author: LEVIN H. CAMPBELL, Circuit Judge.

text:
    UNITED STATES of America, Appellee, v. Edward LEAVITT, Defendant, Appellant.
    No. 72-1370.
    United States Court of Appeals, First Circuit.
    Argued April 9, 1973.
    Decided May 18, 1973.

      Robert A. Petow, Boston, Mass, by appointment of the Court, for appellant.
    Robert B. Collings, Asst. U. S. Atty., with whom James N. Gabriel, U. S. Atty., was on brief, for appellee.
    Before COFFIN, Chief Judge, McEN-TEE and CAMPBELL, Circuit Judges.
   LEVIN H. CAMPBELL, Circuit Judge.

Appellant contends that the District Court erred in sentencing him while he was intoxicated. Convicted four days earlier by a jury of assaulting a Federal Revenue Agent, he appeared for sentencing several hours late. The District Court inquired if there was any legal cause why sentence should not be imposed, to which the Government responded, “The Government knows of none.” There was no response from defendant or his counsel; however, following the Court’s next question, “Is there anything you want to say in behalf of the Defendant ?”, counsel spoke at length in mitigation. He did not then or thereafter ask for a postponement of sentencing. Counsel’s remarks included the following:

“Mr. Leavitt, your Honor, it’s fair to say . . . he is here in Court and has had some alcohol. This is his problem. It is a disease. He was late getting here, but he has had the strength and courage to come in here although he has had alcohol. The conclusion of the Probation Report by the Probation Department here, in this Court, concludes that he is a chronic alcoholic, that he’s been so for a long period of time and that, basically, he is not a man of evil.”

Counsel also outlined aspects of appellant’s personal history, education and family life; noted that the Revenue Agent was not harmed, and other mitigating factors; and requested that his client be placed on probation. The Court then asked the defendant if there was anything he wished to say in his behalf. The defendant replied, “The only thing I can say, your Honor, I am an honest man. That is all I have to say. That is all I can say.”

The Court then sentenced defendant to three years confinement, of which six months was to be served, the balance to be suspended, and defendant to be placed on probation for three years.

After sentencing, the Court remarked that it “finds that the Defendant is in an intoxicated condition at this time.” Noting that he was “competent and not intoxicated” at the time of impanelment of the jury, the Court said it was “proceeding pursuant to Rule 43 to sentence the Defendant, in the absence of the Defendant, insofar as his mental state is concerned. The Court finding that the Defendant, under these conditions, has absented himself voluntarily from the proceedings as to his condition of alcoholism.”

The Court’s reading of Fed.R. Crim.P. 43 was erroneous. Both at common law and under Rule 43, a defendant has a right not to be sentenced in absentia for a felony. See Note, Procedural Due Process at Judicial Sentencing for a Felony, 81 Harv.L.Rev. 821, 830 (1968). Rule 43 states, “The defendant shall be present ... at the imposition of sentence . . . . ” It goes on to permit continuing a trial “to and including the return of verdict” if the defendant voluntarily absents himself after the trial has commenced; but this exception does not apply to sentencing after verdict.

The question on appeal, as the parties recognize, has nothing to do with actual absence. Defendant was physically present. The question is whether his drunken condition made it inappropriate for the Court to proceed with sentencing. It is contended that he could not exercise meaningfully his right of allocution and, more generally, that his condition undermined the legitimacy and acceptability of the sentencing procedure. See Note, Procedural Due Process, supra, 81 Harv. L.Rev. at 831-33. Under Rule 32(a), the Court must “address the defendant personally and ask if he wishes to make a statement in his own behalf and to present any information in mitigation of punishment.” Failure to comply with the Rule invalidates a sentence and would require a remand for resentencing. Green v. United States, 365 U.S. 301, 81 S.Ct. 653, 5 L.Ed.2d 670 (1961). Here the Court complied literally with the Rule, but defendant argues that his condition rendered the sentencing improper no matter how correctly conducted.

Both practical and theoretical considerations lead us to reject an across-the-board rule that drunkenness automatically invalidates sentencing. Rather, we hold that the sentencing court has reasonable discretion to proceed or not to proceed in light of all the circumstances. Its discretion is, however, not absolute, and is subject to review. If there appears to be a substantial possibility that injustice was done, or if, under all the circumstances, the proceeding failed to afford the appearance of justice — and thus was incompatible with the dignity of the Court and with a proper respect for the individual — we will remand for resentencing. On the other hand, we are not prepared to absolve a criminal defendant from all responsibility for his self-created condition. While alcoholism is recognized to be more a tragic disability than a simple defect of will, the Supreme Court has declined to conclude, “on the current state of medical knowledge, that chronic alcoholics in general . . . suffer from such an irresistible compulsion to drink and to get drunk in public that they are utterly unable to control their performance of either or both of these acts . . . .” Powell v. Texas, 392 U.S. 514, 535, 88 S.Ct. 2145, 2155, 20 L.Ed.2d 1254 (1968) ; see Watson v. United States, 141 U.S.App.D.C. 335, 439 F.2d 442, 451 (1970).

A bailed defendant who imbibes prior to a scheduled court appearance does not have an automatic right to assume that the court will rearrange its affairs to accommodate him. Unlike an incompetent defendant, he retains some responsibility for his own condition; if he later appeals, he must show likely or seeming injustice.

In the present case, appellant has failed to demonstrate that he was unjustly treated. Allocution, although always required under federal procedure to be invited and allowed, is not — at least so far as the invitation is concerned — a constitutional right essential to fundamental fairness. Hill v. United States, 368 U.S. 424, 428, 82 S.Ct. 468, 7 L.Ed. 2d 417 (1961). Note, Procedural Due Process, supra, 81 Harv.L.Rev. at 832. Compare McGautha v. California, 402 U.S. 183, 218 n. 22, 91 S.Ct. 1454, 28 L.Ed.2d 711 (1971). Defendant was afforded the right, and he exercised it. It remains entirely speculative what more, if anything, he would have said had he been sober. Nor can we say, in light of his response to the Court’s invitation to speak, that he was totally unable to comprehend the proceedings. Even in the case of mentally ill defendants, it has been said that “the presence of some degree of mental illness is not to be equated with incompetence to be sentenced.” Hall v. United States, 410 F.2d 653, 658 (4th Cir. 1969), cert. denied 396 U.S. 970, 90 S.Ct. 455, 24 L.Ed.2d 436 (1969).

Moreover, we see nothing to indicate that the District Court, which presided at trial, was “misinformed or uninformed as to any relevant circumstances.” See Hill, supra, 368 U.S. at 429, 82 S.Ct. at 472. The Court had before it a presentence report including information earlier obtained from defendant. It had the benefit of defense counsel’s remarks on the subject of sentence. Defense counsel neither requested a postponement nor suggested in any other way that more relevant information might be obtained.

Finally, we note that the sentence of three years, with six months to be served, was not notably severe for the offense.

In light of these circumstances, we believe that the District Court did not exceed its discretion in proceeding as it did.

Affirmed.

      . In so ruling, we are not to be understood as in any way encouraging sentencing proceedings where a defendant is obviously intoxicated or drugged. Courts will normally be well advised to postpone the proceeding, revoking bail if need be to insure against recurrence.


source: Caselaw Access Project

author: BARNES, Senior Circuit Judge.

license: Public Domain

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. JOHN S. BARNES CORPORATION, Respondent.
    No. 72-1636.
    United States Court of Appeals, Seventh Circuit.
    Argued April 13, 1973.
    Decided May 1, 1973.
    Peter G. Nash, Gen. Counsel, Julius Rosenbaum, Atty., N. L. R. B., Washington, D. C., for petitioner.
    James S. Petrie, Chicago, 111., for respondent.
    Before HASTINGS, BARNES and SPRECHER, Circuit Judges.

       The Honorable Stanley N. Barnes, Senior Circuit Judge for the Ninth Circuit, sitting by designation.

   BARNES, Senior Circuit Judge.

The National Labor Relations Board petitions this court for enforcement of its order, 195 N.L.R.B. No. 123 as supplemented by 197 N.L.R.B. No. 10, issued against the John S. Barnes Corporation pursuant to '§ 10(e) of the National Labor Relations Act, as amended, 61 Stat. 136, 73 Stat. 519, 29 U.S.C. § 151, et seq. The incidents giving rise to this action occurred in Rockford, Illinois, thus giving this court jurisdiction of the matter.

On May 26, 1964, Local 1553, International Association of Machinists and Aerospace Workers, AFL-CIO, filed a representation petition with the Board seeking to represent a unit of the Company’s employees. A Board-conducted election was held in August, 1964, and the Union did not receive a majority of the votes east. Objections to the conduct of the election were filed with the Board together with unfair labor practice charges. On a consolidated proceeding, the Board held that the Company violated § 8(a)(3) and § 8(a)(1) of the Act and set aside the August, 1964 election, 180 N.L.R.B. 911 (1970). A second election with a redefined unit was ordered.

