author: WEICK, Circuit Judge.

text:
    ROYAL CHINA, INC., and Brookpark Royalon, Inc., Plaintiffs-Appellees, v. TRAVELERS INDEMNITY COMPANY, Defendant-Appellant. ROYAL CHINA, INC., and Brookpark Royalon, Inc., Plaintiffs-Cross-Appellants, v. TRAVELERS INDEMNITY COMPANY, Defendant-Cross-Appellee.
    Nos. 74-1024, 74-1025.
    United States Court of Appeals, Sixth Circuit.
    Argued April 16, 1974.
    Decided June 18, 1974.

      John E. Martindale, Arter & Hadden, Cleveland, Ohio, for defendant-appellant.
    Sheldon Berns, Cleveland, Ohio, for plaintiff-appellees; Kahn, Kleinman, Yanowitz & Arnson, Michael H. Diamant, Cleveland, Ohio, on brief.
    Before WEICK, MILLER and LIVELY, Circuit Judges.
   WEICK, Circuit Judge.

In this appeal we construe the provisions of a policy of insurance issued by Travelers Indemnity Company (Travelers) to Royal China, Inc. and its subsidiaries (hereinafter referred to as Royal), which policy insured Royal against the perils of “all risks of loss or damage to the insured’s records of accounts receivable.”

A fire occurred in the Sebring, Ohio plant of Royal resulting in the destruction of certain records which were kept in filing cabinets. Royal contended that as a result of the destruction of these records it was unable to collect on some of its accounts receivable. Travelers denied liability claiming that the particular records which were destroyed were not insured under the provisions of the policy.

Royal filed suit on the policy of insurance in the District Court against Travelers, to recover its damages. Jurisdiction was based on diversity of citizenship. The parties stipulated the facts, and each filed a motion for summary judgment. The District Court granted Royal’s motion for summary judgment and entered judgment against Travelers in the amount of $37,874.58. Travelers appealed. Royal cross-appealed, claiming additional damages. We reverse. The case is governed by Ohio law.

The policy of insurance provided that the stated subject of the insurance was as follows:

1. Subject of Insurance, (a) All sums due the insured from customers, provided the insured is unable to effect collection thereof as a direct result of loss of or damage to records of accounts receivable:
(b) Interest charges on any loan to offset impaired collections pending repayment of such sums made uncollectible by such loss or damage;
(c) Collection expense in excess of normal collection cost and made necessary because of such loss or damage;
(d) Other expenses, when reasonably incurred by the insured in reestablishing records of accounts receivable following such loss or damage.

The policy further contained the following condition precedent to recovery:

3. Protection of Records of Accounts Receivable. Insurance under this policy shall apply only while records of accounts receivable are contained in the premises described above, it being a condition precedent to any right of recovery hereunder that such records shall be kept in the following described receptacles at all times when the premises are not open for business, except while such records are in actual use or as stated in paragraph 4 below:
Kind
Name of Maker
"Class or Hour Exposure" of Label
Name of Issuer of Label
DIEBOLD 4 HOUR

The policy provided in Condition 7, in regard to determination of the amount of the accounts receivable, the following:

There shall be deducted from the total amount of accounts receivable, however established, the amount of such accounts evidenced by records not lost or damaged, or otherwise established or collected by the insured, and an amount to allow for probable bad debts which would normally have been uncollectible by the insured. All unearned interest and service charges shall be deducted.

It was the position of Travelers that the policy insured only against loss or damage to “records of accounts receivable” ; that such insured records were required to be kept in the Diebold safe; that the ledger cards were records of accounts receivable and were kept in the safe as the policy required; that such records were not destroyed; that purchase orders, bills of lading, invoices and receipts, stored in filing cabinets (which were destroyed by fire) were not records of accounts receivable; and that if they were records of accounts receivable they were required to be kept in the Diebold safe.

Travelers further contended that even if these papers which were stored in cabinets were held to be records of accounts receivable, the amount of Royal’s claim can be determined from the ledger cards, and therefore such amount must be deducted under the provisions of Condition 7.

The District Court in its Memorandum and Order found no ambiguity in the provisions of the policy. It further found that the storing of the ledger cards in the Diebold safe was substantial ■ compliance with the provisions of the policy, and that the invoices, bills of lading, purchase orders, receipts, and other papers stored in the cabinets were insured.

In our opinion, purchase orders, bills of lading, receipts and invoices stored in the cabinets are not records of accounts receivable within the meaning of the policy.

In C. E. Riley Co. v. Levy Overall Mfg. Co., 10 Ohio App. 261 (Hamilton Co. 1919), the Court said:

If the question, relied on by defendant in error, turned on whether the book account had been proved by competent evidence, the judgment would be sustained.
“By an account-book is meant a register of the daily business of the party.” Swan’s Treatise (23 ed.) p. 311.
Invoices are not evidence of book accounts nor of sales. (Id. at 264).

In Brown v. Columbus Stamping & Mfg. Co., 9 Ohio App.2d 123, 223 N.E.2d 373 (Franklin Co. 1967), the court cited Riley, stating:

In the case of C. E. Riley Co. . the court held:
“Invoices are not evidence of book accounts nor of sales.”
Invoices are not books of original entry as required by the “shop book” rule. 21 Ohio Jurisprudence 2d 616, Section 596. Varying uses of invoices make them unsatisfactory as evidence. For example, they are frequently only memoranda used to advise of a sale on consignment, a note to an insurance company to secure coverage on a shipment of merchandise, a shipping notice, or other quasi-accounting uses, none of which supports the implications of the short form pleading or the reliability and significance of a book of original entry. (9 Ohio App. 2d at 127, 223 N.E.2d at 376).

See also 1 Ohio Jur.2d Accounts and Accounting § 4, p. 168.

Where a policy of insurance contains ambiguous language, it is construed against the insurer and most favorably to the insured. In the present case the District Court found the policy provisions not to be ambiguous. We agree.

Royal contends that the orders, receipts, invoices, and other papers kept in the cabinets were mere “back up accounts receivable records.” The policy in clear language required the records of accounts receivable to be kept in the Diebold safe. It would not be substantial compliance with the policy to keep such records in cabinets which could be destroyed by fire.

We are of the opinion that the “back up” papers kept in the cabinets were not insured.

In an action on an account in Ohio the ledger cards, properly identified, are admissible in evidence to prove the account. Saperston v. Rae-Columbus, Inc., 151 Ohio St. 11, 84 N.E.2d 218 (1949).

The ledger cards would constitute “ . . . prima facie evidence sufficient to establish the account . ” American Security Serv., Inc. v. Baumann, 32 Ohio App.2d 237, 244, 289 N.E.2d 373, 378 (Franklin Co. 1972).

The plaintiff might have been able to collect the full amount of its claims had it instituted action against its debtors to collect on the accounts. It chose not to do so.

In our opinion, Condition No. 7 also precludes recovery.

The judgment of the District Court is reversed; the cross-appeal is dismissed; and the cause is remanded for dismissal of the complaint.


source: Caselaw Access Project

author: RONEY, Circuit Judge:

license: Public Domain

text:
    ALTERMAN FOODS, INC., Petitioner, v. FEDERAL TRADE COMMISSION, Respondent.
    No. 73-1960.
    United States Court of Appeals, Fifth Circuit.
    July 22, 1974.

      Allen I. Hirsch, Cleburne E. Gregory, Jr., Atlanta, Ga., for petitioner.
    Robert E. Duncan, Atty., Office of General Counsel, Calvin J. Collier, General Counsel, Harold D. Rhynedance, Jr., Asst. General Counsel, and Gerald Harwood, Asst. General Counsel, Federal Trade Commission, Washington, D. C., for respondent.
    Before DYER, MORGAN and RO-NEY, Circuit Judges.

      . Among the seven illustrative suppliers, the highest percentage was just over 3%. There was testimony that it would have cost one supplier $1500 to reach independently the A.B.C. retailers present at the food shows.

   RONEY, Circuit Judge:

The general question in this ease is whether a wholesaler and retailer of groceries and household products violates the Federal Trade Commission Act by inducing its suppliers, at their own expense, to participate in a food show for its buyers and customers, knowing that the suppliers did not so cooperate with its competitors. The Federal Trade Commission found a violation, and we agree.

The case comes to us on a petition of Alterman Foods, Inc. to set aside a Federal Trade Commission cease and desist order. - F.T.C. -, Trade Reg.Rep. ¶ 20,248 (Dkt. 8844, Feb. 12, 1973). Alterman is a combination wholesaler and ■retailer of groceries and household products serving primarily Georgia and Alabama with annual sales exceeding $130 million. It sells to the public at retail from approximately 70 food stores, Big Apple, Food Giant, and K-Mart, which it operates directly or through wholly-owned subsidiaries. Its wholesale division sells exclusively to the “A.B.C. Food Stores,” approximately 375 independent grocery stores organized as a voluntary cooperative and under contract to purchase most of their stock from Alter-man. The institutional division sells in bulk to restaurants, hotels, hospitals, and other institutions.

Since 1956 Alterman has held an annual “food show” conducted under the jurisdiction of its wholesale division, for the institutional, independent, and supermarket buyers. At the show, suppliers demonstrate their wares to an audience of up to 15,000 managers, co-managers, and employees of the Alter-man owned retail outlets, together with their families and friends; independent A.B.C. Store owners, their employees, families, and friends; and customers of the institutional division. The general consuming public is not invited to attend.

The Commission found that the suppliers’ involvement in the food show constituted, in connection with the resale of the suppliers’ products, promotional allowances and services to Alterman which were not accorded on proportionally equal terms to the suppliers’ other customers. The suppliers thus violated sections 2(d) and 2(e) of the Clayton Act, as amended by the Robinson-Pat-man Act, 15 U.S.C.A. 13(d) and (e). The Commission concluded that Alter-man, by knowingly inducing and receiving these discriminatory allowances and services, engaged in unfair competition at both wholesale and retail levels in violation of section 5 of the Federal Trade Commission Act, 15 U.S.C.A. § 45. It issued a cease and desist order.

Seeking to set aside or modify the order, Alterman asserts (1) no retail level violation was proved because the promotional allowances and services were not provided in connection with the retail sale of the suppliers’ products; (2) there was no violation of the Act at the wholesale level because no other customers of the participating suppliers competed with Alterman at the wholesale level except one wholesaler as to which any violation was de minimis-, (3) in any event, the allowances and services satisfied the tests for proportional equality among the suppliers’ customers; and (4) the Commission’s order was overbroad.

