author: J. JOSEPH SMITH, Circuit Judge:

text:
    Frederick F. PORDUM, Appellant, v. BOARD OF REGENTS OF the STATE OF NEW YORK et al., Appellees.
    No. 279, Docket 73-1842.
    United States Court of Appeals, Second Circuit.
    Argued Jan. 10, 1974.
    Decided Feb. 20, 1974.

      Bernard F. Ashe, Albany, N. Y. (James R. Sandner, and Ivor R. Moskowitz, Albany, N. Y., of counsel), for appellant.
    Margery Evans Reifler, Deputy Asst. Atty. Gen. (Louis J. Lefkowitz, Atty. Gen. of N. Y., Samuel A. Hirshowitz, First Asst. Atty. Gen., of counsel), for appellees.
    Before KAUFMAN, Chief Judge, and SMITH and FEINBERG, Circuit Judges.
   J. JOSEPH SMITH, Circuit Judge:

This is an appeal from a decision of the United States District Court, Northern District of New York, James T. Foley, Chief Judge, entered on April 26, 1973, reported at 357 F.Supp. 222, refusing to convene a three-judge court to consider the constitutionality of section 305(7) of the New York Education Law and otherwise dismissing appellant Pordum’s complaint. We affirm.

Frederick F. Pordum is a tenured teacher in the Lackawanna, New York school system. He holds a New York State Teaching Certificate issued by the Commissioner of Education of New York State. In 1967, Pordum requested and received a two-year leave of absence from the school district, and this leave was subsequently extended for an additional three years, to expire on January 1, 1973. In June 1971, while Pordum was a member of the Erie County Legislature, he was convicted in the United States District Court, Western District of New York, of the crime of conspiracy to promote and facilitate the promotion of bribery of public officals, a felony under 18 U.S.C. § 371. He was sentenced to serve three years in prison.

On December 22, 1972, Pordum was released on parole from prison. He wrote to the Lackawanna school system on December 29, stating that his leave of absence was about to expire and that he was ready to resume teaching. By letter dated January 24, 1973, the school district informed appellant that it had assigned him to Wilson Elementary School, effective February 1, 1973, the beginning of the new term.

Also on January 24, the Commissioner of Education wrote to appellant, ordering him to show cause on February 15, 1973, at a hearing why his teaching certificate should not be revoked. The Commissioner stated in the letter that he was acting pursuant to section 305(7), which provides:

He [the Commissioner] may annul upon cause shown to his satisfaction any certificate of qualification granted to a teacher by any authority whatever or declare any diploma issued by a state teachers college and state colleges for teachers ineffective and null as a qualification to teach a common school within this state, and he may reconsider and reverse his action in any such matter.

In a separate letter dated January 24, the Commissioner ordered the Lackawanna school district not to re-employ Pordum pending the outcome of the February 15 hearing. On January 30, the school district informed appellant that he would be notified by the district or by the Commissioner if and when he was to report to work.

Appellant has refused to comply with the hearing procedure. At his rquest, the hearing was postponed until March 30, 1973. On March 8, he commenced this action in the United States District Court, naming the Commissioner and the school district as defendants and challenging the constitutionality of section 305(7). The Commissioner remains prepared to go forward with the hearing. The school district, meanwhile, asserts that it is ready and willing to employ Pordum, without a hearing. Although a defendant in this lawsuit, the district joined in appellant’s motion below for immediate reinstatement. The district did not appear at oral argument.

Appellant contends that section 305(7) is unconstitutional in that it does not afford due process of law, is fatally vague, violates the equal protection clause, and is overbroad. Judge Foley concluded that these claims were either foreclosed by previous decisions of the Supreme Court or obviously lacking in merit and that therefore a three-judge court need not be convened. Goosby v. Osser, 409 U.S. 512, 518, 93 S.Ct. 854, 35 L.Ed.2d 36 (1973). We agree with this conclusion.

Due Process

In the Commissioner’s letter of January 24 to appellant, appellant was notified that a hearing would be held prior to the Commissioner’s ultimate disposition of the teaching certificate, that a hearing officer would preside,, that appellant would be allowed to present evidence, cross-examine witnesses and obtain a copy of the transcript of the hearing. At oral argument, the Commissioner stated that judicial review of the Commissioner’s determination was available pursuant to Article 78 of the New York Civil Practice Law and Rules. As Judge Foley found, these rights were granted “with an attitude of fairness to insure compliance with due process requirements.” 357 F.Supp. at 225. Appellant does not contest these procedures. He challenges only the failure to afford him a hearing prior to his suspension.

The Commissioner characterizes this claim as an argument that Pordum must be reinstated as a teacher pending a hearing. Appellant emphasizes the fact that he has been ordered to report as a teacher by the school district and argues that the job cannot be taken away from him before a hearing is held. Semantics aside, Pordum’s position is this: He must be allowed to teach in Wilson Elementary School until a hearing is held and a decision based on that hearing, concerning his fitness to teach has been made, a matter of three or four weeks. Appellant is not complaining of procrastination by the Commissioner; his position is that the Commissioner cannot keep him out of the classroom for one day pending a hearing.

In evaluating any due process claim, we must begin with the question whether a “liberty” or “property” interest is at stake. The interest of an untenured college teacher in his job was held in Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972), to be insufficient to invoke the protection of the due process clause. The Roth Court emphasized the non-stigmatic nature of a failure to rehire an untenured teacher and the fact that the action did not seriously impede the teacher’s ability to secure another teaching position.

Pordum’s interest in retaining his certification is materially more substantial than that of the teacher in Roth. Pordum is a tenured teacher. Moreover, while it is uncertain whether revocation of his certification will automatically bar him from teaching in the public schools of New York State, such action would amount to an official declaration that he is unfit to teach and might well impede his ability to secure a teaching job, in public or private schools, in New York or in another state. His interest in his certificate is a sufficient property interest to be protected by the due process clause and, indeed, Pordum is being afforded a hearing prior to potential revocation. This does not, however, necessarily require a hearing prior to his temporary suspension.

An analysis of a due process claim to a prior hearing must start from the proposition that “ . . .an individual [must] be given an opportunity for a hearing before he is deprived of any significant property interest, except for extraordinary situations where some valid governmental interest is at stake that justifies postponing the hearing until after the event.” Boddie v. Connecticut, 401 U.S. 371, 379, 91 S.Ct. 780, 786, 28 L.Ed.2d 113 (1971) (original emphasis). Governmental interests which have been held sufficient to outweigh the individual’s interest in a prior hearing include the cost to the public of using probably useless drugs, the threat to the credit position of a bank, the finding that food was unfit to eat, the national security, the prevention of tax evasion, the possibility of irregular securities dealing, the pendency of charges of misbehavior by police officers, and the threat to the safety of drivers and pedestrians. In each of these eases, the court scrutinized the pertinent competing considerations to determine whether summary administrative action was justified.

Here, the Commissioner asserts the interest of the well-being of the children at Wilson Elementary School. He does so in a conclusory manner, but we presume that this general interest encompasses Pordum’s possible corrupting influence, the possibility that the students might not respect Pordum, and the disruption of the educative process which would result if Pordum were removed from the classroom subsequent to the hearing after having taught for several weeks. While the first of these dangers might appear to be improbable, we must remember that teachers serve as models for students and that the minds of elementary school pupils are very impressionable.

Pordum responds by pointing to his bank balance. He argues that he has been unable to provide himself and his family with a “living.” But appellant had not been employed as a teacher for five years preceding his suspension and he stands to lose only three or four weeks pay pending the Commissioner’s determination (and if he is found fit to teach he may be entitled to back pay under section 3020-a(4)). Moreover, appellant’s initial response to notification of the hearing, a request for postponement, and his subsequent actions do not evidence dire need.

In sum, then, the interests of the state are quite significant, while those of appellant are not. In this case, it is the students at Wilson Elementary School who have a right to a prior hearing, not appellant.

In an attempt to escape this result, appellant contended at oral argument that the Commissioner did not have the authority to suspend him and that the school district, in obeying the unauthorized order of the Commissioner not to employ him, breached independent constitutional and statutory duties owing to appellant. This argument is based on the major premise that the Commissioner has the authority only to revoke and annul Pordum’s license, not to suspend him from his teaching duties. The Commissioner in response cited section 308 of the Education Law:

The commissioner of education shall also have power and it shall be his duty to cause to be instituted such proceedings or processes as may be necessary to properly enforce and give effect to any provision in this chapter or in any other general or special law pertaining to the school system of the state or any part thereof or to any school district or city. He shall possess the power and authority to likewise enforce any rule or direction of the regents.

We need not reach this question of New York law in order to dispose of this argument because appellant’s minor premises are incorrect. The constitutional duty the district might owe Pordum is identical to the duty analyzed above. As to the statutory duty, it is embodied in section 3020-a(2):

Upon receipt of the charges, the clerk of the school district or employing board shall immediately notify said board thereof. Within five days after receipt of charges, the employing board, in executive session, shall determine, by a vote of a majority of all the members of such board, whether probable cause exists. If such determination is affirmative, a written statement specifying the_ charges in detail, and outlining his rights under this section, shall be immediately forwarded to the accused employee by certified mail. The employee may be suspended pending a hearing on the charges and the final determination thereof. [emphasis added]

Even though the school district did not initiate the suspension, it adopted that action. Pordum was not entitled to any more from the school district than he received.

Vagueness

Appellant’s vagueness claim must fail because Pordum cannot argue that he was surprised to learn that a felony conviction might bar him from teaching in the public schools of New York State. Section 3020-a of the Education Law, which sets forth the procedure by which a tenured teacher may be dismissed by a school district, states that there is a five-year statute of limitations on charges, “except when the charge is of misconduct constituting a crime when committed.” This constitutes some notice that criminal behavior is cause for dismissal. The fact that Pordum is being examined pursuant to section 305(7), by the ’ Commissioner, and not under section 3020-a, by the school district, is immaterial to the question of notice. Moreover, common sense is as helpful to this question as is the Education Law: A teacher is fairly chargeable with the knowledge that conduct which will subject him or her to five years in prison, the maximum under 18 U.S.C. § 371, will also subject that teacher to review concerning fitness to teach.

