author: AINSWORTH, Circuit Judge:

text:
    Ollie CORNIST et al., Plaintiffs-Appellees, v. RICHLAND PARISH SCHOOL BOARD et al., Defendants-Appellants. Elvert CHISLEY et al., Plaintiffs-Appellees, v. RICHLAND PARISH SCHOOL BOARD et al., Defendants-Appellants.
    No. 72-3346.
    United States Court of Appeals, Fifth Circuit.
    May 14, 1973.

      John F. Ward, Jr., Baton Rouge, La., William R. Coenan, Asst. Dist. Atty., Rudolph McIntyre, Dist. Atty., Rayville, La., for defendants-appellants.
    Paul H. Kidd, Monroe, La., for plaintiffs-appellees.
    Before BELL, AINSWORTH and GODBOLD, Circuit Judges.
   AINSWORTH, Circuit Judge:

Appellant Richland Parish School Board on August 10, 1972 filed a Notice of Appeal from a Judgment dated April 20, 1972, an Amended Judgment dated May 1, 1972, and an Order dated July 20, 1972 which denied Richland’s May 10, 1972 Motion for New Trial as “filed too late” and ordered that “the judgment of this Court of April 20, 1972 is the final judgment of this Court.” Appellees have filed a Motion to Dismiss the appeal as not having been timely filed. We deny the Motion to Dismiss for reasons which require that we also vacate the July 20 Order and remand for the District Judge to rule on the pending Motion for New Trial filed by Richland.

The judgment dated April 20, 1972, “approved as to form” by counsel for both plaintiffs and defendants and signed by the District Judge, ordered reinstatement of two teachers, plaintiffs-ap-pellees Ollie Cornist and Elvert Chisley, and further provided:

[T]he issues of punitive damages and attorney fees relating to the discharges of Elvert Chisley and Ollie Cornist, the reinstatement of Sidney Perkins as a high school band director, the establishment of racial ratios of faculty, staff, and administration, the contempt of the Board, attorneys fees, fines, and punitive damages for the contempt are taken under advisement.

However, on April 27, 1972 counsel for defendant submitted a new judgment “approved as to form” by counsel for both plaintiffs and defendant, along with the following letter stating in part:

Dear Judge Dawkins:
On April 20, 1972 Mr. Paul Kidd brought me a judgment which I approved without really reading. My Superintendent objected to one paragraph concerning the re-instatement of Sidney Perkins, band director. Mr. Kidd readily agreed to submit a new judgment in lieu of the original.
However you signed the first judgment and I would appreciate very much if you would substitute the second agreed judgment by simply writing “Amended” across the face of the first page or in whatever manner you see best.

The District Judge on May 1, 1972 signed the new judgment and wrote in “Amended” as requested. The new judgment ordered reinstatement of plaintiffs as before, but omitted, among other things, the provision quoted above relating to Sidney Perkins and instead simply provided in place of the above quoted excerpt from the judgment the following: “[A] 11 other issues are taken under advisement.”

Richland filed its Motion for New Trial on May 10, 1972. Whether it was timely and within the 10-day time limit specified by Rule 59(b), Federal Rules of Civil Procedure, depends upon the question whether the May 1 Amended Judgment was the judgment contemplated by that subsection. On July 20, 1972 the District Judge denied the Motion for New Trial “as having been filed too late” and determined that the April 20 judgment was the final judgment of the Court.

The Supreme Court said in United States v. Indrelunas, 411 U.S. 216, 217, 93 S.Ct. 1562, 1563, 36 L.Ed.2d 202 (1973), a related case, that a “conflict on an issue such as this is of importance and concern to every litigant in a federal court, since, as this case makes clear, the timeliness of appeals, as well as the timeliness of post-trial motions, may turn on the question of when judgment is entered.” To decide when judgment was entered in this case insofar as Rule 59(b) purposes are concerned, we must refer to a general rule enunciated by a long line of judicial authority, that the second judgment prevails and begins the running of the 10-day limitation, if it is a superseding judgment making a change of substance which “disturbed or revised legal rights and obligations.” Federal Trade Comm’n v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 211-212, 73 S.Ct. 245, 248-249, 97 L.Ed. 245 (1952). See Federal Power Comm’n v. Idaho Power Co., 344 U.S. 17, 19-22, 73 S.Ct. 85, 86-87, 97 L.Ed. 15 (1952); Zimmern v. United States, 298 U.S. 167, 56 S.Ct. 706, 80 L.Ed. 1118 (1936). However, if the Court does no more in the second judgment than make a clerical change, such as correct the names of parties or dates, the time for filing motions does not start to run from entry of the second judgment, but rather runs from date of the first judgment. See Department of Banking v. Pink, 317 U.S. 264, 63 S.Ct. 233, 87 L.Ed. 254 (1942); United States v. 1,431.80 Acres of Land, 8 Cir., 1972, 466 F.2d 820; Albers v. Gant, 5 Cir., 1970, 435 F.2d 146; Lieberman v. Gulf Oil Corp., 2 Cir., 1963, 315 F.2d 403.

Here the request was for “a new judgment in lieu of the original,” and it is apparent that the second judgment was intended to supersede the first. The fact that the second judgment was termed an “Amended” Judgment is not decisive, because the Supreme Court has said that “the question of whether time . was to be enlarged cannot turn on the adjective which the court below chose to use in the caption of its second judgment.” Federal Trade Comm’n v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 212-213, 73 S.Ct. 245, 249, 97 L.Ed. 245 (1952). The important circumstance here is that the second judgment omitted a paragraph of substance concerned with, inter alia, the legal rights and possible reinstatement of another teacher, Sidney Perkins.

Accordingly, the time for filing motions began to run with the entry of the Amended Judgment on May 1, 1972, and the Motion for New Trial on May 10 was therefore timely and within the 10-day period. The District Judge must therefore consider and rule on the merits of the pending Motion for New Trial filed by appellant before the time to file a notice of appeal by an aggrieved party commences to run. See Rule 4(a), Federal Rules of Appellate Procedure.

Motion to dismiss the appeal is denied; vacated and remanded for further proceedings.


source: Caselaw Access Project

author: DUNIWAY, Circuit Judge.

license: Public Domain

text:
    GARDINER MANUFACTURING CO., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
    No. 26657.
    United States Court of Appeals, Ninth Circuit.
    May 22, 1973.
    Rehearing Denied June 29, 1973.

      Richard Harrington (argued), Ath-earn, Chandler & Hoffman, San Francisco, Cal., for plaintiff-appellant.
    Walter H. Fleischer (argued), L. Patrick Gray, III, Asst. Atty. Gen., Dept, of Justice, Washington, D. C., James L. Browning, Jr., U. S. Atty., San Francisco, Cal., Daniel Joseph, Robert V. Zener, Morton Hollander, Dept, of Justice, Washington, D. C., for defendant-appel-lee.
    Before HAMLIN, DUNIWAY and GOODWIN, Circuit Judges.
   OPINION

DUNIWAY, Circuit Judge.

On January 7, 1965, Gardiner Manufacturing Company delivered 18 steel tackle blocks to the United States pursuant to Gardiner’s subcontract with Orbit Industries, Inc. Orbit, the prime contractor, paid for the blocks with a check which was dishonored on January 18. Orbit subsequently went bankrupt, and Gardiner instituted this action against the United States to recover the value of the blocks. The district court held for the United States, and Gardiner appeals. We affirm.

First, Gardiner argues that it is entitled to recover the cost of the blocks under the Tucker Act, 28 U.S.C. § 1346(a) (2). We do not agree. A subcontractor derives no rights from the contract between the prime contractor and the United States. Nickel v. Pollia, 10 Cir., 1950, 179 F.2d 160, 163-164. Beaconwear Clothing Co. v. United States, 1966, 355 F.2d 583, 590, 174 Ct.Cl. 40. See also Bank of Arizona v. National Surety Corp., 9 Cir., 1956, 237 F.2d 90, 93. Thus, in order for Gardiner to state a claim under the Tucker Act, it must show the existence of an actual contract between it and the United States. Merritt v. United States, 1925, 267 U.S. 338, 340-341, 45 S.Ct. 278, 69 L.Ed. 643. See generally Baltimore & Ohio R. R. Co. v. United States, 1923, 261 U.S. 592, 597-598, 43 S.Ct. 425, 67 L.Ed. 816; 1A Corbin, Contracts §§ 18, 19 (1963). No such contract has been alleged.

Gardiner’s second argument is that it is entitled to recover under the Federal Tort Claims Act, 28 U.S.C. § 1346(b) because Orbit acquired only voidable title to the blocks, and “[t]itle, like a stream, cannot rise higher than its source.” It concludes that the United States converted the blocks when it failed to return them after learning that Orbit’s check had been dishonored.

However, even if we were to assume that conversion is a tort which is cognizable under the Tort Claims Act, Gardiner’s argument fails. The Uniform Commercial Code, to which federal courts look in developing federal “sales” law, United States v. Wegematic Corp., 2 Cir., 1966, 360 F.2d 674, 676, provides in relevant part:

“Sec. 2-403. Power to Transfer; Good Faith Purchase of Goods; ‘Entrusting’.
(1) . . . A person with voidable title has power to transfer a good title to a good faith purchaser for value. When goods have been delivered under a transaction of purchase the purchaser has such power even though
(b) the delivery was in exchange for a check which is later dishonored, . . .
Sec. 1-201. General Definitions.
(44) ‘Value’. . . . a person gives ‘value’ for rights if he acquires them
(c) by accepting delivery pursuant to a preexisting contract for purchase; . . .”

Under these provisions, the United States gave value for the blocks when it accepted delivery on January 7, pursuant to its contract with Orbit. Its good faith at that time cannot be questioned, since it had no notice that Orbit’s check to Gardiner would be dishonored. Thus, the United States acquired good title to the blocks, and did not convert them. See Restatement 2d of Torts § 229 comment d (1965).

Affirmed.

      . The quotation is from Barthlemess v. Cavalier, 1934, 2 Cal.App.2d 477, 38 P.2d 484 (per Yankwich, J.). However, sales law has changed considerably in the past 40 years.

      . Relying upon the fact that conversion is essentially a strict liability tort in California, Poggi v. Scott, 1914, 167 Cal. 372, 375, 139 P. 815, and that the Tort Claims Act permits the United States to be held liable only for negligent or wrongful acts of its agents, Dalehite v. United States, 1953, 346 U.S. 15, 73 S.Ct. 956, 97 L.Ed. 1427, the district court con-eluded that Congress did not consent to suits for conversion. The Third Circuit, although not confronting the question directly, has held that conversion actions are permitted under the Act. See Aleutco Corp. v. United States, 3 Cir., 1957, 244 F.2d 674, 678-679. However, since we conclude that Gardiner has no claim for conversion, we decline to decide this issue.


author: MEHAFFY, Circuit Judge.

text:
    UNITED STATES of America, Appellee, v. William F. MEESE, Appellant.
    No. 72-1709.
    United States Court of Appeals, Eighth Circuit.
    Submitted April 13, 1973.
    Decided May 31, 1973.

