author: COLEMAN, Circuit Judge.

text:
    FITZGERALD MOTOR COMPANY, INC., and Loans, Inc., Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
    No. 74-1291.
    United States Court of Appeals, Fifth Circuit.
    Feb. 28, 1975.

      Richard E. Thomasson, J. Robert Hardcastle, Atlanta, Ga., for petitioners-appellants.
    Scott P. Crampton, Asst. Atty. Gen., Tax Div., U. S. Dept, of Justice, Meade Whitaker, Chief Counsel, Chris J. Ray, Atty., Internal Revenue Service, Meyer Rothwacks, Chief, App. Sec., Robert G. Burt, Atty., Jonathan S. Cohen, Richard Farber, Attys., Tax Div., Dept, of Justice, Washington, D. C., for respondent-appellee.

      Before BROWN, Chief Judge, and COLEMAN and DYER, Circuit Judges.
   COLEMAN, Circuit Judge.

Pursuant to 26 U.S.C. § 482, the Commissioner of Internal Revenue allocated additional income to Petitioner-Appellants as a result of loans between and among three sister corporations. The taxpayers filed petitions in the United States Tax Court for a redetermination of the assessed deficiencies in taxes for the years 1966 through 1968, totaling $7,874.43. The Tax Court entered judgment against them, 60 T.C. 957 (1973), and this appeal followed. We affirm.

Facts

Taxpayer, Fitzgerald Motor Company, Inc. (Fitzgerald) is a Georgia corporation engaged in the retail sale of automobiles. Taxpayer, Loans, Inc., (Loans), also a Georgia corporation, is engaged in the business of providing financing on automobiles sold by Fitzgerald. At all relevant times, the sole stockholder of both Fitzgerald and Loans was B. I. Anderson. Mr. Anderson also owned all of the stock of Dixie Peanut Company, Inc. (Dixie), a Georgia corporation, engaged in the sale of peanuts and corn as a wholesaler.

During the taxable years in issue as well as prior thereto, both Fitzgerald and Loans, made advances to Dixie. Moreover, Fitzgerald obtained advances from Loans. As the result of these advances among three entities, which were owned by the same individual, the balances in the inter-company loan accounts for the years 1951 through 1968 were as follows:

Year Owed to Fitzgerald by Dixie Owed to Loans Owed to Loans by Fitzgerald by Dixie
1968 $182,689.73 $80,199.80 $21,805.86
1967 174,933.07 74,499.41 21.805.86
1966 169,783.66 71.304.90 21.805.86
1965 169,521.16 62,935.89 21.805.86
1964 188,058.40 39,368.93 21.805.86
1963 181,843.31 46.975.91 21.805.86
1962 181,043.91 27.690.44 21.805.86
1961 175,923.70 28,693.01 16,000.00
1960 76,840.07 25,507.60 10,000.00
.1959 67,829.92 30,565.40 10,000.00
1958 59,584.35 36.633.44 10,000.00
1957 52,380.82 13.900.45 10,000.00
1956 45,432,46 , 4,225.05
1955 30,572.13 8,789.97
1954 18,141.55 27,499.99
1953 3,655.98 21,279.65
1952 991.06 1,472.78
1951 8,782.91

No notes or other evidences of indebtedness were issued with respect to the above indicated inter-company advances. The record does not indicate the rates or amounts of interest, if any, called for or in fact paid upon the indebtedness, nor does the record disclose the purposes for which the loans were made or the manner in which the loan proceeds were used by the borrowers.

Fitzgerald and Loans were operated at a profit in each of the years in question, but Dixie sustained a net operating loss for each of those years. Dixie did realize, however, a substantial gross profit in each of the years 1966 through 1968.

In his notices of deficiencies to taxpayers, the Commissioner determined that the interest income reported by Loans was understated to the extent that it failed to charge an arm’s-length rate of interest on the monies which it had advanced to Fitzgerald and Dixie, and that, the interest income of Fitzgerald was understated to the extent that it had loaned money to Dixie at less than arm’s-length interest. Under the authority of Section 482 of the 1954 Code, the deficiency notices further allocated additional income to taxpayers in order to prevent the evasion of taxes and to clearly reflect their income and that of Dixie. In this deficiency notice, Fitzgerald was notified that it would be entitled to correlative adjustments (i. e., interest deductions) for each of the years 1966 through 1968 if it were finally determined that the income of Loans should be increased for each, of those years because of the advances from Loans to Fitzgerald.

The amounts of additional income allocated to each taxpayer are as follows:

1966 1967 1968
Fitzgerald $3,110;64 $3,283.90 $5,128.58
Loans (advances to Fitzgerald and Dixie) $4,725.161 $4,755.25 $4,952.73

The above amounts were determined by computing simple interest at an arm’s-length rate of 5 percent on the average monthly balance during the tax years of the advances made by taxpayers. Both Dixie and Fitzgerald had gross income substantially in excess of the interest charge allocated to taxpayers under Section 482.

The Tax Court rejected the Commissioner’s primary contention that Section 482 authorizes him to allocate additional interest income to a taxpayer who has loaned money to a commonly controlled corporation at a less than arm’s-length rate of interest, regardless of whether or not the borrowed funds produced income. The Tax Court, however, sustained the Commissioner’s allocation on the basis that taxpayers had failed to meet their burden of proving that the reallocated income for the years in issue did not result from the debtors’ use of the less than arm’s-length loans. Although for a different reason, we have reached the same conclusion as the Tax Com t, and its decision is affirmed.

Analysis

On appeal, taxpayers seek to defend the tracing of income theory adopted by the Tax Court and contend that they met their burden of establishing that the borrowed funds did not generate additional income. In the alternative, taxpayers assert that the Commissioner improperly computed the amount of interest allocated, failed to make necessary correlative adjustments, and acted arbitrarily and unreasonably in making the allocations.

Appellant taxpayers rely on a series of Tax Court cases dating back to 1940 which in general hold that before income can be allocated to a borrower under Section 482, income must in fact exist. Tennessee-Arkansas Gravel Co. v. Commissioner, 6 Cir., 1940, 112 F.2d 508; Smith-Bridgman & Co. v. Commissioner, 16 T.C. 287 (1951) acq. 1951-1 C.B. 3; Texsun Supply Co. v. Commissioner, 17 T.C. 433 (1951); P. P. G. Industries, Inc. v. Commissioner, 55 T.C. 928 (1970); Huber Homes, Inc. Commissioner, 55 T.C. 598 (1971).

The Tax Court has continuously held that the Commissioner’s authority to allocate income under Section 482 in the case of a bargain loan is dependent on the borrower realizing gross income from the use of the loan, and has been placing on the taxpayer the burden of proving that the proceeds of interest free loans did not produce gross income. This is a case of first impression in this Court, and Appellant urges us to adopt the Tax Court’s “tracing” theory, contending that no gross income was generated by the inter-company loans.

The Tax Court’s tracing theory yields a two prong test: (1) Did the borrower have gross income during the year in question and (2) Was this income derived from using the borrowed funds? In addition to being needlessly complicated, this procedure adds a requirement (the debtor’s gross income) to those given in both Section 482 and the applicable Regulations — neither of which requires gross income as an element.

More specifically, Treas.Reg. 1.482— 1(d)(4) allows the Commissioner to make an appropriate allocation to reflect an arm’s-length charge for interest on an advance from one member of a controlled group to another, whether or not the borrower realizes income from the advance.

Treasury Regulations must be sustained unless unreasonable and plainly inconsistent with the revenue statutes, and are not to be overruled except for weighty reasons. Commissioner v. South Texas Company, 333 U.S. 496, 501, 68 S.Ct. 695, 92 L.Ed. 831 (1947). The applicable Regulations have been reviewed and approved by the Second, Eighth, and Ninth Circuits. These courts agree that gross income by the debtor is immaterial.

In B. Forman v. Commissioner, 2 Cir., 1972, 453 F.2d 1144, cert. denied, 407 U.S. 934, 92 S.Ct. 2458, 32 L.Ed.2d 817 (1972), the taxpayers (two independent corporations) created a jointly-owned subsidiary (Midtown) to develop a shopping center. Both taxpayers loaned Midtown $1,000,000 and in exchange received notes bearing . 3V2% interest. These notes were eventually exchanged for non-interest bearing notes. The Commissioner allocated interest income to each taxpayer at the rate of 5% per annum on the. outstanding indebtedness. After finding the requisite common control between taxpayers and Midtown, the Second Circuit sustained the allocation, adding

These regulations [Treas.Reg. § 1.482-2(a)] must prevail, for they are entirely consistent with the sqope and purpose of § 482. The instant loans without interest are obviously not at arm’s length, since no unrelated parties would loan such large sums without interest. The allocation of the interest income to taxpayers was necessary in order to properly reflect their taxable incomes. Forman, supra at 1156.

In Kahler Corp. v. Commissioner, 8 Cir., 1973, 486 F.2d 1, taxpayer, a parent corporation, borrowed money at rates exceeding 5%, deducted the interest paid as an expense in determining its taxable income, and then loaned the money interest free to its subsidiaries. Pursuant to § 482 and Treas.Reg. 1.482-2(a), the Commissioner allocated interest- income • at the rate of 5% per annum to the parent. The Tax Court overruled the Commissioner on grounds that he failed to establish that the advances to the subsidiaries resulted in the production of gross income. The Eighth Circuit reversed the Tax Court, stating that it agreed with the position taken by the Commissioner and the Second Circuit in Forman. After finding that the Commissioner’s allocation of interest income to Kahler was consistent with Treas.Reg. 1.482-2, that Court added

The proper standard to be applied in cases such as this is whether or not the loans from the taxpayer to other members of a controlled group would have been made on an interest free basis in arm’s length dealings between uncontrolled taxpayers. Whether the Commissioner shows that the borrowed funds actually produced income for the borrowing corporation is of no importance. Money, and the use of money, is an essential element in the profit making activities of most corporations, just as raw material is a necessary component in the manufacture of salable goods. Kahler, supra, at p. 5.

During the pendency of this appeal, the Ninth Circuit has joined the Second and Eighth Circuits in holding that tracing in order to determine whether the borrowed funds generated gross income to the borrower is neither necessary nor required. Kerry Investment Co. v. Commissioner, 9 Cir., 1974, 500 F.2d 108.

