author: LEWIS R. MORGAN, Circuit Judge.

text:
    REFRIGERATION CONTRACTORS, INC., Plaintiff-Appellee-Cross Appellant, International Association of Machinists & Aerospace Workers, AFL-CIO Lodge No. 12, Intervenor-Plaintiff-Appellee, v. LOCAL UNION NO. 211 OF the UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF the PLUMBING AND PIPEFITTING INDUSTRY OF the UNITED STATES AND CANADA, AFL-CIO, Defendant-Appellant-Cross Appellee.
    No. 73-2931.
    United States Court of Appeals, Fifth Circuit.
    Sept. 27, 1974.
    Rehearing Denied Nov. 5, 1974.

      W. Wiley Doran, Thomas J. Mitchell, Houston, Tex., for defendant-appellant-cross appellee.
    Joe S. Powell, Houston, Tex., for plaintiff-appellee-cross appellant.
    James P. Wolf, Houston, Tex., for Int’l Ass’n of Machinists, and others.
    Before DYER and MORGAN, Circuit Judges, and KRAFT, District Judge.
   LEWIS R. MORGAN, Circuit Judge.

Following a non-jury trial, plaintiff s-appellees were awarded damages under § 303 of the Labor Management Relations Act, 29 U.S.C. § 187, for losses caused by defendant-appellant’s violations of § 8(b) (4) (i) and (ii), (B) and (D) of the Act, 29 U.S.C. § 158(b)(4) (i) and (ii), (B) and (D). We affirm in part, reverse in part, and remand for further proceedings.

In the summer of 1970, appellee Refrigeration Contractors, Inc. (hereafter Refrigeration) was awarded contracts to install commercial refrigeration equipment in four restaurants at two locations in Houston, Texas. Before beginning work on any of the projects, Refrigeration entered a collective bargaining agreement with appellee Lodge No. 12, International Association of Machinists and Aerospace Workers (hereafter Machinists)’. Members of Local No. 211 of the United States Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry (hereafter Pipefitters) had been employed by another subcontractor to install the heating and air conditioning equipment in the projects. Shortly after work began at one of the jobsites, representatives of the Pipefitters approached the Machinists’ steward on the job. They told him that the Machinists were doing Pipefitters’ work, and that if they continued to do it, the Pipefitters would walk off the job. When the Machinists did not stop work, the Pipefit-ters made good on their threat, a move which threatened to delay the project indefinitely. The district court found that as a result, great pressure was brought to bear on the primary contractors to replace Refrigeration’s Machinist employees with the Pipefitter employees of a different subcontractor, that the primary contractors did so, and that as a result, Refrigeration and Machinists suffered damages of $14,072.72 and $2,883.10, respectively. Before bringing the § 303 action, appellees instituted a proceeding under § 10 (k) of the Act, 29 U.S.C. § 160(d), before the National Labor Relations Board which found that the disputed work belonged to the employees of Refrigeration and that there was reasonable cause to believe that appellant had violated the Act.

In pertinent part, 29 U.S.C. § 158(b)(4) makes it an unfair labor practice for “a labor organization or its agents”

(i) to engage in ... a strike . or
(ii) to threaten, coerce, or restrain any person engaged in commerce . where in either case an object thereof is—
X X * -X- -X- *
(B) forcing or requiring any person ... to cease doing business with any other person
X X X X X X
(D) forcing or requiring any employer to assign particular work to employees in a particular labor organization . . . rather than to employees in another labor organization ....

Appellant initially contends its boycott was not prohibited since it was purely for the purpose of protesting the “substandard” wage paid by Refrigeration, and since no genuine jurisdictional dispute existed between the Pipefitters and the Machinists. The record is replete with testimony supportive of the district court’s finding that appellant’s activities and purposes violated the Act. It should hardly be necessary to point out that the activity is illegal if an object is one prohibited by the Act, regardless of the presence of other, legal motives. N.L.R.B. v. Denver Building and Construction Trades Council, 341 U.S. 675, 71 S.Ct. 943, 95 L.Ed. 1284 (1951). The record clearly indicates that an object of appellants strike and threats was to force the contractors to cease doing business with Refrigeration and to assign the work to companies employing Pipefitters. Additionally, there was testimony that Machinists as well as Pipe-fitters performed the sort of work involved in the Houston area, indicating the existence of a true jurisdictional dispute.

