author: CHOY, Circuit Judge:

text:
    CENTRAL COUNCIL OF the TLINGIT & HAIDA INDIANS OF ALASKA, and Sealaska Corporation, Plaintiffs-Appellants, v. CHUGACH NATIVE ASSOCIATION and Chugach Natives, Inc., Defendants-Appellees.
    No. 74-1433.
    United States Court of Appeals, Ninth Circuit.
    Sept. 5, 1974.

      Lawrence T. Feeney (argued), Faulkner, Banfield, Doogan, Gross & Holmes, Juneau, Alaska, for plaintiffs-appellants.
    Clark S. Gruening (argued), Mc-Cutcheon & Gruening, Anchorage, Alaska, for defendants-appellees.
    Before KOELSCH, CARTER and CHOY, Circuit Judges.
   CHOY, Circuit Judge:

This is a suit brought by the Central Council of the Tlingit & Haida Indians and their regional corporation, Sealaska Corp., to compel arbitration of a boundary dispute with the Chugach Natives under § 7(a) of the Alaska Native Claims Settlement Act. The district court held the suit was barred by laches, and this appeal ensued. We reverse.

The Native Claims Act grants the Native peoples of Alaska substantial amounts of money and forty million acres of land as compensation for the Natives’ aboriginal land claims. To administer the property and money, the Act authorizes the creation of twelve regional corporations which are to correspond to the areas inhabited by the various Native groups. The Tlingits’ and Haidas’ Sealaska Corp. and the Chu-gachs’ Chugach Natives, Inc., are the two corporations established for those peoples’ regions.

The statute, in § 7(a), sets forth the procedure for determining the boundaries of the twelve regions.

For purposes of this chapter, the State of Alaska shall be divided by the Secretary [of the Interior] within one year after December 18, 1971, into twelve geographic regions, with each region composed as far as practicable of Natives having a common heritage and sharing common interests. . . . Any dispute over the boundaries of a region or regions shall be resolved by a board of arbitrators consisting of one person selected by each of the Native associations involved, and an additional one or two persons to be selected by the arbitrators selected by the Native associations involved.

The Tlingits and Haidas basically reside in the southeastern portion of the state — the relatively populous panhandle between Canada and the sea — from near Yakutat and the 141st meridian southward. The Chugachs are their immediate northerly neighbors occupying the area along the Gulf of Alaska around Prince William Sound and Valdez to the west near Cook Inlet. On December 11, 1972 — prior to the deadline in § 7(a) —the Secretary issued his map setting the regional boundaries; the border between the two regions involved in this case was established at the 141st meridian. Appellants, however, claim that an approximately 150 mile stretch of land along the coast from the meridian to the Copper River more properly belongs in their region. Though the land is largely uninhabitated, the Tlingits and Haidas assert the area has important cultural and historical significance to them.

Sealaska first brought its claim to light just after it was formed, in June, 1972. During the summer months the chairman of Sealaska’s boundary committee repeatedly tried to arrange negotiations over the question with the president of the newly-formed Chugach Natives, Inc., Cecil Barnes. Barnes never declared outright opposition to the proposal for negotiations but merely demurred, explaining that he was unable to gather an opinion from his corporation’s Board of Directors on the issue. By November no progress had been made. Sealaska complained to the Interior Department, and Barnes also wrote the Department setting forth the Chu-gach argument for the 141st meridian boundary.

In December the Secretary notified the regions of his § 7(a) decision. In a letter accompanying his map, the Secretary explained that if arbitration were not completed under § 7(a) by March 15, 1973, the Department would use the map “in its administration of the Alaska Native Claims Settlement Act of 1971.” This was apparently an effort to set an arbitration deadline. While Sealaska protested the Secretary’s authority to set such a statute of limitations, it proceeded formally to demand arbitration on January 24, 1973. Chugach Natives, Inc. did not respond. A second demand was made on April 9, and when there was again no response, the present suit was filed on May 1,1973.

The appellees offer a number of justifications for the district court’s decision to dismiss the action, but only three merit full discussion.

First, they contend that the Secretary’s administratively-set deadline of March 15, 1973 is binding. The district court gave this factor some weight. The trouble with this, however, is that there is absolutely no authority for the Secretary to establish such a cutoff date in § 7(a) or anywhere else in the statute. Indeed, it would be contrary to the expression of the framers of the Act that, in §§ 7 and 8, they had “adopted a policy of self-determination on the part of the Alaska Native people.” Thus, even assuming the deadline was intended to apply to the regional corporations rather than being solely for the Secretary’s own administrative purposes, it cannot bind this court.

For a similar reason, the deadline cannot be defended as an administrative “interpretation” to which we should accord deference under cases like Eby v. Reb Realty, Inc., 495 F.2d 646, 649-650 (9th Cir. 1974). There is no term here — like the statutory definition of “creditor” in Eby — which requires interpretation.

Secondly, appellees argue that the suit is barred by the traditional doctrine of laches. Again, we cannot agree. The two requisites for the applications of laches are well known:

Laches requires proof of (1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting the defense.

Costello v. United States, 365 U.S. 265, 282, 81 S.Ct. 534, 543, 5 L.Ed.2d 551 (1961). There is a sufficient showing of neither here. Chugach Natives, Inc. expressed an apparent readiness to negotiate the dispute well into the fall of 1972. Up to then, Sealaska cannot be held responsible for forbearing to sue to compel arbitration, for it thought the more desirable avenue of negotiation was open. See West Los Angeles Institute for Cancer Research v. Mayer, 366 F.2d 220, 228 (9th Cir. 1966), cert. denied, 385 U.S. 1010, 87 S.Ct. 718, 17 L. Ed.2d 548 (1967). The November 10th letter, which simply reiterated the Chugach argument to the Department of the Interior, hardly changed that. Shortly thereafter, Sealaska demanded arbitration, and its brief delay in filing and noticing the suit — in part, occasioned by the silence of the Chugach organizations —was hardly unreasonable.

Equally, appellees failed to carry their burden to prove prejudice. While it is claimed that much time and money was expended in reliance on Sealaska’s failure to sue for arbitration, the Chugachs present no specific proof of other than minimal reliance during the time preceding notice of the suit.

Lastly, appellees argue that the structure of the Act, involving a coordinated set of deadlines for various actions, demands that we adhere to a cutoff date near that set by the Secretary. To describe the operation of this complex piece of legislation in understandable terms would outreach the reasonable bounds of this opinion. Suffice it to say that the Act prescribes a number of significant completion dates with those most immediately proximate to the commencement of this litigation occurring in December, 1973. We readily agree that it might upset the sequence of the Act were we to ignore the importance of these dates in considering a plea of laches. However, this lawsuit, filed in May, was not begun so near the December, 1973 deadlines as to endanger the administration of the statute.

Of course, those dates have now passed, but that does not alter our conclusion. We are required to view the case from the time of its filing and notice.

Declaring that these arbitration suits will be barred only if unreasonably delayed is not, we realize, an ideally precise solution. But Congress, which appears to have inadvertently failed to set a statutory deadline for arbitration, is better equipped to impose a precise solution, and further entreaties are best addressed there.

One collateral issue remains. Chugach Natives, Inc., asserts that the Secretary is required to be joined as a party under F.R.Civ.P. 19(a). We disagree, for neither condition of the rule is met. Complete relief can be granted without the Secretary’s presence, and the Secretary claims no interest which must be protected in these proceedings. See generally C. Wright & A. Miller, Federal Practice and Procedure § 1604 (1972).

Reversed with direction to order the parties to arbitration forthwith.

      . 43 U.S.C. § 1606(a).

      . Conf.Rep.jNo. 92-746, 92d Cong., 1st Sess. (1971), 1971 Code Cong. & Admin.News at p. 2250.

      . Accord, e. g., Hecht v. Harris, Upham & Co., 430 F.2d 1202, 1208 (9th Cir. 1970).

      . See Costello v. United States, 365 U.S. at 282, 81 S.Ct. 534.

      . By that date the Secretary had to complete designation of national interest lands, 43 U. S.C. § 1616(d)(2), a factor which affects future Native selection rights. It is also the final date for villages to elect certain property rights. 43 U.S.O. § 1618(b).

      . The related claim that the other regional corporations must be joined under the rule is frivolous.


source: Caselaw Access Project

author: WINTER, Circuit Judge:

license: Public Domain

text:
    James ROWLEY and John H. Grimes, Jr., Petitioners, v. Honorable James B. McMILLAN, Judge of the United States District Court for the Western District of North Carolina, Charlotte Division, et al., Respondents. Marvin Ray SPARROW et al., Appellees, v. J. C. GOODMAN, Jr., Chief of Police of Charlotte, N. C., et al., Defendants, James Rowley, Director of the U. S. Secret Service, and John H. Grimes, Jr., Agent of the U. S. Secret Service, Appellants, And divers other Secret Service Agents, et al., Defendants.
    Nos. 73-2451, 73-2454.
    United States Court of Appeals, Fourth Circuit.
    Argued April 1, 1974.
    Decided July 26, 1974.

