author: WATERMAN, Circuit Judge:

text:
    Ellen F. BAER, Plaintiff-Appellant, v. UNITED SERVICES AUTOMOBILE ASSOCIATION, Defendant-Appellee.
    No. 953, Docket 73-2723.
    United States Court of Appeals, Second Circuit.
    Argued May 2, 1974.
    Decided June 27, 1974.
    Henry P. Wasserstein, John D. Feer-ick, Henry P. Baer, Skadden, Arps, Slate, Meagher & Flom, New York City, for plaintiff-appellant.
    Allen M. Taylor, Bower & Gardner, New York City, for defendant-appellee.
   WATERMAN, Circuit Judge:

This is an appeal from a decision of the United States District Court for the Southern District of New York, Motley, J., granting defendant-appellee United Services Automobile Association’s (“United”) motion for summary judgment on the ground that plaintiff-appellant Baer’s action against United, which had issued a policy of insurance to Baer, was barred by a one-year limitations provision in that insurance policy. The district court believed that it had jurisdiction of the controversy under 28 U.S. C. § 1332, but neither the complaint in the district court nor the record before us negates the possibility that the parties are not of diverse citizenship. We therefore, sponte, remand to the district court with instructions to vacate its judgment and dismiss the complaint for lack of subject-matter jurisdiction.

The complaint in the district court identified the plaintiff as a citizen of the state of New York, and we have no reason to question the validity of this assertion. That same paragraph in the complaint then describes United as “a corporation organized and existing under the laws of the State of Texas having its principal place of business in the State of Texas.” If this characterization were correct, diversity would exist, for under 28 U.S.C. § 1332(c) United would be deemed a citizen of the state of Texas and its citizenship would thus be diverse from that of Baer. But, in its answer in the district court, United, while purporting to concede that it “is a citizen and resident of the State of Texas,” nevertheless denied that it had “knowledge or information sufficient to form a belief as to” whether it is a corporation. Subsequently, however, in its affidavit in reply to the affidavit filed by Baer in opposition to United’s motion for summary judgment, United clarified its status by explaining:

United Services Automobile Association is not the average insurance company. It is indeed not a corporation, but “an inter-insurance exchange” .... It insures only service-men, ex-service-men, and their immediate families. It sometimes refers to its insureds as “members” . It attempts, to an extent, to treat its insureds as partners in an Enterprise, rather than to deal with them on a strictly adversary basis. (Emphasis supplied).

In the insurance policies it issues United very carefully maintains this self-appraisal by referring to itself only as an “inter-insurance exchange” or “reciprocal insurance association,” both of which are familiar types of unincorporated associations.

Of our own accord we have examined the pertinent portions of the Texas statute under which United was organized and exists, the Texas Insurance Code of 1969, as amended. The two relevant chapters of that statute are Chapters Two and Nineteen, V.A.T.S., involving the incorporation of insurance companies and the organization of reciprocal exchanges, respectively. Inasmuch as Chapter Nineteen contains some cross-references to both Chapter Two and to the general corporation laws of Texas, see Texas Insurance Code, Articles 19.02, 19.03, one might surmise that under the Texas statute a reciprocal exchange is indistinguishable from an insurance corporation. Upon inquiry, however, what emerges is a statutory pattern which, while recognizing and retaining the distinction between the reciprocal exchange entity, traditionally a voluntary unincorporated association, and the insurance corporation, subjects both entities to the same supervision of state insurance officials. Thus, under Articles 2.01 and 2.04 of the Texas Insurance Code of 1969, as amended, insurance corporations and reciprocals alike must fulfill the same qualification requirements before they will be authorized to organize under the laws of Texas and to issue insurance. These statutory provisions are designed only to protect prospective insureds by preventing the organization of insurance entities whose chances of success are minimal because poorly financed or staffed and operated by personnel with inadequate experience in the field of insurance. There is no evident intention that this supervision is designed to intrude upon the traditional distinction drawn between corporations and reciprocal insurance associations, no matter how insignificant that distinction may appear to be as a practical matter. Indeed, the continuing validity of the distinction is expressly recognized by the statute itself, for that statute allows the reciprocal’s members to limit their contingent liability to the amount of the premiums paid by each “if the free surplus of [the reciprocal] is equal to the minimum capital stock and minimum surplus required of a stock company \i. e., a corporation] transacting the same kinds of business.” Article 19.03. Thus, under the Texas statute, the reciprocal is regarded as distinct from an insurance “stock company” or, in other words, from an insurance corporation. As we shall soon point out, this formal distinction drawn between the insurance reciprocal and the insurance corporation under state law seems to be, under United Steelworkers v. R. H. Bouligny, Inc., 382 U.S. 145, 86 S.Ct. 272, 15 L.Ed.2d 217 (1965), dispos-itive on the issue of whether the reciprocal should be considered a corporation for diversity purposes, irrespective- of whether the distinction is, as a practical matter, an artificial or illogical one. The existence of the distinction under state law, and not the logic underlying that distinction, is the paramount consideration. Inasmuch as the Texas statute draws that distinction, we are constrained here to regard United as an unincorporated association.

For the purpose of determining whether diversity jurisdiction exists, unincorporated associations have long been considered to be citizens of each and every state in which the association has members. Thus, if the unincorporated association party to a lawsuit has any member whose state citizenship coincides with the state citizenship of any of the opposing parties in the lawsuit, a federal district court has no diversity jurisdiction. Rosendale v. Phillips, 87 F.2d 454 (2 Cir. 1937) (per curiam). Any trend toward erosion of this rule creating multiple state citizenship for unincorporated associations, see e. g., Mason v. American Express Co., 334 F.2d 392 (2 Cir. 1964), seems to have been abruptly halted by United States Steelworkers v. R. H. Bouligny, Inc., supra, 382 U.S. at 149-153, 86 S.Ct. 272, in which the Supreme Court held that a labor union is not an independent “juridical personality” for the purpose of ascertaining its citizenship in diversity cases.

There, the Court did not dispute the logic of the union’s contention that

. many voluntary associations and labor unions are indistinguishable from corporations in terms of the reality of function and structure, and to say that the latter are juridical persons and “citizens” and the former are not is to base a distinction upon an inadequate and irrelevant difference. [The union] assert[s], with considerable merit, that it is not good judicial administration, nor is it fair, to remit a labor union or other unincorporated association to vagaries of jurisdiction determined by the citizenship of its members and to disregard the fact that unions and associations may exist and have an identity and a local habitation of their own. Id. at 149-150, 86 S.Ct. at 274.

Yet, despite this acknowledgment of the significant similarity between corporations and certain other types of associations, the Court was unwilling to tamper with the existing statutory rule of 28 U.S.C. § 1332(c), which by its express terms applies only to corporations:

We are of the view that these arguments, however appealing, are addressed to an inappropriate forum, and that pleas for extension of the diversity jurisdiction to hitherto uncovered broad categories of litigants ought to be made to the Congress and not to the courts. Id. at 150-151, 86 S.Ct. at 275.

Bouligny appears to have been intended to truncate any further judicial enlargement of the clear language of 28 U.S.C. § 1332(c) and to disapprove any judicial enlargement which had already occurred. See, e. g., Truck Insurance Exchange v. Dow Chemical Co., 331 F.Supp. 323, 324-325 (W.D.Mo.1971); 3A J. Moore, Federal Practice f[ 17.25, at 862-864 (Supp.1973).

We thus find the rule which has been traditionally applied to unincorporated associations apposite here. Furthermore, United appears to be precisely the type of unincorporated reciprocal insurance association which was held by the Tenth Circuit in Arbuthnot v. State Automobile Insurance Association, 264 F.2d 260 (10 Cir. 1959), to be, for diversity purposes, a citizen of each state in which it has members or subscribers. Of course Mason v. American Express Co., supra, in which we held that a New York joint stock association was a citizen only of New York, might be authority for regarding United as possessing a “juridical personality” independent of its members, an approach which would have the effect here of making United a citizen of Texas as if a corporation incorporated there. In reaching the result in Mason, however, we distinguished Ar-buthnot on the ground that the unincorporated association in Arbuthnot possessed fewer of the classical attributes of a corporation than the joint stock device of American Express possessed. See 334 F.2d at 402. More importantly, the precedential value of Mason was, at the least, seriously undermined by United Steelworkers v. R. H. Boulig-ny, Inc., supra, 382 U.S. at 152 n. 10, 86 S.Ct. 272, which, as we have stressed seems to represent a broad reaffirmance of the diversity rule traditionally applied to unincorporated associations.

Inasmuch as United should, for diversity jurisdictional purposes, be considered a resident of each state in which it has members, diversity jurisdiction would be defeated here, as we have explained, if United has even one member, other than Baer, who is a citizen of New York. We think it inconceivable that it does not have such a member.

Of course our order dismissing for lack of subject-matter jurisdiction will not have been anticipated by the parties, for both in the district court below and on this appeal, the issue of whether the district court had subject-matter jurisdiction has not been raised. Nevertheless, “[b]ecause of the limited jurisdiction of the federal courts, . . . it is incumbent upon this court to raise the question of subject-matter jurisdiction sua sponte whenever it appears from the pleadings or otherwise that jurisdiction is lacking.” John Birch Society v. National Broadcasting Co., 377 F.2d 194, 199 (2 Cir. 1967); see Mitchell v. Maurer, 293 U.S. 237, 55 S.Ct. 162, 79 L.Ed. 338 (1934); Wymard v. McCloskey & Co., 342 F.2d 495, 497 (3 Cir.), cert. denied, 382 U.S. 823, 86 S.Ct. 52, 15 L.Ed. 2d 68 (1965). Having raised the question of our own accord, we have examined the complaint and have discovered nothing there that negates the possibility that United should be considered a citizen of New York here because it has members, other than Baer, who are citizens of New York. “[T]he complaint in this action fails to show diversity of citizenship on its face, because it does not allege the citizenship of the members of [United].” Fine v. Philip Morris, Inc., 239 F.Supp. 361, 366 (SDNY 1964). Such a complaint, which on its face fails to negate the possibility that diversity does not exist, is defective. John Birch Society v. National Broadcasting Co., supra, 377 F.2d at 198; George v. Douglas Aircraft Co., 332 F.2d 73, 74 n. 1 (2 Cir.), cert. denied, 379 U.S. 904, 85 S.Ct. 193, 13 L.Ed.2d 177 (1964); Fine v. Philip Morris, Inc., supra 239 F.Supp. at 364-366.