      Ronald L. Rothman, Clayton, Mo., for appellant.
    Ann T. Wallace, Atty., Dept, of Justice, Washington, D. C., for appellee.
    Before MEHAFFY, BRIGHT and ROSS, Circuit Judges.
   MEHAFFY, Circuit Judge.

Defendant was convicted of operating an illegal gambling business in violation of 18 U.S.C. § 1955 which prohibits the operation of an illegal gambling business. It defines an illegal gambling business as a gambling business which (a) is a violation of state law; (b) involves five or more persons “who conduct, finance, manage, supervise, direct, or own all or part of such business. . . . ”; and (c) has been in substantially continuous operation in excess of thirty days.

A jury was waived and the facts stipulated in the district court resulting in the conviction by The Honorable James H. Meredith, Chief Judge, United States District Court for the Eastern District of Missouri.

On appeal defendant challenges the constitutionality of the statute on its face and as applied to him. He also challenges the sufficiency of the evidence to support the conviction. We affirm.

As stipulated the evidence showed that defendant owned a partnership interest in and operated a gambling business for a period in excess of thirty days involving fifty-four slot machines. He maintained a warehouse used for storing and repairing the machines and employed from six to nine individuals to operate the business. One of the employees, defendant’s wife, was the bookkeeper. Five other employees collected the funds from the machines at their various locations in different clubs. These five employees and another person employed for a period in excess of five months also repaired the machines at the clubs where they were located and at defendant’s warehouse. These employees transported the machines between the clubs and the warehouse when necessary. For a period of about three months an additional two employees were employed to act as change-makers at one of the clubs. Half of the salary of these two employees was paid by defendant.

Constitutionality of § 1955.

Defendant argues that the statute is unconstitutional on its face since no relationship between intrastate conduct and interstate commerce is required to be shown and that the statute is unconstitutional as applied to him in that no showing that these particular gambling activities affected interstate commerce was made. This court has already held that “[c]onvictions under § 1955 do not require a showing in each individual case that the gambling activities of a particular defendant have affected commerce. . . . ” Schneider v. United States, 459 F.2d 540, 541 (8th Cir.), cert. denied, 409 U.S. 877, 93 S.Ct. 129, 34 L.Ed.2d 131 (1972). We further held in Schneider that there is a sufficient rational basis for Congress’ conclusion that illegal gambling-affects interstate commerce. 459 F.2d at 542. We adhere to our holding in Schneider which is in accord with United States v. Becker, 461 F.2d 230 (2d Cir. 1972), petition for cert. filed, 41 U.S.L.W. 3160 (U.S. July 28, 1972) (No. 72-158); United States v. Riehl, 460 F.2d 454 (3d Cir. 1972); United States v. Harris, 460 F.2d 1041 (5th Cir.), cert. denied, 409 U.S. 877, 93 S.Ct. 128, 34 L.Ed.2d 130 (1972); and United States v. Palmer, 465 F.2d 697 (6th Cir.), cert. denied, 409 U.S. 874, 93 S.Ct. 119, 34 L.Ed.2d 126 (1972). Thus, as we held in Schneider, the statute is a constitutional exercise of power under the commerce clause and is constitutional as applied to defendant.

Defendant argues that his gambling business was a small one and located within a single county in Missouri; hence, he argues, his illegal activities are not within the intended scope of the statute. In view of our finding that § 1955 is constitutional and since defendant is within the prohibited class, we do not consider the magnitude of the particular activity charged since we are without power “ ‘to excise as trivial, individual instances’ of the class.” Perez v. United States, 402 U.S. 146, 154, 91 S.Ct. 1357, 1361, 28 L.Ed.2d 686 (1971).

Sufficiency vf the Evidence.

Defendant contends that he is the only person who conducted the business and that the other persons were mere employees; thus, he argues, the statutory requirement that five or more persons conduct the business was not met. We hold that all levels of personnel involved in operating an illegal gambling business and not merely the management level are to be included in determining whether five or more persons conduct such business within the meaning of § 1955. United States v. Becker, supra; United States v. Riehl, supra; United States v. Harris, supra; United States v. Palmer, supra.

Finally, defendant contends that the evidence does not show he violated Missouri law, 41 V.A.M.S. §§ 563.370, 563.-374 and 563.380, as charged in the indictment. We find this contention to be without merit.

We have considered other related contentions of defendant and find them to be without merit. Accordingly, the judgment is affirmed.

      . We also followed Schneider in United States v. Wolk, 466 F.2d 1143 (8th Cir. 1972).


author: ELY, Circuit Judge:

text:
    BAT RENTALS, INC., a Nevada corporation, Appellant, v. UNITED STATES of America and State of Nevada, Appellees, John Deere Industrial Equipment Co., Intervenor.
    No. 71-1627.
    United States Court of Appeals, Ninth Circuit.
    April 12, 1973.

      Ira Heeht (argued), Las Vegas, Nev., for appellant.
    Eloise E. Davies (argued), Civil Div., Dept, of Justice, Bart M. Schouweiler, U. S. Atty.; Robert R. List, Atty. Gen., L. Patrick Gray, III, Asst. Atty. Gen., Alan S. Rosenthal, Civil Div., Dept, of Justice, Washington, D. C., for appellees.
    Before ELY and HUFSTEDLER, Circuit Judges, and CRARY, District Judge.

       Honorable E. Avery Crary, United States District Judge, Los Angeles, California, sitting by designation.

   ELY, Circuit Judge:

The Nevada Department of Highways invited bids for the furnishing of fourteen front end loaders with a minimum diesel engine horsepower. The loaders were to be used by the Nevada Department primarily for routine maintenance, but it was possible that they would also occasionally be rented and operated by the United States Bureau of Public Roads. The appellant, a Nevada corporation, submitted a bid, as did John Deere Industrial Equipment Co., a Colorado corporation. The contract was awarded to John Deere, whereupon the appellant filed an action for declaratory relief in the District Court. It alleged a violation of certain Nevada revised statutes, Nev.Rev.Stat. §§ 334.005, 334.007, and 334.009, which generally provide bidder preferences for resident dealers and contractors who offer locally manufactured materials and equipment on public contracts. The state statutes allow these preferences only insofar as to do so would not be antagonistic to federal law. The Federal Highway Act, 23 U.S.C. § 112(b), requires the states to solicit competitive bids and to accept low bids on federally aided highway projects, and 23 C.F.R. § 1.19 prohibits price differentials in favor of locally produced materials in respect to such bids. In this case John Deere was the low bidder, and also, according to the Government, the only qualified bidder.

The appellant’s complaint against the United States was based upon its general allegation that authorities of the State of Nevada had been erroneously instructed by some representative of the United States that 23 C.F.R. § 1.19 prohibited the application of Nevada’s preference statute Í3U a situation wherein, as here, there existed the possibility that equipment 3night thereafter be rented from the state and used for federal aid highway projects.

The appellant also sought an injunction restraining Nevada from performing its contract with John Deere, whereupon John Deere intervened. The District Court, after considering various affidavits, dismissed the appellant’s suit against the United States with prejudice and dismissed the suit against the State of Nevada, without prejudice.

The District Court held that the United States had not given its consent to be sued in a case of this kind. The-appellant relies upon 5 U.S.C. § 702 and 5 U.S.C. § 701. Section 702 reads:

“A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof.” (emphasis added).

Neither the appellant’s original complaint nor its amended complaint, nor its affidavits, specify any “agency” of the United States to which it attributes, in part, its aggrievement. It alleged only —and this upon mere information or belief — that some unspecified agency or official of the United States gave erroneous legal advice to the Nevada authorities. This was not enough. It is well established that when a sovereign surrenders its immunity from suit by statute, such a statute must be strictly construed against the surrender of such immunity.

In Mann v. United States, 399 F.2d 672 (9th Cir. 1968), we wrote:

“[W]e are not free to enlarge that consent to be sued which the Government, through Congress, has undertaken so carefully to limit.”

Id. at 673. Accord, Claremont Aircraft, Inc. v. United States, 420 F.2d 896 (9th Cir. 1969); see United States v. Sherwood, 312 U.S. 594, 590, 61 S.Ct. 767, 85 L.Ed. 1058 (1941) (a statute “must be interpreted in the light of its function in giving consent of the Government to be sued, which consent, since it is a relinquishment of a sovereign immunity, must be strictly interpreted.”).

Having reached the conclusion that the District Court properly applied the doctrine of sovereign immunity, we need not discuss the Government’s alternative contention that the appellant was an unqualified bidder and' thus had no standing to maintain the suit. Having dismissed the appellant’s action against the United States, the District Court was clearly correct in dismissing the complaint as to the State of Nevada. There remained no diversity of citizenship or substantial federal question; hence, the District Court then lacked the requisite jurisdiction.

If the appellant is correct in its allegation that the Nevada authorities failed to comply with the requirements of Nevada law, its attempt to, vindicate its alleged rights must be made in the Nevada courts.

Affirmed.


author: PER CURIAM:

text:
    In the Matter of DESERT PAINT & SUPPLY COMPANY, a co-partnership composed of Ray E. Primer and Betty Primer, Bankrupt. WESTERN BOARD OF ADJUSTERS, INC., a California corporation, Respondent-Appellant, v. Richard R. CLEMENTS, Trustee-Appellee.
    No. 71-1625.
    United States Court of Appeals, Ninth Circuit.
    April 27, 1973.
    Rehearing Denied June 1, 1973.

      Barnard F. Klein (argued), Beverly Hills, Cal., for respondent-appellant.
    Lawrence A. Diamant (argued), Herbert Wolas, Robinson & Wolas, Los An-geles, Cal., for trustee-appellee.
    Before ELY and HUFSTEDLER, Circuit Judges, and TURRENTINE, District Judge.

       Honorable Howard Turrentine, United States District Judge, San Diego, California, sitting by designation.

   PER CURIAM:

The appellant (Western) appeals from the District Court’s affirmance of a bankruptcy Order declaring a security agreement and financing statement executed in favor of Western to be null and void, awarding damages to the trustee in the sum of $10,474.32 together with interest, and assessing exemplary damages in the sum of $15,000.00.

The dispute arose over a debt owed by the bankrupt to a third person and assigned to Western for collection. Western took possession of certain property that had been delivered to the bankrupt for resale. The trustee, seeking damages, alleged that the security agreement existing between the bankrupt and Western was null and void and that, hence, Western committed a tortious conversion of the property.

Western contends that the dispute was not properly within the summary jurisdiction of the Bankruptcy Court, that the President of Western was improperly denied representation of counsel during the section 21(a) examination, that the factual determinations of the referee were clearly erroneous, and that there was no basis in the record to support the award of exemplary damages.

Treating Western’s jurisdictional claim first, we note that the summary jurisdiction of the referee in bankruptcy extends primarily to those assets in the actual or constructive possession of the bankrupt. See Suhl v. Bumb, 348 F.2d 869 (9th Cir. 1965). Beyond that, the referee is powerless to reach assets in the actual or constructive possession of a third person asserting a bona fide claim to the property unless the third person consents to the non-plenary proceedings. 11 U.S.C. § 11(a)(7). In the present case, it is undisputed that Western was a third person to the proceedings and that it had actual possession of the property under a bona fide claim of right based upon a security agreement executed by the bankrupt and filed with the Secretary of State. The secondary and controlling question, then, is whether Western consented to the jurisdiction of the Bankruptcy Court, .as urged by the appellee.

