source: Caselaw Access Project

author: GEE, Circuit Judge:

license: Public Domain

text:
    Alfred F. PIRRONE, d/b/a Pirrone Wine Cellars, Plaintiff-Appellee, v. MONARCH WINE COMPANY OF GEORGIA, Defendant-Appellant.
    No. 73-2913.
    United States Court of Appeals, Fifth Circuit.
    July 10, 1974.

      J. R. Cullens, William E. Cetti, John Y. Burch, Cartersville, Ga., for defendant-appellant.
    Alford Wall, Steven J. Martin, Atlanta, Ga., for plaintiff-appellee.
    Before COLEMAN, CLARK and GEE, Circuit Judges.
   GEE, Circuit Judge:

This diversity contract action was brought by Alfred F. Pirrone (Pirrone), a California wine-maker of modest capacity, against Monarch Wine Company of Georgia (Monarch), the nation’s largest purchaser of peach brandy. From a jury verdict for Pirrone, Monarch appeals. We affirm in part and in part reverse.

Peach brandy is an off-season crop for California wine-makers such as Pirrone. Since peach production there occurs from late June into August, it is possible to produce this brandy and clear production facilities of it in time for the major activity, grape-crushing, which commences in late summer or early fall. In January of 1968, Pirrone executed a written contract with Monarch to produce and sell to it 150,000 proof gallons of the brandy for each of the 1968 and 1969 crop seasons at $.75 per proof gallon. Monarch was to have the option to buy 30,000 additional proof gallons each year should Pirrone produce so much, and Pirrone was to produce peach brandy for no one else during these years. A shipping schedule was provided by which about half the brandy was to be shipped during the period of production and the remainder in five equal monthly carloads thereafter.

For reasons not entirely clear, Monarch had no more than executed the Pirrone contract when it began to repent of it. Monarch witnesses at trial related that it had over-bought on brandy, and during 1968 the market price dropped to two-thirds of the contract price. By early June, Monarch executives were seeking to persuade Pirrone to modify the contract, then entirely ex-ecutory, to diminish its amounts. Pirrone refused, but a memorandum in Monarch’s files indicated a belief by its officials that Pirrone had agreed they need not take delivery of any of the 1968 brandy until December. At trial, Pirrone denied making such an agreement.

Agreement or no, Monarch took full advantage of the fact that Pirrone could ship no brandy whatever without a permit from the United States for each shipment — a permit which Monarch had to initiate. The record is clear that Monarch grossly violated the shipping schedules of the agreement. As a result, by late September, Pirrone was threatening to destroy the brandy unless he received some shipment authorizations. And in late October Pirrone wrote to Monarch complaining of financial difficulties and requesting a substantial advance payment to tide him over. Monarch, however, maintained its position that the contract had been modified to require it take no shipments until December, though it did authorize one 16,-000 gallon carload in late September as a “favor” to Pirrone. Just before Christmas, 1968, Monarch at last proposed to take 40,000 gallons in February, and Pirrone responded insisting on monthly shipments each of 15,000 gallons commencing in December.

With his facilities thus stuffed with Monarch’s brandy and no sure relief in sight, Pirrone suggested in early January 1969 that the contract be ended. By his proposal, Monarch would take all the-brandy which he had produced for it on a shipping schedule which would clear his storage by July. To complicate matters, Pirrone had produced a 30,000 gallon surplus because of the unusual sweetness of the 1968 peach crop, and Pirrone thus sought to have Monarch take this off his hands. His proposal was embodied in a writing, styled “Termination Agreement” and signed by him.

Monarch’s response was to return to Pirrone a revised agreement, executed by its president and likewise dated in January 1969, under which Pirrone’s storage would not be cleared until August and Monarch would not purchase the surplus. Pirrone rejoined with a telegraphic ultimatum to sign the agreement prepared by him and forward a shipping permit or stand suit on the original contract. The following day, February 5, however, he took a different tack.

Under that date, he wrote to Monarch’s president, in pertinent part as follows:

Dear Mr. Gilsten:
This is intended as an addition and clarification to our termination agreement dated January 1969.
Monarch Wine Company of Georgia, Inc., will be required to take delivery of one hundred and thirty five thousand (135,000) proof gallons of peach high proof, excluding approximately fifteen thousand (15,000) proof gallons which Monarch has already received, on or before the 1st day of July, 1969.

The remainder of the letter consisted of bland references to housekeeping details. Pirrone’s letter crossed in the mails one from Monarch’s Georgia counsel to Pirrone stating flatly that Monarch would purchase none of the surplus brandy and urging execution of Monarch’s form of the termination agreement. During the spring and summer of 1969 the remainder of the 1968 brandy was finally ordered out and delivered to the accompaniment of threats and rumblings by Pirrone and remonstrances by Monarch, none of which produced any definitive resolution of what the parties by now rather plainly saw as the sole remaining live issue between them, the disposition of the surplus 30,000 gallons from the 1968 crop year.

At last, when only 8,000 gallons remained to be delivered, California counsel for Pirrone made letter demand on Monarch to take the surplus forthwith, noting “that Mr. Pirrone sent you a Termination Agreement in January of this year in which you agreed to remove all of this brandy. . . .” This arrived on the same day that Monarch forwarded to Pirrone the permit for shipment of the last 8,000 gallons covered by letter remarking: “This completes the total amount under our agreement.” Pirrone made no brandy for Monarch during the 1969 peach season, but in November filed a suit for lost profits on the 1969 portion of the original agreement in the California courts which was eventually dismissed, apparently for want of jurisdiction over Monarch’s person. About two years after the abortive filing in California, Pirrone brought this action on the original contract seeking in three counts, damages for (1) delays in taking delivery of the 1968 crop brandy, (2) loss of profits on the 1969 crop increment, and (3) failure of Monarch to take the 30,000 gallon surplus produced in 1968.

Trial produced only a little light beyond the above, which is drawn chiefly from the parties’ correspondence and memoranda introduced as exhibits. Both were ready writers. Two matters of some significance were, however, elicited in testimony. Pironne admitted, in effeet, that by the letter of February 5, 1969, quoted in part above, he meant to mislead Monarch into believing he agreed to Monarch’s conditions of terminating the contract, while maintaining a secret intent to force the 30,000 gallon surplus upon Monarch. He excused this by citing his desperation at having facilities clogged with brandy which he could not ship without Monarch’s by-your-leave, his financial problems, etc. A Monarch official, for its part, admitted under heavy cross-examination that had Pirrone not agreed to Monarch’s conditions, the remainder of the 1968 brandy would never have been ordered out at all. Pirrone’s basic theories were no executed termination agreement or, if one, duress invalidating it, and breach and anticipatory breach of contract. On a general charge incorporating these theories, as well as waiver and the effect of partial agreements under Georgia law, the jury found for Pirrone in damages on each of his three counts.

On appeal, Monarch asserts that the verdict was inconsistent with itself as allowing recovery both on the original contract and on the termination agreement (viewed as an accord and satisfaction), want of evidence to support the verdict, and want of evidence to support the theory of duress plus an evidentiary point.

The record evidence supports the Count 1 jury finding of damages caused Pirrone by Monarch’s dilatory behavior in ordering out the brandy during 1968, forcing him to lose that grape-crushing season. It likewise supports the damages found under Count 3; a careful reading of the original contract shows it did not require brandy for the 1969 crop-year gallonage to be produced from that year’s crop. Pirrone was therefore acting on rights at least implicitly giving him by the contract in producing, though unintentionally, the 30,000 gallon surplus in 1968. Under the contract, he need not have feared a modest surplus in that year, since he had a right to carry it forward to apply on the 1969 gallonage. This he produced at a time when the contract was in full and unquestioned force and effect, and to this extent the 1969 portion of the contract became no longer executory on his side. His rights being to this extent fixed, they could not be ousted on any theory presented here except agreement on his part to relinquish them. There is sufficient evidence to support the presumed finding of the jury, confirmed by the court’s judgment, that no agreement of his extended so far. There is no inconsistency in the jury awards under Counts 1 and 3. Both rest on Monarch’s unilateral breach of the original contract.

As to Pirrone’s recovery under Count 2, however, for lost profit on the executory portion of the 1969 gallonage, the case is otherwise. Without dispute, this portion of the contract was bilaterally executory at the time of the party’s exchange of “termination agreement” drafts in January 1969. Both drafts contained provisions wiping out the 1969 gallonage and, to the extent that this portion of the contract was executory, we think the mutual intent of the parties to abandon it conclusively demonstrated by the record. Both, but especially Pirrone, repeatedly referred to their “termination agreement” after the January exchange and Pirrone’s artfully-intended letter of February 5; and though the fate of the 30,000 gallon surplus remained ambiguous and disputed, each party plainly thought, objectively manifested, and intended the other to think that they had agreed on some^ thing. Otherwise at variance, their proposals for modifying the contract met on this head. Both acted upon the agreement: Monarch received all of the 1968 brandy except the disputed surplus; Pirrone never after January 1969 so much as suggested the 1969 portion of the contract was in effect, and neither offered to nor did make any brandy for Monarch from the 1969 peach crop. We. are persuaded the record conclusively demonstrates that, under general principles of commercial law and the pertinent sections of the Uniform Commercial Code as adopted by Georgia, the parties reached and consummated an agreement terminating and settling between them all rights, claims and questions arising out of the executory portion of the 1969 segment of the agreement.

Insofar as the record supports any claim of anticipatory breach, we think it comprehended within and settled by this agreement. As for Pirrone’s suggestion that duress motivated his assent to this agreement, the claim is far on the outer fringes of the doctrine. We have been shown no Georgia case which supports the proposition that hardship resulting from mere commercial breach of contract terms brings that doctrine into play, and the havoc which such a holding would work with desirable settlements of disputed claims is obvious. Several Georgia cases do suggest that even where duress exists, one such as Pirrone who continues to accept benefits under an agreement tainted with it after the duress is removed may not later raise it

It follows that there was no evidence meeting Boeing v. Shipman standards supporting the jury verdict under Count 2.

In summary we affirm the court’s judgment based on the jury’s findings on Counts 1 and 3 and we reverse the judgment insofar as it is based on the jury’s finding on Count 2.

Affirmed in part, reversed in part.

      . That a copy of a document relevant to damages was admitted in violation of the best evidence rule, the original having been shown to be in existence. This was not reversible error. The figure for which the document was admitted had already been testified to without objection and the evidence was thus cumulative. Yellow Bayou Plantation, Inc. v. Shell Chemical, Inc., 491 F.2d 1239 (5th Cir. 1974).

      . Which, under Georgia Law, required no new consideration. Ga.Code Ann. § 109A-2-209.