In our opinion, the position taken by the Second, Eighth, and Ninth Circuits is the preferable one. Each of these Courts has examined the legislative intent of § 482 and they have all determined that the section is applicable regardless of whether or not the debtor uses it to produce income. To adopt the rule of the Tax Court is to place a premium on sophisticated accounting and will afford a tax saving to those shrewd enough to invest borrowed money in nonproductive assets, which, in turn, frees existing funds for income producing activities.

Taxpayers next assert as a ground for reversal that the Commissioner improperly computed the income allocable to them when he applied an arm’s-length rate to the average monthly balance of their advances during the years in issue. The Tax Court rejected this argument, and we think correctly so. It was noted that the debtor corporations had full use in each taxable year of all of the borrowed funds which had not been repaid. This is the procedure used in Kahler, Forman, and Kerry. We think this should be adopted as the rule in this Circuit. There can be no question about the rate of 5 percent per annum, in light of Treas.Reg. § 1.482-2(a)(2)(ii).

Taxpayers also assert that the allocation of income to them constitutes a prohibited creation of income because the Commissioner has failed to make correlative adjustments with respect to Dixie’s income. However, a reading of Treas.Reg. § 1.482(d)(2) discloses that this is not the case.

When an adjustment is made to the income of one member of a group of controlled taxpayers (the primary adjustment), a correlative adjustment is made to the income of any other member of the group involved in the allocation. However, this correlative adjustment is actually made only if the tax liability of the other member is affected for any pending taxable year. Because Dixie operated at a net loss during the years in question, and hence correlative adjustments would have no effect on Dixie’s tax liability for those years, there is no requirement that a correlative adjustment actually be made. For purposes of determining Dixie’s tax liability in later years, the adjustment is deemed to have been made. Further, because the primary adjustment in this case will not be considered made until this court action is final, no correlative adjustment is yet due anyway. Treas.Reg. § 1.482(d)(2)(v).

Appellants’ final assignment of error is that the Commissioner erred in allocating additional income to them because the advances in question did not distort income, nor were they designed to evade taxes. As previously discussed, the failure to charge an arm’s-length rate of interest distorted income to the extent that the lenders’ incomes were understated, and Dixie’s was overstated. Actual intent to evade taxes is not a prerequisite to the Commissioner’s invocation of § 482. The authority to determine true taxable income extends to any case in which the taxable income of a controlled taxpayer is other than it would have been had the taxpayer been dealing at arm’s length with an uncontrolled taxpayer. Treas.Reg. § 1.482-1(c).

Conclusion

In sum, although for a reason different to that assigned by the Tax Court, it nevertheless reached the right result. Its Judgment, therefore, is

Affirmed.

      . The Commissioner conceded below that because of a mathematical error the additional income allocated co Loans for 1966 was overstated by $1,438.39.

      . Treas.Reg. § 1.482-2(a)(l) provides:
      Where one member of a group of controlled entities makes a loan or advance directly or indirectly to, or otherwise becomes a creditor of, another member of such group, and charges no interest, or charges interest at a rate which is not equal to an arm’s length rate as defined in subparagraph (2) of this paragraph, the district director may make appropriate allocations to reflect an arm’s length interest rate for the use of such loan or advance.

      . Treas.Reg. § 1.482-1 (d)(4) provides:
      If the members of a group of controlled taxpayers engage in transactions with one another, the district director may distribute, apportion, or allocate income, deductions, credits, or allowances to reflect the true taxable income of the individual members under the standards set forth in this section and in § 1.482-2 notwithstanding the fact that the ultimate income anticipated from a series of transactions may not be realized or is realized during a later period. For example, if one member of a controlled group sells a product at less than an arm’s length price to a second member of the group in one taxable year and the second member resells the product to an unrelated party in the next taxable year, the district director may make an appropriate allocation to reflect an arm’s length price for the sale of the product in the first taxable year, notwithstanding that the second member of the group had not realized any gross income from the resale of the product in the first year. Similarly, if one member of a group lends money to a second member of the group in a taxable year, the district director may make an appropriate allocation to reflect an arm’s length charge for interest during such taxable year even if the second member does not realize income during such year. The provisions of this subparagraph apply even if the gross income contemplated from a series of transactions is never, in fact, realized by the other members.

      . (2) Arm’s length interest rate. For the
      purposes of this paragraph, the arm’s length interest rate shall be the rate of interest which was charged, or would have been charged at the time the indebtedness arose, in independent transactions with or between unrelated parties under similar circumstances. All relevant factors will be considered, including the amount and durátion of the loan, the security involved, the credit standing of the borrower, and the interest rate prevailing at the situs of the lender or creditor for comparable loans. If the creditor was not regularly engaged in the business of making loans or advances of the same general type as the loan or advance in question to unrelated parties. the arm’s length rate for purposes of this paragraph shall be—
      (i) The' rate of interest actually charged if at least 4 but not in excess of 6 percent per annum simple interest,
      (ii) 5 percent per annum simple interest if no interest was charged or if the rate of interest charged was less than 4, or in excess of 6 percent per annum simple interest, unless the taxpayer establishes a more appropriate rate under the standards set forth in the first sentence of this subpara-graph. For purposes of the preceding sentence if the rate actually charged is greater than 6 percent per annum simple interest and less than the rate determined under the standards set forth in the first sentence of this subparagraph, or if the rate actually charged is less than 4 percent per annum simple interest and greater than the rate determined under the standards set forth in the first sentence of this subparagraph, then the rate actually charged shall be deemed to be a more appropriate rate under the standards set forth in the first sentence of this subparagraph. Notwithstanding the other provisions of this subpara-graph if the loan or advance represents the proceeds of a loan obtained by the lender at the situs of the borrower the arm’s length rate shall be equal to the rate actually paid by the lender increased by an amount which reflects the costs or deductions incurred by the lender in borrowing such amounts and making such loans, unless the taxpayer establishes a more appropriate rate under the standards set forth in the first sentence of this subparagraph.


source: Caselaw Access Project

author: CLARK, Circuit Judge.

license: Public Domain

text:
    Herbert MILLER, Plaintiff-Appellee, v. ROYAL NETHERLANDS STEAMSHIP COMPANY and West of England Shipowners Mutual Protection & Indemnity Association (Luxembourg), Defendants-Third-Party Plaintiffs-Appellants, Strachan Shipping Company, Third-Party-Defendant-Appellee and American Mutual Liability Insurance Company, Intervenor-Appellee.
    No. 74-1237.
    United States Court of Appeals, Fifth Circuit.
    Feb. 28, 1975.

      George W. Healy III, New Orleans, La., for Royal Netherlands, etc.
    William M. Kimball, New York City, for West of England Shipowners, etc.
    Stuart A. McClendon, W. Frederick Denkman, Metairie, La., for Strachan Shipping Co. & American Mutual.
    Bruce W. Dinwiddie, Stanley J. Jacobs, New Orleans, La., for Miller.
    Before THORNBERRY, MORGAN and CLARK, Circuit Judges.
   CLARK, Circuit Judge.

The often lauded special verdict procedure of Fed.R.Civ.P. 49(a) creates the principal problem in this admiralty appeal. Plaintiff longshoreman, Herbert Miller, sued defendant, Royal Netherlands Steamship Company (Royal Netherlands), owner of the motorship ADONIS for injuries to Miller allegedly caused by Royal Netherlands’ negligence and/or unseaworthiness of the ADONIS. Plaintiff also sued Royal Netherlands’ insurer, West of England Ship Owners Mutual Protection & Indemnity Association, pursuant to the Louisiana Direct Action Statute. Royal Netherlands in turn filed a third-party complaint against stevedore Strachan Shipping Company (Stra-chan), Miller’s employer and against Strachan’s insurer, American Mutual Liability Insurance Company, thus completing the now classic longshoreman-shipowner-stevedore triangle. See, Seas Shipping Co., Inc. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946); and Ryan Stevedoring Co. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956).

Miller sued Royal Netherlands for injuries he sustained aboard the ADONIS on January 10, 1972 while she was docked starboard side to the Washington Avenue Wharf in New Orleans. ' Miller’s gang was loading and stowing pipes in the port and starboard wings of the vessel’s No. 2 ’tween deck. The 1,850-pound pipes were stowed in tiers and these tiers were stacked to a height of approx-, imately 6 to 8 feet. Following the completion of loading of the pipe, Miller was waiting in the center of the hatch to help off-load a forklift machine which had been used to stow the pipe when 39 pieces of pipe with a combined weight of 72,000 pounds suddenly came out of the offshore wing stow and fell into the square of the hatch, crushing off one of Miller’s arms and inflicting other serious injuries upon him.

The pivotal issue in the trial of this litigation became whether an inshore list of the ship caused the pipe to fall, or whether the falling pipe caused the ship to list. Miller claimed that the ship was negligently made unstable and unsea-worthy by improper loading and distribution of potable water in the No. 4 tank and by improper distribution of cargo, an activity conducted by the ship’s crew without the participation or assistance of the stevedore. Miller also claimed that the manner in which the pipe was stowed rendered the ADONIS unseaworthy and negligently unstable because the stow was not properly tiered, chocked, dunnaged and lashed. Royal Netherlands answered first that it was neither negligent nor was the ship unseaworthy, and alternatively, in the event that the jury might determine that the ship was unseaworthy, that such unseaworthiness was caused or brought into play by stevedore Strachan in breach of its implied warranty of workmanlike performance and, therefore, that it was entitled to indemnification from Strachan if it was required to pay damages based upon the ship’s unseaworthiness. Strachan countered by asserting that all cargo operations were conducted in a safe and workmanlike manner in compliance with all safety regulations and that the ship’s inshore list caused the pipe previously stowed to either break or jump over its chocking.

In answers to special interrogatories, the jury found that Royal Netherlands was negligent and that the ADONIS was unseaworthy, but that Royal Netherlands’ negligence alone proximately caused Miller’s injuries; that the stevedore, Strachan, did not breach its warranty of workmanlike performance to Royal Netherlands, and that Miller’s damages were 200,000 dollars. The trial court entered judgment holding Royal Netherlands solely liable in the amount of 200,000 dollars. We affirm.