In the response to the referee’s Show Cause Order, Western objected to the jurisdiction of the federal courts and argued that the claim properly belonged in state court because, inter alia, “the issues raised are complex, undecided and unresolved factual issues relying upon an interpretation of recent State legislation.” While this general objection did not expressly refer to the referee’s jurisdiction, it can hardly be read as an expression of consent to summary jurisdiction. Nor can it be read as implied consent by silence for although the objection was inartfully phrased, it adequately noted Western’s objection that it not be deprived of its right to a plenary proceeding.

“The power of a bankruptcy court to resolve adverse claims concerning the assets of the bankrupt’s estate is indeed a power of imposing magnitude. Since it results in depriving adverse claimants of a plenary suit, we must ever be cautious lest we permit its extension-to a situation that should not permit summary disposition.”

Suhl v. Bumb, supra at 871.

Having concluded that this was not a proper case for the exercise of the referee’s summary jurisdiction, we need not reach Western’s other assignments of error. The property in question cannot be treated as part of the bankrupt estate until the issues are resolved in a plenary proceeding.

Reversed.

      . Nothing in our opinion is intended to prejudice any future efforts by the trustee to seek to redress his alleged grievanees against appellant for its alleged misconduct,


author: PER CURIAM.

text:
    In the Matter of Nathaniel JOHNSON, Individually and doing business as Johnson’s Pharmacy, Bankrupt. John NEEDLES et al., Appellants, v. Nathaniel JOHNSON, Individually and doing business as Johnson’s Pharmacy, and Francis O. Drummond, Trustee, Appellees.
    No. 71-1309.
    United States Court of Appeals, Ninth Circuit
    May 23, 1973.

      Sandor T. Boxer (argued), Hal L. Coskey, G. Merle Bergman of Coskey & Coskey, Los Angeles, Cal., for appellants.
    Hubert F. Laugharn (argued), Robert A. Fisher of Craig, Weller & Laugharn, Weinstein, Saltz & Ruffner, Los Angeles, Cal., for appellees.
    Before ELY and HUFSTEDLER, Circuit Judges, and TURRENTINE, District Judge.

       Honorable Howard B. Turrentine, United States District Judge, San Diego, California, sitting by designation.

   OPINION

PER CURIAM.

This appeal raises the question of whether a claim for attorneys’ fees was properly disallowed. The attorneys represented a creditors’ committee. The proceedings originated under Chapter XI of the Bankruptcy Act, but when an Amended Plan of Arrangement presented by the debtor was eventually disapproved, the Chapter XI proceedings were dismissed and the debtor was adjudicated a bankrupt. The attorneys for the creditors’ committee then sought fees, for their services to the committee, in the amount of $2135. The claim was disallowed by the Referee, the Referee’s Order in that respect was upheld by the District Court, and this appeal followed. We affirm.

Section 339(2) of the Bankruptcy Act, 11 U.S.C. § 739, provides for allowance of fees to attorneys for a creditors’ committee in chapter proceedings, but the statute contains the explicit provision that such fees are allowable if, and only if, “the arrangement is confirmed.” As we have hitherto recited, the proposed Chapter XI arrangement was not confirmed ; hence, the Referee had no choice, under section 339(2), save to reject the fee application.

The appellants contend that the proviso of section 339(2) is unconstitutional, since, according to them, it provides for the taking of property without compensation and establishes an arbitrary classification. They also urge that the proviso penalizes the exercise of the free speech right established by the First Amendment. In our opinion, this second argument, while ingenious, has no merit whatsoever. We reject the first argument on our conclusion that the Congress adopted a perfectly reasonable and rational basis in providing that fees to the attorneys for creditors’ committees shall be allowed from the estate of a debtor in chapter proceedings only in cases wherein plans of arrangement are confirmed.

The appellants also rely upon section 64(a) of the Bankruptcy Act, 11 U.S.C. § 104. Assuming arguendo as urged by the appellants, that the statute allows attorneys fees such as those here claimed when “the confirmation of an arrangement . . . has been refused . upon the objection and through the efforts and at the cost and expense of . . . .” a creditors’ committee, one of the Referee’s findings undercuts the validity of the appellant’s reliance upon the section. The Referee found, inter alia, that “[a]t no time did the creditor’s committee object to the arrangement . . . .” and “[t] his court therefore concluded that the creditors’ committee through its attorneys had performed no act which caused the confirmation of the arrangement to be refused.”

The Referee’s quoted finding and conclusion are, essentially determinations of fact. They were upheld by the District Court, and since they are supported by substantial evidence, we are in no position to disturb them.

Affirmed.


text:
    Betty L. KINDREW, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
    No. 73-1471
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    June 5, 1973.
    Michael Maher, Orlando, Fla., Daniel C. McCormic, Wildwood, Fla., for plaintiff-appellant.
    John L. Briggs, U. S. Atty., Jacksonville, Fla., Oscar Blasingame, Asst. U. S. Atty., Tampa, Fla., David V. Hutchinson, Eloise E. Davies, Robert E. Kopp, Admiralty & Shipping Section, U. S. Dept, of Justice, Washington, D. C., for defendant-appellee.

      Before GEWIN, COLEMAN and MORGAN, Circuit Judges.

       Rule 18, 5 Cir., See Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I.

   PER CURIAM:

On February 9, 1970, Betty L. Kindrew, the plaintiff-appellant, was standing on the deck of the United States Coast Guard Cutter JUNIPER at Tampa, Florida. She was struck by a line which was being heaved from a United States Naval vessel as it came alongside the JUNIPER.

The next day, she was notified by the United States Coast Guard legal officer that if it was her intention to file a claim it should be submitted on Standard Form 95, a set of which was enclosed in the communication.

On March 4, 1970, through her attorneys, Mrs. Kindrew filed a claim for $10,000.

On February 23, 1971, Chief Counsel for the Coast Guard notified claimant’s attorneys that the government would pay $750 in settlement of the case, noting that the guests on the JUNIPER were warned to stand clear when the other vessel came alongside; moreover, Mrs. Kindrew’s injuries had not required either hospitalization or that she be confined to bed at home. X-rays revealed no evidence of any fractures or dislocations.

This settlement was not accepted.

On May 3, 1972, twenty seven months after the accident and approximately fifteen months after notice of the rejection of the proposed settlement, this suit was filed.

The government pleaded the two year statute of limitations, 46 U.S.C. § 782; 46 U.S.C., § 745.

Although the government rejected the claim ten months before the statute of limitations attached, plaintiff contended below and contends here that the date on which she received notice of denial of the administrative claim, rather than the date of the injury, should be the date from which her cause of action must be deemed to have run.

The Coast Guard letter of March 26, 1971, informed Mrs. Kindrew, “Therefore there remains only our duty to advise you that you have a right to institute suit in district court in accordance with the provisions of the Public Vessels Act, 46 U.S.C., 785-790”.

The judgment of the District Court, 352 F.Supp. 277, dismissing plaintiff’s suit for having been filed more than two years after the date of the alleged injury must be affirmed under the authority of New Orleans Stevedoring Company v. United States, 5 Cir., 1971, 439 F.2d 89; McMahon v. United States, 1951, 342 U. S. 25, 72 S.Ct. 17, 96 L.Ed. 26 and Soriano v. United States, 1956, 352 U.S. 270, 77 S.Ct. 269, 1 L.Ed.2d 306.

Affirmed.


text:
    Lee LAMBERT, Jr., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.
    No. 72-3328.
    United States Court of Appeals,. Fifth Circuit.
    June 4, 1973.

      John L. Briggs, U. S. Atty., Jacksonville, Fla., Emmett B. Lewis, Adm. & Shipping Section, Morton Hollander, Chief Dept, of Justice, Kathryn H. Baldwin, Civil Div., Dept, of Justice, Washington, D. C., for defendant-appellant.
    Edward A. White, William R. Swain, Jacksonville, Fla„ for plaintiff-appellee.
    Before WISDOM, GEWIN and CLARK, Circuit Judges.
   PER CURIAM:

The Government appeals from a judgment awarding damages to Appellee Lambert for injuries he suffered during the performance of his duties as a stevedore foreman while employed by the United States. The Government asserts that the district court erred in holding that: (a) the previous improper loading of cargo of the USNS MUSKINGHAM, the vessel on which Lambert was performing his duties resulted in the ship being unseaworthy; (b) the findings that the ship was unseaworthy and Lambert was contributorily negligent are irreconcilable; and, (c) the proximate cause of Lambert’s injuries was the un-seaworthy condition of the vessel instead of concluding that Lambert’s negligence was the sole proximate cause of the injury.

Lambert was the stevedore foreman for the night loading crew which was stowing cargo on board the United States’ vessel, USNS MUSKINGHAM. The day crew had improperly loaded the Number 1 lower hold by initially stowing the cargo at the hatch opening and working outward to the skin of the ship instead of starting at the ship’s skin and working inboard towards the hatch opening as is customary and proper. The latter loading procedure permits the last of the cargo to be lowered directly into place in the hold through the hatch opening and is admittedly the safer and more practical way of completing a loading assignment.

The day crew’s loading operation had resulted in an unfilled space with a width of three feet from the ship’s skin to the loaded cargo of large connex boxes and a length of approximately ten feet. After surveying this situation, Lambert determined that the most economical utilization of this space would be to place a large tire which was six feet high and three feet wide in this unused area.

To accomplish this difficult task it was necessary for Lambert to,lower the tire through the hatch opening to the lower hold and then move outward with the tire over the connex boxes to the skin of the ship. With the aid of ropes it was his intention to tilt the tire over the edge of the connex boxes until it fell snugly into place in its assigned destination.

After reaching the edge of the connex boxes with the tire, Lambert lowered himself into the unused space because he felt that he could give better directions from that vantage point for the tedious tilting operation. This cumbersome loading procedure was untimely aborted when the tire caught on the edge of the connex boxes and bounced to the floor of the opening, pinning Lambert against the skin of the ship. The falling tire caused Lambert severe physical injury.

After a trial without a jury, the district court found that the day crew’s improper stowage of the connex boxes had made the vessel unseaworthy. The court concluded that the doctrine of unseaworthiness is applicable to the improper stowage of cargo. The court held that this hazardous condition was the proximate cause of Lambert’s injuries. However, the court did reduce Lambert’s recovery by 40%, basing its reduction on Lambert’s negligent presence in the unused space when the tire was lowered over the side of the connex boxes.

After a careful review of the evidence presented at trial, we conclude that there was ample evidence to support the findings of the court below. The district court correctly discerned the controlling legal principles and applied them to the facts adduced from the evidence presented. The district court’s judgment is therefore, affirmed.


text:
    Wayne WRIGHT, Plaintiff-Appellant, v. GENERAL MOTORS CORP. and T. A. Brouillette and Son, Inc., Defendants-Appellees.
    No. 71-1835.
    United States Court of Appeals, Seventh Circuit.
    Argued Nov. 28, 1972.
    Decided May 24, 1973.
    William D. Hanagan, Mt. Vernon, 111., for plaintiff-appellant.
    John E. Jacobsen, Mt. Vernon, 111., Vincent J. Hatch, Belleville, 111., for defendants-appellees.
    Before DUFFY, Senior Circuit Judge, STEVENS, Circuit Judge, and CAMPBELL, Senior District Judge.