      . Until filing his California action in November, a clear afterthought as to this claim.

      . Preserved where not specifically displaced. Ga.Code Ann. § 109A-1-103.

      . Ga.Code Ann. §§ 109A-2-207 to 109A-2-209.

      . And the party’s briefs agree there is none in point.

      . E. g., Williams v. Rente Banking Co., 114 Ga.App. 778, 152 S.E.2d 825 (1966).

      . 411 F.2d 365 (5th Cir. 1969).


author: GODBOLD, Circuit Judge: PER CURIAM:

text:
    Louis Sager HUNSUCKER, Jr., Plaintiff-Appellant, v. Robert L. PHINNEY, District Director of Internal Revenue, DefendantAppellee.
    No. 71-2580.
    United States Court of Appeals, Fifth Circuit.
    July 10, 1974.
    Rehearing Denied Aug. 29, 1974.

      Douglass D. Hearne, Austin, Tex., for plaintiff-appellant.
    Morris Silverstein, U. S. Dept, of Justice, Tax Div., Scott P. Crampton, Asst. Atty. Gen., Carlton D. Powell, Fred B. Ugast, Act. Asst. Atty. Gen., Meyer Rothwacks, Attys., Tax Div., Dept, of Justice, Washington, D. C., William S. Sessions, U. S. Atty., San Antonio, Tex., for defendant-appellee.
    Before GODBOLD, DYER and GEE, Circuit Judges.
   GODBOLD, Circuit Judge:

Appellant Hunsucker, against whom no civil or criminal proceeding was pending, sued seeking to prohibit the use against him in any action, civil or criminal, of documentary evidence that he claims had been illegally seized. More specifically he sought pursuant to the federal declaratory judgment statute, 28 U.S.C. §§ 2201-2202, a declaration that the material was illegally seized, and, pursuant to Rule 41(e), F.R.Crim.P., return of the seized property and an order prohibiting its use as evidence against him. His suit was dismissed with prejudice, and he appeals.

These are the relevant facts, as found by the District Court. On December 23, 1967, Hunsucker’s apartment was searched by agents of the United States pursuant to a search warrant issued by a United States Commissioner. Bet slips, wager recap slips, names and addresses and other items were seized. Hunsucker was arrested on the same day and charged with violations of 26 U.S.C. §§ 4901, 7203, and 7262. Subsequently the criminal action was dismissed by the U.S. Attorney, and the seized materials were turned over to an agent of the Internal Revenue Service who, on the basis of these materials, recommended that an assessment of $36,167 be made against Hunsucker for delinquent excise taxes. At the time of trial no assessment had actually been made. Prior to trial in the District Court the seized materials were returned to Hunsucker, but the IRS made and retained copies of some items.

The District Court held that it had jurisdiction and dismissed the action with prejudice. The dismissal appears to be based on alternative conclusions that either (a) determination of whether or not the evidence was illegally seized was premature, or (b) that the search warrant was issued with an adequate showing of probable cause and was not invalidated by the subsequent decisions in Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968), and Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968).

Hunsucker asserts that this is not a tax case but a controversy concerning search and seizure. That characterization is a necessary one because, as we discuss below, § 2201 does not confer power to enter declaratory judgments in tax cases, and the use of injunctions against assessment or collection of federal taxes is barred by 26 U.S.C. § 7421(a) (subject to certain narrow exceptions). Having attempted to remove himself from the tax field, Hunsucker seeks to obtain an early adjudication of the legality of the seizure by invoking a limited concept of supervisory and equitable powers of the court and a seldom used jurisdictional statute, 28 U.S.C. § 1356.

A. Equitable or supervisory jurisdiction

Hunsucker contends that cases entertaining pleas for suppression and return of unconstitutionally seized property prior to any indictment establish that the District Court had jurisdiction. We hold that even if the District Court had the power to adjudicate the issues tendered and to grant the relief requested, the exercise of'that power is tempered by equitable considerations which justified the District Court’s conclusion that Hunsucker’s attempt to obtain relief was premature.

A substantial body of precedent establishes that federal district courts have power to order the suppression or return of unlawfully seized property even though no indictment has been returned and thus no criminal prosecution is yet in existence. Though firmly established, this jurisdiction is an exceptional one. Judge Friendly has observed that one may search the jurisdictional statutes, 28 U.S.C. §§ 1331-1358, in vain for a grant of such power in cases where the jurisdictional amount required by § 1331(a) is not satisfied, Grant v. United States, 282 F.2d 165, 168 (CA2, 1960), and Judge .Wyzanski has referred to the power as “the anomalous jurisdiction,” Lord v. Kelley, 223 F.Supp. 684 (D.Mass.1963), appeal dismissed, 334 F.2d 742 (CA1, 1964), cert. denied, 379 U.S. 961, 85 S.Ct. 650, 13 L.Ed.2d 556 (1965). The theory articulated by most of the cases is that jurisdiction to order suppression or return prior to indictment exists not by virtue of any statute but rather derives from the inherent authority of the court over those who are its officers.

Whether the anomalous jurisdiction extends to cases, such as this one, where the likely future proceeding is at least nominally civil in nature rather than criminal is uncertain. The theoretical basis of the jurisdiction in the court’s power over its officers would seem unaffected. We have encountered only one case, however, in which it appears that the anomalous jurisdiction was exercised where the only likely future proceeding was a civil one, and in that ease it was simply exercised without discussion. United States v. Blank, 261 F.Supp. 180 (N.D.Ohio 1966). Some cases suggest in passing that exercise of the jurisdiction is limited to cases of threatened criminal indictment. Thus in Lord v. Kelley, 223 F.Supp. 684, 689 (D.Mass. 1963), Judge Wyzanski stated,

Often — perhaps usually — it will be more prudent for a trial court to await the return of an indictment before granting any relief. For in many eases the trial court may not be persuaded that the substantial risk facing the aggrieved person is a criminal prosecution, as distinguished from an administrative or civil proceeding.

See also Fifth Avenue Peace Parade Committee v. Hoover, 327 F.Supp. 238, 242 (S.D.N.Y.1971). Certainly where a criminal indictment is threatened one reason for early adjudication of the admissibility of evidence exists which is not present where only a civil proceeding is threatened: the criminal indictment itself carries a danger of stigmatization which may not be removed by a determination in the criminal trial that the evidence on which the indictment was based is inadmissible. See In re Fried, 161 F.2d 453, 458 (CA2, 1947) (opinion of Frank, J.). Hunsucker argues that even if a threatened criminal prosecution is usually necessary, the threat of an assessment for unpaid gambling taxes sufficiently resembles a threat of criminal indictment to bring this action within the cases dealing with pre-indictment suppression or return where a criminal indictment is threatened. We do not determine in this case whether exercise of the anomalous jurisdiction is limited to instances where criminal prosecution is threatened nor do we determine whether the threat of a gambling tax assessment is a surrogate for threatened prosecution. Rather, we have assumed that for one reason or the other the cases dealing with pre-indictment suppression or return are applicable here.

The documents which are the immediate subject of the present dispute are apparently in the hands of agents of the Internal Revenue Service, and the question arises whether these persons are subject to the court’s power over its officers. A number of older cases suggest not, but more recent cases indicate that the court’s supervisory power is adequate to reach IRS agents as well as those who are traditionally regarded as officers of the court. We pretermit the question and assume for purposes of this case that the District Court had supervisory power over the IRS agents in possession of the documents.

But even if the District Court’s power over its officers provides a theoretical basis for jurisdiction in this case, it does not automatically follow that this unique power should be exercised wherever it exists. Rather such jurisdiction should be exercised with “caution and restraint,” and “subject to equitable principles.” The applicability of equitable principles is the same whether the present action is viewed as one brought under Rule 41(e), F.R.Crim.P., or as one premised on the equity jurisdiction of the District Court. In either event the theoretical basis of jurisdiction to order pre-indictment return or suppression is grounded in the court’s supervisory power over its officers. As the Court of Appeals for the District of Columbia Circuit has observed, Rule 41 “is a crystallization of a principle of equity jurisdiction. That equity jurisdiction persists as to situations not specifically covered by the Rule. Alternatively the same result can be reached by a broad reading of the Rule.” Smith v. Katzenbach, 122 U.S.App.D.C. 113,351 F.2d 810, 814 (1965).

Having concluded that exercise of the anomalous jurisdiction which Hunsueker seeks to invoke is governed by equitable principles, we must inquire whether those principles warrant jurisdiction in this case. The government argues and the District Court concluded that Hunsueker had an adequate remedy at law in that he could wait until an assessment was made, pay the tax for one wager and file a claim, and if necessary a suit, for refund. Hunsucker’s counter-argument, that he would be required to incriminate himself in order to prevail in the refund suit, is the same argument which a majority of this Court en banc found “unpersuasive” in Lucia v. United States, 474 F.2d 565 (CA5, 1973). There wás no showing that irreparable injury would result from waiting to vindicate his rights until a refund suit could be brought. The District Judge specifically found that, “The plaintiff has not presented any evidence to show that he would be irreparably injured unless granted the relief requested,” and this finding was not contested on appeal. Nor since the search in issue was conducted pursuant to a warrant issued in the normal manner could we say that the action which Hunsueker seeks to attack involved a “callous disregard for . . . constitutional rights.” The material return of which is sought consists of copies made by the IRS of bet memoranda, telephone and mileage records, sports schedules, a telephone and address book, and “face and hand signals for gin.” We do not doubt that Hunsucker retains an -interest in the copies sufficient to allow him to demand their return if the originals, already restored to him, were unlawfully seized. See, e. g., United States v. Kraus, 270 F. 578 (S.D.N.Y.1921) (Hand, J.). But the question here is not whether he has such a right but when the legality of the seizure is to be adjudicated. The return of the originals prior to trial in the District Court forecloses the possibility that equitable intervention might have been justified on the theory that some of these materials were necessary to conduct a legitimate business or were otherwise of substantial value to Hunsucker. Cf. Eastus v. Bradshaw, 94 F.2d 788 (CA5, 1938). In short we find no equitable consideration which would warrant invoking the anomalous jurisdiction to adjudicate the merits of this case.

B. 28 U.S.C. § 1356

In his complaint Hunsucker claimed jurisdiction based on 28 U.S.C. § 1356. While this claim was not pressed on appeal, we must nevertheless consider it. Section 1356 confers upon district courts “original jurisdiction ... of any seizure under any law of the United States on land or upon waters not within admiralty and maritime jurisdiction.” This section has seldom been a subject of reported litigation. The few cases existing uniformly fail to provide deci-

sional support for finding jurisdiction under the section in this case.