There is authority, upon which we choose to rely, however, for the proposition that a jurisdictionally defective complaint can be regarded as satisfactorily amended if the record as a whole establishes the existence of the required diversity of citizenship between the parties. See John Birch Society v. National Broadcasting Co., supra, 377 F.2d at 199; George v. Douglas Aircraft Co., supra, 332 F.2d at 74 n. 1; National Farmers Union Property & Casualty Co. v. Fisher, 284 F.2d 421, 422-423 (8 Cir. 1960). Accordingly, we have carefully studied the record in this cáse but have discovered no information there which would eliminate the possibility that United has members, other than Baer, who are citizens of New York.

We therefore remand the case to the district court with directions to vacate its judgment and to dismiss the complaint for lack of subject-matter jurisdiction.

      . Of course, under no circumstances can United’s purported acknowledgment that it is a “citizen and resident [.only! of the State of Texas” have the effect of conferring diversity jurisdiction on this court if, according to the applicable rules for determining “citizenship” of an organization such as United, that assertion be erroneous. Diversity does not in fact exist despite pleadings, admissions, or concessions if, under these applicable rules, and on the. record as a whole, United must be considered a “citizen” of New York, the state of which Baer is unquestionably a citizen. See Wymard v. McCloskey & Co., 342 F.2d 495, 497 (3 Cir.), cert. denied, 382 U.S. 823, 86 S.Ct. 52, 15 L.Ed.2d 68 (1965).

      . This distinction is drawn elsewhere in Chapter Nineteen. See Article 19.06 (emphasis supplied) :
      [The reciprocal si all maintain] at all times a surplus over and above all liabilities equal to the minimum cajntal stock and surplus required of a stock insurance company transacting the same kinds of business.

      . We do not mean to imjily that the distinction drawn under Texas law between a reciprocal such as United and an insurer incorporated under Texas law is an insubstantial distinction. To the contrary, in many respects United is dramatically different from an ordinary insurance company utilizing the corporate form for the purpose of doing business with the public at large. United, with a few exceptions, insures only present and former United States military personnel and tlieir immediate families and adheres to the traditional concept that in a reciprocal insurance association the members, by exchanging contracts of insurance, are both the insurers and the insureds. In a very real sense then, when a disgruntled policyholder sues the reciprocal, lie is suing not so much the entity as he is his fellow individual members of that entity.
      Besides this important conceptual difference, the statute recognizes formal structural differences between the reciprocal and the insurance corporation. For example, under the statutory scheme the reciprocal does not have the capital structure of a corporation but rather what is termed “free surplus.” Having no capital structure, the reciprocal does not issue shares of capital stock.

      . Inasmuch as it is incorrect, the allegation that United is a corporation organized under the laws of Texas does not bar our inquiry. And, the defendant, in its pleadings, as we have pointed out, put the plaintiff to her proof thereof.

      . In any event, the plaintiff, as we have stated above, was put on notice to inquire about this and failed to do so.


source: Caselaw Access Project

license: Public Domain

text:
    William HURDICH, Plaintiff, v. EASTMOUNT SHIPPING CORP., Defendant and Third Party Plaintiff, Appellant-Cross Appellee, v. R.C.A. CORPORATION, Third Party Defendant Appellee-Cross Appellant.
    Nos. 907, 1037, Dockets 73-2727, 74-1088.
    United States Court of Appeals, Second Circuit.
    Argued April 30, 1974.
    Decided Sept. 12, 1974.

      Thomas H. Healey, Darby, Healey, Stonebridge & Whelan, New York City, for Eastmount.
    John F. X. McKiernan, Hill, Betts & Nash, New York City, for R.C.A.
    Before WATERMAN, FRIENDLY and MULLIGAN, Circuit Judges.
   WATERMAN, Circuit Judge:

These are cross-appeals from a judgment of the United States District Court for the Southern District of New York, Lasker, J., entered in a third-party action which developed out of a fact pattern frequently recurring in the field of maritime law. In the principal action the seaman plaintiff William Hurdich sued his shipowner employer, Eastmount Shipping Corporation (Eastmount) for personal injuries sustained by him because of the alleged negligence of East-mount and the unseaworthiness of its vessel on which Hurdich was employed when injured. Eastmount, after answering and controverting Hurdich’s allegations of negligence and unseaworthiness, then filed its third-party complaint against RCA Corporation (RCA) which had performed certain repair work on the vessel on which Hurdich was injured. By this imp leader Eastmount, claiming a breach of RCA’s implied warranty of workmanlike service, asserted that Hurdich’s injuries, if any, had been caused by the negligence of RCA. Accordingly, in the event that Eastmount should be adjudged liable to Hurdich, the vessel owner sought full indemnity from RCA. After a trial by jury in the principal action, a judgment of $75,000 was awarded in Hurdich’s favor against Eastmount. No appeal has been taken from that judgment. The third-party action was then tried separately by the district court sitting without a jury. The court found that RCA had indeed breached its implied warranty of workmanlike service. Despite this breach, the court nevertheless believed that Eastmount was not entitled to a full recovery over against RCA. Instead, finding that their combined negligence had produced Hurdich’s injuries, and thereby concluding that Eastmount and RCA were joint tortfeasors, the court held that Eastmount was entitled to contribution from RCA of $37,500, one-half the amount for which Eastmount had been held liable to Hurdich. It is from this judgment that these cross-appeals by Eastmount and RCA arise.

Eastmount protests that under Ryan Stevedoring Co. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956) and its progeny, Eastmount was entitled to full recovery over, i. e., indemnity, on its claim of breach of implied warranty of workmanlike service, and that it was impermissible under prevailing maritime law for the district court to dispose of the case by regarding Eastmount and RCA as joint tortfeasors with Eastmount entitled to contribution only, instead of to its implied contractual indemnity. RCA presents a bifurcated argument on appeal. It primarily argues that East-mount is entitled to neither indemnity nor contribution because Eastmount’s conduct, which we shall discuss below, precludes both. However, RCA urges alternatively an affirmance of the district court’s decision to allow contribution and to disallow indemnity.

Although, as mentioned, the district court “conclude[d] that RCA is liable to Eastmount for breach of its warranty of workmanlike service [,]” the court’s award of only one-half of what East-mount sought from RCA demonstrates that the breach of the warranty was not, in fact, the basis upon which Eastmount was allowed to recover against RCA. If it had been, then Eastmount should have been entitled to indemnity, that is, a full recovery over. Rather, despite some misleading language in the district court’s opinion, a careful examination of that opinion reveals that the only basis on which Eastmount could properly have been allowed to recover against RCA was on a theory of contribution since East-mount was precluded by its own conduct from obtaining a recovery under an implied warranty. Thus construing the district court decision as one disallowing an indemnity but ordering a contribution between joint tortfeasors, we affirm the judgment below.

The facts are not complex. East-mount, through an intermediary, retained RCA to replace an antenna insulator on one of Eastmount’s vessels, the Susquehanna. The repairs were performed in Mobile, Alabama on May 17, 1968 and May 20, 1968 by one of RCA’s service employees, Jack Hays. On May 17 Hays was assisted by two of East-mount’s employees, the Susquehanna’s radio officer and the first assistant engineer. The work that day involved chipping and removing the old insulator so that that the new insulator might be installed at a later date. In the course of removing the old insulator, insulation debris accumulated on the deck of the flying bridge, the area of the vessel upon which the antenna was located. Hays testified that this debris had been cleaned up by the end of May 17 and further asserted that the ship’s radio officer had aided in this cleanup. On May 20, Hays returned alone to the flying bridge to fasten the new insulator into place on the antenna. No further debris was created by the bolting operation and no additional cleanup was undertaken.

On June 2, 1968, Hurdich, while walking on the flying bridge, slipped and fell on some of the insulation debris which had purportedly been cleaned up on the 17th of May. Hurdich then initiated the litigation, described above, which has led to this appeal.

We heard oral argument before the United States Supreme Court rendered its decision in Cooper Stevedoring Co. v. Fritz Kopke, Inc., 417 U.S. 106, 94 S.Ct. 2174, 40 L.Ed.2d 694 (1974). There the Court held that contribution between joint tortfeasors is permissible under maritime law in noncollision cases, as well as in collision cases, provided that neither of the joint tortfeasors is immunized from a suit which the injured victim of the tort could institute. Inasmuch as Hurdich was not precluded by statute, or otherwise precluded from suing either Eastmount, which he did sue, or the other tortfeasor, RCA, the Cooper Stevedoring holding applies here. That holding defeats Eastmount’s contention that contribution between joint tortfeasors is impermissible in a noncollision case. Therefore, under Cooper Stevedoring the district judge, on the basis of his considered belief that East-mount and RCA were concurrently at fault, was entitled to award Eastmount contribution from RCA, and, whether or not more should be awarded, was at least reasonably entitled to assess this contribution at one-half of Hurdich’s recovery against Eastmount. What remains for us to decide is whether the judge should have granted Eastmount more — namely, a full recovery over against RCA on the basis that East-mount had a right to full indemnity because RCA had breached its implied warranty of workmanlike service. In Cooper Stevedoring the Fifth Circuit had affirmed the district court’s denial of a request for full indemnity. See 479 F.2d 1041 (5 Cir. 1973). This issue of whether full indemnity should have been granted was not, however, presented for review to the Supreme Court, see 94 S.Ct. at 2176, n. 4 and we thus lack the benefit of a recent clarifying pronouncement on this difficult issue.