As applied to the case of a convicted felon, section 305(7) is not impermissibly vague. Cf., Beilan v. Board of Public Education, 357 U.S. 399, 406-408, 78 S.Ct. 1317, 2 L.Ed.2d 1414 (1957). This conclusion is sufficient to uphold Judge Foley’s determination that appellant’s claim was without merit. We are not concerned here with other hypothetical situations. “[0]ne to whom application of a statute is constitutional will not be heard to attack the statute on the ground that impliedly it might also be taken as applying to other persons or other situations in which its application might be unconstitutional.” United States v. Raines, 362 U.S. 17, 21, 80 S.Ct. 519, 522, 4 L.Ed.2d 524 (1960).

Equal Protection

Appellant next contends that section 305(7) is unconstitutional in that it is silent with respect to procedural standards and vague in defining misconduct whereas section 6509 of the Education Code, which provides for the regulation of other professions, establishes clear and detailed procedures and defines professional misconduct with precision. This is said to result in a denial of equal protection.

This argument relies upon an assumption of an equivalence between the teaching profession and the professions regulated by section 6509, which include massage, landscape architecture, and podiatry. But the teaching profession differs from these other professions in many respects, including the special vulnerability of the client population, the high duty of care owed by the state to that group, and the unique responsibility which the state has to provide an effective system of education. These distinctions justify the legislative determination that different treatment with respect to the disciplining of the different professionals is required. Williamson v. Lee Optical Co., 348 U.S. 483, 75 S.Ct. 461, 99 L.Ed. 563 (1955).

Overbreadth

Finally, appellant argues that section 305(7) is overbroad and thereby creates an impermissible chilling effect on First Amendment rights. Pordum, however, has not shown and, when asked, could not say in what respect his First Amendment rights were being chilled. We express no opinion as to the constitutionality of section 305(7) on this ground as applied to others when we conclude, as we must, that appellant’s claim has no merit.

In sum, the lack of substance in Pordum’s claims of unconstitutionality was sufficiently obvious that Judge Foley “did not need to call on two other judges for reassurance,” Green v. Board of Elections, 380 F.2d 445, 452 (2d Cir. 1967), cert. denied, 389 U.S. 1048, 88 S.Ct. 768, 19 L.Ed.2d 840 (1968); Nieves v. Oswald, 477 F.2d 1109, 1115 (2d Cir. 1973).

Remaining Issues

Appellant contends that even if the court below was correct in refusing to convene a three-judge court, it should not have dismissed his 42 U.S.C. § 1983 claim against appellees for the deprivation of his constitutional rights. Since it is clear that appellant’s constitutional rights have not been violated, dismissal was proper.

Affirmed.

      . Neither the letter nor the parties specified what grade or subject Pordum was to teach. But it appears from several suggestions in that letter concerning preparation and from the oral argument before Judge Foley that appellant was to be a classroom teacher and not a special duties teacher.

      . Appellant contends that the Commissioner does not have the power to suspend or dismiss a teacher, only to revoke certification. This contention is questionable. See text at notes 10-11. But since a school district which emjdoys a non-certified teacher may not receive state aid, section 3604, it is unlikely that Pordum would be hired by the public school districts of New York if his certification were revoked.

      . Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594, 70 S.Ct. 870, 94 L.Ed. 1088 (1950) (seizure of drugs).

      . Fahey v. Mallonee, 332 U.S. 245, 67 S.Ct. 1552, 91 L.Ed. 2030 (1947) (seizure of assets) .

      . North American Cold Storage Co. v. Chicago, 211 U.S. 306, 29 S.Ct. 101, 53 L.Ed. 195 (1908) (seizure of food).

      . Cafeteria Workers v. McElroy, 367 U.S. 886, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961) (dismissal of employee).

      . Phillips v. Commissioner of Internal Revenue, 283 U.S. 589, 51 S.Ct. 608, 75 L.Ed. 1289 (1931) (“seizure” of assets).

      . R. A. Holman & Co. v. SEC, 112 U.S.App.D.C. 43, 299 F.2d 127, cert. denied, 370 U.S. 911, 82 S.Ct. 1257, 8 L.Ed.2d 404 (1962) (suspension of dealer).

      . La Bonte v. City of Berlin, 85 N.H. 89, 154 A. 89 (1931) and De Marco v. Board of Chosen Freeholders, 21 N.J. 136, 121 A.2d 396 (1956) (suspension of officers).

      . Thornhill v. Kirkman, 62 So.2d 740 (S.Ct.Fla.1953) (suspension of driver’s license).

      . This acquiescence may have been motivated by a desire to continue receiving state aid. See n. 2, supra.

      . It is noteworthy that section 6509, which sets fortli the definition of “professional misconduct” with respect to disciplinary proceedings for the professions of medicine, physical therapy, massage, dentistry, veterinary medicine, pharmacy, nursing, podiatry, optometry, ophthalmic dispensing, engineering and land surveying, architecture and landscape architecture, public accounting, shorthand reporting, psychology and social work, provides that conviction of a crime under New York or federal law subjects a person to possible dismissal from these professions.

      . The state’s duty to educate its citizens is embodied by art. 11, § 1 of the New York State Constitution: “The legislature shall provide for the maintenance and support of a system of free common schools, wherein all the children of this state may be educated.”

      . There may, of course, be serious problems for the Commissioner’s consideration. In brief and at oral argument, the Commissioner stated that the sole function of the hearing was to show that Pordum indeed had been convicted of a crime. The Commissioner argued:
      Assuming the right to a hearing, the purpose of the hearing in this case could only be to explore the facts surrounding the commission of the crime and the subsequent rehabilitation (if any) of the convicted felon. . . . This obviously is restricted here by the fact that appellant has not yet completed his sentence, but rather is on probation, so that the fact of the conviction has not receded and rehabilitation is not a recognizable factor. [Commissioner’s Brief, at 22].
      If the hearing were to proceed in this manner, with the irrebuttable presumption that a person who has been convicted of committing a crime and who is on probation is unfit to teach in the public schools, it might raise serious constitutional difficulties.
      Such irrebuttable presumptions are disfavored under the due process clause, Vlandis v. Kline, 412 U.S. 441, 446 [93 S.Ct. 2230, 37 L.Ed.2d 63] (1973), Cleveland Board of Education v. LaFleur, 42 U.S.L.W. 4186, 4190-91 [414 U.S. 632, 94 S.Ct. 791, 39 L.Ed.2d 52] (Jan. 21, 1974), and will be overturned if they are found to be neither “necessarily nor universally true.” LaFleur, 42 U.S.L.W. at 4190. The Court, however, has upheld the use of a per se rule to exclude a class of persons from a certain occupation, but it did so in the context of a rule which was established after a comprehensive investigation into the relationship between the class of persons excluded (those convicted of felonies) and the evil sought to be avoided (corrupt practices by waterfront union officials). DeVeau v. Braisted, 363 U.S. 144 [80 S.Ct. 1146, 4 L.Ed.2d 1109] (1960). Where no such legislative finding is present, exclusion from a profession can be justified only after a detailed and particularistic consideration of the relationship between the person involved and the purpose of exclusion. Schware v. Board of Bar Examiners, 353 U.S. 232 [77 S.Ct. 752, 1 L.Ed.2d 796] (1957).
      Moreover, there are factors present here which appear to evidence a need for a close inquiry. Appellant is a tenured teacher, and the school district forcefully asserts its desire to have him teach in Wilson Elementary School. At oral argument before Judge Foley, the school district argued that the children in the class to which appellant was assigned were suffering because they were being taught by a substitute teacher. The Commissioner’s view that probationary status is evidence of unfitness to teach is at odds with modern correctional theory. Such thinking bars persons with criminal records from many employment opportunities. See, generally, Employment of Former Criminals, 55 Cornell L.Rev. 306, 306-312 (1970), and The Collateral Consequences of Criminal Conviction, 23 Vand.L.Rev. 929, 1001-1018 (1970). These barriers to employment appear to be a major contributor to the high rate of recidivism which plagues society. President’s Commission on Law Enforcement and Administration of Justice, Task Force Report: Corrections, 32 (1967). The Task Force found that much of this regulation was unreasonable and explained this finding in this way:
      Most of the disabilities and disqualifications in this area [employment] result from the actions of various administrative agencies, rather than directly from the conviction. Such groups tend to be primarily concerned with advancing the interests o'f their own members. Thus, when faced with the problem of whether to license persons with criminal records, they may be unduly concerned with the effect on the status of their professions. Further, to the extent they try to consider the public interest, they are likely to have an unrealistic view of the importance of their own profession or occupation and the potential harm to the public that might be done by unfit persons.

        Id. at 91. While these comments may be more directly relevant to other professions, the message is not entirely inapposite in this case. Finally, it is conceivable that Pordum will be a better teacher .for his prison experience. See, e. g., Nordheimer, “Ex Convicts Teach Delinquents Crime Doesn’t Pay,” The New York Times, December 24, 1973, p. 7. “The best teachers, it [a project funded by the Federal Government] is trying to demonstrate, are those who have been through the nation’s corrections systems and know what it does to young minds.”
      However, we do not reach these questions or express any opinion thereon. After a thorough consideration of the matter, the Commissioner may conclude that there is an inevitable relationship between a criminal conviction, or between convictions of a type, and unfitness to teach and therefore deem a particularistic inquiry unnecessary in this case. Such a conclusion would be reviewable and might be found to be warranted. It must of course, be based on more than administrative convenience. LaFleur, 42 U.S.L.W. at 4191 [94 S.Ct. 791],


source: Caselaw Access Project

author: SPRECHER, Circuit Judge.

license: Public Domain

text:
    James R. FITZPATRICK, as Trustee of A. W. Sikking Co., Bankrupt, Plaintiff-Appellee, v. PHILCO FINANCE CORP., Defendant-Appellant.
    No. 73-1161.
    United States Court of Appeals, Seventh Circuit.
    Argued Jan. 10, 1974.
    Decided Feb. 21, 1974.

      Robert C. Walbaum, Richard R. Grummon, Springfield, Ill., for defendant-appellant.
    Conrad Noll, Jr., Robert E. Davlin, Springfield, Ill., for plaintiff-appellee.
    Before SWYGERT, Chief Judge, KILEY, Senior Circuit Judge, and SPRECHER, Circuit Judge.
   SPRECHER, Circuit Judge.

This appeal concerns the right to proceeds from secured collateral following the debtor’s bankruptcy.

Prior to 1969, A. W. Sikking Co. was a large and established appliance store in Springfield, Illinois. For some years Sikking had financed its purchase of Philco appliances through an agreement with Philco Finance Corp. Pursuant to that agreement, Philco had properly filed financing statements showing its secured interest in the appliances and in the proceeds of the collateral. As soon as Sikking sold an applicance, it was obligated under the agreement to pay the amount due on that item to Philco.