         Senior District Judge William J. Campbell of the Northern District of Illinois is sitting by designation.

   WILLIAM J. CAMPBELL, Senior District Judge.

In this diversity action in which Illinois law controls, the plaintiff appeals from an order of the district court which dismissed his products liability complaint for failure to state a claim upon which relief could be granted. We reverse and remand for further proceedings.

In his amended complaint, the plaintiff named as defendants General Motors Corp. and T. A. Brouillette and Son, Inc., respectively the manufacturer and the seller of plaintiff’s truck, and alleged that he was operating the truck when, due to a defect in the transmission system, the truck went into two gears at once, stopped on a public highway and could not be moved. The amended complaint further alleged that the plaintiff then activated the emergency flasher lights on the vehicle, got out of the truck in order to make emergency repairs on the transmission system so that the vehicle might be moved off the road, and while so engaged was struck and injured by a vehicle coming from the opposite direction.

The defendant General Motors Corp. moved to dismiss the amended complaint, and the district court held as a matter of law that the defendants’ conduct was not the proximate cause of the plaintiff’s injuries. The district judge stated:

“The allegations of the complaint are sufficient to show that the product was defective and that the defect caused the truck to stop on the highway. The complaint does not show where with regard to the travel portion of the highway the truck came to rest. It does allege, however, that plaintiff was standing at the left front side of the truck. It does not allege whether the plaintiff was standing in the line of the oncoming traffic or whether the oncoming car crossed over into plaintiff’s lane and struck plaintiff. In either case it can hardly be said that the defective condition of the truck was the direct and proximate cause of plaintiff’s injury. The allegations of the complaint show that his injuries were caused by his own conduct in improperly placing himself in the lane of oncoming traffic or the wrongful conduct of the oncoming vehicle by its being in the improper lane. Neither of these conditions can be attributable to the defect in the product.”

Under Illinois law, before an intervening force will relieve a defendant from liability for his wrongful conduct, the intervening force must itself be outside the range of reasonable anticipation as a consequence of the defendants’ wrongful conduct. Ney v. Yellow Cab Co., 2 Ill.2d 74, 80-83, 117 N.E.2d 74 (1954). Where the question of whether the intervening force or event was a reasonable foreseeable consequence of the defendants’ conduct is one over which reasonable men might differ, the issue of proximate causation should never be determined as a matter of law. Ney v. Yellow Cab Co., 2 Ill.2d 74, 84, 117 N.E.2d 74 (1954). In that circumstance, the issue of proximate cause is for the jury to decide under appropriate instructions. We note, too, that the Illinois approach comports with the view of the Restatement. Restatement of Torts, 2d edition, §§ 440-447 (1965).

Examining the allegations in the plaintiff’s amended complaint, we are unable to conclude as a matter of law that the defendants’ conduct was not a proximate cause of the plaintiff’s injuries. Whether the plaintiff’s conduct in attempting to make emergency repairs on the disabled vehicle and his being struck by another oncoming vehicle while so engaged interrupted the chain of causation set in motion by the defendants’ wrongful conduct is a question over which, we think, reasonable minds might reach differing conclusions. When a vehicle suddenly comes to a halt on a public highway, we do not believe that an attempt to make emergency repairs on the vehicle or the vehicle’s being struck by another vehicle are outside the range of reasonable anticipation. In any event, since there is room for an honest difference of opinion, the issue of proximate causation presents a question of fact for the jury to resolve.

For the reasons stated, the order of the district court is reversed and the cause is remanded for further proceedings consistent herewith.


author: ALFRED T. GOODWIN, Circuit Judge:

text:
    RETAIL CLERKS UNION, LOCAL 770, et al., Appellees, v. RETAIL CLERKS INTERNATIONAL ASSOCIATION et al., Appellants.
    No. 72-3119.
    United States Court of Appeals, Ninth Circuit.
    April 19, 1973.
    Stuart L. Kadison (argued), Thomas J. McDermott, Jr., Joseph A. Murray, Jr., Richard T. Williams, Kadison, Pfael-zer, Woodard & Quinn, Los Angeles, Cal., for appellants.
    Alan D. Croll (argued), Frank Roth-man, Stuart A. Benjamin, Gary G. Neustadter, Wyman, Bautzer, Rothman & Kuchel, Beverly Hills, Cal., Albert Brundage, Brundage, Neyhart, Miller, Ross & Reich, Los Angeles, Cal., for ap-pellees.
    Before CARTER, CHOY and GOODWIN, Circuit Judges.
   ALFRED T. GOODWIN, Circuit Judge:

An international union appeals a district court injunction which delayed the imposition of a trusteeship upon a local union until after the completion of hearings within the framework of the International’s by-laws and the provisions of 29 U.S.C. §§ 462-464.

On October 7, 1972, the local filed a complaint in the district court seeking damages and an injunction to remedy alleged harassment of local members in the course of an investigation by the International into alleged corruption at the local level. On October 28, 1972, the International’s president sent a letter to the local purporting to. impose a trusteeship, and on November 1 the International sought the aid of the court in enforcing the trusteeship. The district court ordered hearings and stayed the imposition of the trusteeship pending their completion.

The International argues here that because the International’s president had in his own mind determined that an “emergency” existed within the meaning of the International’s constitution, the district court had no discretion to decide for itself the nonexistence of an emergency sufficient to warrant the imposition of a trusteeship pending a full hearing.

In the Labor-Management Reporting and Disclosure Act of 1959, 73 Stat. 531, 29 U.S.C. §§ 462-464, Congress limited in various ways the purposes for which and the procedures by which a trusteeship may be imposed upon a local union. The trusteeship must be imposed in accordance with the constitution and bylaws of the international; it can only be imposed for certain defined purposes; it must be authorized or ratified by a fair hearing.

Congress did not provide that the hearing must be held in all cases before trusteeship can be imposed. The Second Circuit, in the context of a threatened illegal strike against the Postal Service, has held that a trusteeship may be imposed provisionally before the hearing, subject to ratification thereafter, and that the district court should look only into the “good faith” of the international in imposing the trusteeship. National Ass’n of Letter Carriers v. Sombrotto, 449 F.2d 915 (2d Cir. 1971). The international urges that this “good faith” standhrd should be applied not only to the question of the necessity for the trusteeship but also to the determination that an emergency exists.

The Fifth Circuit has held that the district court has discretion to decide whether the hearing should precede or follow the trusteeship. Bailey v. Dixon, 429 F.2d 1321 (5th Cir. 1970). During the pendency of this appeal the District of Columbia Circuit held invalid a trusteeship imposed without a prior hearing, holding, “[ajbsent a reasonable belief in the necessity for immediate action, all practical steps must be taken to afford a hearing before a trusteeship is imposed.” U.M.W. Local 13410 v. U.M.W., 475 F.2d 906 (D.C.Cir., 1973) (emphasis in original).

We hold that the district court does have discretion to determine whether it could reasonably be said that an emergency exists, and that the district court acted within its discretion when it ordered the trusteeship stayed pending a hearing in this case. Congress recognized that the imposition of a trusteeship is an extraordinary intrusion into the affairs of a local union. Such a step should not be taken without a prior hearing, absent some necessity for immediate action.

In the case before us, the claim of emergency was based on some allegedly nonconforming contracts which had been negotiated by the Local but whose implementation had been delayed by order of the International, and on a questionable financial transaction which had taken place six years previously. The district court was warranted in finding that the International produced no facts showing a necessity for immediate action, particularly in view of contemporaneous protective orders entered by the court to preserve assets and to prevent further contracts from being made.

While maintenance of the status quo by injunction will not always be possible or desirable, and while initial deference should be given to the International’s finding that an emergency exists, the district court acted properly in this case.

Affirmed.


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Wayne C. FLEMING, Defendant-Appellant.
    No. 73-1002.
    United States Court of Appeals, Tenth Circuit.
    Submitted April 16, 1973.
    Decided April 23, 1973.
    Thomas A. Williams, Enid, Okl., for defendant-appellant.
    William R. Burkett, U. S. Atty. and John E. Green, Asst. U. S. Atty., for plaintiff-appellee.
    Before HILL, BARRETT and DOYLE, Circuit Judges.
   PER CURIAM.

Pursuant to 18 U.S.C. § 3401, Wayne C. Fleming, the appellant, waived his right to be tried before a judge of the district court and consented to a trial before a United States Magistrate for the Western District of Oklahoma. He was convicted on an indictment charging violation of 18 U.S.C. § 1701 (obstruction of mails).

An appeal was taken to the district court where the conviction was affirmed, and Fleming now appeals to this Court. The sole issue presented for our review is the contention that the Government failed to establish the elements of the crime, specifically that there was no showing that the mail items were knowingly and willfully discarded with an intent to obstruct delivery.

Fleming was officially employed as a mail carrier for the United States Postal Service in Norman, Oklahoma. He was charged with knowingly and willfully obstructing and retarding the passage of mail in that he did throw away and discard thirty-three (33) pieces of third class mail (circulars from Zales Jewelers) addressed to customers on his mail route in Norman, Oklahoma, on September 26, 1972. A summary of the evidence adduced before the Magistrate is attached as an appendix to this opinion.

The elements of the offense are (1) obstructing or retarding (2) the passage of mail (3) willfully and knowingly. United States v. Takacs, 344 F. Supp. 947 (W.D.Okl.1972). See also United States v. Claypool, 14 F. 127 (W.D.Mo.1882). Passage of the mail means the transmission of mail matter from the time of placing in an official depository to the time of delivery to the addressee. United States v. Claypool, supra. This element is clearly established as are Fleming’s acts that obstructed or retarded the passage of the circulars, as he acknowledges.

The basic argument is that Fleming did not know that discarding-the circulars was improper since he had never had any training sessions nor had he ever seen a copy of the “City Carrier’s Instruction Handbook”. This argument is somewhat inconsistent with his written statement to postal inspectors. The issue of criminal intent is a factual question seldom provable by direct evidence but may be inferred from all the facts and circumstances of a case which reasonably tend to show a ment.al attitude. See United States v. Tasher, 453 F.2d 244 (10th Cir. 1972); United States v. Ebey, 424 F.2d 376 (10th Cir. 1970); United States v. Mecham, 422 F.2d 838 (10th Cir. 1970). We are satisfied that Fleming willfully and knowingly obstructed or retarded the passage of mail.

Affirmed.

APPENDIX

WITNESSES FOR THE UNITED STATES AND THEIR TESTIMONY

JERRY CADE, FOREMAN OF DELIVERY, NORMAN POST OFFICE:

He schedules employees and supervises them. On September 26, 1972, the defendant was scheduled to serve City Route #5 in Norman, Oklahoma. Around 9:00 a. m., Mr. Cade found in trash can near defendant’s working area mail for City Route #5, which he identified as Zales’ Circulars (Pl. Exs. 1 and 2). If mail is not deliverable, carrier is to endorse and place in throw-back case provided for carrier. Carrier is not authorized to throw any mail in trash basket.

