author: FAIRCHILD, Circuit Judge. PELL, Circuit Judge

text:
    NATIONAL CASH REGISTER CO., Plaintiff-Appellant, v. UNARCO INDUSTRIES, INC., Defendant-Appellee.
    No. 72-1029.
    United States Court of Appeals, Seventh Circuit.
    Argued Jan. 23, 1973.
    Decided Jan. 3, 1974.
    John L. Conlon, Chicago, Ill., for plaintiff-appellant.
    Otis H. Halleen, Jonathan H. Sherr, Chicago, Ill., for defendant-appellee.
    Before KILEY, FAIRCHILD and PELL, Circuit Judges.
   FAIRCHILD, Circuit Judge.

Plaintiff appeals from a judgment dismissing its complaint.

Plaintiff, the owner, contracted with Shook for the construction of a distribution center building for plaintiff. The contract called for installation of 23 ten-foot “dockboards” (mechanical loading platforms). Subsequently, plaintiff decided that only longer, 12 foot dock-boards, not a standard size, could fulfill plaintiff's needs. Accordingly, Shook and plaintiff agreed that plaintiff would find a manufacturer that would provide the 12 foot dockboards and would pay the additional cost.

Plaintiff located defendant as a seller of dockboards, and Shook, at plaintiff’s direction, made an agreement with defendant whereby defendant agreed to construct the 12 foot dockboards for $25,645. Although the parties to this contract were Shook and defendant, plaintiff played a part in its formation, as well as its later termination. Defendant did not produce the dockboards. After it became clear that defendant would not perform, defendant and Shook discussed the problem and it was agreed that the contract with defendant should be canceled.

Shook’s vice president sent defendant a letter stating, in part, “we are cancel-ling without charge and making arrangements to procure elsewhere.” Plaintiff later purchased the dockboards from anothér manufacturer at a cost $17,394 in excess of the amount specified in the contract between Shook and defendant. Plaintiff seeks to recover this sum from defendant.

Jurisdiction is founded on diversity. Both parties apparently accept Illinois law as controlling. Each party moved for summary judgment. The district court concluded that plaintiff has shown no right to recover for breach of the contract between Shook and defendant. Plaintiff appeals from the judgment entered accordingly.

1. Plaintiff’s standing to sue.

Generally, one who is not a party to a contract may not recover for its breach. See, e. g., Vanderlaan v. Berry Construction Company, 119 Ill.App.2d 142, 255 N.E.2d 615 (1970). Plaintiff contends that it is a third-party beneficiary of the contract between Shook and defendant and therefore entitled to sue. Although the work performed by subcontractors ultimately accrues to the property owner, the owner is ordinarily regarded as only an incidental beneficiary of the subcontract. 1 Restatement of Contracts § 147, Illustration 1; Restatement of Contracts 2d § 133, Illustration 18 (Tent. Draft No. 3, 1967); Kircher v. Hunter, 101 Cal.App. 548, 281 P. 1047 (1929); Cox v. Curnutt, 271 P. 2d 342 (Okl., 1954). Possibly plaintiff’s direct involvement in the selection of defendant for the particular work, and in the formation of the contract, would call for application of a different principle here, but because subrogation is available, the question need not be answered.

Plaintiff also asserts it can maintain this action as a subrogee of Shook’s claim against defendant for breach of contract.

Illinois recognizes the doctrine of subrogation as a broad, flexible tool for the accomplishment of justice. “This legal concept originated in equity, but is presently an integral part of the common law, and is designed to place the ultimate responsibility for a loss upon the one on whom in good conscience it ought to fall, and to reimburse the innocent party who is compelled to pay. Under this doctrine, a person who, pursuant to a legal liability, has paid for a loss or injury resulting from the negligence or wrongful act of another, will be subrogated to the rights of the injured person against such wrongdoer.” Geneva Construction Co. v. Martin Transfer & Stor. Co., 4 Ill.2d 273, 122 N.E.2d 540, 546 (1954); Dworak v. Tempel, 17 Ill.2d 181, 161 N.E.2d 258, 263 (1959); In re Federal Facilities Realty Trust, 220 F. 2d 495, 503 (7th Cir., 1955).

Plaintiff needed the peculiar sized dockboards, and obligated itself to Shook to find a source and pay the added cost. Shook was obligated to complete the building. Plaintiff had found defendant and, at plaintiff’s request, defendant agreed with Shook to produce at an agreed price. Defendant’s breach of its contract with Shook compelled plaintiff to find a new source and pay an even higher price. Recognizing that there may be circumstances peculiar to this case which would justify reliance on a third party beneficiary, or even an agency, theory, it seems clear that in any event equity requires that defendant should bear the burden of the increased price which plaintiff was compelled to pay. We conclude that plaintiff is a subrogee of Shook’s cause of action for breach of contract, and that it was error to dismiss plaintiff’s case on the ground plaintiff lacked standing.

We conclude, contrary to one of defendant’s contentions, that the affidavit of plaintiff’s assistant director of distribution, sufficiently shows that plaintiff in fact paid the higher price for the dockboards ultimately secured. It has been held that, under a cost-plus contract, the extra expenses resulting from a subcontractor’s breach fall on the owner rather than the general contractor. Hegeman-Harris Co. v. Tebbetts & Garland Co., 262 Ill.App. 524 (1st Dist., 1931). The agreement between plaintiff and Shook with respect to these dock-boards is similar.

2. Defense that damage claim was waived or renounced.

One of the defenses alleged in the answer was that Shook waived and renounced any claim it might have had against defendant. Defendant relied on the “without charge” language in “we are cancelling without charge and making arrangements to procure elsewhere” in the letter already referred to.

Plaintiff argues (and the affidavit of the author of the letter asserts)' that “without charge” meant only that Shook would not accede to any charge by defendant for engineering costs in its abortive attempts to produce the dock-boards. Plaintiff argues further that at best for defendant the “without charge” phrase is ambiguous, and, as a matter of law, is not the necessary clear expression of intent to waive or renounce.

U.C.C. § 1-107 (S.H.A. ch. 26, § 1-107) provides that a claim arising out of a breach of contract can be discharged “by a written waiver or renunciation signed and delivered by the aggrieved party.” This provision is subject to U. C.C. § 2-720 which states:

“Unless the contrary intention clearly appears, expressions of ‘cancellation’ or ‘rescission’ of the contract or the like shall not be construed as a renunciation or discharge of any claim in damages for an antecedent breach.”

U.C.C. § 1-205, requires consideration both of any course of dealing between the parties and any applicable usage of-trade in interpreting expressions and agreements. The meaning of a commercial agreement of the parties “is to be determined by the language used by them and by their action, read and interpreted in the light of commercial practices and other surrounding circumstances.” U.C.C. § 1-205, Comment 1. A similar rule has long prevailed in Illinois. Sterling-Midland Coal Co. v. Great Lakes Coal & C. Co., 334 Ill. 281, 165 N.E. 793, 796 (1929). See also Construction Aggregates Corp. v. Hewitt-Robins Inc., 404 F.2d 505, 509 (7th Cir., 1968), cert, denied, 395 U.S. 921, 89 S.Ct. 1774, 23 L.Ed.2d 238.

Plaintiff is surely correct in saying that in order for the language to be found a waiver or renunciation, such intention must clearly appear. The present record, however, does not permit that determination to be made as a matter of law.

The clerk of this court is directed to enter judgment reversing the judgment appealed from and remanding the cause for further proceedings.

PELL, Circuit Judge

(dissenting).

Being of the opinion that the judgment entered by the district court should be affirmed, I respectfully dissent. The majority of the panel has reversed the judgment of the district court on a subrogation theory, a basis barely adverted to in the court below.

When the district court had the motions for summary judgment under consideration, the plaintiff filed a 19 page brief which for the most part was devoted to an effort to show that the “without charge” phrase in the Shook letter meant that Shook was saying it would not expect to pay Unarco anything even though Shook was formally terminating the contract. Another interpretation is that Shook was stating that it was waiving any right that it might have had to seek reimbursement from Unarco.

On the last page of the brief, the plaintiff in an ambivalent wind-up stated, “[furthermore, the increased cost of the dockboards caused by Unarco’s breach was paid for by NCR. Under such circumstances NCR may be regarded as either a proper assignee or subro-gee to maintain the action. [Citation of three federal district court cases from other states omitted.]”

The district court in its order granting summary judgment was equally cursory in its attention to the subrogation aspect of the case:

“The plaintiff in its briefs seeks to recover from defendant upon the theory that it was a third party beneficiary of a contract between defendant and Charles H. Shook, Inc., and the real party in interest and therefore entitled to bring this action against the defendant, yet nowhere does the plaintiff allege in its complaint that it was the assignee, subrogee or direct third party beneficiary. Plaintiff was at most an incidental beneficiary of the contract between defendant and Charles H. Shook, Inc., and therefore is not entitled to bring this action.”

Even if it is conceded that it is the facts addueible from the pleadings and the affidavits rather than the theory proclaimed in the complaint which is determinative on the summary judgment question, nevertheless, the foregoing illustrates that we are venturing into an area for decisional purposes which was not deemed of great moment in the trial court.

On that basis of exploration it appears to me that the record contains other support for the correctness of the district court’s opinion. Before discussing that, however, I must observe that I cannot disagree with the basis on which the district court did rest its decision. While the privity concept is certainly not the stout fellow of yesteryear, it is not devoid of vitality. The plaintiff chose its route of dealing only with Shook, yet now it is willing to leap over that arrangement which would have been a barrier to the defendant proceeding against it. Vanderlaan v. Berry Construction Company, 119 Ill.App.2d 142, 255 N.E.2d 615 (1970). I am not aware of any case under the controlling law of Illinois which squarely holds that in the owner-contractor-subcontractor syndrome the privity necessity can be dispensed with through the guise of an overriding subrogation theory.