In Slocum v. Mayberry, 15 U.S. (2 Wheat.) 1, 4 L.Ed. 169 (1817), Chief Justice Marshall interpreted the original Judiciary Act provision from which § 1356 is drawn. He held that where an officer of the United States was without authority to seize or hold property the courts of the United States had no jurisdiction to entertain the owner’s action for relief but that the state courts remained a proper forum for such actions.

One hundred forty years later the Ninth Circuit applied Slocum to deny a claim of jurisdiction under § 1356. In Johnston v. Earle, 245 F.2d 793 (CA9, 1957), the plaintiff brought an action for damages against agents of the IRS for alleged tortious conversion of plaintiff’s tractor. The court, reasoning in part that “the complaint alleges that the seizure was not under any law of the United States,” (original emphasis) held that § 1356 did not confer jurisdiction and that proper forum for damage or replevin actions lay in the state courts. Similarly Hunsueker’s allegation is that the seizure was not authorized under Rule 41, F.R.Crim.P., because probable cause was lacking. The analysis of Slocum as applied in Johnston indicates that this allegation is not cognizable under § 1356.

We have found no construction of § 1356 which would confer jurisdiction over this action. We decline to create one.

C. 28 U.S.C. § 1331

Hunsucker did not contend that 28 U.S.C. § 1331 federal question jurisdiction exists in this case. We believe he was correct in not making such a contention. The only means by which Hunsucker could have satisfied the jurisdictional amount requirement would be by conceptually linking his action to the $36,000 assessment he says was threatened at the time this action was begun. But linking the threatened assessment to the present action would compel a conclusion which Hunsucker has assiduously denied, for it would imply that the present action is a controversy' concerning federal taxes rather than one relating solely to searches and seizures. And if it is a tax case, it is a case in which the court lacks power to grant the declaratory relief requested, and in which injunctive relief is not available absent exceptional circumstances not shown to be present here. See 26 U.S.C. § 7421(a); Miller v. Standard Nut Margarine Co., 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422 (1932); Enochs v. Williams Packing & Navigation Co., Inc., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962). See also, Brittingham v. United States Commissioner of Internal Revenue, 451 F.2d 315 (CA5, 1971); Koin v. Coyle, 402 F.2d 468 (CA7, 1968); Zamaroni v. Philpott, 346 F.2d 365 (CA7, 1965); Vuin v. Burton, 327 F.2d 967 (CA6, 1964). Cf. Campbell v. Guetersloh, 287 F.2d 878, 881 (CA5, 1961). Accepting Hunsucker’s argument that this is not a tax case, or at least that he did not intend it to be, we are unable to find jurisdiction under § 1331.

Exercise of non-statutory equitable or supervisory jurisdiction is not warranted in this case, and we find no basis for statutory jurisdiction. The District Court correctly dismissed the action, but that dismissal should have been without prejudice to adjudication of Hunsucker’s claims in an appropriate future proceeding. The judgment is amended to provide that the dismissal was without prejudice and as so amended is affirmed.

ON PETITION FOR REHEARING

PER CURIAM:

Appellant’s Petition for Rehearing urges as two additional bases for District Court jurisdiction 28 U.S.C. §§ 1346(a)(2) and 1361. Reliance on the “Tucker Act,” § 1346(a)(2), is misplaced. That Act applies only to suits for money damages while appellant seeks equitable relief. See, e. g., Wells v. United States, 280 F.2d 275 (CA9, 1960); Clay v. United States, 93 U.S. App.D.C. 119, 210 F.2d 686 (CADC, 1953), cert. denied, 347 U.S. 927, 74 S.Ct. 530, 98 L.Ed. 1080 (1954); Bower v. United States, 347 F.Supp. 1252 (W.D.Pa.1972). Assuming without deciding that § 1361 mandamus jurisdiction is potentially available, those factors found in the original opinion to preclude exercise of equitable or supervisory jurisdiction also make mandamus relief inappropriate.

      . At the time of trial, Rule 41(e), F.R.Crim.P., provided:
      (e) Motion for Return of Property and to Suppress Evidence. A person aggrieved by an unlawful search and seizure may move the district court for the district in which the property was seized for the return of the property and to suppress for the use as evidence anything so obtained on the ground that (1) the property was illegally seized without warrant, or (2) the warrant is insufficient on its face, or (3) the property seized is not that described in the warrant, or (4) there was not probable cause for believing the existence of the grounds on which the warrant was issued, or (5) the warrant was illegally executed. The judge shall receive evidence on any issue of fact necessary to the decision of the motion. If the motion is granted the property shall be restored unless otherwise subject to lawful detection and it shall not be admissible in evidence at any hearing or trial. The motion to suppress evidence may also be made in the district where the trial is to be had. The motion shall be made before trial or hearing unless opportunity therefor did not exist or the defendant was not aware of the grounds for the motion, but the court in its discretion may entertain the motion at the trial or hearing.

      . See, e. g., Go-Bart Importing Co. v. United States, 282 U.S. 344, 51 S.Ct. 153, 75 L.Ed. 374 (1931); In re Grand Jury Proceedings, 450 F.2d 199 (CA3, 1971), aff’d sub nom., Gelbard v. United States, 408 U.S. 41, 92 S.Ct. 2357, 33 L.Ed.2d 179 (1972); Smith v. Katzenbach, 122 U.S.App.D.C. 113, 351 F.2d 810, 815-816 (1965); Austin v. United States, 297 F.2d 356 (CA4, 1961), mandate recalled and appeal dismissed, 353 F.2d 512 (1962); Grant v. United States, 282 F.2d 165 (CA2, 1960); Eastus v. Bradshaw, 94 F.2d 788 (CA5, 1938), cert. denied, 304 U.S. 576, 58 S.Ct. 1045, 82 L.Ed. 1539; Foley v. United States, 64 F.2d 1 (CA5, 1933), cert. denied, 289 U.S. 762, 53 S.Ct. 766, 77 L.Ed. 1505; Goodman v. Lane, 48 F.2d 32 (CA8, 1931); United States v. Bell, 120 F.Supp. 670 (D.C.D.C.1954); Friedman v. Yellowley, 290 F. 248 (E.D.N.Y.1923); United States v. Hee, 219 F. 1019 (D.N.J.1915). Cf. In re Fried, 161 F.2d 453 (CA2, 1947), cert. granted, 331 U.S. 804, 67 S.Ct. 1755, 91 L.Ed. 1826, cert. dismissed, 332 U.S. 807, 68 S.Ct. 105, 92 L.Ed. 384 (pre-indictment suppression of confession on fifth amendment grounds).

      . The classic statement of the theory is that contained in Judge Hough’s opinion in United States v. Maresca, 266 F. 713, 717 (S.D.N.Y.1920):
      Whenever an officer of the court has in his possession or under his control books or papers, or (by parity of reasoning) any other articles in which the court has official interest, and of which any person (whether party to a pending litigation or not) has been unlawfully deprived, that person may petition the court for restitution. This I take to be an elementary principle, depending upon the inherent disciplinary power of any court of record. Attorneys are officers of the court, and the United States attorney does not by taking office escape from this species of professional discipline. Thus power to entertain this motion depends on the fact that the party proceeded against is an attorney, not that he is an official known as the United States attorney. It is further true that the right to move does not at all depend on the existence of this indictment ; it might be made, were no prosecution pending.
      See also, e. g., Go-Bart Importing Co. v. United States, 282 U.S. 344, 51 S.Ct. 153, 75 L.Ed. 374 (1931); In re Grand Jury Proceedings, 450 F.2d 199 (CA3, 1971); Smith v. Katzenbach, 122 U.S.App.D.C. 113, 351 F.2d 810, 815-816 (1965); Grant v. United States, 282 F.2d 165 (CA2, 1960); Centracchio v. Garrity, 198 F.2d 382 (CA1, 1952), cert. denied, 344 U.S. 866, 73 S.Ct. 108, 97 L.Ed. 672; Eastus v. Bradshaw, 94 F.2d 788 (CA5, 1938); Foley v. United States, 64 F. 2d 1 (CA5, 1933); Applybe v. United States, 32 F.2d 873 (CA9, 1929), cert. denied, 280 U.S. 594, 50 S.Ct. 39, 74 L.Ed. 641; Fifth Avenue Peace Parade Committee v. Hoover, 327 F.Supp. 238 (S.D.N.Y.1971); Silbert v. United States, 275 F.Supp. 765 (D.Md.1967); Bodgers v. United States, 158 F.Supp. 670 (S.D.Cal.1958), mandamus denied, see D.C., 158 F.Supp. 684; United States v. Bell, 120 F.Supp. 670 (D.C.D.C.1954); United States v. Mahon, 42 F.2d 571 (S.D.N.Y.1930); Sims v. Stuart, 291 F. 707 (S.D.N.Y.1922); United States v. Hee, 219 F. 1019 (D.N.J.1915).
      A few cases — e. g., Foley v. United States, supra, Smith v. Katzenbach, supra, and In re Fried, 161 F.2d 453 (CA2, 1947) — refer to the theoretical basis of this jurisdiction as the power of the court to “reach forward to control the improper preparation of evidence which is to be used ’in a case coming before it, and ... by summary procedure [to] restrain oppressive or unlawful conduct of its own officers.” Foley v. United States at 3. We doubt that the “reaching forward” image represents a distinct jurisdictional basis. Rather it appears to help define the occasions in which the power derived from, authority over officers of the court should be exercised. Our resolution of this case, however, makes it unnecessary for us to finally decide here either whether jurisdiction could be maintained on a “reaching forward” theory in circumstances where the person in possession of the goods was not an officer subject to the court’s direction or whether the power over officers should only be exercised where some future proceeding is contemplated before the same court. Cf. Eastus v. Bradshaw, supra.

      . See, e. g., Eastus v. Bradshaw, 94 F.2d 788, 789 (CA5, 1938); Applybe v. United States, 32 F.2d 873 (CA9, 1929); United States v. Hee, 219 F. 1019 (D.N.J.1915).

      . See, e. g., Smith v. Katzenbach, 122 U.S. App.D.C. 113, 351 F.2d 810, 816 (1965); Lord v. Kelley, 223 F.Supp. 684, 688-689 (D.Mass.1963); United States v. Bell, 120 F.Supp. 670, 673 (D.C.D.C.1954).

      . Fifth Avenue Peace Parade Committee v. Hoover, 327 F.Supp. 238, 242 (S.D.N.Y.1971).