WALLACE E. PUGSLEY, JR., POSTAL INSPECTOR, OKLA. CITY:

Mr. Pugsley identified statement of defendant (Pl. Ex. 3). He testified Pl. Ex. 1 contains 33 Zales’ Circulars with good addresses on Route 5, and that PI. Ex. 2 contains 50 Zales’ Circulars with addresses on Route 5 for persons who defendant claimed had moved. These were not properly endorsed by defendant.

C. E. WELCH, POSTAL INSPECTOR:

He had observed trash basket on September 25 and there were no Zales’ Circulars in it. Defendant told him he placed the Zales’ Circulars in trash basket on September 26.

WITNESSES FOR THE DEFENSE AND THEIR TESTIMONY

JAMES A. BRUEL, MAIL CARRIER, NORMAN, OKLAHOMA:

Sometimes the throw-back case gets full and material spills on floor. Carrier is not authorized to throw away mail — only the supervisor.

JAMES BRANN, MAIL CARRIER, NORMAN, OKLAHOMA:

The procedures concerning throw-back mail have not been strictly enforced in the Norman Post Office. The throw-, back cases do get full and overflow onto the floor. On September 26, he put his Zales’ Circulars which were not deliverable in the throw-back case and not the trash basket. He had never seen any carrier • place mail in the trash basket without checking with supervisor.

JOHN WOMACK, POSTAL CLERK AT NORMAN, OKLAHOMA:

He testified he had observed the throwback cases overflowing but has never seen or heard of a carrier throwing mail into trash cans. He did not consider the Norman Post Office a good operation.

WAYNE C. FLEMING, DEFENDANT:

He put Zales’ Circulars which he considered undeliverable in the trash can. If some with good addresses were thrown away, it was unintentional. On September 26, he had coverage of Zales’ Circulars for everybody on route — approximately 500-600. Although he has been the carrier for three years, he has never had any training sessions. He does not have the Carrier’s Handbook (Pl. Ex. 4), and has never seen a copy.

      . “ . . . I realize that I was derelict in my duties that in failing to ascertain mail discarded was not closely examined to insure that mail containing good addresses was not discarded. I was also derelict in not lining out the addresses as required by normal postal procedures.” Government’s Exhibit No. 3.


text:
    Tony RICE et al., Appellants, v. The UNITED STATES of America et al., Appellees.
    No. 72-1738.
    United States Court of Appeals, Eighth Circuit.
    Submitted March 15, 1973.
    Decided April 20, 1973.
    George T. Dynes, Dickinson, N. D., for appellants.

      Lawrence E. Shearer, Atty., Dept, of Justice, Washington, D. C., and Charles A. Feste, Fargo, N. D., for appellees.
    Before MATTHES, Chief Judge, and ROSS and STEPHENSON, Circuit Judges.
   PER CURIAM.

This is an action brought by appellants to review a decision of the Board of Land Appeals approving the grant of an oil and gas lease on Burlington Northern, Inc. railroad right-of-way in Stark County, North Dakota. Judge VanSickle entered judgment affirming the decision of the Board of Land Appeals. We affirm.

The predecessor to Burlington Northern, Inc., Northern Pacific Railway Co., was granted a 400-foot wide strip of land from Lake Superior to Puget Sound under an Act of Congress passed July 2, 1864. This 400-foot wide strip passed through Section 8, Township 139 North, Range 98 West of the 5th P.M. in Stark County, North Dakota. In 1904 and in 1910 patents were issued to Mr. O’Connell and Mr. Gillman for 160-acre tracts of land within said Section 8. Although the railroad right-of-way crossed those two tracts, no mention was made in the patents of the railroad right-of-way or of the mineral rights attendant thereto. The appellants are successors in title to Mr. Gillman and Mr. O’Connell.

No question is raised as to the ownership of the right-of-way, as such, but appellants claim to own the oil and gas rights under the right-of-way. Their theory is that under United States v. Union Pacific R.R., 353 U.S. 112, 77 S. Ct. 685, 1 L.Ed.2d 693 (1957), title to oil and gas rights did not pass from the United States to Northern Pacific, and that since the descriptions in the patents given their predecessors in title included the entire 160-acre tracts without excluding the railroad right-of-way, they are the lawful owners of all of the interest that the United States retained in the railroad right-of-way, including oil and gas rights.

The trial court held that under Northern Pacific Ry. v. Townsend, 190 U.S. 267, 23 S.Ct. 671, 47 L.Ed. 1044 (1903) the 400-foot strip of land conveyed to the railroad was taken out of the category of public land subject to preemption and sale and that the land department therefore could not have conveyed any interest in it to the appellants’ predecessors in title when the patents were issued.

We have carefully considered the record and the briefs of the parties and conclude that the trial court correctly decided the factual and legal issues presented. We therefore affirm on the basis of Judge VanSickle’s well-reasoned memorandum opinion. Rice v. United States, 348 F.Supp. 254 (D.N.D. 1972).


text:
    Edward Joseph VICKNAIR, Plaintiff-Appellee, v. ARCHIE TOWING COMPANY, INC., Defendant-Appellant.
    No. 72-3241.
    United States Court of Appeals, Fifth Circuit.
    June 4, 1973.

      Patrick L. Burke, Joy S. Miller, New Orleans, La., for defendant-appellant.
    Dan C. Garner, William L. Von Hoene, New Orleans, La., for plaintiff-appellee.
    Before TUTTLE, GODBOLD and MORGAN, Circuit Judges.
   PER CURIAM.

We conclude that if errors occurred in the reception of evidence or in the wording of the special interrogatories they were in no way prejudicial to the defendant. The only remaining issue is the argument that the jury’s verdict of $65,000 for the permanent partial impairment of the plaintiff’s ankle was so excessive as to bring it within the power of this court to reverse the denial of the motion in the trial court to order a re-mittitur of a part of the verdict or grant a new trial. In our position of over-viewing the jury’s verdict for injury which caused loss of wages, future loss of wages, past pain and suffering, future pain and suffering and loss of function of ten to fifteen percent of one leg in the case of a twenty-seven year old worker with a substantial earning capacity we conclude that this court does not have the power to disturb the verdict. See Neese, Administrator, v. Southern Railway Company, 350 U.S. 77, 76 S.Ct. 131, 100 L.Ed. 60, in which the Supreme Court reversed the Court of Appeals for the Fourth Circuit, 216 F.2d 772, when that court had directed a remit-itur in an appeal from a verdict claimed not to have been mathematically sustainable. See also Grunenthal v. Long Island Railroad Company, 393 U.S. 156, 89 S. Ct. 331, 21 L.Ed.2d 309.

The judgment is affirmed.


text:
    CALIFORNIA MOLASSES CO. et al., Appellants, v. C. BREWER & CO. et al., Appellees.
    No. 72-1265.
    United States Court of Appeals, Ninth Circuit.
    April 18, 1973.
    Rehearing Denied May 23, 1973.

      Francis 0. Scarpulla, Linda L. Tedes-chi, Alvin H. Pelavin, Philip K. Jensen, John T. Weld, San Francisco, Cal., for appellants.
    William H. Orrick, James K. Haynes, W. Reece Bader, Orrick, Herington, Rowley, & Sutcliffe, David M. Balabani-an, Arthur R. Albrecht, McClutcheon, Doyle, Brown & Enersen, San Francisco, Cal., Robert B. Owen, George R. Poeh-ner, Covington & Burling, Washington, D. C., for appellees.
    Before BROWNING, WRIGHT and GOODWIN, Circuit Judges.
   PER CURIAM:

Plaintiffs commenced an antitrust action on July 17, 1969. Two years later, because the file revealed little or no progress, the district judge to whom the case had been assigned ordered the plaintiff to show cause why the case should not be dismissed for failure to prosecute. Following a hearing, and a warning, the court gave plaintiffs ninety days to complete the preliminary phase of discovery. When the time expired without substantial progress, the court dismissed the action on December 13, 1971.

This appeal asserts that the dismissal pursuant to Fed.R.Civ.P. 41(b) was an abuse of discretion. The scope of discretion in such cases is fully discussed in Von Poppenheim v. Portland Boxing & Wrestling Com’n, 442 F.2d 1047 (9th Cir. 1971), cert. denied 404 U.S. 1039 (1972). The record here reveals no abuse.

After the court had called the plaintiff’s delinquencies to the attention of counsel and had given fair warning that the case would be dismissed, plaintiff used more than half of the ninety days seeking new counsel. The promised discovery was not accomplished.

This court is aware of the serious consequences to a party of the dismissal of his case. But if the Rules of Civil Procedure are to be effective they must be enforced. The sanction imposed in this case was neither harsh nor unexpected under the circumstances. The dismissal was clearly within the discretionary power of the court to keep its calendar moving.

Affirmed.


author: BUTZNER, Circuit Judge:

text:
    KERR-McGEE CORPORATION, Appellee, v. William E. LAW, in personam, and as Owner and Claimant of the BARGE MICHAEL, In Rem, Appellant.
    No. 72-2406.
    United States Court of Appeals, Fourth Circuit.
    Argued April 3, 1973.
    Decided June 7, 1973.

      Morton H. Clark, Norfolk, Va. (Van-deventer, Black, Meredith & Martin, Norfolk, Va. on brief) for appellant.
    Walkley E. Johnson, Jr., Norfolk, Va. (Crenshaw, Ware & Johnson, Norfolk, Va., on brief) for appellee.
    Before HAYNSWORTH, Chief Judge, and BUTZNER and FIELD, Circuit Judges.
   BUTZNER, Circuit Judge:

This appeal involves the in personam liability of the owner of a vessel that is subject to a demise or bareboat charter and the in rem liability of the vessel for damage to cargo. Loaded with super-phosphate, the Barge MICHAEL capsized and sank in high seas and heavy winds in the Chesapeake Bay while en route from Baltimore, Maryland to Wil-liamston, North Carolina. The barge, owned by William E. Law, had been demised to Allied Towing Corporation, an affiliate of Allied Container Service, 15 months before it sank. Law was the president and principal stockholder of Allied Towing. Although the transportation agreement for the cargo was made between Kerr-McGee Chemical Corporation and Allied Container, Allied Towing was performing the carriage with its own tug and the MICHAEL. Kerr-McGee was aware of the arrangement.

The district judge found that the cargo loss was caused by the unseaworthiness of the Barge MICHAEL and the negligence of Allied Towing and William E. Law. He held that Allied Towing was exculpated by the terms of the transportation agreement, and this ruling has not been appealed. He further held that because Law was not a party to the agreement, neither he nor the MICHAEL could benefit from the exculpatory clause. Accordingly, the district court entered judgment against Law in personam and the MICHAEL in rem for the cargo loss. We reverse.

I

Expert testimony established that defective hatch covers allowed high seas to flood the cargo compartment and capsize the barge. Law admitted that the hatches had not been repaired since he purchased the barge three years earlier. He knew that eighteen days before the accident the barge had run aground and taken water through the hatch covers, and he had been advised that the hatch covers were damaged. On the basis of this evidence, the district court held that Law was negligent.

