author: PER CURIAM: ROBB, Circuit Judge,

text:
    Joseph LESTER, a minor, by and through his father and next friend, Robert Lester, et al., Appellants v. H. Searl DUNN, Appellant Joseph LESTER, a minor, et al. v. H. Searl DUNN, Appellant Ann DeLaVal Dunn
    Nos. 71-1879, 71-1880.
    United States Court of Appeals, District of Columbia Circuit.
    Feb. 21, 1973.

      James B. Goding, Washington, D. C., was on the brief for appellants in No. 71-1879 and appellees in No. 71-1880.
    John J. O’Neill, Jr., Washington, D. C., was on the brief for appellant in No. 71-1880 and appellees in No. 71-1879.
    Before WRIGHT and ROBB, Circuit Judges, and MATTHEWS, Senior District Judge.

       Of the United States District Court for the District of Columbia, sitting by designation pursuant to 28 U.S.O. § 294(c) (1970).

   PER CURIAM:

Plaintiffs-appellants claim that the trial court erred in denying their motion for a new trial in a personal injury action, the ground of the motion being that the jury’s award of damages in the amount of $1,000 for the injured boy’s father and nothing for the injured boy himself was arbitrary as a matter of law. Defendant-appellee has cross-appealed, contesting the District Court’s denial of his motion for judgment notwithstanding the verdict. Also in dispute is the propriety of a directed verdict entered by the District Court against one of the plaintiffs, Susan Lester, the mother of the injured boy. We reverse the denial of a new trial and the directed verdict against Mrs. Lester, and affirm the denial of cross-appellant’s motion for judgment notwithstanding the verdict.

The facts relating to the liability of cross-appellant are set out at length in our prior decision in this case and need only be summarized here. See Lester v. Dunn, 141 U.S.App.D.C. 146, 436 F.2d 300 (1970). Joseph Lester, a nine-year-old boy, was injured when he fell from a “Tarzan swing” rigged up in the Dunns’ back yard. The evidence of liability, which the jury must have accepted since it found for plaintiffs, indicated that Joseph was an invited guest of Mr. Dunn’s son, that the swing involved an unreasonable risk to children in that when allowed to swing forward its arc ended some 22 feet above a creek, that Mr. Dunn knew of the risk as he had seen children using the swing and knew that two children had already hurt themselves falling from it, and that Mr. Dunn failed to take reasonable care either to make the swing safe or to warn Joseph of the danger.

Much of the evidence of damages was either stipulated or uncontroverted. Mr. Lester, the boy’s father, claimed out-of-pocket hospital expenses amounting to $3,390. He also claimed out-of-pocket expenses for taxicabs, parking fees and baby-sitter charges which he and Mrs. Lester spent in order to visit Joseph in the hospital over a period of six weeks. These expenses, added to those for orthopedic devices, amounted to another $870, bringing total out-of-pocket expenses to $4,260. The injured boy himself claimed damages for his pain and suffering. The uncontroverted evidence showed that Joseph suffered a comminuted fracture of the right thigh, a serious and painful injury. He was in a hospital, in traction with a pin through the bone of his leg, for about six weeks and was at home in a cast for some five weeks more. He was permanently disabled in that one leg was slightly shorter than the other; in addition, there was a slight limp, inability to squat, and a 20-degree limitation of full flexion of the right knee.

Both Mr. and Mrs. Lester sought damages based on the allegation that they “have been and will be obligated to spend considerable time in taking care of their minor son at home interfering with the normal and usual living in plaintiffs’ home and causing plaintiff Robert Lester to lose time from his usual and gainful occupation, and all to their great damage.” The trial court felt that this kind of injury was “damnum absque injuria” in the eyes of the law. Since all of Mrs. Lester’s claim for damages fell within this category, the court granted a directed verdict against her. To ensure that the jurors would not consider these items as recoverable elements of damage with respect to Mr. Lester, the court prevented plaintiffs from introducing evidence as to this aspect of the case, and refused a jury instruction which would have directed that Mr. Lester be compensated for “the inconvenience and interference with his usual and normal activities which you find to have been caused by the injuries sustained by his minor son.”

The jury returned separate verdicts as to the claims of the two remaining plaintiffs, Joseph Lester and his father. The jury found for both plaintiffs on the issue of liability and awarded Joseph $0 and Mr. Lester $1,000.

I

That the court acted properly in denying appellee’s motion for judgment notwithstanding the verdict was settled in our earlier opinion, where we held that the District Court had erred in granting a directed verdict for the defendant. Judgment notwithstanding the verdict is nothing more than a directed verdict granted after, rather than before, the jury has had an opportunity to bring in a verdict. See Rule 50(b), Fed.R.Civ.P. Since we earlier held “there was a case for the jury” and that a directed verdict was improper, it is clear that the court acted properly in denying the motion for judgment notwithstanding the verdict.

II

With respect to the claims of Mr. and Mrs. Lester for the time they spent caring for Joseph, for the interference with their normal and usual living, and for loss of income to Mr. Lester because he had to lose time from work in order to visit his son in the hospital, it was wrong to label all these items mere “inconveniences” and we think some of the claimed items were compensable in damages.

All parties have agreed that the law to be applied in this case is that of the State of Maryland, the place where the tort occurred. The Supreme Court of Maryland decided long ago that when a minor is injured his mother is entitled to recover for the care and labor of nursing him. See County Commissioners of Harford County v. Hamilton, 60 Md. 340 (1883). This is consistent with the generally accepted view. Where a child is injured, the parent may recover “the reasonable expenses of procuring medical treatment and care” and where the parent provides that care him- or herself, “[t]he value of the parent’s own services, as nurse or otherwise, is recoverable * * C. McCormick, Law of Damages 328-329 & n.6 (1935), and cases there cited. Where “circumstances render it necessary or advisable for the parent to quit work to attend the child, rather than employ another to attend him, it would seem that the parent should recover the loss of wages.” Id. at 329 n.6.

We think Mrs. Lester’s claim for damages should have gone to the jury. Plaintiffs would have shown that, under doctor’s directions, Mrs. Lester visited Joseph in the hospital three times a day, spending about an hour each time, including commuting time. When Joseph came home, he was in a cast covering most of his body from his armpits to his toes. He was, in the words of the doctor, “like a solid piece of rock * * * about 5 feet long * * Mrs. Lester would have shown the jury that his care required her almost constant attendance, and she is entitled to compensation for those services just as if she had hired a nurse to assist her son rather than doing it herself. Similarly, the above principles would allow Mr. Lester to obtain damages for a loss in income caused by his having to take time off from work in order to care for Joseph. Of course, this is not to say that Joseph’s parents have any right to recover for the mental anguish or suffering caused them by his injury. See generally W. Prosser, Law of Torts 333-335 (4th ed. 1971). But they do have a right to be compensated for the services they provided above and beyond those normally incident to the parent-child relationship.

Ill

Although the question of damages is within the province of the jury, a jury verdict should be set aside when it is so inadequate as to indicate prejudice, passion or partiality on the part of the jury, or where it must have been based on oversight, mistake or consideration of an improper element. See 25A C.J.S. Damages § 196 at 262 (1966). In the present case, since the jury awarded Mr. Lester less than his stipulated out-of-pocket expenses, the award must have been based either on prejudice or on consideration of an improper factor. The jurors’ decision to award the injured boy nothing at all, in light of the painful injury and the permanent partial disability demonstrated at trial, is simply arbitrary. Defendant has referred us to several cases in which a court sustained a jury’s verdict where the jury found for the plaintiff and awarded zero damages, but these cases involve either situations where such a verdict may be interpreted as a verdict for the defendant, see Royal Indemnity Co. v. Island Lake Township, 177 Minn. 408, 409, 225 N.W. 291, 292 (1929), or where the facts of the case are such that no damages were in fact shown, see, e.g., Spears v. Hough, 8 Cir., 458 F.2d 529, 531 (1972). In this case, however, we cannot interpret the jury verdict as one for the defendant, since the jury did assess some damages against the defendant. Nor is this a case where no damages were proved, since counsel for the defendant conceded in his closing argument to the jury that, in addition to his painful injuries, the boy suffered some permanent disability. Where a jury has in fact assessed some damages, and where those damages are consistent with the uncontroverted evidence as to out-of-pocket loss, an appellate court is reluctant to upset the trial court’s denial of a motion for a new trial merely because it feels that the pain and suffering merited a larger award. See, e.g., Rankin v. Shayne Brothers, Inc., 98 U.S.App.D.C. 214, 217, 234 F.2d 35, 38 (1956). But where, as in the present case, the verdict is inconsistent with stipulated evidence as to out-of-pocket loss, and whete the jury arbitrarily abdicated its responsibility to assess damages for one <Jf the plaintiffs, the interests of justice require a new trial. Since the irrationality of the jury’s award here is such that even speculation as to why it afited as it did is unrewarding, the propel course is to have a new trial on all issües, rather than one limited to the question of damages. Therefore, the judgment is

Reversed and the case is remanded for a new trial.

ROBB, Circuit Judge,

dissenting:

As indicated in the court’s opinion the decisions are uniform that when a child is injured a parent is entitled to recover from the tort-feasor the reasonable value of the care or attendance rendered by the parent to the child. See, in addition to the authorities cited by the majority, Johnson v. Rhuda, 156 Me. 370, 164 A.2d 675 (1960); Annot. 90 A.L.R.2d 1335 (1963); 59 Am.Jur.2d, Parent and Child, § 120 (1971); 22 Am.Jur.2d, Damages, § 207 (1971); 25 C.J.S. Damages § 91(3) (1966). To this extent I agree with the majority. I do not agree, however, that the parent may recover wages or salary lost by her because of her attendance upon the child. She should recover only the amount for which reasonably competent nursing and attendance by others could have been obtained. For example, a motion picture actress who voluntarily withdraws from her lucrative occupation to care for her injured child should not be allowed to charge her loss of income to the defendant. Sedlock v. Trosper, 307 Ky. 369, 211 S.W.2d 147 (1948); Armstrong v. Onufrock, 75 Nev. 342, 341 P.2d 105, 76 A.L.R.2d 946 (1959); Johnson v. St. Paul & W. Coal Co., 131 Wis. 627, 111 N.W. 722 (1907); Barnes v. Keene, 132 N.Y. 13, 29 N.E. 1090 (Ct.App.1892). Cf. Adams v. Erickson, 394 F.2d 171 (10th Cir. 1968).