      . Lord v. Kelley, 223 F.Supp. 684, 689 (D.Mass.1963), citing Centracchio v. Garrity, 198 F.2d 382 (CA1, 1952). See also Donlon v. United States, 331 F.Supp. 979, 980 (D.Del.1971) (“[A] pre-indictment motion to return evidence not tied to an existing criminal proceeding is grounded upon equitable considerations. The Court has jurisdiction . . . but in its discretion may refuse to hear it on its merits.”); C. Wright, 3 Federal Practice and Procedure, Criminal § 673, p. 110 (1969) (“This [pre-indictment motions for suppression and return] is quite an anomalous jurisdiction. Recent cases have indicated that it should be exercised with caution and restraint, and that the motion should be dismissed for want of equity if the moving party has an adequate remedy otherwise or if he cannot show irreparable injury.”)'

      . With an exception not pertinent here, the notes of the Advisory Committee on Rules concerning Rule 41(e), F.R.Crim.P., state that the rule “is a restatement of existing law and practice.”

      . We note that this is a case where at the time of trial it appeared likely that a future proceeding would be available in which I-Iunsucker could vindicate his rights. Indeed the threat of assessment seems to have been what prompted Hunsueker to file this action. Where no future proceeding in which the plaintiff may vindicate his rights seems likely, it becomes more difficult to find an adequate remedy at law [consider, however, the possibility of state court actions in trespass or replevin, cf. United States v. Nirenberg, 19 F.R.D. 421 (E.D.N.Y.1956) ] and exercise of the anomalous jurisdiction may conceivably be appropriate. Cf. In re Grand Jury Proceedings, 450 F.2d 199 (CA3, 1971).

      . See Silbert v. United States, 275 F.Supp. 765 (D.Md.1967), in which Judge Frank Kaufman suggests that whether the allegations of the complaint show such “callous disregard” is a factor to he considered in determining whether to exercise jurisdiction in eases involving pre-indictment suppression and return. See also United States v. Harte-Hanks Newspapers, 254 F.2d 366 (CA5, 1958), cert. denied, 357 U.S. 938, 78 S.Ct. 1385, 2 L.Ed.2d 1551 (“It is established law that suppression of evidence prior to an indictment should be considered only when there is a clear and definite showing that constitutional rights have been violated.”); Parrish v. United States, 256 F.Supp. 793 (E.D.Va.1966), appeal dismissed, 376 F.2d 601 (CA4, 1967) (whether plaintiffs show “a clear deprivation of their constitutional rights” is a factor in determining whether equitable relief should be granted.)

      . Unless the action was one which could be entertained by the court sitting in admiralty.

      . We do not read Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), to implicitly change the analysis of § 1356. As Justice Harlan’s concurring opinion makes clear, jurisdiction in that cáse was premised on 28 U.S.C. § 1331(a). See 403 U.S. at 398, 91 S.Ct. at 2005, 29 L.Ed.2d at 628.

      . The Declaratory Judgments Act excludes federal tax cases from the grant of declaratory authority. Title 28, § 2201 provides that,
      “In a case of actual controversy within its jurisdiction, except with respect to Federal taxes, any court of the United States . . . may declare the rights and other legal relations of any interested party


author: JOHN R. BROWN, Chief Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Jean CARMICHAEL, Defendant-Appellant.
    No. 73-3304
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    July 3, 1974.

      John H. Duhig, Miami, Fla., for defendant-appellant.
    John W. Stokes, Jr., U. S. Atty., E. Ray Taylor, Jr., Asst. U. S. Atty., Atlanta, Ga., for plaintiff-appellee.
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, Circuit Judges.

       Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir. 1970, 431 F.2d 409.

   JOHN R. BROWN, Chief Judge:

Appellant, Ms. Jean Carmichael, was convicted on two counts of violating 18 U.S.C.A. § 1343 and one count of violating 18 U.S.C.A. § 2314. The sum and substance of these violations was that appellant devised a scheme to defraud Ms. Laura Harris, Ms. Vonna McNiff, and Mr. Heywood Allen out of a total of $17,500.00 by means of false and fraudulent pretenses. The appellant’s sole contention on appeal is that there was insufficient evidence to support the verdict as to these three counts. Viewing the evidence in a light most favorable to the verdict, Glasser v. United States, 1942, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680, we find more than sufficient evidence to support the jury’s findings. We therefore affirm.

The Set-Up

The saga of the parting of Ms. McNiff, Ms. Harris, Mr. Allen and their money began one night in May of 1971. Ms. McNiff and Ms. Harris, while on vacation in Miami, Florida, from Atlanta, Georgia, requested their friend Mr. Allen to squire them to a local exclusive private club to dine. While at the club, Mr. Allen saw the appellant who was an acquaintance of his and took the opportunity to introduce the three women. The appellant immediately impressed Ms. Harris and Ms. McNiff as being a person of great charm, generosity, wealth, and social position. She dressed elegantly, engaged Mr. Allen in a conversation concerning the Cadillac she was planning on purchasing and insisted that she and her escort pay for everyone’s dinner. Later that evening she invited everyone to her sumptuous home and proceeded to dazzle them with her expensive and varied wardrobe. She made it a point to display her two full-length mink coats, one of which she said was given her by a prominent politician. She was, she stated, on very good terms with the politician’s prestigious family.

During the early months of her friendship with Ms. McNiff and Ms. Harris, the appellant clearly attempted to perpetuate the illusion of wealth and grandeur she had already created. For example, the appellant on one occasion off-handedly remarked to the two women that she wished she could take them to her house in Jamaica but unfortunately she had recently sold it. On another occasion she paid for the two women’s memberships and dinners plus a $100.00 life membership for herself at a cystic fibrosis fund raising affair. Still another time she was observed paying the expenses of herself, her two daughters, her son-in-law, her grandchild, and two of her friends during an ocean cruise to the Bahamas.

If there ever lingered doubt in the minds of Ms. McNiff and Ms. Harris as to the appellant’s solvency, it was dispelled after they attended the wedding the appellant provided for her daughter. The appellant had 5,000 yellow long-stemmed roses flown in from California at what she indicated was a “great expense”. She also provided at least one orchestra and several bars for some 600 guests and held a reception and dinner at an exclusive Miami club following the wedding. At one time during the affair, the appellant indicated to the two women that she may have spent as much as $30,000.00 on the wedding although at trial she confessed that $8,000.00 was a more reasonable estimate and that the roseg were donated by her ex-husband, a wholesale florist in California. Although it is not necessary to conclude that the appellant calculated such events solely to mislead Ms. McNiff and Ms. Harris, it is certain the fact finder could hold that she grossly exaggerated her expenditures and her financial ability and that she took every advantage to create a false impression of wealth.

The Sting

Some time in early June of 1972, the appellant telephoned Ms. McNiff, who had returned to Atlanta, long distance from Miami. The appellant was distraught. When asked to reveal the source of her distress, she confessed it was financial She owned, she alleged, a large tract of land in Ohio which could be sold for a $2,000,000.00 profit as a shopping center development if only she could raise $90,000.00 with which to pay off back taxes and attorneys’ fees. She stated that one of her bankers would lend her $50,000.00 and.a mortgage on her home would yield $20,000.00. The rest of her wealth, however, was tied up in various investments and thus unliquid. She desperately needed several thousand dollars, and would be able to repay whoever lent her that amount within two weeks since the shopping center deal was about to be closed. Based on over a year of observing the appellant act as a woman of means, Ms. McNiff wired her $7,500.00, the majority of her life’s savings. Unfortunately, the appellant owned no property in Ohio. In fact, she stated at trial, she needed the money to repay several other of her friends who had also lent her various sums and to encourage her ex-husband to put the title of their sumptuous home in her name.

Two weeks later, on the date the loan was to be repaid, Ms. McNiff and Ms. Harris flew to Florida and met the appellant. By then, however, a curious thing had happened — the appellant needed more money. Without stating why Ms. McNiff’s $7,500.00 was insufficient, she reiterated her plea for more money based on the apocryphal Ohio land scheme. To induce Ms. Harris to make her a loan, the appellant produced a stock receipt for $130,000.00 worth of IBM stock which she indicated was in the hands of her broker being sold and could be used as collateral. The stock receipt was indeed genuine but unfortunately belonged to a friend of the appellant’s, Mr. Robert Connally, who had only temporarily lent the appellant the certificates for business reasons. As a further inducement, the appellant also stated that if Ms. Harris would lend her $7,500.00, both she and Ms. McNiff would receive their principal plus a $1,500.00 profit within two more weeks. Ms. Harris agreed to the loan.

Encouraged by her success, the appellant then made the incredibly audacious suggestion that Ms. Harris telephone their mutual friend, Mr. Heywood Allen, and ask him for a loan of $10,000.00. To soften the blow, the appellant suggested Ms. Harris tell Mr. Allen that the money was to be used in a profitable business venture, that he would be repaid in two weeks with 10% interest, and that the borrower (who was to remain anonymous) had $130,000.00 worth of IBM stock as collateral. Based on these representations plus his friendship of long-standing with Ms. Harris, Mr. Allen consented to the loan. He asked Ms. Harris, however, to personally sign a note for the full amount. After making arrangements with her bank and obtaining Mr. Allen’s check, Ms. Harris wired the $17,500.00 to the appellant in Miami. Several days later, after being pressed by Ms. Harris, the appellant signed unsecured notes to Ms. Harris, Ms. McNiff and Mr. Allen covering their loans.

No Blood In The Turnip

As was predictable, the months that followed the making of the loans were filled with a series of unsuccessful attempts by Ms. Harris, Ms. McNiff, and Mr. Allen to collect their money and a series of ingenious and sometimes belligerent explanations by the appellant as to why she was unable to repay them. On the day the money was due, for example, when Ms. Harris called to arrange repayment, the appellant stated she had just lost $40,000.00 in the stock market and could not be bothered thinking about repaying such an insignificant sum as $17,500.00. When contacted several days later, the appellant was unable to repay the loan because her fictitious Ohio property had been flooded. On another occasion, the appellant stated her husband was suing her for a large sum of money as a result of their divorce and every dollar she had was tied up in court — perhaps the most accurate and truthful of all her excuses. Each time she was contacted concerning repayment, she assured the women they would be repaid shortly because she was anticipating some external source of funds. In July, the source was to be appellant’s married friend Bob. In September, she expected funds from her father’s estate in California. On several occasions she promised she would stop in Atlanta on her way to or from settling her father’s estate in California and deliver the money. Of course she never did. Meanwhile, however, she continued to live a profligate life, indulging in several ocean cruises with her daughters as was her wont.