Law does not contest the factual findings of the district court, but argues that because the barge was under a demise charter to Allied Towing Corporation, Allied became the owner pro hac vice for the term of the charter and Law owed no duty to the owner of the cargo concerning the condition of the barge. Kerr-McGee, agreeing that the barge was under a demise charter, disagrees about the effect of the charter on the liability of the owner. It argues that the question is not one of the warranty of seaworthiness, but rather the negligence of Law, which it says is separate and distinct from the transportation agreement or the charter.

We think the authorities sustain Law’s position. There is no suggestion that the barge was unseaworthy or that Law had failed to exercise due care regarding its condition when he chartered it to Allied Towing. While there appear to be few cases dealing with the question, those in which the issue has been raised hold that the owner of a vessel under a demise charter is liable only for unseaworthiness or negligence that- pre-exists the charter. Ramos v. Beauregard, Inc., 423 F.2d 916 (1st Cir. 1970); Vitozi v. Balboa Shipping Co., 163 F.2d 286 (1st Cir. 1947); In re New York Dock Co., 61 F.2d 777 (2d Cir. 1932). See In re Marine Sulphur Queen, 460 F.2d 89, 100 (2d Cir. 1972) (dictum). This rule recognizes that when the owner of the vessel enters into a demise charter, he surrenders all possession and control of the vessel to the charterer. Since he no longer has the right to control the use of the vessel, he is no longer charged with the duties and liabilities that arise out of its ownership. Conversely, the demise charterer “becomes subject to the duties and responsibilities of ownership.” Leary v. United States, 81 U.S. (14 Wall.) 607, 610, 20 L.Ed. 756 (1872). Allocation of insurance is consistent with this rule. The owner typically carries hull insurance for his own account and the charterer arranges for indemnity coverage. Gilmore & Black, The Law of Admiralty § 4-22 (1957).

The bare fact that Law was president and principal stockholder of Allied Towing does not, standing alone, alter our decision. The record does not disclose participation by Law in the operation and maintenance of the barge. It is reasonable to assume, however, that any duties of this nature that he performed related to his position in Allied Towing and not to his ownership of the barge. Therefore, since Law, as owner of a vessel under a demise charter, owed Kerr-McGee, the owner of the cargo, no duty to maintain the vessel after it was chartered, the judgment of the district court holding him liable for negligence must be reversed.

II

The issue of the MICHAEL’S in rem liability stands on a different footing. The district court found that the defective hatch covers rendered the barge un-seaworthy and that this condition was the cause of the accident. He accordingly held the barge liable for the loss.

The existence of a demise charter does not prevent the attachment of tort liens or preclude the in rem liability of a vessel. Gilmore & Black, supra,, § 4-24. Where, as here, the vessel is found to be unseaworthy, it is liable for the loss of cargo caused by that condition. However, Law urges that clause 13 of the transportation agreement between Allied Container and Kerr-McGee exculpates the barge from liability.

Clause 13 provided as follows:

“All claims for loss, damage and/or expense of whatsoever nature or from whatsoever cause, including all right of subrogation against Allied and its affiliated companies, and its vessels employed herein, are hereby waived, except for General Average, Sue and Labor, and collision liability.”

Law asserts that the clause insulates the MICHAEL from liability because the barge was demised to Allied Towing, one of Allied Container’s affiliated companies. Kerr-McGee resists application of the clause, arguing that a proper construction excludes the MICHAEL from the term “its vessels” and that the clause is invalid as opposed to public policy.

Although the agreement was made between Allied Container and Kerr-McGee, Kerr-McGee was aware the carriage was being performed by Allied Towing. Kerr-McGee returned the executed copy of the transportation agreement to Allied Towing, and it was billed by Allied Towing. Further, the district court found that Allied Towing was an affiliated company of Allied Container. Nevertheless, the court held that the barge was not exculpated by clause 13 because its owner was not a party to the agreement.

We believe clause 13 should not be given such a narrow construction. The clause specifically exculpates Allied Container and its vessels. It also clearly exculpates Allied Towing as an affiliated company. The record does not disclose that Kerr-McGee bargained for the use of any particular barge. It appears to have been content to load its cargo on any barge that Allied Towing tendered. Surely under these circumstances, it would be unduly technical and inconsistent to hold that while the parties agreed to exculpate a vessel actually owned by Allied Container, they intended not to exculpate a vessel furnished by an affiliated company under a demise charter. Nothing in the agreement or in the evidence suggests that the parties intended to make this fine distinction when they used the words, “its vessels,” instead of the words, “their vessels,” and no practical or economic justification for the distinction has been shown. We conclude, therefore, that clause 13 embraces the MICHAEL.

Nor does the clause contravene public policy. Although section 1 of the Harter Act, 46 U.S.C. § 190, forbids stipulations against negligence by carriers, the Act applies only to contracts of common carriage unless it is specifically incorporated into the agreement for private affreightment. E. g., Commercial Transport Corp. v. Martin Oil Service, Inc., 374 F.2d 813, 818 (7th Cir. 1967); Brown & Root, Inc. v. American Home Assurance Co., 353 F.2d 113, 118 (5th Cir. 1965), cert. denied, 384 U.S. 943, 86 S.Ct. 1465, 16 L.Ed.2d 541 (1966); Koppers Conn. Coke Co. v. James McWilliams Blue Line, Inc., 89 F.2d 865, 866 (2d Cir.), cert. denied, 302 U.S. 706, 58 S.Ct. 25, 82 L.Ed. 545 (1937). The district court found, and the parties do not suggest otherwise, that the cargo was shipped under a contract of private carriage. Section 1 of the Harter Act was not incorporated into the transportation agreement. Allied and Kerr-McGee, therefore, were free to make whatever contractual allocation of risk they desired. See The Monarch of Nassau, 155 F.2d 48 (5th Cir. 1946); The Elizabeth Edwards, 27 F.2d 747 (2d Cir. 1928). Kerr-McGee’s reliance on Bisso v. Inland Waterways Corp., 349 U.S. 85, 75 S.Ct. 629, 99 L.Ed. 911 (1955), does not require a contrary result. Mr. Justice Black was careful to point out that the decision was based on the particular nature of the tug-tow relationship, and specifically stated that the considerations which invalidated exculpatory clauses in towage contracts did not necessarily command a similar result in other maritime contracts. 349 U.S. at 91, 93, 75 S.Ct. 629. Both before and after Bisso, it has been held that exculpatory clauses in private contracts of affreightment are not contrary to public policy. E. g., Texas Co. v. Lea River Lines, Inc., 206 F.2d 55 (3rd Cir. 1953); Allied Chem. Corp. v. Gulf Atlantic Towing Corp., 244 F. Supp. 2 (E.D.Va.1964).

The judgment of the district court is reversed.


author: WALLACE, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Richard Daniel ALSOP, Defendant-Appellant.
    No. 72-1899.
    United States Court of Appeals, Ninth Circuit.
    May 14, 1973.
    L. Earl Hawley (argued), Las Vegas, Nev., for defendant-appellant.
    Raymond B. Little, Asst. U. S. Atty. (argued), Joseph L. Ward, U. S. Atty., Las Vegas, Nev., for plaintiff-appellee.

      Before ELY and WALLACE, Circuit Judges, and SOLOMON, District Judge.

       Honorable Gus J. Solomon, United States District Judge, Portland, Oregon, sitting by designation.

   WALLACE, Circuit Judge:

A jury found Richard Daniel Alsop guilty of the crime of bank robbery in violation of 18 U.S.C. § 2113(a). He appeals claiming that the indictment was duplicitous, that certain jury instructions were erroneous and that the trial court erred in refusing his requested instructions. We affirm.

On November 3, 1971, Alsop entered the Nevada National Bank in Las Yegas, Nevada. He approached the teller and asked for two rolls of pennies in exchange for a dollar. When the teller placed the pennies on the counter, Alsop told- her, “Give me the rest of the paper money.” The teller laughed, thinking it was a joke. Alsop produced a toy gun and a paper bag and told the teller that he was not kidding. Alsop took the bag, then filled with money, and left. He was captured a short distance from the bank with the money and toy gun.

Alsop contends that the indictment was duplicitous because it placed into issue elements of 18 U.S.C. § 2113 (d), as well as those of § 2113(a). We disagree. The indictment is ordinarily sufficient when, as here, the wording of the indictment is taken directly from the statute. See United States v. Ansani, 240 F.2d 216, 223 (7th Cir.), cert. denied, 353 U.S. 936, 77 S.Ct. 813, 1 L.Ed.2d 759 (1957); Brown v. United States, 222 F.2d 293, 296 (9th Cir. 1955). That the statute and the indictment use the disjunctive phrase “by force and violence, or by intimidation” does not mean the indictment is duplicitous. See United States v. Ansani, supra, 240 F.2d at 223. Only one offense was charged and Alsop was well aware of it. Furthermore, the indictment specifically advises Alsop that he is accused of acting “in volation of Title 18, United States Code, Section 2113(a).”

Alsop proposed five jury instructions which were refused by the trial court. “[W]e have carefully considered the instructions as a whole and find that they fully cover the applicable law. ... It was not error to refuse the specific instructions requested.” Himmelfarb v. United States, 175 F.2d 924, 951 (9th Cir.), cert. denied, 338 U. S. 860, 70 S.Ct. 103, 94 L.Ed. 527 (1949). Three of the proposed instructions defined other crimes, none of which were charged against Alsop. They were properly rejected. The fourth directs the jury that it can consider the lack of evidence on a particular issue. This instruction may be useful in a particular case at the judge’s discretion, but failing to give it was not error. United States v. Hephner, 410 F.2d 930, 934 (7th Cir. 1969). The final rejected instruction would advise the jury that any intimidation requires a demonstration of ability to carry out the threat. This is not a prerequisite for a conviction pursuant to 18 U.S.C. § 2113(a). See United States v. Brown, 412 F.2d 381, 383-384 (8th Cir. 1969).

Alsop objected to and now challenges the language emphasized in the following instruction:

Now, to take “by intimidation” means wilfully to take by putting in fear of bodily harm. Such fear must arise from the wilful conduct of the accused, rather than from some mere temperamental timidity of the victim; however, the fear of the victim need not be so great as to result in terror, panic, or hysteria.
A taking “by intimidation” must be established by proof of one or more acts or statements of the accused which were done or made, in such a manner, and under such circumstances, as would produce in the ordinary person fear of bodily harm.
However, actual fear need not be proved. Fear, like intent, may be inferred from statements made and acts done or omitted by the accused, and by the victim as well; and from all the surrounding circumstances shown by the evidence in the case.

He asserts that fear must be proven and that the challenged language obviates this essential element. However, actual fear need not be proven. The instruction when read as a whole advises the jury to focus its attention on the conduct of the defendant and not on the reaction of the victim. The courageousness or timidity of the victim is irrelevant ; it is the acts of the accused which constitute an intimidation. Were it otherwise, a fearless banker could never be robbed by intimidation. We refuse to reach such an absurd result.

He also contends that stating “actual fear need not be proved” is inconsistent with defining intimidation as “wilfully to take by putting in fear of bodily harm.” However, reading the instruction as a whole, rather than focusing on selected segments, leads us to believe the jury was not misled.