Assuming that the majority is entirely correct in its view of the law on these points I still cannot accept its conclusion. The flaw in the majority opinion is that the plaintiffs never presented a claim for the reasonable value of the care or attendance they rendered to their child, nor did they make any claim for lost wages. The statement of special damages which they filed listed no such items. Their counsel at trial repeatedly informed the court that their claim was only for damages for “an interference and deprivation of usual and normal activities of both of these parents”. (TR. 108, 109, 110, 111, 133). Nothing was said about the reasonable value of the parents' services, nor was there any mention of lost wages, or any offer of proof on these subjects. Finally, the instruction on damages requested by the plaintiffs did not mention the possibility of any recovery of lost wages or compensation for the value of the parents’ services. Thus, the district court’s ruling on the claim actually presented was correct. The plaintiffs could not recover on the theory they advanced.

Now the majority recasts the theory of the plaintiffs’ case, substituting a new proposition for the untenable one on which the plaintiffs relied. The majority intimates that plaintiffs’ counsel may have been at fault in failing to focus upon a valid theory of recovery; but a litigant is bound by the actions of his counsel at trial and it is not for us to build a case for him.

Since the case is to be retried I agree with the majority that the proper course is to have a new trial on all issues, rather than one limited to the question of damages. Simmons v. Fish, 210 Mass. 563, 97 N.E. 102, 106 (1912). Nevertheless, I cannot agree that the verdict of the jury was so arbitrary that it must be reversed. The jury may well have believed that the disability of the minor plaintiff was slight, since he testified that he could “walk good” (TR. 53) and that although he could not squat and could not run and swim as fast as he could before the accident there was no change in his ability to get around and play. (TR. 25). He still played kickball and baseball, rode a bike and swam. (TR. 27). In short, although I might have reached a different conclusion I think the jury acted within the limits of its discretion.

A further explanation for the verdict is found in Exhibit 5, introduced in evidence by the plaintiffs to establish the medical expenses they had incurred. This exhibit is a statement on the stationary of Group Health Association, Inc., entitled “Statement for Insurance Reimbursement”. A note from the fore-lady of the jury, which is in the file, reads “We would like to see all the exhibits introduced”, indicating that the exhibit went to the jury room.

Exhibit 5 reflects that the plaintiffs paid less than $100 for the medical services rendered to the minor plaintiff; the balance of approximately $3,400 was paid by the insurance company. Conceivably, the jury believed that the plaintiffs should not recover for this balance which they had not paid. On this premise the award of $1,000 to the plaintiff father was no doubt made to cover the additional expenses, amounting to about $900, which he had proved. Of course, the plaintiffs were entitled to recover notwithstanding the payments by the insurance company, but they did not request an instruction to this effect and none was given. In these circumstances they are not in a position to complain that the jury made a mistake. Bryant v. Mathis, 107 U.S.App.D.C. 339, 278 F.2d 19 (1960). In that ease the jury did not allow recovery for lost earnings although the uncontradicted testimony showed that the plaintiff had sustained such a loss. We held that the verdict was not “so arbitrary that it must be reversed as a matter of law.” Explaining, we said: “Conceivably, the jury Believed that appellant had been paid during her absence from work, and thus did not allow recovery for lost earnings. Although she was entitled to an instruction that lost wages are recoverable notwithstanding compensation from a collateral source, she requested no such instruction and none was given. . . . ” (Citations omitted.) 107 U.S.App.D.C. at 340, 278 F.2d at 20. See also, Rankin v. Shayne Bros., Inc., 98 U.S.App.D.C. 214, 234 F.2d 35 (1956), a case in which we expressed “considerable wonderment” about a verdict, but refused to disturb an award of $123.90 for the death of an infant.

I respectfully dissent.

      . Although the trial court asked plaintiffs’ counsel to provide some legal authority for the principle that the boy’s mother was entitled to compensation for the time spent caring for him after his injury, counsel failed to provide the trial court with the precedents which he now provides ' this court and upon which we rely in part in reversing the trial court. Indeed, plaintiffs’ counsel failed to provide any legal authority on this point. Since this same failing of trial counsel was noted in our opinion on the first appeal of this case, see Lester v. Dunn, 141 U.S.App.D.C. 146, 148 n.1, 436 F.2d 300, 302 n.1 (1970), we take this opportunity to remind counsel that it is in the interest of fair and efficient administration of justice, as well as in the interest of his own clients, for counsel to prepare the legal aspects of Ms case prior to trial so the trial court can be fully advised of the legal principles upon which he relies.


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    In re ESTATE of Paul Latimer WEIR, Deceased. Margaret Partee WEIHS, Appellant, v. Elizabeth HOLMEAD.
    No. 72-1444.
    United States Court of Appeals, District of Columbia Circuit.
    March 8, 1973.

      Earl H. Davis, Washington, D. C., was on the brief for appellant.
    Mark P. Friedlander, Jr., Washington, D. C., was on the brief for appellee.
    Before McGOWAN, MacKINNON and WILKEY, Circuit Judges.

       Judge MacKinnon did not participate in the consideration or decision of this case.

   PER CURIAM:

This case involves a challenge to a will executed by the caveator’s uncle on June 6, 1966, which named an 80-year old woman, the caveatee and appellee herein, as principal beneficiary under the will. Testator, Paul Weir, was a lifelong bachelor who was predeceased by a sister who had no children and a brother who left two surviving children, a son and a daughter, Margaret Weihs, the caveator and appellant herein. Mr. Weir, an engineer, met Elizabeth Holmead, a widow of approximately the same age, shortly after World War II, and they became close friends until Mr. Weir’s death on February 19, 1971. Although they had separate apartments, they shared each other’s company, traveled together, and took their meals together; in short, they became constant companions until testator’s death.

On February 9, 1956, Mr. Weir executed a will which left a life estate to Mrs. Holmead and the remainder to his brother, or if he be not living, to his brother’s heirs. In 1965, Mr. Weir’s brother died. Then, on June 6, 1966, Mr. Weir executed a new will which left $10,000 each to his nephew and niece, the caveator, and the remainder of his estate to Mrs. Holmead. Upon testator’s death in 1971, the niece filed a caveat challenging the 1966 will, claiming lack of due execution, lack of testamentary capacity, undue influence by Mrs. Holmead and others, and fraud and deceit. The District Court, at the conclusion of caveator’s evidence, directed a verdict for the caveatee on all issues, finding that there was no evidence upon which a reasonable juror could have found for the caveator. Caveator has appealed, and for the reasons stated below, we affirm the District Court’s decision.

Appellee contends that the District Court erred in directing a verdict in this case. A review of the District Court record convinces us otherwise. The contentions of lack of due execution and fraud and deceit were completely unsupported in District Court and are not pressed upon appeal.

The evidence introduced as to lack of testamentary capacity was that the testator dressed conservatively, was occasionally forgetful, sometimes untidy (he left his socks on the floor), and had some strange habits such as picking up dust from the floor and inspecting it. For example, Mrs. Lay, a retired nurse, who lived in an adjoining apartment and had prepared some meals for testator, testified that she believed testator lacked testamentary capacity at the time of the execution of the 1966 will. Upon cross-examination, it became clear that the only basis for this conclusion was the fact that testator sometimes picked up dust and wore torn trousers, and her feeling that she “couldn’t understand why he wouldn’t want to” leave his entire estate to his blood relatives. Mr. Lauten, a trust officer of National Savings & Trust Company, executor of the first (1956) will, testified that he believed testator didn’t have all his “faculties” at the time of the making of the 1966 will. Mr. Lauten testified that he somehow got the impression that testator was unsatisfied with the 1966 will, but could give no basis for this hunch, or for his bare assertion that the testator didn’t have all his “faculties.” Caveator testified that she believed testator lacked testamentary capacity because her middle name was misspelled in the 1966 will and she didn’t believe that her uncle would have signed anything with that name misspelled since it was a family name that was very important to him. Also introduced into evidence was a letter from the caveator to testator, received in 1966, which was stamped “Received May 21, 1963, P. L. Weir.” The letter was initialed by testator. This was the substance of caveator’s evidence on testamentary capacity.

Although caveator’s evidence perhaps presented interesting tidbits, the District Court was correct in concluding that there was not enough evidence to go to the jury on the issue of testamentary capacity. In order to make a valid will, testator must be “of sound and disposing mind and capable of executing a valid deed or contract.” In this jurisdiction, as in most others, sound and disposing mind simply means that “the decedent must have had, at the time of execution of the instrument, sufficient mental capacity to dispose of his property or estate with judgment and understanding, considering the nature and character of the estate as well as the relative claims of different persons, who would be the natural objects of [his] bounty." In -cases where testamentary incapacity has been found there has been a considerably stronger showing that testator lacked a sound and disposing mind. For instance, evidence that testator was extremely ill or under heavy sedation at the time of the execution of the will has been sufficient to allow the issue of testamentary capacity to go to the jury. We have discovered no case, and appellant cites none, where the issue of testamentary capacity was allowed to go to the jury on such speculative and meaningless testimony as was presented below. There was simply no evidence introduced by caveator that would have permitted a jury to conclude that testator did not understand, precisely what he was doing when he executed the contested will.

Similarly, the evidence presented as to undue influence was insufficient to allow the jury to take that issue. All the witnesses testified without qualification that testator and Mrs. Holmead had great affection for each other, and that with the exception of Mrs. Holmead, testator had no close friends. He saw his niece and nephew very infrequently, and only rarely spoke with them on the phone. Although testator’s nephew testified that he believed Mrs. Holmead exercised a “wifely” influence on his uncle, neither nephew or niece could recite anything in particular that Mrs. Holmead ever did or said to unduly influence their uncle.

