case. Here Taxpayer argues that Y.M.C.A. v. Davis should be controlling and thus that entire federal estate tax burden attributable to the probate estate should fall upon Item 10, which he construes to be the residuary clause. The Commissioner apparently does not dispute Taxpayer’s construction of the wi! but instead argues that the law advocated by Taxpayer no longer controls in Ohio in light of his reading of McDougall, Campbell and Hall.

In this regard, we note that the cardinal rule of will interpretation in Ohio is to ascertain and give effect to the meaning and intent of the testator’s language in his will. 56 O.Jur.2d Wills § 519 (1963). As mentioned previously, the Commissioner’s reading of Ohio law here and with respect to the non-probate assets would result in not only shifting the tax burden, but would also cause reduction of both the marital and charitable deductions as well as an increase in the estate’s overall tax liability of $2,344,746.55. In rejecting interpretations which would lead to similar results, both federal and state courts have considered the notion that such a result was intended by the testator as being “incredible” and contrary to what one would presume a testator’s normal intent to be; that is, to maximize his deductions and minimize his tax liability. Dodd v. United States, 345 F.2d 715 (3d Cir. 1965); Gesner v. Roberts, 88 N.J.Super. 278, 212 A.2d 43 (1965); Case v. Roebl-ing, 42 N.J.Super. 545, 127 A.2d 409 (1956). Examination of Penney’s will indicates that he also did not intend the result advocated by the Commissioner. This is particularly evident when it is considered that' Item 3 of the will is framed in the traditional language of a formula marital bequest, and, as the Tax Court noted, is “designed to increase to 50 percent of the adjusted gross estate the amount of all property passing to his [decedent’s] spouse which qualified for the marital deduction.” Under these circumstances we are not persuaded that the result advocated by the Commissioner was intended by the testator as a consequence of the omission of a “tax clause.” The question remains whether the trio of cases cited by the Commissioner and the Tax Court require such a result, when the application of Y.M.C.A. v. Davis would not.

As previously noted the decedent in McDougall died intestate, and thus no issue of apportionment of federal estate taxes among the beneficiaries of the decedent’s will was involved in that case. In addition, the McDougall court specifically distinguished the two cases directly involved here on that basis:

“The instant case is not like Young Men’s Christian Ass’n. v. Davis, supra, where, by the terms of her will, the testator indicated a preference for certain legatees by providing for them specifically and then specifically stating that what was left was to go to other legatees. In such an instance, especially where only probate assets are involved, it is apparent that those who are designated by the testator to take what is left over were intended by the testator to bear the burden of the debts, estate tax and other obligations of the estate, while the testator did not intend that those who were specifically provided for were to bear that burden.” 157 Ohio St. at 57, 104 N.E. 2d at 447.

Thus the court was not only not confronted with a Y.M.C.A. v. Davis factual situation, but also specifically sought to insure that its adoption of equitable apportionment in a case where the decedent died intestate would not be construed to prohibit any exoneration otherwise permitted by that case in a situation where the decedent’s intent was evident from the terms of his will. So reconciled, McDougall does not alter the law set out in Y.M.C.A. v. Davis.

The same may be said as far as Campbell is concerned in view of the Ohio law that the widow’s election to take against the will removes it from the case as far as she is concerned. Weeks v. Vandeveer, 13 Ohio St.2d 15, 233 N.E.2d 502 (1968) ; Winters Nat’l Bank & Trust Co. v. Riffe, 2 Ohio St.2d 72, 206 N.E.2d 212 (1965). Hall, on the other hand, is not as easily distinguishable since it involved the construction of a will and dealt with an issue similar to the one considered in Y.M.C.A. v. Davis. However, it does not constitute an abandonment of the principles reflected in that case. It holds only that a residuary charitable legatee is not exonerated from federal estate tax liability absent an expression of such an intent from the testator. This is wholly consistent with the traditional view of the position occupied by residuary legatees and with the decision in Y.M.C.A. v. Davis. Hall does not hold that the testator’s specific bequests are chargeable with a portion of the tax burden, nor does it hold that all charitable bequests, whether specific or residuary, must bear a portion of the tax burden. It simply does not reach these questions. Suffice it to say that, in view of the distinction drawn in McDougall and the restrictive approach adopted in Campbell, Hall, neither alone nor in conjunction with the other cases, alters the law of Y.M.C.A. v. Davis, or requires the harsh result advocated by the Commissioner and reached by the Tax Court.

The decision of the Tax Court is reversed, and the case remanded for a re-computation of any estate tax due in accordance with the foregoing opinion.

      . Estate of Herbert R. Penney, Deceased, Milton H. Penney, Executor, Petitioner v. Commissioner of Internal Revenue, Respondent, 59 T.C. 102 (1973).

      . Int.Rev.Code of 1954 § 2056(b)(4)(A); Estate Tax Regs. § 20.2056(b)-4(c). Although the various provisions governing the deductibility of marital and charitable transfers differ in wording and operation, the net effect in the circumstances involved herein is sufficiently similar that, for the purposes of this appeal, they will be treated as operating in the same manner.

      . Cox v. United States, 421 F.2d 576 (5th Cir. 1970). See 4 J. Rabkin & M. Johnson, Federal Income Gift and Estate Taxation § 53.04B (4), (1974).