Royal Netherlands mounts its attack upon the judgment below on the grounds that (1) there is insufficient evidence upon which to warrant a verdict against the shipowner, (2) the jury’s answers to the special interrogatories are fatally inconsistent and (3) the charge that Royal Netherlands could recover indemnity from Strachan only if the jury found that unseaworthiness of the ADONIS proximately caused Miller’s injury was reversibly erroneous.

A review of the record convinces us that Royal Netherlands’ sufficiency of the evidence complaint is without merit. In a lengthy trial all three parties developed extensive proof to construct and reinforce their contradictory conceptions of the events culminating in Miller’s injuries. The contradictory proof developed classic jury issues as to cause and effect. Sufficient evidence was adduced to have sustained a verdict based on any party’s major premise.

Royal Netherlands’ more substantial allegation relates to inconsistency in the jury’s answers to the special verdict questions submitted pursuant to Rule 49(a) F.R.Civ.P. These questions and the jury’s responses are set out in the margin.

A finding by this court that a critical verdict was inconsistent with another would require a remand for a new trial [e.g., Royal Netherlands S.S. Co. v. Strachan Shipping Co., 362 F.2d 691 (5th Cir. 1966); Missouri Pacific R.R. Co. v. Salazar, 254 F.2d 847 (5th Cir. 1958)] since we could not speculate which inconsistent finding the jury intended to be controlling. However, the determination that an inconsistency exists must be made only after a concerted effort to reconcile every apparent inconsistency. As we stated in Griffin v. Matherne, 471 F.2d 911 (5th Cir. 1973): “The Seventh Amendment requires that if there is a view of the case which makes the jury’s answers consistent, the court must adopt that view and enter judgment accordingly. Atlantic & Gulf Stevedores v. Eller-man Lines, 369 U.S. 355, 364, 82 S.Ct. 780, 786, 7 L.Ed.2d 798, 806-807 (1962). This court has stated that the test to be applied in reconciling apparent conflicts between the jury’s answers is whether the answers may fairly be said to represent a logical and probable decision on the relevant issues as submitted, . .” Id. at 915. “We therefore must attempt to reconcile the jury’s findings, by exegesis, if necessary, . before we are free to disregard the jury’s verdict and remand the case for a new trial.” Gallick v. B & O R.R. Co., 372 U.S. 108, 119, 83 S.Ct. 659, 666, 9 L.Ed.2d 618 (1963).

The jury found that the defendant Royal Netherlands was negligent [No. 1]; that Royal Netherlands’ negligence was a proximate cause of plaintiff’s injuries [No. 2]; that the ADONIS was unsea-worthy [No. 3], but that the unseaworthiness of the vessel was not a proximate cause of plaintiff’s injuries [No. 4]; and that Strachan Shipping Company did not breach its warranty of workmanlike performance to Royal Netherlands [No. 8]. Royal Netherlands contends that if the jury found that its negligence caused the ship to become unstable, they were legally bound to find that such instability constituted unseaworthiness. Therefore, Royal Netherlands continues, the jury’s proximate cause answers to Nos. 2 and 4 were inconsistent since they would have determined thereby that the same condition both was and was not a proximate cause of Miller’s injury.

While ordinarily liability based upon unseaworthiness is wholly distinct from liability based upon negligence, e.g., Seas Shipping Co. v. Sieracki, 328 U.S. 85, 94, 66 S.Ct. 872, 877, 90 L.Ed. 1099 (1946), a negligent act or omission in the course of loading which causes a vessel to become unstable also creates an unseaworthy condition. See, e.g., Usner v. Luckenbach Overseas Corp., 400 U.S. 494, 499, 91 S.Ct. 514, 518, 27 L.Ed.2d 562 (1971); Gutierrez v. Waterman S.S. Corp., 373 U.S. 206, 83 S.Ct. 1185, 10 L.Ed.2d 297 (1963); Atlantic & Gulf Stevedores v. Ellerman Lines, 369 U.S. 355, 82 S.Ct. 780, 7 L.Ed.2d 798 (1962). However, the sum of these legal theories does not lead to the conclusion that the jury’s answers to interrogatories Nos. 2 and 4 must be inconsistent in this case.

It is possible to reconcile the answers by making the plausible assumption that the jury considered only the acts and omissions it thought caused the listing of the ship in answering the negligence question, and separately and distinctly applied its decision on unseaworthiness to the manner of the stowage of the pipe, i.e., they found that the ship’s officers’ negligence in failing to attend to the vessel’s lateral stability and subsequent loading of water in the No. 4 starboard tank caused the ADONIS to list and that the manner of stowing the pipe created an unseaworthy condition. A review of the proof adduced, the conduct of the trial, the trial court’s instructions and arguments of counsel demonstrate that this is a logical and probable way to reconciliation of the inconsistency of the answers in point of legal theory.

This pervasive, totality-of-circumstances overview was suggested by this court in McVey v. Phillips Petroleum Co., 288 F.2d 53 (5th Cir. 1961), and confirmed in Griffin v. Matherne, 471 F.2d 911 (5th Cir. 1973). In such a light, the jury could consistently have found that Royal Netherlands’ own personnel were negligent in creating and failing to correct the starboard list and that the ship was unseaworthy because the pipe was improperly stowed, but that the list and not the improper stowage of the pipe proximately caused the pipe to fall.

The district court’s lengthy instructions contained an explanation of the difference between negligence and unseaworthiness and cautioned the jury that if they found both negligence and unseaworthiness, the plaintiff could still recover only for one. Reason confirms that the jury could have found negligence on the part of the shipowner in creating and failing to correct the list (since it was a finding which the evidence clearly would permit) but, mindful of the court’s instruction, simply did not pause to further consider whether the list also constituted an unseaworthy condition. In view of the mass of evidence and copious judicial instructions which this jury faced, such a failure to appreciate the need to apply this legal concept is not only plausible but understandable. Indeed, considering that the jury’s function under Rule 49(a) is solely one of fact finding, a jury which had made a finding that the listing of the ship constituted negligence on the part of the shipowner, would not be bound to apply the legal consequences of such a finding, i.e., that negligence causing instability necessarily constituted an unseaworthy condition in the ship. This could be done by the court. Since this logical and probable rationalization of the jury’s answers exists the verdict must be accepted. Even though equally persuasive possibilities' that would produce reversal might be shown to exist, our inquiry ends here. Stacey v. Illinois Central R.R., 491 F.2d 542 (5th Cir. 1974); Griffin v. Matherne, supra.

Royal Netherlands further asserts that the trial court erred in instructing the jury that a shipowner may recover indemnity from an injured longshoreman’s stevedore-employer only if the jury found that unseaworthiness of the vessel proximately caused the plaintiff’s injury. Royal Netherlands contends that this charge suffers from the erroneous implication that Royal Netherlands could not recover indemnity if it was found liable for negligence.

Under our assumption (required to harmonize the jury’s special verdict answers) that the jury determined that Royal Netherlands’ negligence in creating and failing to correct the list was the sole proximate cause of Miller’s injury, any further finding as to the stevedore’s work, which must have been determined to have been unrelated to creation or correction of the list, would have been superfluous and irrelevant.

Royal Netherlands relies upon Weyerhaeuser S.S. Co. v. Nacirema, etc., Co., 355 U.S. 563, 78 S.Ct. 438, 2 L.Ed.2d 491 (1958) and Grace Lines, Inc. v. Port Everglades Terminal Co., 324 F.2d 699 (5th Cir. 1963) for its contention that the judge’s charge was erroneous. In Weyerhaeuser, the Supreme Court held, and in Grace Lines, this court held that the trial judge was in error in directing a verdict for the stevedore after a determination that the shipowner was liable only for negligence, and not for unseaworthiness. Royal Netherlands asserts that the effect of the court’s charge in this case is the same, i.e., that Royal Netherlands could not recover indemnity if it was found liable for negligence. The prejudicial defect, Royal Netherlands continues, is made evident by the special verdicts that Royal Netherlands was guilty of negligence which proximately caused the accident and that no breach of warranty of workmanlike performance was committed by Strachan.

Neither Weyerhaeuser nor Grace Lines is apropos to the case presently before this court. In the case at bar the judge instructed the jury that Royal Netherlands’ claim against Strachan must be predicated upon a finding that unseaworthiness of the vessel proximately caused plaintiff Miller’s injuries, and not, as Royal Netherlands contends, that Royal Netherlands was precluded from recovering indemnity from Strachan if its liability was based on a finding of negligence. The concept of unseaworthiness did occupy a crucial place in Royal Netherlands’ case against Strachan because a finding that Strachan breached its warranty of workmanlike performance, a prerequisite to recovery by Royal Netherlands, would necessarily render the vessel unseaworthy in a case such as this where Strachan’s acts involved only the manner of loading and method of stowage of the pipes. E.g., Usner v. Luckenbach Overseas Corp., 400 U.S. 494, 499, 91 S.Ct. 514, 518, 27 L.Ed.2d 562 (1971); Gutierrez v. Waterman S.S. Corp., 373 U.S. 206, 83 S.Ct. 1185, 10 L.Ed.2d 297 (1963); Atlantic & Gulf Stevedores v. Ellerman Lines, 369 U.S. 355, 82 S.Ct. 780, 7 L.Ed.2d 798 (1962). Thus the judge’s charge that the jury must find that the unseaworthiness of the vessel was the proximate cause of Miller’s injury was not erroneous when read in context with all other instructions.

This situation is different from that in both Weyerhaeuser and Grace Lines. In those cases the trial judge dismissed the shipowner’s third-party complaint without giving the jury an opportunity to determine if the stevedore’s actions, alleged by the shipowner to have constituted a breach of warranty, would have sustained a recovery over by the shipowner in spite of its own negligence. In Weyerhaeuser and Grace Lines, a jury trial of the stevedore’s culpability was required because the acts and omissions of both the shipowner and the stevedore surrounding the accidents were so physically intertwined that an initial finding of negligence against the shipowner would not preclude an additional finding that the stevedore’s breach of its warranty of workmanlike performance also contributed to the injury. In the case before us today, however, consistency with our resolution of the jury’s answers to the interrogatories compels a finding that the jury determined only the shipowner was responsible for the injury proximately resulting from its neglect in causing the vessel’s starboard list.

Affirmed.