Applicable Legal Principles

The Commission determined that Alterman, in inducing suppliers to violate their obligations under the amended Clayton Act, had committed an unfair method of competition proscribed by section 5(a)(1) of the Federal Trade Commission Act, 15 U.S.C.A. § 45(a)(1). The courts have uniformly accepted this use of section 5 to reach buyer conduct not directly proscribed by the prohibitions on sellers established by sections 2(d) and 2(e) of the amended Clayton Act. Colonial Stores, Inc. v. FTC, 450 F.2d 733 (5th Cir. 1971); FTC v. J. Weingarten, Inc., 336 F.2d 687 (5th Cir. 1964), cert. denied, 380 U.S. 908, 85 S.Ct. 890, 13 L.Ed.2d 796 (1965); R. H. Macy & Co. v. FTC, 326 F.2d 445 (2d Cir. 1964); Giant Food Inc. v. FTC, 113 U.S.App.D.C. 227, 307 F.2d 184 (1962), cert. denied, 372 U.S. 910, 83 S.Ct. 723, 9 L.Ed.2d 718 (1963); see FTC v. Fred Meyer, Inc., 390 U.S. 341, 88 S.Ct. 904, 19 L.Ed.2d 1222 (1968).

Section 2(d) makes it unlawful for a supplier to pay allowances for advertising or other sales promotion services or facilities provided by one customer who resells the supplier’s products unless the allowances are “available on proportionally equal terms to all other customers competing in the distribution of such products.”

Section 2(e) prohibits a seller from favoring any purchaser with promotional services and facilities “not accorded to all purchasers on proportionally equal terms.”

The basic factual elements of the unfair method of competition of inducing discriminatory payments or services violative of the Clayton Act are:

1. that a respondent in commerce knowingly solicited or induced and received from a supplier promotional allowances, services, or facilities ;
2. that the solicited promotional considerations were received in connection with the resale of the supplier’s product;
3. that the respondent had competitors at the same functional level; and
4. that the respondent knew or should have known that its competitors were not offered the promotional considerations in question on proportionally equal terms.

FTC v. J. Weingarten, Inc., 336 F.2d 687, 693 n. 16 (5th Cir. 1964), cert. denied, 380 U.S. 908, 85 S.Ct. 890, 13 L.Ed.2d 796 (1965); see FTC v. Fred Meyer, Inc., 390 U.S. 341, 88 S.Ct. 904, 19 L.Ed.2d 1222 (1968); Commission Guide 14, 16 C.F.R. § 240.14 (1974) (FTC Guides for Advertising Allowances and Other Merchandising Payments and Services).

The Commission’s findings are, of course, conclusive if supported by substantial evidence. Colonial Stores, Inc. v. FTC, 450 F.2d 733 (5th Cir. 1971); Foremost Dairies, Inc. v. FTC, 348 F.2d 674 (5th Cir.), cert. denied, 382 U.S. 959, 86 S.Ct. 435, 15 L.Ed.2d 362 (1965); see 15 U.S.C.A. § 45(c). The Commission has wide discretion in its choice of remedies for unlawful practices, and its determination is not to be disturbed unless the remedy selected “has no reasonable relation to the unlawful practices found to exist.” Jacob Siegel Co. v. FTC, 327 U.S. 608, 613, 66 S.Ct. 758, 760, 90 L.Ed. 888 (1946); accord, FTC v. Colgate-Palmolive Co., 380 U.S. 374, 85 S.Ct. 1035, 13 L.Ed.2d 904 (1965). The Commission is not limited to prohibiting only the precise form of illegal practices found by it. FTC v. Colgate-Palmolive Co., supra; FTC v. Mandel Brothers, 359 U.S. 385, 79 S.Ct. 818, 3 L.Ed.2d 893 (1959).

Commission’s Findings and Order

All of Alterman’s suppliers were encouraged to participate in the food show each year. In each year covered by the complaint (1966-1969), approximately 300 suppliers participated. In order to participate, a supplier was required to rent a booth in which to display his products, at a cost of $350 or $375 depending on the year, and to staff the booth in order to display its products. The section 2(d) charge is based on the profit Alterman derived from the show, approximately $100 per supplier even after an admittedly generous allowance for indirect costs. The section 2(e) allegation stems from the promotional services — supplies and labor — furnished by the participating suppliers.

The Commission found that Alterman knowingly induced suppliers to participate in its food show and thereby received favored allowances and services. The Commission determined that the food show benefited Alterman’s retail and wholesale sales. Both Associated Grocers Co-op, Inc. and May & Company of Georgia were wholesale competitors discriminated against by suppliers’ participation in the food show. The Promotional considerations accorded by the suppliers discriminated against Alter-man’s retail competitors both directly and indirectly.

Having found the elements necessary to adjudicate section 5 violations at both wholesale and retail levels, the Commission issued an order which prohibits Alterman from inducing and receiving from a supplier promotional services or facilities, or anything of value in exchange for promotional consideration provided by Alterman, when Alterman knows or should know that the promotional considerations it obtains are not made available by the supplier on proportionally equal terms to all other customers competing with Alterman in the distribution of the supplier’s products. The term “customers” includes retail customers who do not purchase directly from the supplier. As to the operation of future food shows, the order requires Alterman to bear its proper share of the operating expenses and to repay any profit on a show to all participants pro rata. Alterman must deliver a copy of the Commission’s order to everyone invited to participate in a food show.

Retail Sales

Alterman argues that the Commission erred in finding a violation at the retail level of distribution on the ground that the food shows are solely wholesale promotions and the promotional allowances and services provided by the suppliers were not “in connection with” resale of the suppliers’ products to retail customers. The Commission reasoned that the suppliers’ booths, displays, and demonstrations aided Alterman’s retail operation both indirectly and directly: indirectly, by giving special information to those involved in retail sales on how to display and market their products most effectively, thus giving them an advantage over their retail competitors; and directly, by the profit made by Alter-man’s wholesale division from the show, which could in turn reduce the profit margin it needed from the sale of products through its retail division in order to achieve an appropriate overall corporate profit.

Alterman cites the Administrative Law Judge’s finding that the food shows were wholesale promotions and that the promotional services did not facilitate retail sales. In support of this position, Alterman notes that the consuming public was not invited to attend the food shows and that there was no general advertising of shows. In addition, it points out that, although personnel from Alterman’s retail outlets were invited to the shows, they were not permitted to purchase from suppliers there and were not eligible for free orders and prizes offered by suppliers. Alterman also contends that the Commission did not prove that the profits on food shows were used by the retail division and thus did not prove discriminatory allowances in connection with resale at retail.

We should note that the Commission, rather than the Administrative Law Judge, bears the ultimate responsibility of decision and may, therefore, reach results contrary to those of its hearing officer. Findings substituted by the Commission, if supported by substantial evidence, control. Mississippi River. Corp. v. FTC, 454 F.2d 1083, 1089 (8th Cir. 1972); Art National Manufacturers Distributing Co. v. FTC, 298 F.2d 476, 477 (2d Cir.), cert. denied, 370 U.S. 939, 82 S.Ct. 1588, 8 L.Ed.2d 808 (1962); cf. NLRB v. Seafarers International Union, 496 F.2d 1363, 1364 (5th Cir. 1974).

The record contains substantial evidence supporting the Commission’s determination that the food shows were in connection with Alterman’s retail resales of the participating suppliers’ products. Suppliers were invited by Alterman’s buyers who purchased for the Company’s retail division as well as for its wholesale business. The Alterman vice-president in charge of retail operations testified that the Company’s retail stores and their managers definitely benefit from the food shows. Company literature encouraging retailers to attend the shows stresses the benefits to them of participation. The store managers have general discretion in stocking their stores. By going to a food show, a manager can acquire information on new products. He can also observe methods of promoting sales and building up his store. According to another Alterman vice-president, the food shows “cement the relationship between a food supplier and the retailer.” Thus, the suppliers’ promotional services at food shows benefited Alterman at the retail level.

The profits on booth rentals were, in effect, price reductions on suppliers’ products. See Grand Union Co. v. FTC, 300 F.2d 92, 99 (2d Cir. 1962). Although, as Alterman argues, there is no formal proof that its profits on the food shows were put to use at the retail level, the Commission could properly infer that this additional source of profit enabled the Company to maintain a given overall profit level while charging less in its other operations, an advantage denied to Alterman’s competitors. This inference lies within the competence of the Commission and constitutes substantial evidence in the absence of contrary evidence produced by Alterman. See Colonial Stores, Inc. v. FTC, 450 F.2d 733, 739 n. 13, 741 nn. 17 & 18 (5th Cir. 1971).

Wholesale Competition

Alterman attacks the Commission’s finding that Associated Grocers is “as a practical matter” based on “the market realities” in competition with Alterman at the wholesale level. In the broad range of possible functional organizations, a retailer-owned buying cooperative, such as Associated Grocers, may serve as the common agent of individual retailer-members, as their wholesaler, or as something in between. Classification as to function is the province of the trier of fact. Fred Meyer, Inc. v. FTC, 359 F.2d 351, 361 (9th Cir. 1966), rev’d in part on other grounds, 390 U.S. 341, 88 S.Ct. 904, 19 L.Ed.2d 1222 (1968).

We find the Commission determination that Associated Grocers’ headquarters was Alterman’s functional competitor supported by substantial evidence. Associated Grocers’ headquarters performs functions similar to Alter-man’s operation of its voluntary cooperative for A.B.C. Stores. Each maintains substantial inventories of suppliers’ products, purchased directly in its own name, in a large warehouse. Each sells products at wholesale prices and delivers them to affiliated independent retail stores. There is some degree of competition between the two organizations for the business of existing and new independent retail outlets. Finally, there was testimony that, during the years covered by the complaint, Alterman and Associated Grocers were the only two major sources in the Atlanta trade area offering retailers a full line of grocery supplies. This is sufficient evidence to support the Commission’s finding that Alterman’s wholesale division and Associated Grocers’ headquarters are in basic competition for wholesale business. See Tri-Valley Packing Association v. FTC, 329 F.2d 694, 706-709 (9th Cir. 1964); Alhambra Motor Parts v. FTC, 309 F.2d 213 (9th Cir. 1962); cf. Central Retailer-Owned Grocers, Inc. v. FTC, 319 F.2d 410 (7th Cir. 1963).

Alterman asserts a crucial distinction in that Associated Grocers is owned by the retailers which it serves. Any profits from the headquarters operation are returned to the members. In contrast, any profit from Alterman’s wholesale division belongs to the Company, not to the A.B.C. Stores. The dispositive criterion, however, is the functional level at which the activities take place. Nothing in FTC v. Fred Meyer, Inc., 390 U.S. 341, 88 S.Ct. 904, 19 L.Ed.2d 1222 (1968), indicates that ownership of a functional wholesaler by its customers would prevent the Commission from reaching otherwise illegal conduct.