      . General Code § 10503 — 4, Ohio’s Statute of Descent and Distribution, is substantially unchanged in O.R.C. § 2105.06 (1968) and read, in pertinent part, as follows:
      “When a person dies intestate having title or right to any personal property, or to any real estate or inheritance in this state, such personal property shall be distributed, and such real estate or inheritance shall descend and pass in parcenary, except as otherwise provided by law, in the following course:
      “2. If there be a spouse and one child, or its lineal, descendants, . surviving, one-half to the surviving spouse and one-half to such child or its lineal descendants, per stirpes.
      “3. If there be a spouse and more than one child, or their lineal descendants, surviving, one-third to the surviving spouse and the remainder to the children equally, or to the lineal descendants of any deceased child, per stirpes.”

      . General Code § 10504-55, Ohio’s jirovision permitting the spouse’s election against the will, is substantially unchanged in O.R.C. § 2107.39 and read, in pertinent- part, as follows :
      “After the probate of the will and filing of the inventory, appraisement and schedule of debts, the Probate Court on the motion of the executor or administrator, or on its own motion, forthwith shall issue a citation to the surviving spouse, if any, to elect whether to take under the will or under the statute of descent and distribution. In the event of election to take under the statute of descent and distribution, such spouse shall tahe not to exceed one-half of the net estate. . . . ”

      . 162 Ohio St. at 206, 122 N.E.2d at 697:
      “Such a decision, however, results in the widow receiving as her ‘one-half of the net estate’, somewhere between $286,000 and $296,000 (or between 37 per cent and 42 per cent) more than all the others entitled to share in the estate. In view of this result, we are inevitably though reluctantly led to a reconsideration of our decision in Miller v. Hammond, supra."

      . See 37 A.L.R.2d 215 (1954) ; Kahn, The Federal Estate Tax Burden Borne By A Dissenting Widow, 64 Mich.L.Rev. 1499, 1507-09 (1964).

      . 5 Bove-Parker Revision: Page on Wills § 38.15 (1962).

      . Supra note 1, 59 T.C. at 105.


author: BRIGHT, Circuit Judge.

text:
    UNITED STATES of America, Appellee, v. Louis R. HOOG, Appellant.
    No. 74-1259.
    United States Court of Appeals, Eighth Circuit.
    Submitted Sept. 11, 1974.
    Decided Oct. 15, 1974.
    Rehearing Denied Nov. 8, 1974.
    Certiorari Denied March 3, 1975.
    See 95 S.Ct. 1349.

      George D. Blackwood, Jr., Kansas City, Mo., for appellant.
    J. Whitfield Moody, Asst. U. S. Atty., Kansas City, 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.

   BRIGHT, Circuit Judge.

The defendant-appellant, Louis R. Hoog, after trial before a jury, stands convicted on three counts of violating 18 U.S.C. §§ 2 and 1201(a). The trial court sentenced him to life imprisonment on each count subject to the provisions of 18 U.S.C. § 4208(a)(2), with the sentences to be served concurrently. He appeals from the judgment, claiming several errors in the conduct of the trial.

A review of the facts upon which Hoog’s conviction is based will aid in evaluating the merit, if any, of his appeal. At the time of the occurrence of the alleged offenses Hoog was self-employed as an electrician. He had been so employed since 1968. He had earlier been hospitalized for a form of schizophrenia. Hospitalization took place between 1954 and 1962, at irregular intervals, during his release on parole following a term of federal imprisonment and during a subsequent term of imprisonment for a state conviction of statutory rape. There is no evidence that Hoog was at any time hospitalized or treated for any mental condition between 1962 and the commission of the offenses with which he was charged, in May and August of 1973. We briefly recount the details concerning each charge.

Count I: On May 9, 1973, Hoog’s son by a common law marriage, Jerry Mills, induced one Tracy Eybel, age 16, to accept a ride in his pickup truck. She accepted his offer of a ride with the understanding that Mills would drive her to her home. She entered the truck shortly after midnight at her place of employment in Kansas City, Missouri. Shortly after Mills had begun to drive in the direction of Ms. Eybel’s home, he received a message over a radio receiver located in the cab of the truck. Explaining to Ms. Eybel that an emergency had arisen, he thereupon turned the truck about and began driving in the opposite direction. He soon met the defendant, who joined him and Ms. Eybel in the truck. Whether the truck was in Missouri or Kansas at the time that Hoog entered it was not established by the evidence. Hoog rode with Mills and Ms. Eybel to within two or three blocks of Mills’ destination in an industrial area of Kansas City, Kansas. Hoog then departed the couple on the pretext of obtaining parts for some repair job. Mills then took Ms. Eybel to a deserted building and raped her. Hoog appeared on the scene soon thereafter and also raped her. Hoog and Mills then drove her home, at the same time offering their apologies for the assaults.

Count II: On August 1, 1973, Hoog induced one Patricia Justice, age 17, to accept a ride in his camper truck. She accepted his offer in the belief that he would drive her to his office for a job interview as a receptionist. She entered the truck in Kansas City, Missouri. Hoog then drove her to the same building in Kansas City, Kansas, where he and Mills had previously raped Ms. Eybel. He informed Ms. Justice that this would be her place of employment. He then briefly entered the building for the purpose of placing a telephone call. Upon returning to the truck, he drove her to a bar, where he placed another telephone call. He then drove her to an apartment complex in Lenexa, Kansas, where he met with Mills and introduced Mills to Ms. Justice as the person who would interview her for the position as a receptionist. Mills arranged to meet with Ms. Justice later in the afternoon to discuss the job. Hoog then drove her back to the bar; Mills soon joined them there. After Mills had arrived, Hoog excused himself, saying that he had to return home to his wife. Mills' then proceeded with Ms. Justice to a motel in Missouri. Once at the motel, Mills led her into one of its units and physically assaulted her. In the course of the beating, Hoog appeared and offered to take her home. Hoog then drove Ms. Justice into Kansas and stopped his automobile in open country. Mills pulled up behind him, left his vehicle, and forcibly removed Ms. Justice from Hoog’s car. As Mills was removing her, Hoog explained to Ms. Justice that he (Hoog) was “sorry” but that he had to “go home to my wife.” Hoog departed and Mills then drove Ms. Justice to a remote area where he beat and raped her. After this assault, Mills returned to the motel with Ms. Justice. The following morning Hoog appeared at the motel and spoke briefly with Ms. Justice, offering her the services of his family physician. Mills then drove her home.