Unfortunately for the caveator, influence gained by years of mutual affection is not sufficient in law to establish undue influence. Undue influence is influence gained by improper means. As this court stated in MacMillan v. Knost, 75 U.S.App.D.C. 261, 262, 126 F.2d 235, 236, cert. denied, 317 U.S. 641, 63 S.Ct. 32, 87 L.Ed. 516 (1942):

Influence gained by kindness and affection will not be regarded as “undue,” if no imposition or fraud be practiced, even though it induces the testator to make an unequal * * * disposition of his property in favor of those who have contributed to his comfort, * * * if such disposition is voluntarily made. Confidential relations existing between the testator and beneficiary do not alone furnish any presumption of undue influence. * * * One has the right to influence another to make a will in his favor. He may * * * lay his claims for preferment before the testator. They may be based on kinship or friendship or kindness or service or need or any other sentimental or material consideration. One can use argument and persuasion so long as it is fair and honest and does not go to an oppressive degree where it becomes coercive.

The court then added that the “possibility or suspicion of undue influence is not enough.”

In rejecting a contention that undue influence was exerted by testatrix’s daughter, this court, in Brooke v. Barnes, 61 App.D.C. 161, 163, 58 F.2d 887, 889 (1932), stated:

It is no ground of criticism that others might have made a different will. . It will be remembered that it is not influence, but undue influence, that is charged, and is necessary to overthrow a will.

The court emphasized that the fact one requests the testator to make a will a particular way does not establish undue influence.

The cases cited by appellant are completely inapposite, and the distinguishing facts of each one only serve to illustrate the lack of any evidence of undue influence in this case. Where the issue of undue influence had been permitted to go to the jury in the cases cited by appellant, there had been testimony which strongly indicated that the testator was peculiarly in a position to be coercively influenced. For example, the testatrix was extremely ill and prevented, by false representations of a nurse, from seeing her relatives, or the testatrix was subject to threats of physical abuse while under sedation to compel her to execute a will. In contrast, there was absolutely no testimony in this case indicating any coercion exercised by Mrs. Holmead, or anyone else. If the caveatee exercised any influence whatsoever over testator, it was the influence that arises from genuine mutual affection. And, as noted above, “influence gained by kindness and affection” is not regarded as undue.

If the long-standing salutary policy of our law favoring free and untrammeled disposition of one’s property means anything, it means that the District Court would have erred in allowing this case to go to the jury. Only through sheer speculation could the jury have found lack of testamentary capacity or undue influence.

Affirmed.

      . On February 5, 1973, acting on appellee’s motion to advance this appeal for hearing on the summary calendar, we ordered, under Rule 11(e) of the General Rules of this court, that this case be considered and decided without oral argument.

      . Two of the three attesting witnesses testified as to the due execution of the will, the absence of the third witness being satisfactorily explained. Joint Appendix (J. A.) 134a-158(a). A will is valid in the District of Columbia if it is in writing and signed by the testator and attested and subscribed in the presence of the testator by at least two credible witnesses. D.C. Code § 18-103. As to the claim of fraud and deceit, both the caveator and nephew testified that they knew of not one false statement made by Mrs. Holmead to testator to influence the making of the will. J.A. 195a, 129a. There was absolutely no evidence presented by appellee establishing fraud or deceit.

      . Rather than establishing testamentary incapacity, caveator’s evidence only indicated that testator, like most of us, had some peculiarities that marked him as an individual.

      . J.A. 56a.

      . J.A. 60a. It should be noted that the fact that testator has made a so-called “unnatural disposition” is not, in and of itself, an indication of incapacity. See, e. g., Morgan v. Morgan, 30 App.D.C. 436, 449 (1908).

      . J.A. 210a.

      . J.A. 212a.

      . J.A. 197a.

      . D.C.Code § 18-102.

      . Thomas v. Young, 57 App.D.C. 282, 284, 22 F.2d 588, 590 (1928). See also Thompson, v. Smith, 70 App.D.C. 65, 73, 103 F.2d 936, 944 (1939), where this court stated:
      To make a valid will it is not necessary that the testator should be endowed with a high order of intellect, or even an intellect measuring up to the ordinary-standards of mankind. Nor is it necessary to the making of a valid will that the party should have a perfect memory, and that his mind should be wholly unimpaired by age, sickness or other infirmities. If the party possess memory and mind enough to know what property he owns and desires to dispose of, and the person or persons to whom he intends to give it, and the manner in which he wishes it applied by such person, and generally, fully understands his purposes and the business he is engaged in, in so disposing of his property, he is, in contemplation of law, of sound and disposing mind.

        See also 1 Page on Wills, § 12.21 (3rd ed. 1959).

      . See, e. g., McCartney v. Holmquist, 70 App.D.C. 334, 335, 106 F.2d 855, 856 (1939); Thomas v. Young, 57 App.D.C. 282, 283, 22 F.2d 588, 589 (1928). In Labofish v. Berman, 60 App.D.C. 397, 398, 55 F.2d 1022, 1023 (1932), this court held there was sufficient evidence to go to the jury where testator, in addition to being in poor health, subject to fainting attacks, irritable, and unable to properly attend to business, frequently accused his mother and wife of robbing him and his children of trying to poison him. And he “eurs[edj his mother on her deathbed and at her funeral, and, during her burial, threatening to kill himself.” Id. This type of evidence is in stark contrast to that presented in this case.

      . There is, of course, a presumption in favor of testamentary capacity. See, e. g., Morgan v. Adams, 29 App.D.C. 198, 206 (1907).

      . J.A. 116a, 196a.'

      . J.A. 187a, 196a.

      . J.A. 130a.

      . J.A. 129a, 197a.

      . 75 U.S.App.D.C. at 262, 126 F.2d at 236. See Beyer v. LeFevre, 186 U.S. 114, 126, 22 S.Ct. 765, 46 L.Ed. 1080 (1902).

      . The court was quoting from Beyer v. LeFevre, 186 U.S. 114, 122-124, 22 S.Ct. 765, 46 L.Ed. 1080 (1902).

      . 61 U.S.App.D.C. at 163, 58 F.2d at 889. In this case there was not even any testimony that Mrs. Holmead ever requested testator to dispose of his estate in a particular way.

      . Duckett v. Duckett, 77 U.S.App.D.C. 303, 134 F.2d 527 (1943); McCartney v. Holmquist, 70 App.D.C. 334, 106 F.2d 855 (1939).

      . Thomas v. Young, 57 App.D.C. 282, 22 F.2d 588 (1927).

      . MacMillan v. Knost, 75 U.S.App.D.C. at 262, 126 F.2d at 236.

      . See, e. g., Simmons v. Pinney, 126 U.S.App.D.C. 184, 185, 375 F.2d 929, 930 (1967); Barbour v. Moore, 4 App.D.C. 535, 547 (1894).


author: PER CURIAM;

text:
    Flaviana B. NOVEDA, Appellant, v. Honorable Elliott L. RICHARDSON.
    No. 71-2061.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Jan. 26, 1973.
    Decided March 2, 1973.
    Richard B. Wolf, Washington, D. C., for appellant.
    Thomas H. Queen, Asst. U. S. Atty., with whom Harold H. Titus, Jr., U. S. Atty., John A. Terry, and J. Michael McGarry, III, Asst. U. S. Attys., were on the brief for appellee.
    Before GEORGE C. EDWARDS, Jr., Circuit Judge for the Sixth Circuit, ROBB, Circuit Judge, and GERHARD A. GESELL, District Judge, United States District Court for the District of Columbia.

       Sitting by designation pursuant to 28 U.S.C. § 291(a).

       Sitting by designation pursuant to 28 U.S.C. § 292(a).

   PER CURIAM;

Appellant applied for parent’s insurance benefits under the Social Security Act. Her claim was denied by the Secretary of HEW and his action was affirmed by the District Court on cross-motions for summary judgment. We reverse and remand with directions on the basis of our decision in Radlinska v. Secretary, HEW, 147 U.S.App.D.C. 200, 454 F.2d 1043 (1971), a holding subsequent to the ruling of the District Court. The Secretary gave principal reliance to a statement made by appellant on her first application in 1959. Appellant, aged 73, is an impoverished, illiterate widowed mother who was apparently confused at the time the statement was recorded for her. When her answer is properly discounted in the light of Radlinska, supra, and the record as a whole, it is clear that she received sufficient support for a three-month period to qualify under 20 C.F.R. § 404.350(e)(3). It is conceded a remand for reconsideration will serve no purpose for the record is complete. The case is accordingly remanded to the District Court with directions to enter an order declaring appellant’s eligibility.

It is so ordered.


text:
    PAGE COMMUNICATIONS ENGINEERS, INC., Appellant, v. Robert T. FKOEHLKE, Secretary of the Army, et al. PAGE COMMUNICATIONS ENGINEERS, INC. v. Robert T. FROEHLKE, Secretary of the Army, et al., Appellants. National Surety Corporation, Defendant on counterclaim, Federal Electric Corporation, Defendant-Intervenor.
    Nos. 72-1104, 72-1105.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Jan. 31, 1973.
    Decided March 12, 1973.
    W. Stanfield Johnson, Washington, D. C., with whom Eldon H. Crowell, Washington, D. C., and Robert H. Rawson, Jr., Shaker Heights, Ohio, were on the brief, for appellant in No. 72-1104 and appellee in No. 72-1105.
    Anthony J. Steinmeyer, Atty., Dept of Justice, with whom Harold H. Titus, Jr., U. S. Atty., and Walter H. Fleischer, Atty., Dept, of Justice, were on the brief, for appellants in No. 72-1105 and appellees in No. 72-1104. Harold H. Titus, Jr., U. S. Atty., John A. Terry and William H. Schweitzer, Asst. U. S. Attys., entered appearances for appellants in No. 72-1105 and appellees in No. 72-1104.
    David V. Anthony, Washington, D. C., with whom William H. Butterfield, Washington, D. C., was on the brief, for-Federal Electric Corp., defendant-intervenor.
    Before LEVENTHAL and ROBB, Circuit Judges, and CHARLES RICHEY, United States District Judge of the United States District Court for the District of Columbia.

       Sitting by designation pursuant to 28 U.S.C. § 292(a).

   PER CURIAM:

The Department of the Army awarded Federal Electric Corporation a contract to perform field engineering and other work required for an integrated communications system in the Republic of South Vietnam. Page Communications Engineers, Inc., an unsuccessful offeror, brought an action against the Department and the Secretary of the Army to enjoin any performance pursuant to that award. Federal Electric intervened in the action. Upon motion by Page the District Court on November 3, 1970 issued a preliminary injunction prohibiting any steps toward performance of the contract for a period of forty-five days, or until the General Accounting Office ruled on a protest of the award filed by Page, whichever event occurred earlier. The court required Page to post a bond conditioned upon the payment of “all damages not to exceed the sum of one hundred thousand & 00/000 dollars ($100,000.00) suffered or sustained by reason of wrongfully and inequitably suing out the injunction”.