Affirmed.

      . The arresting officer testified that, when Alsop was captured, “directly to the left of him, approximately one to two feet from his side, was a brown paper bag, which was torn on one side, revealing paper currency of an unknown amount, and a small chrome-colored cap pistol.” Evidently, the cap pistol looked authentic. A bank teller, when asked what she had been afraid of, replied: “That the gun could have been — what he could have done. It looked pretty real after you looked at it for a while.”

      . See 2 E. Devitt & C. Blackmar, Federal Jury Practice and Instructions § 48.05 (2d ed. 1970).

      . See United States v. Epps, 438 F.2d 1192, 1193 (4th Cir. 1971) ; United States v. Brown, supra, 412 F.2d at 383-384; United States v. Baker, 129 F.Supp. 684, 686-687 (S.D.Cal.1955). See also United States v. Johnson, 401 F.2d 746 (2d Cir. 1968).

      . The determination of whether there has been an intimidation should be guided by an objective test focusing on the accused’s actions. That test requires the application of the standard of the ordinary man. Therefore, to obviate any future alleged difficulty, we suggest the definition of intimidation should be modified. It could read, for example: To take, or attempt to take, “by intimidation” means wilfully to take, or attempt to take, in such a way that would put an ordinary, reasonable person in fear of bodily harm. See United States v. Roustio, 455 F.2d 366, 371-372 (7th Cir. 1972); United States v. Thomas, 455 F.2d 320, 322 (6th Cir. 1972); United States v. DePalma, 414 F.2d 394, 396 (9th Cir. 1969), cert. denied, 396 U.S. 1046, 90 S.Ct. 697, 24 L.Ed.2d 690 (1970). See also United States v. Epps, and cases cited, supra note 3.


author: GEWIN, Circuit Judge:

text:
    In the Matter of REHKOPF MATTRESS SALES, INC. and Rehkopf Mattress Company, Inc., Bankrupt. Billy Joe REHKOFF, Appellant, v. William V. BROWN, Jr., Trustee, Appellee.
    No. 73-1134
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    June 1, 1973.

      Donald Friedman, Jack Carter, Tex-arkana, Tex., for Rehkopf Mattress Sales, Inc.
    B. A. Britt, Jr., Texarkana, Tex., for appellee.
    Before GEWIN, COLEMAN and MORGAN, Circuit Judges.

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

   GEWIN, Circuit Judge:

Billy Joe Rehkopf (Rehkopf) appeals from a judgment of the district court affirming a bankruptcy court order which restrains him from interfering with the bankruptcy trustee’s possession of a certain store located in Texarkana, Texas. The sole issue to be resolved on appeal is whether the store falls within the summary jurisdiction of the bankruptcy court. The bankruptcy court concluded that the property in question was in possession of the bankrupt at the time of the initial petition and adjudication in bankruptcy and therefore came within its summary jurisdiction. It issued an order protecting its jurisdiction which, upon petition for review by Rehkopf, was upheld by the district court. We agree with the district court that summary jurisdiction was appropriate and accordingly affirm its judgment.

On June 5, 1972 Rehkopf Mattress Company, Ine. (RMC), along with Reh-kopf Mattress Sales, Inc. (RMS), voluntarily filed a petition in bankruptcy in the United States District Court for the Eastern District of Texas. RMC was engaged in the manufacture of furniture and mattresses. When the manufacturing process was complete the finished products were sold to RMS which in turn sold them to retailers. RMS’ sole function was to sell RMC products. RMC conducted its business at two locations, Store No. 1 in downtown Texarkana and Store No. 2 in the industrial sector of Texarkana. It had been insolvent for some four or five years prior to the filing of the petition in bankruptcy. The referee found that Rehkopf was well aware of the company’s insolvency.

Both RMC and RMS were wholly owned by Nell Rehkopf. She also served as president of the two companies until she was declared incompetent in April of 1972; her appointed guardian then took her place. The transaction which gave rise to the present dispute occurred in November of 1971, approximately seven months before the petition in bankruptcy was filed. At that time Nell Rehkopf purportedly sold Store No. 1 to Billy Joe Rehkopf. A warranty deed reciting a consideration of $2,000 was executed purporting to convey to him title to the store’s real property, i. e. the land and building, and a bill of sale reciting a consideration of $1,000 was also executed purporting to vest in him title to the store’s personalty. Both the deed and the bill of sale were duly recorded. Although the consideration for the sale of the store and personalty was supposedly $3,000, Billy Joe Rehkopf was unable to furnish any proof that this amount was actually paid although he was given full opportunity to do so.

After the sale RMC continued to operate Store No. 1 as before. There was no change in the management, and RMC’s books continued to reflect that it owned the store. Rehkopf made no effort to exercise any control over the property. He was paid no rent by RMC for its use of the store, and he did not ask for any rent until after RMC’s petition in bankruptcy was filed.

Immediately after the voluntary petition in bankruptcy was filed, William V.' Brown, Jr. was appointed receiver and thereafter trustee in bankruptcy, and he took possession of all the bankrupt companies' assets. But on June 14, 1972 a suit against Brown in his capacity as receiver was instituted by Rehkopf in the 102nd Judicial District Court of Bowie County, Texas. Upon Rehkopf’s assertion that he was the rightful owner of Store No. 1, the state court issued a temporary injunction restraining Brown as receiver from interfering with Rehkopf’s possession and use of the property. Brown immediately petitioned the bankruptcy court to stay enforcement of the state court’s order. After a hearing the bankruptcy court determined that the store was in the possession of the bankrupt at the time of the petition in bankruptcy and therefore came within its summary jurisdiction. Rehkopf was ordered not to interfere with the trustee’s possession of the store and not to execute the state court order. The district court subsequently affirmed the bankruptcy court’s order, and Rehkopf appealed.

The question we must decide is whether Store No. 1 became subject to the bankruptcy court’s summary jurisdiction when RMC filed its voluntary petition in bankruptcy in June and was adjudicated a bankrupt and a receiver appointed. It is undisputed that if the store passed into the bankruptcy court’s summary jurisdiction, then it was proper for that court to order Rehkopf not to interfere with its possession of the store and to stay enforcement of the state court order. The summary jurisdiction of a bankruptcy court is exclusive; once a bankruptcy court has acquired summary jurisdiction over property, that property is withdrawn from the jurisdiction of all other courts. Any subsequent action commenced as to that property is in effect an interference with the orderly procedure of the bankruptcy proceeding and is therefore enjoinable. This rule is but an application of the general rule that when a court of competent jurisdiction takes possession of property through its officers, that property is withdrawn from the jurisdiction of all other courts which, though of concurrent jurisdiction, may not disturb that possession.

An exercise of summary jurisdiction is appropriate, however, only if the property in question was in the possession of the bankrupt on the date the petition was filed. It is settled that upon the filing of a petition in bankruptcy, all of the property in the alleged bankrupt’s actual or constructive possession passes at once into the custody of the bankruptcy court and becomes subject to its summary jurisdiction. On the other hand, if the property is within the actual or constructive possession of a third party who asserts a bona fide claim to the property, the bankruptcy court cannot summarily determine the merits of that claim without the consent of the third party. The test of summary jurisdiction then is possession, either actual or constructive, by the bankrupt on the date the petition is filed. This test was stated by the Supreme Court in the leading case of Thompson v. Magnolia Petroleum Company as follows: “Bankruptcy courts have summary jurisdiction to adjudicate controversies relating to property over which they have actual or constructive possession. And the test of this jurisdiction is not title in but possession by the bankrupt at the time of the filing of the petition in bankruptcy.”

The issue in the instant case is in some respects similar to that presented in Jackson v. Sports Company of Texas, Inc. In that controversy prior to filing a petition in bankruptcy, the bankrupt corporation had conveyed title to the store it occupied to one of its officers. Although the corporation continued in possession . of the premises until the date of its voluntary bankruptcy, it did so only as a tenant. It paid rent to the transferee from the date of the conveyance. This court held that the store in question did not pass into the summary jurisdiction of the bankruptcy court and that a plenary proceeding was necessary in order to determine rightful title to it.

But in the present case Rehkopf, the alleged titleholder, was never paid any rent by the bankrupt, and he asserted no claim to rent until after the petition in bankruptcy was filed. Furthermore RMC continued in possession of the premises just as before. No changes were made in the bankrupt’s books to reflect a.transfer of ownership, nor was the store operated in any different fashion. In short, in spite of the alleged purchase of the store Rehkopf never exercised any control over it. If he had a right to possession of the store, it was never manifested by any action on his or the bankrupt’s part. In these circumstances we conclude that RMC remained in actual possession of Store No. 1 until it filed its voluntary petition in bankruptcy. On that date the store passed into the summary jurisdiction of the bankruptcy court which properly enjoined Rehkopf from interfering with the trustee’s possession of the property. The judgment of the district court upholding that order is affirmed.

Affirmed.

      . On appeal Rehkopf also protests the bankruptcy court’s refusal to have the testimony at this hearing transcribed. The testimony was recorded on tape. The bankruptcy court did summarize the testimony at the hearing, and Rehkopf makes no showing that the absence of a transcript has prejudiced him. We find the bankruptcy court’s summary of the evidence presented at the hearing entirely adequate. There is no merit in Rehkopf’s protest.

      . Issacs v. Hobbs Tie & Timber Co., 282 U.S. 734, 737, 51 S.Ct. 270, 75 L.Ed. 645 (1931). Accord Carney v. Sanders, 381 F.2d 300, 302 (5th Cir. 1967).

      . Issacs v. Hobbs Tie & Timber Co., 282 U.S. 734, 51 S.Ct. 270, 75 L.Ed. 645 (1931). See generally 1 Collier on Bankruptcy § 2.62, 329 (14th ed. 1971).

      . 11 U.S.C. § 110(a)(5). See, e. g., In re American Southern Publishing Co., 426 F.2d 160, 163 (5th Cir. 1970). See generally, 2 Collier on Bankruptcy §§ 23.03 et seq. (14th ed. 1971).

      . Harrison v. Chamberlain, 271 U.S. 191, 193, 46 S.Ct. 467, 70 L.Ed. 897 (1926). Accord, In re American Southern Publishing Co., 426 F.2d 160, 163 (5th Cir. 1970) and Suhl v. Bumb, 348 F.2d 869, 870 (9th Cir. 1965).

      . 309 U.S. 478, 481, 60 S.Ct. 628, 630, 84 L.Ed. 876 (1940).

      . 278 F.2d 716 (5th Cir. 1960).


author: ROSS, Circuit Judge.

text:
    John L. SANDERS and Helen L. Sanders, Appellees, v. C. E. HISER and Louise Hiser, Appellants.
    No. 72-1522.
    United States Court of Appeals, Eighth Circuit.
    Submitted April 9, 1973.
    Decided May 2, 1973.

      William M. Stocks, Fort Smith, Ark., for appellants.
    Sam Sexton, Jr., Fort Smith, Ark., for appellees.
    Before GIBSON, BRIGHT and ROSS, Circuit Judges.
   ROSS, Circuit Judge.