Count III: On August 3, 1973, the day after Hoog had last spoken with Ms. Justice, Hoog offered a ride to one Karen Hughes, age 18, a hitchhiker. Ms. Hughes was seeking a ride to her home and Hoog agreed to take her there. Hoog then offered her a job at a pay of $125 weekly. Shortly after she had entered his automobile in Kansas City, Missouri, Hoog received a message over a radio receiver located in the front seat of the car. He thereupon explained that he must return to his office and that Ms. Hughes could apply for the job there. Hoog drove to Kansas City, Kansas, and stopped at the same building where he had earlier raped Ms. Eybel. He entered the building and then returned to the automobile. He then departed with Ms. Hughes, representing that he had urgent business to attend to and that he would eventually take her home. After making some additional stops, Hoog drove her to a remote area and raped her. He then drove her home, apologizing for his conduct.

Both Hoog and Mills were indicted on all three counts for

wilfully, knowingly and unlawfully * * * [transporting] in interstate commerce from Kansas City, Missouri, to the State of Kansas [Tracy Eybel, Patricia Justice and Karen Hughes], who had theretofore been unlawfully inveigled, decoyed, and carried away and held * * * for the purpose of rape, in violation of Title 18, United States Code, Section * * * 1201(a) * * *

Hoog was indicted as an aider and abettor of Mills on counts I and II.

Hoog seeks reversal of his conviction on several grounds. First, he contends that the court’s ruling that he was mentally competent to stand trial was clearly erroneous. This contention utterly lacks support. Following commitment to the Medical Center for Federal Prisoners in Springfield, Missouri, where he was diagnosed as competent to stand trial, Hóog was afforded a competency hearing by the court. The record discloses that there was ample evidence by which the court could reasonably have concluded that Hoog was competent to stand trial. Such a determination is for the trial court to make. E. g., United States v. Davis, 365 F.2d 251, 256 (6th Cir. 1966). See United States v. Mercado, 469 F.2d 1148, 1152 (2d Cir. 1972); United States v. Maret, 433 F.2d 1064, 1067 (8th Cir. 1970), cert. denied, 402 U.S. 989, 91 S.Ct. 1678, 29 L.Ed.2d 155 (1971).

Second, Hoog contends that the court erred in denying his request for a severance of the three counts and a separate trial on each. He reasons that the alleged offenses occurred on different dates so as to constitute distinct offenses and that trial of the three counts together might lead the jury to cumulate evidence from one count to the next. On the facts and record of this case, our previous views in Johnson v. United States, 356 F.2d 680 (8th Cir.), cert. denied, 385 U.S. 857, 87 S.Ct. 105, 17 L. Ed.2d 84 (1966), are dispositive:

Under Rule 8(a), Federal Rules of Criminal Procedure, joinder of offenses is ordinarily appropriate where, as here, the specific counts refer to the same type of offenses, occurring over a relatively short period of time, and the evidence as to each count of necessity overlaps. The prime consideration in determining whether or not to grant a severance is the possibility of prejudice to the defendant in conducting his defense. Weighing the danger of confusion and undue cumulative inference is a matter for the trial judge within his sound discretion. His denial of severance is not grounds for reversal unless clear prejudice and abuse of discretion is shown. There has been no such showing here. It is not enough simply to show that such join-der makes it more difficult to defend.
[Id. at 682.]

See also United States v. Chrisco, 493 F.2d 232, 239 (8th Cir. 1974); United States v. Skillman, 442 F.2d 542, 554-556 (8th Cir.), cert. denied, 404 U.S. 833, 92 S.Ct. 82, 30 L.Ed.2d 63 (1971). Moreover, we note that Hoog was not tried with Mills, thereby minimizing the possibility that the jury would impute evidence of Mills’ criminal conduct, particularly with respect to count II, to Hoog. Cf. United States v. Mankins, 497 F.2d 1265, 1266-1267 (4th Cir. 1974) ; United States v. Roell, 487 F.2d 395, 402 (8th Cir. 1973).

Third, Hoog asserts that the court erred in denying his motion for a new trial or for judgment of acquittal notwithstanding the verdict on the ground that he was insane as a matter of law at the time of the alleged offenses. Insanity at the time of the offense is a question for the jury. E. g., United States v. Archer, 450 F.2d 1106, 1108 (8th Cir. 1971), cert. denied, 405 U.S. 1044, 92 S.Ct. 1329, 31 L.Ed.2d 586 (1972); Beardslee v. United States, 387 F.2d 280, 295 (8th Cir. 1967); Alexander v. United States, 380 F.2d 33, 37-38 (8th Cir. 1967). After considering evidence of Hoog’s satisfactory self-employment for five years immediately preceding the offenses, uninterrupted by any hospitalization or treatment for mental illness; testimony by the Government’s expert witness (Dr. Taub) to the effect that Hoog’s schizophrenia was in a state of remission at the time of the offenses; and testimony of the Government’s expert witness (Dr. Marco) to the effect that Hoog’s behavior during the alleged offenses reflected a substantial capacity to appreciate the wrongfulness of his conduct, the jury could reasonably have concluded that Hoog was not insane.