The second election was held in May, 1970. The Union received an 85 to 75 majority of the ballots cast, with 12 ballots challenged. The Company filed seven timely objections to the election, but the Board certified the Union as the exclusive bargaining representative of the designated unit. The Company refused to bargain with the Union and the Board found the Company to be in violation of § 8(a)(5) and § 8(a)(1) of the Act. The Company was ordered to bargain with the Union but refused. This petition for enforcement of the order was then duly filed.

The Company only argues three of its original seven objections to the second election. We find that Objection No. 3, which protested the Union’s distribution of a reproduced official Board document to which partisan messages had been added, was valid. It is therefore unnecessary to consider the other Objections, and we deny the application for enforcement.

On April 23, 1970, the Board issued its “Order Denying Motions” for stay of the second election. The Union on April 29, 1970 printed above a copy of this Order the words: “Now An Election Cam. Be Held As Promised!!!” and distributed the Order as a handbill to the employees.

Two days later, on May 1, 1970, the Union printed and distributed a second circular, (Ex. “B,” A. at 122). The Regional Director of the National Labor Relations Board, in passing on the “Employer’s Objections to Conduct of Election and Conduct Affecting Results of Election,” held that “[Bjecause of the closeness between the distribution of the April 29th and May 1st handbills, and the inter-relationship between the two, as indicated by the references in the May 1st handbill to the Order Denying Motion, the undersigned has considered both handbills as one. Any comment on the second handbill must be considered as reflecting and commenting on the Board’s Order Denying Motion.” (A. at 136).

The Regional Director then stated:

“It is clear that in considering both handbills, the Union has added to an official document of the Board, a message. However in the opinion of the undersigned, this message could in no manner be interpreted by the employees as an endorsement by the Board of the Union. There is no tendency to mislead the voters into believing that the Board favors the Union, since the Union’s messages merely proclaim that the Union was successful in obtaining an election. Therefore, it is recommended that Objection No. 3 be overruled.” (Emphasis added.)

The Board affirmed the Regional Director’s holdings without comment, on a motion for summary judgment.

The existence of “a message” added by the Union to the Board’s order, is thus recognized by both the Regional Director and the Board. To say that portions of Exhibit B (appearing herein in note 2) “could in no manner be interpreted by the employees as an endorsement by the Board of the Union” flies in the face of reason and experience. To conclude that “the Union’s messages merely proclaim that the Union was successful in obtaining an election” lies in the same category. It was more. It was a partisan statement, and we can only conclude it was added for a purpose which seems obvious.

The general rule governing election propaganda was stated in Stewart-Warner Corp., 102 NLRB 1153 (1953):

“The Board does not undertake to police or censor propaganda used in the elections it conducts, but rather leaves to the good sense of the voters the appraisal of such matters, and to opposing parties the task of correcting inaccurate and untruthful statements.” 102 NLRB at 1158; Cf., Linn v. Plant Guard Workers, 383 U.S. 53, 60, 86 S.Ct. 657, 15 L.Ed.2d 582 (1966)”.

An exception to this general rule was stated in Allied Electric Products, Inc., 109 NLRB 1270 (1954), where an election was overturned because the Union had distributed a document which was ostensibly an altered reproduction of an official ballot. The Board now argues that Allied Products “ . . . will be invoked and the election set aside only when the printed material amounts to a copy or close facsimile of an official Board document, and is altered to give the appearance of favoring one of the parties in an election.” (Petitioner’s Brief at 29-30.) This position is totally inconsistent with the Board’s prior decisions. In Rebmer, Inc., 173 NLRB 1434 (1968), the Board set aside an election where the Board’s election notice had been reprinted and altered. The Board’s ruling in Rebmer is, in our opinion the better rule, and is dispositive of the matter sub judice. It reads:

“Our concern is not with the substance of the material added to the Board’s official notice of election, but with the possible impact such a partisan message added to an official Board document, or copy thereof, might have on the freedom of choice of the voter. We are of the opinion that the Board has a responsibility to inform employees fully of their rights and privileges under the Act, and to conduct elections in an atmosphere conducive to a determination of the uninhibited preference of employees. To that end the Board’s notice of election contains information the Board believes should be made available to employees to improve their capability of casting a vote that fully reflects this freedom of choice. To this end the Board also publishes a leaflet including the same type of information, and it is available to anyone who desires to use it. The Board also has a responsibility to protect its processes against abuse or undesirable use. To duplicate a part of the Board’s official notice and then to add to it a personal partisan message that may be interpreted by the employee as an endorsement by the Board of one of the parties to the election, and thus have an impact on the employees’ freedom of choice, is, we think, an undesirable use of Board documents designed for another purpose. That the Union’s message in this case may be arguably innocuous and that there may have been at most a narrow or technical violation of the Allied Electric Products, 109 NLRB 1270, rule, is clearly irrelevant. Whether deliberate or unintentional, such action has a tendency to mislead, and we are of the opinion that the Board should guard against having its prestige put to such possible abuse.” Idem, at 1434 & 5. (Emphasis added.)

Cf. also: Superior Knitting Corporations, 112 NLRB 984 (1955).

For the reasons expressed by the Board in Rebmer, Inc., (supra), the application herein for enforcement is denied.

      . Now An Election Can Be Held As Promised!!!
      ORDER DENYING MOTION On January 23, 1970, the National Labor Relations Board issued a Decision, Order, and Direction of Second Election in the above-entitled proceeding in which the Board, inter alia, dismissed the Section 8(a) (5) allegation of the consolidated complaint, and directed a second election in Case 13-RC-10159 among certain employees of John S. Barnes Corporation, herein called the Respondent, at such time as the Regional Director for Region 13 deemed appropriate. Subsequently, the Union filed with the United States Court of Appeals for the District of Columbia a petition for review of that portion of the Board’s Order which dismissed the Section 8(a)(5) allegations of the consolidated complaint, and the Board filed an application for enforcement of the Board’s Order.
      Thereafter, on April 20, 1970, the Respondent filed a Motion for Stay of the Second Election and a memorandum in support of its motion. It moves the Board to stay the holding of the second election pending review by the Court of the Board’s Decision, Order, and Direction of Second Election, contending “that application of existing Board precedent and policy necessitates postponement of a second election herein until the issues raised by the Union’s Petition for Review are resolved by the Court of Appeals.”
      The Board having duly considered the matter,
      IT IS HEREBY ORDERED that the Respondent’s Motion for Stay of Second Election be, and it hereby is, denied as lacking merit.
      Dated, Washington, D. C., April 23, 1970
      By direction of the Board.

      . IAM WINS THREE IMPORTANT Victories¡!
      1) . The handbill of Wednesday, April 29, 1970 is a copy of Order Denying Motion. The Order reads, “It is hereby ordered that the Respondent’s Motion for Stay of Second Election be, and it hereby is, denied as lacking merit.”

      This means the government has denied MR. SVENSON’S frantic efforts to stall the election.
      2) . . . .At the NLRB Conference in Chicago April 27, 1970, the IAM was successful in preventing the company from stopping the election.
      The U.S. Government will proceed and set the time, date and place despite the frantic efforts of the company to delay the election.
      3) . The IAM was also successful in maneuvering the company into denying an election on company premises.

        This will assure you your right to a secret ballot vote without MR. SVEN-SON’S intimidation, coercion or surveillance !!
      When the Board Sets the Election Date — ■ the Union Will Notify You Immediately.
      Don’t Let Mr. Svenson Cheat You Out of Your Right As an American Citizen . . . Your Right to Vote!!

      Lodge No. 1553, IAM Organizing Committee


author: PER CURIAM:

text:
    UNITED STATES of America, Appellee, v. Ralph MERCADO, Defendant-Appellant.
    No. 838, Docket 73-1282.
    United States Court of Appeals, Second Circuit.
    Submitted May 3, 1973.
    Decided May 10, 1973.

      George E. Wilson, Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty., S. D. N. Y., and Richard J. Davis, Asst. U. S. Atty., of counsel), for appel-lee.
    Steven J. Hyman, New York Civil Liberties Union, New York City, for defendant-appellant.
    Before FRIENDLY, Chief Judge, HAYS, Circuit Judge, and JAMESON District Judge.

       Of the District Court for the District of Montana, sitting by designation.

   PER CURIAM:

Appellant Ralph Mercado was ordered by his local draft board to report for induction on April 5, 1971. He appeared but refused induction despite being advised by induction center officials that this was a felony, claiming for the first time that he was a conscientious objector. Upon receiving notification that Mercado had refused to step forward on this ground, his local board prepared to consider his claim, as it was required to do under this court’s decision in United States v. Gearey, 368 F.2d 144, 149-150 (1966), cert. denied, 389 U.S. 959, 88 S.Ct. 335, 19 L.Ed.2d 368 (1967), and sent him a notice to appear for a personal interview on May 12. On April 21, the Supreme Court handed down its decision in Ehlert v. United States, 402 U.S. 99, 91 S.Ct. 1319, 28 L.Ed.2d 625 (1971), holding that Selective Service local boards need not reopen the classifications of registrants who first claim conscientious objector status after receipt of an order to report for induction. When Mercado appeared at his local board on May 12, the board, pursuant to a post-jEhlert local board memorandum, informed him that it could not consider his claim for , conscientious objection, and set a new date, May 26, for him to report for induction. Mercado again refused induction; this prosecution and conviction ensued.