Sometime in late August Ms. Harris’ already aroused suspicions that she would never be repaid were heightened. Increasingly curious as to why her seemingly wealthy friend was unable to repay such a modest amount, Ms. Harris contacted appellant’s attorney and in response to her questioning he related that to the best of his knowledge appellant neither owned any property in Ohio nor $130,000.00 worth of IBM stock. He also stated that “there were judgments against [the appellant] and unless [Ms. Harris] wanted to stand in line behind a quarter of a million dollars he didn’t think there was much of a chance of [her] getting [her] money in a civil suit.” After several more fruitless telephone calls to the appellant, both Ms. McNiff and Ms. Harris flew to Miami to attempt to register their unsecured notes. In attempting to register their notes, they discovered there was in fact a $250,000.00 judgment on record against the appellant which sufficiently deterred them from taking further legal action.

Sometime in November of 1972, after a particularly threatening phone call from Ms. Harris, the appellant did forward Ms. McNiff a check for $500.00 in Ms. Harris’ name with a note stating she was on her way to California to raise more money. After one last attempt to obtain payment on November 17, Ms. Harris ceased contact with the appellant and sought help from the FBI.

What Ms. McNiff, Ms. Harris, and Mr. Allen did not know either at the time they made the loans or during the attempted collection process was that in January of 1971, the appellant had asked for and obtained a $25,000.00 loan from another friend, Mr. Robert Connally, on the strength of his appraisal of her illusionary wealth and the representation that she was about to realize a $2,000,000.00 profit on property she held in Ohio if she could pay off back taxes. Over a two year period, she only repaid $5,000.00 despite constant urgings by Mr. Connally.

Sufficiency Of The Evidence

The essence of a violation of 18 U.S.C.A. §§ 2314 and 1343 is the act of devising a scheme or artifice to defraud by means of fraudulent or false pretenses. It is such a scheme, we assume, that appellant contends is unsupported by substantial evidence when in her brief she states that “[t]he evidence in this case conclusively shows a loan and not a theft.” We think that there was more than sufficient evidence to support the jury’s verdict. Such a scheme could be supported by the jury’s belief that appellant lied in inducing Ms. McNiff and Ms. Harris to lend her money on the basis of a non-existent business deal involving non-existent property in Ohio. It could further be supported by the jury's belief that appellant offered as collateral $130,000.00 worth of stock she did not own and that appellant had in January of 1971, tricked her friend Robert Connally out of $25,000.00 by using the same bogus tales of a get-rich-quick land scheme as an inducement for the loan. Appellant’s gross -exaggerations of financial solvency, and her numerous evasions and half-truths concerning her ability to repay the loans all contribute to supporting the jury’s verdict of guilt. That the jury chose not to believe appellant’s testimony that Ms. McNiff and Ms. Harris volunteered to lend her their life’s savings because they knew she was having financial problems, is well within their province as the ultimate triers of fact and can certainly not be said to be clearly erroneous. United States v. Davis, 5 Cir., 1971, 443 F.2d 560, cert. denied, 404 U.S. 945, 90 S.Ct. 298, 30 L.Ed.2d 260; United States v. Graves, 5 Cir., 1970, 428 F.2d 196, cert. denied, 400 U.S. 960, 91 S.Ct. 360, 27 L.Ed.2d 269.

Affirmed.

      . 1843. Fraud by wire, radio, or television.- — • Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined not more than $1,000 or imprisoned not more than five years, or both.
      2314• Transportation of stolen goods, securities, moneys, fraudulent State tax stamps, or articles used in counterfeiting. — • Whoever transports in interstate or foreign commerce any goods, wares, merchandise, securities or money, of the value of $5,000 or more, knowing the same to have been stolen, converted or taken by fraud; or
      Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transports or causes to be transported, or induces any person to travel in, or to be transported in interstate commerce in the execution or concealment of a scheme or artifice to defraud that person of money or property having a value of $5,000 or more; . . .
      Shall be fined not more than $10,000 or imprisoned not more than ten years, or both.

      . The appellant does not nor could she with justification urge that there was insufficient evidence to support the finding implicit in the guilty verdict that either the persons defrauded or the money obtained as a result of the fraud traveled in interstate commerce. 18 U.S.C.A. §§ 2314, 1343.


author: PER CURIAM:

text:
    AMERICAN NATIONAL BANK OF AUSTIN, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
    No. 73-3981.
    United States Court of Appeals, Fifth Circuit.
    July 10, 1974.
    Rehearing and Rehearing En Banc Denied Oct. 21, 1974.

      Buford P. Berry, J. W. Bullion, Joe A. Rudberg, Dallas, Tex., Sander W. Shapiro, Austin, Tex., for plaintiff-appellant.
    Scott P. Crampton, Asst. Atty. Gen., Jerome Fink, Chief, Tax Refund Sec. #2, Meyer Rothwacks, Chief, App. Sec., Tax Div., Dept, of Justice, Washington, D. C., William Guild, Charles G. Barnett, Michael D. Cropper, Tax Div., Dept, of Justice, Dallas, Tex., Louis A. Bradbury, Atty., Tax Div., Dept, of Justice, Washington, D. C., William S. Sessions, U. S. Atty., Hugh P. Shovlin, Asst. U. S Atty., San Antonio, Tex., for defendantappellee.
    Before BELL, SIMPSON and IN-GRAHAM, Circuit Judges.
   PER CURIAM:

In the first appeal in this case, American National Bank of Austin v. United States, 421 F.2d 442 (5th Cir., 1970), we held that taxpayer’s role in its municipal bond business was not as an owner of the bonds it handled, but was for tax purposes properly characterized as that of a lender. Absent ownership of the bonds taxpayer was not entitled to exclude the interest income it received on the bonds from its gross income under § 103(a)(1) of the Internal Revenue Code of 1954. Taxpayer thus lost in its attempt to obtain a refund of $778,031.77 for the tax years 1962, 1963 and 1964.

The instant appeal follows our remand, the purpose of which was to determine whether taxpayer was entitled to an addition to its bad debt reserve as a consequence of our decision. Because taxpayer accounts for its bad debt losses on loans by the reserve method, § 166 (a) and (c) of the Code, its position is that our decision changes the basis on which its reserve is computed under Mim. 6209, 1947-2 Cum.Bull. 26, thus producing an increase in the allowable addition to the reserve and a corresponding increased deduction on its income tax return. The district court held for the government and we affirm that decision.

Using the Mim. 6209 formula and based on its outstanding loans exclusive of bonds, the taxpayer had maximum possible deductions of $217,122.45 for 1962 and $270,789.25 for 1963, the tax years currently in issue. “For two basic reasons plaintiff knowingly and voluntarily elected not to take the maximum bad debt deductions which it could have taken for 1962 and 1963 on the basis of information appearing in its returns as originally filed. First, if plaintiff had claimed the maximum bad debt deduction which could have been computed from information contained in its 1962 and 1963 returns as originally filed, operating losses would have been presented on those returns. Plaintiff believed that it was good and prudent business practice to reflect some taxable income for 1962 and 1963, even though it could have technically avoided the payment of any tax in either of the two years by claiming a deduction for the maximum additions to its bad debt reserve which the information presented in its returns as originally filed would have justified. Secondly, plaintiff believed that its bad debt reserve, after additions originally claimed were made, was sufficient in light of the loans then outstanding, but not considering the municipal bonds which it held represented loans.” A $45,000 deduction was therefore taken in 1962 and $175,000 was deducted in 1963. Although it could have established a separate reserve for the bonds under § 582(a) of the Code, the bank decided to use the specific charge-off method to account for any bad debt losses arising from its bond transactions. Taxpayer now seeks an additional deduction of $248,999.36 for 1962 and $223,773.22 for 1963.

We agree with the district court that in the circumstances of this case taxpayer is not entitled to recompute its bad debt deduction. Taxpayer cannot assert that it has suffered an actual loss as a result of the government’s recharacterization of its bond transactions; the bad debt reserve initially established has not proved inadequate to provide taxpayer with tax deductions for its actual bad debt losses. Compare Travis v. Commissioner, 406 F.2d 987 (6th Cir., 1969). The sole reason that taxpayer desires to increase its reserve and get the corresponding deduction is to soften the blow of our decision holding that taxpayer erroneously failed to include the interest from the bonds in its gross income. But, “[t]he deduction is predicted upon what a taxpayer determines its reserve should be rather than what it determines its deduction should be.” Rio Grande Bldg. & Loan Ass’n v. Commissioner, 36 T.C. 657, 665 (1961). Moreover, taxpayer did not believe — as evidenced by its failure to take the maximum allowable deduction — that its reserves were inadequate, and our recharacterization of the bond transactions has had no effect on this initial determination. Taxpayer did not manifest an intent to take the maximum allowable deduction in the first place so we see little reason for allowing taxpayer to take that deduction now solely for the purpose of obtaining a larger tax deduction. See Rio Grande Bldg. & Loan Ass’n v. Commissioner, supra.

The judgment of the district court is affirmed.

      . Mim. 6209 and its progeny (see 5 J. Mertens, Law of Federal Income Taxation, § 30.75 (1969)) permit a bank on the reserve method to use its historic bad debt loss experience to determine the amount of a reasonable addition to its bad debt reserve. In Union National Bank of Youngstown v. United States, 237 F.Supp. 753, 758 (N.D.Ohio, 1965), the court outlined the procedure as follows:
      “(a) The bank computes its bad debt losses for each of the preceding twenty years (including the current taxable year) and applies this to the total loans outstanding at the end of each year.
      (b) The twenty loss ratios so obtained are averaged to obtain the average loss ratio. This ratio is known as the ‘average experience factor.’
      (c) The bank then adds to its reserves an amount equal to the average loss ratio times the loans outstanding at the end of the current year provided,
      (d) That the amount added to the reserve cannot bring the total reserve to more than three times the amount computed in (c) above.”

      . This is a quote from the stipulation of facts.

      . Such a loss would appear to be a rare occurrence since, as we noted in our prior opinion, “only twice in the history of taxpayer has a dealer failed to cause taxpayer to be paid the book value of bonds for which taxpayer had paid . . . .” 421 F.2d at 449.

      . A significant flaw in the bank’s approach to this case is its attempt to treat its erroneous conclusion regarding the nature of its municipal bond transactions as a “mistake of fact” and to build various arguments on this premise. We rejected a similar argument in the first appeal in the following manner:
      “ . . . [Tjaxpayer contends that the question of ownership is one of fact, determined by the trial court in its favor, which should not be set aside unless clearly erroneous. Fed.R.Civ.P. 52(a). We recognize that the characterization of taxpayer’s transactions with the dealers and other banks is at least partially a question of fact. Nevertheless,
      “ ‘ * * * [t]he district court’s finding on this ultimate issue * * * is not to be garrisoned by the clearly erroneous rule. Though it has factual underpinnings this ultimate issue is inherently a question of law. Obeisance to the clearly erroneous rule must yield when the facts are undisputed and we are called upon to reason and interpret. This is the law obligation of the court as distinguished from its fact finding duties. * * * ’.
      United States v. Winthrop, 5 Cir., 1969, 417 F.2d 905.” (Emphasis added.)