Fourth, Hoog argues that the court erred in not granting him a new trial or a judgment of acquittal for the admission of what he characterizes as irrelevant and prejudicial evidence. He contends that by admitting five color photographs of Ms. Justice, taken August 3, 1973, and showing cuts and abrasions inflicted by Mills, and by admitting testimony on the subject of Mills’ beating of Ms. Justice, the court predisposed the jury to sympathize with the victim, thereby unduly prejudicing Hoog, who had not participated in the beating. Were Hoog not charged in count II with aiding and abetting Mills, this line of reasoning might prove persuasive. It is noteworthy, however, that Hoog was charged in count II with both kidnaping Ms. Justice and aiding and abetting Mills in her kidnaping. As an aider and abettor, Hoog is subject to punishment for Mills’ conduct. Hence, Mills’ conduct is directly relevant to the issue of Hoog’s guilt, and the trial court properly admitted evidence of the same. See United States v. Chrisco, supra, 493 F.2d at 239. In response to the contention that the photographs of Ms. Justice were of a gruesome nature, having a natural tendency to prejudice the jury, it should be observed preliminarily that even if they were gruesome, they would not for that reason alone be inadmissible. E. g., Rivers v. United States, 270 F.2d 435 (9th Cir. 1959), cert. denied, 362 U.S. 920, 80 S.Ct. 674, 2 L.Ed.2d 740 (1960); 4 J. Wigmore, Evidence § 1157 at 340 (Chadbourn ed. 1972). In this case, however, there is no indication that the photographs were so gruesome or inflammatory that their prejudicial effect outweighed their probative value. See United States v. Burton, 485 F.2d 715, 717-718 (8th Cir. 1973).

Fifth, Hoog contends that the court erred when it refused to grant a new trial or a judgment of acquittal notwithstanding the verdict for certain remarks by the Government in its closing arguments. On rebuttal, counsel for the Government stated:

Ladies and gentlemen, don’t leave your common sense that you have gained throughout your life outside this courthouse or in this jury box when you go into the jury room to deliberate. Take your common sense with you and look at the facts and the evidence that has been produced.
And, believe me, let’s not let ignorance in allowing this man to be released under the evidence that has been presented to you, it is up to you, ladies and gentlemen, if you think the evidence is deficient, cut this man loose and let him back out.

It is the defendant’s position that this comment constituted plain error insofar as it invited the jury to equate Hoog’s acquittal with his release to commit new crimes against society. We hold that this statement did not amount to plain error. When viewed against the immediately preceding remark by counsel for the defendant that the jury must not concern itself with what action the court takes with respect to Hoog in event of acquittal, the Government’s statement represents a response evoked by appellant’s argument. See United States v. Milne, 498 F.2d 329, 330 (5th Cir. 1974).

Even if it is accepted that the statement constituted error, we conclude that the error was neither prejudicial nor plain. Not only did the court later instruct the jury that it may not take into its consideration of Hoog’s guilt or innocence what punishment the court would impose should it return a guilty verdict and, by implication, what action the court would take should it return a verdict of not guilty, but also the evidence of Hoog’s guilt was strong, minimizing the possibility that the jury would have reached a different verdict in' the absence of the Government’s statement. See United States v. Chrisco, supra, 493 F.2d at 237-238; United States v. Phillips, 482 F.2d 191, 196-197 (8th Cir.), cert. denied, 414 U.S. 1114, 94 S.Ct. 846, 38 L.Ed.2d 741 (1973).

Sixth, Hoog asserts that the court erred in not granting a new trial or a judgment of acquittal in view of the Government’s “failure” to prove that any of the victims were transported across state lines against their will. This argument is frivolous. Uncontra-dieted testimony of each victim discloses that either Mills or Hoog induced each of them to accept a ride by false representations. Once they had accepted a ride, Hoog or Mills lured or enticed each of them — again by false promises — to stay in the vehicle during its roundabout course into Kansas. The complaining witnesses were manifestly “inveigled” or “decoyed” into accepting rides within the plain meaning of 18 U.S.C. § 1201(a).

Seventh, Hoog contends that the court erred in not granting a new trial or a judgment of acquittal notwithstanding the verdict on counts I and II on the ground of insufficient evidence. He reasons that, in the absence of proof that he was with Ms. Eybel at the time of her interstate transportation by Mills, the jury could not convict him, either for kidnaping or for aiding and abetting. It is true that the Government did not introduce direct evidence that Hoog accompanied Ms. Eybel across the Kansas/Missouri border. However, there is ample evidence in the record to support an inference by the jury that Hoog, at the very least, aided and abetted Mills in the transportation. This inference alone will support the conviction on count I. The same reasoning governs with respect to count II. Although Hoog did not rape Ms. Justice, ample evidence was adduced by the Government to support the inference that Hoog, at the very least, aided and abetted Mills in the interstate transportation of Ms. Justice “for ransom or reward or otherwise.” Contrast United States v. Kelton, 446 F.2d 669 (8th Cir. 1971).

Eighth, Hoog asserts that the court’s jury instructions constituted plain error. He argues that the court did not define “unlawful,” as it was applied to “inveigle” and “decoy,” adequately to enable the jury to readily determine, within clearly ascertainable bounds, whether Hoog’s conduct had been unlawful within the meaning of 18 U.S.C. § 1201(a). The court defined “unlawful” as “contrary to law.” This is, admittedly, circular, and no definition at all. But this is not the end of the matter. The court defined “inveigle” as

to lure or entice or lead astray by false representations or promises, or other deceitful means.