      See also, D.C., 376 F.Supp. 1268.

      James E. Walker and Robert G. McClure, Jr., Charlotte, N. C. (Sanders, Walker & London, Charlotte, N. C., on brief), for petitioners in No. 73-2451.
    George S. Daly, Jr., Charlotte, N. C. (Frank Aycock, Charles Lloyd, Asst. At-tys. Gen. of N. C., William A. Watts, Asst. City Atty., Hugh L. Lobdell, S. Dean Hamrick and James Monteith, Charlotte, N. C.), for respondents in No. 73-2451.
    James E. Walker and Robert G. McClure, Jr., Charlotte, N. C. (Sanders, Walker & London, Charlotte, N. C., on brief), for appellants in No. 73-2454.
    George S. Daly, Jr., Charlotte, N. C., for appellees in No. 73-2454.
    Before BOREMAN and BRYAN, Senior Circuit Judges, and WINTER, Circuit Judge.
   WINTER, Circuit Judge:

When the City of Charlotte, North Carolina, proclaimed October 15, 1971 as “Billy Graham Day” to honor one of its native sons, one of the events scheduled-was a rally at the Charlotte Coliseum, a public facility capable of seating 13,000 persons. The public generally was invited and free tickets were widely distributed. In attendance was the President of the United States, and attending and securing his person in part of the premises were members of the Secret Service. Local law enforcement officials were also present, and county police, state police, the F.B.I. and others were consulted. Some members of these latter groups were active in securing presidential safety and in managing and controlling the large number of persons who attended.

As found by the district court, Sparrow v. Goodman, 361 F.Supp. 506 (W.D. N.C.1973), the events inside, including appearances and remarks by the President and Dr. Graham, proceeded without dissenting voice, sign, banner or gesture. But, as further found, certain ticket holders to the event were denied admission, or if once admitted were summarily ejected before the beginning of the program, without apparent justification. The district court found that the criteria of exclusion or expulsion were, inter alia, opposition to the war in Vietnam, advocacy of peace in Vietnam, disapproval of the President, or disapproval of the policies of his administration.

The named plaintiffs, who alleged that they were denied admission or were ejected or were arrested within or without the Coliseum either because they sought peacefully to exercise their constitutional rights by expressing their dissent from the policies of the Nixon administration and their disapproval of the President, or because they were suspected of being persons who might attempt to express such dissent or disapproval, initially brought a class action against named and unnamed members of the Charlotte police department and named and unnamed members of the Secret Service individually and in their official capacities. Joined also as defendants, but only in their official capacities, were the local prosecutor and clerk of court. Declaratory, injunctive and monetary relief were sought.

The district court first heard the case on motion for preliminary injunction and motion by the federal defendants for summary judgment. Evidence was taken and the case briefed and argued. The motion for summary judgment was denied, and the district court granted a preliminary injunction restraining defendants from

discriminatorily arresting or detaining, or keeping from the general public presence of the President, plaintiffs and others similarly situated, on account of their mode of dress or hair style, life style, peaceable expression of political (including dissenting) views.,.exercise of constitutional rights of free speech, petition for redress of grievances or right of association, without prior judicial authorization or without probable cause, or for any other cause not rationally necessary for the personal safety of the President.

361 F.Supp. at 587, 588. The order also directed that the action as to damages proceed. The federal, but not the state, defendants appeal the grant of the preliminary injunction and this appeal is No. 73-2454. We affirm the order granting the preliminary injunction.

Before the preliminary injunction was granted, the federal defendants moved to dismiss the complaint as to them on the ground that the district court lacked subject matter jurisdiction because the federal defendants had official immunity to suit. The motion was renewed from time to time, but ultimately denied.

In connection with discovery prior to the trial on the issue of damages, plaintiffs sought discovery by interrogatories. It was resisted on the ground that the information sought to be elicited was privileged. The interrogatories sought to discover (a) the names and addresses of all Secret Service agents at a given entrance to the Charlotte Coliseum on the day in question between given hours, (b) the names and addresses of the persons for whom a “name check” was run, and (c) for each such person on whom a “name check” was run, the specific information which was secured as a result of the “name check” or otherwise. The two latter areas of inquiry were generated by testimony of the Special Agent in Charge of the Secret Service in Charlotte at the hearing on the preliminary injunction to the effect that a “name check” may have been run on some or all of the persons who were ticket takers at the Coliseum on Billy Graham Day. The district court overruled the federal defendants’ objections to these interrogatories, indicating its willingness to consider an appropriate protective order if one should be requested. Thereafter, the federal defendants sought unsuccessfully to obtain a certification for an interlocutory appeal; and when they were directed to answer these interrogatories, they filed a petition for a writ of mandamus and obtained a stay from us before the date for compliance. The petition for mandamus (No. 73-2451) prays that the writ be issued to direct the district court to dismiss the federal defendants from the suit on the ground that they are immune from suit and the controversy is moot, and, alternatively, that the orders directing them to answer the interrogatories be vacated for the reason that the discovery information sought is privileged. We conclude that the petition for issuance of the writ should be denied.

Because the petition for a writ of mandamus (No. 73-2451) arises out of the facts and matters which are the subject of the appeal (No. 73-2454) and some of the legal issues raised in each overlap, we heard both matters together. We decide them in this single opinion.

No. 73-2454

The federal defendants contend that the preliminary injunction should be vacated or modified with regard to them for several reasons. First, they claim that they may not be enjoined or even sued under the immunity doctrine. The federal defendant James Rowley, Director of the United States Secret Service, contends that in personam jurisdiction has not been obtained over him. All of the defendants argue that the findings of the district court that (1) the Secret Service had a plan of exclusion of persons from the Coliseum based upon the criteria enumerated by the district court, and (2) the Secret Service was in charge of the exclusion of persons that actually occurred on Billy Graham Day are both lacking in evidentiary support and, thus, clearly erroneous. They also argue that the injunction is fatally defective because the district court, in granting interim relief, failed to make a specific finding that plaintiffs were likely to prevail on the merits. Further, the federal defendants assert that the action was moot, in that there was no showing that the President would again appear publicly and speak in Charlotte and that defendants or others similarly situated would be excluded from the gathering. They assert, therefore, that the injunctive relief against future actions was not warranted. Finally, the federal defendants object to compliance with the district court’s order directing them to answer certain interrogatories and to the production of certain documents sought to be inspected by plaintiffs.

A. The claim of immunity is based primarily upon the decision in Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959), with additional support in Gregoire v. Biddle, 177 F.2d 579 (2 Cir. 1949) (quoted and relied on in Barr); Berndtson v. Lewis, 465 F.2d 706 (4 Cir. 1972); and Galella v. Onassis, 487 F.2d 986 (2 Cir. 1973). Pertinent also to this contention is the recent Supreme Court case, decided since the argument of this appeal: Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).

Our reading of these cases persuades us that the doctrine of immunity, whatever its scope (a subject hereafter discussed), has no application to a suit for declaratory or injunctive relief, and, specifically, that it has no application to the aspect of the present litigation which resulted in the federal defendants, and others, being preliminarily enjoined from future denials of the exercise by plaintiffs of their constitutional rights. Reference to Barr and to Scheuer is sufficient to prove the point.

In Barr, damages for libel were sought to be recovered by two officers of the Office of Rent Stabilization from the Acting Director of that agency because of allegedly defamatory statements contained in a press release. The Acting Director claimed either an absolute or qualified privilege. Four justices concluded that the Acting Director had an absolute privilege and a fifth concurred in the judgment on the ground that the press release was neither unauthorized nor beyond the scope of the Acting Director’s official business and he should not be liable therefor. The plurality, per Mr. Justice Harlan, in expressing the view that absolute privilege was applicable, stated:

The reasons for the recognition of the privilege have been often stated. It has been thought important that officials of government should be free to exercise their duties unembarrassed by the fear of damage suits in respect of acts done in the course of those duties — suits which would consume time and energies which would otherwise be devoted to governmental service and the threat of which might appreciably inhibit the fearless, vigorous, and effective administration of policies of government (emphasis supplied). 360 U.S. at 571, 79 S.Ct. at 1339.