We see no merit in Mercado’s claims on appeal. He first argues that the district court’s finding that he was guilty of violating 50 U.S.C. App. § 462 (a) for refusing induction on May 26 was an impermissible variance from the indictment, which charged that he refused induction on April 5. But a refusal to submit to induction is a continuing violation of the statute, as appellant concedes, and the indictment here specifically charged that Mercado had refused to submit to induction “on or about the 5th day of April, 1971, and up to and including the date of the filing of this indictment, [August 31, 1971].” Indeed, Mercado was directed to report on May 26, not by a new order to report for induction, but by a letter which merely advised him that it was his continuing obligation to report for induction and set a particular date on which he could discharge this obligation.

Mercado also claims that the local board should have considered whether he was eligible for a ministerial exemption from military service. Yet Mercado never claimed this status. His claim on appeal is based solely on his use of the word “minister” in his application for conscientious objector status. Even if we were to assume that there is some obligation on a local board to consider a registrant for a classification which he has not requested if it becomes apparent that he may be eligible for it, it is well known, certainly to a draft board, that all members of Jehovah’s Witnesses are known as “ministers” and that this alone is completely insufficient to establish a prima facie claim to the ministerial exemption. See, e. g., United States v. Pompey, 445 F.2d 1313, 1317-1318 (3 Cir. 1971). In any event, 32 C.F.R. § 1625.2 bars reopening of a registrant’s classification after the mailing of an order to report for induction unless there has been a change in his status as a result of circumstances beyond his control, which is clearly not the case here. While the Court’s decision in Ehlert, upholding the validity of this regulation as applied to claims of conscientious objection, is not strictly determinative of the issue of its validity here, since unlike the limited exemption from military service granted conscientious objectors, relied upon by the Ehlert Court, 402 U.S. at 102-103, 91 S.Ct. 1319, Congress has seemingly granted ministers complete exemption from service, 50 U.S.C. App. § 456(g), the Court’s emphasis on the Selective Service System’s need to make reasonable timeliness rules, 402 U.S. at 101-102, 91 S.Ct. 1319, is equally applicable, as is this court’s reasoning in upholding the validity of this regulation in United States v. Gearey, supra, 368 F.2d at 149. See also United States v. Mohammed, 288 F.2d 236, 243 (7 Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 37, 7 L.Ed.2d 26 (1961); United States v. Whitaker, 395 F.2d 664 (4 Cir. 1968).

Indeed, Mercado’s claims are so insubstantial that we would have affirmed his conviction from the bench but for fear that this might be taken as approving the district court’s remarks that “No conviction could be had based on his April 5th conduct alone” because “Mercado either knew that ruling case law in the Circuit entitled him to conduct himself as he had done, or if ignorant, is to be treated no worse for purposes of this indictment than he would be if he knew.” We see no basis for such a construction of what amounts to a conclusive presumption that a preEhlert refusal to submit to induction on the ground of a belatedly-asserted claim of conscientious objection is not a criminal offense in this circuit. This court has already upheld the conviction of a registrant who refused induction on this ground prior to Ehlert, United States v. Holmes, 426 F.2d 915 (2 Cir. 1970), vacated and remanded in light of Ehlert, 402 U.S. 969 (May 17, 1971) conviction affirmed, Docket No. 32788 (July 1, 1971). Other courts of appeals which had previously held that local boards must reopen the classification of a registrant who asserted a late-crystallizing claim of conscientious objection have also had little difficulty in upholding convictions for pre-Ehlert refusals of induction. United States v. Kirkpatrick, 446 F.2d 1371 (10 Cir. 1971); United States v. Camara, 451 F.2d 1122 (1 Cir. 1971), cert. denied, 405 U.S. 1074, 92 S.Ct. 1513, 31 L.Ed.2d 808 (1972). Upholding the conviction of a registrant who claims to have relied on the preexisting case law would appear to be no more than an application of the settled rule that an erroneous belief that an induction order is invalid, even if based on the advice of counsel, is not a defense to a prosecution for refusing induction, and that one who refuses induction on the basis of such a belief acts at his peril. See, e. g., United States v. Wood, 446 F.2d 505 (9 Cir. 1971); United States v. Jacques, 463 F.2d 653, 657 (1 Cir. 1972); United States v. Steiner, 469 F.2d 760, 769 (5 Cir. 1972). We recognize such a rule might be harsh as applied to a registrant who in fact reasonably relied in good faith on the ease law or upon the knowledge that local boards in this circuit would consider a belated conscientious objection claim, and perhaps there is room for flexibility in enforcement of this rule to avoid injustice in a particular case, as there surely would be ground for the exercise of prosecutorial judgment. But Mercado’s would not be a proper case for the exercise of a dispensing power if one exists. There has been no showing that he in fact was aware of or relied upon the case law in this circuit prior to Ehlert. Moreover, any such reliance would have been wholly unjustified in April 1971, when there was widespread disagreement among the courts of appeals and the question had been argued and was pending decision in the Supreme Court. See United States v. Camara, supra, 451 F.2d at 1125.

Judgment affirmed.


author: BRIGHT, Circuit Judge.

text:
    John SHEARON, d/b/a Shearon Lumber Sales, Appellant, v. BOISE CASCADE CORPORATION, Appellee.
    No. 72-1370.
    United States Court of Appeals, Eighth Circuit.
    Submitted Jan. 8, 1973.
    Decided May 18, 1973.

      Roy W. Meadows, Des Moines, Iowa, for appellant.
    James L. Krambeck, Des Moines, Iowa, for appellee.
    Before MATTHES, Chief Judge, BRIGHT, Circuit Judge, and TALBOT SMITH, Senior District Judge

       Eastern District of Michigan, sitting by designation.

   BRIGHT, Circuit Judge.

Plaintiff John Shearon (Shearon), a lumber wholesaler doing business as Shearon Lumber Sales, brought an action against Boise Cascade Corporation (Boise), a lumber producer, for breach of an alleged oral contract giving Shea-ron the exclusive right to sell Boise lumber products to Capp Homes of Iowa (Capp), a consumer of very substantial amounts of lumber for its prefabricated homes. The jury awarded Shearon $100,000 in damages, but the district court denied any recovery by granting defendant’s motion for judgment n. o. v. The district court also granted a new trial conditional upon this court’s failure to sustain the judgment adverse to the jury verdict. We reverse on the grant of judgment n. o. v., but affirm the grant of a new trial and remand the case for further proceedings.

The facts presented at the trial disclose that prior to 1963 Shearon had sold substantial quantities of Boise lumber products, primarily studs, to Capp. Shearon also had established considerable rapport with the president of Capp, Hy Diamond.

In the fall of 1963, Gordon King, a sales manager for Boise, sought to increase his firm’s lumber sales to Capp. He contacted Shearon at Des Moines, Iowa, and requested that Shearon attempt to convert Capp into a buyer of larger quantities of Boise’s lumber products. In this conversation, King allegedly stated that if Shearon could induce Capp to become a more substantial user of Boise products than in the past, Shea-ron would be protected against other wholesalers in his sale of Boise lumber products to Capp and that Boise would not sell direct to this customer.

Thereafter Shearon contacted the president of Capp for the purpose of inducing Capp to purchase substantial quantities of Inland Douglas Fir, produced by Boise. He submitted a program to Diamond designed to provide Capp’s lumber requirements for a one-year period. Apparently Capp adopted this program which resulted in its purchasing substantial amounts of dimension lumber from Boise for its 1964 annual requirements, thus greatly increasing sales of Boise lumber to Capp. However, although Capp purchased 140 carloads of lumber materials from Boise in 1964, Shearon’s sales accounted for only 59 carloads. Another wholesaler handling Boise’s products underbid Shearon’s price for a substantial part of Capp’s lumber requirements from Boise. Shearon vigorously protested this apparent breach of the agreement. King explained that Boise had quoted the second wholesaler a price on lumber products without realizing that this wholesaler was seeking to sell to Capp. Boise later realized its mistake but could not retreat from its commitment to make the shipment to the second wholesaler. According to Shearon, King promised to come to Des Moines to help get things straightened out and to maintain Capp as Shearon’s customer.

In late 1964, King returned to Des Moines and met with Shearon and Capp’s president, Diamond. King indicated to Diamond that he would like to have Capp submit its lumber requirements to only one wholesaler of Boise products. According to the testimony of both Shearon and Diamond, King stated that he wanted Shearon to have the Capp account. Capp’s lumber purchases from Boise for 1965 were ordered by Shearon. That year, Boise shipped more than 200 carloads of lumber products to Capp.

By the next year, circumstances had changed. A new president of Capp approached Boise’s management with a proposal to buy directly from the manufacturer, cutting out the middleman-wholesaler. Boise agreed to this proposal and for the years here in question, 1966 through 1969, sold directly to Capp.

In bringing this action, Shearon alleged and the jury found that he and Boise entered into an oral agreement in September of 1963, under the terms of which Shearon undertook to increase Capp’s purchases of Boise’s lumber products, and in return for his efforts, if successful, Boise agreed to sell to Capp only through Shearon.