Ryan Stevedoring Co. v. Pan-Atlantic Steamship Corp., supra, established the right of a vessel owner to be indemnified by a workman company in the event a judgment is recovered against the shipowner for shipboard injuries which are attributable to the careless manner in which the workman company had performed work on the vessel. The theory articulated by the Court to support this doctrine is that the workman company impliedly warrants that it will perform the agreed-upon tasks in a workmanlike manner. Within two years of the decision in Ryan, however, the Supreme Court superimposed an important qualification onto the shipowner’s right to an indemnity. In Weyerhaeuser Steamship Co. v. Nacirema Operating Co., 355 U.S. 563, 78 S.Ct. 438, 2 L.Ed.2d 491 (1958), the Court announced:

“If . . . [the workman company] rendered a substandard perform-anee which led to foreseeable liability of [the shipowner], the [shipowner] was entitled to indemnity absent conduct on its part sufficient to preclude recovery. The evidence bearing on these issues — [the shipowner’s] action in making the shelter on its ship available to [the workman company’s] employees in Boston although it apparently was unsafe, as well as the [workman company’s] continued use of the shelter for five days thereafter without inspection — was for jury consideration under appropriate instructions.” Id. at 567, 78 S.Ct. at 441 (footnotes omitted) (emphasis inserted).

Thus a shipowner can by its own conduct foreclose its right to indemnity, and in any particular case the determination of whether the shipowner has so precluded itself is an issue of fact. Regrettably, Weyerhaeuser failed to provide ample legal guidelines to be used in making this determination of fact. In the ensuing years the lower federal courts grappled as best they could with the nebulous “Weyerhaeuser dictum” of “absent conduct on its pai’t sufficient to preclude recovery.” Eventually, in Ital-ia Societa per Azioni di Navigazione v. Oregon Stevedoring Co., 376 U.S. 315, 84 S.Ct. 748, 11 L.Ed.2d 732 (1964), the Supreme Court discussed the philosophy underlying the indemnity concept and then supplied, we believe, the test that should be applied by the fact-finder in ascertaining whether the shipowner has engaged in “conduct on its part sufficient to preclude recovery.” This test should have been applied by the district court below but was not. The Court, although justifying imposition of liability on a stevedore, enunciated a principle that “liability should fall upon the party best situated to adopt preventive measures and thereby to reduce the likelihood of injury.” Id. at 324, 84 S.Ct. at 754. This philosophy of permitting the ultimate loss to fall on the party which was best able to prevent that specific loss has been previously acknowledged in this circuit, see Bertino v. Polish Ocean Line, 402 F.2d 863, 866 (2 Cir. 1968), where we held that a stevedore had breached its warranty of workmanlike performance, and we think it is the only practical standard under which the factfinder can determine if the shipowner should be denied its indemnity.

Applying the Italia test to the circumstances of this case, we conclude that Eastmount was so situated that it, rather than RCA, was best able to have eliminated the specific risk which caused the injury to Hurdich. The trial judge found, and we agree with him, that Eastmount, through its agent, the vessel’s radio officer, had actual knowledge concerning the manner in which the May 17 purported cleanup of the insulation debris had been performed. East-mount, while adhering to its refusal to concede that any of the vessel’s personnel had knowledge of the events of May 17, argues that the fact that the RCA workman returned on the 20th to complete the agreed-upon work renders nugatory any knowledge the vessel may have had of any debris carelessly left on the deck on the 17th. To be sure, Hays performed the bolting operation of the 20th in the vicinity of the spot where the insulation debris had fallen and which supposedly had been cleaned up on the 17th. While this fact is somewhat troubling, we choose to accept the district court’s apparent view that the work performed on the 20th, which, as stated above, involved the creation of no additional debris, was sufficiently distinct from the work of the 17th so that that work should be considered a different task. Moreover, Eastmount presented no testimony to show that its employees had been led to believe that the independent operation of chipping the old insulation and cleaning up the insulation litter was not thought to have been completed on the 17th of May, but, instead, was intended to be finished on the 20th when Hays returned alone to bolt the new insulator into place. Knowing of the debris left on the 17th, and having no justifiable reason to believe that Hays had cleaned it up on the 20th, Eastmount, at least under these circumstances, was obligated to inspect the area after Hays had finished his work on the 20th to determine if the hazardous condition of which it had knowledge had been corrected.

Of course this knowledge of an existing dangerous condition is only one of the factors which leads us to hold that Eastmount should be precluded from an indemnity recovery. Perhaps more important than the mere knowledge of the condition on the flying bridge are the related circumstances that Eastmount had the ability to eliminate the risk because it had control over the area where Hurdich was injured, and that, after May 20, as between RCA and • Eastmount, Eastmount alone was capable of remedying the condition which caused the injury to Hurdich. Although most cases which have explored the issue of whether, on the facts, the shipowner should be foreclosed from indemnity have declared that the shipowner is not precluded when the fault attributed to it has been a failure to discover a dangerous condition, see, e. g., Weyerhaeuser Steamship Co. v. Nacirema Operating Co., supra 355 U.S. at 568, 78 S.Ct. 438; De Gioia v. United States Lines Co., 304 F.2d 421, 424 (2 Cir. 1962), the eases appear to have left open the question of whether actual knowledge of the hazardous condition, as was present in this case, should preclude the shipowner, see, e. g., Weyerhaeuser Steamship Co. v. Nacirema Operating Co., supra 355 U.S. at 568, 78 S.Ct. 438; Pettus v. Grace Line, Inc., 305 F.2d 151, 154 (2 Cir. 1962). We believe the proper resolution of that open question is obvious when the shipowner’s actual knowledge of the dangerous condition is aggravated by the fact that it is the only party which over an extended period of time directly preceding the accident could have taken the corrective measures necessary to reduce or eliminate the risk of injury. Indeed, regardless of the legal theory applied in the eases, the issue of whether the shipowner is precluded from indemnity might conceivably have been decided in many of them, as a practical matter, on a determination of whose fault is latest in time, the shipowner’s or the workman company’s. See, e. g., Sessions v. Fritz Kopke, Inc., 479 F.2d 1041 (5 Cir. 1973), aff’d sub. nom. Cooper Stevedoring Co. v. Fritz Kopke, Inc., 417 U.S. 106, 94 S.Ct. 2174, 40 L.Ed.2d 694 (1974); United States Lines, Inc. v. Jarka Corp., 444 F.2d 26 (4 Cir. 1971); Misurella v. Isthmian Lines, Inc., 328 F.2d 40 (2 Cir. 1964); Pettus v. Grace Line, Inc., supra. Of course, in most instances, this is merely a recognition that the party whose fault is immediately antecedent to the injury is the party who was in the optimal position to prevent the injury. Here a failure on our part to attach significant weight to the sequence of fault would be to countenance the absurd result of making RCA shoulder the entire burden for aqy injury sustained to anyone arising from the condition of the area where Hurdich was hurt despite Eastmount's exclusive control after May 20 of that area. Logically, the degree of Eastmount’s fault should be related to the length of time it permitted the known dangerous condition to persist. The period of over two weeks that elapsed between Eastmount’s acquisition of knowledge of the existence of the debris and Hurdieh’s unwitting discovery of that debris is of sufficient duration to preclude Eastmount’s right to indemnity.

Although it is precluded from indemnity i. e., a full recovery over, East-mount is entitled to, and was granted by the district court below, contribution from RCA for a portion of the amount Hurdich recovered from Eastmount. We suspect that a practical effect of the Supreme Court’s decision in Cooper Stevedoring, a case which removed any doubt about the propriety of awarding contribution in maritime noncollision cases in which the plaintiff could have sued either the shipowner or the workman company, or both of them, will be a more enlightened judicial attitude toward finding a shipowner precluded by its own conduct from recovering a Ryan indemnity, and finding a negligent workman company liable proportionally with a negligent shipowner. The comparative negligence doctrine is one with which the admiralty has long been familiar, and the change of attitude which we foresee will be a salutary development in this area in which, irrespective of proportionate fault, full liability has been heretofore sought to ■ be transferred. When, under Cooper Stevedoring, the shipowner has a right to contribution, there is no longer any justification for the perfunctory rejection of the'workman company’s claim that the shipowner by its own wrongful conduct has precluded itself from its right to indemnity. The inflexibility of application of the Ryan doctrine was a product of the blanket prohibition against contribution in noncolKsion cases. The disappearance of that prohibition should presage the development of a more equitable and realistic approach toward dividing the burden between parties who are mutually at fault. Judge Lasker anticipated that realistic approach, and we affirm his commendable solution.

Judgment affirmed.

      . The district court found that Eastmount. was not. precluded by its own conduct. The judgment of that court denying indemnity is incompatible with this finding. See note 3 infra.

      . Eastmount now challenges Judge Lasker’s finding of fact that two of its employees assisted Hays on the 17th of May. Although, as tlie judge noted, Hays originally did not specifically testify that additional parties had assisted him on that date, his original testimony is fairly read as an express denial that any other ROA employees had aided him. Hays’s subsequent revelation that he had been assisted by Eastmount employees is therefore not inconsistent with his previous testimony. Furthermore, Eastmount had the opportunity to offer rebuttal testimony but it (lid not do so. Judge Lasker therefore found as a fact that Hays was assisted by an Eastmount employee, the vessel’s radio officer, in the cleanup on the 17th and that Eastmount, through this employee, had actual knowledge of the hazardous condition which resulted in the injury to Hurdich. We discern no basis for questioning this finding.
      The judge declined, however, to find that the Eastmount employees could be considered as having created the dangerous condition, presumably because of his belief that ultimate responsibility for the manner in which the rej)airs were performed rested with the workman company RCA. We believe the issue here to be primarily, although not exclusively, a factual rather than a legal one, and inasmuch as the district court’s finding on this score is not clearly erroneous, we do not disturb it. An additional reason why we think it unnecessary to pursue any further the issue of whether Eastmount could be said to have “created” the danger is our belief, upon which we shall later elaborate, that Eastmount’s actual knowledge of the dangerous condition and subsequent failure to rectify that, condition constitute conduct on Eastmount’s part sufficient to foreclose its right to indemnity.

      . As noted, we believe the issue of whether the shipowner has precluded itself is an issue of fact. Although denying the request for indemnity, Judge Lasker purported to find as a fact that the shipowner Eastmount had not precluded itself. Aside from the patent non sequitw resulting from this purported finding of fact and the denial of the prayer for indemnity, we disregard this inconsistent purported finding for the additional reason that we believe the district court, by not applying the Italia test, applied an inappropriate standard for determining whether the shipowner had precluded itself.