Assuming arguendo that the Illinois courts might find the subrogation route open in this particular factual context, I would not find that the plaintiff has demonstrated appropriate credentials for the utilization of the subrogation theory as a basis for recovery.

While the subrogation concept, as the majority states, has been referred to as an integral part of the common law, ease law also has declared it not to be a doctrine of common law but one which originated in equity and is a creature of equity. It is designed to promote and to accomplish justice. See, e. g., People v. Metropolitan Casualty Ins. Co., 339 Ill. App. 514, 90 N.E.2d 565 (1st Dist. 1950). The maxims of equity would certainly be applicable to prevent the use of subrogation to accomplish an injustice. The right of subrogation is an equitable right, and where equities are equal the right does not exist. It cannot be utilized without regard to the circumstances but only in cases in which justice demands its application. National Casualty Co. v. Caswell & Co., 317 Ill. App. 66, 45 N.E.2d 698 (1942).

It appears to me that the demand just does not exist here. While the defendant at the time of performance was not responsive to inquiries, it is clear that the projected work was of a nonstandard type which the defendant was having difficulty accomplishing. There is no indication that the price actually paid to the subsequent subcontractor was less than a fair and reasonable amount for the product involved.

However, even if, arguendo, equity would hold a party to its bargain fairly made even though the execution of that contract would have adverse financial impact the conduct of the defendant in my opinion precludes its resort to the equitable doctrine of subrogation.

I rest this conclusion on two aspects of the present case: first, the intervening shield of the general contractor which the plaintiff could have utilized if the defendant were claiming against the plaintiff creates an unequal and an unfair situation; and, second, Shook, in its letter, by stating that it was “cancelling without charge and making arrangements to procure [dockboards] elsewhere,” even if the statement is ambiguous insofar as “without charge” is concerned, created a reasonable basis for belief on the part of the defendant that it was being relieved of an onerous contract without any liability for failure of performance.

The first aspect needs little elaboration. The plaintiff chose to deal with a general contractor and not to expose itself to direct claims from subcontractors. It now seeks to reverse directions on the one way street it selected. To do so would appear to me to be violative of equitable principles.

As to the second aspect, the president and one other employee of the defendant acted upon the Shook letter pursuant to a not unreasonable interpretation that the contract was at an end and that Un-arco would not be charged for any costs incurred by Shook. Accordingly, Unarco terminated its efforts to perform under the contract.

The plaintiff concedes that the “without charge” statement is ambiguous. By so conceding, it is also admitting that the interpretation placed on the words by Unarco is not unreasonable. Whether this would be the ultimate legal effect of the words in a breach of contract suit by the other contracting party, Shook, is not important here, for what we are considering is whether a nonparty who is suing is precluded by equitable principles from using the sub-rogation doctrine. Nor, in my opinion, can NCR improve its position by the fact that it was Shook and not NCR which wrote the letter. In other words, NCR, by its direction to terminate the contract which Shook executed, was placing Unarco in a position in which it reasonably thought that it had lost its contract but would be subject to no liability. Justice is not achieved by now permitting the plaintiff to say that “you were mistaken in your reliance.”

Whether the payment made by NCR was or was not voluntary is arguable and standing by itself might well not be sufficient to defeat subrogation. However, equity considers all of the circumstances, and the somewhat questionable nature of the additional payment by NCR insofar as whether it was voluntary or whether it was required by the NCR-Shook contract therefore includes this element in the overall picture even though the impact may be minimal. Finally, it is noted in relation to the difficulty of performance that the ultimate delivering subcontractor did provide dockboards with a different design.

Considering all of these aspects, I would hold that the district court’s decision was correct and that the plaintiff was precluded from a recovery based upon subrogation.

Plaintiff is not averse to recovery on any basis which it can get the court to accept and also relies upon a third party beneficiary claim, upon an assignment theory, and upon some type of agency relationship with Shook. I find nothing in the record before the district court to make NCR other than the ordinary inei-dental beneficiary of any contracts that its general contractor may have made with subcontractors.

For the reasons indicated herein, I would affirm the judgment of the district court.


source: Caselaw Access Project

author: CUMMINGS, Circuit Judge.

license: Public Domain

text:
    Enrique A. GARCIA, Plaintiff-Appellee, v. David DANIEL, Director of Cook County Department of Public Aid, Defendant-Appellant.
    No. 73-1188.
    United States Court of Appeals, Seventh Circuit.
    Heard Dec. 10, 1973.
    Decided Dec. 28, 1973.
    Rehearing En Banc Denied Jan. 28, 1974.

      Michael B. Cohen, Chicago, Ill., for defendant-appellant.
    Bernard Carey, State’s Atty., John Dienner, III, Paul P. Biebel, Jr., Chicago, Ill., for plaintiff-appellee.
    Before CUMMINGS, PELL and STEVENS, Circuit Judges.
   CUMMINGS, Circuit Judge.

In his second amended complaint under the Civil Rights Act (42 U.S.C. § 1983), plaintiff alleged that on March 3, 1972, he had been unlawfully fired as a caseworker trainee in the Cook County, Illinois, Department of Public Aid as a result of his February 29, 1972, arrest by officers of the federal Immigration and Naturalization Service. Because of his»arrest and detention in jail, plaintiff missed work on March 1st. He alleged that he was summarily discharged by defendant without any notice or hearing. He sought reinstatement with back pay plus $15,000 in damages. Defendant’s motion to dismiss asserted that plaintiff was only a probationary worker and therefore could be summarily discharged under Ill.Rev.Stats. 1971, Ch. 34, § 1118. Defendant attached to his supporting brief his March 3 letter separating plaintiff from his position at the close of business on that date because of his “falsification of official attendance records.” A copy of the termination letter was sent to the Cook County Civil Service Commission. The falsification of records charge was based on the contention that plaintiff’s absence from work was not because of “an accident” as claimed in an intra-office memorandum he wrote, but because of his having been jailed.

The district court filed three brief memorandum opinions. The first concluded that plaintiff had stated a claim. The second required defendant to give plaintiff notice of the charges and a hearing at which he would have the opportunity to clear his name. The court held that such action was required by Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548, decided about four months after plaintiff’s discharge, because Roth contemplated notice and opportunity to be heard where a person was discharged for dishonesty or where the employer sought to bar a discharged person from other public employment. 408 U.S. at 573-574, 92 S.Ct. at 2707. Since defendant has not cross-appealed, this holding is no longer in issue.

Two days after the issuance of the district court’s second opinion, a hearing was conducted by a Cook County Department of Public Aid hearing officer. He found that plaintiff was discharged because of his false written explanation of his March 1, 1972 absence. He considered that plaintiff had not originally been given adequate notice and opportunity to clear his name. He further found that the false statement was made intentionally and concluded that plaintiff had failed to clear his name because the charge that he had falsified records was true. Plaintiff did not challenge these findings in the district court.

Subsequently, plaintiff filed an answer to defendant’s cross-motion for partial summary judgment requesting damages from the date of his termination until the date he was given an administrative hearing. In an accompanying memorandum of law plaintiff spelled out damages of at least $5,073, consisting of loss of earnings and $1,000 expenses for moving to Florida where he secured another job. Simultaneously, he asked the court to assess the defendant with $18.24 in costs and $1500 in plaintiff’s attorney’s fees. In denying plaintiff’s request for damages, costs and attorney’s fees and in granting defendant’s motion that the case be dismissed, the district court stated as follows in its final, unreported opinion:

“Where a court holds that a plaintiff should not have been fired it is reasonable that he be compensated for the time he was not working but should have been. That is not the situation in this lawsuit. The hearing officer found that plaintiff was properly fired for falsifying department records. Plaintiff implicitly accepts the validity of the reason, for in his briefs before this court his only contention is that failure to give a hearing was improper and that damages are recoverable for the period from the date of firing until the hearing was given. Plaintiff cites no case which holds back pay can be awarded where reinstatement is not ordered. Cases ordering back pay do so after ordering reinstatement. See, e. g., McFerren v. County Board of Education of Fayette County, Tennessee, 455 F.2d 199 (6th Cir. 1972). As the Supreme Court recently held, the fact that the employer should have given the employee a hearing prior to firing him does not entitle the employee to reinstatement, it merely means he should be informed of the reasons for firing and be given an opportunity to challenge them. Perry v. Sindermann, 408 U.S. 593, 603, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972).
“Because plaintiff has not shown he is entitled to reinstatement and because he has not alleged any damage to his reputation or ability to pursue a profession that was due to the hearing not being given at the time of firing, there are no grounds for an award of damages. Plaintiff also has not cited any authority in support of his request for attorney’s fees. Plaintiff’s petition for assessment of damages and attorney’s fees is denied. Defendant’s motion for partial summary judgment is granted.”

We affirm.

The district court did not order the Cook County Department of Public Aid to give plaintiff a hearing to protect a property interest in his employment but to give him the “opportunity to clear his name” as specified in Board of Regents v. Roth, 408 U.S. 564, 573, n. 12, 92 S.Ct. 2701, 2707, 33 L.Ed.2d 548. If plaintiff had cleared his name at the administrative hearing, his employer would have “remain [ed] free to deny him future employment for other reasons.” Idem. Had the reason for his discharge been one that did not impugn his good name, he would not have been entitled to any hearing at all. Therefore, back pay would not be the proper measure of damage; pay is simply not the interest this hearing was intended to protect.

Plaintiff relies principally on Birnbaum v. Trussell, 371 F.2d 672 (2d Cir. 1966). That case held that whenever a substantial interest is involved, such as reputation or the ability to pursue a profession effectively, a public employee may not be removed on arbitrary grounds or without a procedure “calculated to determine whether legitimate grounds [for the discharge] do exist.” 371 F.2d 678 and n. 13. Plaintiff emphasizes the statement that 42 U.S.C. § 1983 affords “a right of action for injuries suffered in consequence of a denial of such a hearing.” Id. at 679. But Birnbaum was decided on a motion to dismiss, so that it reached no question relating to remedies. Furthermore, on the facts of this case, no injuries arose “in consequence of” the delay of the hearing. There is no reason to believe that the amount of plaintiff’s moving expenses was affected by the timing of the hearing. Plaintiff’s brief in this Court suggests that because the hearing was not held promptly, he was forced to travel from Florida to Chicago to attend the hearing. This is plausibly a consequence of the delay. But none of the extensive pre-judgment affidavits, pleadings and memoranda on damages presented this theory to the district court. Accordingly, we need not decide whether these travel expenses are a proper element of damage.