In denying Shearon’s right to judgment on the jury verdict, the district court granted the motion for judgment n. o. v. on the following grounds:

(1) The alleged oral agreement could not be performed within one year and evidence to prove such agreement was not admissible under the Iowa statute of frauds;

(2) There was insufficient competent evidence to establish part performance to remove the agreement from the statute of frauds;

(3) The agreement was not enforceable for want of mutuality and consideration ;

(4) The evidence was vague and insufficient to establish an agreement on essential and material terms necessary for the formation of an enforceable contract ;

(5) The damages awarded by the jury were not sustained by sufficient admissible evidence, but rested on speculation and conjecture.

We turn to each of these issues.

I.

THE STATUTE OF FRAUDS

The Iowa statute of frauds provides that “Except when otherwise specially provided, no evidence of the following enumerated contracts is competent, unless it be in writing and signed by the party charged or by his authorized agent: * * * Those [contracts] that are not to be performed within one year from the making thereof.” Iowa Code Ann. § 622.32 (1950). Appellee argues that the agreement between King, acting for Boise, and Shearon falls within the statute since the evidence shows that although the alleged oral agreement was made in 1963, its contemplated and actual performance extended beyond 1964. Assuming, arguendo, the correctness of this assertion, the oral contract nevertheless falls outside of the statute, for its terms do not preclude the possibility of performance within one year.

In approaching the statute of frauds issue, it is well to note the nature of the performance demanded of both parties. While each party might perform on a continuing basis, the parties did not expressly specify the duration of the contract. Thus, the contract was indefinite as to time of performance.

Iowa courts from a very early date have tended to limit the application of the “performable within one year” provision of the statute of frauds. In Blair Town Lot and Land Co. v. Walker, 39 Iowa 406, 411-412 (1874), the Iowa Supreme Court expressed its restrictive view of the one-year provision:

It will be observed that the statute is negative in its language — any contract that is not to be performed within one year from the making thereof. It is not sufficient to bring a case within the statute, that the parties did not contemplate the performance within a year; but there must be a negation of the right to perform it within the year. This negation of the right to perform within the year, may be shown by an express stipulation in the contract that it shall not be performed within that time; by an express stipulation to be occupied more than that time in the performance; by a contract, the terms of which cannot, per possibility, be performed within the year; by a contract, the terms of which show, though not in express language, that the party has no right to perform it within the year. Unless the contract comes within one of these classes, it is not within the statute.

Another early Iowa case holds the statute applies only to a contract not to be performed on either side within one year. Smalley v. Greene, 52 Iowa 241, 3 N.W. 78 (1879). In Stauter v. Walnut Grove Products, 188 N.W.2d 305 (Iowa 1971), the court relied on Blair, supra, 39 Iowa 406, in enforcing an oral employment agreement which provided that employment was to continue as long as the plaintiff “kept up on his job.” The court held that the statute was inapplicable due to the possible death of the plaintiff or the possible cessation of the defendant’s business within one year, however improbable those contingencies might be.

Although the parties in the present case contracted with regard to a single customer, their agreement seems to fall within the general classification of exclusive distributorship agreements in which one party (manufacturer or owner) grants another party the exclusive right to distribute the products of the former. Iowa courts have apparently-adopted the early restrictive view of the statute, as expressed in Blair, in enforcing distributorship arrangements and similar contracts. Iowa cases have held oral exclusive distributorship agreements of indefinite duration enforceable, even when the contemplated performance could or did extend beyond a one-year period. See, e. g., C. C. Hauff Hardware, Inc. v. Long Mfg. Co., 257 Iowa 1127, 136 N.W.2d 276 (1965); Atlas Brewing Co. v. Huffman, 217 Iowa 1217, 252 N.W. 133 (1934); Hirschhorn v. Bradley, 117 Iowa 130, 90 N.W. 592 (1902).

The Iowa cases are in accord with the general rule that an oral contract is not invalidated by the statute of frauds unless, according to the reasonable interpretation of its terms, the contract requires that it should not be performed within one year. Warner v. Texas and Pacific Ry. Co., 164 U.S. 418, 434, 17 S.Ct. 147, 41 L.Ed. 495 (1896) ; 3 S. Williston, Contracts § 495, pp. 575579 (3d ed. 1960); 2 A. Corbin, Contracts, § 344, pp. 534-537 (1950). Corbin also states that, “Contracts for employment or other performance that is to begin within a year and is to continue for an indefinite, unspecified period, are terminable by either party at any time and are held not to he within the one-year clause of the statute.” Id. § 446, p. 552 (emphasis added).

Since the oral contract in question is of no specified duration, since Shearon could potentially have completed his performance within one year, and since one or both parties might have gone out of business within a year, the contract by its terms clearly does not preclude the possibility of performance within one year.

II

MUTUALITY AND CONSIDERATION

The argument is made that the alleged oral contract lacked mutuality and consideration because Shearon was not restricted to promoting Boise’s products in his sales to Capp and because he was free to perform or not at his pleasure. The law of Iowa in regard to mutuality and consideration in exclusive distributorship contracts is summarized in Des Moines Blue Ribbon Distrib., Inc. v. Drewrys Ltd., U.S.A., 256 Iowa 899, 129 N.W.2d 731 (1964), where the Iowa court rejected an argument similar to that presented by the appellee here. The court said:

We think the validity of the claimed agreement depends on whether there was consideration for it. We have ■held “If the lack of mutuality amounts to a lack of consideration, then the contract is invalid. But mere lack of mutuality in and of itself does not render a contract invalid. If mutual promises be the mutual consideration of a contract, then each promise must be enforceable in order to render the other enforceable. Though consideration is essential to the validity of a contract, it is not essential that such consideration consist of a mutual promise.” * * *
Numerous authorities are to the effect that where a contract granting a sole distributorship for an indefinite time is supported by some consideration other than the services to be rendered thereunder as an agent, the contract will continue for a reasonable time and may be terminated without cause only upon reasonable notice. There is substantial evidence plaintiff and its assignor furnished such additional consideration. It could properly be found plaintiff’s assignor agreed to, and did in fact, purchase and pay for defendant’s products, take title to them, assume the risk of their destruction, maintain warehouse facilities, keep an adequate stock of defendant’s products on hand, advertise and otherwise promote their sale and tie up substantial amount of capital in inventory and accounts receivable.
Some of these matters are related to the agency aspects of the agreement but go beyond them. A distributorship contract is more than a mere contract of agency. It is also a sales contract but it is also more than a mere sales contract. It partakes of the substantial aspects of both. [Id. at 736 (citations omitted).]

The court concluded that the above enumerated factors constituted sufficient consideration from the plaintiff to make the contract enforceable. Accord, C. C. Hauff, supra, 257 Iowa 1127, 136 N.W.2d 276. See also Collins v. Parsons College, 203 N.W.2d 594, 598 (Iowa 1973); Atlas Brewing Co., supra, 217 Iowa 1217, 252 N.W. 133; Hirschhorn, supra, 117 Iowa 130, 90 N.W. 592; Kaufman v. Farley Mfg. Co., 78 Iowa 679, 43 N.W. 612 (1889).

Here, under the agreement, if deemed bilateral, Shearon promised to use his best efforts to convert Capp to a full-line lumber customer of Boise, and if deemed unilateral, Shearon actually performed valuable services in convincing Capp of the merits of Boise products in 1964 and in providing sales services the following year. Additionally, since the lumber wholesalers purchased the lumber on their own accounts, Shearon supplied “additional consideration” similar to that supplied in the Des Moines Blue Ribbon case, supra, 129 N.W.2d at 736, which the Iowa court found adequate to overcome the lack of consideration and mutuality arguments. Thus the claim of lack of consideration and mutuality is without merit.

III.

TERMS OF THE CONTRACT

Appellee contends that the proof was insufficient to establish the essential terms of a contract. We reject this contention. The jury instructions contained the following provision:

In order to constitute a valid contract between two parties, there must be an offer and acceptance of a proposition so that the minds of the two parties “meet” concerning the essential terms and condition of the subject about which they are contracting, and they thereby agree to the same thing. An acceptance of an offer which contains additional terms or which varies the terms of the offer would not make a binding contract, for there would still be no “meeting of the minds” of the parties. Such an acceptance would constitute a counter-offer which could then be accepted, thereby forming a binding contract, or rejected by the other party. [Instruction No. 9.]

We think this instruction was proper and the appellant’s evidence, although scarce, was adequate to permit the jury to find for the appellant.

IV.

DAMAGES

Appellee also argues that appellant’s damages were so uncertain and speculative that recovery must be denied. On this matter the court instructed:

In this regard, you are instructed that damages are recoverable only to the extent that the evidence affords a sufficient basis for determining their amount with reasonable certainty. Damages which are uncertain, contingent or speculative in their nature cannot be made the basis of a recovery.
Plaintiff seeks to recover for loss of earnings he claims to have incurred as a result of defendant’s undertaking to sell its lumber products direct to Capp Homes after 1965. In the event you find plaintiff is entitled to recover on this item, then the measure of his recovery is such sum as you find, from a preponderance of the evidence, he would have earned from selling defendant’s products to Capp Homes during this period. In arriving at your decision you must determine what, if anything, Capp Homes would have purchased from plaintiff during this period taking into consideration all the facts and circumstances of the case. The evidence presented as to the purchases of Capp Homes direct from defendant is not necessarily determinative of the purchases they would have made from plaintiff during the same period. To recover for lost earnings plaintiff must prove by a preponderance of the evidence that such amounts are reasonably certain to have been earned or received. [Instruction No. 12.]