Even assuming arguendo that Associated Grocers was not a wholesale competitor of Alterman, we reject Alter-man’s de minimis contention. The Company points out that May & Co. was shown to have competed with Alterman in the distribution of the products of only one small supplier of the 300 participating in the food shows, and that that supplier rented only half a booth in two shows for which it paid a total of $375. Alterman argues that any resultant disfavoring of May & Co. had relatively little effect on competition.

Proof of inj'ury to competition, however, is not required to show prima facie violations of sections 2(d) and (e). See FTC v. Simplicity Pattern Co., 360 U.S. 55, 79 S.Ct. 1005, 3 L.Ed.2d 1079 (1959); R. H. Macy & Co. v. FTC, 326 F.2d 445 (2d Cir. 1964); Giant Food Inc. v. FTC, 113 U.S.App.D.C. 227, 307 F.2d 184 (1962), cert. denied, 372 U.S. 910, 83 S.Ct. 723, 9 L.Ed.2d 718 (1963). Solicitation of discriminatory promotional consideration is per se illegal. R. H. Macy & Co. v. FTC, supra; American News Co. v. FTC, 300 F.2d 104 (2d Cir.), cert. denied, 371 U.S. 824, 83 S.Ct. 44, 9 L.Ed.2d 64 (1962). In any event, the supplier in question, which had a limited product line and a low profit margin, did not usually participate in food shows. Commission counsel tried the case by using seven suppliers as examples to illustrate Alter-man’s violations. The Commission was not required to prove all possible violations by Alterman with the 300-odd participating suppliers to j'ustify a cease and desist order. In this context it cannot be said that Alterman’s use of its buying power to obtain discriminatory promotional allowances and services was “negligible or inconsequential in the sense of being de minimis.” Shreveport Macaroni Manufacturing Co. v. FTC, 321 F.2d 404, 409 (5th Cir. 1963), cert. denied, 375 U.S. 971, 84 S.Ct. 491, 11 L.Ed.2d 418 (1964). This is particularly so because the Commission has the authority to nip potentially destructive practices in the bud. See FTC v. Simplicity Pattern Co., 360 U.S. 55, 68, 79 S.Ct. 1005, 3 L.Ed.2d 1079 (1959). It was enough in this case that the Commission demonstrated that Alterman knowingly solicited and obtained promotional considerations not available to a competitor.

Proportional Equality

The Commission found that the food show participation and booth rental by suppliers was discriminatory. This finding rested on a determination that these promotional considerations were not available to competitors.

Alterman contends that the food show promotional considerations complied with the tests for proportional equality. It points out that the cost of booth rental was a very small percentage of the amount of suppliers’ sales to Alterman and that the suppliers received fair value in terms of promotional exposure for the amounts they paid.

Alterman’s arguments miss the point. To avoid being discriminatory, promotional payments and services must be made “available” or “accorded” to competing customers of the suppliers. To meet this requirement, a supplier must not merely be willing, if asked, to make an equivalent deal with other customers, but must take affirmative action to inform them of the availability of the promotion programs. Fred Meyer, Inc. v. FTC, 359 F.2d 351, 360 n. 10 (9th Cir. 1966), rev’d in part on other grounds, 390 U.S. 341, 88 S.Ct. 904, 19 L.Ed.2d 1222 (1968); Commission Guide 8, 16 C.F.R. § 240.8 (1974); see Vanity Fair Paper Mills, Inc. v. FTC, 311 F.2d 480 (2d Cir. 1962); Exquisite Form Brassiere, Inc. v. FTC, 112 U.S.App.D.C. 175, 301 F.2d 499 (1961), cert. denied, 369 U.S. 888, 82 S.Ct. 1162, 8 L.Ed.2d 289 (1962). Thus, while promotional benefits received may be considered in determining proportional equality, the basic question is one of proportionality of offers. Colonial Stores, Inc. v. FTC, 450 F.2d 733, 744 (5th Cir. 1971). Once the Commission had shown that only Alterman had received special payments and services, the burden of proving the availability of similar payments to its competitors was on Alterman. R. H. Macy & Co. v. FTC, 326 F.2d 445, 450 (2d Cir. 1964); see State Wholesale Grocers v. Great Atlantic & Pacific Tea Co., 258 F.2d 831, 838 (7th Cir. 1958), cert. denied, 358 U.S. 947, 79 S.Ct. 353, 3 L.Ed.2d 352 (1959). The record makes plain, however, that suppliers were either unwilling or unable to extend similar promotional considerations to all other customers.

Scope of the Order

Based on its finding of 2(d) and 2(e) violations in connection with Alterman’s food shows, the Commission not only placed restrictive conditions on future food shows but also broadly prohibited Alterman from inducing and receiving promotional considerations which it knows or should know are not offered to others in violation of sections 2(d) and 2(e). Alterman argues that the Commission’s order is overly broad and that we should modify it to enjoin only section 5 violations arising from food show activities.

The Commission has broad discretion in the formulation of its decrees. Here the Commission has limited its order to those types of section 5 violations in which it found Alterman to have engaged, i. e., inducing from its suppliers payments and services violative of sections 2(d) and 2(e). The terms of the order closely parallel the provisions of 2(d) and 2(e) but do not extend beyond them. Such orders have often been upheld against contentions of overbreadth. See, e. g., FTC v. Ruberoid Co., 343 U.S. 470, 72 S.Ct. 800, 96 L.Ed. 1081 (1952); Electric Bond & Share Co. v. SEC, 303 U.S. 419, 58 S.Ct. 678, 82 L.Ed. 936 (1938); P. Lorillard Co. v. FTC, 267 F.2d 439 (3d Cir. 1959). The Commission has proscribed future conduct of the same general type as the illegal business practices it found. Thus, the proscriptions are reasonably related to the violations uncovered at the hearing.

Alterman makes general allegations of uncertainty in the meaning of the order. In FTC v. National Lead Co., 352 U.S. 419, 77 S.Ct. 502, 1 L.Ed.2d 438 (1957), the subjects of a comprehensive cease and desist order posed hypothetical situations which they claimed might subsequently cause them considerable difficulties. The Supreme Court rejected their arguments, noting that the companies could apply to the Commission for advice, if such situations developed, and present the questions “in evidentiary form rather than as fantasies.” Id. at 431. Accord FTC v. Colgate-Palmolive Co., 380 U.S. 374, 394, 85 S.Ct. 1035, 13 L.Ed.2d 904 (1965); see 16 C.F.R. § 3.61(d) (1974).

Conclusion

The Commission’s determinations being supported by substantial evidence and in accordance with law, and the scope of the order being reasonably related to the nature of the violations found, we deny the petition for review and order the Commission’s cease and desist order enforced in its entirety. See 15 U.S.C.A. § 45(c).

Petition for review denied and cease and desist order enforced.

      . 15 U.S.C.A. § 45(a) (1) reads:
      Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are declared unlawful.

      . Section 2(d), 15 U.S.C.A. § 13(d), provides in full:
      It shall be unlawful for any person engaged in commerce to pay or contract for the payment of anything of value to or for the benefit of a customer of such person in the course of such commerce as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the processing, handling, sale, or offering for sale of any products or commodities manufactured, sold, or offered for sale by such person, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

      . Section 2(e), 15 U.S.C.A. § 13(e), provides in full:
      It shall be unlawful for any person to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale with or without processing, by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all purchasers on proportionally equal terms.
      Although subsections (d) and (e) contain textual variations, they have generally been construed as co-extensive. See, e. g., Exquisite Form Brassiere, Inc. v. FTC, 112 U.S.App.D.C. 175, 301 F.2d 499 (1961), cert. denied, 369 U.S. 888, 82 S.Ct. 1162, 8 L.Ed. 2d 289 (1962); American News Co. v. FTC, 300 F.2d 104 (2d Cir.), cert. denied, 371 U.S. 824, 83 S.Ct. 44, 9 L.Ed.2d 64 (1962); Elizabeth Arden Sales Corp. v. Gus Blass Co., 150 F.2d 988 (8th Cir.), cert. denied, 326 U.S. 773, 66 S.Ct. 231, 90 L.Ed. 467 (1945). See also 1 R. Callman, The Law of Unfair Competition, Trademarks & Monopolies § 28.1 (e) (3d ed. 1967); 2 H. Toulmin, The AntiTrust Laws of the United States § 13.2 (1949).

      . The Administrative Law Judge’s finding that Alterman had sufficient information and experience that it should have known that similar offers had not been made to the grocery trade establishes the requisite element of scienter. See, e. g., Colonial Stores, Inc. v. FTC, 450 F.2d 733, 744-745 (5th Cir. 1971): American News Co. v. FTC, 300 F.2d 104, 110 (2d Cir.), cert. denied, 371 U.S. 824, 83 S.Ct. 44, 9 L.Ed.2d 64 (1962).

      . This does not mean that offers to participate in non-existent food shows would have sufficed. For another aspect of “availability” is that the promotional payments or services in question must be useful and suitable to competing customers or useable and appropriate alternatives must be offered. State Wholesale Grocers v. Great Atlantic & Pacific Tea Co., 258 F.2d 831, 838-839 (7th Cir. 1958), cert. denied, 358 U.S. 947, 79 S.Ct. 353, 3 L.Ed.2d 352 (1959); Elizabeth Arden Sales Corp. v. Gus Blass Co., 150 F.2d 988, 994-995 (8th Cir.), cert. denied, 326 U.S. 773, 66 S.Ct. 231, 90 L.Ed. 467 (1945) Commission Guide 9, 16 C.F.R. § 240.9.


author: JOHN R. BROWN, Chief Judge:

text:
    Shirley DARVILLE, Gloria Harding, Katie Delehanty, Individually, etc., et al., Plaintiffs-Appellants, v. DADE COUNTY SCHOOL BOARD, as an agency and subdivision of the State System of Public Education, et al., etc., Defendants-Appellees.
    No. 73-1519.
    United States Court of Appeals, Fifth Circuit.
    July 10, 1974.

      Rex Ryland, Jr., Philip Carlton, Jr., Miami, Fla., for plaintiffs-appellants.
    Frank A. Howard, Jr., Thomas G. Spicer, Miami, Fla., for defendants-appellees.
    Before BROWN, Chief Judge, and RONEY and GEE, Circuit Judges.
   JOHN R. BROWN, Chief Judge:

This appeal presents the question of whether a school board, once a unitary school system is attained, may initiate pupil assignment plans requiring transportation to ensure the continued existence of the unitary system. The appellants, parents of school age children being assigned and the city of Hialeah, Florida, challenge a plan proposed by the Dade County School Board which was not court ordered and in fact went beyond the requirements of this Court’s mandates. Specifically, the appellants allege that the school board’s actions in attempting to fully implement and retain a unitary school system violate Title VIII of the Education Amendments of 1972 (20 U.S.C.A. §§ 1651-1656). The District Court concluded that the school board was acting within its authority and dismissed the plaintiff’s complaint. We affirm.