The defendants appealed to this court from the order granting a preliminary injunction. On December 4, 1970 the order was summarily reversed and the case was remanded for further proceedings. The order of reversal was stayed for fifteen days.

On December 16, 1970 the Comptroller General issued his decision denying the Page protest.

On December 23, 1970 the District Court denied Page’s motion for an extension of the preliminary injunction. Thereafter, Page filed an amended complaint and the government and Federal Electric answered. The government also filed a counterclaim for damages in the amount of $300,000 alleged to have been “sustained as a result of the preliminary injunction herein”. The District Court granted Page’s motion to dismiss the counterclaim for damages in excess of the face amount of the injunction bond. The government and Federal Electric then moved for summary judgment and Page moved for summary judgment on two of the twelve causes of action alleged in its amended complaint. On September 16, 1971 the District Court granted the defendants’ motions for summary judgment and denied the Page motion. The District Court also dismissed the government’s counterclaim and declined to assess damages against Page under the bond.

Page appeals from the orders granting the defendants’ motions for summary judgment and denying Page’s motion. The government appeals from the order dismissing its counterclaim and rejecting its claim for damages.

In support of its orders on the motions for summary judgment the District Court recited in detail the facts which it found to be undisputed and determinative. (J.A. 343-353). Without recounting these facts it is enough to say that in our judgment the orders of the District Court on the motions were correct. Our conclusion is reinforced by the candid statement of Page in its brief (p. 7, footnote 3) that

Although Page disagreed with the District Court’s treatment of the summary judgment motions * * * Page was satisfied with the practical outcome and would not have appealed, had not the Army persisted in its attempt to impose liability upon Page.

Accordingly, we turn to the court’s refusal to assess damages.

The District Court filed a memorandum opinion explaining its reasons for refusing to assess damages against the plaintiff. Citing Russell v. Farley, 105 U.S. 433, 26 L.Ed. 1060 (1881), and Greenwood County v. Duke Power Co., 107 F.2d 484, 489 (4th Cir. 1939), cert. denied, 309 U.S. 667, 60 S.Ct. 608, 84 L.Ed. 1014 (1940), the court held:

* * * this Court has the discretion, in the interests of equity and justice, to rule that no liability be imposed on the injunction bond -X- -X- * -X-

Continuing, the court said in part:

This was not a frivolous lawsuit, and plaintiff has raised some solid questions. * * * While the award to Federal Electric is justified as having a reasonable basis, the procedures followed herein were not so clearly defined and free of ambiguity as not to raise doubts as to the fairness of this procurement.
This Court was persuaded to grant the preliminary injunction after a lengthy evidentiary hearing (and thus to afford time for meaningful review by the Comptroller General) more by questions raised by the Army evaluation records than by plaintiff’s allegations. At this hearing the Army did not present and the Court was unable to consider a comparative cost study which later became significant in the Comptroller General’s determination and in this Court’s decision not to reinstate the preliminary injunction. This Court might not have issued the preliminary injunction had defendants at that time made the same strong showing, including the comparative cost study, which was made subsequently to the Comptroller General. In the light of those circumstances, it is inequitable to hold plaintiff to liability on the injunction bond.

The record discloses that before the evidentiary hearing on the motion for preliminary injunction the government agreed in open court to produce all “records relating to the evaluation of proposals submitted” by the various offerors, and all “documents setting forth the basis for award to Federal Electric Corp.” The comparative cost study described by the District Court as “significant” was among the requested documents, but was not produced at the hearing. Later, the study was furnished to the General Accounting Office.

In Russell v. Farley, 105 U.S. 433, 435, 26 L.Ed. 1060 (1881), relied upon by the District Court, the plaintiff obtained an injunction upon giving a bond conditioned upon payment to the defendants of “ * * * such damages as they * * may sustain by reason of the writ, if the court finally decide that the party was not entitled thereto -x- -x- *» The circuit court thereafter held that in part the injunction should not have issued, but the court de-' dined to award damages. The circuit court’s decree was affirmed. The Supreme Court said (105 U.S. at 441-442, 26 L.Ed. 1060):

Since the discretion of imposing terms upon a party, as a condition of granting or withholding an injunction, is an inherent power of the court, exercised for the purpose of effecting justice between the parties, it would seem to follow that, in the absence of an imperative statute to the contrary, the court should have the power to mitigate the terms imposed, or to relieve from them altogether, whenever in the course of the proceedings it appears that it would be inequitable or oppressive to continue them * * * * In the course of the pears that it would be inequitable or oppressive to continue them traordinary security ought not to be retained as a basis of further litigation between the parties; that the suit has been fairly and honestly pursued or defended by the party who was required to enter into the undertaking, and that it would be inequitable to subject him to any other liability than that which the law imposes in ordinary cases. In such a case it would be a perversion, rather than a furtherance, of justice to deny to the court the power to supersede the stipulation imposed.

The government says Russell v. Farley is not controlling, first because the injunction issued in that case was never entirely dissolved, and second because Rule 65(c), F.R.Civ.P. is “an imperative statute” which mandates the posting of a bond and thereby deprives the court of discretion to refuse to award damages on the bond if it develops that an injunction was wrongfully issued. We do not agree.

Although Rule 65(c) required a bond here, it does not follow that the District Court was bound to award damages on the bond, without considering the equities of the case. The Rule did not make judgment on the bond automatic, upon a showing of damage. On the contrary, the court in considering the matter of damages was exercising its equity powers, and was bound to effect justice between the parties, avoiding any result that would be inequitable or oppressive for either party. The Rule was not intended to negate the court’s duty in this regard. Thus, we hold that the court had discretion to refuse to award damages, in the interest of equity and justice. This conclusion is consistent with the provision of the Rule which gives the court discretion to fix bond in a nominal amount; clearly the Rule does not contemplate that a defendant who is wrongfully enjoined will always be made whole by recovery of damages.

We think the District Court did not abuse its discretion in declining to assess damages. As the court said, this “was not a frivolous lawsuit”; indeed we made it clear in our unreported opinion reversing the injunction order that we did “not say that the competing eonsiderations would, on balance, necessarily preclude preliminary or final injunctive relief * * * *"(J.A. 61). The good faith of Page cannot be doubted. Moreover, it appears that the injunction might not have issued if the government had timely filed the comparative cost study, an important and relevant document. In light of all these circumstances we think the district judge was correct in holding that it would be inequitable and a perversion of justice to hold Page to liability in damages.

The judgment is affirmed.

      . Rule 65(c) Security. No restraining order or preliminary injunction shall issue except upon the giving of security by the applicant, in such sum as the court deems proper, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained. No such security shall be required of the United States or of an officer or agency thereof.
      The provisions of Rule 65.1 apply to n surety upon a bond or undertaking under this rule.


author: FAHY, Senior Circuit Judge:

text:
    Fred E. WILSON, Appellant, v. George R. SHULTZ, Secretary of the Treasury, et al.
    No. 23898.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Dec. 1, 1972.
    Decided March 15, 1973.

      John P. Witsil, Washington, D. C., submitted on the brief for appellant.
    Kenneth Michael Robinson, Asst. U. S. Atty., with whom Thomas A. Flannery, U. S. Atty. at the time the brief was filed, John A. Terry and Nathan Dodell, Asst. U. S. Attys., submitted on the brief for appellees. Harold H. Titus, Jr., U. S. Atty., also entered an appearance for appellees.
    Before FAHY, Senior Circuit Judge, and WRIGHT and WILKEY, Circuit Judges.
   FAHY, Senior Circuit Judge:

In the District Court appellant, Wilson, sued the Secretary of the Treasury and the Commissioner of the Bureau of Narcotics in the Treasury to have declared involuntary a resignation he had signed as an employee of the Bureau, and for related relief. On the basis of the pleadings, memoranda of the parties and the administrative record compiled in the Civil Service Commission, the District Court granted the motion of the officials, appellees, for summary judgment. The Commission’s Board of Appeals and Review had sustained a decision of its Appeals Examining Office that the resignation was voluntary. The court held this decision to be supported by evidence of substance in the record.

Appellant, an American citizen, was employed in the Bureau of Narcotics at Beirut, Lebanon, where he resided with his wife and children. In March, 1963, two Inspectors of the Bureau, conducting an audit, attributed to appellant what they advised him were certain financial irregularities in the Beirut office. There ensued for the next few days considerable discussion between the Inspectors and appellant and between appellant and others as to the course he should adopt, revolving principally around whether he should or would resign. On March 6, 1963, he submitted a resignation to the Inspectors, to be effective March 16, 1963. Before that date arrived he returned to the United States with his family and promptly advised the Commissioner of Narcotics, by letter of his attorney under date of March 11, 1963, that his “tendered resignation is now withdrawn and we intend to take all steps necessary to see that his good name is protected and his status remains unimpaired.” Appellant maintained that the resignation was not voluntary. No response was made to the withdrawal letter, although under date of March 12, 1963, the Conimissioner acknowledged receipt of appellant’s resignation, “accepted effective March 16, 1963. ”

Appellant on May 23, 1963, appealed to the Appeals Examining Office of the Civil Service Commission, stating that the resignation had been obtained through “force and coercion.” Upon request he submitted by affidavit of June 6, 1963, a detailed statement of his position. The Appeals Examining Office on July 18, 1963, decided that the resignation had been voluntary. Appellant then appealed to the Board of Appeals and Review, which, deeming the record inadequate, required further proceedings at the level of the Appeals Examining Office. These followed, including a hearing, but resulted on April 3, 1964, in the same conclusion. The decision states:

The jurisdiction of the Commission to review the appellant’s case depends upon whether his separation from the Treasury Department was a discharge within the meaning of the Veterans’ Preference Act of 1944.
Since we have found it was not, the appeal is rejected for want of jurisdiction.

On appeal to it again the Board of Appeals and Review, on September 16, 1964, affirmed the decision of the Appeals Examining Office. On September 30, 1964, appellant filed suit in the District Court. For two basic reasons now to be explained we reverse and remand.