      . See Brown, Federal Special Verdicts: The Doubt Eliminator, 44 F.R.D. 245 at 338 (1967); Ford Motor Co. v. Dallas Power & Light Co., 499 F.2d 400, 412 n. 19 (5th Cir. 1974); Simmons v. King, 478 F.2d 857, 862 n. 12 (5th Cir. 1973); Boyce v. Pi Kappa Alpha Holding Corp., 476 F.2d 447, 453 (5th Cir. 1973) (Brown, C. J., concurring); Wolfe v. Virusky, 470 F.2d 831, 837 (5th Cir. 1972) (Brown, C. J., concurring); Burns v. Anchor-Wate Co., 469 F.2d 730, 734 n. 8 (5th Cir. 1972); In re Double D. Dredging Co., Inc., 467 F.2d 468, 469 n. 3 (5th Cir. 1972); Little v. Bankers Life & Cas. Co., 426 F.2d 509, 512 (5th Cir. 1970) (Brown, C. J., concurring); Horne v. Georgia Southern & Florida Ry. Co., 421 F.2d 975, 980 (5th Cir. 1970) (Brown, C. J., concurring).

      . This type of tridimensional admiralty litigation is a vanishing breed. The 1972 amendments to the Longshoremen and Harbor Workers Act, 33 U.S.C. § 901 et seq., effective November, 1972, now limit the longshoreman’s right to sue a shipowner to claims based solely upon the shipowner’s negligence, thereby abolishing the longshoreman’s right to recovery under the doctrine of unseaworthiness and the shipowner’s concomitant right u> m-ik indemnification from the stevedore. '\|T]he stevedore employer shall not be held liable to a shipowner for damages paid by the shipowner to longshoremen and any warranties to the contrary shall be void. 33 U.S. C.A. § 905(b).” Julian v. Mitsui O.S.K. Lines, Ltd., 479 F.2d 432, 434 (5th Cir. 1973), accord, McCawley v. Ozeanosun Compania, Maritime, S.A., 505 F.2d 26 (5th Cir. 1974).

      . Evidence supporting plaintiffs negligence claim against Royal Netherlands revealed, inter alia: (1) that employees of both Royal Netherlands and Strachan observed the starboard list prior to the accident; (2) that both insufficient and inaccurate data was used by the captain in calculating the ship’s stability prior to the accident; (3) that the captain, by his own admission, failed to calculate the port-starboard distribution of cargo prior to the accident; (4) the use of improper sounding procedures in checking liquid cargo and the failure to check list indicators prior to the accident; (5) that shortly before the accident, despite the presence of a greater than usual tonnage of liquids on the vessel’s starboard side, water had been taken in the No. 4 starboard watertank; and (6) expert testimony by a consulting engineer and a naval architect, based upon the ADONIS’ records of cargo and water distribution, which supported plaintiff’s contention that Royal Netherlands negligently overloaded the starboard side of the ship resulting in an inshore list which precipitated the accident. The engineer testified that pipe stowed in the manner testified to by Strachan employees could only come out of stow if an improper list developed.

      . SPECIAL VERDICT:
      1. Was the defendant Royal Netherlands negligent?
      Yes.
      2. If your answer to Interrogatory No. 1 is “Yes,” was the defendant Royal Netherlands negligence a proximate cause of plaintiffs injury?
      Yes.
      3. Was the M/V ADONIS unseaworthy?
      Yes.
      4. If your answer to Interrogatory No. 3 is “Yes,” was the unseaworthiness of the vessel a proximate cause of plaintiff’s injury?
      No.
      5. If your answer to Interrogatories No. 2 and No. 4 is “No,” or blank, do not answer the remaining questions; if your answer to either Interrogatory No. 2 or Interrogatory No. 4 is “Yes”, was plaintiff contributorily negligent?
      No.
      6. If your answer to Interrogatory No. 5 is “Yes”, was that negligence a proximate cause of the injury?
      (No answer)
      7. If your answer to Interrogatory No. 6 is “Yes”, to what extent, expressed in percentage, did plaintiff’s negligence contribute to his injury?
      (No answer)
      8. Did Strachan Shipping Company breach its warranty of workmanlike service to Royal Netherlands?
      No.
      9. If your answer to Interrogatory No. 8 is “Yes”, was that breach a proximate cause of the accident?
      (No answer)
      10. If your answer to Interrogatory No. 9 is “Yes”, did the conduct of Royal Netherlands prevent Strachan Shipping Company from carrying out its warranty of workmanlike service to Royal Netherlands?
      (No answer)
      11. What amount do you find would fairly and adequately compensate plaintiff for his injury? (This must be the total amount of the damages without regard to the degree of plaintiff’s negligence, if any. The Court apportions the damages).
      $200,000.

      . While we fully recognize that a shipowner’s negligence is not a bar to recovery [e.g., T. Smith & Son, Inc. v. Skibs A/S Hassel, 362 F.2d 745 (5th Cir. 1966)] the substance of the court’s instruction may not be construed as putting forward a contrary view.

      . While it may have evoked a clearer response if the court had cast the charge and questions in terms of “breach of warranty of workmanlike performance” rather than in “unseaworthiness of the vessel” the record does not indicate that the wording employed caused confusion in the minds of the jurors.


author: SIMPSON, Circuit Judge:

text:
    John BRADAS et al., Plaintiffs-Appellees, v. RAPIDES PARISH POLICE JURY et al., Defendants-Appellants, Louis Berry et al., Intervenors- Appellees.
    No. 74-2422.
    United States Court of Appeals, Fifth Circuit.
    Feb. 14, 1975.
    Rehearing and Rehearing En Banc Denied March 19, 1975.

      James J. Brady, Camille F. Gravel, Jr., Edwin O. Ware, Dist. Atty., Alfred B. Shapiro, Asst. Dist. Atty., Alexandria, La., for Rapides Parish Police Jury, and others.
    J. Michael Percy, Louis Berry, Alexandria, La., for plaintiffs-appellees.
    Richard B. Millspaugh, Opelousas, La., for intervenors.
    Before GEWIN and SIMPSON, Circuit Judges, and NICHOLS , Associate Judge.

       Of the United States Court of Claims, sitting by designation.

   SIMPSON, Circuit Judge:

By a judgment rendered May 1, 1974, amended and supplemented May 10, 1974, the district court struck down as violative of the Fifteenth Amendment to the Constitution a reapportionment plan (the Le Blanc plan) for the Rapides Parish Police Jury and School Board he had both instituted and approved three years earlier. The May, 1974 judgment is the subject of the instant appeal by the Rapides Parish Police Jury and School Board. That judgment, after nullifying the Le Blanc plan, adopted a substitute plan, discussed in detail hereinafter, and provided that the terms of the then current members of the Police Jury and School Board should terminate upon the commissioning of their successors.

Under the Le Blanc plan the eleven wards of Rapides Parish were divided into one single-member and three multi-member districts for the purpose of electing 18 officers to the parish police jury as well as to the parish school board. The Le Blanc plan separated the parish as follows: District “A” consisted of Wards 1 and 8 with a combined population of 64,649 and was to elect 10 members to each body; District “B” consisted of Wards 9, 10 and 11 with a combined population of 33,300 and was to elect 5 members to each body; District “C” consisted of Wards 2, 3, 4 and 6 with a combined population of 14,073 and was to elect 2 members; and District “D” consisted of Wards 5 and 7 with a combined population of 6,236 and was to elect a single member to each body. The population figures are taken from the 1970 Federal Census. The plan also contained residency requirements for the elected officials. For example, in District A, 8 of the 10 members were required to reside in Ward 1 and the other 2 were required to reside in Ward 8.

Of Rapides Parish’s 118,078 residents 27.9% or 32,975 are black, with most of the blacks residing in Alexandria, population 64,650, the only sizable city in the parish. The relatively concentrated population of Alexandria fills Ward 1 and a portion of Ward 8. Standing alone, Ward 1 is 42% black and 58% white. When combined with Ward 8 to form District A, however, the percentages change to 37% black and 63% white. No black has ever been elected to serve on the parish police jury or school board.

Approximately one year subsequent to the Le Blanc plan’s judicial implementation, the United States brought suit in the district court seeking to nullify the plan because it lacked the prior approval of the Attorney General of the United States pursuant to Section 5 of the Voting Rights Act of 1965, Title 42, U.S.C., § 1973c. The district judge dismissed that suit holding that “Section 5 does not require prior approval of reapportionment plans submitted to a United States District Court in the trial of an adversary proceeding.” United States v: Rapides Parish School Board et al., Civil Action Number 19,209 W.D.La., October 25, 1973. In footnote 1 to that opinion-order, the trial judge made it clear that during the course of the Le Blanc suit he was cognizant of Fifteenth Amendment rights and considered them at various times throughout the proceedings.

The present suit was filed by ten parish citizens, both blacks and whites, alleging that the Le Blanc plan violates the “one man-one vote” rule and results in dilution of the black vote in contravention of the Fifteenth Amendment. Five unsuccessful black candidates for parish office, Louis Berry and others, intervened, generally supporting plaintiffs’ claims. Concentrating on their dilution claim, plaintiffs/intervenors/appellees pointed out that no black has ever been elected to a parish office; that the strength of the black vote in Ward 1 was diluted by the Le Blanc plan from 42% to 37% by combining it with Ward 8 to form District A; that a Ward 8 candidate can be elected on the strength of Ward l’s vote and will therefore be more responsive to Ward 1; and that the political process is not as open and free as possible because the size of Ward 1 makes it relatively expensive for a young candidate with moderate means to run for parish office, thus placing him at a serious disadvantage.

The district court found by its May 1974 judgment that the July 26, 1971 judgment adopting the Le Blanc Plan did not sufficiently consider Fifteenth Amendment rights, though such rights were represented in the prior suit, and nullified that plan. The court proceeded to implement its own reapportionment scheme which divided the parish into nine single member election districts. The effect of this new plan is to cut by 50% the number of officials elected to each parish body from eighteen to nine. The police jury and school board moved the district court to set aside its judgment and grant a new trial. Upon denial of that motion, this appeal followed.