Evolution Of a Unitary School System

The Dade County School Board was under a District Court order to effectuate fully a unitary school system in the 1970-71 school year. In review of the District Court’s desegregation plan prior to its implementation, this Court ordered certain modifications, among them being the grouping of predominantly black Brownsville Junior High School with Miami Springs Junior High School. The District Court plan would have allowed Brownsville to remain segregated, a result not tolerated by this Court. One year after implementing the new desegregation guidelines, the Dade County School District was again reviewed by this Court and was pronounced to have achieved a unitary status.

It was for the 1972-73 school year that the school board, upon its own initiative, ordered the grouping of predominantly white Filer Junior High School with the Brownsville and Miami Springs schools. It was this action on the part of the school board which precipitated the lawsuit by the parents of Filer students and by the city of Hialeah, a community served by Filer Junior High School.

In attacking the actions of the school board as arbitrary and without legal justification, the appellants raise two primary contentions: (1) that the school board’s actions were in conflict with previous court-ordered plans; and (2) the school board has no authority to require transportation of students to achieve a racial balance in schools once a unitary system has been attained. We find no merit in either of these contentions.

Implementation Of Court Mandates

First, we discern no conflict between the school board’s actions and our previous instruction to the Dade County School Board. Our mandate to the school board in Pate, 434 F.2d at 1158, found the retention of Brownsville Junior High School as a virtually all-black school as proposed under the District Court’s plan to be patently unacceptable. We required, at a minimum, the grouping of Brownsville with the predominantly white Miami Springs school. Nothing was said which could be interpreted as inhibiting the school board from adopting a more inclusive grouping plan in furtherance of desegregation goals.

Application Of Title VIII

The appellant’s second challenge assaults the school board’s authority to impose a grouping plan among schools which requires pupil transportation after the school system has achieved unitary status. The Dade County School Board’s plan of grouping Filer with Brownsville and Miami Springs was an affirmative action to promote desegregation within a unitary school system.

The Supreme Court has recognized the school board’s powers in the field of pupil assignment as plenary and shall be usurped by federal courts, only if the school boards default in the exercise of their power. Swann, supra. The Court in Swann stated in unequivocal language that:

School authorities are traditionally charged with broad power to formulate and implement educational policy and might well conclude, for example, that in order to prepare students to live in a pluralistic society each school should have a prescribed ratio of Negro to white students reflecting the proportion for the district as a whole. To do this as an educational policy is within the broad discretionary powers of school authorities; absent a finding of a constitutional violation, however, that would not be within the authority of a federal court.

402 U.S. at 16.

While the Court in Swann, supra, absolved school boards in unitary systems from making yearly adjustments to maintain racial compositions in the schools, no admonitions were given prohibiting school boards from initiating programs proposed to ensure the continuation of racial balance.

Recognizing, as they must, that school boards are vested with broad discretion in pupil assignments, the appellants alternatively assert that the powers of school boards in unitary systems have been curtailed by Title VIII of the Education Amendments of 1972 (20 U.S.C.A. §§ 1651-1656). But a careful reading of the Amendments and a fair reading of § 806 shows that a limited application was intended by Congress. As appellants read § 806 it imposes the restrictions of § 407(a) of the Civil Rights Act of 1964 (42 U.S.C.A. § 2000c-6(a)) on actions by public school boards, a result necessarily foreclosed by McDaniel v. Barresi, 1971, 402 U.S. 39, 91 S.Ct. 1287, 28 L.Ed.2d 582.

We find the appellant’s reliance on § 806 as misplaced. It is an unwarranted and overbroad interpretation of § 806 that applies its prohibitory restrictions to voluntary action by local school boards. A proper reading of § 806 demonstrates that its purpose was to ensure that the prohibitions found in § 407(a) be applied throughout the entire United States “to all public school pupils and to every public school system, public school and public school board.” The provision of § 806 can only be read as applying to federal officials and agencies. Any other interpretation would be inconsistent with the clear wording of the statute.

Recognizing that local school officials are not restricted by the provisions of § 806 in devising school assignment plans, they must be allowed to employ available means to implement these plans. These means include the use of transportation. The Supreme Court recognized the school board’s need to use transportation to carry out pupil assignment programs in North Carolina State Board of Education v. Swann, 1971, 402 U.S. 43, 91 S.Ct. 1284, 28 L.Ed.2d 586. In striking down a North Carolina Anti-Busing statute the Court stated:

We likewise conclude that an absolute prohibition against transportation of students assigned on the basis of race, “or for the purpose of creating a balance or ratio,” will similarly hamper the ability of local authorities to effectively remedy constitutional violations. As noted in Swann, supra, 402 U.S., at 29 [91 S.Ct., at 1282], bus transportation has long been an integral part of all public educational systems, and it is unlikely that a truly effective remedy could be devised without continued reliance upon it.

The actions taken by the Dade County School Board were not in violation of Title VIII nor contrary to the rulings of this Court. The District Court acted properly in dismissing the appellant’s complaint.

Affirmed.

      . The complaint was originally filed in state court challenging Title VIII, § 806 (20 U.S.C.A. § 1656) and alleging a deprivation of equal protection and due process rights. The school board petitioned for removal under 28 U.S.C.A. §§ 1441 and 1443 noting jurisdiction under 28 U.S.C.A. § 1343(3) and 42 U.S.C.A. § 1983. The appellants did not file a motion for remand nor do they object on appeal to federal jurisdiction.

      . Determining that one of the six Oreen criteria which make up a unitary school system was missing, this Court ordered various modifications of the District Court’s pupil assignment plan for the 1970-71 school year. Pate v. Dade County School Board, 5 Cir., 1970, 434 F.2d 1151, cert. denied, 1971, 402 U.S. 953, 91 S.Ct. 1613, 29 L.Ed.2d 123. The modification would have the effect of reducing the number of black students which would be attending all or virtually all-black schools from 44% to 24% of the entire black student population.

      . Following the Supreme Court decision in Swann v. Charlotte-Mecklenburg Board of Education, 1971, 402 U.S. 1, 91 S.Ct. 1267, 28 L.Ed.2d 554, the Dade County School District was again challenged to determine if it adhered to the Swann guidelines. The District Court found compliance and this Court affirmed summarily. Pate v. Dade County School Board, 5 Cir., 1971, 447 F.2d 150, cert. denied, 1972, 405 U.S. 1064, 92 S.Ct. 1493, 31 L.Ed.2d 794.

      . The school board’s plan called for all seventh (7th) grade students of the three schools to attend Brownsville while all eighth (8th) and ninth (9th) grade students would attend Filer or Miami Springs.

      . Section 801 of the Education Amendments stipulates that:
      “No provision of this Act shall be construed to require the assignment or transportation of students or teachers in order to overcome racial imbalance.”

      . Section 806 in its entirety provides:
      “The proviso of section 407(a) of the Civil Rights Act of 1964 providing in substance that no court or official of the United States shall be empowered to issue any order seeking to achieve a racial balance in any school by requiring the transportation of pupils or students from one school to another or one school district to another in order to achieve such racial balance, or otherwise enlarge the existing power of the court to insure compliance with constitutional standards shall apply to all public

        school pupils and to every public school system, public school and public school board, as defined by Title IV, under all circumstances and conditions and at all times in every State, district, territory, Commonwealth, or possession of the United States regardless of whether the residence of such public school pupils or the principal offices of such public school system, public school or public school board is situated in the northern, eastern, western, or southern part of the United States.” (Emphasis added).

      . Prior to the enactment of Title VIII of the Education Amendments of 1972, the Supreme Court dismissed any doubt as to the applicability of § 407(a) of the Civil Rights Act of 1964 to local school boards. McDaniel v. Barresi, supra. The Court answered a charge similar to the one presented in this case that the local school boards were prohibited by Title IV (which includes § 407 (a)) of the Civil Rights Act of 1964 from requiring busing to achieve a racial balance. The Court concluded:
      Nor is the board’s plan barred by Title IV of the Civil Rights Act of 1964. The sections relied upon by respondents (42 U.S.C. §§ 2000c(b), 2000c-6) are directed only at federal officials and are designed simply to foreclose any interpretation of the Act as expanding the powers of federal officials to enforce the Equal Protection Clause. Swann, supra, 402 U.S., at 17 [91 S.Ct., at 1276]. Title IV clearly does not restrict state school authorities in the exercise of their discretionary powers to assign students within their school systems.
      402 U.S. at 41-42.

      . This interpretation is supported by the legislative history of the Act. Senate Report No. 92-604 discussed the stipulation of § 801 admonishing that no provision of the Amendments were to be construed to require the assignment or transportation of pupils. This report indicates that the Act was directed at mandates from federal officials requiring transportation of pupils to achieve racial balances. The report states that, “[t]o the extent consistent with law, the Committee believes that the question of transportation should be decided at the local level.” 1972 U.S.Code Cong, and Admin.News, p. 2605.
      We expressly pretermit any intimation as to the validity or application of § 806 to federal courts since the matter here under review is the voluntary action of the school board, and the complaint against the federal court is not that it took action, but that it declined to take action.
      This Court previously rejected a similar attack, based on the anti-busing restrictions of § 407(a) of the Civil Rights Act of 1964 (42 U.S.C.A. § 2000e-6(a)), against the powers of federal courts to issue orders seeking to achieve a racial balance in schools by requiring the transportation of students from one school to another. In United States v. Jefferson County Bd. of Educ., 5 Cir., 1966, 372 F.2d 836, aff’d on rehearing en banc, 380 F.2d 385, cert. denied, sub nom. Caddo Parish School Bd. v. United States, 1967, 389 U.S. 840, 88 S.Ct. 67, 19 L.Ed.2d 103, the Court declared that “the equitable powers of the courts exist independently of the Civil Rights Act of 1964.” 372 F.2d at 880. This rejection of any limitation on the powers of federal courts to remedy unconstitutional segregation frequently has been cited approvingly by other Courts. Monroe v. Board of Comm’rs, 6 Cir., 1970, 427 F.2d 1005, 1009; Board of Educ. of Indep. School Dist. 89 v. York, 10 Cir., 1970, 429 F.2d 66, 69; Swann v. Charlotte-Meeklenburg Bd. of Educ., 4 Cir., 1970, 431 F.2d 138, 146, affirmed 1971, 402 U.S. 1, 91 S.Ct. 1267, 28 L.Ed.2d 554, reh. denied, 403 U.S. 912, 91 S.Ct. 2200, 29 L.Ed.2d 689.


author: PER CURIAM:

text:
    UNITED STATES of America, Plaintiff-Appellant, v. Lawrence PORTER, Defendant-Appellee. No. 73-3589.
    United States Court of Appeals, Fifth Circuit.
    July 31, 1974.
    Gerald Gallinghouse, U. S. Atty., Mary Williams Cazalas, Asst. U. S. Atty., New Orleans, La., for plaintiff - appellant.
    Ross T. Scaccia, New Orleans, La. (Court-appointed), for defendant-appellee.
    Before BELL, SIMPSON and IN-GRAHAM, Circuit Judges.
   PER CURIAM:

The district court granted a motion to suppress heroin seized as the result of a search of a suitcase in the trunk of an automobile incident to a warrantless arrest. Finding ample evidence of probable cause and exigent circumstances, we reverse. See Draper v. United States, 1959, 358 U.S. 307, 79 S.Ct. 329, 3 L.Ed.2d 327. Cf. United States v. Lopez-Ortiz, 5 Cir., 1974, 492 F.2d 109; United States v. Horton, 5 Cir., 1973, 488 F.2d 374. The district court relied to some extent on the decision of this court in United States v. Soriano, 5 Cir., 1973, 482 F.2d 469. The applicable portion of that decision has been set aside. United States v. Soriano, 5 Cir., 1974, 497 F.2d 147. (En Banc).