It defined “decoy” as

enticement or luring by means of some fraud, trick, or temptation *X* * -X-

When viewed as a whole, these instructions give adequate notice to the jury of the content of the term “unlawful.” See Johnson v. United States, 291 F.2d 150, 156-157 (8th Cir.), cert. denied, 368 U. S. 880, 82 S.Ct. 130, 7 L.Ed.2d 80 (1961). Moreover, we note that definition of “unlawful” as “contrary to law” is not so great an error in the context of this case as to constitute plain error, raising the prospect of a miscarriage of justice. See Johnson v. United States, supra; Armstrong v. United States, 228 F.2d 764, 768 (8th Cir.), cert. denied, 351 U.S. 918, 76 S.Ct. 710, 100 L.Ed. 1450 (1956).

Finally, Hoog contends, inter alia, that he was denied a speedy trial, denied effective assistance of counsel, and committed to the Medical Center for Federal Prisoners at Springfield, Missouri, in violation of his sixth and fifth amendment rights. We have examined these contentions and find them totally devoid of merit.

Affirmed.

      . Hoog was indicted in two counts for violation of both 18 U.S.C. §§ 2 and 1201(a), and in a third count for violation of § 1201(a) alone. Section 1201 (a) provides :
      (a) Whoever knowingly transports in interstate or foreign commerce, any person who has been unlawfully seized, confined, inveigled, decoyed, kidnaped, abducted, or carried away and held for ransom or reward or otherwise, except, in the ease of a minor, by a parent thereof, shall be punished (1) by death if the kidnaped person lias not been liberated unharmed, and if the verdict of the jury shall so recommend, or (2) by imprisonment for any term of years or for life, if the death penalty is not imposed.
      Section 2 provides:
      (a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.

      . The indictment in this case named Hoog and Mills. Mills pleaded guilty to Count II and received a 15-year prison sentence.


author: FIELD, Circuit Judge:

text:
    DAVID R. McGEORGE CAR CO., INC., Appellee, v. LEYLAND MOTOR SALES, INC., Appellant; DAVID R. McGEORGE CAR CO., INC., Appellant, v. LEYLAND MOTOR SALES, INC., Appellee.
    Nos. 73-2114, 73-2115.
    United States Court of Appeals, Fourth Circuit.
    Argued Feb. 7, 1974.
    Decided Oct. 1, 1974.

      John R. Schoemer, Jr., New York City, (Douglas C. Fairhurst, Townley, Updike, Carter & Rodgers, New York City, and A. R. Bowles, II, Bowles & Boyd, Richmond, Va., on brief) for appellant in No. 73-2114 and for appellee in No. 73-2115.
    Jerry S. Cohen, Washington, D. C., (Herbert E. Milstein, Michael D. Haus-feld, Washington, D. C., Douglas W. Conner and Conner & Conner, Richmond, Va., on brief), for appellee in No. 73-2114 and for appellant in No. 73-2115.
    Before HAYNSWORTH, Chief Judge, and CRAVEN and FIELD, Circuit Judges.
   FIELD, Circuit Judge:

David R. McGeorge Car Co., Inc., (McGeorge) brought this action against Leyland Motor Sales, Inc., (Leyland) and its parent corporation, British Ley-land Motors, Inc., alleging that an arrangement in the sale of automobiles constituted bad faith dealing in violation of the Dealers Day in Court Act (DDICA), 15 U.S.C. § 1222, and was also in violation of federal antitrust statutes. The district court awarded relief under the DDICA and the Robinson-Patman Act for Leyland’s deliberate shortage of one line of automobiles to McGeorge in an attempt to coerce its acceptance of additional lines. However, the district court refused to grant relief under either the DDICA or the antitrust acts for British Leyland’s refusal to renew McGeorge’s dealership, after the latter had declined the additional lines of automobiles. Both parties have appealed.

David R. McGeorge Car Co., Inc., was founded in 1960 by David R. McGeorge who managed the company until an illness in February of 1970 when his son Robert assumed control. Throughout the 1960’s McGeorge sold three lines of automobiles, Mercedes-Benz from 1960 on, Triumph from 1963 to mid-1970, and Toyota continuously from 1968. None of the cars was competitive with the other since Mercedes-Benz sold for approximately $6000, Triumph for $2800 and Toyota for $2000. McGeorge’s dealership agreement for the sale of Triumphs, signed originally with the Standard Triumph Motor Company in 1963, was renewed for two years in July, 1968, with Leyland Motor Sales, Inc., the northeast regional distributor for British Leyland Motors, Inc., which had acquired the Standard. Triumph Motor Company.

In addition to its acquisition of Triumph, in April of 1967 British Leyland purchased The Rover Company, Ltd., manufacturers of Land Rover, a cross-country vehicle, and Rover, a luxury sedan in the Mercedes and BMW class. Shortly thereafter British Leyland initiated a policy designed to couple the high consumer appeal of Triumph with its newly acquired Rover, and Triumph dealers throughout the United States were presented with a proposal that in order to continue selling Triumphs they should begin selling Rovers and Land Rovers. At the time of the proposal, Triumphs, already in high demand, began experiencing shortages as a result of labor problems in England. British Leyland was then in the position of allocating an item in high demand and short supply among dealers who had been presented with British Leyland’s offer of Rover and Land Rover. Mc-George declined the proposal based upon its assessment that Rover had little sales potential and the fact that Rover would compete with Mercedes-Benz which it was already selling.