Philco products were distributed in the Illinois-Iowa area by Hardware Products Co. in Sterling, Illinois. Phil-co Finance had extended a credit line of $275,000 to Sikking as Hardware Products’ largest retail dealer.

Sikking’s practice in handling Philco sales was to write up a sales receipt on each appliance sold. The receipt noted the brand and kind of appliance, its model number, total price, cash down payment and financing arrangement. All cash payments were deposited in Sikking’s general account at Springfield Marine Bank. Much of the Philco merchandise was financed on retail installment contracts, which were sold to a finance company not affiliated with Phil-co. Proceeds from these contracts were deposited in the same account.

Sikking then drew checks on its account to pay Philco Finance under the security agreement. It appears that the checks usually noted separate Philco invoice numbers and amounts due for each transaction.

In 1969 several officers and directors of Sikking apparently became aware of mismanagement of the business by its president and general manager, Edward Curry. On July 15 they asked Curry to resign. At the urging of another secured creditor, two vice-presidents, Smith and Reilly, hired an accountant to determine the financial condition of the business.

The accountant, Harold Cox, began work on August 11. Although the books were in bad shape and he could not ascertain or verify the value of certain items, Cox prepared a “tentative” balance sheet which he reviewed with Smith and Reilly on September 3. It showed Sikking’s liabilities exceeded its assets by more than $160,000.

Smith arranged for a meeting the next day, September 4. Those attending included Smith, Reilly and Cox; H. R. Bertolet, manager of the Philco Finance office in Rock Falls, Illinois; Peter Wheeler, an officer of Hardware Products Co.; several men from General Electric Credit Corp.; and Robert Saner, an officer of Springfield Marine Bank. Cox distributed copies of the balance sheet and led a discussion of Sikking’s financial status. No decision about the future of the business was reached at the meeting.

Less than two weeks later, on September 16, Sikking’s officers filed a petition in bankruptcy.

The trustee in bankruptcy filed this action against Philco Finance to recover most of the funds Sikking paid to Philco during the ten-day period before bankruptcy was instituted. The trustee’s theory was that Philco’s security interest in proceeds was limited by Ill.Rev. Stat. ch. 26, § 9-306(4):

In the event of insolvency proceedings instituted by or against a debtor, a secured party with a perfected security interest in proceeds has a perfected security interest
(a) in identifiable non-cash proceeds;
(b) in identifiable cash proceeds in the form of money which is not commingled with other money or deposited in a bank account prior to the insolvency proceedings;
(c) in identifiable cash proceeds in the form of checks and the like which are not deposited in a bank account prior to the insolvency proceedings; and
(d) in all cash and bank accounts of the debtor, if other cash proceeds have been commingled or deposited in a bank account, but the perfected security interest under this paragraph (d) is
(i) subject to any right of set-off ; and
(ii) limited to an amount not greater than the amount of any cash proceeds received by the debtor within 10 days before the institution of the insolvency proceedings and commingled or deposited in a bank account prior to the insolvency proceedings less the amount of cash proceeds received by the debtor and paid over to the secured party during the 10 day period.

The trustee showed that between September 8 and 15 nine checks totaling $44,766.84 were charged against the Sikking bank account payable to Philco Finance. He also proved that proceeds from the sales of Philco appliances between September 6 and 15 totaled $4,513.44 ($664.95 cash down payments + $3,848.49 proceeds from retail installment contracts). Since section 9-306(4) (d) limits the security interest in proceeds to “an amount not greater than the amount of any cash proceeds received by the debtor within 10 days of the insolvency proceedings,” the trustee asked for the return of $40,253.40, the difference between the payments to Philco and the proceeds from Philco sales after September 5. The trustee claimed the $40,253.40 was a voidable preference under section 60 of the Bankruptcy Act, 11 U.S.C. § 96. Philco’s contention on appeal is simple. Ignoring section 9-306(4) (d), it says there can be no voidable preference because the first element under section 60(a)—“a transfer . . . within four months before the filing”—is missing. Phileo relies on Grain Merchants v. Union Bank & Savings Co., 408 F.2d 209 (7th Cir.), cert. denied, 396 U.S. 827, 90 S.Ct. 75, 24 L.Ed.2d 78 (1969), and similar cases. Grain Merchants holds that the transfer of a security interest in after-acquired collateral occurs at the time the financial statement is filed. When filing predates the bankruptcy by four months, the transfer of property such as accounts receivable in a “floating lien” situation does not constitute a voidable preference under the Bankruptcy Act. 408 F.2d at 212-215.

The gap in Philco’s reasoning is that the state law which creates the security interest also limits its application to commingled proceeds in the event of insolvency. Under section 9-306(4)(d), Phileo does not have a perfected security interest in the cash in Sikking’s bank account beyond the amount of cash proceeds Sikking collected after September 5. The financing statement does not cover the overage of $40,253.40, so the transfer of that amount in checks to Phileo occurred within the four-month period.

Nor do the two alternative rationales of Grain Merchants advance Philco’s position. There was no transfer “on account of an antecedent debt” in Grain Merchants because the accounts receivable that arose within the four-month period were part of the entity of collateral that was transferred to the secured creditor when the financing statement was filed. 408 F.2d at 215-217. The “entity theory” does not apply here because, by definition of section 9-306(4)(d), the overage is not a part of the collateral originally transferred to Phileo.

The “substitution of collateral doctrine” was used in Grain Merchants to show that the transfer to the creditor was for a substantially contemporaneous advance and did not deplete the estate. 408 F.2d at 217-218. The arrangement in Grain Merchants required the debtor to deposit all collections from its accounts receivable in an account at the creditor bank; the debtor was allowed to withdraw from that account to meet current expenses. During the four-month period preceding bankruptcy, the withdrawals were in line with the proceeds from new accounts receivable. There was always an excess of collateral over the secured debt. Because the relative positions of the creditor and debtor were unaltered, the other creditors were not harmed by the substitution of new collateral for prior released accounts.

In a sense, section 9-306(4) (d) is an implementation of the substitution of collateral doctrine. It allows a debtor to pay a secured creditor from commingled funds during the ten days before bankruptcy to the extent that the debtor has received cash proceeds within that period. But the doctrine cannot be extended to benefit a creditor such as Phileo which persuades a failing business to remit almost ten times the amount of current proceeds from the secured collateral, to the detriment of other secured creditors who were paid nothing from the bank account in the weeks before bankruptcy. Because of section 9-306(4) (d), proceeds collected before the ten-day period and commingled with other funds are not collateral which may be substituted for other collateral.

We conclude that the theories of Grain Merchants do not apply to commingled proceeds beyond the security interest granted in section 9-306(4) (d).

Finally, acknowledging section 9-306(4) (d) in its reply brief, Phileo argues that the limitation in subsection (ii) to an amount not greater than the amount of “any cash proceeds” refers to all receipts from any source deposited in the bank account, rather than to receipts from the sale of Phileo collateral. Such an interpretation ignores the definition of “proceeds” and perverts the intent of the legislature in adopting section 9-306. The current definition of “proceeds” in section 9-306(1) states: ‘“Proceeds’ includes whatever is received upon the sale, exchange, collection or other disposition of collateral or proceeds.” The grant of a security interest in commingled funds under section 9-306(4) (d) is not an expansion of the pre-Code right of a secured creditor to trace proceeds from the disposition of secured collateral into such funds; instead, it is a substitution for and a limitation upon that right. In re Gibson, 6 U.C.C.Rep.Serv. 1193 (W.D.Okl.1969); Girard Trust Corn Exchange Bank v. Warren, 25 Pa. D.&C.2d 395, 1 U.C.C.Rep.Serv. 531 (Pa.Ct. of C.P.1958); Uniform Commercial Code Comment, Ill.Rev.Stat. ch. 26, § 9-306, p. 403. To implement the statutory scheme, “any cash proceeds” in subsection (ii) must mean cash proceeds from the sale of collateral in which the creditor had a security interest.

Since proceeds from the sale of Philco appliances between September 6 and 15 were only $4,513.44, the overage of $40,253.40 is a voidable preference and must be returned to the trustee.

Philco next challenges the referee’s findings of facts relative to three other elements of a voidable preference. We have reviewed the record and find ample evidence to support the referee’s findings on each point.

1. “Antecedent debt.” Philco argues that the payments it received between September 6 and 15 were for merchandise sold during August and early September and thus were for current accounts. But supposedly Philco was not selling to Sikking on open account; the financing agreement on which Philco relies required payment immediately upon the retail sale of each item. The record contains acknowledgements by witnesses on both sides that Sikking for some months had been selling Philco merchandise “out of trust.” The trustee adequately proved that the September 6-15 payments, amounting to ten times the proceeds from sales during the period, were made “on account of an antecedent debt,” as required by 11 U.S.C. § 96(a)(1).

2. “Preferential treatment.” As a secured creditor, Philco was entitled to all the remedies provided by the Illinois Uniform Commercial Code. Instead of insisting on immediate payment or segregation of proceeds, Philco allowed Sikking to commingle proceeds in a general bank account and to fall far behind in its obligations. Philco then looked to the general bank account to satisfy its secured interest. By transferring to Philco commingled proceeds over and above current sales, Sikking gave Philco preferential treatment not accorded several other secured creditors. Philco calls attention to transfers made to two secured creditors during the period, but these were transfers pursuant to remedies available to the secured creditors. The cheeks to Philco depleted Sikking’s only cash resources and enabled Philco to obtain a greater percentage of its debt than other secured creditors who received no payments. 11 U.S.C. § 96 (a)(1).

3. “Reasonable cause to believe that the debtor is insolvent.” 11 U.S.C. § 96(b) allows the trustee to avoid a preference “if the creditor receiving it . or his agent acting with reference thereto has, at the time when the transfer is made, reasonable cause to believe that the debtor is insolvent.” Phil-co’s remarkable argument is that- H. R. Bertolet, manager of its Illinois-Iowa office in Rock Falls, Illinois, was not its “agent.” Cases interpreting this section hold that virtually any employee of Phil-co would be its “agent” if he were dealing with Sikking. 3 Collier on Bankruptcy 1084-87 (14th ed. 1971). Phil-co emphasizes the limitations on Bertolet’s authority by the home office in Philadelphia. But the fact remains that Bertolet was Philco’s man on the scene. He was the only one in the Philco organization who was in a position to notice changes in a dealer’s record of payments and to investigate its financial status. Bertolet had suspended financing because of Sikking’s delinquency for a short time in May of 1969. He read credit reports on Sikking. He traveled to Springfield occasionally to check Sikking’s inventory of Philco appliances.