Appellants urge three major contentions on appeal: (a) that the Fifteenth Amendment issue dealing with alleged dilution of the black vote had been previously ruled upon by the district court thus making applicable the doctrine of res judicata; (b) that the appellees failed to sustain their burden of proof as to their Fifteenth Amendment claim in accordance with the standards and guidelines established in White v. Regester, 1973, 412 U.S. 755, 93 S.Ct. 2332, 37 L.Ed.2d 314, and its progeny; and (c) that the district court exceeded its authority by ordering a new reapportionment plan requiring a 50% reduction in the number of officials elected to parish office in contravention of Sixty-Seventh Minnesota State Senate v. Beens, 1972, 406 U.S. 187, 92 S.Ct. 1477, 32 L.Ed.2d 1. Since we find merit in appellants’ second contention, regarding the burden of proof, we do not reach the other two points raised.

Allegations of dilution of minority voting strength are not new to this Court. See Reese v. Dallas County, Alabama, 5 Cir. 1974, 505 F.2d 879; Turner v. McKeithen, 5 Cir. 1973, 490 F.2d 191; Zimmer v. McKeithen, 5 Cir. 1973, 485 F.2d 1297 (en banc decision reversing 5 Cir. 1972, 467 F.2d 1381). Following the mandate of the Supreme Court in White v. Regester, 1973, 412 U.S. 755, 93 S.Ct. 2332, 37 L.Ed.2d 314, we have consistently recognized that “access to the political process and not population (is) the barometer of dilution of minority voting strength.” Reese, supra, 505 F.2d at 882; Turner, supra, 490 F.2d at 193-194; Zimmer, supra, 485 F.2d at 1303. Plaintiffs’ burden, then, “is to produce evidence to support findings that the political processes leading to nomination and election were not equally open to participation by the group in question — that its members had less opportunity than did other residents in the district to participate in the political processes and to elect legislators of their choice.” White v. Regester, supra, 412 U.S. at 766, 93 S.Ct. at 2339. It is in the failure to meet this burden that we find appellees’ proof fatally deficient.

In Turner we set forth a number of factors drawn from White and Zimmer relevant to a determination of whether a minority group actually lacks meaningful access to the political process:

“Among the factors entitled to consideration are the continuing effects of past discrimination on the minority group’s ability to participate in the political process, the opportunity for the minority group to participate in the candidate selection process, the responsiveness of elected officials to the particular concerns of the minority group, and the strength of the state interest in multi-member or at-large voting.
Furthermore, both White v. Reges-ter and Zimmer recognized that the presence of various structural voting devices such as a majority vote requirement, anti-single shot voting, large districts, and lack of residency requirements in a district or its geographical subdivisions may increase the potential for dilution under a mul-ti-member or at-large arrangement. Dilution, as with so many complex factual determinations turns on an aggregation of the circumstances.” (footnotes deleted) Turner, supra, 490 F.2d at 194.

Consideration of the evidence below in the light of these factors emphasizes the dearth of appellees’ proof. Neither the record nor the district court’s findings indicates difficulty on behalf of blacks in registering to vote, in choosing the political party they desire to support, in meaningfully participating in party activities, in qualifying as candidates for a desired office, in participating in the candidate selection process, or in participating meaningfully in any other portion of the political process. The record does not evidence a state policy favoring mul-ti-member districts that is rooted in racial discrimination, nor does it indicate a lack of responsiveness on behalf of elected officials to the particular concerns of the black community.

The single glaring fact that no black has ever been elected to a parish office does not by itself support judicial nullification of a reapportionment plan. It evidences no more at the most than a policy of past discrimination. But the issue here of course is not whether Rapides Parish discriminated against blacks in the past, but rather whether any debilitating effects of that discrimination still persist. See Zimmer, supra, 485 F.2d at 1306. In previous cases such debilitating effects have usually been shown by a relatively large discrepancy between the size of the black population and the number of registered black voters, Zim-mer, supra, 485 F.2d at 1306, or between the number of blacks registered to vote in federal elections and the number of blacks registered to vote in state elections, Turner, supra, 490 F.2d at 195. A finding of continuing effects of past discrimination is not supported by any evidence in this record.

Likewise it does not suffice to show that the use of multi-member districts has diminished to some extent the proportion of blacks in the voting unit unless some evidence also demonstrates that such multi-member districts were “conceived or operated as purposeful devices to further racial or economic discrimination.” Whitcomb v. Chavis, 1971, 403 U.S. 124, 149, 91 S.Ct. 1858, 1872, 29 L.Ed.2d 363. To the same extent that the black proportional strength in Ward 1 is decreased by “tacking on” the substantially white Ward 8, the proportional strength of the blacks in Ward 8 has increased. While we have previously recognized that “such increases or decreases in proportional strength resulting from the change from one apportionment system to another may in some cases provide significant evidence of (discriminatory) motive or effect,” Turner, supra, 490 F.2d at 196, the 5% decrease involved before us does not assume compelling significance.

“In Howard v. Adams County Board of Supervisors (5 Cir. 1972, 453 F.2d 455, 457) this court stated that to establish the existence of a constitutionally impermissible redistricting plan, plaintiffs must maintain the burden of showing either first, a racially motivated gerrymander, or a plan drawn along racial lines, or second, that ‘. . . designedly or otherwise, a(n) . . . apportionment scheme, under the circumstances of a particular case, would operate to minimize or cancel out the voting strength of racial or political elements of the voting population.’ ” Zimmer, supra, 485 F.2d at 1304. The district court found that appellees had sustained their burden, stating only that the “record of the Le Blanc suit (Court Ex. 1), the 1970 Census (Court Ex. 2), and the testimony of - plaintiffs’ witnesses, including the results of elections held under the Le Blanc Plan, clearly establish that the plan is unconstitutional.” This sweepingly general finding is not supported by this record. In consequence the judgment appealed from is ordered vacated and this cause is remanded to the district court with directions to reinstate the Le Blanc Plan prior to the next election for Police Jury and School Board scheduled to be held in Rapides Parish.

To prevent needless expense and confusion, the tenure in office of the present members of the Police Jury and School Board, elected under the 9 member plans of the May 1, 1974 judgment, shall not be disturbed in the interim.

Let our mandate issue immediately.

Vacated and remanded with directions.

      . By an unreported judgment of July 26, 1971 in a prior suit entitled Le Blanc et al. v. Rapides Parish Police Jury et al., Civil Action No. 13,715.

      . Entered in a later suit entitled Bradas et al. v. Rapides Parish Police Jury et al., 376 F.Supp. 690.

      . A ward is the basic territorial subdivision of Rapides Parish and other Louisiana parishes, which correspond to counties elsewhere.

      . Both the police jury and the school board are representative bodies with their members elected by parish voters pursuant to territorial areas or districts established either by the Louisiana Legislature or by the police jury itself. The police jury functions pursuant to Article 14 Section 3 of the Louisiana Constitution essentially as the parish legislature, but also historically has performed various administrative functions such as maintenance and construction of roads, bridges and public buildings. The school board was established pursuant to Article 12 Section 10 of the Louisiana Constitution. It operates the public schools of the parish.

      . Footnote 1 read in full:
      1. The Le Blanc suit was brought by two plaintiffs, one of whom was black. Two of the three lawyers representing plaintiffs were blacks. Although Fifteenth Amendment rights were not specifically mentioned in the complaint, an examination of the record will exhibit that they were present and considered by the court at various times throughout the proceeding. Although the Attorney General could have intervened in Suit No. 13,715 from the date of its filing on April 15, 1968 to the date of its termination in June of 1972, he did not choose to do so.
      Civil Action No. 19,190 entitled “John Bra-das, et al v. Rapides Parish Police Jury, et al” was filed in the Western District of Louisiana on July 17, 1973. It is the suit for reapportionment in which Fourteenth and Fifteenth Amendment rights are specifically at issue. The Attorney General has admitted knowledge of this suit but has not intervened, (emphasis added).

      . We have examined the recent Supreme Court decision, Chapman v. Meier, 1975, 420 U.S. 1, 95 S.Ct. 751, 42 L.Ed.2d 766, and determine that nothing said herein is inconsistent with the teachings of that case.


author: THORNBERRY, Circuit Judge:

text:
    PLATORO LIMITED, INC., Plaintiff-Appellee-Cross-Appellant, v. The UNIDENTIFIED REMAINS OF A VESSEL, her cargo, etc., Defendants, State of Texas, Movant-Appellant-Cross-Appellee, Jefferson T. Burke and Billy Russell Algoe, Intervenors-Appellees.
    No. 74-1540.
    United States Court of Appeals, Fifth Circuit.
    Feb. 27, 1975.

      John L. Hill, Atty. Gen. of Tex., Larry F. York, First Asst. Atty. Gen., Elizabeth Levatino, Austin, Tex., for movant-appellant.
    Thomas G. Sharpe, Jr., Brownsville, Tex., for Platoro Limited.
    Roger Butler, Robston, Tex., Gordon L. Briscoe, Harlingen, Tex., Eduardo Roberto Rodriguez, Brownsville, Tex., for Jefferson T. Burke, and others.
    Before THORNBERRY, MORGAN and CLARK, Circuit Judges.
   THORNBERRY, Circuit Judge:

In 1555 several Spanish vessels sank off the coast of Padre Island, Texas, in the Gulf of Mexico during a hurricane. The wreckage remained there practically undisturbed until September 9, 1967. On that date Platoro Limited, Inc., an Indiana corporation, began operations to recover the remains of the vessels. Pla-toro successfully located some artifacts, and, as the items were recovered, it shipped them to Gary, Indiana. Recovery operations took place from September until December 13, 1967, when the 28th Judicial District Court for the State of Texas issued a temporary restraining order prohibiting Platoro from conducting further salvage operations. The State of Texas had instituted the state court suit under former §§ 147a & 147b of the Texas Penal Code.

Shortly after the state court suit was filed, Jerry Sadler, then the Texas Land Commissioner, opened negotiations with Platoro regarding the recovered items. After considerable negotiation, Platoro and Sadler agreed to a contract dividing the articles already recovered, and arranging for continued exploration of the Padre Island area. An officer of Platoro signed the contract, but no representative of the State of Texas ever did. Pursuant to the negotiations, Platoro returned the recovered items to Austin, Texas, where they were held by the General Land Office. In September 1969, the state judicial district court ordered the items transferred to the Texas Archaeological Research Library, also located in Austin.