Finally, plaintiff asks for attorney’s fees. Were any such fees to be granted, it would only be for the proceedings leading to Judge Austin’s second opinion, ordering that a hearing be held. But we have been cited to no authority that would support such an award. Typical of one group of cases relied on by plaintiff is Rolfe v. County Board of Education, 391 F.2d 77 (6th Cir. 1968). In Rolfe, the plaintiff schoolteachers had been discriminatorily discharged, so that their reinstatement with back pay was ordered. Attorney’s fees of $250 apiece were awarded because of the “long, continuing pattern of evasion and obstruction of the desegregation of schools in Lincoln County.” 391 F.2d at 81. No comparable situation exists here. In any event, attorney’s fees in such cases are within the “wide discretion” of the district court (Monroe v. Board of Commissioners, 453 F.2d 259, 263 (6th Cir. 1972)), and in the present case no abuse of discretion has been shown in the denial of attorney’s fees. The remaining cases relied on by plaintiff were brought under Title II of the Civil Rights Act of 1964, and the award of attorney’s fees was pursuant to specific statutory authorization. See § 204(b) of that statute (42 U.S.C. § 2000a-3(b)) and Miller v. Amusement Enterprises, Inc., 426 F.2d 534 (5th Cir. 1970).

Judgment affirmed.


author: ELY, Circuit Judge:

text:
    FAMET, INC., Petitioner & Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent & Cross-Petitioner.
    No. 73-1832.
    United States Court of Appeals, Ninth Circuit.
    Dec. 27, 1973.
    Rehearing Denied Feb. 6,1974.

      Herbert S. Matthews, South San Francisco, Cal., for petitioner & cross-respondent.
    Elliot Moore, Acting Asst. Gen. Counsel, NLRB, Washington, D. C., Roy 0. Hoffman, Regional Director, NLRB, San Francisco, Cal., Peter G. Nash, Gen. Counsel, John S. Irving, Deputy Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Charles I. Cohen, NLRB, Washington, D. C., for respondent & cross-petitioner.
    International Ass’n. of Machinists & Aerospace Workers, AFL-CIO, Local #1327, Burglingame, Cal., for charging party.
    Before ELY, HUFSTEDLER, and SNEED, Circuit Judges.
   OPINION

ELY, Circuit Judge:

The Board’s Decision and Order is reported at 202 NLRB No. 52. Famet, Inc. (hereinafter the “employer”) has filed a Petition in which we are urged to review and set aside the Decision and Order, and the Board has filed a cross-application for the enforcement of its Order.

The controversy, as presented here, has been reduced to the question of whether the employer violated section 8(a)(3) and (1) of the National Labor Relations Act by discharging an employee, one Rutledge, because of his protected union activities.

We need not review the facts in detail, inasmuch as they are fully set forth in the Board’s reported Decision. We shall, however, briefly restate such of the relevant circumstances as are essential to an understanding of the problem. Rutledge was discharged by one Kat-shen, who was the employer’s plant manager, as well as its vice-president and majority stockholder. The employer is a relatively small enterprise, having, at the relevant time, approximately eleven employees. All of these employees worked during the same hours and had their break for luncheon at the same time. The employer’s operations were conducted on two floors of a building, and work benches were located on both of the two floors. Katshen maintained an office on the second floor, but he also had a work bench on the first floor.

There was abundant evidence of the fact that Katshen was antagonistic to trade unions and their activity, and his union animus was clearly established.

The employer hired Rutledge as a machinist on April 1, 1969, and his discharge occurred on November 12, 1971. During this period of approximately two and one-half years, the employer had given several increases in pay to Rutledge so that his beginning wage rate of $3.25 per hour had, at the time of his discharge, been increased to the rate of $4.95 per hour.

In early November of 1971, Rutledge visited the headquarters of a certain union to discuss the possibility of that union’s representation of him and his fellow employees. He was given certain information and supplied with a number of union authorization cards. Rutledge immediately went to his place of work and distributed a card to each of all of the employees, save one.

In the morning of November 12, 1971, Katshen, while distributing pay checks, observed Rutledge talking to an employee named Aiello. Katshen delivered to Rutledge and Aiello their pay checks but said nothing about having observed their conversation. During the following lunch period, however, Katshen directed a foreman, one Staudt, to notify Rutledge (and Rutledge only) that he, Rutledge, had been seen talking, rather than working. Katshen further directed the foreman to admonish Rutledge about this. As Rutledge was returning from his lunch, another employee warned Rutledge that he had learned from an employee named Beardslee that Katshen was aware that union activities were occurring within the plant. Shortly thereafter, when foreman Staudt conveyed Katshen’s warning to Rutledge, Rutledge remarked “It’s no longer a secret, and the cat’s out of the bag.” Rutledge also advised Staudt to take a neutral stand because “They have enough on [Kat-shen]”, and “They were going to get him.” Staudt then reported these remarks directly to Katshen and also told Katshen that two other employees, Stahl and Chasco, were also involved. Kat-shen made no inquiries of Staudt concerning the asserted involvement of Stahl and Chasco. Katshen then proceeded to Rutledge’s place of work, asked Rutledge about his reported threat “to get me”, and Rutledge denied having made such threat. Foreman Staudt was thereupon summoned to repeat that which he had previously reported to Katshen, whereupon Katshen discharged Rutledge, handing him two paychecks which he, Katshen, had evidently already caused to be prepared. The only additional relevant testimony of consequence pertained to certain of Kat-shen’s activities subsequent to his discharge of Rutledge. This evidence was largely to the effect that Katshen had openly addressed the employees, stating inter alia, that he did not like unions and that unions would do the employees no good. There was also testimony to the effect that Katshen had told at least two employees that he did not like unions, and if the two employees desired to work for a union shop, they should seek employment elsewhere.

The critical question, as both the Board and the employer recognize, is whether there was substantial evidence to support the Board’s finding that Kat-shen knew of Rutledge’s union activity prior to the discharge. If there is support for that finding, the Board’s conclusion that Rutledge was unlawfully discharged is, without question, justified.

It is well settled that the Board’s finding that an employer knew of an employee’s union activity may be supported by circumstantial evidence. NLRB v. Miller Redwood Co., 407 F.2d 1366, 1369 (9th Cir. 1969); Santa Fe Drilling Co. v. NLRB, 416 F.2d 725, 729 (9th Cir. 1969). This must be true, since direct evidence of one’s actual knowledge is not always available. The Board’s Decision necessarily rested, to some extent, upon inferences which it drew from the evidentiary facts. If the inferences supporting the Board’s Decision were reasonable, then we must credit them, even though we might have drawn opposing inferences, also reasonable, from the same facts. NLRB v. Walton Mfg. Co., 369 U.S. 404, 405, 82 S.Ct. 853, 7 L.Ed.2d 829 (1962); NLRB v. Holly Bra of Calif., Inc., 405 F.2d 870, 872 (9th Cir. 1969). See also, NLRB v. Lowell Sun Publishing Company, 320 F. 2d 835, at 840 (1st Cir. 1963). The inference that an employer knows of an employee’s union activities has been deemed especially reasonable “where, as here, the employee in question engaged in in-plant union activity and the plant is relatively small.” A. J. Krajewski Manufacturing Company v. NLRB, 413 F.2d 673, at 676 (1st Cir. 1969). In the Decision and Order under review, the Board emphasized the comparatively small number of employees and the close-knit nature of the employer’s operation. Although Chairman Miller disagreed, the majority of the Board apparently thought it inconceivable that Kat-shen in the circumstances, was ignorant of Rutledge’s union activity prior to the latter’s discharge. All of the foregoing leads us to the conclusion that we have no justifiable choice save to enforce the challenged Order. The case is close, however, and we think it not inappropriate to remind the Board that it must exercise especially careful judgment in a case such as this and that it carries the burden of proof. NLRB v. Lowell Sun Publishing Company, supra. Our distinguished Brother Aldrich of the First Circuit wrote, 320 F.2d at 842: “Where a party has two motives, one permissible and the other impermissible, the better rule is what we [have] indicated, namely, that the improper motive must be shown to have been the dominant one.” The Board recognized the validity of this rule in the Decision and Order now under review.

The Board must be as impartial as the courts, serving both union and management, as well as the public at large, with impartiality. If the Board applies this principle — and we think that it almost always does — then it will not invite unto itself such biting criticism as appears in NLRB v. Billen Shoe Co., 397 F.2d 801 (1st Cir. 1968). We need not reiterate the criticism there written, but we do remind the Board that in reviewing Board determinations of the kind here questioned, we will always have in mind the concluding language of Judge Aldrich in Billen:

“If we were to draw a further lesson from this case, and too many others like it that we have had, it is that it is all too easy to say that adequate cause for discipline was seized upon as pretextual in the case of union representatives. The fact is that adequate cause for discharge is of peculiarly legitimate concern in such instances; management cannot run its plant if union organizers can ride roughshod on the basis of their position. When good cause for criticism or discharge appears, the burden which is on the Board is not simply to discover some evidence of improper motive, but to find an affirmative and persuasive reason why the employer rejected the good cause and chose a bad one. The mere existence of anti-union animus is not enough. The fact that the employer may be pleased to effectuate the discharge does not mean that this was his primary motive.”