This is an appeal from a jury verdict entered in favor of Sanders and against the Hisers, awarding $3,600 damages for fraud and deceit in the sale of a one-acre plot of land. This judgment was originally affirmed, by a per curiam opinion of this Court on January 9, 1973. The Hisers submitted a petition for rehearing claiming that this Court erred in failing to decide whether certain evidence was admissible and whether the jurisdiction of the district court had been improperly invoked due to a bad faith allegation of the amount in controversy. After receipt of a response from the Sanders, this Court entered an order on February 28, 1973, granting the petition for rehearing. On rehearing we reverse with directions to dismiss the complaint for lack of subject matter jurisdiction due to a bad faith allegation of amount in controversy.

The complaint alleged diversity of citizenship and that the amount in controversy exceeded $10,000. It further alleged that the Hisers had sold a one-acre tract of ground to the Sanders in February of 1969, and in connection therewith made certain fraudulent misrepresentations concerning platting that tract and a contiguous tract owned by the Hisers and concerning the construction of hard surface streets in the subdivision. The complaint stated that the Sanders constructed a home of a reasonable value of $15,000 on said tract in reliance on these false representations and that they were damaged thereby in the sum of $11,000.-00.

The answer filed by the Hisers specifically denied that the amount in controversy was $10,000 or more and also denied the other substantive allegations of the complaint. Requests for admissions were served upon the Sanders by the Hisers, including no. 35 which stated as follows:

“35. The real property described in the complaint including the value of the residence house has a present value in excess of $10,000.00.”

The response thereto by the Sanders was:

“Denied. This statement is untrue.”

At trial, although the Sanders had denied that the real property described in the complaint, including the value of the home, had a present value in excess of $10,000, Mr. Sanders twice testified that the value of the property was $11,000. Sanders also testified that if the house and lot had been in a subdivision as contemplated by the Sanders it would be worth between $16,000 and $17,000. Mr. Sanders further testified that he paid $1,450 for the lot and $10,750 for construction of the home. He further testified that the cost of constructing a street was approximately $10 a running foot. The Sanders’ expert witness testified that the value of the house situated on the unimproved property was $11,500, but if situated on improved property, it would be $15,500. The defense expert witness testified he had appraised the house in 1971 at $13,000 and that if a seal coat was added on the street, the value of the house would be $13,100.

Hisers’ counsel moved for a directed verdict, arguing in part:

“[A]s I recall, Mr. Sanders testified he figured the lot was worth $11,000.-00; the real estate agent, I believe, said he thought it was worth Eleven five, and the highest price I can recall is somewhere in the neighborhood of $16,500.00. . . .
The point I’m making is that the maximum damage which they have offered or even suggested is $5,500.00, or $5,000.00, which is below the $10,-000.00 jurisdiction of this Court. They have not even attempted to offer proof to justify the allegations of the complaint concerning the jurisdictional amount, and for that we move that the case be dismissed for lack of jurisdiction on the part of the court and for that further reason.”

The trial court, while expressing some reservation about the issue, denied the motion. The motion was renewed at the close of all of the evidence and denied. The jury returned a verdict of $3,600.

The rule applicable to our determination of whether or not the trial court should have dismissed for lack of jurisdiction is as follows:

“[I]f, from the face of the pleadings it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed or if, from the proofs, the court is satisfied to a like certainty that the plaintiff never was entitled to recover that amount, and that his claim was therefore colorable for the purpose of conferring jurisdiction, the suit will be dismissed.” St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938). (Emphasis supplied.)

The amount in controversy requirement of 28 U.S.C. § 1332 defines in part the subject matter jurisdiction of the United States District Courts in diversity cases and both the Congress and the Supreme Court have recognized the importance of the requirement. Congress has said that the purpose of the 1958 amendment raising the amount in controversy to $10,000 was to

“make jurisdiction available in all substantial controversies where other elements of Federal jurisdiction are present. The jurisdictional amount should not be so high to convert the Federal courts into courts of big business nor so low as to fritter away their time in the trial of petty controversies.” U.S. Code Cong. & Admin.News, S.Rep. No. 1830, 85th Cong., 2d Sess., at p. 3101 (1958). (Emphasis supplied.)

The Supreme Court has indicated that the increase in the amount in controversy limits was intended “to check, to some degree, the rising caseload of the federal courts, especially with regard to the federal courts’ diversity of citizenship jurisdiction.” Snyder v. Harris, 394 U.S. 332, 339-340, 89 S.Ct. 1053, 1058, 22 L.Ed.2d 319 (1968). Indeed, since 1789, when a jurisdictional amount of $500 was fixed by the first Judiciary Act, Congress has raised the amount to $2,000 in 1887, $3,000 in 1911, and finally in 1958, the present figure of $10,000. C. Wright, Law of Federal Courts § 32 at 107 (1971).

»[2] As always, the problem with enforcing any legal doctrine comes in the application of the doctrine to the particular case in which it is raised. As the Supreme Court indicated, “[T]he sum claimed by the plaintiff controls if the claim is apparently made in good faith.” St. Paul Mercury Indemnity Co. v. Red Cab Co., supra, 303 U.S. at 288, 58 S.Ct. at 590. The question in this case is therefore whether the Sanders made the allegation of the amount in controversy in good faith. While the courts have taken different approaches to this problem, it is absolutely clear that the “inability of the plaintiff to recover an amount adequate to give the court jurisdiction does not show his bad faith or oust the jurisdiction.” Id. at 289, 58 S. Ct. at 590.

The classic cases where the issue of amount in controversy was resolved against the pleader generally involve those situations where it is possible to tell from the face of the complaint that there is a “legal certainty” that plaintiff cannot recover the jurisdictional amount. Thus, where a complaint prays for damages which are not legally recoverable, dismissal is justified. See e. g., Euge v. Trantina, 422 F.2d 1070, 1074 (8th Cir. 1970). Consequently, the idea that bad faith is the standard for determining the issue is modified by the quasi-objective standard that “[i]t must appear to a legal certainty that the claim is really for less than the jurisdictional amount. . . . ” St. Paul Mercury Indemnity Co. v. Red Cab Co., supra, 303 U.S. at 289, 58 S.Ct. at 590. (Emphasis supplied.) In this case the face of the complaint is not dispositive of the question. Under Arkansas law the Sanders were entitled to the “benefit of their bargain.” See e. g., Cockrum v. Pattillo, 246 Ark. 594, 439 S.W.2d 632, 641 (1969). The complaint does not disclose any legal bar to recovery of more than $10,000.

We must therefore proceed to judge this question on the basis of the second test set forth in St. Paul Mercury Indemnity Co. v. Red Cab Co., supra, 303 U.S. at 289, 58 S.Ct. 586, which is whether we are satisfied to a legal certainty after examination of the proofs that the plaintiffs never were entitled to recover the amount in controversy, and their claim was therefore colorable.

Courts have looked to the “proofs” before trial, Nelson v. Keefer, 451 F.2d 289, 295-296 (3d Cir. 1971), and after trial, City of Boulder v. Snyder, 396 F.2d 853, 856 (10th Cir. 1968), cert. denied, 393 U.S. 1051, 89 S.Ct. 692, 21 L.Ed. 693 (1969). While the general rule counsels against deciding the issue when the merits of the case and the amount in controversy are intertwined, see e. g., Zunamon v. Brown, 418 F.2d 883, 887 (8th Cir. 1969), there are the “flagrant” cases which justify an exception. See e. g., C. Wright, Law of Federal Courts § 33 at 113 (1971). City of Boulder v. Snyder, supra, 396 F.2d 853, is similar to the instant case and an example of a “flagrant” case.

In Snyder plaintiff alleged damages of $25,000 for the wrongful taking of certain water rights caused by a street paving project in front of her residence which resulted in the destruction of a ditch lateral abutting and serving her property. Federal jurisdiction was asserted under the fourteenth amendment. A motion to dismiss was made on the basis of a lack of amount in controversy. The motion was denied, and the case proceeded to trial. Six witnesses, including the plaintiff, testified. The plaintiff testified that her land was worth $15,500 before the taking and $13,500 after the taking. The other witnesses placed the damage at lower amounts. The district court imposed a partial sanction, after awarding damages of $1,500 to the plaintiff and $2,000 to similarly situated in-tervenors, as follows:

“This action, or the proof in this action, although the allegation is sufficient to give this Court jurisdiction, the proof is so far below it I am not going to award costs to the plaintiff. Each party will stand its own cost.” Id. at 855.

The Tenth Circuit Court of Appeals reversed and ordered the dismissal of the claim saying:

“[W]hen, as here, a failure of proof of damage is so complete as to dicate the conclusion that resort to federal jurisdiction has been abused the proper disposition of the suit is dismissal.
[A] plaintiff’s good faith in choosing the federal forum is vulnerable at any time during the trial as well as prior thereto, and if it appears that a plaintiff never was entitled to recover the jurisdictional amount, and that his claim was therefore colorable for the purpose of conferring jurisdiction, the suit must be dismissed. . . . ” Id. at 856.

This case has obvious similarities to Snyder, not the least of which was a “complete failure” of proof of damages in the jurisdictional amount. As the Hisers’ counsel indicated in his motion to dismiss, there was never even a “suggestion” of proof relating to damages approximating $10,000. The most expansive proof was the lay testimony of Mr. Sanders establishing a present value of some $11,000 and a value absent the purported fraud between $16,000 and $17,000. The Sanders’ expert witness testified to a range lower than Mr. Sanders. Therefore, this case does not present the typical factual situation where proof was offered which might conceivably, but doubtfully, establish damage approximating the required amount in controversy. Rather, this case demonstrates a total unconcern with offering any proof which might conceivably establish damage related to the required amount.

An equally telling consideration is the Sanders’ changing posture throughout this case with regard to damages. In their complaint, the Sanders seemingly pleaded that their home should have reasonably been valued at $15,000, but due to the fraud, damage was sustained in the amount of $11,000. Thus it was fair their home and lot was less than $5,000. to assume that the Sanders would attempt to prove that the present value of Indeed before trial the Sanders specifically denied that their home and lot had a present value in excess of $10,000. But at trial, Mr. Sanders not only completely contradicted his denial and affirmatively stated that his home did have a present value in excess of $10,000, but also presented expert testimony to substantiate their claim that the home had a present value in excess of $10,000. The only possible reason for the pretrial denial that the home did have a value in excess of $10,000 would be to strengthen the claim that damages did exceed the required amount. Since Sanders proved themselves that their denial was not candid, such a contradiction argues strongly in favor of the proposition that there was a lack of good faith and that dismissal was required.

The subject matter jurisdiction of the federal courts must be strictly guarded to insure that the direction which Congress has provided will be followed. While diversity plaintiffs should not have their complaints judged by whether a jury or a judge awards an amount equal to the amount in controversy requirements, the flagrant case, where “from the proofs, the court is satisfied to a like certainty that the plaintiff never was entitled to recover that amount, and that his claim was therefore colorable for the purpose of conferring jurisdiction,” St. Paul Mercury Indemnity Co. v. Red Cab Co., supra, 303 U.S. at 289, 58 S.Ct. at 590, requires dismissal.

Reversed and remanded with directions to dismiss for lack of jurisdiction.