In October 1969, Leyland Motor Sales, Inc., began cutting McGeorge’s supply of Triumphs in an attempt to persuade it to reconsider the Rover and Land Rover proposal. Whereas the supply of Triumphs was off 10 to- 20 percent nationally in 1969, McGeorge’s supply was cut by 50 percent in that year and an additional 16 percent in 1970. Conversely, other Virginia Triumph dealers who had accepted Rover and Land Rover experienced only a 25 percent cutback in 1969 and increases of up to 93 percent in 1970. When in May of 1970 it became clear that McGeorge’s rejection of Rover and Land Rover was final, Leyland Motor Sales, Inc., recommended to British Leyland that McGeorge’s Triumph dealership not be renewed upon its normal expiration in July, 1970. The dealership wras not renewed and in September of 1970 David R. McGeorge brought this action.

I

In awarding McGeorge relief under the Robinson-Patman Act the district court, relying on Centex-Winston Corp. v. Edward Hines Lumber Co., 447 F.2d 585 (7 Cir. 1971), held that Leyland’s “delivery” of a short supply of Triumphs to McGeorge was a discriminatory allocation of services proscribed by § 2(e) of the Act which provides that

(e) It shall be unlawful for any person to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale or offering for sale of such commodity so purchased upon terms not accorded to all purchasers on proportionally equal terms. (Emphasis added).

In Centex-Winston, the Seventh Circuit held that a wholesaler’s delivery of lumber to a builder consistently later than contractually specified dates, while delivering lumber orders of the builder’s competitors on time, was discrimination among purchasers in the furnishing of a service, i.e., delivery connected with the resale of a commodity.

We are unable to agree with the conclusion of the district court for even if we were to accept the Seventh Circuit’s characterization of delivery as a “service,” factual distinctions in the present ease render Centex-Winston in-apposite. Unlike Centex-Winston in which the defendant contracted to deliver the commodities, the dealership agreement involved here required McGeorge to accept delivery of Triumphs at their point of arrival in Baltimore or engage independent transporters at its own risk. The record reveals that McGeorge frequently sent individual employees to Baltimore for the express purpose of driving new ears back to Richmond. The district court’s reliance on Centex-Winston was thus misplaced. That Leyland was discriminating in the allocation of Triumphs, the commodity itself, as opposed to a service or facility connected with the resale of the commodity is obvious, and in our opinion places this case beyond the pale of Robinson-Patman. We conclude that Robinson-Patman was an improper basis for the judgment below.

II

We do agree with the district court that Leyland’s conduct in “shorting” McGeorge in the delivery of Triumphs in an attempt to compel it to accept the Rover and Land Rover lines constituted a lack of good faith on its part under the Dealers Day in Court Act. The DDICA, which has been described as “a fringe area of antitrust law * * * designed in part to supplement [those] laws,” requires the manufacturer to act in good faith in carrying out the provisions of the franchise as well as in its termination, cancellation or non-renewal. Good faith, which is defined in Section 1(e) of the Act, has been construed literally by the courts and must be determined in the context of actual or threatened coercion or intimidation, Lawrence Chrysler Plymouth, Inc. v. Chrysler Corp., 461 F.2d 608 (7 Cir. 1972) ; American Motor Sales Corporation v. Semke, 384 F.2d 192 (10 Cir. 1967), and it now appears to be settled that a manufacturer’s coercive attempt to force unwanted automobiles on a dealer constitutes bad faith dealing for purposes of the Act. American Motor Sales v. Semke, supra, and see House Report No. 2850, 84th Cong.2d Sess. 9, 3 U.S.Code Cong. & Admin.News, pp. 4596, 4603 (1956). We think it reasonable to read into McGeorge’s dealership agreement an implied provision that in the event of a strike or casualty occasioning a reduction in the number of Triumphs exported to this Country the manufacturer would treat its dealers ratably and equitably. The district court’s finding of coercion in the cutback of Triumphs is fully supported by the evidence, and the DDICA gives McGeorge a' remedy for the loss of profits suffered by it as a result of this discriminatory action taken by Leyland in an effort to compel McGeorge to make a concession which was not required of it under the terms of its dealership.

The more troublesome question on this aspect of this appeal is whether the district court was correct in holding that the non-renewal of ■ McGeorge’s dealership did not also constitute bad faith dealing under the Act. The district court concluded that Leyland’s decision not to renew was made after the failure of the coercive measures and not as a continuing part thereof, and that although Leyland had acted in bad faith with respect to the shortages, the refusal to renew was based upon a rational business decision. We are inclined to agree with this conclusion. The evidence clearly demonstrates that it was in the best interests of Leyland to market its Triumph and Rover lines in the United States through dual dealerships and, indeed, that such dual dealerships were its only hope of improving the rather disappointing market performance of the Rovers. When McGeorge declined to accept such a dual dealership Leyland had a perfectly legitimate reason to refuse to renew its Triumph franchise. With no further contractual obligations to Mc-George, Leyland’s decision to obtain a dealer who would carry out its marketing policy with respect to both Triumphs and Rovers was based on sound business considerations free from the “coercion or intimidation” proscribed by the Act.