As Phileo’s agent, Bertolet had substantial cause to believe that Sikking was insolvent in September 1969. Besides the storm warnings of the May suspension and unfavorable Dun and Bradstreet reports, Bertolet attended the September 4 meeting and saw the accountant’s tentative balance sheet which showed $160,000 more liabilities than assets. Others attending the meeting concluded from the accountant’s presentation that Sikking was insolvent and would have to declare bankruptcy. Bertolet’s actions following the meeting are further evidence of his knowledge of Sikking’s insolvency. On September 10-12 he came to Springfield to take inventory at Sikking. On the 12th, he asked a Sikking vice president for a check for more than $30,000 for “missing” appliances and took the unusual step of having the check certified. The record sufficiently documents the referee’s finding that Philco Finance through Bertolet had reasonable cause to believe Sikking was insolvent.

Philco advances as error on the referee’s part his ruling that the trustee could call H. R. Bertolet as an adverse witness under Rule 43, Fed.R.Civ.P., or as a witness whose interest is adverse under 11 U.S.C. § 44(j). Either procedure was correct, since Bertolet could be considered a managing agent under the more stringent Rule 43. Pietrucha v. Grant Hospital, 447 F.2d 1029 (7th Cir. 1971); Rea v. Ford Motor Co., 355 F. Supp. 842, 882 (W.D.Pa.1972).

Philco also argues that the trustee should have subpoenaed Bertolet, who had been sitting at the counsel table with Phileo’s attorney for the four days of trial before he was called. Philco did not object to Bertolet’s testifying on the grounds he had not been subpoenaed; its only objection was that he was not an adverse witness. If Philco had raised the subpoena objection at the time, the trustee could have obtained a subpoena from the clerk of the court and served it on Bertolet in the courtroom. The necessity for this procedure is doubtful, however, since the implication of Rule 43 and 11 U.S.C. § 44(j) is that an adverse witness who is present in the courtroom may be called to testify without subpoena.

A final issue raised by Philco is the time of transfer of three checks dated September 2, received and deposited by Philco in Rock Falls on September 4, and paid by Springfield Marine Bank from Sikking’s account on September 8. This question has never been decided for a check that is not post-dated, that has funds to cover it, and that is deposited and paid in the regular course of business. The better view seems to be that payment of the check by the drawee, rather .than the sending or receipt of the check, constitutes the transfer under the Bankruptcy Act. 3 Collier on Bankruptcy 820-23 (14th ed. 1971). Therefore the $5,206.30 represented by the three checks was paid to Philco within the ten-day period and must be deducted from the amount to which Philco is entitled under section 9-306(4) (d) (ii).

The judgment of the referee and the district court is affirmed.

Affirmed.

      . Sikking’s only other bank account was a payroll account at the same bank. Funds from the general account were deposited to it to cover payroll checks.

      . This is the version of section 9-306(4) of the Uniform Commercial Code that was in effect in Illinois in 1969. The section as amended effective July 1, 1973, is set out below; however, the differences in language would not affect the analysis in this opinion.
      In the event of insolvency proceedings instituted by or against a debtor, a secured party with a perfected security interest in proceeds has a perfected security interest only in the following proceeds:
      (a) in identifiable non-cash proceeds and in separate deposit accounts containing only proceeds;
      (b) in identifiable cash proceeds in the form of money which is neither commingled with other money nor deposited in a deposit account prior to the insolvency proceedings;
      (c) in identifiable proceeds in the form of checks and the like which are not deposited in a deposit account prior to the insolvency proceedings; and
      (d) in all cash and deposit accounts of the debtor, in which proceeds have been commingled with other funds, but the security interest under this paragraph (d) is
      (i) subject to any right of set-off; and
      (ii) limited to an amount not greater than the amount of any cash proceeds received by the debtor within 10 days before the institution of the insolvency proceedings less the sum of (I) the payments to the secured party on account of cash proceeds received by the debtor during such period and (II) the cash proceeds received by the debtor during such period to which the secured party is entitled under paragraphs (a) through (c) of this subsection (4).

      . The 1973 definition is “a rephrasing of prior text without change of substance.” Illinois Code Comment, Ill.Rev.Stat. ch. 26, § 9-306 (1973-74 Supp., p. 96).

      . In view of the extensive speculation about the potential conflict between section 9-306(4) (d) and the Bankruptcy Act, it is somewhat surprising that the trustee did not challenge Philco’s right to the $4,513.44 paid from commingled funds. II Gilmore, Security Interests in Personal Property 1337-44 (1965) ; Henson, “‘Proceeds’ under the Uniform Commercial Code,” 65 Columbia Law Review 232 (1965) ; 4A Collier on Bankruptcy 708-10 (14th ed. 1971) ; Gillombardo, “The Treatment of Uniform Commercial Code Proceeds in Bankruptcy: A Proposed Redraft of Section 9-306,” 38 University of Cincinnati Law Review 1 (1969).
      Since the trustee did not raise this intriguing issue here or below, we cannot consider it.


author: DUNIWAY, Circuit Judge:

text:
    PACIFIC MARITIME ASSOCIATION and California Stevedore and Ballast Co., Plaintiffs-Appellants, v. Frank A. QUINN, as an Individual and Frank A. Quinn, as Regional Director of the Equal Employment Opportunity Commission, et al., Defendants-Appellees. INTERNATIONAL LONGSHOREMEN'S & WAREHOUSEMEN'S UNION, LOCAL 34, Plaintiff-Appellant, v. Frank A. QUINN et al., Defendants-Appellees.
    Nos. 71-2710, 71-2868.
    United States Court of Appeals, Ninth Circuit.
    Feb. 19, 1974.
    Dennis T. Daniels (argued), Richard Ernst, Ernst & Daniels, Norman Leonard (argued), Gladstein, Andersen, Leonard, Sibbett & Patsey, San Francisco, Cal., for plaintiff-appellant.
    Ramon V. Gomez (argued), Gerald R. Lopez, EEOC, Office of the General Counsel, Washington, D. C., Chester F. Relyea, EEOC, SF Litigation Center, San Francisco, Cal., for defendants-appellees.
    Before DUNIWAY and WRIGHT, Circuit Judges, and EAST, District Judge.

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

   OPINION

DUNIWAY, Circuit Judge:

This action arises under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. On September 9, 1969, Clarence Harrison, Jr., filed with the Equal Employment Opportunity Commission (EEOC) created by 42 U.S.C. § 2000e-4, a charge of discrimination in employment. The charge was against Harrison’s employer, California Stevedore and Ballast Company (CS&B), Pacific Maritime Association (PMA), a collective bargaining agent for the employers, including CS&B, and International Longshoremen’s & Warehousemen’s Union, Local 34 (Local 34). Harrison stated the charge as follows:

“From October 1968 & continuing to this present time I have been denied the opportunity to work at the supervisorial level by the above organizations. I believe this treatment is discriminatory in nature. I am a Negro.”

The only other information about the charge that is in the record is a letter from CS&B to the Chief of the Cargo Division of the Oakland Army Base where Harrison worked, dated October 21, 1968, which is set out in the margin.

EEOC in due course served, upon PMA, Local 34, and CS&B demands for access to documents authorized by 42 U. S.C. §§ 2000e-8(a) and 2000e-9(a) and (b). Within twenty days, PMA, Local 34, and CS&B filed this action under § 2000e-9(c), seeking to modify or set aside EEOC’s demands. EEOC cross-petitioned for enforcement under § 2000e-9(b). The trial court entered an order modifying and enforcing the demands, and PMA, Local 34, and CS&B appeal.

The only question presented is whether EEOC lacked jurisdiction because the act of discrimination complained of occurred more than 210 days before Harrison filed his complaint with EEOC, 42 U.S.C. § 2000e-5(d) as it read when the complaint was filed. It seems to be agreed by the parties that the letter of October 21, 1968, is what Harrison referred to in his complaint when he said “From October 1968.

Appellants argue that what happened on or about October 21, 1968, assuming that it was a violation of the Act, is not, as a matter of law, a continuing violation, and that therefore EEOC lacks jurisdiction, more than 210 days having passed before Harrison filed his complaint.

We accept, for the purpose of this case, the proposition urged by appellants that the timely filing of a complaint is “jurisdictional.” We have no quarrel with the eases cited by appellants which hold or say (more of them say than hold) the various acts of discrimination are not “continuing.” With one exception, all of these cases arise in a different context, an action by a complainant for relief, following the inability of EEOC to resolve the matter.

The posture of this case is different. It is in the investigative, not the adjudicative, stage, involving a demand by EEOC for access to evidence. Harrison alleged that the discrimination of which he complained was one which was “continuing to this present time,” and the purpose of the EEOC demand is to determine whether it has “reasonable cause to believe that the charge is true.” 42 U.S.C. § 2000e-5(a). As the cases show, some violations are of a continuing nature.

The crucial issue then becomes: What is the scope of judicial review of the controversy before us ? Here, the EEOC does not claim to have reasonable cause to believe that the charge is true; rather, it is making an investigation to find out whether there is such reasonable cause. The standard of review is contained in the statutory grant of the Commission’s investigative authority: the material sought must be “relevant or material to the charge under investigation.” In a case that was appealed to the Fourth Circuit in a setting like this one, the court stated:

“The EEOC in its investigation is seeking only to determine the existence of reasonable cause to believe that the charge is true. See 42 U.S.C. § 2000e-5(a). . . . The statutory standard to be applied in a Demand enforcement proceeding is one of relevancy and materiality, not one of reasonable cause to believe the charge is true. 42 U.S.C. § 2000e-9(a).” Graniteville Co. (Sibley Division) v. EEOC, 4 Cir., 1971, 438 F.2d 32, 36. (emphasis in original)

See also Manpower, Inc. v. EEOC, D.C.E.D.Wis., 1972, 346 F.Supp. 126, 128.

We think that the statute of limitations issue has been raised prematurely. The appellants have said: Every demand made by the EEOC is irrelevant, because the charge filed was too late. The district court responded on the appellants’ own terms: The EEOC’s demands are relevant, because the violation charge is a continuing one. The proper response of the district court to the appellants should have been: We do not know whether or not the violation, if any, is a continuing one; one of the reasons for conducting the investigation is to determine the answer to that very question.