NLRB v. Billen Shoe Co., supra, at 803. The Board’s Order will be Enforced.


author: PER CURIAM.

text:
    UNITED STATES of America, Appellee, v. Louis J. BADIA, M. D., Appellant.
    No. 73-1171.
    United States Court of Appeals, First Circuit.
    Heard Nov. 8, 1973.
    Decided Dec. 27, 1973.

      Walter. J. Hurley, Boston, Mass., for appellant.
    Alan R. Hoffman, Asst. U. S. Atty., with whom James N. Gabriel, U. S. Atty., was on brief, for appellee.
    Before ALDRICH, McENTEE arid CAMPBELL, Circuit Judges.
   PER CURIAM.

Appellant, a physician, was convicted on three counts of knowingly and intentionally distributing controlled substances in violation of 21 U.S.C. § 841(a)(1), and on five counts of willfully, knowingly and intentionally causing the distribution of controlled substances, in violation of § 841(a)(1) and 18 U.S.C. § 2(b). Appellant’s main argument on appeal is that a physician who is validly registered with the federal government to “dispense” controlled substances, as he was, could not have been found on the evidence at trial to have “distributed” such substances in violation of § 841(a)(1). This argument is without merit and we affirm the conviction.

The principal government witness at trial was a federal agent. He testified that on three occasions he called on the appellant at the latter’s office and was either directly sold controlled substances from appellant’s stock or sold prescriptions for controlled substances which he then had filled at various pharmacies. The agent further testified that appellant never examined- him in any way before selling him the drugs or prescriptions, and that appellant indicated that he knew the drugs were not to be used for therapeutic or medical purposes. Appellant took the stand on his own behalf and denied every pertinent fact alleged by the agent. The jury found him guilty on all counts, obviously believing the agent’s testimony and not that of appellant.

The government acknowledges that appellant is authorized to “dispense” controlled substances and therefore could not have been convicted of violating § 841(a)(1) unless the jury found that his actions constituted something other than dispensing, namely, distributing. The real issue, then, is the meaning of “dispense,” which the statute defines as “deliver [ing] a controlled substance to an ultimate user or research subject by, or pursuant to the lawful order of, a practitioner . . . . ” 21 U.S.C. § 802(10) (1970) (emphasis added). “Practitioner” is defined as a “physician . . . registered, or otherwise permitted, by the United States or the jurisdiction in which he practices or does research, to distribute, dispense, conduct research with respect to, administer, or use in teaching or chemical analysis, a controlled substance in the course of professional practice or research.” 21 U.S.C. § 802(20) (1970) (emphasis added). The combined effect of these statutory definitions in the present context is to limit the meaning of “dispense” to delivery of controlled substances by a physician who is acting in the course of professional practice or research. The point is made explicitly in the regulations. See 21 C.F.R. § 306. 04(a) (1973). Delivery of controlled substances outside the course of professional practice or research would constitute “distributing”, see 21 U.S.C. § 802(11) (1970), an activity which violates § 841(a) (1) even if carried on by a registered physician. United States v. Collier, 478 F.2d 268, 271-272 (5th Cir. 1973).

In the instant case, the jury was properly charged that in order to convict appellant under § 841(a)(1) it had to determine whether he had delivered drugs and prescriptions to the agent and, if so, whether such deliveries were in the course of appellant’s professional practice or research. The jury obviously concluded that deliveries had occurred and were not within the course of appellant’s medical practice. Both conclusions were amply warranted by the record. Indeed, assuming as we must the truth of the agent’s testimony for purposes of this appeal, appellant’s conduct bore no more resemblance to professional medical practice than the conduct of any street-corner “pusher.” A medical degree confers no immunity from criminal punishment. United States v. Collier, supra at 271; United States v. Warren, 453 F.2d 738, 744 (2d Cir.), cert, denied, 406 U.S. 944, 92 S.Ct. 2040, 32 L.Ed.2d 331 (1972).

Appellant’s alternative contention that he was entrapped cannot even be considered in view of the fact that he has denied committing any acts on which the conviction could have been based. It is well settled in this circuit that one cannot both deny the deed and say that he was entrapped into doing it. Sylvia v. United States, 312 F.2d 145, 147 (1st Cir.), cert, denied, 374 U.S. 809, 83 S.Ct. 1694, 10 L.Ed.2d 1032 (1963). Quite apart from this principle, there was no evidence that would warrant a finding of entrapment.

Affirmed.

      . The statute provides in pertinent part:
      “(a) Except as authorized by this sub-chapter, it shall be unlawful for any person knowing]y or intentionally—
      (1) to manufacture, distribute, or dispense ... a controlled substance.”

      . The statute provides:
      “(b) Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.”

      . The following excerpt from the agent’s testimony suggests its overall tenor:
      “So I examined the bottle containing a hundred Desoxyn [a controlled substance], and I gave [the appellant] another $20, so I said, well, was that all? He said, ‘The only thing I have left is some lonamin [a noncontrolled substance],’ and I told him that X couldn’t make any money on the lonamin. He told me that the kids told him that it was great for parties and that it was a real good pill. I said I wasn’t interested.
      “Then he told me that he was sorry that he hadn’t met me three years before. He said that he used' to get thousands of these tablets that he would have been able to supply. He also told me that he preferred to sell me the pills from the office because my name wasn’t on them and his name wasn’t on them.”

      . We acknowledge that this interpretation of the statutory scheme conflicts with the recent decision of the Fifth Circuit in United States v. Leigh, 487 F.2d 206 (5th Cir. 1973). In Leigh, the court affirmed the dismissal of an indictment which charged a physician with unlawful “distribution” in violation of § 841(a)(1) where the physician was accused of writing prescriptions for controlled substances outside the course of his professional practice. The court held that instead he should have been indicted for unlawful “dispensing” in violation of § 841(a)(1). We disagree. We think the reason Congress included the term “dispense” in § 841(a) (1) was to compel physicians to become properly licensed. If not licensed, a physician could then be convicted of unlawful dispensing. However, once licensed, he could not be convicted of unlawful dispensing because, as we stated above, the statute defines the term in and of itself as a lawful act. It should also be noted that Leigh seemingly conflicts with the prior Fifth Circuit decision in Oollier, supra, where the court affirmed a physician’s plea of guilty to unlawfully “distributing” controlled substances in violation of § 841(a) (1).


author: PER CURIAM:

text:
    The AETNA CASUALTY AND SURETY COMPANY, Plaintiff-Appellee, v. SERVICE CONTRACTING, INC., Defendant-Appellant.
    No. 73-2076.
    United States Court of Appeals, Fifth Circuit.
    Dec. 21, 1973.

      John J. Weigel, New Orleans, La., for defendant-appellant.
    Melvin W. Mathes, New Orleans, La., for plaintiff-appellee.
    Before TUTTLE, GEWIN and RO-NEY, Circuit Judges.
   PER CURIAM:

The judgment of the trial court is affirmed. We consider that the Reasons for Judgment announced by that court in support of its judgment clearly and accurately present the matter. We therefore append a copy to this opinion.

Appendix

REASONS FOR JUDGMENT

Aetna Casualty and Surety Company issued several policies of insurance to Service Contracting, Inc. covering the period May 1, 1964 to May 1, 1970. At issue in this case were premiums on two policies in effect from May 1, 1964 to May 1, 1967: A Workmen’s Compensation and Employers’ Liability Policy, No. 39C-24856-SR and a Comprehensive General Liability Policy, No. 39AL-7079-SR.

Both of these policies provided for premiums to be computed in accordance with a retrospective premium plan, Plan D. That is, a retrospective premium was computed on the actual losses and expenses incurred under the policies as well as on reserves for possible future losses and expenses. However, payments in excess of $10,000 per claim did not increase the retrospective premium.

As of'the sixth interim or fourth full retrospective rating under Plan D, Service Contracting owed Aetna a total retrospective premium of $39,158.00. Plaintiff’s Exhibit No. 8 demonstrates that this total included reserves for the claims of Lowery and Huff. But by the time of the next rating, as shown in Plaintiff’s Exhibit No. 9, these two claims had been settled, thus establishing the actual losses and expenses incurred. The retrospective premium was thereby reduced in the amount of $4,-888.00, leaving a total of $34,270.00 due Aetna from Service Contracting, Inc.

Of this $34,270.00 Service Contracting disputes only certain charges attributable to the disposition of two claims, the claims of Pat Laster and Archie Dantin.

As set out in plaintiff’s Exhibit No. 10, Pat Laster, an employee of Service Contracting, Inc., sued Texaco, Inc. for injuries received while working on one of its stationary platforms located in the Gulf of Mexico. Texaco filed a third-party complaint against Service Contracting, the indemnitor under a hold-harmless agreement made in Texaco’s favor. Ultimately, Aetna paid $5,100.00 in indemnity to Pat Laster and incurred $5,637.58 in attorney’s fees and costs for a total of $10,737.58.

Aetna handled this claim under the comprehensive liability policy. As applied to this policy, the retrospective premium plan included attorneys’ fees and costs. Therefore, Service Contracting was charged with $4900 of the total attorneys’ fees and costs which, together with the $5100 indemnity payment, amounted to the maximum allowable retrospective premium of $10,000 for a single claim.

Service Contracting objects to being charged anything for attorneys’ fees and costs. They contend that this claim should have been handled under Coverage B of the workmen’s compensation policy which specifically excluded attorneys’ fees and costs from the computation of any retrospective premium. Their reasoning is that the hold-harmless agreement added nothing to their obligations to Texaco which did not already exist in the absence of such a written contract. But this ignores the fact that, having paid workmen’s compensation to Laster in accordance with the exclusive liability provision of the Longshoremen’s and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq., Service Contracting was not subject to any independent tort liability to its employees. Without this underlying tort liability, Service Contracting could not have been liable for indemnity in the absence of a written contract. Ocean Drilling & Exploration Co. v. Berry Brothers Oil Field Service, Inc., 377 F. 2d 511 (5th Cir.), cert, denied, 389 U.S. 849 [88 S.Ct. 102, 19 L.Ed.2d 118] (1967). See General Electric Co. v. Cuban American Nickel Co., 396 F.2d 89 (5th Cir. 1968); Halliburton Co. v. Norton Drilling Co., 302 F.2d 431 (5th Cir. 1962).