Scheuer concerned a suit for damages against the Governor and other officers of the state brought by the personal representatives of students killed on the campus of a state-controlled university. In rejecting the argument that the defendants had absolute “executive immunity” to suit, the Court had occasion to say:

The concept of the immunity of government officers from personal liability springs from the same root considerations that generated the doctrine of sovereign immunity. While the latter doctrine — that the “King could do no wrong” — did not protect all government officers from personal liability, the common law soon recognized the necessity of permitting officials to perform their official functions free from the threat of suits for personal liability. This official immunity apparently rested, in its genesis, on two mutually dependent rationales: (1) the injustice, particularly in the absence of bad faith, of subjecting to liability an officer who is required, by the legal obligations of his position, to exercise discretion; (2) the danger that the threat of such liability would deter his willingness to execute his office with the decisiveness and the judgment required by the public good. (Emphasis added; footnotes eliminated.) 416 U.S. at 239, 94 S.Ct. at 1688, 40 L.Ed.2d at 98-99.

These two quotations demonstrate that the immunity rule, whatever its scope, is grounded upon the inhibitory effect of suits for money damages. Manifestly, actions for injunctive relief do not have that effect. The federal defendants have cited no case, and we have found none, which holds that the immunity doctrine insulates a public official or public employee from injunctive relief to prevent what would otherwise be an illegal act on his part. Scheuer states that the immunity doctrine stems from the same considerations that generated the doctrine of sovereign immunity. That immunity is embodied in the eleventh amendment, so that it is significant to note that since’ Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), the law has been settled that, notwithstanding the eleventh amendment, in an appropriate case a state official may be enjoined by a federal court from future violation of federal law.

Thus, we conclude that the preliminary injunction is not vulnerable to the claim of official immunity.

B. Rowley contends that the district court lacked jurisdiction over his person because he has never been personally served with a copy of the summons and complaint. We are unable to determine if the contention has any merit, because Rowley neither alleged nor tendered proof to overcome the apparent regularity of the marshal’s return. But, if the contention had merit, the objection has been waived and may not be asserted in this appeal.

In response to the original complaint, Rowley appeared and filed a motion to dismiss, questioning the jurisdiction of the district court over the subject matter of the action and the sufficiency of the complaint to state a claim upon which relief could be granted, but not challenging the court’s jurisdiction over his person. Rule 12(b), F.R.Civ.P., provides that the defense of lack of jurisdiction over the person shall be asserted in the pleading in response to the one in which jurisdiction is claimed, or by motion in lieu of a responsive pleading, and Rule 12(h)(1) says that if a defense of lack of jurisdiction over the person is not so asserted, it is waived. Rowley does not appear seriously to contest the conclusion that his failure to assert the lack of jurisdiction over his person in his response to the initial complaint constituted a waiver of that defense, but he argues that he had a right to revive the defense because plaintiffs amended their complaint several times. His response to one of these amended complaints included a claim that the action be dismissed for lack of jurisdiction over his person. We think the argument is foreclosed, however, by the language of Rule 12(g), which states that

[i]f a party makes a motion under this rule but omits therefrom any defense or objection then available to him which this rule permits to be raised by motion, he shall not thereafter make a motion based on the defense or objection so omitted . . . . (Emphasis supplied.)

The leading commentators are in accord that, once having waived the defense of lack of jurisdiction over the person, as Rowley clearly did, Rule 12(g) prevents the defense from being revitalized even though plaintiffs amended their complaint and provided Rowley with an opportunity to file a new motion under Rule 12, or an answer setting forth a defense which Rule 12 would permit to be presented by motion. 2A Moore’s Federal Practice jf 12.22, pp. 2442-43 (1974); Wright and Miller, Federal Practice and Procedure § 1388, p. 845 (1969). They conclude* and we agree, that an amendment to the pleadings permits the responding pleader to assert only such of those defenses which may be presented in a motion under Rule 12 as were not available at the time of his response to the initial pleading. An un-asserted defense available at the time of response to an initial pleading may not be asserted when the initial pleading is amended.

C. Next, we consider the contention that the district court’s ultimate findings of Secret Service participation in the exclusion of persons from the Coliseum and the criteria for exclusion were clearly erroneous. Manifestly, in deciding this issue, we must look to the record as a whole. The federal defendants gave little aid to the district court on these troublesome but important questions because, as the district court recited and the record reflects, they first sought to conceal that the Secret Service was present, 361 F.Supp. at 581; and when the presence of the Secret Service was proved by the testimony of Grimes, the Special Agent in charge of the Secret Service in Charlotte who was called as a plaintiff’s witness, he refused to answer questions as to the criteria for exclusion. They give little aid to us, also, because their brief, while quoting extensively from testimony favorable to them, totally ignores evidence tending to support the district court’s findings. While the record contains conflicting evidence, we think that the district court’s findings are amply supported.

The starting point is the testimony of Grimes who conceded that “plans had been made to exclude people” from the Coliseum on Billy Graham Day, although he declined to identify what people, other than to say “those who might be suspicious,” or the criteria of exclusion. He also testified that the Secret Service agents present on the occasion wore tricolored triangular pins.

Coupled with Grimes’ evidence was the testimony of several eyewitnesses who observed expulsions taking place at the Coliseum on the day of the event. A Charlotte police officer testified that he saw Secret Service agents — identified by him from their wéaring the distinctive pins — assist “private marshals” in excluding persons who sought admittance, and that he assisted such agents, at their request, in escorting persons from the hall. At least three of the named plaintiffs — Mark Englander, Nancy Ferguson and Archie L. Haney, Jr. — testified that the Secret Service — again identified by the distinctive pin — directed or participated in ejecting them from the premises. See summary of testimony, 361 F.Supp. at 571-573, 576. The record shows that Secret Service agents were observed engaged in many activities, and the President of the Chamber of Commerce, the sponsoring organization, testified that the Secret Service was “in complete charge.” The record also shows the dress and hair style of these plaintiffs, as well as others, who were excluded or rejected. The record shows that each conducted himself peaceably, although some carried banners or leaflets critical of the President and the policies of his administration, or participated in chants or songs evidencing their dissent. There is no evidence that anyone was a threat to presidential security.

Since it was admitted that there was a “plan” to exclude people — the actual criteria of exclusion being withheld from the court by one of the federal defendants — and since there was evidence that the Secret Service directed or participated in some expulsions, we think that the district court did not exceed the range of permissible inferences when it concluded that the plan was that of the Secret Service, that the criteria were the characteristics displayed by the plaintiffs — in general, a disposition peacefully to manifest opposition to the President’s policies — and that the Secret Service was in charge of executing the plan. It should be remembered that the finding was made in regard to the grant of a preliminary injunction. If and when the case is reached for trial on the merits and all of the facts disclosed, it may well be that the ultimate or initial responsibility for denial of plaintiffs’ constitutional rights may be found not to rest on the Secret Service. Certainly the district court has not foreclosed that possibility. 361 F.Supp. at 583.

D. Citing Davis v. Crown Central Petroleum Corporation, 483 F.2d 1014 (4 Cir. 1973), the federal defendants contend that the preliminary injunction must be vacated because the district court failed to find that plaintiffs are “likely to prevail eventually on the merits.” It is true that the district court did not make the explicit finding as plaintiffs contend. But we cannot read the district court’s exhaustive opinion other than as stating that conclusion implicitly. Thus, the holding in Davis was met. We do not require the recitation of a particular formula.

E. The contention of the federal defendants that the controversy is moot and that injunctive relief should have been denied as based upon the assertion that Billy Graham Day was a unique, nonrecurring occasion, not to be repeated in the foreseeable future. While we do not suppose that Charlotte, North Carolina, will again arrange public events to honor Dr. Graham in the near future, there is nothing in the record to suggest that the President of the United States is planning to cease making personal appearances before general public audiences, that the federal defendants will fail to perform their statutory duty of protecting him on such occasions, or that the plaintiffs or others similarly situated will not seek admission to future general public meetings for the purpose of exercising rights protected by the first amendment. We take judicial knowledge of Butler v. United States, 365 F.Supp. 1035 (D.Hawaii 1973), in which it appears that when President Nixon arrived at Hick-am Air Force Base on April 30, 1972, approximately one-half year after Billy Graham Day, to meet the President of Japan, who was ¿scheduled to arrive later in the day, numerous protesters sought to exercise their first amendment rights and alleged that they were arbitrarily excluded from the base, notwithstanding that the public generally was invited to be present.

In Lankford v. Gelston, 364 F.2d 197 (4 Cir. 1966), we held that, where there was proof of a massive violation of civil rights by the Baltimore City police, the district court abused its discretion not to have enjoined future violations of those rights even though the likelihood of a future violation was probably foreclosed because of subsequent administrative action. The case at bar is not as aggravated as Lankford, but certainly the district court had discretion to decide whether injunctive relief was appropriate. We cannot say that it abused that discretion in concluding that interim injunctive relief was proper under the state of the record which we have described.

F. The federal defendants’ objections to answering interrogatories is raised also as an alternate ground for relief in their petition for a writ of mandamus and they will be considered later in the opinion. While the federal defendants also contend that they should not be required to produce certain documents that plaintiffs seek to inspect, plaintiffs’ motion for the production of documents has not been ruled on by the district court. It is therefore not yet before us and we express no view on the question.