On August 6, 1969 Platoro filed an in rem suit in the federal district court for the Southern District of Texas. Platoro’s complaint sought a declaration that title to the recovered items was vested in Platoro, or alternatively a salvage award for the recovery operations. The State of Texas appeared in the district court, filing a plea of immunity from suit and requesting dismissal for lack of jurisdiction. The district court refused to dismiss the suit, and enjoined the state district court from disposing of the res. After a hearing, the court ruled that Platoro was entitled to a salvage award for its actions in recovering the items. In its memorandum and order of December 26, 1973, the district court held that (1) the district court had in rem jurisdiction and subject matter jurisdiction over Platoro’s claim; (2) that Texas had title to the artifacts; (3) and Platoro should receive a salvage award of $131,248.00. The State of Texas appeals the district court’s judgment on several grounds: (1) lack of in rem jurisdiction; (2) lack of subject matter jurisdiction since (a) Texas did not waive sovereign immunity, and (b) no maritime peril existed; and (3) improper computation of the salvage award. We reverse on the in rem jurisdiction point, and therefore find it unnecessary to consider the other claims.

To establish in rem jurisdiction in admiralty the res must be present in the district when the suit is filed or during the pendency of the action. Rule C(2), Supplemental Rules for Certain Admiralty and Maritime Claims provides: “In actions in rem the complaint shall describe with reasonable particularity the property that is the subject of the action and state that it is within the district or will be during the pendency of the action.” Rule E(3)(a) of the Supplemental Rules states: “Process in rem and of maritime attachment and garnishment shall be served only within the district.” The fact that the artifacts originally lay within the Southern District does not establish in rem jurisdiction. See American Bank of Wage Claims v. Registry of District Court, 431 F.2d 1215 (9th Cir. 1970). Platoro itself removed the artifacts from the Southern District of Texas long before filing the suit there, and, when the monition issued the artifacts were in the Western District of Texas.

In its jurisdictional ruling, the district court acknowledged that the artifacts were not within the Southern District. It felt, however, that this case fell within exception to the general rule that removal of the res destroys a court’s jurisdictional base. Where the res is accidentally, fraudulently, or improperly removed from the district, the court’s in rem jurisdiction is not destroyed. The Rio Grande, 90 U.S. (23 Wall.) 458, 23 L.Ed. 158 (1874); American Bank of Wage Claims v. Registry of District Court, supra; Martin v. The Bud, 172 F.2d 295 (9th Cir. 1949). The exception cannot apply, however, where the district court did not originally establish its in rem jurisdiction. Furthermore, Platoro was the party who removed the artifacts from the Southern District. The fraud, if any, occurred in effecting removal of the artifacts from Gary, Indiana to Austin, Texas.

The district court relied on an alternative theory to establish its jurisdiction. In December 1967, the State of Texas sued Platoro in state court to enjoin the recovery operations. The court below reasoned that the state district court’s assumption of jurisdiction over Texas and Platoro, gave the federal court the requisite jurisdictional base. We cannot divine the basis for the district court’s conclusion. The basis for the state court’s assertion of jurisdiction is unclear, but it does not appear that the state court had in rem jurisdiction of the artifacts that are the subject of this suit. When Texas filed its state court action, Platoro had already removed those items to Gary, Indiana. Further, the state voluntarily dismissed the state court suit before the federal suit went to trial. The district judge below specifically found that the dismissal was in good faith, and not an attempt to destroy the federal court’s jurisdiction. Thus the basis for the district court’s novel custodia legis theory was removed by the trial date.

The res in question was not actually or constructively present in the Southern District of Texas when Platoro filed suit. The service of process by publication did not operate to establish in rem jurisdiction since Platoro had previously removed the artifacts. Therefore we reverse and remand this cause to the district court with directions to dismiss for lack of jurisdiction.

      . The artifacts came to rest on the clay bottom of the Gulf of Mexico, thirty to forty feet underwater. Eventually they were covered by four to ten feet of sand. Under these conditions, the items were effectively impervious to weather conditions above the surface of the sea, and the sand prevented deterioration underwater. The items remained in this state of equilibrium until 1967 when Platoro commenced recovery operations.

      . Tex.Laws 1931, 42d Leg., 1st C.S., ch. 32 at 71; Tex.Laws 1939, 46th Leg. at 60.

      . The parties did not extensively brief or argue the sovereign immunity question. We feel compelled to point out, however, that this proceeding raises serious Eleventh Amendment questions. That Amendment provides: “The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” U.S.Const. Amend. XI. Though the language of the Amendment is narrow, the Supreme Court has construed the provision broadly. See Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 65 S.Ct. 347, 89 L.Ed. 389 (1959); Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890). Thus there are Eleventh Amendment considerations in an admiralty suit as well as a “suit in law or equity.” In re New York, 256 U.S. 490, 41 S.Ct. 588, 65 L.Ed. 1057 (1921); Intracoastal Transp., Inc. v. Decatur Cty., Georgia, 482 F.2d 361 (5th Cir. 1973). See also Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974).


author: GOLDBERG, Circuit Judge:

text:
    GILBERT IMPORTED HARDWOODS, INC., and Norris Cattle Co., Inc., etc., Plaintiffs-Appellees-Cross-Appellants, v. 245 PACKAGES OF GUATAMBU SQUARES, MORE OR LESS, in rem, Companhia de Navagacao Lloyd Bra-sileiro, in personam and the M/V AL-MIRANTE GRACA ARANHA, in rem, Defendants-Appellants-Cross-Ap-pellees.
    No. 73-3674.
    United States Court of Appeals, Fifth Circuit.
    Feb. 28, 1975.

      Victor T. Hudson, Mobile, Ala., Thomas B. Wheeler, James L. Wheeler, New Orleans, La., for defendants-appellants.
    G. Hamp Uzzelle, III, Mobile, Ala., for plaintiffs-appellees.
    Before THORNBERRY, GOLDBERG and GODBOLD, Circuit Judges.
   GOLDBERG, Circuit Judge:

Plaintiff-appellee A & H Lumber Sales Company [A & H] is a Mobile, Alabama, firm which imports and sells various sorts of South American hardwoods. Defendant-appellant Companhia de Na-vagacao Lloyd Brasileiro [Lloyd] is a Brazilian steamship company. In the seven years that A & H has been in operation, A & H has imported great quantities of Latin lumber, much of it in Lloyd ships. On July 18, 1972, Lloyd received a quantity of rough-cut gua-tambu lumber aboard its vessel M/V ALMIRANTE GRACA ARANHA at Ita-jai, Brazil, for shipment to Mobile. A & H purchased the bills of lading for the lumber while the ship was en route, and when the ALMIRANTE GRACA ARA-NHA arrived at Mobile on August 18, 1972, A & H proffered $13,295.23 to Lloyd’s agent in payment for the freight charges, as specified in the bills of lading. Lloyd contended, however, that the bills understated the amount of lumber actually carried on its vessel, and demanded that a survey of the cargo be made. This survey purported to show that the bills of lading were in fact incorrect, and Lloyd claimed an additional fee of $3,549.30. When A & H refused to pay this amount, Lloyd refused to deliver 245 of the 1,081 packages of lumber. A & H then filed this suit in admiralty on September 15,- 1972, asking the district court to adjudge A & H the proper owner of the disputed cargo, free of Lloyd’s claim for freight; A & H also demanded compensation for certain physical deterioration allegedly suffered by the guatambu in the course of this dispute. Lloyd answered with a counterclaim against A & H for the additional freight fees. After a trial, the district court found that A & H owed Lloyd no additional fees, but found also that Lloyd was not liable for any dajnage to the disputed lumber. Both A & H and Lloyd appeal. We believe that the district court properly refused to hold Lloyd responsible for the damage to the cargo, but we find that the court erred in its determination that A & H paid the correct amount of freight.

I

The origins of this dispute lie in the dissimilarity of standards for the measurement of lumber utilized by buyers and sellers on the one hand, and by shippers and carriers on the other. Buyers and sellers of lumber employ a measure called the board foot, which equals a piece of lumber one foot square and one inch thick, or any other configuration with a total volume of 144 cubic inches. When an American dealer such as A & H determines to purchase a quantity of South American hardwood, therefore, it specifies the number of board feet desired. Ocean carriers of this same lumber, however, deal in terms of the cubic meter, and their tariff schedules employ that standard in place of the board foot. At first glance, this difference in standards would seem to have little practical effect, for any dictionary conversion table will reveal that 424 board feet equal one cubic meter, so that in order to convert any quantity of board feet to cubic meters, one would merely have to divide by 424.

Unfortunately for simplicity, rough-cut lumber must be more finely cut before it can be used. The custom of the trade, therefore, is for the sawmill operator slightly to overcut the wood, by perhaps one-half an inch per foot, in order to ensure that the ultimate user has a full board foot with which to work. This arrangement makes a great deal of sense as between buyers and sellers of lumber, but carriers are not so much concerned with the ultimate use of the cargo they carry as with the amount of space that cargo occupies in their ships. The impact of the application of the hardwood industry’s board foot to the very different concerns of the shipping business is amply illustrated by this case, in which A & H claims that the 189,996 board feet of guatambu evidenced by the bills of lading equal 448.103 cubic meters (189,996 divided by 424), while Lloyd measured the actual cubic dimensions of each package of lumber and claims that the disputed cargo encompasses 578.736 cubic meters. So it is that a tiny differential in each piece of lumber at the sawmill develops into a 20% difference in the entire cargo at the dock.

Soon after A & H entered the hardwood business and began to deal with Lloyd, the two firms commenced to quarrel over the proper basis for ascertaining freight rates for South American hardwood. A & H maintained that the custom of the hardwood business had always been that the proper basis for freight rates was to be found by dividing the number of board feet concerned by 424. Lloyd argued that because of the practice of overcutting, such a method of computation would force the carrier to transport a greater quantity of lumber than that for which it would be compensated. Accordingly, Lloyd and A & H regularly disputed the cargoes delivered by the one to the other. In December, 1970, the first survey of an A & H cargo was made by Lloyd, but no disparity was discovered. In March, 1971, however, another shipment was surveyed: Lloyd claimed that this survey revealed that the bills of lading understated the actual bulk of the cargo by 50%. After considerable negotiation, A & H offered to pay Lloyd $1,521.16 — one-half of the alleged additional fee — in settlement of the controversy. A & H accompanied its check with a letter alleging that the settlement was conditioned on Lloyd’s promise to adhere in the future to A & H’s method of computing freight. Lloyd accepted the check and did not pursue the matter, but denies that such an agreement on rate basis was ever made and states that it so informed A & H at the time. In June, 1971, another dispute arose, but A & H flatly refused to negotiate, referring to the purported March agreement; Lloyd dropped its claim, apparently on the theory that only $50 in additional freight was involved. Between June, 1971, and the beginning of the instant dispute in August, 1972, two or three other Lloyd ships delivered lumber to A & H without incident. Finally, the two parties clashed again after the commencement of this suit, and a compromise akin to that of March, 1971, was reached.