I

We conclude that summary judgment for appellees was unwarranted. The administrative record leaves unresolved the factual issue as to the voluntariness of the resignation. The decision of the Appeals Examining Office, affirmed by the Board of Appeals and Review, sets forth at some length the conflicting evidence upon the issue and tlien disposes of it in the following manner upon the basis solely of appellant’s “own representation” :

Turning back to his original statement submitted to us over Mr. Wilson’s signature under oath, Mr. Wilson says, (1) that he was advised a resignation would stop an investigation of his claims regarding expenditures at Beirut, (2) that he was faced with the fear that if he was discharged in Beirut he would have to pay his own passage home, (3) that he sought advice and was told to go ahead and sign the resignation; get transportation home; he could get the whole thing set aside in the United States.
Thus, on the face of the appellant’s own representation, it does not appear he acted in fear of economic loss— hardship to his family, but acted out a plan with forethought to stop an investigation in Beirut, get himself and his family home and arrive in the United States in status quo Criminal Investigator, GS-12.

This contraction of appellant’s affidavit of June 6, 1963, is incomplete in numerous respects. The affidavit stated that he was told that if he did not resign forthwith he would not be given transportation to the United States for his wife, children or household effects, that “It’s a long swim,” that the Inspectors would make a report which would make it virtually impossible for him again to obtain government employment, that being unable to obtain proper counsel he consulted an official connected with the Embassy and was advised by Embassy personnel that in view of the undue influence exercised upon him “he should submit the resignation which would be without validity since it was done under duress and the situation could be rectified upon his return to the United States.”

Even as condensed by the Appeals Examining Office his representations do not support the Office’s conclusion that “it does not appear he acted in fear of economic loss — hardship to his family . ,” for the decision itself demonstrates that he did in part act out of fear that if he did not resign he would be stranded in Beirut, and if he did resign then he, his family, and his household goods would be returned at Government expense — “that he was faced with the fear that if he was discharged in Beirut he would have to pay his own passage home.”

We accordingly cannot agree that in light of appellant’s representations there was no genuine or material issue of fact as to the voluntariness of the resignation. The administrative record did not authorize the summary judgment for appellees. It did not support the basis upon which the decision was made.

Moreover, the administrative record was incomplete in an important respect. It has been noted that a substantial factor bearing upon the resignation was the representation by the Inspectors, and consequent belief on the part of the appellant, that it was necessary for him to resign to obtain transportation home for himself and family at government expense. As the Chairman of the Board of Appeals and Review advised appellant’s counsel:

The Board finds that Mr. Wilson had . reason to be apprehensive . It would have been quite natural for this apprehension or anxiety to encompass not only the question of his own future Government career but also the question of his entitlement to Government-paid transportation back to the United States for himself, his family and his household goods in the event that he did not resign but was removed from service while overseas. The Board finds that faced with these questions, Mr. Wilson finally decided freely and voluntarily to submit his resignation when he was told that he could do so for personal reasons and that the Government would pay for the cost of transportation of himself, his family and his household goods.

Letter of September 16, 1964, from the Chairman to appellant’s counsel at that time.

The situation thus disclosed gave rise to a question in our minds whether a government employee faced with the threat of discharge in a foreign land could be left stranded there with wife and children unless he resigned. After submittal of the case we inquired of the parties as to the legal requirements and government practice in this regard. In response the Government has submitted to the court “Field Information Circular No. 26” of the Bureau of Narcotics, and explained the purport of Rule 6 of this Circular as follows:

if a person completed two years at a foreign duty assignment post, or if he fails to complete two years at such post but such failure is due to circumstances beyond his control (such as being discharged for cause), then such person is entitled to one-way transportation expenses for returning his immediate family, household goods and personal effects from the post of duty to his place of actual residence.

We are also advised by the Government that appellant had been transferred to Beirut on February 27, 1961, where he served until he submitted his resignation on March 6, 1963, more than two years thereafter. No reference was made to this Circular in connection with any of the circumstances of the resignation or proceedings with respect thereto. Whether the resignation is considered in terms of coercion alone, deception or an otherwise unacceptable withholding of essential information, the importance of this Circular is obvious.

The judgment for appellees not being supported for the reasons we have given, the District Court now has the responsibility of deciding independently whether or not the resignation was involuntary or otherwise ineffective. If so found, appellant’s separation from the service must be held to have been a discharge, note 5, supra. In that event appellant, under the Veterans’ Preference Act, 5 U.S.C. § 7512 (1970), would be entitled, so far as now appears, to procedural rights which have not been accorded, including formal notice of charges and a hearing with respect to them. The District Court may in its sound discretion permit the record before the court, largely the administrative record, to be supplemented by the parties with additional evidence if so advised.

II

A separate basis for our reversal and remand is now considered. In Goodman v. United States, 138 U.S.App.D.C. 1, 424 F.2d 914 (1970), a government employee submitted a resignation after formal charges which might have eventuated in separation from the service for cause. The employee underwent a change of mind prior to the effective date of the resignation and withdrew it, as the court construed his action. He claimed the resignation had been due to coercion and deception by the agency’s representatives. In proceedings before the Civil Service Commission it was there determined that the resignation was voluntary. The Commission rejected the employee’s position and held that the resignation had not been effectively withdrawn, relying upon section 2-3, subchapter 2 of chapter 715 of its Federal Personnel Manual, which reads:

A resignation is binding on the employee once he has submitted it. However, the agency may, in its discretion, permit an employee to withdraw his resignation at any time until it has become effective.

The District Court in upholding the Commission granted summary judgment for the Government. This court reversed. We pointed out that it was unnecessary to explore the content of “acceptance” or “submission” of a resignation, since in any event authority was expressly vested in the agency by the above regulation to permit withdrawal until the resignation had become effective. We said:

That authority is, of course, characterized as reposing in the agency’s discretion, and it is asserted to us that, there being no challenge to the validity of the regulation generally, we must leave undisturbed the particular exercise of discretion under it represented by the agency’s declination of consent in this instance. That does not follow at all. Insofar as we can tell from this record, there was not even any meaningful effort to exercise discretion, except as discretion may have been equated with an automatic purpose to frustrate any invocation of the rights conferred upon appellant by the Veterans Preference Act. (Footnote omitted.)
We decide only that, on this record, we can discern no exercise of discretion in denying the resignation withdrawal which we can take to be an effective withholding of consent. In these circumstances, we think that fidelity to the purposes of the Veterans Preference Act dictates that the resignation be deemed to have been withdrawn, and that appellant is entitled to have the appeal he filed with the Civil Service Commission determined on the merits of the charges made against him, and not dismissed, as it was, for lack of jurisdiction because of the resignation. We view the status of this matter after remand to be as it was when appellant’s initial effort to appeal to the Commission was turned down for want of jurisdiction. All issues relating to the merits of the charges remain open. (Footnote omitted.)

Goodman v. United States, supra, 138 U.S.App.D.C. at 6-7, 424 F.2d at 919-920. And see Cunningham v. United States, 191 Ct.Cl. 471, 423 F.2d 1379, at 1384-1385 (1970). There is also not the slightest indication of the exercise of discretion by the agency in appellant’s case with respect to honoring the withdrawal of his resignation. On the record before us we find no meaningful distinction between Goodman and Wilson’s case on the issue of withdrawal.

The legal developments disclosed by Goodman and Cunningham occurred subsequently to the decisions by the Commission and the District Court in our case. The withdrawal, however, had not been abandoned. If under the principles of Goodman and Cunningham it should have been considered as honored, the court should honor it now, though the particular legal principles enunciated the Goodman and Cunningham were not relied upon until the case reached this court. Since,- however, there may be reasons why those principles do not control, which the Government should have an opportunity to advance if so advised, the impact of Goodman and Cunningham upon appellant’s case is left initially to the District Court on the remand.

Reversed and remanded for further proceedings consistent with this opinion.

      . The Bureau of Narcotics was formerly part of the Treasury Department. In 1966, it was renamed the Bureau of Narcotics and Dangerous Drugs and made part of the Department of Justice.

      . At the same time appellant’s motion for summary judgment was denied.

      . Appellant then, and thenceforth, maintained he had done no wrong.

      . The letter directed appellant upon arrival in Washington and until the close of business March 15, 1963, to report to the Bureau’s headquarters office, and authorized the expenses of his return, and that of his immediate family, household goods and personal effects, to be charged to a stated appropriation.

      . Under the case law as it has developed, and been followed by the Commission, a voluntary resignation is not adverse personnel action of the agency subject to Civil Service Commission review as to its validity. If, however, the resignation is involuntary the separation of the employee by reason of such a resignation is simulated as a discharge. Dabney v. Freeman, 123 U.S.App.D.C. 166, 358 F.2d 533 (1965), citing Paroczay v. Hodges, 219 F.Supp. 89 (D.D.C.1963); Goodman v. United States, 138 U.S.App.D.C. 1, 424 F.2d 914 (1970); Cunningham v. United States, 191 Ct.Cl. 471, 423 F.2d 1379 (1970).

      . In its decision the District Court adverted to the pleadings and memoranda. Nothing in them detracts from our position based upon the administrative record.

      . The decision of the Appeals Examining Office contains the following presentation of appellant’s representations:
      [Appellant], in his affidavit of June 6, 1963, . . . says they [the Inspectors] told him if he did not resign forthwith, that he would not be given transportation back to the United States for his wife and children nor would his household effects be transported. He says the inspectors remarked “it’s a long swim,” threatened to tie up “his Civil Service Retirement” and make reports which would make it “virtually impossible for the affiant to again obtain employment in the service of the United States.”
      He says he consulted with an official of the U. S. Embassy in Beirut and was unable to obtain proper counsel but however was advised by certain of the personnel in the Embassy that in view of the circumstances be should submit the resignation which would be without validity since it was done under duress and the situation could be rectified upon his return to the United States.
      The appellant stated he expressed his belief that the Bureau would not abandon him and his family in a foreign country. He said the Inspector replied he didn’t know anything about an abandonment but if the appellant wished to become an expert on the subject he could by refusing to sign the resignation. He said the Inspecor remarked he could sign the resignation or swim back; threatened to tie up salary due and retirement benefits and said the appellant would never be able to get another job with the government if he did not sign the resignation.