      . IVe note that Hurdich was a seaman employee of the shipowner and, moreover, was injured in 1968. He was not covered by the provisions of the Longshoremen’s and Harbor Workers’ Compensation Act and the Amendments to that Act of 1972 are not applicable here. For a discussion of the change these amendments have made in applicable areas see Cooper Stevedoring Co. v. Fritz Kopke, Inc., 417 U.S. at 113, note 6, 94 S.Ct. at 2178, note 6.


author: BIGGS, Circuit Judge. ROSENN, Circuit Judge

text:
    Rose ZURZOLA and Matthew Zurzola, husband and wife v. GENERAL MOTORS CORPORATION, Appellant in 73-1983, v. Matthew ZURZOLA, Third-Party-Defendant, and Jack Mutchnick and DeVille Leasing Corporation, Third-Party-Defendants. Appeal of Jack MUTCHNICK, in 73-1959. Rose ZURZOLA et al. v. Jack MUTCHNICK, Appellant, and DeVille Leasing Corporation v. Matthew ZURZOLA, Third-Party-Defendant.
    Nos. 73-1959, 73-1983 and 73-1960.
    United States Court of Appeals, Third Circuit.
    Argued April 16, 1974.
    Decided Sept. 17, 1974.

      Rosenn, Circuit Judge, dissented and filed an opinion.
    Francis E. Marshall and Edward R. Murphy, Marshall, Dennehey & Warner, Philadelphia, Pa., for appellee, Matthew Zurzola.
    George J. Lavin, Jr. and Francis F. Quinn, Liebert, Short, Fitzpatrick & Lavin, Philadelphia, Pa., for appellant, General Motors Corp.
    Henry J. Lotto, Philadelphia, Pa., for appellant, Jack Mutchnick.
    Before BIGGS, ALDISERT and RO-SENN, Circuit Judges.
   OPINION OF THE COURT

BIGGS, Circuit Judge.

Rose Zurzola and Matthew Zurzola, husband and wife, residents and citizens of New Jersey, on May 26, 1969, motored to visit relatives in Philadelphia. They became involved in an accident with another automobile at the intersection of Roosevelt Boulevard and Harbi-son Avenue, in Philadelphia. The driver of the other vehicle was Mutchnick, a resident of Pennsylvania. His automobile was owned by and leased to him by the DeVille Leasing Corporation, a Pennsylvania corporation, and had been manufactured by General Motors Corporation, a Delaware corporation. Two suits based on diversity were filed. The first was brought by Rose Zurzola and Matthew Zurzola, husband and wife, and Matthew Zurzola in his own right, vs. General Motors Corporation, No. 70-308 in the district court, at our Nos. 73-1959 and 73-1983. General Motors was accused of having equipped the car with inferior safety glass. General Motors moved to join Mutchnick and DeVille Leasing Corporation as third party defendants and to sever and join Matthew Zurzola as a third party defendant. These motions were granted. The second suit at No. 70-310 in the district court and at our No. 73-1960, was brought by Rose Zurzola, and Rose Zur-zola and Matthew Zurzola, husband and wife, and Matthew Zurzola in his own right, vs. Jack Mutchnick and DeVille Leasing Corporation, alleging negligence on the part of Mutchnick in operating an automobile owned by DeVille while acting as agent of DeVille. The defendants moved to sever Matthew Zurzola and join him as a third party defendant and a severance order was entered. The third party complaint alleges negligence on the part of Matthew Zurzola. The learned district judge entered an order granting Matthew Zurzola’s motion to dismiss him as a third party defendant, in both actions, on the ground of inter-spousal immunity. General Motors and Mutchnick have appealed, having procured adequate Rule 54(b), 28 U.S.C. orders.

In limine we are faced with a complex conflict of laws issue. The district court, 341 F.Supp. 767 (E.D.Pa.1972), concluded: “Presently before this Court are motions of Matthew Zurzola to dismiss him as a third-party defendant on the premise that he is immune from contribution even if a jury finds that negligence on his part caused the injuries to his wife. For the reasons set forth below, we will grant those motions.”

Since the jurisdiction of the district court is based on diversity of citizenship, we apply the conflicts of law rules of Pennsylvania. Klaxon Co. v. Stentor Electrical Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). In Griffith v. United Airlines, Inc., 416 Pa. 1, 203 A.2d 796 (1964), the Pennsylvania Supreme Court held that a court must examine the various contacts that each state has with the matter in controversy to ascertain the state that has the greater interest in the issue and the law of the state most interested should be applied to resolve any dispute.

The district court in the instant case went on to say, 341 F.Supp. at 769: “Applying this test, it is our considered judgment that New Jersey has the most significant interest in the issue of in-traspousal contribution. Matthew and Rose Zurzola were domiciliaries of New Jersey at the time of this accident. Since New Jersey is the state which has the basic responsibility for regulating the incidents of the marital relationship, it follows that any effect which this litigation might have on the domestic relations of these parties is a primary concern to New Jersey.

“On the other hand, Pennsylvania has an important interest in assuring its citizens safe travel on the state’s highways. To the extent that the threat of liability deters carelessness, Pennsylvania arguably has an interest in intraspousal contribution. But resort to New Jersey law in this case should not significantly reduce any deterrence sought by Pennsylvania since the negligent spouse remains liable to third persons beyond the family relationship. Consequently, we are convinced that Pennsylvania would apply New Jersey law to the issue of intra-spousal contribution.

“In fact, the Pennsylvania Supreme Court’s holding in McSwain v. McSwain [420 Pa. 86, 215 A.2d 677 (1966)] mandates this conclusion. That case involved an automobile accident in Colorado involving married residents of Pennsylvania. Mrs. McSwain sued her husband in Pennsylvania under the Colorado Death Act alleging that the accident and death of their child were caused by his negligence. Under Colorado law, a wife could sue her husband directly in tort, whereas, Pennsylvania law barred direct intraspousal tort actions. The lower court held that Pennsylvania law applied and therefore, Mrs. McSwain was barred from suing. The Supreme Court affirmed and stated that: ‘Our conclusion to look to the law of Pennsylvania on the issue of intramarital immunity rests . . . upon a determination that the circumstances of the instant case do not warrant the interjection of Colorado law into what is essentially a Pennsylvania family controversy.’ Id. 97, 215 A.2d [677] 683.

“Turning to New Jersey law, we find that in all instances intraspousal contribution was forbidden at the time of this accident. See e. g., Kennedy v. Camp, 14 N.J. 390, 102 A.2d 595 (1953).

“On July 10, 1970, however, the New Jersey Supreme Court changed the common law to permit such contribution in tort actions. See Immer v. Risko, 56 N. J. 482, 267 A.2d 481 (1970). Defendant Mutchnick argues that this opinion should apply retroactively to permit contribution in this case. Although retroactive application in the Immer case has great appeal, the New Jersey Supreme Court expressly held in Darrow v. Hanover Township, 58 N.J. 410, 278 A.2d 200 (1971), that the Immer decision had prospective application only. Since we are bound to follow New Jersey law and this accident occurred more than a year prior to the Immer opinion, we conclude that Matthew Zurzola enjoys immunity from contribution.

“Even if we were to consider this case under Pennsylvania law, the result would not change. Although the defendants assert that Pennsylvania law permits joinder of a spouse as a third-party defendant for purposes of contribution, the recent Supreme Court case of Falco v. Pados [, 444 Pa. 372], 282 A.2d 351 (1971), expressly held otherwise. Compare Ondovchik v. Ondovchik, 411 Pa. 643, 192 A.2d 389 (1963). Consequently, we must hold that Matthew Zurzola is immune from liability in this suit.”

Only one question is presented here for decision, i. e., should the law of New Jersey or that of Pennsylvania be applied to determine the liability of Matthew Zurzola. As we have said, we must apply the conflict of laws principles of the forum, Pennsylvania. Klaxon Co., supra. The Pennsylvania Supreme Court has held that a court should examine the various contacts that it and any other State has in respect to the controversy to determine what State has the greater interest in the issue. In short, we look to the interests of the States, not to those of individual parties.

Significant contacts seem to lie in the law of both States. As to Pennsylvania, we note the following: (a) The accident occurred in Pennsylvania; (b) the case is being tried in a Pennsylvania court; (c) the defendants and, correspondingly, their insurers may be financially injured by the failure to apply Pennsylvania law; (d) all the defendants have ample Pennsylvania connections; and (e) the safety of the highways of Pennsylvania will be heightened by imposing liability for careless driving whether or not the driver is being sued by or is suing a spouse. New Jersey also has its interests (a) to protect its insurers from losses and (b) to preserve family harmony.

In McSwain v. McSwain, 420 Pa. at 91-97, 215 A.2d at 680-683, where there was a conflict between the law of Pennsylvania and the law of Colorado, Mr. Justice Roberts, speaking for the court, said: “Given the conflict between the law of Colorado, the situs of the accident, and the law of Pennsylvania on the effect of the marital relationship of the parties on appellant’s right to prosecute the instant suit, we are thus confronted with the question of whether the circumstances of the case warranted the application of the Pennsylvania rule.

“Although rendered prior to the decision in Griffith v. United Airlines, Inc., 416 Pa. 1, 203 A.2d 796 (1964), in which this Court rejected the rule of lex loci delicti, the trial court’s decision to look beyond the situs of the accident to apply the Pennsylvania rule of interspousal immunity was not without precedent. Even at the height of its acceptance, similar departures from the dictates of lex loci delicti were made by courts confronted with a conflict as to the effect of the marital relationship on the right of the parties to sue inter se. Following the precedent established in Emery v. Emery, 45 Cal.2d 421, 289 P.2d 218 (1955), an early decision departing from the usual resort to lex loci delicti, a number of courts began to apply the law of the marital domicile to determine the issue. By characterizing the effect of the marital relationship on the rights of the parties as an aspect of family or domestic relations, rather than tort law, many courts which otherwise adhered to the rule of lex loci delicti isolated the issue for treatment under a different choice of law rule. In this manner, some of the rigidity which lex loci delic-ti introduced into the solution of choice of law problems was partially alleviated.