Iowa law appears to permit a flexible approach to proof of the amount of damages sustained. In DeWaay v. Muhr, 160 N.W.2d 454 (1968), the Iowa Supreme Court stated:

Courts have recognized a distinction between proof of the fact that damages have been sustained and proof of the amount of those damages. If it is speculative and uncertain whether damages have been sustained, recovery is denied. If the uncertainty lies only in the amount of damages, recovery may be had if there is proof of a reasonable basis from which the amount can be inferred or approximated, lid. at 460.]

The court in DeWaay found the evidence sufficient to permit a jury to make a “reasonable approximation” of the plaintiff’s claimed loss of net profits.

In cases involving exclusive distributorships, Iowa has apparently permitted proof of damages similar to that offered by Shearon here, e. g., sales made by the distributor before the breach, sales made by the successor to the injured party, and margin of profit anticipated on the type of product being sold. See, e. g., Des Moines Blue Ribbon, supra, 256 Iowa 899, 129 N.W.2d 731; Atlas Brewing Co., supra, 217 Iowa 1217, 252 N.W. 133; Hirschhorn, supra, 117 Iowa 130, 90 N.W. 592. However, while we think that there was sufficient evidence by which the jury could reasonably approximate the amount of damages that Shearon sustained during a given period, we do not think that the question of the length of such period was properly submitted to the jury. The Iowa law as enunciated in C. C. Hauff, supra, 136 N.W.2d at 279, provides:

[W]here plaintiff under the contract was granted a sole distributorship for an indefinite time, furnished some consideration other than personal services to be rendered thereunder as an agent, the contract continues for a reasonable time, and it may be terminated without cause only upon reasonable notice.

Accord, Des Moines Blue Ribbon, supra, 256 Iowa 899, 129 N.W.2d 731; Atlas Brewing Co., supra, 217 Iowa 1217, 252 N.W. 133; Hirschhorn, supra, 117 Iowa 130, 90 N.W. 592; Kaufman, supra, 78 Iowa 679, 43 N.W. 612. In Des Moines Blue Ribbon, supra, 256 Iowa 899, 129 N.W.2d 731, the Iowa Supreme Court explicitly approved of a jury instruction which permitted the jury to “consider and decide what period of time is a reasonable period of time for plaintiff to recover such damages.” Id. at 737.

Accordingly, we vacate the judgment n. o. v. and remand for a new trial in conformity with the ruling of the district court.

Appellant shall have his costs.

      . Appellee cites Huston v. Gelane Co., Inc., 254 Iowa 752, 119 N.W.2d 188 (1963), in support of the ruling of the trial court, but that case is inapposite because the oral contract in question there stipulated an 18-month period for employment rather than an indefinite period,

      . We note that the questions of mutuality and consideration were directly presented to the jury in these terms:
      If you find by a preponderance of the evidence that the .terms of this alleged contract obligated plaintiff to perform his promise, if any, the alleged contract would have sufficient mutuality and consideration to constitute a binding agreement. If on the other hand, if you find the terms of the alleged contract left it optional with plaintiff whether or not he would perform his promise, then the alleged agreement would lack mutuality and consideration and would not be binding on defendant and you should find for defendant. [Instruction No. 8.]
      As evidenced by the verdict, the jury obviously determined this issue in favor of the plaintiff. The evidence adequately supports such a determination.

      . Lewis v. Minnesota Mut. Life Ins. Co., 240 Iowa 1249, 37 N.W.2d 316 (1949), cited by appellees, is not controlling here. That case, involving a lifetime employment contract, was found specifically distinguishable from a distributorship case by the Iowa Supreme Court in C. C. Hauff Hardware, Inc. v. Long Mfg. Co., 257 Iowa 1127, 136 N.W.2d 276 (1965).


text:
    Ralph GRIFFIN and Robert E. Keele, Appellants, v. PACIFIC MARITIME ASSOCIATION and Local 13, International Longshoremen’s and Warehousemen’s Union, Ap-pellees.
    No. 72-2117.
    United States Court of Appeals, Ninth Circuit.
    April 25, 1973.

      Erwin Morse, Herbert E. Selwyn, Sel-wyn, Capalbo & Morse, Los Angeles, Cal., for appellants.
    Kenneth W. Anderson, Kenneth E. Ristau, Jr., Gibson, Dunn & Crutcher, Los Angeles, Cal., George E. Shibley, (for Local 13, ILWU), Long Beach, Cal., for appellees.
    Before MERRILL, ELY, and WRIGHT, Circuit Judges.
   PER CURIAM:

A group of longshoremen appeal from an order granting summary judgment in favor of their union and certain employers.

The longshoremen complain that in 1946, they were “deregistered” by the union and prevented from pursuing their trade until, several years later, they were allowed to reregister. They alleged that the 1946 layoff was racially motivated and contend that the blacks and Mexican-Amerieans who were dereg-istered are entitled to receive credit (towards seniority and vacation, automation and pension pay) for the periods during which they did not work, 1946 to 1948-51.

On multiple grounds the District Court held that it was not required to reach the merits of the claim. We agree with the District Court that the action was barred by reason of the passage of time and the appellants’ failure to exhaust another remedy. We make no judgment on the merits of the claim. Nor do we announce an opinion as to the correctness of the other grounds upon which the District Court rested its decisions.

The longshoremen alleged jurisdiction by reason of both the 1866 Civil Rights Act, 42 U.S.C. §§ 1981, 1985 and the 1964 Civil Rights Act, 42 U.S.C. § 2000e.

The 1866 Act

The pertinent provisions of the 1866 Civil Rights Act prescribe no period of limitations; hence, the most nearly analogous state period of limitations applies. See, e. g., United Automobile Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966); Young v. International Tel. & Tel. Co., 438 F.2d 757, 763 (3d Cir. 1971).

The most nearly applicable California statutes prescribe limitation periods not exceeding four years. See Cal.Code Civ.P. §§ 337, 338(1) (West 1972 Supp.) & 343 (West 1954). If any one of these statutes governs the longshoremen’s § 1981 and § 1985 actions, the filing of the complaint was decidedly tardy-

The longshoremen advance two reasons why the statute of limitations should not be held to have commenced to run from 1946 or thereabouts. First, they argue that the pension and fringe benefits were not fully ascertainable until sometime later, and they contend that their cause of action resides in their 1966-71 contract. We recognize that there may be cases in which a legal wrong has no significantly compensable consequences until the occurrence of a subsequent event. But we need not now decide whether, in such instances, the period of limitations should be considered to commence from the date of that event. Here, the perceivable effects of the alleged wrong were substantial at the outset. In 1948, one of the appellants in this case instituted suit in the California courts, seeking to regain union membership and employment. That suit presented the precise central issue that is now presented here and was decided adversely to the appellant Griffin. Griffin v. International Longshoremen’s and Warehousemen’s Union, 109 Cal.App.2d 823, 241 P.2d 552 (1952). And, in 1965, 33 longshoremen filed a grievance based on their 1946 deregistration and unsuccessfully resorted to arbitration.

Second, the appealing longshoremen contend that by refusing to credit them with the years lost after 1946, appellees are now committing a discriminatory act. We are not unmindful of certain cases wherein the theory of continuing discrimination has been upheld. See, e. g., Love v. Pullman Co., 404 U.S. 522, 524, 92 S.Ct. 616, 30 L.Ed.2d 679 n.3 (1972); Cox v. United States Gypsum Co., 409 F.2d 289 (7th Cir. 1969). A layoff, by itself, however, is not such a continuing act. See Developments in the Law — Employment Discrimination and Title VII of the Civil Rights Act of 1964, 84 Harv.L.R.ev. 1109, 1211 (1971). Furthermore, in the present ease, the only manner in which the appellants could have possibly established their claim was by evidence as to what motivated the 1946 act of deregistration and the subsequent, although short-lived, refusal to allow reregistration. In these circumstances, the District Court properly held that the claims under 42 U.S.C. §§ 1981 and 1985 were barred by reason of the lengthy lapse of time.

The 196k Act

Unlike the 1866 Act, Title VII of the 1964 Civil Rights Act contains provisions that effectively operate to create a limitations period. An aggrieved party may sue in the District Court only if he has first filed charges with the Equal Employment Opportunity Commission (EEOC) within 90 days from the occurrence of the alleged violation, and the suit must be filed within thirty days from receipt of a notice of failure of conciliation from the EEOC. 42 U.S.C. § 2000e-5(a) & (d).