We must allow the Commission to see all relevant evidence on this charge; the Commission can then decide whether it thinks that the violation is a continuing one, and, if so, whether it has reasonable cause to believe the charge is true. All that we now know is that:

1. The drug episode and demotion occurred in October, 1968, and Harrison did not file his charge until September, 1969, and

2. Harrison was restricted “to clerks [sic] work only with no supervisorial assignment until such time as there is reason to believe he will perform his work with diligent application to avoid careless human error,” and

3. Harrison says that the violation is “continuing to the present time,” i. e., September 9, 1969.

Does this constitute a continuing violation? We really do not know. For example, if Harrison had asked for a promotion to supervisor in August, 1969, and had been refused for racial reasons, this would be a continuing violation. Suppose that it turns out that there is an August, 1969, internal memorandum in the files of CS&B evaluating Harrison’s work, which says: “Harrison has been our best worker this year. His work is diligent and he has made no errors in accounting for the drugs that he has unloaded.”? At that point, a failure to give Harrison supervisorial work might well be evidence of a continuing violation, so that the charge was timely filed. The point is that neither we nor the Commission know what evidence there is; there are not enough facts to rule on the question EEOC is entitled to conduct its investigation. When that has been done, the continuing violation question will be ripe.

For the purpose of this opinion, we assume that the statute of limitations issue is “jurisdictional,” and that, if the statute is a bar, EEOC cannot proceed. But EEOC ought to be allowed to determine, in the first instance, whether it has jurisdiction, i. e., whether the violation is a continuing one. It cannot properly make that determination without first getting the relevant facts.

Appellants claim that EEOC’s demand for evidence is overbroad. The district court upheld that claim, in part. Our decision is without prejudice to appellants’ right, or to the district court’s power, further to restrict the breadth of the demand, if the court be so advised.

Affirmed.

      . “Subject: Missing Drugs
      This confirms our conversation on the inaccurate receiving of drugs by C. Harrison, # 13031 on 1 October 1968 at pier 6.
      Harrison has worked at MOTBA, North as a clerk quite regularly during the last few years and sometimes in a supervisorial capacity. In view of the specific incident, disciplinary action was immediately invoked by California Stevedore and Ballast Company as follows:
      (1) Verbal reprimand.
      (2) Restriction to clerks work only with no supervisorial assignments until such time as there is reason to believe he will perform his work with diligent application to avoid careless human error.”

      . Choate v. Caterpillar Tractor Co., 7 Cir., 1968, 402 F.2d 357, 359 (“jurisdictional precondition to the commencement of a court action” by a complainant.) ; Graniteville Co. (Sibley Division) v. EEOC, 4 Cir., 1971, 438 F.2d 32 (dictum—does not deal with time limitation). Cf. Malone v. North American Rockwell Corp., 9 Cir., 1972, 457 F.2d 779; Boudreaux v. Baton Rouge Marine Contracting Co., 5 Cir., 1971, 437 F.2d 1011, 1014-1015, fn. 6; Hutchings v. U. S. Industries, Inc., 5 Cir., 1970, 428 F.2d 303, 308-309, which permit tolling of the limitation in certain cases.

      . Younger v. Glamorgan Pipe and Foundry Co., D.C., W.D.Va., 1969, 310 F.Supp. 195, 197 (job transfer) ; Hutchings v. U. S. Industries, Inc., D.C., E.D.Tex., 1969, 309 F.Supp. 691, 693 (discontinuance of job assignment), reversed on other grounds, 5 Cir., 1970, 428 F.2d 303; Griffin v. Pacific Maritime Ass’n, 9 Cir., 1973, 478 F.2d 1118, 1120 (layoff) ; Gordon v. Baker Protective Services, Inc., D.C., N.D.Ill., 1973, 358 F.Supp. 867 (discontinuance of job assignment) ; Guerra v. Manchester Terminal Corp., D.C., S.D.Tex., 1972, 350 F.Supp. 529 (job transfer).

      . The only case cited involving a demand for access to evidence, Molybdenum Corp. of America v. EEOC, 10 Cir. 1972, 457 F.2d 935, held that the charge was timely. There were two refusals to hire, one of which was within the time limit.

      . A charge filed by a layman should be liberally construed, Cox v. U. S. Gypsum Co., 7 Cir., 1969, 409 F.2d 289, 290; “A layman’s claim of ‘continuing’ discrimination, after a discriminatory layoff, readily suggests that he claims there has been a subsequent recall or new hiring which discriminates against him.” See also Graniteville Co. (Sibley Division) v. EEOC, supra.

      . Cox v. U. S. Gypsum Co., supra; Sciaraffa v. Oxford Paper Co., D.C., Me., 1970, 310 F.Supp. 891 (layoff followed by failure to rehire) ; Banks v. Lockheed-Georgia Co., D.C., N.D.Ga., 1968, 46 F.R.D. 442 (discriminatory system of hiring) ; Boudreaux v. Baton Rouge Marine Contracting Co., 5 Cir., 1971, 437 F.2d 1011, 1014-1015 (discriminatory system of assigning work) ; Belt v. Johnson Motor Lines, Inc., 5 Cir., 1972, 458 F.2d 443 (discriminatory system of transferring to better jobs) ; Motorola, Inc. v. EEOC, D.C., Ariz., 1968, 317 F.Supp. 282 (practice of discrimination against Negroes, Spanish surnamed, and Indians).


author: HILL, Circuit Judge.

text:
    Dorothy HAMMER, Plaintiff-Appellant, v. Joyce E. Jordan STANLEY, Defendant-Appellee.
    No. 73-1288.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted Sept. 11, 1973.
    Decided Dec. 18, 1973.

      Howard A. Spies, Topeka, Kan., for plaintiff-appellant.
    James E. Benfer, Topeka, Kan. (David L. McLane, Topeka, Kan., on the brief), for defendant-appellee.
    Before CLARK, Associate Justice, LEWIS, Chief Judge, and HILL, Circuit Judge.

       Associate Justice, United States Supreme Court, Retired, sitting by designation.

   HILL, Circuit Judge.

In this diversity action appellant guest passenger sued appellee host driver for injuries sustained in a one-car accident. The jury found appellee grossly and wantonly negligent in operating the car, and awarded appellant $15,500 in damages. After the jury’s verdict the trial court sustained appellee’s motion for judgment notwithstanding the verdict on the theory that as a matter of law under the Kansas Guest Statute, KSA 8-122b (1964), the evidence did not support a finding that appellee’s operation of the automobile constituted gross and wanton negligence.

The judgment, n. o. v. presents a question of law whether there is any evidence tending to prove that appellee possessed such an attitude of reckless disregard and complete indifference to the safety of appellant that it constituted gross and wanton negligence. On this question we must, under the familiar rule, take only the evidence most favorable to appellant and - draw the inferences in the light most favorable to her.

The evidence under the above stated rule shows that on the evening of July 26, 1969, appellant Dorothy Hurla Hammer was seriously injured when appellee Joyce Jordan Stanley’s automobile swerved into a ditch at the intersection of Jennings Road and Northwest 46th Street in Shawnee County, Kansas. The story unfolds earlier in the evening, however, when approximately twenty teenagers, including Hammer and Stanley, held a party at the home of Stanley’s grandparents outside Topeka, Kansas. Intoxicating beverages were present at this party, and apparently Stanley consumed three cans of 3.2 beer, two “cherry vodkas”, and possibly one other mixed drink. At approximately 11:00 p. m. Hammer, Stanley and another girl decided to go into town either to get more Cokes or “to get more boys” for the party. Hammer’s cousin who was also at the party warned Stanley that she had consumed too many drinks to be driving and offered to take the girls into town. The offer was refused; instead Stanley drove her own car with Hammer and another girl as passengers. Shortly after leaving the party Stanley thought some boys were following them in another car, so she eluded the boys by turning off on Jennings Road. While driving along Jennings Road at approximately 40 m. p. h., which was well within the speed limit, Stanley lighted up a cigarette. While her attention was diverted she apparently missed the sign warning of the “T” intersection ahead. As she approached the end of Jennings Road she also failed to notice the stop sign. Upon finally observing the dead-end she slammed on her brakes but was unable to stop the car before it careened into the ditch on the other side of Northwest 46th Street.

There were no eye witnesses to the accident. Neither Hammer nor the other passenger in Stanley’s automobile had any recollection of the events immediately preceding the accident. There was evidence that at the time of the accident Stanley was not wearing her glasses as required by her driver’s license. There was also evidence that earlier in the day she had been admonished by a passenger to slow down when she was driving out to the party. Stanley testified she had never been at the intersection of Jennings Road and Northwest 46th Street before, and did not know that Jennings Road was graveled, rough, and of a “washboard effect”.

“ After Hammer’s case was presented to the jury, counsel for Stanley moved for a directed verdict. The trial court took the motion under advisement and allowed Stanley to present her case. Upon completion of Stanley’s case her counsel again moved for a directed verdict, and again the trial court took it under advisement. As noted previously, after the jury found for Hammer, the trial court took affirmative action and rendered judgment for Stanley notwithstanding the verdict.

Whether the district court erred in granting the judgment n. o. v. depends upon the meaning of gross and wanton negligence under the Kansas Guest Statute. The question of whether Hammer was a guest in Stanley’s car was not raised, and thus we narrow our decision to what the Kansas Supreme Court would do if it were determining the gross and wanton negligence question in this case. Kansas Statutes Annotated 8-122b states:

That no person who is transported by the owner or operator of a motor vehicle, as his guest, without payment for such transportation, shall have a cause of action for damages against such owner or operator for injury, death or damage, unless such injury, death or damage shall have resulted from the gross and wanton negligence of the operator of such motor vehicle.