In sum, therefore, we see no reason to disturb the preliminary injunction granted by the district court. Its order is affirmed.

No. 73-2451

In their petition for a writ of mandamus, the federal defendants seek to require the district court summarily to dismiss the suit as to them on the ground of their absolute immunity to suit. Alternatively, they seek reversal of the district court’s order requiring them to answer the interrogatories described above on the ground that the information sought to be elicited was privileged. Plaintiffs do not question the appropriateness of mandamus to obtain appellate review of both of these issues; nor do we. The right to be free from suits seeking to impose liability in damages would be irretrievably lost if interlocutory review of the denial of the federal defendants’ motion for dismissal were not available at this stage of the proceedings. Similarly, their claim that the information, which the district court ordered them to produce, is privileged, could not subsequently be presented for appellate review except by way of an appeal from a contempt citation. Since such an appellate remedy is hardly “adequate,” mandamus is an appropriate method of obtaining review of the district court’s discovery order. See Nixon v. Sirica, 487 F.2d 700, 707 (D.C.Cir. 1973); see also 9 Moore’s Federal Practice, jflf 110.13[2] and 110.28. We proceed to consideration of the contentions on their merits.

A. The decision in Scheuer controls the present disposition of the federal defendants’ claim of immunity. We have held that “[a]lthough Scheuer involved a suit against state executive officers, the court’s discussion of the qualified nature of executive immunity would appear to be equally applicable to federal executive officers.” States Marine Lines, Inc. v. Shultz, 498 F.2d 1146, 1159 (4 Cir., 1974).

In Scheuer, the Court held that official immunity for executive officers is qualified and dependent upon the discretion and responsibility of the individual officer as viewed in relation to the act in question:

[A] qualified immunity is available to officers of the executive branch of Government, the variation dependent upon the scope of discretion and responsibilities of the office and all the circumstances as they reasonably appeared at the time of the action on which liability is sought to be based. It is the existence of reasonable grounds for the belief formed at the time and in light of all the circumstances, coupled with good faith belief, that affords bases for qualified immunity of executive officers for acts performed in the course of official conduct. (Emphasis supplied.)

416 U.S. at 247; 94 S.Ct. at 1692, 40 L.Ed.2d at 103. In Scheuer, the Court reversed the summary dismissal of a suit against the Governor of Ohio, the President of Kent State University, and the Adjutant General and various unnamed members of the Ohio National Guard brought by the personal representatives of three students killed at Kent State University in May, 1970, “because the absence of a factual record, does . . . [not] permit a determination as to the applicability of the foregoing principles to the respondents here-.” 416 U.S. at 249, 94 S.Ct. at 1693, 40 L.Ed.2d at 104. So, too, we think that the claim of immunity in the case at bar is premature. Its application depends upon a determination of all of the circumstances as they reasonably appeared at the time of the action on which liability is sought to be based, and those circumstances have not yet been fully developed. The hearing on the preliminary injunction was fairly extensive, but it cann'ot be said that it considered all of the circumstances relating to the plaintiffs’ alleged denial of their constitutional rights. Until all are known, the determination of whether the federal defendants are immune to suit should not be made.

To give an example of undeveloped, possibly relevant facts: subsequent to entry of the preliminary injunction, there was disclosed a memorandum dated October 14, 1971, from Roland H. Walker to H. R. Haldeman, a presidential assistant, in connection with Billy Graham Day at Charlotte, North Carolina. The memorandum recites that violence and obscenities are anticipated to be experienced at. the forthcoming public event; the memorandum suggests a method of controlling demonstrators outside of the Coliseum, a system for excluding them from the inside, and also a plan to establish a volunteer legal corps to handle legal questions that might arise as a result of denying entrance on the ground of an allegedly counterfeit ticket. The memorandum requests advice as to whether the plan to prevent demonstrators from entering the Coliseum should be pursued, and there is an affirmative endorsement purportedly by Mr. Haldeman.

Plaintiffs urged that we consider the memorandum in connection with the propriety of granting a preliminary injunction as against the contention of the federal defendants that the case is moot. This we have declined to do, since the memorandum was not in evidence before the district court. We cite it, however, not to accept as proved the truth of the statements it contains, but to illustrate the necessity of a full exploration of the facts before dismissal on the ground of immunity is warranted. Additionally, the reticence of the Secret Service to disclose its role in the events of Billy Graham Day has been noted. The reasons, as yet unrevealed, which may have moved the Secret Service to participate in any of the exclusions from the Coliseum here at issue could be crucial to defendants’ entitlement to qualified immunity. If and when full disclosure is made, the contours of the claim of immunity will be delineated.

B. The federal defendants contend that, if they are required to provide the names and addresses of all Secret Service agents who were present at the entrance to the Coliseum during the time that plaintiffs were excluded on Billy Graham Day and the names and addresses of the persons who were-to serve as marshals and upon whom a “name check” was run, and to reveal whatever specific information that was learned about such persons as a result of the check, the operations of the Secret Service in protecting the President would be impaired. They do not, however, allege specific reasons why providing this information would have this effect. The nature of the questions and the information sought to be elicited are such that we have considerable doubt that, if the interrogatories are answered, the operations of the Secret Service in protecting the President would be impaired. We do not, of course, decide that question at this time, but we readily conclude that the federal defendants have not even attempted to demonstrate that, in fact, the danger exists. At most, they state a conclusion which we do not accept as binding. As a general rule:

the courts have repeatedly asserted that the applicability of the privilege is in the end for them and not the Executive to decide.

Nixon v. Sirica, 487 F.2d 700, 713 (D.C. Cir. 1973). See also United States v. Reynolds, 345 U.S. 1, 8, 73 S.Ct. 528, 97 L.Ed. 727 (1953) ; A Quaker Action Group v. Hickel, 137 U.S.App.D.C. 176, 421 F.2d 1111, 1117-1118 (1969).

In ordering the federal defendants to answer the interrogatories, the district court stated its willingness to consider a protective order if one should be requested. Instead, the federal defendants sought an interlocutory appeal, but the district court declined to sign the necessary certification. If the danger of disclosure is as great as the federal defendants conclusorily allege, the appropriate course for them to follow is to move for entry of a protective order, showing the reasons therefor, and to ask the district court to make an in camera inspection and determination of whether their fears are well founded.

[C]ourts appropriately examine a disputed item in camera, even though this necessarily involves a limited intrusion upon what ultimately may be held confidential, where it appears with reasonable clarity that some access is appropriate, and an in camera inspection is needed to determine what should and what should not be revealed.

Nixon v. Sirica, 487 F.2d 700, 720 (D.C. Cir. 1973) (per curiam).

In sum, we do not decide that privilege may not be applicable, but we do decide that the claim of privilege, as well as the claim of immunity, is premature.

No. 73-2454, affirmed.

No. 73-2451, petition for writ denied.


author: BUTZNER, Circuit Judge:

text:
    Wilson COE, Administrator and Agent of the Estate of Mamie D. Coe, Appellant, v. SECRETARY OF HEALTH, EDUCATION, AND WELFARE, an Officer of the United States of America, Appellee.
    No. 74-1215.
    United States Court of Appeals, Fourth Circuit.
    Argued June ,7,1974.
    Decided Sept. 24, 1974.

      Franklin Smith, Elkin, N. C., for appellant.
    Eli Kaplan, Atty., Dept, of Health, Education and Welfare (N. Carlton Til-ley, Jr., U. S. Atty., M. D. N. C., and Benjamin H. White, Jr., Asst. U. S. Atty., on brief), for appellee.
    Before HAYNSWORTH, Chief Judge, and CRAVEN and BUTZNER, Circuit Judges.
   BUTZNER, Circuit Judge:

The administrator of the estate of Mamie D. Coe appeals from a summary judgment of the district court disallowing Medicare benefits for services provided by a nursing home in Winston-Salem, North Carolina. Accepting the facts as found by the administrative law judge, we reverse because we believe that Mrs. Coe’s administrator is entitled to recover as a matter of law.

Mrs. Coe had a long illness, following a stroke which partially paralyzed her left side. This condition, combined with other ailments, resulted in a poor prognosis for her recovery. She was discharged from the hospital in the latter part of June, and on July 10, 1970, she entered a nursing home. She remained there until October 4, 1970, when she was readmitted to the hospital. On October 14, 1970, she moved to the nursing home and stayed there until readmission to the hospital on November 21, 1970. Since this case involves two different stays at the nursing home, we shall deal with each period separately.