“It was in part a recognition of the considerations which prompted such departures and their applicability to the entire spectrum of choice of law problems which led to the growing dissatisfaction with the rule of lex loci delicti. Time found the rule increasingly criticized as a mechanical methodology, predicated on the out-moded ‘vested rights’ theory, and emphasizing certainty and predictability at the expense of other, frequently more relevant considerations. See Griffith v. United Airlines, Inc., 416 Pa. 1, 12-13, 203 A.2d 796, 801 (1964). In a series of significant decisions, a number of jurisdictions abandoned ‘vested rights’ and its embodiment in the rule of lex loci delicti. Recognizing that the state of the situs of the ‘tort’ may not necessarily have a sufficient interest in the issue in dispute to warrant the interjection of its policies into the litigation, these courts embarked upon a new approach to the solution of choice of law problems which replaced the a priori assumptions of lex loci delicti with an analysis of the interests of the various states factually involved in the matter in dispute.

“In Griffith, supra, we sought to make clear that our decision to adopt this approach was dictated by an appreciation of our federal system, the frequently varying policies of its member states, and the increasing mobility of our society. With our citizens and institutions exposed to the varying policies of different states, frequently unequal in their claims to priority, the premise of lex loci delicti that a single spatial fact is an adequate guide to the solution of choice of law problems is no longer acceptable.

“Whether the policies of one state rather than another should be furthered in the event of conflict can only be determined within the matrix of specific litigation. What should be sought is an analysis of the extent to which one state rather than another has demonstrated, by reason of its policies and their connection and relevance to the matter in dispute, a priority of interest in the application of its rule of law. See Griffith v. United Airlines, Inc., 416 Pa. 1, 15, 21-22, 203 A.2d 796, 802, 805, 806 (1964); cf. Bernkrant v. Fowler, 55 Cal.2d 588, 12 Cal.Rptr. 266, 360 P.2d 906 (1961); Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963).

“Under the circumstances of the instant case, such analysis leads us to conclude that the court below did not err in the application of Pennsylvania law to preclude the claim here sought to be asserted.

“We are led to this conclusion by an examination of the respective interests of Colorado and Pennsylvania in the effect to be given the marital relationship on appellant’s right to proceed against her husband. Pennsylvania, by its rule prohibiting such suits, has expressed an interest in foreclosing litigation as an avenue for engendering friction between spouses. See, e. g., Johnson v. Peoples First National Bank & Trust Co., 394 Pa. 116, 145 A.2d 716 (1958); Parks v. Parks, 390 Pa. 287, 135 A.2d 65 (1957); Kaczorowski v. Kalkosinski, 321 Pa. 438, 184 A. 663 (1936). Colorado, on the other hand, by its rule permitting such suits, has expressed an interest in providing redress for the injured spouse even if obtained at the expense of marital harmony.

“Presumably, Colorado has made its determination to permit such suits with its own domiciliaries primarily in mind. In the instant case, however, we deal with a'suit between Pennsylvania domi-ciliaries. Any effect which this litigation may have on the marital relations of the parties is a matter of concern primarily to Pennsylvania, the state which has the basic ‘responsibility for establishing and regulating the incidents of the * * * relationship’ of the parties. Emery v. Emery, 45 Cal.2d 421, 428, 289 P.2d 218, 223 (1955.) And, although Colorado, as the state of both the conduct and injury could assert an interest in this litigation in order to further the deterrence of negligent conduct on its highways and to secure, in the event of insurance, a fund for the payment of local creditors, those interests would not be disserved by the application of the Pennsylvania rule of inter-spousal immunity in the instant case.

“Unlike resort to a standard of care less rigorous than that demanded by Colorado of those who use its highways, resort to the law of Pennsylvania to bar the instant suit would have no adverse effect on any deterrence sought by Colorado through the use of tort liability. Since negligent operation of a motor vehicle invariably involves some hazard to persons beyond the family relationship, potential liability still remains to deter unreasonable conduct on the part of those able to insulate themselves from intrafamily suit.

“Moreover, with regard to Colorado’s interest in securing a fund for the payment of local medical creditors, that interest would not be adversely affected under the facts of the instant case. Since the accident resulted in near immediate death, significant debts are not likely to have been incurred in Colorado.

“Our conclusion to look to the law of Pennsylvania on the issue of intramari-tal immunity rests, not upon a fixed and invariable rule of characterization, such as would dictate resort to the law of the marital domicile in all such cases, but upon a determination that the circumstances of the instant case do not warrant the interjection of Colorado law into what is essentially a Pennsylvania family controversy. The mere fact that the accident occurred in Colorado, absent the expression of a significant interest on the part of that state, does not justify our refusal to give effect to the public policy of this Commonwealth, as embodied in the Act of 1893, that suits of the instant sort not be permitted. The desirability or wisdom of that policy has, since the enactment of the Act, been a matter of legislative determination. Our conclusion here merely recognizes and gives effect to that legislative mandate.” (Footnotes omitted.)

We think the language quoted from Mr. Justice Roberts’ opinion suggests, if it does not compel, the conclusion that Pennsylvania courts would look to the law of the domicile of the parties to determine the interests of that state in respect to spousal relations. In the case at bar the domicile is New Jersey.

It is not necessary to decide any issue of Pennsylvania law for we have decided that the law of New Jersey is applicable. If we apply that law, we must reach the conclusion that the immunity of Matthew Zurzola from suit is operative. New Jersey has a statute somewhat similar to that of Pennsylvania. It is as follows: N.J.S.A. 37:2-5: “Right of husband and wife to contract with or sue each other — Nothing in this chapter contained shall enable a husband or wife to contract with or to sue each other, except as heretofore, and except as authorized by this chapter.” At the time of this accident, the law of New Jersey would not have permitted the joinder for in Kennedy v. Camp, 14 N.J. 390, 102 A.2d 595 (1954), the Supreme Court of New Jersey held that a tortfeasor may not have contribution from a joint participant in the tortious act or omission for the injurious consequences to the wife of the joint participant. In Immer v. Risko, 56 N.J. 482, 267 A.2d 481 (1970), the Supreme Court of New Jersey abrogated the doctrine of inter-spousal immunity in automobile negligence cases. Justice Proctor took the position that the statute embodied the common law and, therefore, the Supreme Court of New Jersey was entitled to reinterpret it as indicated.

In Darrow v. Hanover Township, 58 N.J. 410, 411, 278 A.2d 200, 201 (1971), Justice Proctor stated: “Prior to Immer the immunity rule barred negligence actions between spouses. Orr v. Orr, 36 N.J. 236, 176 A.2d 241 (1961); Koplik v. C. P. Trucking Corp., 27 N.J. 1, 141 A.2d 34 (1958); Kennedy v. Camp, 14 N.J. 390, 102 A.2d 595 (1954). Although we applied the new rule permitting such suits to the parties in Immer, we purposely left open the question of whether it should be fully retrospective. The issue was neither briefed nor argued, and it was our belief that the question should not be resolved until it could be considered in a full, adversary hearing. See Note, ‘Prospective Overruling and Retroactive Application in the Federal Courts,’ 71 Yale L.J. 907, 951 (1962). Accordingly, after we certified the present case we gave notice to the bar that interested parties might apply to us for certification or to submit briefs and appear as amici curiae. 94 N.J.L.J. 169 (March 11, 1971); 94 N.J.L.J. 204 (March 18, 1971). Although no other cases were certified, numerous parties submitted briefs and appeared at the argument before us as amici curiae.” The conclusion of the Supreme Court of New Jersey was that the Immer change was not to be applied retroactively.

The New Jersey Supreme Court, in Darrow, treats the date of the accident as critical and the fact that the law is changed while the ease or the appeal is pending is not considered to permit the application of the new rule. In short, the accident must occur after July 10, 1970, the date Immer was decided, in order for its principle to be applied. Here the accident took place before the Immer decision. This concludes our inquiry. It follows that Matthew Zurzola is immune from liability in these suits.

The judgment of the district court will be affirmed.

ROSENN, Circuit Judge

(dissenting).

I respectfully dissent. Unlike the district court, I believe that under Pennsylvania law the defendants in these cases could properly join the plaintiff’s spouse as a third-party defendant for purposes of contribution. Since the applicable New Jersey law is clearly to the contrary, this reading of Pennsylvania law requires that I determine whether these cases should be decided under Pennsylvania or New Jersey law. I believe, unlike the majority in this case, that Pennsylvania’s conflict-of-law rules require that these eases be decided under Pennsylvania law. I therefore conclude that the district court committed error when it dismissed Matthew Zurzola as a third-party defendant in the actions on the ground of interspousal immunity.

I.

I agree with the majority that at the time of the accident here in question, New Jersey law was governed by Kennedy v. Camp, 14 N.J. 390, 102 A.2d 595 (1954), which held that a defendant tortfeasor could not bring an action for contribution against the spouse of the plaintiff in the original action. I also agree that Kennedy was reversed by Im-mer v. Risko, 56 N.J. 482, 267 A.2d 481 (1970), which abolished the doctrine of interspousal immunity in New Jersey in automobile negligence actions. In Darrow v. Hanover Township, 58 N.J. 410, 278 A.2d 200 (1971), the New Jersey Supreme Court held that “[t]he Immer rule will be available only to persons suffering injuries in automobile accidents occurring after July 10, 1970, the date Immer was decided.” 58 N.J. at 420, 278 A.2d at 205. Since the accident with which we are concerned occurred on May 26, 1969, before Immer, it is clear that the third-party action was properly dismissed under Kennedy if New Jersey law is applicable.