      . The circular was issued on April 1, 1958, pursuant to the Act of August 31, 1954, ch. 1155, 68 Stat. 1008.

      . Rule 6 of Circular No. 26 provides as follows :

        Allowable expenses prior to employees return, (a) An employee shall be allowed one-way transportation expenses for returning his immediate family and his household goods and personal effects from his post of duty to his place of actual residence in the continental United States, one of its territories or possessions, not to exceed those allowed over a usually traveled route between the post of duty and place of actual residence at time of assignment to such post, and will be paid not in excess of one time during such agreed upon period of service, when:
      (1) The employee has acquired eligibility for return transportation by satisfactorily completing the agreed upon two-year period of service.

      . He was transferred to Beirut from Rome, Italy, where he had been assigned since October 5, 1959.

      . Dabney v. Freeman, 123 U.S.App.D.C. 166, 358 F.2d 533 (1965) does not chart the course to be adopted in this case. Aside from differences there exposed with respect to questioned resignations, in terms of the standards for judicial review, reflected in the dissenting opinion, the course followed in that case does not control this case because we are convinced that the basis for the finding of voluntariness is not supported by the administrative record.

      . The letter withdrawing the resignation as we have seen was submitted to the Bureau on March 11, 1963. The Commissioner’s letter of March 12, 1963, acknowledging receipt of the resignation made no mention of its withdrawal. Official Form 50, entitled, Notification of Personnel Action, dated March 27, 1963, and signed by the Commissioner of the Bureau of Narcotics also failed to indicate that appellant had submitted a withdrawal.

      . The District Court’s decision issued on December 5, 1969, whereas the Goodman and Cunningham decisions occurred in 1970.

      . The District Court considered the withdrawal, stating in its order as follows:
      Plaintiff’s contention that his resignation was not accepted before he sought to withdraw it is barred by the doctrine of exhaustion of administrative remedies, and in any event is not sustained by the record ....
      The question under Goodman is not whether the resignation had been accepted but whether its withdrawal had been submitted before the effective date of the resignation. If so, the agency was required to consider it; and the Goodman case to that effect having been decided subsequently to the pendency of appellant’s case before the agency and the Commission, the exhaustion doctrine we think does not preclude the courts from applying the principles of Goodman in now deciding Wilson’s case.


author: HAMLIN, Circuit Judge.

text:
    In the Matter of MESA FARM COMPANY, a partnership composed of James V. Pettitt and George W. Ross, Bankrupt No. 110092, and Mesa Farms, Inc., a California corporation, Bankrupt No. 110091, Appellants, v. UNITED STATES of America, Appellee.
    No. 71-1121.
    United States Court of Appeals, Ninth Circuit.
    March 9, 1973.
    Henry Cohen (argued), Burlingame, Cal., for appellants.
    Anthony J. Steinmeiyer, Atty. (argued), Alan S. Rosenthal, Morton Hollander, Leonard Schaitman, Attys., L. Patrick Gray, III, Asst. Atty. Gen., Dept, of Justice, Washington, D. C., James L. Browning, Jr., U. S. Atty., San Francisco, Cal., for appellee.
    Before HAMLIN and TRASK, Circuit Judges, and SOLOMON, District Judge.

       The Honorable Gus J. Solomon, Senior Judge, United States District Court, Portland, Oregon.

   HAMLIN, Circuit Judge.

Mesa Farm Company and Mesa Farms, Inc., appeal from a denial by the United States District Court for the Northern District of California of a petition for review of the Referee in Bankruptcy’s order directing them to pay an additional $22,200 into the-Referees’ Salary and Expense Fund (hereinafter Fund).

The sole issue presented is a question of first impression, to wit: whether the Judicial Conference of the United States validly promulgated a rule requiring that payment made to the Fund be based upon the fair market value of all assets coming into the bankrupt’s estate, irrespective of whether such property is liquidated in the estate by the trustee. We uphold the rule’s validity and affirm.

In June, 1968, Mesa Farm Company and Mesa Farms, Inc. each filed a petition for arrangement under Chapter XI of the Bankruptcy Act. When no arrangement was consummated, both consented to an adjudication in bankruptcy.

The facts relevant to the instant proceeding were submitted to the District Court on an Agreed Statement of Facts:

“Prior to adjudication MESA FARMS COMPANY, a partnership, owned a fee-simple interest in that realty known as Mahoney Ranch, a leasehold interest in that realty known as Echenique Ranch, and operating agricultural machinery and equipment. MESA FARMS, INC., a corporation, conducted an agricultural business on said realty, using the machinery and equipment. MESA FARMS, INC. had no assets. None of said assets of MESA FARM COMPANY were liquidated in the Chapter XI Proceedings prior to adjudication.
“Subsequent to adjudication the leasehold on the Echenique Ranch was sold to the Echeniques free and clear of liens thereon for $225,000.00. There being more than $225,000.00 of liens on the leasehold, the proceeds were distributed to the lienors.
“During the pendency of the bankruptcy, Paul Masson, Inc. made an offer to the Trustee to purchase the Ma-honey Ranch, subject to a first deed of trust, for a total price, including the amount of the first deed of trust, of $800,000.00. Also during the bankruptcy, Almadén Vineyards, Inc. approached JAMES V. PETTITT and GEORGE W. ROSS, the partners of MESA FARMS COMPANY to purchase the Mahoney Ranch for $850,-000.00. After negotiations between the partners, their attorneys, and Almadén, it was ultimately agreed that the property should be sold free and clear of liens for the price of $1,050,-000.00 cash, the amount being an approximation of that necessary to pay all creditors, secured and otherwise, of MESA FARMS COMPANY and MESA FARMS, INC., taxes, attorneys fees, costs and all expenses of administration. The sale would be made by the partnership to Almadén and was contingent upon dismissal of the bankruptcy proceedings prior to the conclusion of the sale. The machinery and equipment were appraised by an outside appraiser at $60,000.00 and were agreed to be sold by the partnership, contingent upon dismissal of the bankruptcy, to another corporation for $60,000.00 free and clear of liens in satisfaction of its claim against MESA FARM COMPANY on an unsecured loan, which with interest to May 31, 1969, amounted to $60,956.-52.
“On June 6, 1969, a petition to approve the Masson sale and a petition to dismiss the bankruptcies came on simultaneously for hearing. Upon being advised at the hearing of the Almadén offer, representatives of Paul Masson, Inc. withdrew the Mas-son offer. The Referee approved the dismissal conditioned upon the court retaining jurisdiction to determine the amounts payable, if any, to the Referee’s Salary and Expense Fund. Subsequent to the Order of Dismissal, also on June 6, 1969, a Contract of Sale for the Mahoney Ranch to Almadén was signed and escrow was closed less than a week thereafter. The machinery and equipment were thereafter transferred to the creditor corporation.
“The purchase price for the Mahoney Ranch was given to the attorneys for the bankrupt; they have paid all creditors in full except those whose claims are disputed, and some five creditors who have agreed to a reduction of their claims in the event that the moneys payable to the Referee’s Salary and Expense Fund is such that all claims cannot be paid at one hundred cents on the dollar.”

The dismissed bankrupts, appellants herein, paid into the Fund $4,750.00, the amount which would have been owed if the fees were based solely upon the $225,000.00 received from the Echenique Ranch leasehold. The referee held, however, that under a rule of the Judicial Conference of the United States, the payment to the Fund must be based upon $1,335,000.00, i.e., the fair market value of all assets coming into the hands of the trustee. Such assets included the $1,050,000.00 received for the Mahoney Ranch and the $60,000.00 received for the machinery and equipment subsequent to bankruptcy dismissal, in addition to the $225,000.00 received for the leasehold in the bankruptcy proceeding. Accordingly, the referee ordered appellants to pay an additional $22,200.00 into the Fund.

Appellants petitioned the District Court for review of the referee’s order, contending that the Conference rule was invalid. The petition was denied and this appeal followed.

Section 40c(2)(a) of the Bankruptcy Act, 11 U.S.C. § 68(c)(2)(a), provides:

“(2) Additional fees for the referees’ salary and expense fund shall be charged, in accordance with the schedule fixed by the conference (a) against each estate wholly or partially liquidated in a bankruptcy proceeding, and be computed upon the net proceeds realized * * * (emphasis added)

Section 40e(2)(c) provides in pertinent part:

“The Director [of the Administrative Office of the United States Courts], with the approval of the [Judicial Conference, may make, and from time to time amend, rules and regulations prescribing methods for determining net proceeds realized in asset cases * * * .”

The Judicial Conference promulgated the following rule with reference to determining “net proceeds realized” :

“Determination of net proceeds réalized.
“In determining the amount of net proceeds realized in asset cases for the purpose of Section 40c(2) of the Bankruptcy Act as amended, the term ‘net proceeds realized in asset cases’ shall mean, in the case of sale or liquidation, the amount of money coming into the estate of the bankrupt as assets of such estate, which shall include the entire sale price of encumbered property when sold free and clear of all liens, or, if not sold or liquidated, the fair cash market value of all property coming into the estate as assets of such estate * * *

Appellants contend that the Judicial Conference has exceeded its statutory authority as delegated in section 40e(2)(c) by defining “net proceeds realized” to include the fair market value of all property coming into the hands of the trustee in bankruptcy for the purposes of computing amounts due to the Fund, whether or not such property is liquidated in the estate by the trustee.

They urge that the phrase “net proceeds realized” necessarily imports a concept of the result of the sale or liquidation efforts. Specifically, appellants claim “net proceeds realized” refer to those proceeds realized by the trustee only as a result of a liquidation of assets in the bankruptcy proceedings.

In Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965), the Supreme Court enunciated the standard of review that courts must employ when faced with problems of statutory construction:

“[T]his Court shows great deference to the interpretation given the statute by the officers or agency charged with its administration. ‘To sustain the Commission’s application of this statutory term, we need not find that its construction is the only reasonable one, or even that it is the result we would have reached had the question arisen in the first instance in judicial proceedings.’ Unemployment Comm’n v. Aragon, 329 U.S. 143, 153 [67 S.Ct. 245, 250, 91 L.Ed. 136]. See also, e. g., Gray v. Powell, 314 U.S. 402 [62 S.Ct. 326, 86 L.Ed. 301]; Universal Battery Co. v. United States, 281 U.S. 580, 583 [50 S.Ct. 422, 74 L.Ed. 1051]. ‘Particularly is this respect due when the administrative practice at stake “involves a contemporaneous construction of a statute by the men charged with the responsibility of setting its machinery in motion; of making the parts work efficiently and smoothly while they are yet untried and new.” ’ Power Reactor Co., v. Electricians, 367 U.S. 396, 408, 81 S.Ct. 1529, 6 L.Ed.2d 924.”