When a state has prohibited the unlawful practice alleged and has provided an agency “to grant or seek relief,” additional administrative recourse is a prerequisite to private suit. The state agency must be notified, and the charge with the EEOC must be filed no later than thirty days after the state investigation is completed. 42 U.S.C. § 2000e-5(b) & (d). See Love v. Pullman, supra.

California has established the remedies contemplated in § 2000e-5(b). See California Fair Employment Practice Act, Cal.Labor Code § 1410 et seq. (West 1971).

The appellants have never filed charges with the state agency or with the federal commission. They explain their failure to have done so on the theory that exhaustion of these remedies would have been futile because these agencies would merely have required them to seek arbitration. In advancing this argument, the appellants misconceive the role of the EEOC. Moreover, even after their unsuccessful recourse to arbitration, the longshoremen did not pursue the administrative remedies specified in Title VII. Having failed to comply with the requirements of 42 U. S.C. § 2000e-5(a) & (b), the appellants may not, at this late date, maintain action under the Civil Rights Act of 1964.

Affirmed.

      . The suggestion that appellees were es-topped from asserting the statute of limitations as a defense has no merit whatsoever.

      . On the face of it, denial of fringe benefits under the 1966-71 contract is a racially neutral act. At least half of the longshoremen deregistered in 1946 were Caucasian, and all had lower seniority than those not deregistered. There is no claim that the deregistered men have been the victims of discrimination since their reregistration, except inasmuch as they lost credit for their years outside the union.

      . Title VII does not specify how long a person may delay the filing of charges with the state agency. In California, one is allowed a period of one year from the occurrence of the allegedly unlawful act within which to file his claim with the state commission. Cal.Labor Code § 1422 (West 1971).

      . There is no jurisdictional bar to invoking Title VII remedies and the arbitration process independently. See Newman v. Avco Corp., 451 F.2d 743 (6th Cir. 1971) ; Hutchings v. United States Industries, Inc., 428 F.2d 303, 311-14 (5th Cir. 1970) ; Bowe v. Colgate-Palmolive Co., 416 F.2d 711, 714-715 (7th Cir. 1969). But see Alexander v. Gardner-Denver Co., 466 F.2d 1209 (10th Cir. 1972). And our court has held that there is no requirement that all conceivable state remedies be exhausted prior to the institution of a Title VII suit. Crosslin v. Mountain States Tel. & Tel. Co., 422 F.2d 1028, 1031 (9th Cir. 1970).

      . Cf. Culpepper v. Reynolds Metal Co., 421 F.2d 888 (5th Cir. 1970).


author: CRARY, District Judge: ELY, Circuit Judge

text:
    ZEPHYR COVE LODGE, INC., a corporation, Plaintiff-Appellant, v. The FIRST NATIONAL BANK OF NEVADA, as Administrator with Will Annexed of the Estate of George Whittell, Jr., Defendant-Appellee.
    No. 71-1059.
    United States Court of Appeals, Ninth Circuit.
    April 27, 1973.
    Rehearing Denied July 5, 1973.

      Morton Galane (argued), Las Vegas, Nev., Robert F. List, Carson City, Nev., for plaintiff-appellant.
    Casey W. Vlautin (argued), Virgil Wedge, Woodburn, Forman, Wedge, Blakey, Folsom & Hug, Reno, Nev., for defendant-appellee.
    Before ELY and HUFSTEDLER, Circuit Judges, and CRARY, District Judge.

       Honorable E. Avery Crary, United States District Judge, Central District of California, sitting by designation.

   CRARY, District Judge:

The within appeal is from a summary judgment entered in favor of Appellee Bank as Administrator with Will Annexed of the Estate of George Whittell, Jr.

The case involves a suit by Zephyr Cove Lodge, Inc., a corporation, the as-signee of the lessee Gene F. Empey, who is the sole stockholder and president of Zephyr Cove Lodge, Inc., against George Whittell, Jr., lessor, on the jurisdictional basis as provided in Title 28, United States Code § 1332. The issues presented center on the provisions of paragraph 4 of the lease, namely:

“4. The Lessees agree that in the event the Lessor makes a bona fide sale of Zephyr Cove Beach at any time during the term of this lease, the Lessor shall then have the right to cancel this lease without penalty on six (6) months’ notice in writing to the Lessees, but in such case the Lessor shall remunerate the Lessees for the unam-ortized cost of improvements which the Lessees have made on the premises, evidenced by receipted bills. In the event the Lessor does have a bona fide offer of sale, the Lessees will be given the first opportunity to purchase at the same terms and conditions of said offer.”

Leases on the Zephyr Cove property in which Empey, with others, had been lessees, contained the same provisions.

The property leased was known as the Zephyr Cove Beach, a resort consisting of 196.4 acres in Nevada with approximately 1400 feet of shoreline on Lake Tahoe. The lease was not recorded. This tract was a part of some 24,000 acres of Nevada land owned by Whittell which was the subject of the sale negotiations involved herein. The Zephyr Cove lease, executed on October 16, 1958, was between Whittell, as lessor, and Robert L. McDonald and Empey, as lessees. It was for the term January 1, 1959, to December 31, 1964. McDonald assigned his interest in the lease to Em-pey on June 2, 1959.

It is the position of the appellant, as stated by Empey, that it was the obligation of the lessor, under the provisions of paragraph 4 of the lease, to notify the lessee of any offer, if the lessor felt the price was satisfactory although the lessor also felt that a particular term or condition should be changed, and to give a right of first refusal at that price, or any adjusted price that the lessor considered satisfactory. The appellee contends that the lessor must propose to sell the property and terminate the lease to actuate the right of first refusal.

The crux of the case is whether the sentence calling for the right of first refusal is to be interpreted as an independent, free-floating provision unaffected by the first sentence of paragraph 4 of the lease, which concerned cancellation thereof on six months notice in case of a bona fide sale of Zephyr Cove Beach.

Mr. John S. Lewis, Jr., a real estate operator representing Whittell, opened negotiations in late October, 1962, with Joseph I. O’Neill, Jr., through a real estate broker, Charles G. Johnston, for the sale of the 24,000 acres of Whittell’s Nevada property.

There was some misunderstanding on the part of Johnston as to when the Zephyr Cove lease terminated under the provisions thereof. He first advised O’Neill that it expired in 1962 and, as late as May 28, 1963, he stated that Whittell had guaranteed there was no lease on any of the properties that extended beyond 1963.

On June 3, 1963, Whittell and O’Neill signed an option agreement which gave O’Neill the option of purchasing the property in some fifteen parcels as detailed in the agreement. The option provided, among other things, that there was no lease on any of the properties “ * * covered by this option and agreement to purchase * * * ” beyond December, 1963, “ * * * excluding Zephyr Cove lease which runs to December 31, 1964.” This option authorized the purchase of the property in fifteen parcels within one year from notice of exercise of the option, or over a period of four years following notice by O’Neill to the bank of exercise of the option, which he was required to do within 180 days from June 3rd, the date thereof, all as detailed in paragraphs B1 and 2 of the agreement. The Zephyr Cove property was parcel No. 14 as listed in the option.

On June 6, 1963, newspapers in Nevada and California carried announcements of O’Neill having contracted to buy Whittell’s Tahoe land. Lewis, Sr., Whittell’s lawyer, in his deposition taken July 1-2, 1969, said that he learned on or about June 6, 1963, of the first refusal clause in the Zephyr Cove lease and a letter dated June 17, 1963, from Johnston to O’Neill, received by O’Neill on June 18th, clearly indicated that they knew of the lease option at that time.

On June 20, 1963, Lewis, Sr., wrote to Johnston that he, Lewis, Sr., had interpreted the lease clause “ * * * to mean that if the lease terminated on six months notice, Empey would have the right to buy at the same price it was offered to the other party. However, the lease will not be terminated and the construction of the provision would be in some doubt.”

O’Neill’s lawyer advised him that the lease gave Empey a right of first refusal in event of a bona fide sale and that as long as the lease was in force O’Neill should take only an option on the property. On August 13, 1963, Whittell and O’Neill executed a modification of the option and agreement to purchase to provide that upon receipt by the bank “ * * * of the sum of $2,800,000 on January 15, 1965, the bank shall release the deed covering parcel 14.”

On November 13, 1963, Lewis, Sr., advised Empey’s attorney, who had made inquiry as to any sale of the property, that no sale of the Zephyr Cove property, which was in Douglas County, would take place until after the Washoe County and Ormsby County parcels were sold and that Empey’s lease was in no danger as the group agreed to purchase the property in Washoe and Ormsby Counties over a period of approximately five years.

On November 11, 1963, Whittell extended the June 3rd option to March 3, 1964.

The State of Nevada had indicated a desire to purchase a portion of Whit-tell’s land here involved, and in December, 1963, the appraisals by the State of Nevada were completed and the appraised value was $5,000,000 rather than the $18,000,000 expected. This resulted in renewed negotiations and a tentative sale price, submitted by Whittell on or about March 24, 1964, of $11,000,000 with a lease of the Zephyr Cove property for $100,000 per year from January 1, 1965, to December 31, 1969, with the option to purchase the Cove property for $2,500,000. O’Neill, through Johnston, indicated to Whittell by telegram on March 30, 1964, that Whittell’s offer of March 24th was acceptable “in principal.” Whittell, however, refused to sign the sale documents and on April 27, 1964, told O’Neill that the sale was off.