I believe, however, that Pennsylvania law is to the contrary. Interspousal immunity in Pennsylvania is based upon 48 P.S. § 111, unchanged since 1913, which states that a husband or wife “may not sue” his or her spouse, with exceptions not here relevant. In Puller v. Puller, 380 Pa. 219, 110 A.2d 175 (1955), however, the Pennsylvania Supreme Court stated that the general rule of inter-spousal immunity was inapplicable to a suit for contribution by a defendant against the plaintiff’s spouse. The court stated:

Whatever may be the law in the majority of other jurisdictions . . . , it is established in our own State that a tort-feasor has a right to contribution against a joint tort-feasor even though the judgment creditor be the latter’s spouse, parent, or minor child; in other words, a tort-feasor may recover such contribution even though, for some reason, the plaintiff who has obtained a judgment against both of them is precluded from enforcing liability thereunder against the joint tort-feasor: Kaczorowski v. Kalkosin-ski, 321 Pa. 438, 440, 441, 184 A. 663, 664, 104 A.L.R. 1267; Maio, Executrix v. Fahs, 339 Pa. 180, 188, 14 A.2d 105, 109; Rau v. Manko, 341 Pa. 17, 22, 23, 17 A.2d 422, 425; Fisher v. Diehl, 156 Pa.Super. 476, 483-486, 40 A.2d 912, 916-918. The theory is that as between the two tort-feasors the contribution is not a recovery for the tort but the enforcement of an equitable duty to share liability for the wrong done. Undoubtedly, therefore, [the defendant suing for contribution] in this case can recover from [the husband] half the amount of the judgment it paid to [the husband’s] wife and daughter.

380 Pa. at 221-22, 110 A.2d at 177 (emphasis supplied).

This language clearly indicates that even though a wife could not directly enforce liability against her husband, a defendant against whom the wife obtains a judgment has a right to contribution from her husband, based upon the husband’s “equitable duty to share liability for the wrong done.” The cases cited in the quotation make the same distinction between direct suits between husband and wife, and suits involving contribution to a third party. See especially Fisher v. Diehl, supra.

The district court believed that Puller was overruled sub silentio by Falco v. Pados, 444 Pa. 372, 282 A.2d 351 (1971). In Falco the husband, as guardian of his child and in his own right, brought an action against Pados, who joined the wife as an additional defendant. A verdict was entered against both defendants. When the original defendant’s assets proved insufficient to pay the judgment, the husband thereupon attempted to garnish his wife’s liability insurance policy. The court rejected this attempt, stating that 48 P.S. § 111 “prevents the [husband] from recovering damages from his wife in the personal injury action involved, even though his rights are derivative . . . .” 444 Pa. at 384, 282 A.2d at 357.

Far from overruling Puller sub silentio, Falco is fully consistent with Puller, Falco involved an unsuccessful attempt by a plaintiff husband to enforce liability directly against his wife, the joint tortfeasor. The possibility that such an action would be barred was recognized in Puller, but Puller expressly stated that the barring of such an action would not preclude an action for contribution by the defendant against the joint tortfeasor spouse of the plaintiff. As quoted above from Puller:

[A] tort-feasor may recover such contribution even though, for some reason, the plaintiff who has obtained a judgment against both of them is precluded from enforcing liability thereunder against the joint tort-feasor.

Falco, of course, involved the fact situation discussed in the second part of this sentence from Puller, namely a husband obtaining a judgment against his wife and a third party, and attempting to enforce liability directly against his wife.a It was not an action for contribution. The instant case involves the fact situation discussed in the first part of the sentence, namely a defendant attempting to recover contribution from the plaintiff’s spouse. The quoted language clearly indicates that the present action is permissible. See also Fisher v. Diehl, supra; Restifo v. McDonald, 426 Pa. 5, 7 n. 1, 230 A.2d 199, 200 n. 1 (1967). I believe, therefore, that if Pennsylvania law is applicable to the instant case, the district court erred in dismissing the third-party actions against the plaintiff’s husband.

II.

Having concluded that the outcome of this diversity case depends upon whether Pennsylvania or New Jersey law is applicable, I now turn to the Pennsylvania conflict-of-law rules, Klaxon Co. v. Stentor Electrical Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), to determine which state’s law governs this case. As noted by the majority, the leading Pennsylvania case on the subject of conflict of laws is Griffith v. United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796 (1964), which abandoned the rule of lex loci delicti and adopted instead “a more flexible rule which permits analysis of the policies and interests underlying the particular issue before the court.” 416 Pa. at 21, 203 A.2d at 805. As stated in McSwain v. McSwain, 420 Pa. 86, 94, 215 A.2d 677, 682 (1966), “[w]hat should be sought is an analysis of the extent to which one state rather than another has demonstrated, by reason of its policies and their connection and relevance to the matter in dispute, a priority of interest in the application of its rule of law.”

I first consider the interest of Pennsylvania in the application of its own law in this case, permitting the defendant tortfeasors to obtain contribution from a joint tortfeasor who is the husband of the plaintiff. As noted by the majority, the accident occurred in Pennsylvania; the husband-plaintiff (who now claims the benefit of New Jersey law) chose to bring suit in federal court in Pennsylvania; the defendants, all of whom have substantial Pennsylvania contacts, will be injured by failure to apply Pennsylvania law.

I place particular weight on Pennsylvania’s interest in protecting its own residents who become losing defendants in tort suits from being unable to obtain contribution from joint tortfeasors. As noted in that portion of Puller quoted supra, Pennsylvania’s policy in favor of contribution in these circumstances, outweighs its policy in favor of interspousal immunity, contribution being viewed as “the enforcement of an equitable duty to share liability for the wrong done.”

The defendants in these cases before us are (1) Mutchnick, a resident of Pennsylvania who had been driving in Pennsylvania, (2) DeVille Leasing, a Pennsylvania corporation, and (3) General Motors, a Delaware corporation. Had the plaintiffs, the Zurzolas, been residents of Pennsylvania, under my reading of Pennsylvania law these defendants would have been able to bring in Matthew Zurzola as a third-party defendant, thus obtaining contribution for any recovery by Rose Zurzola. Pennsylvania’s policy in favor of permitting its own residents to obtain contribution in these circumstances is certainly no less when the plaintiff and potential third-party defendant are residents of another state.

Against these interests of Pennsylvania in applying its own law of contribution must be weighed the interest of New Jersey in applying its law, which at the time of the accident precluded contribution under the circumstances of this case. The majority relies heavily upon New Jersey’s interest in preserving family harmony. Indeed, promotion of family harmony was the major reason given by the New Jersey Supreme Court when it adopted the rule prohibiting contribution actions against a plaintiff’s spouse. Kennedy v. Camp, 14 N.J. at 394-400, 102 A.2d at 598-600.

However, I believe that little or no weight may be given at the present time to New Jersey’s original rationale for the rule, since even New Jersey has come to recognize that the rationale is invalid. When the New Jersey Supreme Court overruled Kennedy v. Camp, supra, and ended interspousal immunity in automobile negligence cases, it noted:

Regarding the threat to domestic peace, we are doubtful that the marital relationship will be any more disturbed by allowing a cause of action than by denying it.

Immer v. Risko, 56 N.J. at 488, 267 A.2d at 484. Since even the New Jersey Supreme Court no longer believes that the Kennedy v. Camp rule against contribution preserved family harmony, I find it quite unlikely that the Pennsylvania courts, in weighing the interests of Pennsylvania and New Jersey in their respective rules, would give weight to New Jersey’s interest in preserving family harmony.

As we have previously noted, after the accident in the cases before us, the Kennedy v. Camp rule against contribution was overruled in Immer v. Risko, but in Darrow v. Hanover Township the New Jersey Supreme Court refused to apply Immer retroactively. Had Immer been held retroactive, the contribution actions at issue here would clearly be permissible under New Jersey law. I believe, therefore, that the only possible interests of New Jersey in not allowing the present contribution actions to proceed are those reasons it relied upon to continue to apply the Kennedy v. Camp rule to accidents occurring before Immer was decided. Any interests of New Jersey in continuing to apply the Kennedy rule to pve-Immer accidents would represent reasons for refusing to apply Immer retroactively; all other justifications for the Kennedy rule have been abandoned by New Jersey.

I therefore turn to an examination of Darrow v. Hanover Township, 58 N.J. 410, 278 A.2d 200 (1971), to determine the reasons why New Jersey continues to apply the doctrine of interspousal immunity to automobile accidents occurring before Immer was decided. The court in Darrow gave as its essential reason for refusing to apply Immer retroactively its fear that retroactive elimination of the immunity doctrine would permit collusive interspousal suits. The court was apprehensive about cases where the insurance company had relied upon interspousal immunity in effect at the time of the accident and therefore found it unnecessary to promptly investigate the circumstances surrounding the accident. The court’s ■ decision not to apply Immer retroactively was unrelated to its prior policy to maintain family harmony.

As applied to the facts of the instant cases, I believe that this consideration, which is New Jersey’s only interest in opposing the third-party actions before us, is entitled to only minimal weight. There is no indication that the Zurzolas’ insurance company, in reliance upon the New Jersey rule of interspousal immunity then in effect, failed to promptly investigate the Pennsylvania accident in which its insureds were involved. Moreover, it is inconceivable that an insurance company would rely to such a degree upon an interspousal immunity doctrine of the state of its insureds’ domicile that it would fail to even investigate an accident involving a third party which occurred in a foreign jurisdiction which permits contribution suits by third parties against a plaintiff’s spouse. New Jersey’s interest in protecting insurance companies which relied upon its own prior law thus does not apply to accidents such as this occurring outside of New Jersey, where an insurance company would know that there is at least a possibility that the existing New Jersey law of interspousal immunity would not be applied.

I believe, therefore, that the only asserted interest of New Jersey in continuing to apply the Kennedy rule against contribution does not apply to the suits before us. I am left only with Pennsylvania’s interests, particularly its strong and consistent concern in assuring its own residents of the equitable right of contribution from joint tort-feasors who are immune from direct action. Accordingly, I conclude that the Pennsylvania courts would apply Pennsylvania law and permit a Pennsylvania defendant, involved in an accident while operating a vehicle on Pennsylvania highways, to bring a third-party action against the plaintiff’s spouse for contribution in these suits instituted in Pennsylvania. I would therefore reverse the district court’s dismissal of the third-party actions.

      . Emphasis added.

      . We note that, inexplicably, none oí the parties have made reference to this statute in tlieir arguments or in their briefs in this court. We would have thought that this statute would have merited at least passing mention.