Furthermore, since the Laster claim did not arise from an accident on a vessel, the Ryan doctrine of implied warranty does not apply. Loffland Brothers Co. v. Roberts, 386 F.2d 540 (5th Cir. 1967), cert, denied, 389 U.S. 1040 [88 S.Ct. 778, 19 L.Ed.2d 830] (1968); Ocean Drilling & Exploration Co. v. Berry Brothers Oil Field Service, Inc., supra.

Therefore, the hold-harmless agreement provided the sole basis for the indemnification of Texaco by Service Contracting. Contractual liability such as this was specifically excluded from the workmen’s compensation policy, but was explicitly provided for in the comprehensive liability policy. Thus, Aetna quite correctly handled the Laster claim under the comprehensive liability policy which resulted in charging attorneys fees and costs as part of the retrospective premium.

The second disputed claim arises from the pre-trial settlement of Archie Dantin’s suit against Service Contracting. Aetna settled the matter at a total cost, including attorneys’ fees, of $20,931.54. The maximum retrospective premium of $10,000 was charged to Service Contracting.

Service Contracting admits liability for attorneys’ fees and costs of $3,431.54 but objects to the remaining $6,568.46 as part of an improperly paid settlement. Service Contracting contends that it should have been afforded the option of assuming the defense of the Dantin case and holding Aetna harmless for any liability. Service contends that it would have had such an option because, prior to the inception of the policies issued by Aetna to Service Contracting, Aetna had verbally agreed to discuss with Service Contracting the settlement of any claims over $1,000.00, but did not in fact discuss the Dantin settlement.

While Aetna had verbally agreed to discuss any settlements exceeding $1,000.00, Aetna nevertheless retained the sole right and authority to settle any case it deemed expedient. There was no evidence introduced to prove that, if Aetna had discussed the settlement, either Service Contracting or Aetna would have been willing to enter into such a hold-harmless agreement. And in view of the $300,000 in coverage that Service Contracting had with Aetna, it is extremely unlikely that Service Contracting would have released this coverage in hopes of saving a mere $6,568.46.

Moreover, the Louisiana Direct Action Statute, La.R.S. 22:655, giving an injured party a separate right against the insurer, leaves serious doubt as to whether any such hold-harmless agreement could have effectively released the insurer. See Finn v. Employers’ Liability Assurance Corp., 141 So.2d 852 (La. App.2d Cir. 1962).

The attorney who represented Aetna and Service Contracting in the defense of the Dantin claim stated that a settlement of $7,000-$8,000 would have been reasonable. Service Contracting failed to present any evidence to prove that, if it had assumed the defense of the case, it would have saved the $6,568.46 which is contested. Hence, even if Service Contracting had had the right to assume the defense — -which right it did not have —it has failed to establish that it suffered any loss.

Consequently, Aetna properly charged Service Contracting with the basic amounts in dispute, $4,900 for the Last-er claim and $6,568.46 for the Dantin claim. In addition, there is a charge for retrospective factors of 17.76% computed on each of these figures, amounting to $870.00 and $1,166.00 respectively, for a total of $13,504.45, which is contested by Service Contracting. Together with the amount not in controversy, $20-765.54, Service Contracting, Inc. owes Aetna Casualty & Surety Company $34,-270.00.


author: J. JOSEPH SMITH, Circuit Judge:

text:
    The TUPMAN THURLOW CO., INC., Appellee, v. S.S. CAP CASTILLO, her engines, boilers, etc., et al., Appellant.
    No. 84, Docket 73-1277.
    United States Court of Appeals, Second Circuit.
    Argued Nov. 14, 1973.
    Decided Jan. 10, 1974.

      Robert J. Giuffra, New York City (Dougherty, Ryan, Mahoney, Pellegrino & Giuffra, New York City, Vincent J. Barra, New York City, of counsel), for appellant.
    Jeffrey V. Boxer, New York City (L'illy, Sullivan & Purcell, P. C., New York City), for appellee.
    Before KAUFMAN, Chief Judge, and SMITH and OAKES, Circuit Judges.

      . We can deduce little from the condition of the Norfolk beef because apparently the USDA ordered it to be re-cooked before a defrost inspection could be made.

   J. JOSEPH SMITH, Circuit Judge:

This is an appeal from a judgment in admiralty of the United States District Court, Southern District of New York, John M. Cannella, Judge, sitting without a jury, entered on November 9, 1972, holding defendant Oetker, owner of the vessel S.S. Cap Castillo, liable for damage to a cargo of 4,301 cartons of beef during that ship’s voyage from Buenos Aires to Philadelphia. We reverse and remand for a new trial.

The parties agree that inadequate re-frigation caused the beef to spoil at some point between its processing in Buenos Aires and its rejection by the United States Department of Agriculture (USDA) subsequent to unloading in Philadelphia. They disagree as to the cause of and the responsibility for the spoilage. This factual dispute is the principal issue raised on appeal.

Under the Carriage of Goods by Seas Act (COGSA), 46 U.S.C. § 1300 et seq., the plaintiff has the burden of establishing that the cargo in question was delivered in good condition to the carrier and that it was damaged on discharge. If the plaintiff satifies this burden, the burden of proof then shifts to the defendant to establish that the damage resulted from one of the statutory exceptions of § 1304(2). Section 1304(2)(q), which provides that a carrier is not liable for loss resulting from causes which arise without the fault of the carrier, is the relevant exception in this case.Judge Cannella concluded that plaintiff had satisfied its burden and that defendant had not shown that the spoilage was not his fault.

The fixed point by which we must steer on appeal is the clearly erroneous rule. McAllister v. United States, 348 U.S. 19, 20-21, 75 S.Ct. 6, 99 L.Ed. 20 (1954). We believe that the evidence supports the conclusion that the beef was in good condition when loaded and in bad condition when unloaded but that an erroneous assumption underlies the finding concerning defendant/appellant’s diligence. We therefore reverse and remand for new trial.

A. The Facts

In 1966, Frigorifico Anglo S.A., a subsidiary of plaintiff Tupman Thurlow, Inc., purchased cattle in local Argentine markets and slaughtered them at its plant in Buenos Aires. The meat was chilled for two or three days, boned, cut into four-inch squares, placed in a cooking vat, and cooked 200 kilos at a time for a period of one and one-half hours. It was then immersed in cold water to stop the cooking process, dipped into a fat solution, taken to a chilled room and spread out on a table until the beef reached a temperature of 0° centigrade. Next, it was bagged in polyethylene bags, boxed into cartons with steel bands and taken to a freezing chamber where temperatures ranging from minus 18° to minus 20° centigrade were maintained.

This process continued from February to September 1966 until 4,301 cartons were accumulated in the freezing chamber for shipment to plaintiff Tup-man Thurlow, Inc. During this period, Frigorífico made various bacteria checks and the Argentina Department of Agriculture (ADA) supervised the process.

On September 26, 1966 the 4,301 cartons of beef were transported from the Frigorífico plant to the pier in refrigerated trucks. The trip took approximately thirty minutes. The cargo was divided into five lots for which five clean bills of lading were issued. The bulk of the cartons were loaded in the upper tween deck of the No. 2 hatch while some cartons from two lots were loaded in the lower hold above a consignment of frozen beef destined for Norfolk, Virginia, stowed two days earlier. The ship’s cargo officer testified that while the ear-tons were being loaded, he took the pulp temperatures of the beef, by drilling a hole into the frozen cartons. The temperatures ranged between minus 8° and minus 11° centigrade. He also stated that the cartons were not damaged when loaded on the S.S. Cap Castillo.

After leaving Buenos Aires on September 26, the S.S. Cap Castillo arrived in Santos, Brazil on October 4, where a shipment of shrimp was loaded and stowed in a space in the square of the hatch of the upper tween deck of the No. 2 hatch. The ship arrived in New York on October 20, where the shrimp was discharged.

On October 25, the ship arrived in Philadelphia and plaintiff/appellee’s cargo of frozen cooked beef was discharged. After approximately fifteen drafts containing 600 cartons were unloaded from the ship, an inspection by the USDA revealed the presence of blood smears, tissue, and other related matter on the cartons. Several inspectors also noticed an odor, which one inspector described as similar to the smell of a kill floor of a slaughter house. The USDA ordered Tupman Thurlow, Inc. either to re-box the beef or to return it to Argentina. The beef was re-boxed in Philadelphia and allowed entry into the United States. Three of the lots remained in a Philadelphia warehouse and two were shipped by rail to Napoleon, Ohio, where Campbell Soup maintains a plant. Subsequently, all the lots were subjected to a standard defrost inspection. It was at this point that the beef was found to be spoiled, evidencing a readily detectable odor. Some of the meat was found to be not thoroughly cooked. Meanwhile, the S.S. Cap Castillo had sailed from Philadelphia to Norfolk.

Thus there were four periods of refrigeration: at the Frigorífico plant, in the delivery truck, on board the S.S. Cap Castillo, and in the warehouses or trains between the time of unloading in Philadelphia and the defrost inspections.

B. Plaintiff’s Burden

The court’s finding that the beef was in good condition on loading in Buenos Aires on September 26, 1966, is supported by health certificates issued by the ADA, the readings of the bacteria levels in the beef when stored at the Frigorífico plant, testimony concerning the refrigeration practice at the plant and the clean bills of lading. Cargo Officer Bender also testified that the cartons were solid and free of stains when loaded on September 26 and that he found the pulp temperatures to be below the freezing point.