II

Lloyd argues that its tariff requires that the cargo be measured and its carriage charge computed on the overall dimensions of the individual packages of lumber, and that as a matter of law, no custom and usage can modify the tariff. A & H contends that the tariff must be interpreted in accordance with the custom and usage of the South American hardwood trade, which is to say that the volume of the cargo is to be determined by dividing the number of board feet evidenced by the bills of lading by 424, thereby ascertaining the correct number of cubic meters, the standard in which the tariff is couched. At trial, Lloyd introduced evidence tending to demonstrate that no such custom and usage existed between shippers and carriers. A & H produced several witnesses who testified that such a practice was universal in the industry, and who were of the opinion that Lloyd’s recent conduct was utterly alien to their business experience. The district court held that the custom and usage urged by A & H did exist and was incorporated sub silentio into the tariff as it applied between A & H and Lloyd, so that the number of cubic meters of cargo to be used as the basis of the freight calculation was to be determined by dividing the number of board feet stated in the bills of lading by 424. This resolution compelled the conclusion that A & H owed no additional freight to Lloyd.

The question we must address in our review of the district court’s decision is whether any of the evidence of custom and usage could be utilized to interpret Lloyd’s tariff. We note at the outset that a tariff is not an ordinary contract. Section 817(b) of the Federal Shipping Act, 46 U.S.C. § 801, et seq., requires common carriers by water in foreign commerce, such as Lloyd, to establish, observe and enforce tariffs of reasonable rates and charges for carriage of goods by sea. Such rates, and changes therein, are subject to approval by the Federal Maritime Commission, and violations of the statute are punishable by fines of not more than $1,000 for each day that the violation continues.

Once a tariff is established by the carrier and approved by the Federal Maritime Commission, the tariff binds both the carrier and the shipper with the force of law. See Lowden v. Simonds-Shields-Lonsdale Grain Co., 1939, 306 U.S. 516, 59 S.Ct. 612, 83 L.Ed. 953; Sommer Corp. v. Panama Canal Co., 5 Cir. 1973, 475 F.2d 292. The statutory policy behind the strict enforcement of federally-approved tariffs is so strong that the rate must be charged and paid regardless of mistake, inadvertance or contrary intention of the parties. Louisville & Nashville R.R. v. Maxwell, 1915, 237 U.S. 94, 35 S.Ct. 494, 59 L.Ed. 853; St. Louis Southwestern Ry. v. Garvey Elevators, Inc., 5 Cir. 1974, 505 F.2d 625; Chicago, Burlington & Quincy R.R. v. Ready Mixed Concrete Co., 8 Cir. 1973, 487 F.2d 1263; United States v. Pan American Mail Line, Inc., S.D.N.Y.1972, 359 F.Supp. 728. In a word, as Justice Brandéis said in a slightly different com text, in Louisville & Nashville R.R. v. Central Iron & Coal Co., 1924, 265 U.S. 59, 65, 44 S.Ct. 441, 442, 68 L.Ed. 900, 902:

The shipment being an interstate one, the freight rate was that stated in the tariff filed with the Interstate Commerce Commission. The amount of the freight charges legally payable was determined by applying this tariff rate to the actual weight. Thus, they were fixed by law. No contract of the carrier could reduce the amount legally payable, or release from liability a shipper who had assumed an obligation to pay the charges.

Ill

The tariff involved in this case, that of the Inter-American Freight Conference, sets the rates for carriage of guatambu lumber on the basis of the number of cubic meters carried. A & H argues that in order to understand the meaning of “cubic meter,” one must consider the custom and usage of the hardwood trade, i. e., in order to determine the number of cubic meters a cargo encompasses, one must divide the number of board feet stated in the bill of lading by 424. A & H contends that such an exercise in no way offends the strict enforcement of tariff rates, and it is probably true that the universal observance of a custom and usage such as this one would afford little opportunity for discrimination by carriers. Nevertheless, three considerations bind us to the conclusion that since this particular custom and usage was not specifically incorporated into the tariff, it cannot now be heard to modify the rate basis, a most critical term of any tariff.

First, Rule 6(a) of the tariff provides that: “[a]ll cargo is to be measured on the over-all basis of the individual packages unless otherwise specified. . . ” Rule 6(b) provides that “[w]eight or measurement freight rates shall be assessed on actual measurement of individual packages.” These provisions of the tariff, taken in combination, suggest that the sort of custom and usage argued for by A & H would be inimical to the specific terms of the tariff. Second, section 817(b)(1) of the Shipping Act requires that all tariffs filed pursuant thereto “shall also state separately . any rules or regulations which in anywise change, affect, or determine any part or the aggregate of such aforesaid rates, or charges . . ..” Since the custom and usage posited by A & H certainly falls within the ambit of section 817(b)(1) and since such a provision nowhere appears in the tariff, it would seem that the tariff should be read specifically to exclude such a method of computing the rate basis. Finally, the regulations of the Federal Maritime Commission concerning the filing of tariffs by carriers covered by section 817(b) define “tariff” as:

a publication containing the actual rates, charges, classifications, rules regulations, and practices of a carrier or conferences of carriers for transportation by water. For purposes of this tariff circular, the term “practices” refers to those usages, customs or modes of operation which in anywise affect, determine or change a transportation rate, charge or service provided by the carrier and, in the case of conferences, must be restricted to those practices authorized by the basic conference agreement. 46 C.F.R. § 536.2.

This Commission regulation clearly indicates that in order for a custom or usage to affect the rate basis of a tariff, the tariff must specifically so affirm. In order for the Commission to determine whether a rate is “so unreasonably high or low as to be detrimental to the commerce of the United States,” 46 U.S.C. § 817(b)(5), the Commission needs to know all of the factors which may affect that rate. The dispute arose in this case precisely because the custom and usage concerned did not appear in the tariff. In these circumstances, we conclude that the rate basis of this tariff, when viewed in conjunction with the other provisions of the tariff and when considered in the context of the relevant statutory and regulatory scheme, cannot be modified by the custom and usage relied upon by A & H. For this reason, the decree of the district court in favor of A & H on the issue of the additional freight charges must be reversed.

On remand, the district court must determine whether the survey of the disputed cargo made at Lloyd’s request accurately measured the quantity actually carried by the ALMIRANTE GRACA ARANHA. If the court finds that the survey was accurate, it must then ascertain the amount of additional freight owed to Lloyd by A & H and then enter judgment for Lloyd in that sum.

Our resolution of this appeal indicates that Lloyd’s action, pursuant to its carrier’s lien, in withholding a part of the cargo consigned to A & H was justified by A & H’s refusal to pay the full freight due on the lumber. See Osaka Shosen Kaisha v. Pacific Export Lumber Co., 1923, 260 U.S. 490, 43 S.Ct. 172, 67 L.Ed. 364; The Bird of Paradise, 1866, 72 U.S. (5 Wall.) 545, 18 L.Ed. 662; Beverly Hills Nat. Bank & Trust Co. v. Compania de Navegacione Almirante S.A., Panama, 9 Cir. 1971, 437 F.2d 301, cert. denied, 402 U.S. 996, 91 S.Ct. 2173, 29 L.Ed. 161. This determination, coupled with the district court’s finding that A & H did not diligently pursue the means available for possessing itself of the disputed guatambu pending this litigation, compels the conclusion that the district properly refused to award A & H damages for any deterioration in the quality of the lumber while it was in Lloyd’s possession.

In conclusion, we observe that while evidence of custom and usage is very often an invaluable device for enabling courts and juries to interpret ambiguous contracts as the makers of the contract intended, that is not to say that this tariff is susceptible to a gloss based on extra-contractual evidence. Since the rate basis of a tariff must be unambiguous in order for the tariff fully to serve its anti-discriminatory purpose, it is only when the specifications of the tariff call for timbers of custom and usage that such beams may be incorporated into the rate structure. Congress has made tariffs strictissimi juris, and businessmen may not make them otherwise, even with tools of hoary tradition. If A & H desires a different rule than that set out in the tariff, it must secure an appropriate amendment of that document.

Affirmed in part; reversed in part and remanded.

      . Gilbert Imported Hardwoods, Inc. and Norris Cattle Company, Inc. are partners doing business as A & H Lumber Sales Company.

      . At trial, Lloyd amended its counterclaim to assert that A & H owed it a total of $3,875.58 in additional freight.

      . Section 817(b) provides, in pertinent part, that:
      (1) From and after ninety days following October 3, 1961 every common carrier by water in foreign commerce and every conference of such carriers shall file with the Commission and keep open to public inspection tariffs showing all the rates and charges of such carrier or conference of carriers for transportation to and from United States ports and foreign ports between all points on its own route and on any through route which has been established. Such tariffs shall plainly show the places between which freight will be carried, and shall contain the classification of freight in force, and shall also state separately such terminal or other charge, privilege, or facility under the control of the carrier or conference of carriers which is granted or allowed, and any rules or regulations which in anywise change, affect, or determine any part or the aggregate of such aforesaid rates, or charges, and shall include specimens of any bill of lading, contract of affreightment, or other document evidencing the transportation agreement.
      (2) No change shall be made in rates, charges, classifications, rules or regulations, which results in an increase in cost to the shipper, nor shall any new or initial rate of any common carrier by water in foreign commerce or conference of such carriers be instituted, except by the publication, and filing, as aforesaid, of a new tariff or tariffs which shall become effective not earlier than thirty days after the date of publication and filing thereof with the Commission, and each such tariff or tariffs shall plainly show the changes proposed to be made in the tariff or tariffs then in force and the time when the rates, charges, classifications, rules or regulations as changed are to become effective: Provided, however, That the Commission may in its discretion and for good cause, allow such changes and such new or initial rates to become effective upon less than the period of thirty days herein specified. Any change in the rates, charges, or classifications, rules or regulations which results in a decreased cost to the shipper may become effective upon the publication and filing with the Commission. The term “tariff” as used in this .paragraph shall include any amendment, supplement or reissue.
      (3) No common carrier by water in foreign commerce or conference of such carriers shall charge or demand or collect or receive a greater or less or different compensation for the transportation of property or for any service in connection therewith than the rates which are specified in its tariffs on file with the Commission and duly published and in effect at the time; nor shall any such carrier rebate, refund, or remit in any manner or by any device any portion of the rates or charges so specified, nor extend or deny to any person any privilege or facility, except in accordance with such. tariffs .
      (4) The Commission shall by regulations prescribe the form and manner in which the tariffs required by this section shall be published and filed; and the Commission is authorized to reject any tariff filed with it which is not in conformity with this section and with such regulations. Upon rejection by the Commission, a tariff shall be void and its use unlawful.
      (5) The Commission shall disapprove any rate or charge filed by a common carrier by water in the foreign commerce of the United States or conference of carriers which, after hearing, it finds to be so. unreasonably high or low as to be detrimental to the commerce of the United States.
      (6) Whoever violates any provision of this section shall be subject to a civil penalty of not more than $1,000 for each day such violation continues.