      . Both the government and the taxpayer rely on this case as support for their respective positions. Read as a whole, this case does not support the taxpayer in its attempt to recompute its bad debt loss deduction.


author: DYER, Circuit Judge:

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. BIG THREE INDUSTRIES, INC., Respondent. Tommy J. GRISSOM et al., Plaintiffs-Appellees, Cross-Appellants, v. NATIONAL LABOR RELATIONS BOARD, Defendant-Appellee, Big Three Industries, Inc., Defendant-Appellant, Cross-Appellee, International Brotherhood of Teamsters, Chauffeurs, etc., Defendant-Appellee.
    Nos. 73-1921, 73-3680.
    United States Court of Appeals, Fifth Circuit.
    July 10, 1974.

      Elliott Moore, Deputy Assoc. Gen. Counsel, N. L. R. B., Washington, D. C., Charles M. Paschal, Jr., Director Region 15, N. L. R. B., New Orleans, La., Abigail Cooley, N. L. R. B., Washington, D. C., for petitioner.
    Charles R. Vickery, Jr., David S. Brown, Houston, Tex., John B. Williams, Baton Rouge, La., for respondent and defendant-appellant, cross appellee.
    William R. D’Armond, Baton Rouge, La., for Grissom.
    Abigail Cooley, N. L. R. B., Glen M. Bendixsen, Chief of Sp. Litigation, N. L. R. B., Washington, D. C., Louis V. Baldovin, Jr., Regional Atty., Region 15, N. L. R. B., New Orleans, La., for N. L. R. B.
    O. Romaine Russell, Baton Rouge, La.,. for Teamsters Local.
    Before DYER and MORGAN, Circuit Judges, and KRAFT, District Judge.
   DYER, Circuit Judge:

In these consolidated cases, the Board petitions for enforcement of its orders finding the employer, Big Three Industries, guilty of refusing to bargain with the duly certified union in violation of section 8(a) (5) and (1) of the National Labor Relations Act and of threatening to and subsequently discharging an employee in violation of section 8(a)(3) and (1). In a separate proceeding, certain employees in the bargaining unit, dissatisfied with the union’s lack of success, filed a decertification petition with the Board after the expiration of the union’s certification year, but subsequent to the union’s filing of unfair labor practice charges against the employer. The Board’s decision to dismiss the employees’ petition was upheld by the district court as an appropriate exercise of the Board’s statutory authority. We grant enforcement in full and affirm the district court’s judgment.

I. Bargaining Order

The situs of the labor problems presently before us is Big Three’s Baton Rouge plant, which is engaged in various cryogenics-related operations of producing and distributing liquidified oxygen and nitrogen. In July 1971 following a Board-conducted election, Local No. 5 of the General Truck Drivers, Warehousemen and Helpers, a Teamsters Union affiliate, was certified as the exclusive representative of the employer’s production and maintenance employees. A few weeks later, several union representatives met for the first time with two company negotiators and discussed briefly a proposed union draft of a collective bargaining agreement, which the union tendered with the assurance that all terms were negotiable. At this first session, the employer’s chief representative read through the proposals, striking out various provisions as he went along, and stated in substance that “we won’t have this, and we won’t have that.” Mincing few words, the representative indicated that with this sort of proposed contract, the company might as well shut down, that the employees would get nothing more than they were presently receiving, that the company could easily close down the Baton Rouge facility as it had previously done with another Big Three plant, and that the union could feel at complete liberty to go on strike.

Apparently to no one’s surprise, no agreement was reached at this opening session, so the parties resolved to meet again later in the month, at which time the company would offer a set of counterproposals. The parties reconvened on August 26, 1971, but the company failed to produce the anticipated proposals. Instead, the company representative indicated again that the employees would get no more than they were presently receiving, but in reviewing the original union proposals the negotiator agreed to certain provisions in principle which the company would rewrite and submit for further consideration. On various substantive proposals, such as sick leave and temporary work assignments, the chief negotiator indicated that the union’s suggestions were rejected and that he would not discuss the matters further, since the status quo on basic terms and conditions of employment would remain inviolate.

In September 1971 the company sent its counterproposals and rewritten terms to the union. Importantly, several provisions to which the company had orally agreed in principle at the previous session were conspicuously absent from the proposed draft, such as terms whereby the company would provide space for a union bulletin board and would permit a checkoff for union dues. Other union-drafted provisions which the company basically assented to and agreed to “rewrite” were largely eviscerated by the counterproposals, such as the union’s proposals with respect to seniority and grievance procedures. The union thereupon rejected the counteroffer as a whole and requested further bargaining sessions.

The parties caucused for the third and final time on October 22, 1971. The employer’s representatives announced that the previously submitted counterproposals constituted the company’s only offer, that further union bickering was pointless, and that if the union persisted in ploughing over the same ground, further negotiations would be a waste of time. The union reiterated that its proposals were negotiable in all respects, but the parties, at complete loggerheads, dispersed without agreement. A subsequent union request for additional negotiations went unheeded, with the company again indicating that any further meetings would be futile. On December 15, 1971, the union filed 8(a)(5) and (1) charges with the Board, which eventually determined that the employer had unlawfully failed to bargain in good faith.

Determining whether a party’s conduct at the negotiating table evinces an unlawful failure to abide by the statutory mandate to bargain in good faith is an inescapably elusive inquiry. Once the parties embark on the ritual of convening and conversing together, objective standards against which statutory duties can be measured are not readily at hand. N. L. R. B. v. Herman Sausage Co., 5 Cir. 1960, 275 F.2d 229, 231. But at bottom we know that merely meeting together or simply manifesting a willingness to talk does not discharge the federally imposed duty to bargain. Tex Tan Welhausen Company v. N. L. R. B., 5 Cir. 1969, 419 F.2d 1265, 1268, cert. denied, 1971, 402 U.S. 973, 91 S.Ct. 1663, 29 L.Ed.2d 138; N. L. R. B. v. Denton, 5 Cir. 1954, 217 F.2d 567, 570, cert. denied, 1955, 348 U.S. 981, 75 S.Ct. 572, 99 L.Ed. 764. Indeed, “to sit at a bargaining table . . . or to make concessions here and there, could be the very means by which to conceal a purposeful strategy to make bargaining futile or fail.” N. L. R. B. v. Herman Sausage Co., supra, at 232.

Mechanically plodding , through the forms of collective bargaining therefore does not suffice, for Congress has required the parties not simply to convene, but to meet and negotiate in a certain frame of mind — to bargain in good faith. Negotiating parties are thus statutorily adjured to enter discussions with an “ ‘open and fair mind, and a sincere purpose to find a basis of agreement * * * * ’ ” N. L. R. B. v. A. W. Thompson, Inc., 5 Cir. 1971, 449 F.2d 1333, 1335, cert. denied, 1972, 405 U.S. 1065, 92 S.Ct. 1497, 31 L.Ed.2d 795. See also N. L. R. B. v. Truitt Mfg. Co., 1956, 351 U.S. 149, 76 S.Ct. 753, 100 L.Ed. 1027. But once the parties are physically engaged in the rituals of bargaining, as the employer and union were here, piercing through the formal litany to detect a want of good faith must rest in great measure on reasoned inferences. And it is beyond dispute that the reservoir of experience and expertise which enhances the likely reasonableness of such inferences is found in the Board itself. As Mr. Justice Frankfurter observed :

A determination of good faith or of want of good faith normally can rest only on an inference based upon more or less persuasive manifestations of another’s state of mind.
* -X- * -X- * -X-
The appropriate inferences to be drawn from what is often confused and tangled testimony makes a finding of absence of good faith one for the judgment of the Labor Board, unless the record as a whole leaves such judgment without reasonable foundation.

N. L. R. B. v. Truitt Mfg. Co., supra, at 155 (separate opinion).

Substantial evidence supports the Board’s conclusion that Big Three violated 8(a)(5) and (1). From the outset of the negotiations with the union in August 1971, the employer through its representatives evidenced a belligerent, intransigent attitude completely at war with any genuine “desire to reach ultimate agreement. . . .” N. L. R. B. v. Insurance Agents’ International Union, AFI-CIO, 1960, 361 U.S. 477, 485, 80 S.Ct. 419, 4 L.Ed.2d 454. Evidence abounded by which the Board could reasonably conclude that the company’s initial threats to shut the plant down, its taunting the union to go on strike, and its firm pronouncement that the employees would get nothing more than what they were presently getting, aptly demonstrated “a completely closed mind and [a lack of a] spirit of cooperation and good faith. . .. . ” N. L. R. B. v. Wonder State Mfg. Co., 8 Cir. 1965, 344 F.2d 210, 215. Once negotiations were seemingly underway, the company, without discussion, summarily omitted from its counterproposals union provisions orally agreed upon and, in “rephrasing” other proposals which had been assented to in principle, the company substantially rewrote important terms so as to render them completely inconsistent with the previous oral understanding. Once its spurious rewriting services were completed, the company then refused to discuss the revised terms further. Such complete intransigence and refusals to discuss mandatory subjects of bargaining run afoul of the N.L.R.A.’s bargaining requirements. Sweeney & Co. v. N. L. R. B., 5 Cir. 1971, 437 F.2d 1127, 1134-1135.

By detecting a lack of good faith in the employer’s conduct, the Board is not, as the company would have it, indirectly attempting to impose actual terms on the parties, H. K. Porter Co. v. N. L. R. B., 1970, 397 U.S. 99, 90 S.Ct. 821, 25 L.Ed.2d 146, nor is the Board seeking to interdict merely a particularly vigorous instance of hard bargaining. An employer can properly insist, and adamantly so, on a bargaining position without contravening statutory requirements. Chevron Oil Co., Standard Oil of Texas Div. v. N. L. R. B., 5 Cir. 1971, 442 F.2d 1067, 1072. But there comes a point when hard bargaining ends and obstructionist intransigence begins. The totality of circumstances in this case adequately supports the Board’s inference of bad faith on the part of Big Three by the latter’s failure to discuss meaningfully various terms and conditions of employment during the two months of negotiations and its steadfast refusal to meet further after the three unsuccessful sessions, despite the union’s requests and assurances that all its proposals were at all times negotiable.