The plaintiff contends, however, that Leyland’s conduct in its efforts to coerce McGeorge in the 1969-70 period fatally infected its 1970 decision to transfer the dual line to another dealer. To accept this charge of continuing bad faith, however, would permanently preclude Leyland from making any change in its marketing procedures at any time in the future and, in effect, the bond between dealer and manufacturer would be indissoluble. “A franchise is not a marriage for life,” and the Act does not prohibit the manufacturer from terminating or refusing to renew the franchise of a dealer who is not providing the manufacturer with adequate representation or who refuses to carry out its legitimate marketing policies. “Nor does the [Act] curtail the manufacturer’s right to cancel or not renew an inefficient or undesirable dealer’s franchise.” It has been held that under the Act a manufacturer is not precluded from terminating or refusing to renew the franchise of a dealership which has not provided adequate sales representatives, adequate facilities for the conduct of the dealership, or does not meet reasonable sales objectives. We discern no significant difference between those cases and the present one where the evidence supports the conclusion that Leyland acted in the reasonable belief that its business welfare required a dual dealership arrangement.

Ill

On its cross-appeal McGeorge contends that the shortage in the delivery of Triumphs and the subsequent refusal by Leyland to renew its dealership were merely progressive stages in a scheme to enforce a tie-in of Triumphs and Rovers, and that Leyland’s conduct in this respect violated both Section 3 of the Clayton Act and Section 1 of the Sherman Act under the per se doctrine of International Salt Co. v. United States, 332 U.S. 392, 68 S.Ct. 12, 92 L.Ed. 20 (1947). The district judge rejected this contention of McGeorge primarily upon his finding that Leyland’s conduct did not impede or suppress competition nor did the proposed arrangement preclude McGeorge from continuing its representation of Mercedes-Benz or other motor cars competitive with Rover. We agree with this conclusion of the district court.

The “perceptible pattern of illegality” in “tying eases” was stated in Times-Picayune v. United States, 345 U.S. 594, 608-609, 73 S.Ct. 872, 880, 97 L.Ed. 1277 (1953):

“When the seller enjoys a monopolistic position in the market for the ‘tying’ product, or if a substantial volume of commerce in the ‘tied’ product is restrained, a tying arrangement violates the narrower standards expressed in § 3 of the Clayton Act because from either factor the requisite potential lessening of competition is inferred. And because for even a lawful monopolist it is ‘unreasonable, per se, to foreclose competitors from any substantial market’, a tying arrangement is banned by § 1 of the Sherman Act whenever both conditions are met.”
(Emphasis in original.)

Following this delineation of the hallmarks of illegality, however, the court made it clear that it is the resultant foreclosure of competition which offends the antitrust statutes. “The common core of the adjudicated unlawful tying arrangements is the forced purchase of a second distinct commodity with the desired purchase of a dominant ‘tying’ product, resulting in economic harm to competition in the ‘tied’ market.” Id. at 614, 73 S.Ct. at 883. The address of the statutes to the anti-competitive effect of such an arrangement was emphasized by Mr. Justice Harlan in his dissenting opinion in Northern Pac. R. Co. v. United States, 356 U.S. 1, 14, 78 S.Ct. 514, 522, 2 L.Ed.2d 545 (1958):

“It is not, as the Court intimates at one point in its opinion, that under the Sherman Act the tying clause is illegal per se; the per se illegality results from its use by virtue of a vendor’s dominance over the tying interest to foreclose competitors from a substantial market in the tied interest.”

Similarly, the decisions in our circuit have focused upon the competitive effect of the suspect conduct. In McElhenney Co. v. Western Auto Supply Company, 269 F.2d 332, 338-339 (4 Cir. 1959), Judge Sobeloff stated that

“The gravamen of a Section 3 violation is the forbidden condition, agreement or understanding of exclusivity, and a proper pleading should assert this ultimate fact. It makes no difference whether this is voluntary or is imposed by coercion, but without such agreement, condition or understanding, there can be no statutory infraction. It is only in the presence of this essential element that consideration must be given as to whether competition may be substantially lessened or whether there is any tendency toward monopoly.”

And in the later case of Advance Business Systems & Supply Co. v. SCM Corporation, 415 F.2d 55, 60 (4 Cir. 1969), Judge Sobeloff pointed out the manner in which competition is curbed by an illegal tie-in:

“First, the buyer is prevented from seeking alternative sources of supply for the tied product; second, eompet-ing suppliers of the tied product are foreclosed from that part of the market which is subject to the tying arrangement.”

The language in these decisions accords with the rationale of two classic cases in this area, Fed. Trade Comm. v. Sinclair Co., 261. U.S. 463, 43 S.Ct. 450, 67 L.Ed. 746 (1923), and United Shoe Mach. Co. v. United States, 258 U.S. 451, 42 S.Ct. 363, 66 L.Ed. 708 (1922), that the vice of an illegal tie-in is the fact that the agreement or the effect thereof lessens competition in the tied product. We agree with the district judge that the dual dealership proposed by Leyland does not fall within that classification of arrangements which have no lawful business objective and “serve hardly any purpose beyond the suppression of competition.” The record supports the finding that Leyland’s conduct did not impede nor tend to impede competition between Rover and other motor cars in its style and price range, and it is this fact which clearly distinguishes the case before us from the tie-ins which were condemned by the Court in Fortner Enterprises v. U. S. Steel, 394 U.S. 495, 89 S.Ct. 1252, 22 L.Ed.2d 495 (1969); Northern Pac. R. Co. v. United States, supra; and International Salt Co. v. United States, supra.

IV

In granting McGeorge relief under the Robinson-Patman Act the district court, acting pursuant to Section 4 of the Clayton Act, entered orders awarding treble damages in the amount of $109,176 and attorney’s fees in the amount of $25,700. Since we conclude that McGeorge was not entitled to relief under the antitrust laws, this award of treble damages as well as attorney’s fees was, of course, improper.