Reversed and remanded for further proceedings are not inconsistent herewith.

      . We agree with the district court that appellant was arrested when the vehicle was stopped. Hence, probable cause is measured without benefit of statements made thereafter by appellant and no Miranda question is involved. Miranda v. Arizona, 1966, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694.


author: WISDOM, Circuit Judge: RIVES, Circuit Judge

text:
    Jerry Mack DORROUGH, Petitioner-Appellant, v. W. J. ESTELLE, Director, TDC, Respondent-Appellee.
    No. 73-1881.
    United States Court oí Appeals, Fifth Circuit.
    July 29, 1974.

      David M. Ellis, Dallas, Tex. (Court-appointed), for petitioner-appellant.
    Gilbert J. Pena, Asst. Atty. Gen., Austin, Tex., for respondent-appellee.
    Before RIVES, WISDOM and MORGAN, Circuit Judges.
   WISDOM, Circuit Judge:

In this appeal from the district court’s denial of his petition for a writ of habeas corpus, Jerry Mack Dorrough attacks the constitutionality of article 44.-09, Vernon’s Tex.Code Crim.Proc.Ann. Dorrough argues that he was denied equal protection of the laws when his direct appeal from a state felony conviction was dismissed upon his escape from confinement, and was not reinstated upon his subsequent recapture. Article 44.09 strips the Court of Criminal Appeals of jurisdiction in pending appeals by convicted felons who escape from custody, but provides for reinstatement under specified conditions, not met by Dorrough. We hold that the Texas statute violates the equal protection clause of the fourteenth amendment.

Dorrough was convicted in a Texas court of bank robbery and sentenced to twenty-five years confinement. He appealed. While his direct appeal was pending, on May 27, 1963, he and his cellmate escaped from prison, commandeering a United States mail truck to make their getaway. Dorrough was recaptured two days later. He is now serving a twenty-five year sentence in a federal penitentiary for the theft of the mail truck. See 18 U.S.C. § 2114. The State of Texas has filed a detainer warrant against Dorrough for the unserved portion of his state sentence. In this action he seeks to void the detainer.

After Dorrough was recaptured, on motion by the State the Court of Criminal Appeals dismissed his direct appeal in accordance with article 44.09, Tex.Code Crim.Proc.Ann.. vides: which pro-

If the defendant, pending an appeal in the felony ease, makes his escape from custody, the jurisdiction of the Court of Criminal Appeals shall no longer attach in the ease. Upon the fact of such escape being made to appear', the court shall, on motion of the State’s attorney, dismiss the appeal; but the order dismissing the appeal shall be set aside if it is made to appear that the defendant has voluntarily returned within ten days to the custody of the officer from whom he escaped; and in cases where the punishment inflicted by the jury is death or confinement in an institution operated by the Department of Corrections for life, the court may in its discretion reinstate the appeal if the defendant is recaptured or voluntarily surrenders within thirty days after such escape.

Arguing that the statute violates the equal protection clause of the fourteenth amendment, Dorrough filed an action in the district court against the State of Texas seeking damages and injunctive relief under the Civil Rights Act, 42 U.S.C. § 1983. The case was referred to a United States magistrate, who held that the suit could not be pursued under the Civil Rights Act, but could be maintained as a claim for habeas corpus relief. The magistrate substituted the present respondent-appellee for the State of Texas and found that Dorrough was in custody under Braden v. 30th Judicial Circuit Court of Kentucky, 1973, 410 U.S. 484, 93 S.Ct. 1123, 35 L.Ed.2d 443, and that state remedies had been exhausted. On the merits, the magistrate found no violation of equal protection and recommended denial of all relief. The district court adopted the magistrate’s findings and conclusions and issued an order denying relief. We reverse.

Equal protection analysis is “two-tiered”: under the standard most often employed, a state classification will be upheld if rationally related to a legitimate state purpose; but classifications that are “suspect” or that touch on a “fundamental interest” will be subjected to “strict scrutiny” and struck down unless justified by a compelling state interest. See Shapiro v. Thompson, 394 U.S. 618, 655, 89 S.Ct. 1322, 22 L.Ed.2d 600 (Harlan, J. concurring); Developments in the Law — Equal Protection, 82 Harv.L.Rev. 1065 (1969). The first fork in the well-traveled road of equal protection analysis, therefore, poses the question of the proper standard of review.

Dorrough urges that a strict standard be employed here. Equal access to criminal appeals, he contends, is a fundamental right and as such may be denied only to serve a compelling state interest. In support of this position, Dorrough relies on Griffin v. Illinois, 1956, 351 U.S. 12, 76 S.Ct. 585, 100 L.Ed. 891; Douglas v. California, 1963, 372 U.S. 353, 83 S.Ct. 814, 9 L.Ed.2d 811, and numerous related cases. The thrust of this line of decisions is that a state may not discriminate against defendants on account of their poverty in parceling out rights of the accused. Plainly, the cases demonstrate that “once established avenues [of appellate review] must be kept free of unreasoned distinctions that can only impede open and equal access to the courts”, Rinaldi v. Yeager, 1966, 384 U.S. 305, 310, 86 S.Ct. 1497, 1500, 16 L.Ed.2d 577. The cases do not, however, accord equal access to appellate review the status of a fundamental interest capable of triggering strict scrutiny.

The Supreme Court has recently declared that the determination of what interests are to be considered “fundamental” for purposes of choosing the proper standard or review under the equal protection clause should begin with an examination of substantive constitutional safeguards. Writing for the Court in San Antonio Independent School District v. Rodriguez, 1973, 411 U.S. 1, 33-34, 93 S.Ct. 1278, 1297, 36 L.Ed.2d 16, Justice Powell described the inquiry as whether the interest involved is “explicitly or implicitly guaranteed by the Constitution”. Appeals from state criminal convictions are not so favored. It has long been established that the federal Constitution does not require states to provide appellate review: “An appeal from a judgment of conviction is not a matter of absolute right, independently of constitutional or statutory provisions allowing such appeal. It is wholly within the discretion of the state to allow or not to allow such a review”. McKane v. Durston, 1894, 153 U.S. 684, 687, 14 S.Ct. 913, 915, 38 L.Ed. 867; Griffin v. Illinois, supra, 351 U.S. at 18, 76 S.Ct. 585. Of course, the Constitution requires that when provided appeals must comport with principles of due process and equal protection. Pate v. Holman, 5 Cir. 1965, 341 F.2d 764, 773 n. 10, modified on other grounds, 343 F.2d 546. But the fourteenth amendment protections may not be used to bootstrap the stricter standard of review for equal protection analysis. There are present here none of the substantive constitutional rights found at the heart of those “fundamental interests” that trigger strict scrutiny.

Although in dismissing Dorrough’s direct appeal Texas has employed a harsh sanction, the severity of the detriment caused by the classification provides no key to whether the interest infringed is “fundamental”. See San Antonio Independent School District v. Rodriguez, supra, 411 U.S. at 33, 93 S.Ct. 1278. Recognizing the importance of the interests concerned, the Supreme Court has nevertheless refused to accord welfare benefits, housing, education, and discharge in bankruptcy preferred status under the equal protection clause. Faced with a paucity of logical limitations once an interest is declared “fundamental” and the compelling state interest test is brought to bear, the Court has balked. See Note, New Tenets in Old Houses: Changing Concepts of Equal Protection in Lindsey v. Normet, 58 Va.L.Rev. 930, 941 (1972).

Instead of broadening the reach and number of fundamental interests, the Court has found flexibility in the other prong of equal protection analysis, the rational relationship test.

Under “traditional” equal protection analysis, legislative classifications are permitted if they are rationally related to a legitimate state interest. See United States Department of Agriculture v. Moreno, 1973, 413 U.S. 528, 93 S.Ct. 2821, 37 L.Ed.2d 782. Commentators have often noted that, at least at one time, this test seemed heavily weighted in favor of upholding the classification. It was a test of “minimal scrutiny”. Today, however, whatever it may have been in the past, the rational relationship standard is relatively strict. Recent Supreme Court cases teach that the test calls for a serious and genuine judicial inquiry into the correspondence between the classification and the legislative goals.

Under the Texas statute Dorrough is a member of a narrow and special class of criminal defendants — those defendants convicted and sentenced to terms of years in felony cases who escape and do not return voluntarily within 10 days. Tex.Code Crim.Proc.Ann. art. 44.09. The statute does not affect the right of appeal of those who escape before trial or sentencing. McGee v. State, Tex.Cr.App.1969, 445 S.W.2d 187, 190. It does not affect escaping nonfelons. And, although it provides for dismissal of appeals of escaping defendants sentenced to death or life terms, it provides more liberally for reinstatement of these appeals.

The appellee argues that the statute treats equally all those within the subject class; that is, all convicted defendants who, like Dorrough, escape from confinement after being sentenced to a term of years and do not voluntarily return within 10 days are treated alike in being deprived of any pending direct appeal. That fact is uncontested. But as the Supreme Court noted in McLaughlin v. Florida, 1964, 379 U.S. 184, 191, 85 S.Ct. 283, 288, 13 L.Ed.2d 222, our inquiry must go further. “Judicial inquiry under the Equal Protection Clause . . . does not end with a showing of equal application among the members of the class defined by the legislation. The courts must reach and determine the question whether the classifications drawn in a statute are reasonable in light of its purpose”. See Rinaldi v. Yeager, supra, 384 U.S. at 309, 86 S.Ct. at 1499. The classification must include “all persons who are similarly situated with respect to the purpose of the law.” Tussman & tenBroek, The Equal Protection of the Laws, 37 Calif.L.Rev. 341, 346 (1949); see F.S. Royster Guano Co. v. Virginia, 1920, 253 U. S. 412, 415, 40 S.Ct. 560, 64 L.Ed. 989.