O’Neill thereafter sued Whittell for the property and after trial in the United States District Court it was adjudged that there was no binding contract since there was an abandonment or mutual re-cision of the option.

Exhaustive discovery was had before the appellees’ motion for summary judgment was heard. All negotiations concerning possible sale of the Nevada property as a whole and the Zephyr Cove property separately were covered in detail, as disclosed in the hundreds of pages of depositions and documents set forth in the record on appeal and as disclosed in the briefs of the parties. The appellant does not contend that there is additional evidence to be produced at trial but that he should be allowed to argue certain portions, disclosed in the record, to the jury.

The history of paragraph 4 of the lease, supra, and its appearance in prior leases of the property is covered in the discovery but there is no evidence of negotiations between the lessor and lessees as to the interpretations of the parties of the right to first refusal provision at the time paragraph 4 was first included in a lease on the Zephyr Cove property nor at the time of the execution of the lease here involved on October 16, 1958, for the period from January 1, 1959, to December 31, 1964.

The District Court, in a twenty-two page Order granting the appellee’s motion for summary judgment, details the facts and law to be applied as to both the case at bench and the companion consolidated case, Zephyr Cove Lodge, Inc., a corporation, v. RKO General, Inc., a corporation, and Joseph I. O’Neill, Jr., No. 71-1006. A separate per curiam opinion has been filed in that case.

In considering the propriety of the summary judgment herein, we of course, must view the evidence most favorable to the appellant. Having in mind that the issue is the interpretation of the provisions of paragraph 4 of the lease, any evidence of intent expressed orally between the lessor and the lessee or lessees should be considered, particularly for the purpose of ascertaining whether there be a material issue of fact to be determined.

The record does not disclose nor do the parties in their briefs point to any negotiations or communications between the parties to the lease involved, or as to a prior lease, which would indicate, or from which a trier of the facts might determine, what the parties intended by the provisions of paragraph 4 of the lease at the time it was entered into or to support appellant’s theory that the first refusal clause was to be deemed a provision to be exercised independent of the sale and cancellation provisions in paragraph 4. The opinions of O’Neill, his counsel and his realtor, Johnston, are not controlling.

It is uncontroverted (1) that there was no sale of the Zephyr Cove property, (2) the lease was not terminated by Whittell, and (3) the lessee was in undisturbed possession of Zephyr Cove until the lease expired on December 31, 1964.

Discussion of Applicable Law

The authorities disclose that there are two general classes of first refusal clauses to be found in leases. Sometimes leases give the lessee an independent enforcealble right to buy the property during the term of the lease on the same terms and conditions which the owner had decided to accept from a third person making an offer in good faith. On the other hand, some leases make the right of first refusal a part of a provision which reserves to the lessor the right to cancel the lease in the event he decides to sell the premises.

We conclude the lease in the instant ease is of the second class, that the right to first refusal in the second sentence of paragraph 4 of the lease is not an independent right but that the first sentence of the paragraph and provision for cancellation therein must be read and considered as a part of and a condition to the first refusal right. The cancellation provision of paragraph 4 is for the benefit of the lessor, in that he has the authority to sell the property free of the lease, whereas the first right of refusal protects the lessee’s tenancy by giving him the right to buy the property to prevent cancellation of his lease by sale.

Both parties discuss Callaghan v. Hawkes, 121 Mass. 298 (1876). In that case, the lease gave Hawkes, the lessor, the right to sell the property by giving the lessees two months notice thereof and also by giving them the right to purchase at the agreed price of sale. The lessees also had the right, in the event of sale, to take off the crops.

Hawkes sold the property, subject to the lease, and the lessees continued in possession to the end of the lease period. The Court held that the right of refusal did not come into effect since the lease was not cancelled, observing:

“The clause in question, in form and necessary legal construction, is enabling and not restrictive, and confers upon the lessor a right which he would not otherwise have had. Independently of, and notwithstanding this clause, he may sell the reversion. The whole effect of the clause was to enable him to terminate the lease, and sell the whole estate, first giving the lessees the opportunity of purchasing. This construction is fortified by the final clause, which allows to the lessees, in case of sale, the privilege of taking off the crops.”

To the same effect, Gulf Theatres v. Guardian Life Ins. Co., 157 Fla. 428, 26 So.2d 188 (1946), and Signal Oil Co. v. Republic Investment Co., 11 Wash.2d 325, 118 P.2d 957 at 959 (1941).

Superior Portland Cement v. Pacific Coast Cement, 33 Wash.2d 169, 205 P.2d 597 (1949), relied on by appellant, distinguishes the Signal Oil Company case, supra, wherein the Court said, as to a first refusal clause like that in the instant case:

“ ‘Cases holding that, where an option has been inserted in the lease giving the lessee the right to purchase, but containing no provision with reference to the surrender of the premises during the term of the lease, the option is enforcible, have no application to the situation presented in this case.
“ ‘The superior court correctly construed the lease as covering only a sale that would disturb the possession.’ ” [Pages 615-616.]

Appellant’s reliance on Wilson v. Brown, 5 Cal.2d 425, 55 P.2d 485 (1936), and Moreno v. Blinn, 81 Cal.App.2d 852, 185 P.2d 332 (1947), does not appear to be justified.

In the Wilson case, the lease provided:

“ ‘The lessors hereby reserve the right to sell the property at any time, and in case of sale, preference to purchase said property shall be given to said lessees.’ This same paragraph of the lease contained the provision that, in the event the lessees should not exercise said preference, they agreed to sell and convey their interest in the service station fixtures to the said lessors, or any person they might designate, at the then market value.” [Pages 485-486.]

The entire tract, of which the leased property was a part, was sold without giving the lessees the right to purchase the leased property. The purchaser contended that the right of first refusal was conditioned on termination of the lease. The Court disagreed, stating that the lessors had treated the provision as an independent right and not conditioned on termination of the lease. [Page 486.] The Browns, lessors, had told the purchaser, Baker, that he would have to see the Wilsons and Baker saw them and offered them the leased property. [Page 486.] There was conflicting evidence as to whether the lessees said they did not want to buy all of the leased premises and this point was resolved in favor of the lessees.

The Court ruled that the lessors had never treated the right of the lessees to purchase as conditioned on the termination of the lease by sale of the property.

In the Moreno case, supra, the lessor, Blinn, leased thirty acres to Moreno for a period of six years. The lessor had “permission to sell said property, but giving tenant first right to purchase.” [185 P.2d at page 333.] The lease also provided that the lessee had the right to remove improvements on expiration of the lease. There was no provision for termination of the lease on sale of the property. In February, 1943, Blinn sold seven of the thirty acres, after Moreno approved the sale and quitclaimed the seven acres sold. Blinn sold to Garcia the remainder of the thirty acres by straight deed, not subject to Moreno’s lease, in October, 1943. Garcia was aware of the terms of the lease. In February, 1944, Moreno offered to purchase the property for the price sold to Garcia. In the meantime, he had paid • rent to Garcia. Blinn contended that Moreno’s right to purchase was conditioned on the lessor’s desire to sell and terminate the lease. The Court said the lease was recorded shortly after it was made and that it was not necessary to give the respondent an option to buy in order to protect his rights for the term of the lease. Holding that first refusal was an independent right, the Court states:

“The language used would indicate that he (Moreno) was given an unlimited right to purchase the property if the lessor decided to sell. Not only is this a reasonable interpretation, but it is supported by the acts and conduct of the parties.
* * * * * *
“A further consideration is that when the Blinns sold to the Garcias their deed was not made subject to the respondent’s lease. * * * The lessor attempted to sell without a reservation as to the lease rights, and, under any view, the right to exercise the option came into existence.” [Page 334.]

Appellant also relies on Gilbert v. Van Kleeck, 284 App.Div. 611, 132 N.Y.S.2d 580 (1954). That case concerned leases of two separate stores upon a portion of the premises involved. One was occupied as a barber shop and was leased to Mr. Ferrara by Van Kleeck on February 15, 1945. The other store was leased to a firm, Crosby and Mertz, later Crosby-Mertz, Inc. Each lease gave an option to the lessee to purchase the entire parcel of which the leased premises were a part on the same terms as offered to any prospective purchaser whose offer the lessor was willing to accept, with the further provision to sell and cancel the lease in the event of a bona fide sale of the property.

Following receipt of Van Kleeck’s letter notifying Ferrara and Crosby and Mertz of impending sale of the property to Gilbert and offering the premises to the lessees on like terms, Crosby-Mertz, Inc., exercised the option to purchase and the property was sold to it.

Gilbert, plaintiff in the lower court, who became the assignee of the option to purchase under the Ferrara lease, sued for specific performance of the contract to purchase between himself and Van Kleeck and of the option to purchase he held as assignee of Ferrara. The appellate division ruled that the purchaser, Gilbert, could not defeat the second option to Crosby and Mertz by purchasing the first option to purchase and then asserting he was exercising the first option “ * * * by matching his own offer.”