In his initial computation of damages the district judge proceeded on the assumption that McGeorge should have received an additional 14 cars in the fall of 1969 and an additional 52 cars for the first seven months of 1970, or a total of 66 vehicles. Multiplying 66 by a gross profits factor of $708 per car, less certain adjustments, the court arrived at basic damages in the amount of $36,392. While the record supports the gross profits factor adopted by the district court, we agree with the defendant that the projected shortage of 52 cars in McGeorge’s “allocation” for the first seven months of 1970 was erroneous.

In arriving at this projection the court accepted the formula propounded by the plaintiff’s expert that 1967-68 sales of Triumphs to McGeorge amounted to 87 percent of the combined total of cars sold to three other designated dealers, and the application of this percentage to the units supplied to the same three dealers in 1970 gave McGeorge a projected allocation of 83 cars for that period. Since McGeorge, in fact, received only 31 cars during the period, the court concluded that it had been shorted 52 units. In our opinion the basic percentage should have been McGeorge’s share of the aggregate of the vehicles supplied to McGeorge as well as the three other designated dealers in 1967-68. This would result in a projected allocation to McGeorge of 47 percent, and when this is applied to the 126 units available and delivered to the same four dealers, during the first seven months of 1970, McGeorge would be entitled to 59 cars, with a resultant shortage of 28 instead of the 52 found by the district court. Accordingly, the judgment of the district court will be set aside and the case remanded for the assessment of damages only under the DDICA, and in assessing these damages the district court shall apply the formula to a projected shortage of 14 cars in the fall of 1969 and 28 cars in the first seven months of 1970.

      . British Leyland Motors, Inc., the parent corporation, was subsequently dismissed as a party defendant.

      . 15 U.S.C. § 13(e).

      . For the contrary view see Rowe, Pricing and the Robinson-Patman Act, 41 Antitrust U.J. 98, 109 (1972).

      . § 1222. Authorization of suits against manufacturers ; amount of recovery; defenses
      An automobile dealer may bring suit against any automobile manufacturer engaged in commerce, in any district court of the United States in the district in which said manufacturer resides, or is found, or has an agent, without respect to the amount in controversy, and shall recover the damages by him sustained and the cost of suit by reason of the failure of said automobile manufacturer from and after August 8, 1956 to act in good faith in performing or complying with any of the terms or provisions of the franchise, or in terminating, canceling, or not renewing the franchise with said dealer: Pro vided, That in any such suit the manufacturer shall not be barred from asserting in defense of any such action the failure of the dealer to act in good faith. Aug. 8, 1956, c. 1038, § 2, 70 Stat. 1125; 15 U.S.O. § 1222.

      . Autowest, Inc. v. Peugeot, Inc., 434 F.2d 556, 561 (2 Cir. 1970).

      . § 1221. Definitions As used in this chapter'—
      ❖ * * * *
      (e) The term “good faith” shall mean the duty of each party to any franchise, and all officers, employees, or agents thereof to act in a fair and equitable manner toward each other so as to guarantee the one party freedom from coercion, intimidation, or threats of coercion or intimidation from the other party: Provided, That recommendation, endorsement, exposition, persuasion, urging or argument shall not be deemed to constitute a lack of good faith. Aug. 8, 1956, c. 1038, § 1, 70 Stat. 1125; 15 U.S.O. § 1221(e).

      . “The existence of coercion or intimidation depends upon the circumstances arising in each particular case and may be inferred from a course of conduct. For example, manufacturer pressure, direct or indirect, upon a dealer to accept automobiles, parts, accessories, or supplies which the dealer does not need, want, or feel the market is able to absorb, may in appropriate instances constitute coercion or intimidation.

      . Bateman v. Ford Motor Company, 302 F.2d 63, 66 (3 Cir. 1962).

      . H.R.Rep. No. 2850, 84th Cong.2d Sess. 9, U.S.Code Cong. & Admin.News, pp. 4596, 4603 (1956).

      . Garvin v. American Motor Sales Corporation, 318 F.2d 518 (3 Cir. 1963) ; Woodard v. General Motors Corporation, 298 F.2d 121 (5 Cir. 1962).

      . Milos v. Ford Motor Company, 317 F.2d 712 (3 Cir. 1963) ; Staten Island Motors, Inc. v. American Motors Sales Corp., 169 F.Supp. 378 (D.N.J.1959).

      . Frank Chevrolet Co. v. General Motors Corp., 419 F.2d 1054 (6 Cir. 1969).

      . While the district judge found that Mc-George had not acted in bad faith, we note that business expediency in its relations with both Mercedes and Toyota influenced McGeorge to a large degree in its refusal to accept the dual dealership. Robert Mc-George testified that in the year 1969 his company sold 119 Mercedes, 246 Toyotas and 77 Triumphs. He further testified that his father, David McGeorge, had told him that he liad spoken to' Mercedes-Benz representatives about taking on Rover and that they “frowned” on it and that he felt “they would lift the franchise.” The record further indicates that Toyota was pressing McGeorge to eliminate Triumphs and continue only with Toyota and Mercedes. This possibility played a significant part in Ley-land’s decision to seek another dealer who could guarantee more permanency.

      . 15 Ü.S.C. § 14.

      . 15 U.S.C. § 1.

      . Standard Oil Co. v. United States, 337 U.S. 293, 305-306, 69 S.Ct. 1051, 1058, 93 L.Ed. 1371 (1949).

      . 15 U.S.C. § 15.