The present section 40c of the Bankruptcy Act originated in the Referees’ Salary Act of 1946, 60 Stat. 323, which placed referees on a salary basis and abolished the theretofore practice whereby referees derived compensation directly from fees imposed on their cases. See generally, 2 Collier on Bankruptcy § 40.01 [4] (1971). The 1946 Act also created two trust funds to be used to pay referees’ salaries and expenses. The trust funds were supported by “a simplified system based upon two essential levies: (1) a fixed filing fee [Section 40c(l)] and (2) an additional fixed charge in asset, arrangement, and wage earner cases according to the size of the estate. [Section 40c(2)].” H.R.Rep.No. 1037, 79th Cong., 1st Sess. 5 (1945); S. Rep.No. 959, 79th Cong., 2d Sess. 6 (1946). The 1946 Act “sought to make the system self-sustaining and paid for by those who use it * * * .” United States v. Kras, 409 U.S. 434, at 448, 93 S.Ct. 631 at 639, 34 L.Ed.2d 626 (1973).

Pursuant to the terms of section 40c(2), the Judicial Conference promulgated rules and regulations prescribing the methods for determining, inter alia, “net proceeds realized in asset cases.” The Conference’s construction of that phrase to include all property coming into the estate, supra, is herein challenged.

The rule is the contemporaneous construction of section 40e(2) by those charged with administering the referee salary and expense system, supra. As such, the Conference rule is entitled to great deference. Udall v. Tallman, supra. “[T]heir construction should be given effect unless plainly unreasonable or in conflict with the plain intent of the legislature.” Brotherhood of Railroad Trainmen v. Akron & B. B. R. Co., 128 U.S.App.D.C. 59, 385 F.2d 581, 612 (D.C.Cir. 1967), cert. den. 390 U.S. 923, 88 S.Ct. 851, 19 L.Ed.2d 983 (1968).

The propriety of the challenged rule is buttressed by the fact that it appears consistent with congressional intent. Congress contemplated that the fee paid into the Fund would be assessed “according to the size of the estate,” in support of a self-sustaining system. H. R.Rep.No. 1037, supra, at 5-6, S.Rep.No. 959, supra, at 6; United States v. Kras, supra. The cash proceeds received from a partial liquidation of an estate are not necessarily related to the estate’s size. In the instant case, an estate valued at over $1,335,000.00 produced only $225,000.00 cash. In light of the foregoing, the Conference rule interpreting “net proceeds realized” to include all assets coming into the estate is justifiable.

Furthermore, the Conference rule effectively negates the possibility of a bankrupt’s estate being negotiated so as to avoid payment to the Fund after lengthy pendency of bankruptcy proceedings.

In sum, there appear to be rational bases for the Conference definition of “net proceeds realized.” Certainly, we can find no abuse of its broad Udall discretion.

Accordingly, the District Court’s order denying the appellants’ petition for review is affirmed.

      . 11 U.S.C. §§ 701-799.

      . Appellants challenge only the rule’s validity, and not its application to the facts of this case.

      . Conference Report, May 2, 1947, pp. 41— 42.

      . Appellants cite several judicial definitions supportive of their restrictive interpretation of the term “proceeds.” The Government has been equally astute in noting judicial definitions supportive of their broader interpretation of the term.
      We can only conclude that the term “proceeds” is “a word of great generality.” Phelps v. Harris, 101 U.S. 370, 380, 25 L.Ed. 855 (1879).

      . Appellants’ contention that the Udall standard is inapplicable to the Judicial Conference, on the premise that it is not a regulatory agency, is contradicted by the case law. See American Guaranty Corp. v. United States, 401 F.2d 1004, 185 Ct.Cl. 502 (1968).

      . The two funds were combined in 1959 to form the present day Referees’ Salary and Expense Fund. 73 Stat. 259.

      . The “Agreed Statement of Facts” contains no reference to the motives of either appellants or Almadén in their consummation of the Mahoney Ranch sale.

      . Indeed, the leading bankruptcy commentators, 2 Collier on Bankruptcy ¶ 40.05 [2.5] (1971) and 6 Remington, Bankruptcy Law § 2729 (1952), and several courts, In re Street, 184 F.2d 710 (3rd Cir. 1950); Reconstruction Finance Corp. v. Cohen, 179 F.2d 773 (10th Cir. 1950) and In re Stephen R. Jackson and Co., 82 F.Supp. 966 (D.Del.1949), have relied upon the challenged rule without questioning its propriety. Cf., In re La Rowe, 91 F.Supp. 52 (D.Minn.1950).


text:
    Yolanda M. NAUCK, Petitioner, v. IMMIGRATION AND NATURALIZATION SERVICE, Respondent.
    No. 35609.
    United States Court of Appeals, Second Circuit.
    Argued Jan. 15, 1973.
    Decided March 5, 1973.

      Edward L. Dubroff, Brooklyn, N. Y. (Thomas T. Heeht, New York City, on the brief), for petitioner.
    Stanley H. Wallenstein, Sp. Asst. U. S. Atty., New York City (Whitney North Seymour, Jr., U. S. Atty., New York City, and Joseph P. Marro, Sp. Asst. U. S. Atty., New York City, on the brief), for respondent.
    Before FRIENDLY, Chief Judge, OAKES and TIMBERS, Circuit Judges.
   PER CURIAM:

This petition for review raises the issue whether the recipient of full and legally-prescribed notice of a proposed change in visa status, after being informed of the nature and implication of the change and after waiving by silence the various options available, can overturn the findings of an INS Special Inquiry Officer and the Board of Immigration Appeals that she knowingly abandoned the desired status. We deny the petition for review of an order of the Board of Immigration Appeals finding petitioner deportable.

Petitioner, a native and citizen of Brazil, entered the United States on July 1, 1963 under a permanent resident visa. In October 1964, she became employed by Lloyd Brasileiro, an agency of the Brazilian government. Upon the commencement of that employment, the Brazilian Embassy notified the Secretary of State, who in turn notified the INS, of petitioner’s entitlement to a foreign government employee status, under 8 U.S.C. § 1101(a) (15) (A) (ii) (1970). As a result, the INS on June 28, 1966 informed petitioner that it proposed to adjust her status from permanent resident to nonimmigrant employee of a foreign government in accordance with 8 U.S.C. § 1257 (1970). Included in the notice was information regarding such options as the right within ten days to file an answer or to request a hearing (at which representation by counsel would be permitted), as well as the further right to retain her permanent resident status by signing a waiver of all rights, privileges, exemptions, and immunities resulting from her employment with a foreign government agency. Copies of the waiver form were attached to the notice.

Upon petitioner’s failure to respond, the INS notified her on September 13, 1966 that her status had been changed to a nonimmigrant employee of a foreign government. Soon afterwards, petitioner was sent an identification card reflecting her new status.

On March 13, 1968, petitioner returned from a three month visit to relatives in Brazil, and was admitted as a nonimmigrant employed of a foreign government. Five days later her employment with Lloyd Brasileiro was terminated. Petitioner nevertheless remained in the United States. This development eventually came to the attention of the INS and on September 15, 1969 it issued a show cause order and a notice of hearing regarding the alleged deportability of petitioner under 8 U.S.C. § 1251(a)(2) (1970). A hearing was held before a Special Inquiry Officer, the result of which was a finding that petitioner was deportable, with an allowance of voluntary departure within ninety days in lieu of an order of deportation. That decision was appealed to the Board of Immigration Appeals. The Board dismissed the appeal, but petitioner was again allowed voluntary departure within thirty days of the order. This petition for review followed.

Petitioner’s challenge to the order is based on her claim that, because she did not truly comprehend the nature of the proposed change in status, she could not have knowingly abandoned her permanent resident status. In Moser v. United States, 341 U.S. 41 (1951), the Court overturned an order debarring from United States citizenship a native of Switzerland who had claimed exemption from United States military service, on the view that the alien did not have “an opportunity to make an intelligent election between the diametrically opposed courses” available to him. Unlike Moser, however, this case does not present a situation of an alien being misled as to the implications of his acts, nor is it a case requiring a particular inference to be drawn from an ambiguous overt act of an alien. Cf. Afroyim v. Rusk, 387 U.S. 253 (1967) (naturalized citizen voting in foreign election); Gastelum-Quinones v. Kennedy, 374 U.S. 469 (1963) (permanent resident attended meetings of, and paid dues to, Communist Party). Here, conversely, the record convincingly shows that petitioner was given full and adequate notice of the impending change in status, that she visited the INS for the first time following receipt of the notice that the change had been effected, and that the failure to take timely action as outlined in the initial notice was either wilful or grossly negligent. We note, moreover, that under § 247 of the Act, 8 U.S.C. § 1257, the INS is without discretion in a case of this sort — an alien who, upon receipt of the proper notice under 8 C.F.R. § 247 (1972), fails to exercise any of the available courses of action, is in all cases to be adjusted to nonimmigrant status.

The record here clearly indicates that petitioner was given the opportunity to make a factual showing that she had not knowingly abandoned her permanent resident status. Both the Special Inquiry Officer and the Board of Immigration Appeals expressly and emphatically rejected that contention. We hold that conclusion to have been “supported by reasonable, substantial, and probative evidence on the record considered as a whole”, 8 U.S.C. § 1105a(a)(4) (1970), and accordingly dismiss the petition for review.

      . Except for petitioner’s visit to the INS office on that date, see note 2, infra, no inquiries or protests concerning this change were made either before or after its effective date until June 14, 1967, when Lloyd Brasileiro wrote the District Director of the INS requesting a reinstatement of petitioner’s permanent resident status. The INS file on petitioner’s case indicates that it followed up Lloyd Brasileiro’s letter with a phone call on February 28, 1968. At that time, however, petitioner was on a lengthy visit to Brazil, and the INS was therefore informed that no reply to the letter would be necessary. On February 19, 1969, petitioner’s former attorney wrote the INS indicating petitioner’s “desire to resume her status as a permanent resident.”