The Court considered the contention that the options to purchase were merely conditions with which the lessor must comply if he desired to cancel the lease. After discussing Callaghan v. Hawkes, supra, the Court observes that all the parties, by their conduct prior to suit and by their pleadings in the ease, construed the provisions of the lease as giving the lessees enforceable options to purchase without regard to the provisions for cancellation of the leases. The lessor, Van Kleeck, wrote to the lessees inquiring as to their wishes to purchase the property upon receipt of the purchase offer from plaintiff. Gilbert, in his complaint and amended complaint, alleged his right to purchase the premises under the first refusal rights as set forth in the two leases, referred to above, and these allegations were admitted in the answers. The Court said:

“The construction so agreed upon by all the parties is controlling here.” [Page 589.]

Obviously, the Court, in its ruling, relied on the clearly defined conduct of the parties which evidenced the intent that the option of the lessees to purchase was a right independent of any provision for surrender of the leased premises following sale of the property. We do not have a comparable situation at bench. Here, as soon as the provisions of paragraph 4 came to the attention of the parties, every effort was made to preserve the lessee’s rights under the lease. Whittell is not to be faulted for doing what was required to avoid the necessity of offering the Zephyr Cove property for sale to the lessee.

We conclude that the right of the appellant to purchase the Zephyr Cove property under the conditions of paragraph 4 of the lease did not accrue. The summary judgment dismissing the action as to the appellee herein is Affirmed.

ELY, Circuit Judge

(dissenting):

I respectfully dissent. In doing so, I first emphasize the requirement that all reasonable intendments touching upon the existence of a genuine issue of material fact must be indulged against the moving party. United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Griffeth v. Utah Power & Light Co., 226 F.2d 661 (9th Cir. 1955). This traditional and necessarily rigid requirement stems from recognition that summary judgment is an extremely drastic remedy. 3 Barron & Holtzoff, Federal Practice and Procedure § 1231 (Wright ed.), quoted in Hoffman v. Babbitt Bros. Trading Co., 203 F.2d 636, 637 n. 1 (9th Cir. 1953). Accordingly, summary judgment should be rendered only “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R. Civ.P. 56(c). See Consolidated Electric Co. v. United States, 355 F.2d 437 (9th Cir. 1966).

From the voluminous discovery records and briefs in this case, and from the unambiguous provisions of the first-refusal clause of the contract, I simply cannot agree that the negotiations entered into between Whittell and O’Neill failed to raise a genuine issue of fact concerning Zephyr Cove’s right to purchase the property that it had leased and improved.

Paragraph 4 of the lease agreement expressly provides that “[i]n the event the Lessor does have a bona fide offer of sale, the Lessees will be given the first opportunity to purchase at the same terms and conditions of said offer.” The majority, however, refuses to read this provision independently of the first sentence of paragraph 4, which provides for cancellation of the lease on six months notice of a bona fide sale of Zephyr Cove Beach. Thus the majority concludes that appellant’s right of first refusal was conditioned upon the lessor’s decision to sell the property accompanied by an actual termination of the lease.

To justify this conclusion in a summary judgment context, the movant (appellee) had the initial and heavy burden of demonstrating the absence of any genuine issue of material fact so that, under applicable principles of substantive law, it was entitled to judgment as a matter of law. The several cases examined by the majority do not, however, satisfy me that appellee was entitled to judgment as matter of law. To the contrary, as the majority notes, the “authorities disclose that there are two general classes of first refusal clauses to be found in leases.” Similarly, in the cited cases the factual issues, including those involving the intent of the parties, were fully tried, producing varying conclusions concerning the right of first refusal.

Further, as the majority also expressly recognizes, “[t]he crux of the case is whether the sentence calling for the right of first refusal is to be interpreted as an independent, free-floating provision unaffected by the first sentence of paragraph 4. . . .” As I perceive this critical factual issue, the relationship between these two key sentences cannot be divined solely from within the four corners of the contract. To go beyond the borders of the contract, however, would necessitate inquiry into the intentions of the parties; and, as the majority admits, there was nothing presented that fully elucidated those intentions. Absent a plenary trial, such was impossible. Moreover, the movant (appellee) conceded that “construction of the [first refusal] provision would be in some doubt” even if the lease were not terminated prior to a proposed sale. In consequence, I can find no basis for the majority’s implied conclusion that the movant met its prima facie burden of dispelling the existence of triable issues.

Even if we were to assume arguendo that appellee, as the movant, has met his prima facie burden of dispelling the existence of a triable issue, I believe that in considering all the evidence in a light most favorable to appellant it is indisputable that Zephyr Cove has presented a genuine issue of material fact as the traditional test of which has hitherto been understood. See, e. g., Adickes v. S. H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Northrop Architectural Systems v. Lup-ton Mfg. Co., 437 F.2d 889, 891 (9th Cir. 1970).

The deposition of Lewis, Jr. (counsel for Whittell), reveals, for example, that Lewis, Jr., told Whittell that Whittell could not sell the beach property directly to O’Neill because the first refusal clause was supposed to operate in Zephyr Cove’s favor. The majority ascribes some importance to a letter from Lewis, Sr. (also counsel for Whittell) suggesting that Lewis, Sr. interpreted the subject clauses of the lease “to mean that if the lease terminated on six months notice, Empey [appellant’s predecessor] would have a right to buy. . . .” Appellant, however, adequately met this averment by pointing out that in writing this letter “Lewis, Sr. was representing Whittell’s interest in retaining the [O’Neill] deposit [on the Zephyr Cove Beach property] and, therefore, proposed an admittedly doubtful defense against possible enforcement of the right of first refusal.” Construing this conflicting evidence, as we must, in the light most favorable to the party opposing summary judgment, appellant’s interpretation should prevail.

In addition, Whittell testified upon deposition that since he and O’Neill felt (in 1963) that Empey had the right to buy the property and that Whittell was without a right to sell it without consulting Empey, they had left Zephyr Cove out of the description.

Finally, Whittell’s failure to contradict the written assertion that appellant had “a prior right of purchase on the same terms and conditions involved in a contemplated sale to anyone else” leads to a reasonable inference, at least for purposes of determining summary judgment, that the assertion was admitted. See Megarry Brothers, Inc. v. United States, 404 F.2d 479 (8th Cir. 1968); Rumble v. United States, 143 F. 772 (9th Cir. 1906); C. McCormick, Law of Evidence 531-32 (1954) (“failure to reply to a letter, containing statements which it would be natural under all the circumstances for the addressee to deny if he believed them untrue, is receivable as evidence of an admission by silence”).

The majority appears to believe, erroneously, that the appellant carried the burden, not only in resisting the motion for summary judgment, but also in demonstrating the merits of its claim in this court. This is not right. While it recognizes that there had been received no evidence adequate to allow for the determination of the intent of the parties in respect to paragraph 4, the majority nevertheless underscores the absence of evidence sufficient “to support appellant’s theory.” Similarly, the majority concludes that “Whittell is not to be faulted for doing what was required to avoid the necessity of offering the Zephyr Cove property for sale to the lessee.” Whittell, however, must be faulted if, as appellant maintains, he breached the lease agreement. Appellant’s only burden in this respect was to raise a triable issue, and that burden arose only if ap-pellee, as the movant, first made the pri-ma facie showing that “it is quite clear what the truth is.” See note 1 supra.

I am thus bewildered by the majority’s willingness to affirm summary judgment despite the movant’s failure to meet his prima facie burden. I am equally confounded by my colleagues’ readiness to make factual determinations essential to the interpretation of the contract, especially in the presence of conflicting averments and in the acknowledged absence of adequate information as to intent. By allowing the movant to meet his burden by merely offering the motion, and by requiring the appellant, at the same time, to set forth far more than “specific facts showing that there is a genuine issue for trial,” the majority’s decision compels the party responding to the motion to shoulder the additional burden of convincing the court that he should prevail on the merits. I respectfully submit that this turns the summary judgment procedure on its head; consequently, I would reverse.

      . The lease in question was originally taken by two individuals. The appellant corporation was subsequently created and the lease cosigned to it.

      . Sartor v. Arkansas Gas Corp., 321 U.S. 620, 627, 64 S.Ct. 724, 728, 88 L.Ed. 1593 (1944) (movant has the burden of showing that “it is quite clear what the truth is” thereby excluding any real doubt as to the existence of a genuine issue of material fact) ; 6 J. Moore, Federal Practice U 56.15 [3], at 2335 (2d ed. 1973) (“The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts”).

      . The majority -writes: “The record does not disclose nor do the parties in their briefs point to any negotiations or communications between the parties to the lease involved, or as to a prior lease, which would indicate, or from which a trier of the facts might determine, what the parties intended by the provisions of paragraph 4.” I disagree, believing that the record carries us further. The material presented by the appellee, with some inferences that might be reasonably drawn from it, would have adequately supported a factual determination that the parties to the contract did in fact intend that the second sentence of paragraph 4 be literally applied. After all, the appellee intended to, and did, make substantial improvements on the leased property. It is altogether possible, if not probable, that it intended to protect itself against any divestiture of its property which might result from Whittell’s exercising the unrestricted power to convey the whole property to a third person.