Appellant challenges the weight of the evidence as to good condition on loading. He points to the shipper’s failure to produce records which might have disclosed breakdowns in the refrigeration equipment at the plant, to the shipper’s failure to establish the temperature in the delivery trucks, to the inconsistency between the ADA certificates (which stated that the beef was thoroughly cooked) and the finding of the USDA that some of it was not thoroughly cooked, and to appellee’s failure to produce evidence which would have dispelled the possibility that the beef spoiled during two periods when the plant’s equipment was being defrosted.

The court also concluded that the beef was in bad condition upon discharge on October 25, 1966. This finding is supported by testimony of USDA inspectors that the cartons were stained and smelled bad when taken from the ship that day, and by evidence that subsequent examination revealed that the meat had high bacteria levels and a noxious odor.

Appellant disputes this, pointing out that only a small percentage of the cartons were found to be in bad condition on October 25. He notes that the beef was detained by the USDA because of the condition of the cartons, not because of beef spoilage and argues that the USDA’s failure to order an immediate defrost inspection evidences the USDA’s satisfaction that the beef itself was in good condition upon discharge in Philadelphia. Appellant suggests that the beef may have spoiled subsequent to its unloading, while it was being stored and transported by the USDA.

Although some of appellant’s suggestions appear to be unlikely, others are plausible. The clean bills of lading and the testimony of the Cargo Officer would seem to dispel the possibility that the meat spoiled at the plant. The condition of the cartons upon discharge makes it unlikely that the meat spoiled while in the control of the USDA. While it is possible that inadequate refrigeration in the delivery trucks, compounded by the exposure of the meat to the air while it awaited loading in Buenos Aires, might have begun a thawing process which damaged the beef, there is no need for us to retry these issues. Appellant has not demonstrated that the finding of the court on these matters was clearly erroneous. Judge Cannella was confronted with a confusing factual situation but there is ample evidence to support his conclusion that appellee satisfied its burden of proof under COGSA.

C. Defendant’s Burden of Proof

In concluding that appellant shipowner had not shown that the spoilage was not caused by his negligence, the court below relied on the fact that the temperature chart produced by appellant did not preclude the possibility of a breakdown in the ship’s refrigeration system and did not show a temperature in the relevant holds for September 26, 1966, and on the fact that appellant did not produce a book which Cargo Officer Bender suggested contained the best evidence of the refrigeration of the beef during the voyage.

We think that the court below erred in finding that the chart (Plaintiff’s Exhibit 14, referred to as Defendant’s Exhibit 3 in Bender’s deposition) called a “reefer chart” because of its association with the refrigeration equipment, did not contain a reading for September 26. The matter is significant, because Judge Cannella deduced from the good condition of the shrimp when unloaded in New York that the spoilage occurred between September 26 and October 4, when the shrimp was loaded in Santos. Since the loading in Buenos Aires was completed at one o’clock in the afternoon on September 26, an interpretation of the reefer chart which indicated no recordation on that date would leave fifteen hours unaccounted for by the reefer chart. And because the beef was exposed to the air while the loading progressed, these first fifteen hours could be critical.

The reefer chart itself is difficult to read. Its vertical axis consists of temperatures in centigrade; its horizontal axis consists of dates, the numbering be-, ginning on September 27, 1966. There are'two dots, or readings, 5 mm. apart, between each date, signifying that recordings were made every twelve hours. There is one dot 5 mm. to the left of the September 27 date. The ambiguity consists of this: it is unclear what time of day is signified by the date. If it is meant to signify the morning reading, then the dot to the left of September 27 would indicate a September 26 reading. If it is meant to signify the afternoon reading, then no September 26 reading appears.

The testimony concerning the reefer chart was claimed to be ambiguous. Cargo Officer Bender testified that the chart contained a September 26 reading, and at one point he stated that the chart was properly read by interpreting the dots directly above the dates to refer to four o’clock in the morning and the dots between the dates to refer to four o’clock in the afternoon. On the other hand, at two other points Bender stated that some records did not contain a September 26 reading. This latter testimony is claimed to be unclear because of some possible confusion about the labels to be given to different “logs,” “reports,” “workbooks” and “charts.” The claimed confusion seems more apparent than real. Bender was referring not to the chart, but to the deck log, and work report entries by him, and a reefer log, in which he would not make entries (App. 339a, 325a-327a).

Moreover, the testimony of the Cargo Officer is not the sole evidence. Although the chart is by no means plain, we think that close analysis reveals that Bender’s testimony that the dots above the dates refer to four o’clock in the morning very probably is correct.

A comparison of the facts known about the unloading in Philadelphia on October 25 with the readings on the reefer chart on about that date indicates that the dots above the dates signify readings at four o’clock in the morning. We know that the cargo was unloaded beginning at eight o’clock in the morning and that the unloading ended at 2:30 in the afternoon. During the course of the unloading, the refrigeration equipment would be deactivated and the holds exposed to the outside air, causing an increase in the temperatures in the compartments. In fact, the reefer chart shows an increase in the temperature of over 3° centigrade on about October 25, followed by an equal decrease in the temperature. We can assume that the sudden temperature decline was caused by the closing of the hatch and the reactivation of the refrigeration equipment, in preparation for the trip from Philadelphia to Norfolk. The rise and fall is shown on the chart to have occurred within the space of two dots, or twenty-four hours.

If we assume that the dots above the dates refer to four o’clock in the morning, these facts follow. At four in the morning on October 25 the temperature was minus 20° in the holds. Unloading began at eight in the morning. By four in the afternoon that day, the temperature was more than minus 18°. Unloading ended at 2:30. At four in the morning October 28, the temperature was back to minus 20°.

There were two unloadings beside the Philadelphia unloading, in New York on October 20 and in Norfolk on October 26. A comparison of the facts known about these discharges supports the inference derived from the above analysis.

On October 20, from 1:45 in the afternoon to 2:40 in the afternoon, the shrimp was unloaded in New York. The reefer chart shows a substantial temperature increase in the holds between four in the morning of the 20th and four in the afternoon and a sharp decrease in the temperature in the next twelve hours, using the time line of the above assumption. This interpretation conforms without difficulty to the facts we know about unloading and its effects on the temperature in the holds.

On October 26, from 1:25 in the afternoon to four in the afternoon, a cargo of beef was unloaded in Norfolk. Norfolk was the last stop on the voyage, and it is reasonable to assume that the refrigeration equipment was deactivated for the duration when the Norfolk cargo began to be unloaded. The reefer chart indicates, based on our assumption, a temperature at four in the morning on October 26 of slightly over minus 20°. The chart stops at that point. This is consistent with a shut-down of the equipment before the four in the afternoon reading.

One other fluctuation in the chart might be predicted, that associated with the loading of the shrimp in Santos on October 4, between 4:50 and 6:30 in the afternoon. However, no significant fluctuation appears in the chart around this time. This is explained by the fact that the four o’clock reading had been taken just before the beginning of the loading.

To summarize, fluctuations in three places in the reefer chart support the conclusion that the temperature readings above the dates on the chart refer to readings at four in the morning. This is consistent with Bender’s testimony explaining the chart. Together, they comprise persuasive evidence that the reefer chart contains a temperature reading for four in the afternoon on September 26 — a reading of minus 16° just three hours after the beef was loaded in Buenos Aires.

Thus, the reefer chart evidences the temperatures in the holds throughout the voyage from Buenos Aires to Philadelphia and indicates that the beef was properly refrigerated while on board the S.S. Cap Castillo. Appellant contends that under Manhattan Fruit Export Corp. v. Royal Netherlands Steamship Co., 271 F.2d 607 (2d Cir. 1959), cert, denied, 363 U.S. 812, 80 S.Ct. 1249, 4 L. Ed.2d 1154 (1960), the chart must be accepted as prima facie evidence of his due diligence.

In Manhattan Fruit, plaintiff shipped plums under an agreement calling for refrigeration at temperatures between 35° and 40° or 41° fahrenheit. When unloaded, the plums were spoiled, and the issue was whether the carrier had maintained the proper temperature in the hold. The carrier sought to introduce into evidence charts, constructed by recording the temperature in the compartment every two hours on scraps of paper and later averaging to obtain a daily temperature in the compartment. The district court refused to credit the charts because there was no proof as to when the temperature record was made and as to how soon they were made after the temperature was recorded on the scraps. The Court of Appeals held that it was clear error to find that the charts were unreliable, stating that they constituted prima facie evidence of the carrier’s due diligence. Here, the court below dealt with Manhattan Fruit by stating that that decision “should be confined to its facts,” but the court did not spell out why it thought the reefer chart was less reliable than the charts in Manhattan Fruit.

Two factors might make the reefer chart less credible than those in Manhattan Fruit. First, appellant took the temperature in the hold every twelve hours, whereas the carrier in that case measured the temperature every two hours. We have not been presented, however, with evidence suggesting that this difference is material. Second, there was no evidence in Manhattan Fruit that the carrier was suppressing better evidence of the temperatures in the hold. Her,e, there is such a claim, in the form of the mysterious, Kuehltagé-buch (literally, “daily cooler book.”)

Cargo Officer Bender, who was in charge of compiling the reefer chart, was the only witness to suggest the existence of the Kuehltagebuch. He stated that such a book is kept by the ship’s engineer and contains, in addition to a record of temperatures in the refrigerated holds, “information about occurrences, about the way the compressors work, about the working of the whole refrigerating system.” Bender testified that he did not know whether a Kuehlta-gebuch was kept on the S.S. Cap Castillo during the voyage in question but that in his experience a Kuehltagebuch is always kept. Appellant’s counsel was asked to produce the Kuehltagebuch, and subsequently counsel informed the court below that no such book was among the records of the voyage. Counsel also pointed out to the court that the reefer chart had been signed and approved by the Chief Engineer of the S.S. Cap Castillo.

The Kuehltagebuch is clearly material to the issue of due diligence. It might contain an unambiguous record of the temperatures in the hold, and it might also preclude the possibility of breakdown in the refrigeration equipment.