      . Justices Francis, Hall and Haneman dissenting.

      . Justice Proctor stated: “The meaning of this [statutory] provision lias been the subject of numerous decisions. See Koplik v. C. P. Trucking Corp., supra, 27 N.J. at 4-7, 141 A.2d 34, and cases cited therein. In Kennedy v. Camp, [14 N.J. 390, 102 A.2d 595 (1954),] this Court held that the above provision did not alter the common law unity of interests of the spouses and hence a husband would not be liable to his wife for injuries caused by his negligent driving of an automobile. Id, 14 N.J. at 397, 102 A.2d 595. Kennedy did not hold that the provision required application of the immunity doctrine but merely that the common law continued unchanged. This reasoning was in accord with earlier cases which held that that provision did not disturb the common law. Hudson v. Gas Consumers’ Assn., 123 N.J.L. 252, 253, 8 A.2d 337 (E. & A.1939); Freitag v. Bersano, 123 N.J.Eq. 515, 516, 198 A. 845 (Ch.1938); Drum v. Drum, 69 N.J.L. 557, 558, 55 A. 86 (Sup.Ct.1903). In Koplik, supra, however, this Court held in a four to three decision that ‘the common law interspousal negligence tort immunity has been perpetuated [by N.J.S.A. 37:2 — 5], and that it lias been made a part of our statutory law as well.’ 27 N.J. at 6, 141 A.2d at 37. Writing for the minority, Justice Jacobs strongly objected to this construction of the statute and expressed his opinion that there was nothing in the provision which either expressly or impliedly incorporated the common law immunity doctrine into the statutory law of the State. In his view the provision merely left the common law ‘intact with its inherent capacity for later judicial alteration.’ Id. at 18-19, 141 A.2d at 44.
      “Three years later, in Long v. Landy, 35 N.J. 44, 171 A.2d 1 (1961) * * * we held that the common law immunity doctrine was not rigidly incorporated into our statutory law; immunity should apply only where the reasons for its existence continue. * * * In other words, the statute did not incorporate immunity, but rather the common law with its inherent capacity for change.” 56 N.J. at 486-487, 267 A.2d at 483.

      . See also Currier, Time and Change in Judge-Made Law: Prospective Overruling, 51 Va.L.Rev. 201 (1965).

      . See also Restifo v. McDonald, 426 Pa. 5, 7 n. 1, 230 A.2d 199, 200 n. 1 (1967), where it is stated:
      Pennsylvania’s intrafamily immunity doctrine would prevent plaintiffs [husband and children] from obtaining a judgment against Mrs. Restifo [wife]; nevertheless, she would remain liable to the appellant [the original defendant] for contribution if she were found to be a joint tortfeasor [citing Puller v. Puller, supra, and Fisher v. Diehl, supra].

      . Since the Falco opinion cites Puller elsewhere, see 444 Pa. at 379, 282 A.2d at 355, it cannot be said that the Falco court failed to expressly overrule Puller because it was unaware of Puller.

      a. As the quotation indicates, the court viewed the husband’s action as a direct action against his spouse, even though the husband’s suit was brought in part in his capacity as guardian. This holding, while it may slightly broaden the scope of what constitutes a direct interspousal action, certainly does not connote that a defendant’s suit for contribution from the plaintiff’s spouse constitutes a direct interspousal action.

      . Justice Roberts, concurring and dissenting in Falco, contended that a husband should be able to recover directly from his wife as long as he did not institute the suit against his wife, as for example when he sued a third party who brought in the wife as an additional defendant. Since Puller clearly contemplated that the husband could not recover- directly from his wife even in these circumstances, Justice Roberts’ theory would narrow the scope of interspousal immunity. The Falco court’s rejection of this theory is thus a rejection of a narrowing of the immunity doctrine. It is not an expansion of the immunity doctrine beyond that pronounced by Puller.

      . I note that I would have difficulty with the district court’s conclusion that Falco controls under Pennsylvania law even if I agreed that Falco overruled Puller. The accident here occurred in 1969, after Puller but before Falco. When the New Jersey Supreme Court changed its rule on inter-spousal immunity (reducing immunity), the change was applied irrespectively only. See Darrow,- supra. It could be contended, therefore, that even if Puller were overruled by Falco, Falco would be applied prospectively only by Pennsylvania courts and the third-party actions at issue liere are governed by, and permissible under, Puller.

      . McSwain v. McSwain, 420 Pa. 86, 215 A.2d 677 (1966), relied upon by the majority, presented a different situation. In that case, husband and wife, both domiciliaries of Pennsylvania, were in an automobile accident in Colorado. The Pennsylvania court held that the wife’s direct action against her husband was barred by Pennsylvania’s law of interspousal immunity. It reasoned that Pennsylvania’s interest in maintaining marital harmony of its domiciliarles outweighed Colorado’s interest in deterrence of negligent conduct on its highways through the use of tort liability between spouses. There is no indication in the opinion, however, that had a Colorado resident been involved in the accident, the Pennsylvania courts would have deemed Pennsylvania’s interest in marital harmony to outweigh Colorado’s interest in protecting its own citizens by imposing tort liability on those who use its highways. Therefore, since McSwain did not involve such a balancing of interests, I do not believe that it supports the majority’s conclusion that New Jersey’s interest in marital harmony outweighs Pennsylvania’s interest in protecting its resident defendants.


author: EAST, Senior District Judge:

text:
    In the Matter of ULTRA PRECISION INDUSTRIES, INC., a California corporation, Bankrupt (two cases). NATIONAL ACCEPTANCE COMPANY OF CALIFORNIA, Petitioner-Appellant, v. COMMUNITY BANK, et al., Respondent-Appellee. NATIONAL ACCEPTANCE COMPANY OF CALIFORNIA, Petitioner-Appellant, v. WOLF MACHINERY COMPANY, Respondent-Appellee.
    Nos. 72-3088, 72-3089.
    United States Court of Appeals, Ninth Circuit.
    Sept. 18, 1974.

      Joseph Weissman (argued), of Buch-alter, Nemer, Fields & Savitch, Los An-geles, Cal., for appellant.
    George E. Leaver (argued) of Getz, Aikens & Manning, Los Angeles, Cal., for appellee Community Bank.
    Frank A. Riehle, Jr. (argued), Los Angeles, Cal., for appellee Wolf Machinery Co.
    Before CHAMBERS and CARTER, Circuit Judges, and EAST, Senior District Judge.

       Honorable William G. East, Senior United States District Judge for the District of Oregon, sitting by designation.

   OPINION

EAST, Senior District Judge:

THE APPEAL

National Acceptance Company of California (National) appeals from the two several orders of the District Court denying its Petition for Review and affirming the referee’s two several rulings or orders that the security interest held by Community Bank (Bank) and Wolf Machinery Company (Wolf) in three large Rigid Hydro Copy Profiling Machines, numbered 5890 and 5910 (Bank) and machine numbered 5934 (Wolf), respectively, had priority over a conflicting security interest held by National. § 9312(4) of the Uniform Commercial Code of California (Code). We affirm.

FACTS

The pertinent facts are:

National loaned Ultra Precision Industries, Inc. (Ultra) $692,000, and to secure the repayment of that sum, Ultra on or about March 7, 1967, executed in favor of National a Chattel Mortgage Security Agreement covering specifically described equipment of Ultra. National perfected its security interest by timely filing a Financing Statement. The Chattel Mortgage Security Agreement and the Financing Statement contained the usual after-acquired equipment security clauses; however, without reference to any specific property.

Subsequent to the acquisition of National’s security interest and during 1967 and 1968, Ultra placed orders with Wolf for two of the machines, later identified as machines numbered 5890 and 5910. It was agreed between Ultra and Wolf that after those machines had been shipped to Ultra and installed, Ultra would be given ah opportunity to test them in their operations during a reasonable testing period, and, further, that arrangements satisfactory to Ultra for outside financing was a condition precedent to the ultimate purchase of those machines. The machines were delivered to Ultra on April 30, 1968 and June 20, 1968, respectively, satisfactory testing was accomplished, outside financing obtained, and on July 31, 1968, Ultra and Wolf executed a Purchase Money Security Interest Conditional Sales Agreement (Security Interest Agreement) covering the sale of those two machines by Wolf to Ultra, and as a part of the outside financing arrangement, Wolf in consideration of the payment of $128,122.20 assigned the Security Interest Agreement to Bank. Bank’s security interest was perfected by the filing of a Financing Statement on August 5, 1968.

In June, 1968, Ultra placed another order with Wolf for a similar machine, later identified as machine numbered 5934, under identical terms of testing and purchase as those for the purchase of the above numbered machines 5890 and 5910. The machine was delivered to Ultra on August 7, 1968, satisfactory testing was accomplished, outside financing obtained, and on October 23, 1968, Ultra and Wolf executed a similar Security Interest Agreement covering the sale of the machine numbered 5934 by Wolf to Ultra, and as a part of the outside financing arrangement, Wolf, for value received, assigned the Security Interest Agreement to C.I.T. Corporation. C.I.T. Corporation’s security interest was perfected by the filing of a Financing Statement on October 30, 1968. On October 7, 1969, C.I.T. Corporation reassigned the Security Interest Agreement to Wolf when Ultra became bankrupt.

ISSUE

The priorities among the three security interests involved are determined by the application of § ,9312(4), which reads:

“A purchase money security interest in collateral other than inventory has priority over a conflicting security interest in the same collateral if the purchase money security interest is perfected at the time the debtor receives possession of the collateral or within 10 days thereafter, (emphasis added)

The sole issue presented by the facts and the contention of the parties on appeal is: On what dates did Ultra become “the debtor [receiving] possession of the collateral [the three respective machines]” within the meaning of § 9312(4)?

DISCUSSION

Briefly stated, National contends that Ultra was its “debtor” in “possession of the collateral” at the moment it received physical delivery of the respective three machines, without regard to any agreement to the contrary between Wolf and Ultra as to the terms and conditions of the ultimate sale and purchase of the machines respectively; hence, the machines were within the grasp of the after-acquired property clause. Since the Security' Interest Agreements held by Bank and Wolf were not perfected within ten days “thereafter” as commanded by § 9312(4), they are unenforceable as against National’s perfected security interest.