I

The law in effect in 1970 provided that Mrs. Coe could receive extended care benefits only if she entered a nursing home within 14 days after her discharge from the hospital. The administrative law judge, resolving conflicting evidence caused by the accidental destruction of the hospital’s records, found that she had been discharged on June 22, 1970. Accordingly, he ruled that she was not entitled to benefits because she did not enter the nursing home within 14 days. His determination of elapsed time between discharge from the hospital and admission to the home is supported by substantial evidence, and therefore it is binding on us. See Estep v. Richardson, 459 F.2d 1015, 1016 (4th Cir. 1972).

The administrative law judge correctly interpreted the 14 day rule in effect at the time he rendered his decision. The rule is based on the statutory definition of “post hospital extended care services.” This definition was amended in 1972, but apparently the amendment was not called to the attention of the“ district court. Under the current statute, post hospital extended care services include services furnished a patient who is admitted to a qualified nursing home “within such time as it would be medically appropriate to begin an active course of treatment, in the case of an individual whose condition is such that skilled nursing facility care would not be medically appropriate within 14 days after discharge from a hospital.”

An appellate court should “apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or there is statutory direction or legislative history to the contrary.” Bradley v. Richmond School Board, 416 U.S. 696, 711, 94 S.Ct. 2006, 2016, 40 L.Ed.2d 476, 488 (1974); United States v. Schooner Peggy, 5 U.S. (1 Cranch) 103, 109, 2 L.Ed. 49 (1801). We conclude, therefore, that the amended statute should be applied to this case. Ordinarily, we would remand to afford the Secretary an opportunity to reconsider this claim in the light of the amendment. In this instance, however, there is no need to do so. Cf. Breeden v. Weinberger, 493 F.2d 1003, 1011 (4th Cir. 1974). Mrs. Coe was denied benefits solely because she did not satisfy the 14 day rule. The undisputed facts, however, indicate that she qualifies under the amendment. At the time she was discharged from the hospital, there was a possibility that she could be cared for at her own home. However, it became apparent that she needed skilled care that her elderly husband could not provide, and her doctor ordered her admission to the nursing home. She was unable to eat and had to be fed through a nasal tube for over a month.

Accordingly, we hold that Mrs. Coe’s administrator is entitled to recover benefits for her care in the nursing home from July 10, 1970 to October 4, 1970.

II

On October 4, 1970, Mrs. Coe re-entered the hospital where she was treated for a urinary infection. She returned to the nursing home on October 14, 1970, and remained there until she again left for the hospital on November 21, 1970. Throughout her second stay in the nursing home, Mrs. Coe was unable to take care of herself. She had to be fed, though not through a tube, her position in bed had to be regularly changed, and she received daily physical therapy until, toward the end of her stay, it became apparent that she would no longer benefit from this treatment. Her urinary problems persisted, necessitating use of an indwelling catheter, which had to be monitored, irrigated and occasionally changed.

The Secretary, affirmed by the district court, disallowed benefits because in his opinion Mrs. Coe was not furnished skilled nursing care as required by the Act, but on the contrary was furnished only custodial care which is excluded from coverage. In reaching this decision, the administrative law judge and the district court applied Social Security Regulations that were promulgated after Mrs. Coe left the nursing home.

The Act provides that extended care services include nursing care under the supervision of a registered professional nurse; physical therapy, and other services necessary to the health of the patient. The regulations in effect at the time Mrs. Coe was confined in. the nursing home tracked the statute. The uncontradicted facts establish that Mrs. Coe satisfied the statutory requirements as interpreted by those regulations. Her physician certified her need for skilled nursing care. She received physical therapy and her indwelling catheter required continued attention and oeca-s sional removal and reinsertion.

In June 1971, the regulations were amended by the addition of several paragraphs defining post hospital extended care and skilled nursing services. The amended regulations cite a number of services that are not necessarily indicative of skilled nursing care. The examples include frequently turning a bedridden patient, assistance with eating, physical therapy, and the routine care of an indwelling catheter. The administrative law judge and the district court expressly relied on these new regulations to bar reimbursement. Mrs. Coe’s administrator urges that even if the new regulations are applicable, the Secretary’s disallowance is not supported by substantial evidence. We believe, however, that it is unnecessary to decide this issue.

In our view, the new regulations should not have been applied retrospectively to Mrs. Coe’s claim. The principles governing retrospective application of newly enacted laws pertain also to new regulations of administrative agencies. Thorpe v. Housing Authority of Durham, 393 U.S. 268, 282, 89 S.Ct. 518, 21 L.Ed.2d 474 (1969). The general rule prescribing retroactive application of the law, discussed in Part I of this opinion, is subject to an important exception: retrospective application is inappropriate when it results in manifest injustice. Application of the current regulations in this instance constitutes a prohibited interference with Mrs. Coe’s antecedent right to reimbursement at the time the services were rendered. Cf. Greene v. United States, 376 U.S. 149, 160, 84 S.Ct. 615, 11 L.Ed.2d 576 (1964). Divestiture of this matured right is a type of manifest injustice which the exception is designed to prevent. Cf. Greene v. United States, supra; see Bradley v. Richmond School Board, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476, 491 (1974) . (dictum); Thorpe v. Housing Authority of Durham, supra, at 282 n. 43 (dictum).

Finally, we reject the government’s contention that the care provided Mrs. Coe should be excluded from coverage because it is custodial. This type of care is not defined either by the statute or the regulations. Therefore, the statute should be construed according to the commonplace usage of its words. Custodial is defined as “marked by or given to watching and protecting rather than seeking to cure, [for example] custodial care rather than a therapeutic program.” Exclusions from coverage should be narrowly construed lest they inadvertently encompass the qualifications for benefits. Thus, when an elderly patient needs both custodial and skilled nursing care, the remedial purpose of the Act would be defeated by denying coverage. Ridgely v. Secretary of Dept. of Health, Education and Welfare, 345 F.Supp. 983, 993 (D.Md.1972), aff’d, 475 F.2d 1222 (4th Cir. 1943). The undisputed evidence shows that Mrs. Coe’s care was not confined to watching or protecting her. Her daily physical therapy, and the constant attention to her urinary infection were therapeutic measures.

We conclude, therefore, that Mrs. Coe’s administrator is entitled to recover benefits for her second stay in the nursing home.

The judgment of the district court is reversed and this case is remanded for entry of judgment for the administrator.

      . 42U.S.C. § 1395x(i) (1970).

      . 42 U.S.C. § 1395x(i) (C). The older § 1395.x (i) was amended by § 248, P.L. 92-603 (1972). Unlike many other amendments to the Social Security Act enacted by P.L. 92-603, § 248 became effective immediately.

      . The statute defining extended care services and the regulations in effect at the time of Mrs. Coe’s treatment implicitly recognize, and current regulations expressly state, that feeding through a levine tube is a skilled nursing service. 42 U.S.C. § 1395x(h) ; 20 C.F.R. § 405.125 (1970) ; 20 C.F.R. § 405.-127(b)(2) (1974).

      . 42 U.S.C. § 1395f (a) (2) (C) (1970).

      . 42 U.S.C. § 1395y(a)(9) (1970).

      . 42 U.S.C. § 1395x(h) (1970).

      . 20 C.F.R. § 405.125 (1970).

      . 20 C.F.R. § 405.126-128 (1974).

      . 42 U.S.C. § 1395y(a) (9) (1970).

      . Webster’s New International Dictionary at 559 (3d ed. 1964).


author: HILL, Circuit Judge.

text:
    In the Matter of TONKAWA REFINING COMPANY, a corporation, debtor. Robert J. STANTON, Trustee, Appellant, v. William SUTTON, Trustee, Appellee. National Labor Relations Board, Amicus Curiae. Houston National Bank, Amicus Curiae.
    No. 74-1027.
    United States Court of Appeals, Tenth Circuit.
    Argued Aug. 20, 1974.
    Decided Sept. 23, 1974.

      James O. Ellison, Tulsa, Okl., for appellant.
    Loyd Benefield, Oklahoma City, Okl. (John A. Johnson, Oklahoma City, Okl., on the brief), for appellee.
    Peter Carre, Washington, D. C. (Peter G. Nash, Gen. Counsel, John S. .Irving, Deputy Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, Abigail Cooley, Asst. Gen. Counsel, Sp. Litigation, Washington, D. C., on the brief), for amicus curiae National Labor Relations Board; (Charles C. Green, Kerr, Davis, Irvine, Burbage & Green, Inc., Oklahoma City, Okl., on the brief for Houston National Bank).
    Before HILL and DOYLE, Circuit Judges, and SMITH, District Judge.

       Honorable Talbot Smith, Eastern District of Michigan, sitting by designation.

   HILL, Circuit Judge.