The non-production of material evidence which is in the control of a party raises an inference that that evidence is unfavorable to that party. See, e.g., United States v. Delaware Bay and River Pilots’ Ass’n, 44 F.2d 1, 4 (3d Cir.), cert, denied, 283 U.S. 838, 51 S.Ct. 486, 75 L.Ed. 1449 (1930); The Motor Launch No. 12, 65 F.Supp. 252, 253 (E. D.Pa.1946); J. Gerber & Co. v. S.S. Sabine Howaldt, 437 F.2d 580, 593 (2d Cir. 1971). This rule has been said to be particularly applicable to suits in admiralty, where records are often crucial and records and witnesses often are in the control of one party. O. F. Shearer & Sons v. Cincinnati Marine Service, Inc., 279 F.2d 68, 73 (6th Cir. 1960). The inference raised has been said to be sufficient to decide a close case. Cary-Davis Tug & Barge Co. v. United States, 8 F.2d 324, 325 (9th Cir. 1925). This inference can of course be rebutted by an adequate explanation for the non-production.

The court below evidently believed that appellant’s explanation for the non-production of the Kuehltagebuch was inadequate because the court stated that the non-production was evidence of appellant’s failure to sustain his burden of proof. On the record before us, we cannot say that this conclusion was error.

However, although the court below was justified in taking the non-production as evidence unfavorable to appellant, we hesitate to conclude that the non-production can stand alone as the determinative factor in the case. As noted, the other evidence which the court below relied on in concluding that appellant had not demonstrated due diligence (the purported absence of a September 26 tern-perature entry on the chart) appears to be incorrect. The mysterious Kuehlta-gebuch alone remains to support that conclusion. We are not convinced that Judge Cannella intended that this evidence bear that much weight.

We think that the most appropriate course to follow in these circumstances is to remand for a new trial. This disposition will permit a trier of fact to sift evidence and weigh credibility in order to judge what weight the non-production should have. It will permit the parties to introduce evidence which might shed more light on the reliability of the reefer chart. The parties may, for example, illuminate the significance, if any, of the twelve-hour gap between the readings on the chart. Appellant might endeavor to produce the Chief Engineer, who would have kept the Kuehltagebuch. It may be that the reefer chart is sufficient to sustain appellant’s burden; again, it may be that the non-production of the Kuehltagebuch is outcome-determinative. A thorough review of the record and due consideration of the importance of credibility to ' the issue of non-production convinces us that the ultimate resolution of this question cannot be achieved from that record.

D. Evidentiary Rulings

Appellant objects to various eviden-tiary rulings by the court below. While none of these rulings requires reversal, they merit discussion because these issues will undoubtedly arise at the new trial.

Appellant objects on the ground of authenticity to the introduction of the Argentine health certificates and of the report of Inspector Drew of the USDA. However, the parties stipulated that the contents of the USDA file would be admissible, and these documents were contained in that file. Therefore, the documents are admissible. Ross v. American Export Isbrandtsen Lines, Inc., 453 F.2d 1199, 1201, n. 2 (2d Cir. 1972).

Appellant also contests the introduction of the Frigorífico bacteria charts on the ground of appellee’s failure to identify the charts in the PreTrial Memorandum and Order. This objection is governed by Rule 16 of the Federal Rules of Civil Procedure, and the standard to be applied in reviewing decisions under that rule was stated in Laguna v. American Export Isbrandtsen Lines, Inc., 439 F.2d 97, 101 (2d Cir. 1971):

Rule 16 provides, in pertinent part, that the pretrial order
controls the subsequent course of the action, unless modified at the trial to prevent manifest injustice.
Whether to allow such a modification in a particular case poses nice questions of balancing “the need for doing justice on the merits between the parties (in spite of the errors and oversights of their attorneys) against the need for maintaining orderly and efficient procedural arrangements.” 3 J. Moore, Federal Practice ¶ 16.20, at 1136 (3d ed. 1968). But on the whole, we have not viewed such modification with hostility. E. g., Clark v. Pennsylvania R.R., 328 F.2d 591, 594 (2d Cir.), cert, denied, 377 U.S. 1006, 84 S.Ct. 1943, 12 L.Ed.2d 1054 (1964); Scott v. Spanjer Bros., 298 F.2d 928, 931 (2d Cir. 1962).

Judge Cannella at first refused to allow the charts to be introduced, reasoning that their surprise production worked an injustice on appellant. Later in the trial, when he became convinced that appellant was well prepared to cope with the charts the trial judge decided to hear the evidence. We think that this decision was fair to the parties and that it satisfied the interest of orderly procedure.

Finally, appellant contends that the report of an inspector of his insurance company which was compiled on September 24 in Buenos Aries and which would have demonstrated that the hold was pre-cooled to minus 15° prior to the loading of the Norfolk beef should have been admitted into evidence. The court below refused to admit the report on the basis of hearsay, but appellant maintains that it is admissible as a document kept in the regular course of business under 28 U.S.C. § 1732.

In the light of Cargo Officer Bender’s testimony and of notations in Bender’s log which evidence this pre-cooling, the exclusion of the report did not prejudice appellant to a significant degree. However, upon retrial the report may well be admitted because there is no evidence in the record to the effect that the report, which was prepared prior to notice of the accident and which is normally undertaken, was prepared with this litigation in mind. Cf. Palmer v. Hoffman, 318 U.S. 109, 63 S.Ct. 477, 87 L.Ed. 645 (1943).

The case is remanded to the district court for a new trial.

      . 46 U.S.C. § 1304(2) (q) provides:
      (2) Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from—
      (q) Any other cause arising without the actual fault and privity of the carrier and without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.

      . Where, as here, the external appearance of cargo is probative of the condition of the goods, clean bills of lading are evidence of good condition. Cf. The Niel Maersk, 91 F. 2d 932, 933 (2d Cir.), cert, denied, 302 U.S. 753, 58 S.Ct. 281, 82 L.Ed. 582 (1937).

      . A new trial may not, of course, be necessary if the case is otherwise disposed of. The nature of the remaining issues suggests that settlement negotiations may well be fruitful.


author: HEANEY, Circuit Judge.

text:
    Jess Raymond BRIDWELL, Petitioner-Appellant, v. Dr. P. J. CICCONE, Director, United States Medical Center for Federal Prisoners, Springfield, Missouri, Respondent-Appellee.
    No. 73-1549.
    United States Court of Appeals, Eighth Circuit.
    Submitted Nov. 16, 1973.
    Decided Dec. 11, 1973.

      David Freeman, Federal Public Defender, and Thomas M. Larson, Asst. Federal Public Defender, Kansas City, Mo., for petitioner-appellant.
    Frederick 0. Griffin, Asst. U. S. Atty., Kansas City, Mo., for respondent-appellee.
    Before GIBSON, LAY and HEANEY, Circuit Judges.

      . 28 U.S.C. § 636(b) provides:
      (b) Any district court of the United States, by the concurrence of a majority of all the judges of such district court, may establish rules pursuant to which any full-time United States magistrate, or, where there is no full-time magistrate reasonably available, any part-time magistrate specially designated by the court, may be assigned within the territorial jurisdiction of such court such additional duties as are not inconsistent with the Constitution and laws of the United States. The additional duties authorized by rule may include, but are not restricted to—
      (1) service as a special master in an appropriate civil action, pursuant to the applicable provisions of this title and the Federal Rules of Civil Procedure for the United States district courts ;
      (2) assistance to a district judge in the conduct of pretrial or discovery proceedings in civil or criminal actions ; and
      (3) preliminary review of applications for post-trial relief made by individuals convicted of criminal offenses, and submission of a report and recommendations to facilitate the decision of the district judge having jurisdiction over the case as to whether there should be a hearing.

   HEANEY, Circuit Judge.

Jesse Raymond Bridwell, a prisoner at the United States Medical Center for Federal Prisoners, filed a habeas corpus petition in the United States District Court for the Western District of Missouri. He claimed that he had been denied due process of law by the United States Board of Parole. He alleged that the Board: (1) refused to permit him to review the records before the Board and failed to inform him of “anything” in the record that might be adverse to his being paroled; (2) failed to consider favorable information in the file with respect to his post-release employment, sponsorship or character references; (3) considered only the “negative” F.B. I. make-sheet in reaching its decision; and (4) failed to inform him of the reasons for refusing to grant his parole. Bridwell asked the court to order the United States Board of Parole to grant him a new parole hearing, or, alternatively, to order his discharge from confinement.

The District Court referred the case to the United States Magistrate at Springfield, Missouri, pursuant to- Local Rule 26. The magistrate thereafter entered a written order requiring the Director of the Medical Center to show cause why the writ of habeas corpus should not issue.

The Director’s response stated: (1) Existing rules do not permit a petitioner to inspect, review or discover the information in the petitioner’s file. (2) The decision of the Board was made on the bases of “the record, observations, hearings, and the Board’s experience and the law * * * ”; and the record contained recommendations of the sentencing authorities and the circumstances of the petitioner’s case including his institutional adjustment and his prior community experience and adjustment. (3) Information with respect to the petitioner’s post-release employment, sponsorship and character references was not submitted by petitioner’s benefactors until after the hearing had been held and a decision entered; and for that reason, it was not considered by the Board.

The petitioner then filed a traverse to the Director’s response. He denied that he was seeking to discover the contents of his file and alleged his main concern was the failure of the Board to consider letters attesting to his good character and offering him employment upon release. He alleged that a prison caseworker, responsible for preparing his file for the Board, negligently failed to include the letters in the file presented to the Board.

The magistrate examined the petitioner’s file which was considered by the Board in making its determinations. He then prepared a written report and recommendations. He agreed that the Board had refused to permit Bridwell to examine his file, had refused to inform him as to adverse information in the file, and had refused to inform him of the reasons for denying parole. However, he held, as a matter of law, that the Board’s refusals were proper. The magistrate found that the file before the Board included the petitioner’s criminal record, family history, marital situation, vocational and professional skills, education, physical education, living habits in a free society and behavior and progress while incarcerated. He agreed with the petitioner’s contention that the Board had not considered the letters offering the petitioner post-release employment, but stated that the failure to consider them did not amount- to a denial of due process because the letters had not been mailed or received until after the Parole Board had held its hearing and issued its decision. He recommended that the writ of habeas corpus be denied.