The company’s retort to the 8(a)(5) charge is unpersuasive. Big Three argues, first, that the union’s proposals were tainted with illegality; second, that its proposals were economically preposterous; and third, that the parties bargained to an impasse. Big Three first attacks the union’s demands as violative either of the 1971 presidential wage and price freeze or of substantive federal law. We agree with the trial examiner that by and large this broadside attack is a red herring. The intervening wage freeze of August 15, 1971, manifestly did not prevent the parties from bargaining or contracting for wage increases which would go into effect subsequent to the freeze, yet the company inexplicably argues almost three years later that the union’s proposals are still somehow violative of a now defunct economic policy. Moreover, the union’s wage demands were first tendered, and rejected out of hand with the response that the employees would get nothing more than the then prevailing wages, almost two weeks before the freeze was announced. As for other alleged illegalities infecting the union’s proposals, the provisions were either completely lawful or else were amendable to cure technical faults, a possibility which the union consistently offered to the employer by reiterating its willingness to negotiate.

Big Three’s lament that the union’s economic demands were too high is wholly misdirected. Neither the Board nor this Court sits to evaluate the business feasibility of employee wage demands. If the company deemed the wage and benefit proposals “ridiculous,” then the appropriate posture would have been to bargain with the union in a spirit of good faith, as the union repeatedly announced it was willing to do, until such time as either an agreement or an impasse resulted. Instead, substantial evidence indicated that the company simply refused to discuss proposed wage and benefit changes, given the announced predetermined conclusion that no modifications at all would be forthcoming.

Finally, the company’s actual bargaining posture answers in full its contention that an impasse was reached in the negotiations. “Impasse” within the meaning of the federal labor laws presupposes a reasonable effort at good-faith bargaining which, despite noble intentions, does not conclude in an agreement between the parties. N. L. R. B. v. Palomar Corp., 5 Cir. 1972, 465 F.2d 731, 735. Here the company failed to fulfill this necessary precondition to impasse.

II. Employee Discharge

Shortly before the union filed refusal-to-bargain charges with the Board in December 1971, the employer discharged one of its control room operators, Fred Rushlow, a known union advocate, following an incident in which a container or vessel under Rushlow’s control was overflowed with liquid nitrogen, resulting in damage to the truck bed on which the vessel rested. The Board subsequently determined that Rushlow was not responsible for the damage and that his discharge was in violation of 8(a)(3) and (1) because it stemmed from the employer’s anti-union animus. We find that, although the evidence did suggest Rushlow’s culpability and that cause for his discharge therefore existed, substantial evidence supports the Board’s determination that the actual reason for the discharge was the employer’s anti-union sentiments.

At the time of his discharge, Rushlow, who had been in Big Three’s employ for over two years, was a control room operator, charged with overseeing and operating the plant’s control board. In addition to duties at the control board, operators were also responsible for supervising the filling of tanks or vessels with liquid oxygen or nitrogen produced at the plant. Typically, a truck transport belonging to Big Three or a customer would be driven to the plant, parked some twenty or thirty feet from the control room, and filled with liquid gas. The filling procedure would ordinarily be carried out by the operator and his “helper,” who was assigned miscellaneous tasks in the plant by the operator as different needs arose. During the filling process, truck drivers were required to stay behind their trucks to watch over the process. This precautionary measure was due in part to the fact that relatively crude methods were used for determining when a vessel was completely full. Ordinarily, a vessel would be filled until the liquid began to overflow from the vessel’s outlet or vent, at which point the operator or helper would shut off the valves to prevent further overflow. According to the testimony, this overflow procedure was normally followed at Big Three, since other methods of determining the actual volume pumped into a vessel were infrequently operational.

On the evening of December 13, a truck owned by a Big Three affiliate, Woodward Wight Big Three, was brought into the plant during Rushlow’s shift. Informed that servicing this particular vessel was a rush job, Rushlow, with his helper’s assistance, promptly set about filling the vessel. As his helper, Holliday, was simultaneously engaged in other plant operations, Rushlow indicated that he would keep an eye on the vessel from the nearby control room, which was equipped with large windows allowing an operator to observe the filling process, and thus free the helper to proceed with his other tasks. During the filling process, Rushlow attended to the control board, his primary responsibility, and looked out the window at the vessel “every minute or so” in order to detect the telltale overflow. After some twenty minutes had passed, the ordinary time .required for filling vessels of this particular type, Rushlow, while still in the control room, observed liquid nitrogen overflowing from the vent, left the control room and shut off the intake value. He then instructed Holliday to disconnect the hose to prepare the truck for departure, whereupon Holliday heard explosion noises in the vicinity of the vessel. Rushlow promptly investigated and saw long, narrow cracks in the metal-plated truck bed on which the vessel rested, apparently caused by a substantial overflow of the extremely cold liquid nitrogen. Rushlow immediately called his superiors to brief them on what had happened and remonstrated with the Woodward Wight driver, who had not remained behind the truck during the filling process. The plant manager arrived and, although the testimony is in dispute, apparently inquired simply as to what happened, and was told by Rushlow that he had allowed the vessel to run over. The manager left the plant without further adieu and on the following morning informed Rushlow that he was discharged.

Although we cannot concur in the Board’s speculative conclusion that Rushlow was not responsible at all for the damage to the Woodward Wight truck bed, we do agree that the discharge nonetheless contravened section 8(a)(3). Cause for discharge is simply not the sine qua, non of 8(a)(3) analysis. This Court has consistently held that the existence of cause cannot validate a dismissal which was in fact motivated by anti-union animus. See N. L. R. B. v. Central Power & Light Co., 5 Cir. 1970, 425 F.2d 1318, 1322; N. L. R. B. v. Southeastern Stages, Inc., 5 Cir. 1970, 423 F.2d 878, 879. As we stated in N. L. R. B. v. Central Power & Light Co., supra, at 1322: “No doubt, cause existed for the discharge, and [the discharged hireling] was not a model employee. * * * Nonetheless, the existence of cause is not a defense to a discharge actually motivated by anti-union purposes.” In fact, although justifiable grounds may abound, a discharge is unlawful even if it is “partially motivated by the employee’s protected activity. . ” N. L. R. B. v. Ayer Lar Sanitarium, 9 Cir. 1970, 436 F.2d 45, 50 (emphasis supplied).

Moreover, we are mindful that whatever conclusions we might reach were the issue before us de novo, it is not our province to “displace the Board’s choice between two conflicting views” even if we would be justified in deciding the issue differently were it before us in the first instance. Universal Camera Corp. v. N. L. R. B., 1951, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456. For it is the Board which has peculiar “competence to weigh the significance of the raw facts of conduct and to draw from them an informed judgment as to the ultimate fact.” N. L. R. B. v. Insurance Agents’ International Union, AFL-CIO, supra, at 505 (separate opinion of Frankfurter, J.). Thus, the courts uniformly defer to the Board in assessing the credibility of witnesses and in drawing inferences which reasonably are to be derived from the evidence. See, e. g., N. L. R. B. v. Groendyke Transport Inc., 5 Cir. 1974, 493 F.2d 17 [1974]; N. L. R. B. v. Finesilver Mfg. Co., 5 Cir. 1968, 400 F.2d 644, 645; N. L. R. B. v. Universal Packing & Gasket Co., 5 Cir. 1967, 379 F.2d 269.

We think that substantial evidence undergirded the Board’s finding of unlawful discharge, for various extenuating circumstances are clearly reflected in the record which, when combined with Rushlow’s outspoken union activism, support a determination of an 8(a)(3) violation. Importantly, Rushlow at all times during the filling process was followed standard operating procedures prevailing in the plant. Substantial testimony was adduced which indicated that control room operators were obligated to keep close surveillance over the plant’s central control board. Given this overriding responsibility, auxiliary duties, such as filling vessels with liquid gas, were normally accomplished in the precise manner that Rushlow followed on December 13. Operators would uniformly oversee the filling process from the control room, so that servicing a vehicle would not take them completely away from the control board for a substantial period of time. In addition, despite the dangerous nature of the substances produced in the plant, the customary procedure at Big Three was to overflow a vessel as the means for determining when the container was at full capacity. Consequently, the evidence strongly suggests that throughout the critical time period, Rushlow was performing according to usual procedures which were fully known to the plant supervisors.

Moreover, the evidence indicated that certain peculiarities in regard to the Woodward Wight truck may have been important in mitigating Rushlow’s responsibility for what occurred. The type of flat-bed truck used by Woodward Wight in this instance was not customarily employed in the cryogenics industry, since transport trucks with built-on containers were typically utilized. Indeed, Holliday, Rushlow’s helper, testified that during his year-long tenure at the plant, he had never seen a truck of this type used before. It is therefore likely that Big Three’s normal filling procedures were ill-suited for this unusual type of vehicle. But of even greater significance is the fact that the damage to the truck was relatively minor, in that the only evidence of repair expenses produced at the hearing indicated a total charge of $89.00. Rushlow offered to pay for the repairs in full, but his offer was firmly and summarily rebuffed.

Although Rushlow was following standard procedures and the damage to the truck was relatively insignificant, Big Three earnestly contends that Rush-low’s discharge was necessitated due to the ire of the plant’s customer, the president of Woodward Wight Big Three, who was angered over the damage done to his truck bed. The Board could reasonably call this justification into question, since Woodward Wight was a Big Three affiliate in which Big Three had a one-half ownership interest. The likelihood of Big Three’s losing this sort of customer account as a result of nominal damage to a truck bed seems highly remote.

And it is of some relevance that Rush-low was never afforded a reasonable opportunity to explain the full circumstances of what occurred, including the culpable absence of the Woodward Wight truck driver who, had he not absented himself, could have observed the beginning of the overflow and then informed Rushlow or Holliday, either of whom could have promptly shut off the valves. Big Three suggests that the plant manager’s inquiry of Rushlow on the evening of the accident manifested the employer’s desire to ferret out the truth, but the Board credited Rushlow’s testimony that the plant manager already knew that an overflow had occurred and that he simply wanted to know where the damaged truck was then located. Rushlow was discharged summarily on the following morning, without being able to relate fully the events of the preceding evening. This summary procedure seems particularly odd since, even according to one of Big Three’s own witnesses, Rushlow was known as a conscientious, fast-learning control room operator.

Our somewhat lengthy examination of the factual circumstances surrounding this discharge is not to suggest that a private employer’s employment decisions are per se within judicial scrutiny, since we are fully aware that ordinarily an employer may discharge an employee for any lawful reason whatsoever. N. L. R. B. v. Buddies Supermarkets, Inc., 5 Cir. 1973, 481 F.2d 714, 721-722. But these extenuating circumstances clearly lend additional significance to Rushlow’s well-known union sentiments.