This appeal involves the authority and propriety of retaining a subsidiary corporation’s Chapter X reorganization petition in the United States District Court for the Western District of Oklahoma, instead of transferring it to the Northern District of Oklahoma where the parent corporation is undergoing reorganization. ,,

Appellant Robert Stanton is the successor trustee in reorganization for Tulsa Crude Oil Purchasing Corporation (Tulsa Crude). Tulsa Crude operates out of Tulsa, Oklahoma, in the state’s Northern District. Together with six wholly owned subsidiaries, it is engaged in the business of buying, selling, transporting and refining crude oil.

Appellee William Sutton is.the trustee in reorganization for Tonkawa Refining Company (Tonkawa), one of Tulsa Crude’s subsidiaries. Tonkawa’s business, which is conducted independently of and autonomously from its parent, involves the operation of a refinery located in Arnett, Oklahoma, in the state’s Western District. It produces and sells jet fuel, its principal customers being Air Force installations in the Western District.

On February 9, 1972, an involuntary petition in bankruptcy was filed against Tulsa Crude in the Northern District of Oklahoma. The petition made no mention of Tonkawa, either directly or indirectly. The following day an involuntary petition in bankruptcy was filed against Tulsa Crude and all of its subsidiaries, including Tonkawa, in the Western District of Oklahoma. Thereafter, on February 16, 1972, an involuntary Chapter X reorganization petition was filed against Tonkawa in the Western District.

On March 6, 1972, a voluntary Chapter X reorganization petition was filed by Tulsa Crude in the Northern District, in its straight bankruptcy proceeding. This petition did not mention Ton-kawa. On September 20, 1972, the proceedings against Tulsa Crude and all of its subsidiaries, except Tonkawa, were consolidated in the Northern District.

Tulsa Crude’s prior co-trustees then applied to the Western District for an order transferring the proceedings against Tonkawa to the Northern District. A special master was appointed and an evidentiary hearing was conducted. The special master’s subsequent report recommended denial of the application to transfer. The report was confirmed by the district court on November 28, 1971, and this appeal is taken therefrom.

Appellant’s first argument is jurisdictional. Relying on § 111 of the Bankruptcy Act, 11 U.S.C. § 511, he contends the Northern District is the appropriate forum to adjudicate the Tonkawa proceedings because the reorganization court which first acquires jurisdiction over the parent thereby acquires exclusive jurisdiction over all its property wherever located, including a wholly owned subsidiary. We disagree.

Except in circumstances in which the parent and subsidiary are so completely “one” that the corporate veil may be pierced with impunity and technicalities laid aside [not the situation here], the tendency of the courts, in general, is to interpret their jurisdiction over the debtor parent as limited to the parent’s property ownership, i. e., to the stock held by the parent corporation. Hence the court in which the parent is being reorganized has no jurisdiction to enjoin an action against a subsidiary of the debtor, even though the debtor is a substantial shareholder, and though the outcome of the plan will be affected by the pending suit. Such a suit is not against the debtor’s property, since it is directed not against the debtor’s stock but against the assets of the subsidiary. 6 Collier on Bankruptcy II 3.11, at 500 (14th ed. 1972). See also In re Adolph Gobel, Inc., 80 F.2d 849 (2d Cir. 1936).

The Northern District, as Tulsa Crude’s reorganization court, acquired jurisdiction only over Tonkawa’s stock. Section 111 did not confer upon it additional jurisdiction over Tonkawa’s assets. It would have acquired that power had a petition by or against Tonkawa been filed there, under 11 U.S.C. § 529. That was not done. The only petitions involving Tonkawa, either in straight bankruptcy or under Chapter X, were filed in the Western District, which thereby became Tonkawa’s reorganization court.

Even though the Tonkawa proceeding is properly in the Western District, appellant asserts it should be transferred to the Northern District to effectuate the general policy of allowing parent and subsidiary to be reorganized in a single proceeding. We recognize this policy but believe it is one of several factors to be considered by the reorganization court in determining whether a transfer would best serve the interests of the parties. Such a decision, which must be made on a case-by-case basis, is discretionary and will not be disturbed on appeal absent an abuse of that discretion.

Transfer and consolidation, it is asserted, would best serve the interests of the parties. Tulsa Crude and its previously consolidated subsidiaries are to be liquidated and appellant claims Tonkawa’s inclusion in the liquidation plan would form an integrated business package which would be more attractive to prospective purchasers. We believe this would needlessly dilute the claims of Tonkawa’s creditors, and jeopardize their interests. Tulsa Crude is burdened by massive amounts of debts and administrative expenses. Tonkawa, on the other hand, has developed into a highly efficient business operation under ap-pellee’s management and is currently making a profit of $30,000 a month. Moreover, adoption of appellant’s proposal to liquidate Tonkawa would ignore one of the primary purposes of Chapter X, which is to effect the rehabilitation of corporate debtors. 6 Collier On Bankruptcy H 0.11, at 116 (14th ed. 1972).

There are several additional factors which favor retention instead of transfer. Tonkawa has operated independently of its parent and has separate creditors. With the exception of the Houston National Bank (Tonkawa’s largest and only secured creditor), Tulsa Crude and a subsidiary, sixty-seven creditors have filed claims against Ton-kawa. Thirty-two of these creditors are out-of-state and thirty-two are located in the Western District of Oklahoma. Only three Tonkawa creditors are. located in the Northern District. Of these three, two have offices or counsel in the Western District. The third, an individual, has a claim of only $292.

Tonkawa’s books and records are located in the Western District. Transferring these documents to the Northern District would result in a delay in the proceedings while appellant becomes acquainted with them, and the logistics involved would entail cumbersome clerical work.

The Western District is the situs of Tonkawa’s principal place of business. Most, if not all, of its assets and customers are located there. Finally, appellee, peculiarly qualified to supervise Tonka-wa because of his prior business experience, resides in the Western District.

Based on these circumstances we find no abuse of discretion and conclude that retention of the Tonkawa reorganization in the Western District of Oklahoma, rather than transfer to the Northern District, will best serve the parties’ interests.

Accordingly, we affirm.

      . Tulsa Crude’s subsidiaries are: Central Plains Transport Company; Hoeing Transportation, Inc.; Miller Trucking Service, Inc; Plains Industrial Corporation; Admiral Crude Oil Corporation; and Tonkawa Refining Company. Tulsa Crude obtained Tonka-wa Refining Company in August, 1971, by purchasing all of its capital stock.

      . 11 U.S.C. § 511 provides :
      “Where not inconsistent with the provisions of this chapter, the court in which a petition is filed shall, for the purposes of this chapter, have exclusive jurisdiction of the debtor and its property, wherever located.”

      . 11 U.S.C. § 529 provides:
      “If a corporation be a subsidiary, an original petition by or against it may be filed either as provided in section 528 of this title or in the court which has approved the petition by or against its parent corporation.”

      . 11 U.S.C. § 55(c) provides :
      “The judge may transfer any case under tills title to a court, of bankruptcy in any other district, regardless of the location of the principal assets of the bankrupt, or his principal place of business, or his residence, if the interests of the parties will he best served." (Emphasis added).

      . This is an important consideration in view of the fact that Tonkawa’s creditors are separate from Tulsa Crude’s creditors.


author: McWILLIAMS, Circuit Judge.

text:
    Merritt Victor GILMORE and Rose L. Gilmore, Plaintiffs-Appellees, v. CONSTITUTION LIFE INSURANCE COMPANY, Defendant-Appellant.
    No. 73-1963.
    United States Court of Appeals, Tenth Circuit.
    Argued July 11, 1974.
    Decided Sept. 12, 1974.
    Rehearing Denied Oct. 2, 1974.

      Irvin M. Kent, Denver, Colo. (Victor T. Roushar and Petrie, Woodrow, Rous-har & Weaver, Montrose, Colo., on the brief), for plaintiffs-appellees.
    Kenneth L. Starr, Denver, Colo. (Hardin Holmes, James C. Ruh and Ireland, Stapleton, Pryor & Holmes, Denver, Colo., on the brief), for defendant-appellant.
    Before BREITENSTEIN, MC-WILLIAMS and BARRETT, Circuit Judges.
   McWILLIAMS, Circuit Judge.

This is an agency case wherein the trial court held the principal liable for the fraud of its agent on the grounds that the principal had clothed its agent with such authority that the agent was apparently acting within the scope of his authority when he committed the fraudulent acts upon which the present action is based. The trial court accordingly entered judgment against the principal and the latter now appeals. We affirm.

The agent’s fraud is undisputed and the only issue is the principal’s liability therefor. In our view the trial court's ultimate findings are supported by the record and in reaching its conclusions the trial court did not misapprehend or misapply the local Colorado law bearing on the question of the apparent authority of an agent. Let us examine the events out of which the present controversy arises.