The District Court approved the magistrate’s recommendations. It denied the petitioner’s request for relief.

Bridwell contends on appeal: (1) that the District Court was obligated to conduct a de novo plenary hearing on the petitioner’s request for a writ of habeas corpus, and that it failed to do so; and (2) that the District Court erred in holding that he had not been denied due process because of the negligence of his caseworker in failing to include the employment and character letters in his file. He asks this Court to order his immediate discharge from prison.

We affirm. The District Court was not obligated to conduct a de novo evidentiary hearing on the petitioner’s request for a writ of habeas corpus for the simple reason that the record makes it clear that an evidentiary hearing was unnecessary. The respondent conceded that the petitioner had not been permitted to examine his file, that information in the file adverse to the petitioner had not been disclosed to the petitioner, and that the petitioner had not been informed of the reasons for the denial of parole. The respondent admitted that the character and post-employment release letters had not been considered because they had not even been mailed by petitioner’s character references and benefactors as of the date of the Board’s hearing. It is clear from the record that the only factual issue was whether the petitioner’s caseworker had been negligent in failing to secure these letters from the petitioner’s benefactors. The magistrate took the position that it was unnecessary to resolve that issue because the caseworker was under no duty to secure the letters in question.

Under these circumstances, it is unnecessary for us to decide whether Local Rule 26 is valid insofar as it permits a magistrate to conduct evidentiary hearings in habeas corpus matters arising at the Medical Center. The magistrate’s report was in fact nothing more than a preliminary review of an application for post-trial relief and, as such, was specifically authorized by 28 U.S.C. § 636(b). We note only that the rule was adopted with the obvious good purpose of providing prompt hearings to prisoners and that the rule appears to meet many of the major objections to the practice of using magistrates to conduct evidentiary hearings raised by some other Circuits. We understand the rule to provide each petitioner with the right to a de novo evidentiary hearing by a District Court judge in every case in which a timely objection is taken to a finding on a material issue of fact. It, thus, insures that the ultimate decision in every case will be made by the District Court judge.

We find no merit to the petitioner’s second contention. Prison officials certainly have a duty to place letters relating to a prisoner’s character and post-employment opportunities in the file to be considered by the Parole Board, but they cannot be faulted for failing to perform this duty if the letters have not even been written. They have no duty to obtain such letters unless they have agreed to do so, and no such agreement is alleged here. Moreover, there is no showing that the caseworker knew that the letters were coming. Thus, the caseworker had no reason to request a postponement of the parole hearing.

We held in Burton v. Ciecone, 484 F. 2d 1322 (8th Cir. 1973) that the Parole Board is obligated to follow its own rules. These rules provide in part:

The following factors are considered by the Board in its decision making.
* # -» *
G. Community Resources, Including Release Plans
(1) Residence; live alone, with family, or others
(2) Employment, training, or academic education
(3) Special needs and resources to meet them * * *

Rules of the United States Board of Parole (January 1, 1971), 14-15.

The rules also provide:

Review on the record
Any prisoner’s case may be reviewed at any time upon the receipt of new information of significance relative to the possibility of parole. Such review may be made solely on the basis of the information in the file in Washington, as well as the new information. A review may be conducted following a request by the prisoner or a responsible person acting in his behalf.
A request for a review on the record will be granted when the Board’s Parole Executive or other designated official determines that such review is justified on the basis of receipt of sufficiently significant information which was not known to the Board at the time of any previous consideration.
Such reviews will be conducted for prisoners who have not been paroled or reparoled and who were last considered by the Board more than ninety days previously, except that the waiting period is thirty days if the sentence is one year and one day or less. In emergency situations, with the approval of a member, exceptions to the waiting period may be made. Exceptions to the waiting periods will always be made in the cases of possible revocation of parole or mandatory release. The Board, or a division thereof, may schedule any case for a review on the record without regard to any waiting period, provided new information of significance has been presented.
A decision relative to parole following a review on the record will be made by a voting quorum established for other Board considerations.

Id. at 21.

It appears that the letters in question constitute significant information which was not known to the Board when it considered the petitioner’s application, and that the petitioner is entitled to a review on his application. It will, of course, be for the Board to determine whether the petitioner is now entitled to release. See, Brest v. Ciccone, 371 F.2d 981 (8th Cir. 1967).

Affirmed.

      . Local Buie 26 for the United States District Court for the Western District of Missouri provides:

        Duties and Powers of Full-Time and Part-Time United States Magistrates

      This rule describes and defines the general, specific, and additional duties and powers of full-time and part-time magistrates in the Western District of Missouri.
      A. Duties and Powers of Full-Time and Part-Time Magistrates.

      1. Each full-time United States magistrate and each part-time magistrate for the Western District of Missouri is hereby authorized to exercise all powers and perform all duties now or hereafter authorized and required by the statutes of the United States and by any applicable federal and local rule, order, or regulation.
      * * % t¡: *
      b. Civil Proceedings.

      (1) Assisting district judges in the conduct of pretrial proceedings in civil cases as authorized or directed by other general or special orders of the Court en banc. The magistrate’s duties and powers shall include, but are not limited to, the following : * * * (b) supervising discovery proceedings and making such orders that may be necessary or desirable to expedite and conclude discovery;
      5¡5 í¡í SfS 5$C if* Sj>
      (5) Assisting district judges by preliminary review, pretrial, and prehearing processing of habeas corpus and civil rights petitions, motions, and complaints, and in other petitions and complaints, including, but not limited to, those seeking relief from custody or from conditions of confinement, filed by a convicted or uncon-victed person in federal or state custody, under Sections 2241 and 2254, Title 28, United States Code, or other legal procedures, as authorized or directed by other general or special orders of the Court en banc. The magistrate’s duties and powers shall include, but are not limited to, the following: * * * (e) conducting evi-dentiary hearings.
      The magistrate shall submit a written report and recommendations, consisting of findings of fact, conclusions of law, and a proposed judgment or order to be entered by a district judge; provided, however, that there shall be a review de novo of any order or finding of a magistrate to which a written exception is filed by a party within five (5) days after notice of the order or finding of a magistrate before a party is required to comply with the order; and provided, further, that there shall be a review de novo of any finding of fact made by the magistrate to which a written exception is filed by a party within ten (10) days after notice of submission of a written report unless the district judge directs otherwise. The review de novo provided for herein shall include an evidentiary hearing when appropriate or required by law.
      (6) Serving, without additional compensation, as a standing or special master, under the provisions of Rule 53, Federal Rules of Civil Procedure, in all habeas corpus and civil rights petitions, motions, and complaints, and in other petitions and complaints, including, but not limited to, those seeking relief from custody or from conditions of confinement, filed by a convicted or unconvicted person in federal or state custody, under Sections 2241 and 2254, Title 28, United States Code, Section 1983, Title 42, United States Code, or other legal procedures, as authorized or directed by other general or special orders of the Court en banc. As master, the magistrate’s duties and powers shall include, but are not limited to, the following: * * * (e) conducting evidentiary hearings.
      The magistrate shall submit a written report and recommendations, consisting of findings of fact, conclusions of law, and a proposed judgment or order to be entered by a district judge; provided, however, that there shall be a review de novo of any order or finding of a magistrate to which a written exception is filed by a party within five (5) days after notice of the order or finding of a magistrate before a party is required to comply with the order; and provided further, that there shall be a review de novo of any finding of fact made by the magistrate to which a written exception is filed by a party within ten (10) days after notice of submission of a written report unless the district judge directs otherwise. The review de novo provided for herein shall include an evidentiary hearing when appropriate or required by law.

      . No question is raised as to the validity of these refusals on this appeal. See and compare, Menechino v. Oswald, 430 F.2d 403 (2nd Cir. 1970), cert, denied, 400 U.S. 1023, 91 S.Ct. 588, 27 L.Ed.2d 635 (1971), and
        Ilyser v. Reed, 115 U.S.App.D.C. 254, 318 F.2d 225 (1963), with Childs, et al. v. United States Board of Parole, et al., Civ.No. 1616-70 (D.D.C. October 1, 1973) where the District Court judge stated that Morris-sey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972), requires that parole hearings comply with minimum due process standards, and McDonnell v. Wolff, 483 F.2d 1059 (8th Cir. 1973), where this Court held that minimum due process standards must be followed in prison disciplinary hearings.

      . The First, Sixth and Seventh Circuits appear to hold that magistrates are not authorized by law to conduct evidentiary hearings in habeas corpus cases. Rainha v. Cassidy, 454 F.2d 207 (1st Cir. 1972) ; Wedding v. Wingo, 483 F.2d 1131 (6th Cir. 1973) ; TPO, Inc. v. McMillen, 460 F.2d 348 (7th Cir. 1972). The Second and Fifth Circuits appear to approve the practice. United States ex rel. Gonzalez v. Zelker, 477 F.2d 797 (2nd Cir. 1973) ; Parnell v. Wainwright, 464 F.2d 735 (5tli Cir. 1972). For early comments on the problem, see La Buy v. Howes Leather Co., 352 U.S. 249, 77 S.Ct. 309, 1 L.Ed.2d 290 (1957) ; Holiday v. Johnston, 313 U.S. 342, 61 S.Ct. 1015, 85 L.Ed. 1392 (1941).
      Proposed Rule 11 and the Advisory Committee Note thereto of the Preliminary Draft of the Proposed Rules Governing Ha-beas Corpus Proceedings (January, 1973) appear to recommend that magistrates be permitted to conduct evidentiary hearings in habeas corpus cases without the safeguards provided in the Western District of Missouri’s Local Rule No. 26.