      . Section 817(b) does provide for rectification of certain clerical ar.d administrative errors on the part of common carriers, subject to Federal Maritime Commission approval.


author: MERRILL, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Leon KARP, Defendant-Appellant.
    No. 74-1911.
    United States Court of Appeals, Ninth Circuit.
    Dec. 4, 1974.

      Before MERRILL and GOODWIN, Circuit Judges, and WOLLENBERG, District Judge.

       Honorable Albert C. Wollenberg, United States District Judge for the Northern District of California, sitting by designation.

   OPINION

MERRILL, Circuit Judge:

On this appeal from convictions of possession of counterfeit notes under 18 U.S.C. § 472 and negatives for the making of counterfeit notes under 18 U.S.C. § 474 the sole contention is that the notes and negatives were discovered in an unlawful search and should have been suppressed. We affirm.

In May, 1973, the Secret Service learned from a convicted manufacturer and distributor of counterfeit notes that he had given $20,000 worth of counterfeit notes to Leon Karp, the defendant. On July 24, 1973, an individual matching defendant’s description made a purchase at a sporting goods store and offered a counterfeit note as payment. The clerks observed defendant leave the store and noted the license plate number of the automobile in which he drove away. They apprised the Secret Service of the occurrences and gave it the counterfeit note and the license plate number.

The Secret Service traced the license number through the Department of Motor Vehicles to the defendant. On July 26 the Secret Service went to defendant’s place of business and found his car in the parking lot. They waited nearby and observed defendant enter the car. At this point, without any warrant, they arrested defendant and seized the car pursuant to 49 U.S.C. § 782. The defendant was removed to a Secret Service vehicle. The agents then drove defendant’s automobile to the Federal Building where an inventory of the vehicle revealed counterfeit notes in the glove compartment. The vehicle was then locked. Later that day special agents returned to complete the inventory and discovered 15 negatives for making counterfeit notes in a box on the back seat. On one of these negatives the defendant’s left palm print was found.

If the seizure of the automobile without warrant was valid then the subsequent search was valid under Cooper v. California, 386 U.S. 58, 87 S.Ct. 788, 17 L.Ed.2d 730 (1967). The question is whether seizure without warrant was valid under 49 U.S.C. § 782. Under facts Which we do not find distinguishable from those at bar, this court in United States v. McCormick, 502 F.2d 281 (9th Cir. 1974), has held that seizure without warrant under § 782 was not a reasonable seizure under the Fourth Amendment. We there held that the 'warrant requirement of the Fourth Amendment applies to a seizure for forfeiture as well as to a search; that the automobile exception announced in Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 (1925), does not apply to such seizures unless (1) there was probable cause to believe that the car seized was at the time of seizure being used in a manner that subjected it to forfeiture, or (2) exigent circumstances excused the failure to obtain warrant.

Like McCormick, this case presents neither of those two factors. While there was probable cause to believe that the car had in the past been used to transport contraband, and that it was therefore subject to seizure under § 782, there was no probable cause to suppose that at the time of seizure it was transporting contraband. Nor were there exigent circumstances justifying the war-rantless search. Here as in McCormick the officers had ample time to secure a warrant after they acquired probable cause to believe the car was subject to forfeiture. There was no need for immediate action either to secure the car for forfeiture proceedings or to search its interior. Under McCormick, then, lack of warrant was not excused.

The United States contends, however, that the rule of McCormick should be applied only to seizures conducted after July 17, 1974, the date of announcement of the rule. We agree.

The threshold question bearing upon the issue of prospective application of a rule under Linkletter v. Walker, 381 U.S. 618, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965), is whether the decision states, new principles of law or merely applies what has always been the law. In our view new principles are stated in McCormick. The question remains whether these new principles should have retroactive application.

In Stovall v. Denno, 388 U.S. 293, 87 S.Ct. 1967, 18 L.Ed.2d 1199 (1967), the United States Supreme Court indicated that, whenever the question of retroactive application of a new law is before the court, three criteria should be considered:

“(a) the purpose to be served by the new standards, (b) the extent of the reliance by law enforcement authorities on the old standards, and (c) the effect on the administration of justice of a retroactive application of the new standards.”

388 U.S. at 297, 87 S.Ct. at 1970. This tripartite test was reiterated in later Supreme Court decisions, Michigan v. Payne, 412 U.S. 47, 51, 93 S.Ct. 1966, 36 L.Ed.2d 736 (1973), and was most recently adopted by this circuit in United States v. Bowen, 500 F.2d 960, 975, cert. granted 419 U.S. 824, 95 S.Ct. 40, 42 L.Ed. 47 (1974).

First with regard to the purpose to be served by the new rule, we note that as a rule bearing on search and seizure it does not go to the fairness of a trial or the integrity of the fact-finding process, and in no way impairs the court’s ability to determine the defendant’s guilt or innocence, and that rules of this sort generally should not be applied retroactively. Bowen, supra, 500 F.2d at 977-978.

Applying the second of the Stovall criteria (namely, “the reliance by law enforcement authorities on the old standards,”) to the case at bar, it would seem that retroactive application is not warranted. Clearly, the law enforcement officers in the present case had probable cause to believe appellant’s automobile had been used to transport counterfeit money. Since they were thus justified in seizing appellant’s automobile under 49 U.S.C. § 782, there was no reason under then existing rules of law for the officers to believe they must first secure a warrant. No decision of this circuit had so indicated and other circuits had upheld similar seizures. See United States v. Stout, 434 F.2d 1264 (10th Cir. 1970); United States v. Trotta, 401 F.2d 514 (4th Cir. 1968), cert. denied, 394 U.S. 908, 89 S.Ct. 1019, 22 L.Ed.2d 219 (1969); United States v. Francolina, 367 F.2d 1013 (2d Cir. 1966), cert. denied, 386 U.S. 960, 87 S.Ct. 1020, 18 L.Ed.2d 110 (1967); United States v. Troiano, 365 F.2d 416 (3d Cir.), cert. denied, 385 U.S. 958, 87 S.Ct. 396, 17 L.Ed.2d 303 (1966); Drummond v. United States, 350 F.2d 983 (8th Cir. 1965), cert. denied, 384 U.S. 944, 86 S.Ct. 1469, 16 L.Ed.2d 542 (1966); cf. United States v. McKinnon, 426 F.2d 845 (5th Cir.), cert. denied, 400 U.S. 868, 91 S.Ct. 111, 27 L.Ed.2d 108 (1970).

The third criterion to be employed in determining the question of retroactivity is the effect which the new pronouncement will have on the administration of justice. If McCormick were to be applied retroactively to all seizures made before July 17, 1974, the consequences to the orderly administration of justice would undoubtedly be widespread.

We conclude that the rule of McCormick should have prospective application only. Under prior law of this circuit, Kaplan v. United States, 375 F.2d 895, 899-900 (9th Cir.), cert. denied, 389 U.S. 839, 88 S.Ct. 67, 19 L.Ed.2d 103 (1967); see Howard v. United States, 423 F.2d 1102, 1103 (9th Cir. 1970), affirmance of the district court would have called for.

Accordingly judgment is affirmed.

      . This seems to be acknowledged by the opinion itself. We there distinguished United States v. Arias, 453 F.2d 641 (9th Cir. 1972), upon the ground that the car in that case was, at the time of seizure, “being used to facilitate the consummation of a crime,” McCormick, 502 F.2d at 284 and further stated:
      “Our other decisions, Lockett v. United States, 9 Cir., 1968, 390 F.2d 168; Kaplan v. United States, 9 Cir., 1967, 375 F.2d 895; Browning v. United States, 9 Cir., 1966, 366 F.2d 420, and Burge v. United States, 9 Cir., 1965, 342 F.2d 408, were all decided before the decisions of the Supreme Court in Coolidge v. New Hampshire, supra; Chimel v. United States, 1969, 395 U.S. 752, 89 S.Ct. 2034, 23 L.Ed.2d 685; United States v. Robinson, 1973, 414 U.S. 218, 94 S.Ct. 467, 38 L.Ed.2d 427 (Dec. 11, 1973); and Almeida-Sanchez v. United States, 1973, 413 U.S. 266, 93 S.Ct. 2535, 37 L.Ed.2d 596. To the extent that any of our cases can be read as holding that, in every case, a car can be seized under 49 U.S.C. § 782 without a warrant, so long as probable cause exists, they no longer state good law, for reasons considered hereafter.”
      United States v. McCormick, 502 F.2d at 284. We explained the change wrought by Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971), by noting that, although Cooper would seem to uphold the validity of the seizure along with the subsequent search, the Court in Cooper “did not pass on the legality of the original seizure of Cooper’s car.” 502 F.2d at 284. Coolidge was then quoted as indicating that the Supreme Court would limit the rule of Cooper to cases in which the seizure was “unquestionably legal.” This reinterpretation of Cooper was the basis for our re-examination of our line of cases which either had not discussed, as in Lockett, Kaplan, and Browning, or had rejected, as in Burge, a requirement that warrant be secured before seizure for forfeiture.