In 1952, Merritt Victor Gilmore purchased a policy of life insurance from the Sterling Life Insurance Company. Gilmore, a resident of Montrose, Colorado, is a retired trucker who before his retirement operated a trucking business on Colorado’s western slope hauling uranium for Union Carbide from 1949-63. Gilmore had only an eighth grade education and at the time of trial had been retired for several years. The policy of insurance thus purchased in 1952 had a maturity date of September 29, 1969, and a maturity value of $15,880. Sometime after issuing Gilmore the policy of insurance, Sterling Life Insurance Company was acquired by the Constitution Life Insurance Company.

The Constitution Life Insurance Company is a corporation organized under the laws of Illinois with its principal place of business in that state and it is authorized to transact business in Colorado. One Lejzor Bryks, a resident of Denver, was a general agent for Constitution in the state of Colorado from 1958 till October 7, 1971, when Constitution terminated the relationship. On December 15, 1971, Bryks committed suicide.

Gilmore first met Bryks in May 1968, when Bryks came to the Gilmore residence in Montrose, Colorado, introducing himself as an agent for Constitution and offering to assist Gilmore in connection with his insurance needs. Specifically, Bryks at their first meeting in May 1968 advised Gilmore that if he paid his annual premium payment on the old Sterling policy at that time, instead of waiting till September 1968, he would be able to obtain the full maturity cash value of the policy in September 196S, even though the maturity date of the policy of the policy was September 1969. This was admittedly a false representation by Bryks. Gilmore, however, relied on Bryks’ statement, and thereupon made out his personal check in favor of Constitution for the annual premium, otherwise due in September 1968, which he gave to Bryks. Bryks later endorsed this check on behalf of Constitution and deposited it in an account in the Cherry Creek National Bank, Denver, Colorado. This account plays a rather prominent role in this dispute, and brief reference thereto should be made at this point.

In April 1964 Constitution authorized Bryks, its general agent, to open an account in its name in the Cherry Creek National Bank, with Bryks having the authority to deposit in that account checks made payable to Constitution, and also having the authority to draw on the account, both on his sole signature. Accordingly, as previously mentioned, the premium check which Gilmore gave Bryks in May 1968 was deposited by Bryks in Constitution’s account in the Cherry Creek National Bank. Gilmore also purchased a health and accident policy from Constitution through Bryks in September 1968, and the premium for this policy was paid for at that time by a check made payable to Constitution which Bryks deposited in Constitution’s account in Cherry Creek National.

In September 1968 Bryks again journeyed to Montrose from Denver and presented Gilmore with a blank form for him to sign for the purpose of cashing in his old Sterling policy, which was now the obligation of Constitution. Gilmore signed the form in blank and gave it to Bryks to complete and transmit to Constitution. Gilmore anticipated, based on Bryks’ representation, that he would receive in excess of $15,500 on the surrender of his policy, such being its full maturity value. However, when Bryks filled out the application form which Gilmore had signed in blank, the amount that was to be received was only $14,659.40, which was its value as of September 196S.

In due time Constitution prepared a check in the amount of $14,659.40 payable to Gilmore and gave the check to Bryks for delivery to Gilmore. Bryks, however, did not ° deliver the check to Gilmore, but forged Gilmore’s endorsement and deposited it in the Cherry Creek National Bank account. Bryks then contacted Gilmore and persuaded Gilmore not to take the entire amount of his policy in cash, but to take $10,000 of these proceeds and buy a so-called “certificate” which would draw 8% interest. Gilmore agreed to this, and accepted a $10,000 certificate and a cheek for $5,569.30 for the balance due on the surrender of his Sterling policy, the total of these two amounts equalling the full maturity value of the policy. In buying the certificate Gilmore testified that he thought he was “investing” or “lending” to Constitution. It subsequently developed that these certificates were Bryks’ own invention, and that Constitution had no knowledge of Bryks’ activities in thus selling certificates, which he apparently sold not only to Gilmore, but to others as well.

In December 1968 Bryks suggested to Gilmore that he buy another $5000 certificate, which he did. And again, in June 1969, at Bryks’ suggestion Gilmore bought another $5000 certificate. In each instance Gilmore paid for the certificate with a check made payable to Constitution, which Bryks then deposited in the Cherry Creek bank account.

Bryks paid Gilmore interest on these certificates commencing with the issuance of the first certificate and continuing through December 1971. During 1969, for example, Gilmore received $1400 as interest on the certificates, and at the end of 1969 he received in the mail a Form 1099 showing the amount of $1400 as interest for him to report on his income tax. This form was stamped in the “By Whom Paid” blank with

“Constitution Life Insurance Co. Rocky Mountain States District Office 1637 Race Street Denver 6, Colorado.”

On October 29, 1971, Bryks wrote Gilmore and enclosed one certificate for $20,000, requesting that Gilmore return the three outstanding certificates, which totaled $20,000. This Gilmore did. As indicated, Bryks committed suicide in December 1971, and when the interest payments were no longer forthcoming, Gilmore contacted Constitution. The latter denied knowledge of its agent’s fraud and disavowed liability on its part.

It was in this setting that Gilmore brought suit against Constitution, seeking to recover the $20,000 that he had given Bryks in return for the three certificates. Suit was brought in the District Court for Montrose County, State of Colorado, but was removed to the federal court by Constitution. At trial Gilmore did not, and could not, produce the first three certificates which he had purchased from Bryks. As indicated, these three had been surrendered to Bryks in return for the one $20,000 certificate. The latter certificate was produced upon trial. This fourth certificate made no reference, as such, to Constitution, but did recite that Gilmore had previously given Bryks $20,000 “towards our special fund on which we are paying 8% interest per annum” (emphasis added). Gilmore had no recollection as to the exact language used in the first three certificates, though they were said to be similar in appearance to the fourth certificate. He did recall, however, that the first three certificates, unlike the fourth, were on Constitution’s stationery and bore a Lawrence Street address in Chicago, Illinois.

Trial of this matter was to the court. After all the evidence was in, the trial court suggested to the parties that the evidence was not really in great dispute and directed counsel to draw up stipulated findings of fact. This was done, and such were then adopted by the trial court as its findings. As mentioned earlier, the trial court concluded that in selling the certificates to Gilmore, Bryks was acting within his apparent authority as a general agent for Constitution, and accordingly entered judgment for Gilmore against Constitution in the amount of $10,960.92 and costs. Gilmore’s original claim had been reduced by the sum of $10,000 which he had received from Cherry Creek National Bank by way of settlement, the bank having previously accepted for deposit the check bearing Gilmore’s forged endorsement. It is this judgment, which includes the two $5000 payments which Gilmore made in December 1968 and in June 1969 for so-called certificates, plus interest thereon, that Constitution now appeals.

As above indicated, at the conclusion of the trial the judge directed counsel to prepare a stipulated findings of fact. This counsel did, and the trial judge then accepted the stipulated findings as his own. However, the trial court then proceeded to make certain conclusions, which were in a sense ultimate findings of fact. It was in these conclusions that the trial court held that Constitution had clothed its agent, Bryks, with such authority that in committing the frauds against Gilmore in December 1968 and June 1969, Bryks was apparently acting within his authority as a general agent for Constitution and that the latter was accordingly liable to Gilmore. In our view the record supports the trial court’s resolution of this matter.

At the outset of our discussion we would recognize the argument particularly stressed by Constitution in this court, namely, that Constitution had no authority to itself sell certificates; that it followed that under no circumstance could Bryks have authority, be it express or implied, to sell certificates; and that the selling of certificates was so foreign to the business of the principal, which was selling insurance, that the very nature of the transaction complained of negated even a suggestion that Bryks had apparent authority to sell certificates to Gilmore. We do not agree that Bryks’ selling of certificates to Gilmore was so far removed from his principal’s business that as a matter of law it must be said that he was acting without and beyond his apparent authority.

In the first place, Constitution entrusted its agent, Bryks, with the proceeds of the Sterling policy for delivery to Gilmore. If Constitution had mailed the check to Gilmore, Bryks’ fraud scheme would have been nipped in the very beginning. The fact that the check was made payable to Gilmore, and that Constitution had no reason to expect that Bryks would forge Gilmore’s endorsement, does not deny the fact that Constitution nonetheless wanted its agent to personally deliver the proceeds of his policy to Gilmore. And when an agent is delivering a check for the proceeds of an insurance policy to its erstwhile policyholder, to us it would be normal, and not highly unusual, for the agent to attempt to persuade the policyholder to reinvest with the company, in one way or another, at least a portion of the proceeds of the surrendered policy. “Buying a Piece of the Rock,” for example, is virtually a household expression at the moment. So, when Bryks had some $14,000 for delivery to Gilmore, it was as we see it a normal, natural thing for him to attempt to interest Gilmore in “lending,” or “investing,” at least a portion of the proceeds with his principal, at an attractive 8% interest rate. Under all the circumstances, this then is but one of the factors to be considered in determining whether the record, considered in its entirety, supports a finding of apparent authority. We will now list the factors which in our view support a finding of apparent authority.