The evidence unmistakably shows that Rushlow was one of the most active and vocal members of the union with which Big Three unlawfully refused to bargain. Rushlow testified on behalf of the union at a representation proceeding involving Big Three’s affiliate, Woodward Wight, some four months before his discharge. He was an active member of the union’s negotiating team which met with Big Three’s representatives, and on one occasion prompted an angry response from a company negotiator because of his inquiries about company policy. Two months before his discharge at a plant-wide safety meeting, Rushlow called the supervisors’ attention to various safety violations and threatened to report the matters to the federal government if remedial steps were not promptly undertaken. During the same period of time, the plant manager, in a conversation with a control room operator concerning the union, stated that there were several employees with whom he could not communicate and that, of these, one in particular, Fred Rushlow, “had to go.”

The totality of these circumstances, particularly when viewed in light of the coincidence of other section 8 violations by the company, see N. L. R. B. v. Central Power & Light Co., supra; N. L. R. B. v. Stemus Mfg. Co., 6 Cir. 1970, 423 F.2d 737, 741-742, demonstrates that, whatever our view might be were the case first before us, the Board’s finding was based on evidence which reasonably supports its conclusion. N. L. R. B. v. Federal Pacific Electric Company, 5 Cir. 1971, 441 F.2d 765. The findings of unlawful discharge and an unlawful threat to discharge are based on substantial evidence.

III. Decertification

Our enforcement of the Board’s order requiring the company to bargain in good faith substantially influences our disposition of the bargaining unit employees’ appeal with respect to the Board’s dismissal of their decertification petition. One component of the Board’s order remedying the 8(a)(5) violation in this case is the extension of the union’s certification year, pursuant to the reasoning of Raynal Plymouth Co., 1969, 175 N.L.R.B. 527. Thus, Big Three is now duty bound to bargain with the union for a reasonable time, an obligation which is utterly inconsistent with the Board’s concurrent processing of representation petitions aimed at dismantling the union’s status as exclusive bargaining representative. Indeed, one statutorily provided incident of the certification year is that no further representation elections will be held during that time. 29 U.S.C.A. § 159(e)(2). See Brooks v. N. L. R. B., 1954, 348 U.S. 96, 101-102, 75 S.Ct. 176, 99 L.Ed. 125.

It would be particularly anomalous, and disruptive of industrial peace, to allow the employer’s wrongful refusal to bargain in good faith to dissipate the union’s strength, and then to require a new election which “would not be likely to demonstrate the employees’ true, undistorted desires,” N. L. R. B. v. Gissel Packing Co., 1969, 395 U.S. 575, 611-612, n. 33, 89 S.Ct. 1918, 1938, 23 L.Ed. 2d 547, since employee disaffection with the union in such cases is in all likelihood prompted by the employer-induced failure to achieve desired results at the bargaining table. No more illustrative instance of this danger need be sought than the decertification petition filed by the disgruntled employees in this case. The handwritten petition, expressive simply of disenchantment with the union’s lack of bargaining accomplishments, states: “It is our feeling that Teamsters Local # 5 has accomplished nothing in our favor, therefor [sic] we would like a new election to determine if we will continue to be represented by the above union or if we may represent ourselves.” By skillful maneuvering, the employer has sapped union sentiments and relegated the union to minority status.

Our decision in this regard is demanded by an abundance of precedent. This Circuit has approved the Board’s dismissal of decertification petitions filed during “insulated” periods of bargaining, N. L. R. B. v. A. W. Thompson, Inc., supra at 1337, even though the union’s certification year has expired. General Electric Co., Battery Products, Capacitor Dept. v. N. L. R. B., 5 Cir. 1968, 400 F.2d 713, 727-729, cert. denied, 1969, 394 U.S. 904, 89 S.Ct. 1012, 22 L.Ed.2d 216. A decertification petition, albeit indicative of employee sentiment at a particular point in time, is not a talismanic expression of free choice which obliterates all that has gone before. For, notwithstanding the filing of an employee petition, a union which has “not been afforded a reasonable opportunity to prove itself as the employees’ bargaining agent . . . [can] not be decertified prior to being afforded such an opportunity.” N. L. R. B. v. Montgomery Ward & Co., 7 Cir. 1968, 399 F.2d 409, 410 (emphasis supplied); N. L. R. B. v. Universal Gear Service Corp., 6 Cir. 1968, 394 F.2d 396, 397-398. Union immunity from decertification during protected bargaining periods cannot be eliminated even if the petition represents a clear majority of unit employees, N. L. R. B. v. Cayuga Crushed Stone, Inc., 2 Cir. 1973, 474 F.2d 1380, 1383, because of the obvious reason that the union’s majority status is inexorably eroded by the employer’s refusal to bargain. Franks Bros. v. N. L. R. B., 1944, 321 U.S. 702, 704, 64 S.Ct. 817, 88 L.Ed. 1020; N. L. R. B. v. Hamilton, 10 Cir. 1955, 220 F.2d 492, 494.

The reasoning underlying this limitation on temporary employee sentiment flows from the Supreme Court’s decision in Franks Bros., supra. As the Court there stated:

Out of its wide experience, the Board many times has expressed the view that the unlawful refusal of an employer to bargain collectively with its employees’ chosen representatives disrupts the employees’ morale, deters their organizational activities, and discourages their membership in unions. The Board’s study of this problem has led it to conclude that, for these reasons, a requirement that union membership be kept intact during delays incident to hearings would result in permitting employers to profit from their own wrongful refusal to bargain.
* * * * * *
[The Board has adopted a] remedy which requires that an employer bargain exclusively with the particular union which represented a majority of the employees at the time of the wrongful refusal to bargain despite that union’s subsequent failure to retain its majority. The Board might well think that, were it not to adopt this type of remedy, but instead order elections upon every claim that a shift in union membership had occurred during proceedings occasioned by an employer’s wrongful refusal to bargain, recalcitrant employers might be able by continued opposition to union membership indefinitely to postpone performance of their statutory obligation.

321 U.S. at 704-705 (emphasis supplied) .

This result works no injustice to the employees. In the first place, courts have long recognized that employee choice is not necessarily reflected in an election where the employer, by committing substantial unfair labor practices, has poisoned the electoral well. N. L. R. B. v. Gissel Packing Co., supra; International Association of Machinists v. N. L. R. B., 1940, 311 U.S. 72, 82, 61 S.Ct. 83, 85 L.Ed. 50; N. L. R. B. v. Groendyke Transport, Inc., supra; N. L. R. B. v. Kaiser Agricultural Chemicals, 5 Cir. 1973, 473 F.2d 374, 384-385; J. P. Stevens & Co., Inc. v. N. L. R. B., 5 Cir. 1971, 441 F.2d 514, 525 cert. denied, 1971, 404 U.S. 830, 92 S.Ct. 69, 30 L.Ed.2d 59. Indeed, a decertification petition tendered on the heels of employer unfair labor practices may “merely [indicate] that the unfair labor practices continue to affect employee sentiment and make a fair election impossible.” N. L. R. B. v. Kaiser Agricultural Chemicals, supra, at 385 (emphasis supplied).

Second, a bargaining order mandating good-faith discussions with what appeal's to be a minority union does not inalterably freeze federally protected bargaining relationships. The Supreme Court considered this precise argument in Franks Bros, in the following way:

Contrary to [the] petitioner’s suggestion, this remedy, as embodied in a Board order [to bargain], does not involve any injustice to employees who may wish to substitute for the particular union some other bargaining agent or arrangement. For a Board order which requires an employer to bargain with a designated union is not intended to fix a permanent bargaining relationship without regard to new situations that may develop. But, as the remedy here in question recognizes, a bargaining relationship once rightfully established must be permitted to exist and function for a reasonable period in which it can be given a fair chance to succeed.

321 U.S. at 705 (citation omitted).

In sum, this array of decisional authority firmly establishes the principle that a bargaining relationship, once established, must be permitted a reasonable period of gestation, during which time the union’s status as the employees’ exclusive representative must remain inviolate. Since in this case the company has never fulfilled its statutory duty to bargain with the union in good faith, no representation proceedings can be conducted until the conclusion of a reasonable period of good-faith bargaining. “After such a reasonable period the Board may, in a proper proceeding and upon a proper showing, take steps in recognition of changed situations which might make appropriate changed bargaining relationships.” Franks Bros. Co. v. N. L. R. B., supra, at 705-706.

Without even addressing this uniform line of authority, the employees and the intervening employer invoke instead this Court’s decisions articulating the salutary principle that the pendency of unfair labor practice charges does not per se warrant the Board’s blocking, without investigation, a decertification petition filed by unit employees. Templeton v. Dixie Color Printing Co., 5 Cir. 1971, 444 F.2d 1064, followed in Surratt v. N. L. R. B., 5 Cir. 1972, 463 F.2d 378. Templeton and Surratt sought to vindicate the congressional command in 29 U.S.C.A. § 159(c)(1) that whenever a representation petition is filed, “the Board shall investigate such petition and if it has reasonable cause to believe that a question of representation affecting commerce exists shall provide for an appropriate hearing. . .

Both these cases involved a critical factor absent in the case sub judice. In each case, either a substantial period of actual bargaining had transpired, Templeton, or, as in Surratt, the union’s certification year had expired, subsequent to actual bargaining, before the employees petitioned for an election. In Templeton, moreover, the alleged unfair labor practices had occurred some four years before a decertification petition was filed, and some seven years by the time of appellate review. Given this lengthy time lapse, this Court found it highly unlikely that any past unfair labor practices could still be influencing the employees’ free choice at that much later date. Importantly, in the case sub judice no Templeton time lag has occurred and there has never been a protected period of good-faith bargaining, demanded by Franks Bros, and its progeny, which was present in Surratt.

Moreover, even if these significant factual distinctions were not present, it is imperative to recall that Templeton required not the full processing of decertification petitions, but simply an investigation of such petitions to determine whether a question of representation exists. On this record, we cannot find clearly erroneous the district court’s determination that the Board did in fact comply with the statutorily imposed investigation requirement, for where the Board, in response to an employee petition, investigates sufficiently to determine that a non-frivolous charge has been made that no Franks Bros.-demanded period of bargaining has ever occurred, then the Board has thereby gathered sufficient operative facts to determine whether a representation question is actually presented. This the Board has done, and Templeton requires no more.

Enforcement granted.

Affirmed.

      . There is disputed testimony as to whether Rushlow was specifically told to “top the vessel off,” meaning that the vessel was already partly filled, thereby reducing the time needed for filling. The trial examiner discredited the company’s testimony to this effeet,

      . On the other hand, the employer adduced evidence that Rushlow had been warned previously to control his temper. The plant manager who fired Rushlow, nonetheless, testified that the only reason for the discharge was due to the vessel’s overflowing.