      . Petitioner’s testimony at the hearing before the Special Inquiry Officer disclosed that at this visit to the INS petitioner and an officer of the Service had a conversation during which, according to petitioner, the officer “asked me whether I was going to chango my visa and asked me to give him my green card [indicating permanent resident status] and I told him that I had lost it.” When asked whether she had said anything regarding her desire to retain her “A”, or permanent resident, status, petitioner replied, “I don’t remember what the conversation was about..”

      . As in the two prior fora, no contention is made here that the notice to petitioner at each stage was anything but in full compliance with the statutory requirements.


author: MULLIGAN, Circuit Judge.

text:
    In the Matter of APPLIANCE PACKING & WAREHOUSING CORP., Bankrupt.
    No. 72-2104.
    United States Court of Appeals, Second Circuit.
    Argued Feb. 21, 1973.
    Decided March 20, 1973.

      Howard Karasik, New York City, for appellant, Joseph Gould, Trustee in Bankruptcy of Appliance Packing & Warehousing Corp.
    Morton L. Gitter, New York City (Lawrence Bauchner, and Otterbourg, Steindler, Houston & Rosen, P.C., New York City, of counsel), for Warren Schwartz, Trustee in Bankruptcy of Arista Trading Co.
    Before FEINBERG, MULLIGAN and TIMBERS, Circuit Judges.
   MULLIGAN, Circuit Judge.

This is an appeal from a decision of the United States District Court for the Southern District of New York, Hon. Constance Baker Motley, D.C., 358 F. Supp. 84 setting aside an order of the Referee in Bankruptcy, Hon. Roy Babitt, which had subrogated the trustee in bankruptcy of Appliance Packing & Warehousing Corp. (Appliance) to whatever rights Westinghouse Electric International Co. (Westinghouse) has against Arista Trading Company (Arista), also a bankrupt. We affirm the decision of the District Judge.

Arista, a partnership, purchased appliances from Westinghouse for ultimate resale in the export market. Appliance, a corporation whose sole shareholders were the two partners of Arista, packaged and warehoused appliances for export; the greater part of its business was attributable to Arista. By July, 1964, Arista owed Westinghouse about $147,000. On July 28, 1964 Arista and Appliance jointly executed a $142,000 promissory note, payable in 24 installments, to Westinghouse. The note was secured by a mortgage on Appliance’s real property.

Arista’s financial position continued to be unstable and in 1965, Arista defaulted on the note with an outstanding indebtedness of $97,000. To preserve Arista’s business, Appliance on May 26, 1965 executed a further guarantee of all obligations owed by Arista to Westinghouse. Within a few weeks, Appliance gave another mortgage on its real property to Westinghouse as collateral for all amounts it guaranteed under the May 26 agreement. Neither the guarantee nor the new mortgage made any explicit reference to the 1964 promissory note.

Arista continued to be unable to meet the periodic payments. On June 19, 1966, Arista and Appliance executed another installment promissory note, in the sum of $37,500, payable to Westinghouse. One month later, on July 19, 1966, Appliance executed an “extension of mortgage” agreement, in reference to the mortgage given as security for the July 28, 1964 note. Westinghouse simply agreed to extend the time for payment of some $97,000 due on the 1964 promissory note, until July 1, 1967.

When Arista and Appliance were both adjudicated bankrupts, Westinghouse filed a claim for $111,639.16 in Appliance’s proceeding for the unpaid balances due on both notes. Appliance’s trustee objected and Westinghouse agreed to accept $50,000 from Appliance in partial satisfaction of its claims, together with an unsecured claim for the balance. Arista likewise filed a claim in the Appliance proceeding, and this led the trustee of Appliance to seek to subrogate Appliance to Westinghouse’s rights on the notes against Arista and to offset these rights against Arista’s claim.

Appellant, the trustee of Appliance, claims that the note originally executed on July 28, 1964 is governed by the New York Uniform Commercial Code and that pursuant to § 3-415 (McKinney 1964) of the Code, Appliance was an accommodation party to the note and is now entitled to full indemnity from Arista. The trustee of Arista claims that the former New York Negotiable Instruments Law governs the rights of the parties on the note. Under that statute, he argues, Appliance cannot be an accommodation party, but rather must be considered a co-maker, entitled only to contribution from Arista. The Referee in Bankruptcy held that the Uniform Commercial Code was applicable and that Appliance was entitled to full indemnity. On Arista’s petition to review, the District Court held that the Negotiable Instruments Law governed the note and that Arista was entitled to contribution, i. e., one-half of the excess of payments made by Appliance over payments made by Arista on the note, might be set off against Arista’s claim against Appliance.

The crucial question to be determined is whether the Uniform Commercial Code or the Negotiable Instruments Law is applicable. The New York Uniform Commercial Code “applies to transactions entered into and events occurring on and after” September 27, 1964. N.Y.U.C.C. §§ 10-101 & 10-105 (McKinney 1964). Relying on the term "events,” the Referee held that the Commercial Code governed since “all of the operative facts determining the extent of indebtedness to [Westinghouse] followed the enactment of the Uniform Commercial Code.” The District Judge reversed on the basis of § 10-102(2) (McKinney Supp.1972) which provides in pertinent part:

Transactions validly entered into before the effective date specified in Section 10-105 of this Act and the rights, duties and interests flowing., from them remain valid thereafter and” may be terminated, completed, consummated or enforced as required or permitted by any statute or other law repealed or modified by this Act as though such repeal or modification had not occurred ....

By the terms of the 1964 note, some 22 of the scheduled 24 installment payments were due after the effective date of the Commercial Code in New York. While §§ 10-101 and 10-105 have been criticized as somewhat vague, we interpret § 10-102(2) to mean that the mere fact that these payments were to be made after the effective date of the Code, does not make the Code applicable to the 1964 note. See James Talcott, Inc. v. Shulman, 82 N.J.Super. 438, 198 A.2d 98 (App.Div.1964); cf. Gem Corrugated Box Corp. v. National Kraft Container Corp., 427 F.2d 499, 502 n. 2 (2nd Cir. 1970). The “extension of mortgage” agreement merely extended the time for payment of the note until July 1, 1967, and in our view did not alter Arista’s and Appliance’s liabilities on the instrument. The May 26, 1965 guarantee, the other mortgage and the $37,500 promissory note, were in our view separate transactions which did not modify or relate to the 1964 note. Therefore the guarantee could not give Appliance any greater rights against Arista for payments made on account of the note.

A. J. Armstrong Co. v. Janburt Embroidery Corp., 97 N.J.Super. 246, 234 A.2d 737 (Super.Ct.1967), cited by the appellant, is inapposite. There a series of 72 promissory notes were made prior to the effective date of the Uniform Commercial Code in New Jersey. The parties agreed to a refinancing of the notes, and one new promissory note payable in 48 installments was executed after the effective date of the Code. On these facts, the court held the Uniform Commercial Code applicable to the refinanced transaction. No substitute note was given here, the date, of the original note was merely extended and the subsequent guarantee, mortgage and promissory note did not purport to alter the 1964 instrument. These developments do not demonstrate the parties’ intent to refinance or replace this instrument. Cf. Lack’s Stores, Inc. v. Waisath, 464 S.W.2d 220 (Tex.Civ.Ct.App.), rev’d in part on other grounds, 474 S.W.2d 444 (Tex.1971).

We cannot agree with Appliance’s suggestion that it is an “accommodation party” under the Negotiable Instruments Law. The relevant section, N.Y. Negotiable Instruments Law § 55 provides:

An accommodation party is one who has signed the instrument as maker, drawer, acceptor or indorser, without receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party.

Our inquiry is whether Appliance can be considered to have received “value” for the instrument. See W. Britton, Bills and Notes, § 93, at 219 (2d ed. 1961). We do not accept the position that Appliance is to be deemed an accommodation party because it did not directly receive the proceeds of the note. Such a restricted reading of § 55 would collide with the broad definition of “value” as “any consideration sufficient to support a simple contract,” contained in § 51. Rather, any substantial benefit or consideration accruing directly or indirectly to Appliance by way of Westinghouse’s extension of credit to Arista, is sufficient to deny Appliance accommodation status. Williams v. Reed, 48 Cal.2d 57, 307 P.2d 353 (1957); Brayer v. Edell, 163 N.Y.S. 989 (Sup.Ct.1917); 1 J. Daniel, Negotiable Instruments § 216, at 277 (7th ed. T. Calvert 1933).

Both the District Court and the Referee (in dictum) believed that Appliance was so interested in the Westinghouse-Arista transaction, that it had received “value” within the meaning of § 55. The two business entities were commonly owned and controlled; Appliance was the' packer and warehouser of the products Arista purchased from Westinghouse. The fact is that Appliance’s own welfare, as well as Arista’s, was dependent upon Westinghouse’s extension of credit. Clearly Appliance must be considered to have received “value” for the promissory note.

Affirmed.

      . This amounts to approximately $3,000. Arista had paid some $44,000 on the note, and Appliance has given Westinghouse $50,000.
      It should be noted that the present appeal deals only with the promissory note executed on July 28, 1964 for $142,000. Arista’s trustee states that the June 19, 1966 note for $37,500 is governed by the New York Uniform Commercial Code and that Appliance, as an accommodation party, is entitled to full indemnity for whatever it pays Westinghouse on this obligation.

      . See Janover & Dulles, The Application of the Transition Provisions of Uniform Commercial Code Article 10 to Chattel Security Piling, 39 N.Y.U.L.Rev. 1027 (1964). Compare N.Y.Negotiable Instruments Law § 6.

      . The only authority relied upon to equate accommodation party status with nonreceipt of proceeds of the note is Salzberg v. Deutsch, 150 Misc. 870, 270 N.Y.S. 595 (Mun.Ct.1934). That case does not refer to the pertinent provisions of the Negotiable Instruments Law and there is no indication that the two co-signers of the note there received any benefit from the instrument.

      . In the May 26, 1965 guarantee given to Westinghouse, Appliance represented that it was “financially interested in the affairs of [Arista] or expect [ed] to derive advantage either directly or indirectly” from Westinghouse’s extension of credit to Arista.