We conclude that the classification drawn by article 44.09 is irrational in view of its obvious purpose — to discourage convicts from escaping from confinement and to promote the prompt and voluntary return of those who do escape.

First, the statute is underinelusive. It does not apply to those who escape prior to sentencing. McGee v. State, supra, 445 S.W.2d at 190. In fact, it appears that only those who have appeals actually pending at the time of escape lose their right to appeal. A convicted felon who escapes and returns after being sentenced but before his record of appeal is filed with the Court of Criminal Appeals may still be able to prosecute an appeal. Moreover, those convicted of misdemeanors do not lose their right to appeal if they escape while their appeals are pending. Although we recognize that the State’s interest may be greater in reducing the number and duration of escapes of felons than of nonfelons, this does not itself excuse the underinclusiveness of the statute.

Second, the different treatment of the appeals of defendants who are sentenced to terms of years and defendants who are sentenced to life terms or death is without a rational basis. The statute provides, on the one hand, for setting aside the order dismissing the appeal of one sentenced to a term of years only upon “voluntary” return within 10 days. Recapture does not qualify as “voluntary” return. See, e. g., Holliday v. State, Tex.Cr.App.1972, 482 S.W.2d 215; Pendergrass v. State, Tex.Cr.App.1922, 92 Tex.Cr.R. 467, 244 S.W. 513. On the other hand, escapees under death or life sentences may have their appeals reinstated if they return within 30 days after their escape. And they need not return voluntarily; their appeals may be reinstated also if they are recaptured during the 30 day period. Due to the irrevocability of death, capital convictions may be sui generis. Griffin v. Illinois, supra, 351 U.S. at 21, 76 S.Ct. 5850. (Frankfurter, J. concurring). We see no basis in logic, however, for treating those with life sentences differently from all those who are sentenced to terms of years. A defendant sentenced to a term of years may spend as long or longer behind bar's than one sentenced to life. Indeed, Texas law treats equally for parole purposes those sentenced to life and those sentenced to terms of 60 or more years; all are eligible to be considered for parole after serving 20 years. We cannot say that those sentenced to terms of years have a less significant interest in appeal than those sentenced to life imprisonment. Nor can we perceive any relationship between the type of sentence imposed and the potential merit of the appeal. Finally, the State’s interest in protecting society from dangerous criminals cannot require that those sentenced to terms of years be treated more harshly for escaping than those sentenced to life. In short, article 44.09 invidiously discriminates against convicted felons sentenced to terms of years. The distinctions drawn by the statute are “unreasoned distinctions” proscribed by the fourteenth amendment. Mayer v. Chicago, 1971, 404 U.S. 189, 196, 92 S.Ct. 410, 30 L.Ed.2d 372; Rinaldi v. Yeager, supra, 384 U.S. at 310, 86 S.Ct. 1497. The classification drawn by article 44.09 lacks more than “mathematical nicety”. See Lindsley v. Natural Carbonic Gas Co., 1911, 220 U.S. 61, 78, 31 S.Ct. 337, 55 L.Ed. 369. It is “wholly without any rational basis”. United States Department of Agriculture v. Moreno, supra, 413 U.S. at 538.

We emphasize that it is only the unreasonable classification, not the practice of dismissing or reinstating appeals of escapees, that is objectionable. We do not denigrate the historic reluctance of appellate courts to decide appeals of defendants who escape and refuse to submit to the control of the court below. See Molinaro v. New Jersey, 1970, 396 U.S. 365, 90 S.Ct. 498, 24 L.Ed.2d 586; Bonahan v. Nebraska, 1887, 125 U.S. 692, 8 S.Ct. 1390, 31 L.Ed. 854; Smith v. United States, 1876, 94 U.S. (4 Otto) 97, 24 L.Ed. 32. Nor do we find fault with the Texas statute for providing for the immediate dismissal of appeals of escapees. Such a practice may be administratively prudent, and there is no constitutionally set rule for when dismissal should be made. In Smith the Court dismissed the case at the beginning of the following term. In Bonahan the Court struck the case from the docket at the end of the term in which it arose. In Molinaro the case was dismissed without awaiting “the end of the Term or the expiration of a fixed period of time”. 396 U.S. at 366, 90 S.Ct. at 499. And in Van Blaricom v. Forscht, 5 Cir. 1974, 490 F.2d 461, 462 (en banc), this Court removed the appeal from the docket and ordered that if it was not made known to the Court within 30 days that the appellant was available and subject to judgment, his appeal would be dismissed. Accord, United States v. Dawson, 6 Cir. 1965, 350 F.2d 396; see also Eisler v. United States, 1949, 338 U.S. 189, 69 S.Ct. 1453, 93 L.Ed. 1897 (removed from docket), 338 U.S. 883, 70 S.Ct. 181, 94 L.Ed. 542 (cert. dismissed); United States v. Tremont, 1 Cir. 1971, 438 F.2d 1202. Finally, we do not criticize the reinstatement of an appeal upon the return of the appellant to custody. We have ourselves provided for it. See Brown v. United States, 5 Cir., nos. 26,249 & 30,405, May 26, 1971.

Dismissal or reinstatement of appeals of escapees may be based on established and strictly followed policies, or may be left to the discretion of the appellate court. The point, though, is that dismissal or reinstatement may not be based on a policy that invidiously discriminates against certain classes of escapees. We express no opinion as to whether Texas may deny an appeal to all convicted individuals who escape, no matter how quickly they are recaptured or even if they return to custody voluntarily. That question is not before us.

When the Texas Court of Criminal Appeals dismissed Dorrough’s appeal under Article 44.09 after his escape and recapture, it denied him equal protection of the laws. Dorrough must now be provided a direct appeal from his bank robbery conviction. Unless the State provides him an appeal — or a new trial within a reasonable time, if an effective appeal is not possible — the writ shall issue and the detainer warrant shall be voided.

Reversed and remanded.

RIVES, Circuit Judge

(specially concurring) :

I concur in the result but not in everything said in the opinion. Insofar as the opinion demonstrates that the classification system established by Article 44.09 does not have a rational relation to a legitimate state purpose and therefore violates equal protection, I heartily agree.

Every statutory classification must meet the rational relationship test. Some classifications, those which are “suspect” and those which deny a “fundamental” right, can be justified only by showing a “compelling” state interest. As to the statutory “first appeal” provided to criminal defendants, it seems to me that a classification which denies any appeal whatsoever to a prisoner who has been recaptured within two days after escaping can be justified only by showing a “compelling” state interest.

I therefore specially concur.

      . Dorrough pleaded guilty to the federal offense. He has challenged his guilty plea four times before this Court under 28 U.S.C. § 2255, each time unsuccessfully. See Dorrough v. United States, 5 Cir. 1964, 327 F.2d 667; Dorrough v. United States, 5 Cir. 1965, 344 F.2d 125; Dorrough v. United States, 5 Cir. 1967, 385 F.2d 887, aff’d en banc, 1968, 397 F.2d 811, cert. denied, 394 U.S. 1019, 89 S.Ct. 1637, 23 L.Ed.2d 44; Dorrough v. United States, 5 Cir. 1971, 440 F.2d 1336, cert. denied, 404 U.S. 915, 92 S.Ct. 239, 30 L.Ed.2d 190.

      . Dorrough has also previously sought to void the detainer, by arguing that the State lost jurisdiction over him by surrendering him to federal authorities. The district court held that Texas had not waived its right to have Dorrough returned for service of his state sentence. IVe affirmed. See Dorrough v. United States, 5 Cir. 1971, 440 F.2d 1063, cert. denied, 404 U.S. 840, 92 S.Ct. 134, 30 L.Ed.2d 74.

      . The magistrate stated :
      I believe it is clear, and I believe the court has already determined by entry of the order permitting the filing of this application, that it cannot be pursued as a civil rights action. I believe it is equally clear, and I believe the court so determined when it entered the order permitting filing of this application, that the relief sought by applicant is in the nature of habeas corpus and that applicant has present status to assert his claim. The State of Texas, who applicant sought to name as a defendant, is not a person amenable to suit under any of the civil rights statutes, including 42 U.S.C. § 1983 ....
      The appellee here agrees that the magistrate and the district court were correct in treating Dorrough’s complaint as an application for a writ of habeas corpus.
      This Court has held that a district court may determine the merits of a habeas claim without the necessity of impaneling a three-judge court. Scott v. District Attorney, E.D.La.1970, 309 F.Supp. 873, aff’d, 5 Cir. 437 F.2d 500. Other courts are in accord. The three-judge-court statute, 28 U.S.C. § 2281, “has no relation to Habeas Corpus proceedings”. United States ex rel. Murphy v. Warden of Clinton Prison, N.D.N.Y. 1939, 29 F.Supp. 486, 489, aff’d, 2 Cir. 108 F.2d 861, cert. denied, 309 U.S. 661, 60 S.Ct. 583, 84 L.Ed. 1009. See also United States ex rel. Laino v. Warden of Wallkill Prison, S.D.N.Y.1965, 246 F.Supp. 72, 92 n. 16, aff’d, 2 Cir., 355 F.2d 208; United States ex rel. Robinson v. York, D.Conn. 1968, 281 F.Supp. 8, 12; Tedder v. Cox, W.D.Va.1970, 317 F.Supp. 33, 35 n. 1.

      . Although the issue is not raised by the parties, we note a Wingo problem lurking here. See Wingo v. Wedding, 1974, - U. S.-, 94 S.Ct. 2842, 40 L.Ed.2d- [1974], In Wingo the Supreme Court held that under the Magistrates Act of 1968, 28 U.S.C. § 635(b), a magistrate has no authority to conduct an evidentiary hearing on a habeas corpus petition. Since we grant Dorrough relief on the grounds that the Texas statute is unconstitutional, we do not reach the Wingo issue.

      . See, e. g., Mayer v. Chicago, 1971, 404 U.S. 189, 92 S.Ct. 410, 30 L.Ed.2d 372 (denying free transcript to indigent appealing from nonfelony convictions violates equal protection); Tate v. Short, 1971, 401 U.S. 395, 91 S.Ct. 668, 28 L.Ed.2d 130 (imprisonment of indigent as satisfaction of traffic fines violates equal protection); Williams v. Illinois, 1970, 399 U.S. 235, 90 S.Ct. 2018, 26 L.Ed.2d 586 (imprisonment of indigent beyond statutory maximum term for failure to pay fine and court costs violates equal protection); Williams v. Oklahoma City, 1969, 395 U.S. 458, 89 S.Ct. 1818, 23 L.Ed.2d 440 (denial of free transcript necessary for indigent to perfect appeal from drunken driving conviction violates equal protection); Rinaldi v. Yeager, 1966, 384 U.S. 305, 86 S.Ct. 1497, 16 L.Ed.2d 577 (withholding indigent inmate’s pay to reimburse county for cost of transcript furnished for unsuccessful appeal violates equal protection); Smith v. Bennett, 1961, 365 U.S. 708, 81 S.Ct. 895, 6 L.Ed.2d 39 (requiring indigents to pay filing fee before state habeas petition is considered violates equal protection).