Bank and Wolf each contend that Ultra did not become their “debtor” in “possession of the collateral” (the three respective machines) until the terms and conditions of the proposed sales and purchases thereof had been met and the Security Interest Agreement had been executed and delivered. We subscribe to that contention.

Section 9105(1) of the Code provides: “(1) In this division unless the context otherwise requires:
“(d) ‘Debtor’ means the person who owes payment or other performance of the obligation secured . . . . ”

National urges that the term “debtor” as used in § 9312(4) means the debtor under its “conflicting security interest.” Such an interpretation does violence to the clear language of the section, and such a thesis is inherently re-jected under the rationale and holdings in Brodie Hotel Supply, Inc. v. United States, 431 F.2d 1316 (C.A.9 1970), and In Re Automated Bookbinding Services, Inc., 471 F.2d 546 (C.A.4 1972). To us, the word “debtor” in § 9312(4) means the debtor of the seller or holder of the “purchase money security interest in collateral” (the thing sold).

It is manifest that Ultra was not a “debtor” of Wolf and did not owe payment or other performance of the obligation secured unto Wolf until the moment of the execution and delivery of the Security Interest Agreements on July 31, 1968 and October 23, 1968, respectively. Suffice to say that prior to those dates, (a) Wolf held no definitive security interest in the machines which could be perfected by the filing of a Financing Statement, and (b) Ultra held no assignable legal interest in the machines which could fall into the grasp of National’s after-acquired property security clause.

We hold that Ultra became the purchase money security interest “debtor [receiving] possession of the collateral [the three respective machines]” at the instant of the execution and delivery of the Security Interest Agreements, respectively, and not before; and, further, that since each of the Security Interest Agreements were timely perfected, the security interests of Wolf and Bank, respectively, are each prior and superior to the conflicting security interest held by National. Brodie, supra.

National’s side contention that the Alaskan statute dealt with in Brodie contains a material variance from the wording of § 9312(4) is without merit.

So far as we are advised, the Supreme Court of California has not addressed the issue presented here. National strongly urges that if the Court of California were considering this controversy, it would not follow Brodie and instead would adopt the date of delivery interpretation of § 9312(4) espoused in In Re Automated Bookbinding Services, Inc., supra. However, National fails to recognize and acknowledge the fatal impact of Footnote 14 to that Court’s opinion, at page 553, upon its claim under the instant facts. Footnote 14 reads as follows:

“Brodie Hotel Supply, Inc. v. United States, 431 F.2d 1316 (9th Cir. 1970), is cited by HMC [the holder of the purchase money security interest] to stand for the proposition that mere physical control doesn’t constitute possession under § 9-312(4). But Brodie is inapposite, being a case where the debtor had physical control before the goods were sold to him by the holder of the purchase money security interest and before the security agreement was entered into. Since HMC had contracted for the sale with the bankrupt on January 30, and entered into a security agreement, the bankrupt was in possession from June 2, when it received physical control of the collateral.”

We envision the Court of California as adopting the rationale and holding of Brodie when considering the issue under the facts here presented. Any other interpretation would vitiate the special priority status granted to holders of perfected purchase money security interests under the provisions of § 9312(4) over holders of conflicting security interests in the same collateral.

The record as a whole reveals good faith, above board, uninvolved commercial credit transactions, without any withholding on the part of or secret equities among the parties. National was in no way misled by any acts of Wolf or Bank giving rise to an estoppel, and National advanced no money or credit on the strength of Ultra’s pre-Security Interest Agreement possession of the machines. Wolf was entitled to abide with the terms and conditions of the proposed sales and purchases of its machines and to perfect its ultimate Security Interest Agreements in accordance with § 9312 (4).

Affirmed.

      . These machines are large complicated precisión pieces of equipment, weighing 16,000 to 20,000 pounds each.

      . The machines were shaped directly from Europe by Cosa (a distributor) to the plant of Ultra as a matter of convenience, rather than to Wolf and then to Ultra. This practice is customary in the industry with respect to machines of the size and weight involved. “These machines are relatively complicated machines to get them right,” [Rep. Tr. p. 73, lines 24-25], they take four to five days to install [Rep.Tr. p. 53], and it is not at all unusual that the machines have various assemblies and adjustments for a period of 90 days, and in the case of Machine 5890, even longer [Rep.Tr. pp. 116 and 117].

      . The general purpose of the Uniform Commercial Code is to create a precise guide for commercial transactions under which businessmen may predict with confidence the results of their dealings and avoid the confusion arising from a debtor’s ostensible dominion of proi)erty then burdened with an outstanding secret security interest. The requirement of strict compliance with the filing provisions is the prime virtue of the Code. Today filing is required to perfect the security interest so that creditors may learn of pre-existing security interests. See In Re Automated Bookbinding Services, Inc., infra.


author: PER CURIAM.

text:
    UNITED STATES of America, Appellee, v. Charles NICK, Appellant.
    No. 74-1208.
    United States Court of Appeals, Eighth Circuit.
    Submitted Sept. 10, 1974.
    Decided Sept. 30, 1974.

      Harvey I. Feldman, St. Louis, Mo., for appellant.
    William Dye, Atty. Drug Enforcement Agency, St. Louis, Mo., for appellee.
    Before LAY, ROSS and WEBSTER, Circuit Judges.
   PER CURIAM.

Charles Nick appeals his conviction on two counts of distributing heroin in violation of 21 U.S.C. § 841(a)(1) and his resulting sentence of ten years imprisonment on each count, to be served concurrently. He asserts prejudicial error by the trial court in limiting his cross-examination of the principal prosecution witness. He further challenges the sentence imposed by the trial judge, contending that it resulted from a mechanical sentencing process which precluded probation and was so excessive as to warrant review.

The two sales of heroin in this case were made to a government informant and were visually witnessed by an officer of the St. Louis Police Department. At trial both the officer and the informant testified as to the sales and the circumstances surrounding them.

I

In cross-examining the informant, Nick’s counsel asked at what address the informant lived and if he was then living with his wife. The informant stated that he was living with his wife at a street address located in the City of St. Louis. Nick’s counsel later tried to ask the informant if he was not then being held in the St. Louis City Jail on a charge of burglary, but the prosecuting attorney objected to the question as improper impeachment and the objection was sustained. Nick contends on appeal that this ruling by the trial court denied him the right to confront a witness against him in violation of his Sixth Amendment rights. We disagree.

In Alford v. United States, 282 U.S. 687, 51 S.Ct. 218, 75 L.Ed. 624 (1931), the Supreme Court ruled that a trial court must allow cross-examination as to a witness’ address in order to “place the witness in his proper setting.” 282 U.S. at 692, 51 S.Ct. at 219. The requirements of Alford were fully complied with in the instant case when the informant gave his residence address. Counsel’s attempt to go beyond this could have no other objective than to draw the jury’s attention to the fact that the witness was in jail.

Smith v. Illinois, 390 U.S. 129, 88 S.Ct. 748, 19 L.Ed.2d 956 (1968), requires reversal only where the trial court’s failure to permit the elicitation of a witness’ name and address resulted in a denial of the right to cross-examine a witness effectively. The record in the instant case reveals that at time of cross-examination defense counsel and the jury knew that the informant had a prior felony conviction, was being paid by the government to be an informant, had been an informant in the past, had been a narcotics addict in the past, and that no promise or threat had been made to induce testimony favorable to the government. Cross-examination was vigorous, and except for the one question discussed herein, the government interposed no objections. Under such circumstances, appellant’s contention that he was denied effective cross-examination is totally without merit. United States v. Teller, 412 F.2d 374 (7th Cir. 1969), cert. denied, 402 U.S. 949, 91 S.Ct. 1603, 29 L.Ed.2d 118 (1971); see United States v. Lee, 413 F.2d 910 (7th Cir. 1969), cert. denied, 396 U.S. 1022, 90 S.Ct. 595, 24 L.Ed.2d 515 (1970); cf. United States v. Alston, 460 F.2d 48 (5th Cir.), cert. denied, 409 U.S. 871, 93 S.Ct. 200, 34 L.Ed.2d 122 (1972); United States ex rel. Abbott v. Twomey, 460 F.2d 400 (7th Cir. 1972).

II

“ [A] sentence imposed by a federal district judge, if within statutory limits, is generally not subject to review.” United States v. Tucker, 404 U.S. 443, 447, 92 S.Ct. 589, 591, 30 L.Ed.2d 592 (1972). At the time of allocution, Judge Meredith stated: “There is no way this court is going to put anybody who sells narcotics on probation, period.” Appellant contends that the judge either abused his discretion or failed to exercise any discretion in refusing to consider him for possible probation. However, Nick has failed to demonstrate that the trial judge had a mechanically inflexible practice of denying probation or that his refusal to grant this appellant probation under the facts of this case was a gross abuse of discretion. On the contrary, the record makes clear that defense counsel was given full latitude to present facts in mitigation of his offense and punishment. We find no abuse of discretion and affirm the judgment and sentence of the district court.

      . Tlie Honorable James H. Meredith, Chief Judge, United States District Court, Eastern District of Missouri.

      . Indeed, the government points out that in United States v. Clopton, No. 73 Or. 46(1) (Aug. 17, 1973), Judge Meredith recently placed two of six defendants who had pleaded guilty to federal narcotics charges on probation.

      . See ABA Project on Standards for Criminal Justice, Standards Relating to Probation § 1.3(a) (App. Draft 1970) :
      Probation should be the sentence unless the court finds that:
      (i) confinement is necessary to protect the public from further criminal activity by tlie offender; or
      5¡s ¡i:
      (iii) it would unduly depreciate the seriousness of the offense if a sentence of probation were imposed.

      . See Woosley v. United States, 478 F.2d 139 (8th Cir. 1973). In view of our holding, it is unnecessary for us to consider to what extent a denial of probation, as distinguished from a revocation of probation, is subject to judicial review. Cf. Burns v. United States, 287 U.S. 216, 53 S.Ct. 154, 77 L.Ed. 266 (1932).