There is no paucity of Kansas cases interpreting the phrase “gross and wanton negligence” as used in the guest statute. Some of the reported cases include: Bacon v. Werner, 207 Kan. 26, 484 P.2d 1020 (1971); Reynolds v. Estate of Stanosheck, 206 Kan. 714, 482 P.2d 440 (1971); Muhn v. Shell, 196 Kan. 713, 413 P.2d 997 (1966); Saunders v. Shaver, 190 Kan. 699, 378 P.2d 70 (1963); MacDougall v. Walthall, 174 Kan. 663, 257 P.2d 1107 (1953); Elliott v. McKenzie, 180 Kan. 344, 304 P.2d 550 (1956). Probably one of the most cogent definitions of gross and wanton negligence is that found in Saunders v. Shaver, supra:

A wanton act is something more than ordinary negligence, and yet it is something less than willful injury; to constitute wantonness, the act must indicate a realization of the imminence of danger and a reckless disregard and complete indifference and unconcern for the probable consequences of the wrongful act. It is sufficient if it indicates a reckless disregard for the rights of others with a total indifference to the consequences, although a catastrophe might be the natural result. (378 P.2d at 71-72).

Put another way, the defendant driver’s conduct must be such as to indicate that he is willing in injure the passengers in the automobile, or that with a realization of imminent danger he is so indifferent to the consequences as to amount to a willingness to injure. Stout v. Gallemore, 138 Kan. 385, 26 P.2d 573 (1933). To determine whether an act is gross and wanton we must look to the wrongdoer’s mental attitude. If he realizes the imminent danger and yet shows reckless disregard, indifference and unconcern for the probable consequences of his acts, he is guilty of gross and wanton conduct. Muhn v. Shell, supra.

Recovery under the Kansas Guest Statute is difficult. For example, in Reynolds v. Estate of Stanosheck, supra, plaintiff’s daughter was injured when defendant driver drove his automobile into a train at a railroad crossing. The evidence indicated the train was traveling along the railroad tracks at approximately 12 m. p. h.; the bell was ringing continuously; and the whistle was blown at every railroad crossing. The crossing was not hidden, obstructed or difficult to see. The evidence plainly showed that the defendant was careless in watching for trains and that nothing obstructed his view of the oncoming train. Nevertheless, the Kansas Supreme Court determined as a matter of law that defendant’s failure to observe the train constituted no more than ordinary negligence and thus denied plaintiff recovery under the guest statute.

'Another ease indicating the difficulty of recovering under the guest statute is Bacon v. Werner, supra. In Bacon plaintiff passenger was injured when defendant driver failed to negotiate a curve in the highway. The evidence indicates that plaintiff and defendant spent from 7:00 p. m. to 2:00 a. m. one evening shooting pool and drinking beer. While traveling to another location defendant turned a corner at an excessive rate of speed and lost control of his car. The curve was properly marked with a sign saying “Slow, Dangerous Curve” and there were approximately ten reflector signs on each side of the road indicating the curve. Officers making out the official report described the accident in these terms:

Vehicle was headed north on Clifton Ave. Failed to reduce speed for curve, went over embankment.

The speed was estimated at approximately 65 miles per hour, and drinking was indicated as an accident factor in the report. The Kansas Supreme Court, in holding for defendant, found that defendant’s conduct did not show a willingness to injure plaintiff, nor did it show that defendant realized imminent danger but was so indifferent to the consequences as to constitute a willingness to injure.

In the instant case we cannot find Stanley grossly and wantonly negligent as required under Kansas law. Unquestionably she was careless in driving her vehicle without wearing her eyeglasses and in taking her eyes off the road while lighting a cigarette. Nowhere, however, has there been evidence that she realized imminent danger but was indifferent to the consequences. On the contrary, the uncontroverted evidence shows that Stanley was driving her car well below the speed limit. She did not observe the stop sign at the intersection until it was too late, but when she did notice the stop sign she immediately slammed on her brakes. The uncontroverted testimony is that she was unfamiliar with Jennings Road and thus had no way of knowing that it was graveled, rough, and of a washboard effect. In conclusion, the evidence shows that Stanley failed to keep a proper lookout while approaching the “T” intersection, but there has been no evidence showing her intent to drive recklessly without regard for the safety of her passengers.

We therefore affirm the trial court’s decision awarding Stanley judgment notwithstanding the verdict.


author: ALDRICH, Senior Circuit Judge: SNEED, Circuit Judge

text:
    UNITED STATES of America, Plaintiff, Appellee, v. Daniel GERARD, Defendant, Appellant. UNITED STATES of America, Plaintiff, Appellee, v. Harold Eugene GOLDSTEIN, Defendant, Appellant.
    Nos. 72-3128, 72-3129.
    United States Court of Appeals, Ninth Circuit.
    Feb. 6, 1974.

      Alvin S. Michaelson (argued), Los Angeles, Cal., for appellant Gerard.
    Henry Huntington Rossbacker, Los Angeles, Cal. (argued), for appellant Goldstein.
    Brendan D. Lynch, Asst. U. S. Atty. (argued), William D. Keller, U. S. Atty., and Eric A. Nobles, Asst. U. S. Atty., Los Angeles, Cal., for appellee.
    Before ALDRICH, DUNIWAY and SNEED, Circuit Judges.

       Hon. Bailey Aldrich, United States Senior Circuit Judge, First Circuit, sitting by designation.

   ALDRICH, Senior Circuit Judge:

Our conclusion that there must be a new trial essentially limits our consideration in this case to one ground we find sufficient in itself—the government’s coverup of its relations with its principal witness, an alleged accomplice of the defendants. The underlying facts are these. Defendants Gerard, Goldstein and DeVito were indicted on a three-count indictment in connection with counterfeit Federal Reserve notes. 18 U.S.C. §§ 2, 371, 472 and 473. All three pleaded guilty to Count I (conspiracy), but at the sentencing a problem arose and the court allowed the withdrawal of the pleas. All were then reindicted on the same counts, with a fourth count added against Gerard. DeVito pleaded guilty again on the conspiracy count, but his sentencing was postponed until after the trial of the others. The other defendants, the present appellants, went to trial, with DeVito a key witness against them. They were convicted on all counts.

Prior to trial defendants sought unsuccessfully to learn of any government promise to DeVito. We agree, at least for present purposes, that the government was not obliged to disclose in advance the possible vulnerability of its witnesses and we mention this only to show that the defendants’ interest in this subject at trial could not have caught the government by surprise. With regard to the government’s withholding of information at trial we will proceed in the following order. First, a statement of applicable principles; second, by way of anticipation, the government’s explanation of any nondisclosure of its full dealings with DeVito, and last, what the record in fact shows.

The basic principle is clear enough: the government is obliged to disclose pertinent material evidence favorable to the defense, and this applies not only to matters of substance, but to matters relating to the credibility of government witnesses. Giglio v. United States, 405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104 (1972) ; Napue v. Illinois, 360 U.S. 264, 79 S.Ct. 1173, 3 L.Ed.2d 1217 (1959); United States v. Hibler, 463 F.2d 455, 460 (9th Cir. 1972); Loraine v. United States, 396 F.2d 335 (9th Cir. 1968), cert. denied 393 U.S. 933, 89 S.Ct. 292, 21 L.Ed.2d 270. There is a subsidiary principle: the government’s motives in suppressing evidence may be material in determining whether a new trial is necessary. True, if the suppressed evidence is of unquestionable materiality, the government is not saved by good motives. Brady v. Maryland, 373 U.S. 83, at 87, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). On the other hand, when the suppressed evidence is of less obvious materiality, improper prosecutorial motives may be relevant for one of two reasons. The fact that a prosecutor intentionally fails to perfom his duty may be regarded as an admission that performance would injure the government’s case; an admission, so to speak, of prejudice which might, particularly in close cases, tip the scales. See, e.g., Napue v. Illinois, ante, 360 U.S. at 270, 79 S.Ct. 1173. Alternatively, even though we could not be persuaded that the defendant had been seriously prejudiced, if the prosecutorial conduct was censorable we might reverse a conviction in the interest of keeping the administration of justice beyond the “suspicion of reproach,” or, perhaps, as a prophylactic against willful prosecutorial misconduct. Kyle v. United States, 297 F.2d 507, 514 (2d Cir. 1961); see Mooney v. Holohan, 294 U.S. 103, 112-113, 55 S.Ct. 340, 79 L.Ed. 791 (1935); cf. Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652 (1914).

The government’s position (in a brief filed by other than trial counsel) was that the court permitted full cross-examination as to DeVito’s understanding of his agreement with the government, including even DeVito’s subjective conclusion as to what the government’s sentencing recommendation would be.

“[DeVito] testified that the prosecutor, Mr. MacIntyre ‘ . . . says he would make a recommendation on the day of my sentence to the Judge and it was entirely up to the Judge—the Judge’s own discretion whether he would accept it or not.’ ”
“[DeVito] testified that he ‘expected the Government’s recommendation would help him get the lightest possible sentence:’ and that he had ‘never been told by anyone that the recommendation would be for probation.’ ”

Thus the defendants, the government says, had ample opportunity to put before the jury the full relationship between DeVito and the government. Finally, the government pointed out that certain self-contradictory testimony by the prosecutor, Mr. MacIntyre, was not given in the presence of the jury and therefore was not prejudicial, and asserted that what took place during the summation, post, was not error.

We turn to the record facts referred to in defendants’ briefs. Early during cross-examination De Vito said that the prosecutor had told him that in return for testifying he would make a “recommendation” as to his sentence, but that he did not state what it would be. However,‘he did later say that he did expect probation. After the jury was excused for the day, defense counsel put the prosecutor on the stand. His testimony was that although he told DeVito he would make a recommendation, he “believed” he did not tell anyone what the recomihendation would be. The next day, in the continued absence of the jury, in response to further pressing by the defense, he admitted that he told DeVito’s counsel that he was going to recommend probation. The reason for this reluctance is elusive. Unobserved by counsel and by the court, DeVito was in the courtroom at that time. When his presence was discovered, in response to a question by the court he said his attorney had not disclosed this recommendation to him. The court then prohibited any further inquiry or mention of this promise, to the attorney in the presence of the jury.

A “recommendation” that a defendant hoped would be for probation, and a positive commitment to recommend probation are two very different matters. Whatever is the commitment must be kept. Santobello v. New York, 404 U.S. 257, 92 S.Ct. 495, 30 L.Ed.2d 427 (1971). The jury should have been permitted to find that DeVito in fact knew the full promise. His denial that his attorney had told him should not have ended the matter, for it was DeVito’s very credibility that was at stake. The prosecutor admitted that he had not requested DeVito’s counsel to keep the promise secret from his client, and a jury could reasonably infer that counsel would in fact communicate. Indeed, we can scarcely doubt that he would. There is no reason for the prosecutor to make the promise, except for its intended effect upon the witness.