      . The Court has, it is true, used the word “fundamental” loosely in the context of equal access to criminal appeals. In Rinaldi v. Yeager, for example, the Court said: “[lit is now fundamental that once established, these avenues [of appellate review] must be kept free of unreasoned distinctions . . . .” 384 U.S. at 310, 86 S.Ct. at 1500. We believe, however, that this use of the word is not intended to invoke the strict standard of review. We note that Rinaldi v. Yeager was decided under the rational relationship test. See infra. See also Mayer v. Chicago, 1971, 404 U.S. 189, 92 S.Ct. 410, 30 L.Ed.2d 372.

      . Compare, e. g., Roe v. Wade, 1973, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (privacy); Dunn v. Blumstein, 1972, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (voting); Police Department of City of Chicago v. Mosley, 1972, 408 U.S. 92, 92 S.Ct. 2286, 33 L.Ed.2d 212 (free expression); Shapiro v. Thompson, 1969, 394 U.S. 618, 89 S.Ct. 1322, 22 D.Ed.2d 600 (interstate travel); Sherbert v. Verner, 1963, 374 U.S. 398, 83 S.Ct. 1790, 10 L.Ed.2d 965 (free exercise of religion); Skinner v. Oklahoma, 1942, 316 U.S. 535, 62 S.Ct. 1110, 86 L.Ed. 1655 (procreation).

      . Jefferson v. Hackney, 1972, 406 U.S. 535, 92 S.Ct. 1724, 32 L.Ed.2d 285; Dandridge v. Williams, 1970, 397 U.S. 471, 485, 90 S.Ct. 1153, 25 L.Ed.2d 491. See also Richardson v. Belcher, 1971, 404 U.S. 78, 92 S.Ct. 254, 30 L.Ed.2d 231.

      . Lindsey v. Normet, 1972, 405 U.S. 56, 92 S.Ct. 862, 31 L.Ed.2d 36.

      . San Antonio Independent School Dist. v. Rodriguez, 1973, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed.2d 16.

      . United States v. Kras, 1973, 409 U.S. 434, 93 S.Ct. 631, 34 L.Ed.2d 626.

      . The Court has also been reluctant to increase the number of suspect classifications. See San Antonio Independent School Dist. v. Rodriguez, 1973, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed.2d 16 (wealth); Kahn v. Slievin, -U.S. -, 94 S.Ct. 1734, 40 L.Ed.2d 189 (1974) (gender); Weber v. Aetna Casualty & Surety Co., 1972, 406 U.S. 164, 92 S.Ct. 1400, 31 L.Ed.2d 768 (illegitimacy).

      . One commentator has described the inherent difficulties in expanding the “strict scrutiny” standard of review as follows :
      Every interest which triggered active review took on the authority of a formal catagorical imperative. Once established, it applied to any and all situations; there was no way to control it. Each new fundamental interest or suspect classification traveled with increasingly cumbersome precedential baggage as more competing rights were swept aside. It became apparent that like strategic nuclear weapons the active standard of review . . . could not be used without absolute commitment and wanton destruction.
      Note, The Decline and Fall of the New Equal Protection: A Polemical Approach, 58 Va.L.Rev. 1489, 1496 (1972) (footnote omitted).

      . See, e. g., Gunther, Forward: In Search of Evolving Doctrine on a Changing Court: A Model for a Newer Equal Protection, 86 Harv.L.Rev. 1, 18-19 (1972) ; Developments in the Law — Equal Protection, 82 Harv.L.Rev. 1065, 1087 (1969) ; Note, New Tenets in Old Houses: Changing Concepts of Equal Protection in Lindsey v. Normet, 58 Va.L.Rev. 930, 937 (1972).

      . See, e. g., United States Department of Agriculture v. Moreno, 1973, 413 U.S. 528, 93 S.Ct. 2821, 37 L.Ed.2d 782; Weber v. Aetna Casualty & Surety Co., 1972, 406 U.S. 164, 92 S.Ct. 1400, 31 L.Ed.2d 768; Eisenstadt v. Baird, 1972, 405 U.S. 438, 92 S.Ct. 1029, 31 L.Ed.2d 349; Mayer v. Chicago, 1971, 404 U.S. 189, 92 S.Ct. 410, 30 L.Ed.2d 372; Reed v. Reed, 1971, 404 U.S. 71, 92 S.Ct. 251, 30 L.Ed.2d 225.

      . An appeal is not perfected under Texas law until the record of appeal is filed with the Court of Criminal Appeals. McGee v. State, Tex.Cr.App., 445 S.W.2d 187, 190. In Webb v. State, Tex.Cr.App.1970, 460 S.W.2d 903, the defendant escaped on May 27, 1969, and was recaptured on October 13, 1969. Because his record of appeal was not filed until May 18, 1970, however, the State’s motion to dismiss the appeal under article 44.-09 was denied.

      . Thus, had Dorrough been under a life sentence, after his recapture the Court of Criminal Appeals could have reinstated his appeal. See Foster v. State, Tex.Cr.App. 1973, 497 S.W.2d 291; Steese v. State, Tex.Cr.App.1960, 170 Tex.Cr.R. 269, 340 S.W.2d 49. In Palmer v. State, Tex.Cr.App.1935, 128 Tex.Cr.R. 293, 81 S.W.2d 76, 77, the court stated that it was its “duty” to decline to sustain the State’s motion to dismiss the appeal of the appellant, who had been sentenced to death, had escaped, and had been recaptured 22 days later.

      . Tex.Code Crim.Proc.Ann. art. 42.12 § 15: (a) The Board [of Pardons and Paroles] is hereby authorized to release on parole, with the approval of the Governor, any person confined in any penal or correctional institution of this. State, except persons under sentence of death, who has served one-third of the maximum sentence imposed, provided that in any case he may be paroled after serving 20 calendar years. Time served on the sentence imposed shall be the total calendar time served and all credits allowed under the laws governing the operation of the Department of Corrections, and executive clemency. All paroles shall issue upon order of the Board, duly adopted and approved by the Governor.

      . In the Brown case we wrote:
      It is common knowledge that appellant, H. Rap Brown, has disappeared and his jrresent whereabouts are unknown. If his disappearance was willful and he is yet alive he would necessarily be a fugitive from justice. Under these circumstances, the Court, sua sponte orders this appeal stricken from the docket of this Court, to be reinstated, on appropriate motion, if and when it should be known to the Court that Brown is available and subject to any judgment which might be entered in this case. See the order of this Court dated February 3, 1971, No. 29,419, Timothy Leary vs. United States of America.
      Brown later moved to reinstate his appeal, but this Court did not reach the question of reinstatement. We vacated the judgment and sentence below, because Brown had not been present at sentencing. The cause was remanded for resentencing. “Upon imposition of sentence and entry of judgment, Brown will be under a judgment and sentence from which a timely appeal may be taken.” United States v. Brown, 5 Cir. 1972, 456 F.2d 1112, 1114.

      . Douglas v. California, 1963, 372 U.S. 353 at 356 and 357, 83 S.Ct. 814; cf. Ross v. Moffitt, 1974, - U.S. -, 94 S.Ct. 2437, 40 L.Ed.2d-.

      . See Mr. Justice Marshall’s discussion in dissent in San Antonio School District v. Rodriguez, 1973, 411 U.S. 1, at 102 and n. 61, 93 S.Ct. 1278.


text:
    Peter M. BRADY, Plaintiff-Appellant, v. CONTINENTAL CASUALTY COMPANY, Defendant-Appellee.
    No. 74-1713
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    July 26, 1974.
    T. G. LaGrone, F. Hartselle Baker, Edward H. Hurt, Orlando, Fla., for plaintiff-appellant.
    W. B. Hallowes, Jr., Orlando, Fla., for defendant-appellee.
    Before BELL, SIMPSON and MORGAN, Circuit Judges.

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

   PER CURIAM:

In this Florida diversity action by appellant Brady against Continental Casualty Company for recovery of benefits for permanent total disability under an accident disability insurance policy the jury rendered a verdict in favor of Continental. By this appeal, appellant Brady complains that the district court committed error in refusing to grant him a directed verdict on the grounds that the definition of the word “injury” contained in the policy of insurance was ambiguous.

Being a diversity case, this court must apply Florida substantive law. Erie Railroad Company v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). On the basis of the decisions of Florida courts in Berg v. New York Life Insurance Company, 88 So.2d 915 (Fla.1956), and Roberts v. Southern Farm Bureau Casualty Ins. Co., 215 So.2d 59 (Fla.App.1968), as well as other Florida decisions, it seems clear that an insured seeking to recover permanent total disability benefits under an insurance policy which provides that the permanent total disability must result from bodily injury caused by an accident and resulting directly and independently of all other causes, has the burden of proving that the cause of his disability falls within these provisions. In the instant case, the evidence indicated that the insured’s disability was caused by pre-existing conditions which was merely aggravated by the accident, and on the evidence submitted appellant was not entitled to recover under the terms of the contract of insurance.

Judgment affirmed.

      . See also, Benante v. Allstate Insurance Company, 477 F.2d 553 (5th Cir. 1973) ; Prudential Insurance Company of America v. Schreffler, 376 F.2d 397 (5th Cir. 1967); Decker v. New York Life Insurance Company, 328 F.2d 650 (5th Cir. 1964); Ryan v. Continental Casualty Co., 47 F.2d 472 (5th Cir. 1931), construing Florida law.


text:
    CHARLOTTE AIRCRAFT CORPORATION, Plaintiff-Appellee, v. BRANIFF AIRWAYS, INC., Defendant-Appellant.
    No. 73-3038.
    United States Court of Appeals, Fifth Circuit.
    July 24, 1974.
    Sam Daniels, Talbot W. Trammell, Miami, Fla., for defendant-appellant.
    Jordan A. Greene, Robert Orseck, Robert L. Parks, Miami, Fla., for plaintiff-appellee.
    Before WISDOM, AINSWORTH and GODBOLD, Circuit Judges.
   PER CURIAM:

The parties agree that this is a fair statement of the issues on this appeal in a case governed by Texas law.