First: Bryks was a general agent for Constitution for some thirteen years, and during that time Constitution’s supervision of Bryks lay somewhere between minimal and nonexistent. We recognize that a principal is not responsible for any and all acts of his agent, regardless of whether such are within or without the agent’s authority. At the same time, a principal may not accept the benefits of its agent’s endeavors, and reject out of hand detriments arising therefrom. In other words, a principal may not turn loose his agent on the general public, and then merely sit back and exercise little or no supervision. In this regard, see, for example, Witcher v. Gibson, 15 Colo.App. 163, 61 P. 192 (1900), where appears the following:

“* * * it is always incumbent on * * * [a principal] to conduct his business with care. He is not bound to watch his agent, nor bound to be constantly on the lookout to see that he is not cheated. But he is certainly obligated to keep himself advised of the course of his business, and to know whether his agent is using the specific authority which is granted him, and, if he is not, to advise the parties with whom he is dealing to no longer transact such business with him. * * * ”

The foregoing quotation was cited with approval by the Colorado Supreme Court in Zeller v. Taylor, 95 Colo. 503, 37 P.2d 391 (1934).

Second: Bryks, as Constitution’s general agent, first contacted Gilmore at the latter’s home in Montrose, holding himself out as a general agent for Constitution, which he was, and offering to aid Gilmore in his insurance program.

Third: As mentioned above, Constitution entrusted Bryks with the personal delivery to Gilmore of the proceeds of the Sterling policy, thereby setting in motion the chain of events which resulted in the Gilmores being defrauded of $20,000.

Fourth: Constitution authorized Bryks to open an account in the Cherry Creek National Bank in its name, with Bryks having the sole and uncontrolled authority to make deposits to such account and to draw thereon. Bryks had “free rein” with this account, and Constitution never ran an audit on the account carried in its name in the Cherry Creek National Bank at any time. Hence, Bryks was able to endorse and then deposit the numerous checks which Gilmore made payable to Constitution, including, for example, Gilmore’s last annual premium payment on the Sterling policy, the premiums due on several health and accident policies which Gilmore bought of Constitution through Bryks, not to mention the two checks for $5000 each with which he purchased certificates in December 1968 and June 1969. Similarly, the balance of the proceeds realized from the surrender of the Sterling policy, exclusive of the first certificate in the amount of $10,000, was paid by a check drawn on this account. So, Constitution authorized Bryks to maintain an account in its name and permitted Bryks to so manipulate this account that a third person, such as Gilmore, would reasonably believe that Bryks had authority to accept the checks which Gilmore gave for the certificates.

Fifth: The certificates which Gilmore purchased were on Constitution’s letterheads, which Constitution apparently permitted its agent to have and to use as he saw fit.

Sixth: Interest payments on the certificates were represented by checks drawn on the Cherry Creek bank account. And yearly statements as to interest earned on the certificates were given Gilmore which reflected in the “By Whom Paid” blank that it was Constitution which was paying the interest. In preparing these statements, Bryks apparently had access to a stamp bearing the name of “Constitution Life Insurance Company,” which gave Bryks’ street address in Denver as the address for Constitution’s “Rocky Mountain .States District Office.”

Without further extending this opinion with our analysis of the evidence bearing upon the trial court’s ultimate finding of apparent authority, we conclude that the record does support such and that on appeal we are not at liberty to disturb it. In System Investment Corp. v. Montview Acceptance Corp., 355 F.2d 463 (10th Cir. 1966), a diversity case arising in Colorado, we observed that apparent authority of an agent to do an act is created as to third persons, such as Gilmore in the instant case, not only by written or spoken words by the principal, but also may be created by any conduct of the principal which, reasonably interpreted, causes such third person to believe that the principal consents to have the act done on his behalf by the one purporting to act for him. In this regard, for example, the authorization given Bryks to open an account in Cherry Creek National Bank in Constitution’s name so as to permit the deposit therein of any check made payable to Constitution is of significance. Such enabled Bryks, for example, to deposit premium payments made to Constitution by Gilmore and delivered to Bryks, and at the same time to handle in the similar fashion the payments subsequently made to Bryks for the certificates, such payments also being in the form of a personal cheek made payable to Constitution. See also, Westinghouse Credit Corporation v. Green, 384 F.2d 298 (10th Cir. 1967). To the same effect in another diversity case arising out of Colorado, see Thomas v. Colorado Trust Deed Funds, Inc., 366 F.2d 140 (10th Cir. 1966), where we recognized the general rule that a principal is responsible for the fraudulent acts of an agent whom he has put in a position to perpetrate the fraud complained of.

We regard the trial court’s finding of apparent authority to be an ultimate finding of fact that cannot be disturbed by us on review unless it be “clearly erroneous.” There is a suggestion that since counsel submitted stipulated findings of fact which were adopted by the trial court that this is not a situation where the “clearly erroneous” rule should be applied and that we are free to make our own resolution of the matter. We do not agree.

The question of an agent’s authority to act on behalf of his principal is ordinarily one of fact. System Investment Corp. v. Montview Acceptance Corp., supra, and J. T. Majors & Son, Inc. v. Lippert Bros. Inc., 263 F.2d 650 (10th Cir. 1958). As indicated, there was á complete trial of this case to the trial court, and it was only after all the evidence was in that the trial court suggested to counsel that they attempt to draw up a stipulated findings of fact. This stipulation was in reality but a recitation in summary form of the evidence adduced by both sides upon trial. As a preface to the stipulation, counsel simply agreed that the several “findings” were “supported” by evidence presented to the trial court, but did not agree that such “findings” were necessarily “relevant,” nor that such had necessarily been “established” by “credible” testimony. And no mention is made in the stipulated findings of fact concerning the crucial issue of “apparent authority.” It is only in its so-called “conclusions” that the trial court made a finding of “apparent authority,” which, as above mentioned, we deem to be in reality an ultimate finding of fact. It is on this basis that we are of the view that the “clearly erroneous” rule embodied in Fed.R. Civ.P. 52 is applicable to the present case.

In this court, Constitution urges with considerable emphasis the applicability of a Colorado Court of Appeals case, Schuette v. Winternitz, 498 P.2d 1183 (Colo.App.1972), and suggests that such dictates a reversal. It is true that in that ease there is broad language to the effect that a principal is not bound by the false representations of his agent made without his knowledge, consent, authority or subsequent ratification after receipt of a benefit. However, the facts of that case are quite dissimilar to the ones in the instant case. It would appear that in Schuette the issue of apparent authority was not raised or considered. In any event, we do not regard Schuette to be dispositive of the present case.

A Colorado Court of Appeals ease more nearly in point is Frank v. Constitution Life Insurance Company, 519 P.2d 1206 (Colo.App.1974). Coincidentally, that case involved the same defendant as in the instant case and concerned a similar transaction where the same agent, Bryks, sold an investment certificate to one Frank, and then deposited the $5000 check made payable to Constitution in the same Cherry Creek bank account. In that case both Frank and Constitution moved for summary judgment. Frank based his motion on the grounds that Constitution’s acceptance of previous premium payments, which Frank had made by giving Bryks cheeks payable to Constitution, had clothed Bryks with apparent authority to accept the $5000 check for the certificate. Constitution in turn moved for summary judgment on the ground that the bank account into which Frank’s checks had been deposited was in reality owned exclusively by Bryks and that no part of the $5000 had ever been actually received by Constitution. The trial court denied Constitution’s motion for summary judgment, but granted Frank’s motion and entered judgment for Frank against Constitution for $5000. In reversing, the Colorado Court of Appeals wrote as follows:

“An issue of fact may arise from countervailing inferences which are permissible from evidence accepted as true. O’Herron v. State Farm Mutual Automobile Insurance Co., 156 Colo. 164, 397 P.2d 227. Where undisputed evidence permits conflicting inferences, the party against whom a motion for summary judgment is made is entitled to all favorable inferences which may reasonably be drawn from the evidence; and if, when so viewed, reasonable men might reach different conclusions, the motion should be denied. O’Herron v. State Farm, supra. See also School District v. Grant, 156 Colo. 328, 399 P.2d 101.
“When the above standards are applied here, it is clear that issues of material fact remained as to Bryks’ apparent authority to issue the certificate and as to the alleged negligence of plaintiffs in accepting the certificate. Therefore, plaintiffs’ motion for summary judgment should have been denied.”

So, in Frank v. Constitution Life Insurance Co., supra, the issue as to Bryks’ apparent authority to sell certificates on behalf of Constitution was held to be an issue of material fact, to be resolved upon trial. Here, the issue of apparent authority has been resolved upon trial and we are not inclined to disturb the trial court’s disposition of the matter.

Judgment affirmed.