Defendants were not only deprived of all evidence of this promise, but the prosecutor failed to disclose at trial that DeVito was in separate and further difficulties, this time involving counterfeit government securities, giving him further reason for “cooperating” with the government. This matter came to the defense’s attention only aft-, er trial, when, at DeVito’s sentencing, his “cooperation” was detailed and he received here, also, a suspended sentence and probation. In the light of our clearly announced rule it is difficult to think that the prosecutor’s failure to disclose this further interest of DeVito’s was inadvertent. Hibler v. United States, ante, 463 F.2d at 459; Rhinehart v. Rhay, 440 F.2d 718, 723 (9th Cir. 1971).

Instead of making disclosure, the prosecutor elevated and exacerbated the situation. When, during the summation, defense counsel argued that DeVito “is going to get sentenced after this case. He has a deal. Whatever that deal is, I don’t know,” the prosecutor objected. “That is an improper statement, your Honor. There is no evidence of that whatsoever.” The court replied, “I think that is certainly an improper statement. Now, you can state what the testimony is, but that wasn’t the testimony.” Counsel dropped the matter by referring to the jury’s memory.

It may be that this exchange was technically correct, depending on- how one interprets the word “deal.” We may observe, however, that for a prosecutor to fail to keep his promise as to a recommendation is enough to require the court to vacate a plea. Santobello v. New York, ante. It is with this background that we view the prosecutor’s further remarks which the government says were not prejudicial.

“The fact that they state to you that there was a deal made, is ridiculous. Because I have nothing to do with sentencing whatsoever. . . .”

This, of course, was not true; otherwise there would be no point in even discussing recommendations.

“Mr. DeVito . . . has nothing to gain in this case, except here in court having the court hear him testify, that is it.”

This, equally, was not true. With the court’s exclusion of the specific promise of probation on the one hand, the downgrading of even the admitted evidence of the witness’ hope for indulgence on the other, and the concealment of significant further evidence supportive of that hope, we cannot feel that defendants have had a full opportunity of attacking the credibility of a, and in the case of one defendant, the, main witness against them. There must be a new trial.

A separate point is raised by Gerard in connection with Count 4, against him alone, added by the second indictment. This charged him with carrying a firearm during the commission of the previously alleged felonies, in violation of 18 U.S.C. § 924(c). The matter is material because the court imposed a separate, and in this instance, a consecutive sentence. Gerard claims that under North Carolina v. Pearce, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969), this count, and this sentence, were impermissible infringements on his right to assert the invalidity of his plea.

Pearce held that, absent some proper reason affirmatively shown for imposing a longer sentence after the first had been vacated by reason of error committed at the trial, an increase of sentence was constitutionally impermissible as bearing the appearance of vindictiveness for taking the appeal; the Court pointing out that fear of vindictiveness might discourage meritorious appeals. Rejecting claims of double jeopardy and equal protection, the Court did not bar increased sentences for proper reasons, but held that such reasons must be restricted to demonstrated events occurring subsequently to the first sentencing. The basis of the Pearce opinion was recently re-emphasized when the Court held that it was not necessary that such reasons appear if the circumstances precluded the possibility of improper motivation. Chaffin v. Stynchcombe, 412 U.S. 17, 93 S.Ct. 1977, 36 L.Ed.2d 714 (1973) (second jury set sentence, not knowing of first); see also Colten v. Kentucky, 407 U.S. 104, 92 S.Ct. 1953, 32 L.Ed.2d 530 (1972).

Sentencing after a retrial is not the sole area for the application of Pearce. In the course of that opinion the Court affirmed the decision in Rice v. Simpson, 274 F.Supp. 116 (M.D.Ala.1967). Rice had been convicted in the state court on guilty pleas, but, while serving his sentence, had persuaded the state court to set aside the conviction and pleas due to lack of representation by counsel. Upon conviction following a full trial Rice was given a greatly increased sentence. The district court, on a habeas petition, ruled the increase impermissible. In affirming, the Court quoted the district court’s opinion to the effect that it was “shocking that the State of Alabama has not attempted to explain or justify the increase in Rice’s punishment,” and that “the conclusion is inescapable that the State of Alabama is punishing petitioner Rice for his having exercised his post-conviction right of review.” 395 U.S. at 726, 89 S.Ct. at 2081.

Although wd do not escape the basic lesson of Pearce by showing that we are in another situation, different circumstances may suggest another litmus test for the elimination of vindictiveness. In addition to the difference common to all plea cases, in the instant case the sentencing court was presented with a special consideration in the new count to the indictment. This may call for an examination of the propriety not only of the resentencing itself but also of the prosecutor’s action in adding the count, since, at least in some circumstances, a prosecutor, too, may be guilty of vindictiveness. See Chaffin v. Stynchcombe, ante, 412 U.S. at 27 n. 13, 93 S.Ct. 1977; Williams v. McMann, 436 F.2d 103, 105 (2d Cir. 1970), cert denied 402 U.S. 914, 91 S.Ct. 1396, 28 L.Ed.2d 656.

The Court in Pearce (Rice) entered into no discussion of how the possibility of vindictiveness could be excluded in the case of resentencing after a withdrawn plea, finding it unnecessary since no attempt of any kind was made in that case. We believe that there may be a broader range of possible answers here than in cases like Pearce itself, where the first sentence was imposed after a full trial. The very fact, for example, that there was a plea suggests the possibility of a plea bargain, or perhaps a consciously lower sentence in consideration of the defendant’s not insisting upon trial. Without going into the thorny area of plea bargaining participated in by the court, United States v. Stockwell, 472 F.2d 1186 (9th Cir. 1973), cert. denied 411 U.S. 948, 93 S.Ct. 1924, 36 L.Ed.2d 409, see, in general, Note, The Unconstitutionality of Plea Bargaining, 83 Harv.L.Rev. 1387 (1970), plea bargaining by a prosecutor is a well accepted procedure. Chaffin v. Stynchcombe, ante; Cortez v. United States, 337 F.2d 699 (9th Cir. 1964), cert. denied 381 U.S. 953, 85 S.Ct. 1811, 14 L.Ed.2d 726. If, as part of that process, a prosecutor may properly indicate the risks in not pleading guilty, whether of a larger sentence or of a larger exposure, see Brady v. United States, 397 U.S. 742, 750, 90 S.Ct. 1463, 25 L.Ed.2d 747 et seq. (1970), we see no reason why the state should necessarily be precluded in all respects from actualizing these risks ,wben the plea is withdrawn. We would be concerned if, through an indiscriminate application of the Pearce rule, the government should always be locked into its side of the bargain when the defendant succeeds in withdrawing from his. Cf. United States v. Resnick, 483 F.2d 354, 358 (5th Cir. 1973); United States ex rel. Williams v. McMann, 436 F.2d 103, 106-107 (2d Cir. 1970). If, for example, a defendant pleaded guilty to one count and the prosecutor dismissed the others, it should be reasonably apparent that the dismissal was in consideration of the plea; if the defendant succeeded in withdrawing the plea, he should not be able to object to the prosecutor’s reviving the other counts. Cf. Santobello v. New York, ante, 404 U.S. at 263 n. 2, 92 S.Ct. 495. That, however, is not necessarily the same as adding a new count which had not entered into the proceedings before.

When the present defendants came on for sentencing as a result of their pleas, a discussion occurred from which the court concluded, correctly or not, that they believed they had a proper reason to expect a one-year sentence. Stating it was not responsible for that belief, and had no intention of meeting it, but, rather, had in mind “straight three year sentences,” the court offered to permit the withdrawal of the pleas, an offer which defendants accepted. Under these circumstances Pearce (Rice) is obviously inapplicable to the three-year sentence the court ultimately imposed on counts 1-3; nor do defendants contend otherwise. We believe, however, that it is applicable, on the facts of this case, to the additional, consecutive sentence on count 4 for at least one reason.

The record shows that at the time of the aborted sentence hearing the court was aware of the fact that Gerard had carried a gun. It did not learn of any new facts which could justify a further sentence; it merely announced at the sentencing that at the earlier hearing the facts which supported the later fourth count had been “treated lightly . So I didn’t take that factor into specific account.” This change in the court’s view of the overall facts is not even as favorable to the government as that in Marano v. United States, ante, n. 3, and defendant here is no more assured that vindictiveness did not enter into the resentencing than were defendants in Pearce. Where the rebuttal of the possibility of vindictiveness is by the presentation of additional information, “identifiable conduct on the part of the defendant occurring after the time of the original sentencing proceeding,” the Pearce requirement, 395 U.S. at 726, 89 S.Ct. at 2081, is scarcely met by transferring old facts from the presentence report to a separate count in the indictment. Nor are any other circumstances “affirmatively appearing,” Pearce, ante, at 726, 89 S.Ct. 2072, that might be an adequate substitute. We must, therefore, hold the increase in sentence impermissible.

The situation as to the United States Attorney’s filing the additional count would seem little different. He offers as the sole reason, “As long as the possibility of this agreed disposition existed it would have been pointless for the government to seek additional counts.” Having in mind that he knew all the facts from the outset, the breakdown in the agreement seems scarcely a new reason for not including the count initially. In view of the difficulties we would face in distinguishing this case from Pearce (Rice), we do not propose to try to do so simply to permit the imposition of what can be no more than a concurrent sentence on a count the government did not think worth bringing in the first place.

The verdicts and j udgments are vacated, and a new trial ordered on Counts 1, 2 and 3. Count 4 is to be dismissed.

SNEED, Circuit Judge

(concurring in part and dissenting in part).

I am in full agreement with my brethren with respect to the necessity of a new trial because of the government’s failure to disclose adequately its relations with the witness DeVito. I respectfully dissent, however, from that portion of their holding that dismisses Count 4 of the second indictment.

My brethren believe that the Due Process Clause, as interpreted by the Supreme Court in North Carolina v. Pearce, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969), requires that Count 4 be dismissed. I dissent because in my view the application of the reasoning and technique of Pearce to the facts of this case as they relate to Count 4 is neither required nor wise.

Judge Aldrich emphasizes that the trial court was aware, prior to its initially suggesting the imposition of a three-year sentence, that Gerard had carried a gun during the commission of the principal offense. It will contribute to the understanding of the issues that separate us to set forth the colloquy, as it relates to the court’s prior knowledge, which occurred between the court and counsel for Gerard at the time sentencing was actually imposed.