Stripped of sub-issues and arguments, the issues presented by Braniff concern only a challenge to the sufficiency of the evidence to support the crucial jury findings of an ‘exclusive right to sell’ contract [with Charlotte] for a ‘reasonable commission’ which findings were made in response to special interrogatories. In essence, the defendant argues that it was and is entitled to a directed verdict in its favor, negating those jury findings, or at least that it is entitled to a new trial on the grounds that the findings are against the manifest weight of the evidence.

Despite substantial arguments touching on numerous provisions of the law of contracts, this case ends up as a sufficiency of the evidence dispute.

There was adequate evidence on the basis of which a jury could conclude that Braniff granted to Charlotte the exclusive right to sell to Allegheny Airlines the airplanes and spare parts that Braniff wished to sell. By “exclusive right to sell” we mean that Braniff excluded itself from making a sale directly to Allegheny. Once it is determined that the existence of an exclusive right to sell was a jury issue, it then becomes clear to us that there was sufficient evidence on the basis of which a jury could conclude that, while there was no meeting of the minds of the parties on a 5% commission, there was an implied agreement that Charlotte would be paid a reasonable commission. The jury could find, as it did, that there was an oral contract pursuant to which Charlotte had an exclusive right to sell, with an implied provision that Charlotte was entitled to a reasonable commission. Indeed, once it is concluded that existence of an exclusive right to sell was a jury issue, it is difficult to understand Braniff’s contention that it did not obligate itself as a part of such an arrangement to pay Charlotte a reasonable commission. If parties — one of them a broker normally operating on a commission basis — enter into an exclusive right to sell agreement, and there is no understanding as to a fixed rate of commission, the situation tends to require an inference that the grantor of the right to sell obligated himself to pay a reasonable commission. Otherwise, the broker is limited to the reasonable value of his services as compensation for consummating a sale or as damages for breach if the grantor sells around him — as Braniff did — in derogation of the grant.

Braniff having made a direct sale of the planes to an airline included within the exclusive agency which the jury found was granted to Charlotte, was obligated to pay a reasonable commission.

Affirmed.


author: CRAVEN, Circuit Judge: DONALD RUSSELL, Circuit Judge

text:
    UNITED STATES of America, Appellee, v. Bernard R. BOWSER, Appellant.
    No. 73-2033.
    United States Court of Appeals, Fourth Circuit.
    Argued Feb. 4, 1974.
    Decided April 29, 1974.
    Certiorari Denied Oct. 15, 1974.
    See 95 S.Ct. 105.

      Robert Wells, Third Year Law Student (George K. Walker [Court-appointed counsel] Asst. Professor of Law, Winston-Salem, N. C., David L. Hill, Third Year Law Student, on brief), for appellant.
    Michael A. Rhine, Asst. U. S. Atty., (Brian P. Gettings, U. S. Atty., on brief), for appellee.
    Before HAYNSWORTH, Chief Judge, and CRAVEN and RUSSELL, Circuit Judges.
   CRAVEN, Circuit Judge:

It has been said that the United States is the only civilized country in the world that permits one judge to exercise unbridled discretion, not subject to review, as to the extent and duration of punishment. Whether or not that is true, it is settled, despite mounting criticism of the rule, that judges of the United States Courts of Appeals lack the power to review and revise sentences absent exceptional circumstances. United States v. Godel, 361 F.2d 21 (4th Cir.), cert. denied, 385 U.S. 838, 87 S.Ct. 87, 17 L.Ed.2d 72 (1966); United States v. Pruit, 341 F.2d 700 (4th Cir. 1965); United States v. Martell, 335 F.2d 764 (4th Cir. 1964).

Appellant Bowser is the apparent victim of disparity in punishment. Bowser was convicted by a jury after a trial conducted by a district judge assigned from outside the circuit. He was then sentenced by a judge of the Eastern District of Virginia who knew nothing of the trial or of the circumstances of the bank robbery except what he may have learned from the preliminary hearing, the sentencing hearing, and the presentence report. The circumstances of the robbery may be described as typical: although a gun was used to threaten the employees, it was not discharged, and no personal injury resulted. The sentence determined upon was nevertheless the maximum 25 years permitted by the statute.

On the day after we heard the appeal in this case, we heard appeals from the same district in United States v. Holley, 502 F.2d 273 (4th Cir. 1974), and United States v. Johnson, 495 F.2d 377 (4th Cir. 1974). Holley shot at a bank employee and subsequently threatened to blow his head off. After terrorizing the rest of the employees, he tied them up, made them lie face down in the vault of the bank, and locked them in it. Despite the higher degree of violence and danger to others in the Holley case as compared with this case, another judge of the Eastern District of Virginia sentenced Holley to a term of 20 years. Johnson, too, received a 20-year sentence from yet another district judge in the Eastern District of Virginia although it was his second conviction for bank robbery. It is perplexing that in the same district another more violent bank robber and a second offender are treated more leniently than Bowser.

Where the sentencing judge is not the trial judge and has no special knowledge of the case, and where such a judge imposes the maximum sentence despite no aggravating circumstances, the question arises whether there has been an actual exercise of discretion. Under such circumstances a statement of reasons for the sentencing decision would seem to be highly appropriate.

Although we may not review the sentence itself, we are empowered to “scrutinze a sentence to ascertain whether there has indeed been an exercise of discretion.” United States v. Wilson, 450 F.2d 495, 498 (4th Cir. 1971). We vacate to afford the district court the opportunity to resentence Bowser. The district court, in the exercise of its discretion, will be free to reimpose the same sentence or impose a lesser one, as he may think just and proper — for the final sentencing decision is his and not ours. Since Bowser must be resentenced, we do not reach the question urged upon us by counsel as to whether or not the sentencing procedure was flawed by reliance upon invalid prior convictions.

We have carefully considered the other assignments of error and find them without merit.

Vacated and remanded.

DONALD RUSSELL, Circuit Judge

(concurring specially):

In the unique circumstances of this case, in which the sentencing judge was not the trial judge, where the record available to the sentencing judge on the defendant’s participation in the crime was scanty, and where the sentence imposed was the maximum, it would no doubt be sound practice for the sentencing court to indicate the basis for its sentence and for that reason I concur in the remand of this ease, in order to insure that the sentencing court has before it an adequate record on which to exercise its discretionary power of sentencing.

      . A.B.A. Project on Minimum Standards for Criminal Justice, Standards Relating to Appellate Review of Sentences, approved by the A.B.A. House of Delegates in February 1968, 1-2. See M. Frankel, Criminal Sentences 75-85 (1972); Zumwalt, The Anarchy of Sentencing in the Federal Courts, 57 Judicature 96 (1973).

      . Gore v. United States, 357 U.S. 386, 78 S.Ct. 1280, 2 L.Ed.2d 1405 (1958), Blockburger v. United States, 284 U.S. 299, 52 S.Ct. 180, 76 L.Ed. 306 (1932). See Note, Appellate Review of Sentences and the Need for a Reviewable Record, 1973 Duke L.J. 1357, for the suggestion that the rule against appellate review is of dubious origin and has been justifiably eroded. In 1967 the Senate passed a bill providing for appellate review of sentencing [S.1540, 90th Cong., 1st Sess. (1967)], and a similar bill is again pending in the Senate. S.716, 93d Cong., 1st Sess. (1973).

      . In a supplemental brief, Professor Walker calls our attention to the possibility that the sentencing judge may have actually confused Bowser’s role in the robbery with that of another culprit. It is urged that the transcript (which had not been typed at time of sentencing) and the exhibits show that Bowser’s participation consisted of putting money into a sack and that, although armed, he did not even point a gun at a bank employee, as did others. It is suggested, and we agree, that the presentence report proffered the sentencing judge could have been read to mean that Bowser personally assaulted the tellers and put the life of one in jeopardy.
      Although Fed.R.Crim.P. 25(b) permits sentencing by a judge who did not try the case, the better practice, of course, is for the judge who presided at trial to impose sen-fence. United States v. Bakewell, 430 F.2d 721, 722 (5th Cir.), cert. denied, 400 U.S. 964, 91 S.Ct. 366, 27 L.Ed.2d 384 (1970). AVliere there are questions of fact as to degree. and extent of culpability in participating in the substantive crime, it would seem essential that the sentencing judge should await preparation of the transcript and review it before imposing sentence. Cf. Carbo v. United States, 314 F.2d 718, 749-750 (9th Cir. 1963), cert. denied, 377 U.S. 953, 84 S.Ct. 1625, 12 L.Ed.2d 498 (1964).

      . It has been determined that the courts of the Eastern District of Virginia are “consistently more severe than any other Fourth Circuit court averaging offense by offense a full year above the standard Circuit sentence.” Zumwalt, The Anarchy of Sentencing in the Federal Courts, 57 Judicature 96 (1973).

      . See Note, Appellate Review of Sentences and the Need for a Reviewable Record, 1973 Duke L.J. 1357, 1374-76; cf. United States v. Kaylor (Appeal of Hopkins), 491 F.2d 1133 (2d Cir. 1974) (en banc). Professor Davis has also urged that the sentencing process include a statement of reasons:
      10. Sentencing. The power of judges to sentence criminal defendants is one of the best examples of unstructured discretionary power that can and should be structured. The degree of disparity from one judge to another is widely regarded as a disgrace to the legal system. All the elements of structuring are needed — open plans, policy statements and rules, findings and reasons, and open precedents.
      K. Davis, Discretionary Justice: A Preliminary Inquiry 133 (1969).

      . Cf. United States v. Powell, 487 F.2d 325 (4th Cir., decided November 14, 1973) (“failure of the record to support material factors on which the severity of the punishment rested”); United States v. Stumpf, 476 F.2d 945 (4th Cir. 1973) (discovery of evidence of defendant’s psychiatric difficulties after sentencing); United States v. Sidella, 469 F.2d 1079 (4th Cir. 1972) (possible misreading of 21 U.S.C. § 844(b) involving the availability of probation) ; United States v. Wilson, 450 F.2d 495 (4th Cir. 1971) (failure to consider alternative sentencing under the Youth Corrections Act).
      The trend of cases in other circuits has been in this direction. Woosley v. United States, 478 F.2d 139 (8th Cir. 1973); United States v. Daniels, 446 F.2d 967 (6th Cir. 1971) (en banc). See United States v. Hartford, 489 F.2d 652 (5th Cir. 1974); United States v. Baker, 487 F.2d 360 (2d Cir. 1973) (Lumbard, dissenting). See also United States v. Thompson, 483 F.2d 527 (3d Cir. 1973); United States v. Townsend, 478 F.2d 1072 (3d Cir. 1973); United States v. Walker, 469 F.2d 1377 (1st Cir. 1972), cert. denied, 410 U.S. 989, 93 S.Ct. 1501, 36 L.Ed.2d 188 (1973); United States v. Adams, 449 F.2d 122 (5th Cir. 1971). But see United States v. Velazquez, 482 F.2d 139 (2d Cir. 1973).