Mr. Michaelson: . . . Your Honor’s intention the last time was to give a three-year sentence, yet your Honor had before him the very same factual situation.
The Court: No, I didn’t. I beg your pardon. I didn’t mean to contradict you flatly. At that time I had in the probation report a note concerning this gun proposition. At that time it was not charged and I didn’t think that it was appropriate for me to consider it except as it might have reflected upon the other counts. It was treated lightly, you might say, and I think your treatment was the same way. So I didn’t take that factor into specific account.
Now that I have heard all the evidence and have come to my own conclusions about it, I think that I have to take it into account.

In Pearce, as well as in its companion case, Simpson, Warden v. Rice, the Supreme Court was concerned with eliminating vindictiveness in the imposition of sentence following a second trial, which the defendant had obtained as a result of a successful collateral attack on his first conviction. The heart of the Court’s position was expressed in the following lines:

Due process of law, then, requires that vindictiveness against a defendant for having successfully attacked his first conviction must play no part in the sentence he receives after a new trial. And since the fear of such vindictiveness may unconstitutionally deter a defendant’s exercise of the right to appeal or collaterally attack his first conviction, due process also requires that a defendant be freed of apprehension of such a retaliatory motivation on the part of the sentencing judge.
In order to assure the absence of such a motivation, we have concluded that whenever a judge imposes a more severe sentence upon a defendant after a new trial, the reasons for his doing so must affirmatively appear. Those reasons must be based upon objective information concerning identifiable conduct on the part of the defendant occurring after the time of the original sentencing proceeding. And the factual data upon which the increased sentence is based must be made part of the record, so that the constitutional legitimacy of the increased sentence may be fully reviewed on appeal. (Footnotes omitted.) 395 U.S. 711 at 725, 726, §9 S.Ct. 2072, 2080, 23 L.Ed.2d 656.

It is obvious that the foregoing language cannot be applied literally to the facts of this case. Here there has been no prior conviction, no appeal from or collateral attack on a prior conviction, no second trial, and only one completed sentencing proceeding. Moreover, the record before us quite adequately precludes any inference of vindictiveness on the part of the trial court in imposing the consecutive one-year sentence with respect to Count 4. The trial court, at the time it rejected the initial plea bargain with respect to the three-count indictment, quite properly could consider Gerard’s possession of a firearm only to the extent that such possession bore on the three counts then before it. It is consistent with the record to assume that this was the extent to which it was considered.

The situation was quite different at the time sentence was imposed following Gerard’s conviction on the four counts. The trial court presumably was then under an obligation to impose a sentence with respect to each count. My brothers appear to believe that the accrual of this duty, made necessary by the superseding indictment and conviction thereon, does not represent “new facts” which, under Pearce (Rice), will justify an aggregate sentence greater than that the trial court previously indicated it was prepared to accept. It is obvious, however, that in this ease the superseding indictment, joined with the development of the facts at the trial concerning that count, Gerard’s conviction thereon and the duty of the trial court to impose sentence pursuant to Rule 32, Federal Rules of Criminal Procedure, do constitute “new facts” within the ordinary meaning of those words. Moreover, these facts should be more than sufficient to justify the imposition of a consecutive one-year sentence based on the fourth count.

The purpose of the majority’s proscription is apparently to discourage trial judges from punishing defendants who, when confronted by the terms of the plea bargain, choose instead to stand trial. While this objective has been expressly recognized by this Court in United States v. Stockwell, 472 F.2d 1186 (9th Cir. 1973), in that case the trial court had made plain to the defendant that the sentence it would impose following trial could be greater than would be imposed following a plea of guilty. Under such circumstances a requirement that there be an affirmative showing that a post-trial sentence was prompted neither by vindictiveness nor a desire to punish the defendant for rejecting the offered plea was entirely proper.

It is important to understand what the majority here condemns. It does not appear inconsistent with their approach for the trial court to have directed that the one-year sentence was to run concurrently; nor, apparently, would it have been improper for the trial court to have imposed two-year sentences with respect to the three counterfeiting counts and then imposed a one-year consecutive sentence on the fourth count. What appears to be forbidden is an aggregate sentence greater than that which the trial court indicated it was prepared to accept prior to the addition of the fourth count.

However, the majority’s holding fails to take into account a crucial difference between the facts before us in Stockwell and those involved in the instant case. The distinction has as its source the superseding indictment, which added the fourth count and which originated with the prosecutor, not the trial judge. If it was a proper indictment, the defendant should not expect to receive, if convicted on all counts, a sentence no greater than that which the trial court had earlier suggested as being appropriate under the original three-count indictment. Because no meaningful sentence could be imposed under the reasoning of the majority, and because the prosecutor’s position is said to be “little different” from that of the trial judge, it is arguable that the issue before us in this case is in fact the propriety of the new fourth count being included in the superseding indictment rather than the appropriateness of the sentence imposed by the trial court with respect to that new count.

It is difficult to understand the purpose of a principle which requires that prosecutors include all possible counts in their initial indictment even in the absence of concealment of facts from the defense. The extent to which this principle creates mischief can be illustrated dramatically by comparing two situations that appear to be functionally equivalent, but which will be treated differently unless the view of my colleagues is narrowly restricted to the facts of this case. The first is where an indictment containing four counts, for example, is obtained prior to any plea bargaining. Following such bargaining, the prosecution offers to drop Count 4 in exchange for a guilty plea on the remaining three. The defendant agrees, but the trial judge upon hearing the prosecution’s recommended sentence rejects the bargain- and permits the defendant to withdraw his plea. The majority recognizes that prosecution thereafter on the four counts is proper. It is unclear, however, the extent to which the trial judge’s discretion will be limited to the sentence he might have initially thought proper prior to the defendant’s withdrawal of his plea. Perhaps the majority would limit the aggregate sentence to that which the trial judge indicated he would impose at the time the plea bargain was rejected, but that is by no means certain. In any event, in light of the opinion in this case a prudent trial judge cannot commit himself to a sentence with respect to the three counts when rejecting a plea if he wishes, without serious question, to retain full freedom of action.

The signals are much clearer when the plea bargain precedes indictment. Assuming that as a consequence of such bargain only a three-count indictment is obtained, and that the trial judge, aware of facts sufficient to support a fourth count, rejects the bargain. It is tolerably plain that my brethren would prohibit the prosecutor from obtaining a superseding indictment with four counts in the absence of “new facts” which were not known to him at the time he obtained the original indictment. It is painfully clear, however, that even were the prosecutor to obtain a new indictment with an added count, there could be no justification under the majority’s approach for an aggregate sentence greater than that which the trial judge may have indicated was proper with respect to the initial three-count indictment. In such a case it is quite doubtful that the trial judge could retain any freedom of action by concealing his estimate of a proper sentence at the time of his rejection of the plea inasmuch as the majority appears to regard the addition of such a fourth count as per se improper.

There are additional difficulties with the approach taken in Judge Aldrich’s opinion. Although I assume that its philosophy would require the invalidation of a count added by a vindictive prosecutor on the basis of facts known only to him, or on the basis of facts known to him and to the defendant and his counsel, this cannot be said with complete assurance. Too much weight appears to have been placed by the majority on knowledge by the trial judge of the facts upon which the additional count rests to permit such an easy conclusion.

There also exists uncertainty about the nature of the facts sufficient to make an “affirmative” rebuttal of the possibility of vindictiveness. Obviously an assertion by the trial judge that he did not directly consider the facts which support the new count in arriving at his initial sentence will not be sufficient. An almost identical assertion was made by the trial judge in this case. It is also unclear whether under the majority’s view the “new facts” must consist of all the operative facts of the additional count or only a portion of such facts. It may be that mere contextual facts will be sufficient to rebut vindictiveness. Perhaps my brethren would require that the “new facts” be unknown at the time of the collapse of the plea bargain to everyone, other than perhaps the defendant and his counsel, and that they consist of all the operative facts of the added count. In sum, the majority, in requiring an affirmative refutation of the mere possibility of vindictiveness, has left us in the dark concerning both the character of the “new facts” that are necessary and the identity of the persons to whom they must be “new”.

It may be that to some my concern with the majority opinion will appear exaggerated. To them, all that the majority requires is that all possible counts be included in an initial indictment. Enough has been said to indicate that the requirements imposed by the majority might not be met so easily. However, even if they can be so satisfied, the consequence is a mischievous distinction between pre-indictment and post-indictment plea bargaining.

Any such distinction moves this Court toward greater supervision of the plea bargaining process than I believe appropriate. The legitimacy of plea bargaining has been recognized by the Supreme Court. Brady v. United States, 397 U.S. 742, 749-755, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1969). The prosecutor, a leading actor in this process, is a creature of the executive branch of government; and it is to the executive branch that the people in the long run must look for control of the discretion our system of criminal justice vests in its prosecutors. See Pugach v. Klein, 193 F.Supp. 630 (S.D.N. Y.1961); Note, Prosecutor’s Discretion, 103 U.Pa.L.Rev. 1057 (1955). In the short run, the safeguards of a trial should limit the harm of vindictively imposed additional counts. Insofar as the trial judge is concerned, I would impose the restraints of Pearce {Rice) in the pre-conviction plea bargaining setting only when the trial judge has indicated to the defendant that, unless he accepts the terms deemed proper by the judge with respect to the counts which have been, or would be, charged under the bargained plea, a greater sentence will be imposed following trial and conviction. No such greater sentence should be permissible. However, these are not the facts of the case before us.

The fourth count should not be dismissed.

      . The testimony was accurately quoted in the government’s brief, ante.

      . “I don’t know whether I expect probation for testifying or whether I expect probation because I pleaded guilty and X want to plead my guilt and start a new life.”

      . Thus the First Circuit in Maraño v. United States, 374 F.2d 583 (1967), a pre-Pearce decision, held that the district court, after a second trial, could not be allowed to impose a longer sentence even though the government had succeeded in painting a blacker picture of the original crime. Cf. Walsh v. United States, 374 F.2d 421 (9th Cir. 1967). Cases such as United States v. Coke, 404 F.2d 836 (2d Cir. 1968) holding that it is enough if the court states it relied on the blacker picture are overruled by Pearce.

      . Always assuming the indication is factually “justified,” (Brady, ante, at 751 n. 8, 90 S.Ct. 1463), a matter not to be doubted in the case at bar.

      . We note that although the language in 18 U.S.C. § 924(c) is ambiguous on the subject, for a first offense under this statute a consecutive sentence is not mandatory. United States v. Sudduth, 457 F.2d 1198 (10th Cir. 1972).