Appellant’s second contention is that plaintiffs failed to prove a causal relationship between appellant’s acts and the termination of Refrigeration’s contracts. This claim is wholly without merit, since as to each of the three can-celled contracts, the contracting parties testified that the termination resulted from pressure generated by the Pipefitters’ refusal to work.

The calculation of Refrigeration’s damages proved troubling. Normally in such cases, the innocent contractor is entitled to any portion of the contract price remaining unpaid, less the amount it would have cost to complete the work. Here, however, Refrigeration did not employ cost accounting tech-ñiques; although the record is far from clear, it appears that Refrigeration is unable to calculate what its costs would have been on any of the three jobs. The district court seems, as a result, simply to have awarded as damages the unpaid contract prices. This will not do, since the work was not completed.

On remand, should calculation of Refrigeration’s costs prove impossible, another approach is open to the district court. Refrigeration’s accountant testified that the company normally operated on a 20-25% profit margin on similar jobs, and its president set the figure at 23%. The court may therefore assess damages as 23% of the unpaid contract prices. Of course, this method will not provide a totally accurate measure of damages, but it is clearly acceptable under the guidelines established by this court for § 303 actions. As we said in Sheet Metal Workers v. Atlas Sheet Metal Company, 384 F.2d 101, 109 (5 Cir. 1967):

While the employer must prove that he has sustained some injury to his business or property, he need not detail the exact amount of damages suffered. It is sufficient if the evidence supports a just and reasonable approximation.

This principle was cited with approval in Vulcan Materials Company v. United Steelworkers of America, 430 F.2d 446 (5 Cir. 1970), and in Gulf Coast Building and Supply Company, Inc. v. International Brotherhood of Electrical Workers, 428 F.2d 121, 125 (5 Cir. 1970), wherein the court said:

Although the employer must prove that he has suffered some injury to his business or property, he need not detail the exact amount of damages suffered; it will suffice if the evidence shows the extent of damages as a matter of just and reasonable inference, although the result may be only approximate.

In Gulf Coast, the award of damages was based on accountant’s summaries quite similar to the evidence introduced by Refrigeration.

The district court also awarded damages based on the “loss” of Refrigeration’s contract to install equipment at the Shell Information Center in Houston, predicating its award on the existence of an oral contract. The record reveals no evidence of such a contract; rather, Refrigeration simply submitted a bid for the job which was not accepted. In such a situation, appellant can hardly be held liable since appellee suffered no loss. The award was error and must be reversed.

To the extent Refrigeration employees were rendered unproductive by appellant’s wrongful activities, their wages are proper elements of Refrigeration’s damages, as the district court held. Atlas, supra, 384 F.2d p. 110. However, there is some conflict in the testimony as to whether the hourly rate claimed by Refrigeration is that at which the employees were actually paid. Naturally, Refrigeration may recover only such wages as were actually paid out; we remand for further findings on this issue.

Finally, numerous cases make clear that damages in a § 303 case may include costs of reasonable legal action taken to effect a resumption of work. See, for example, Abbott v. Local Union No. 142 of United Associations of Journeymen and Apprentices of Pipe Fitting Industry of United States and Canada, 429 F.2d 786 (5 Cir. 1970), Mason-Rust v. Laborers’ International Union of North America, 435 F.2d 939 (8 Cir. 1970). While “reasonable legal action” has been held to include the filing of unfair labor practice charges with the National Labor Relations Board, it does not include the bringing of the § 303 damages suit itself. Atlas, supra, 384 F.2d p. 110. Appellant’s contention that attorney’s fees should not be awarded for the NLRB proceeding because work had already been “resumed” is without merit, since it was Pipefitters, not Machinists, who had “resumed” the work thanks to the very violation of the Act on which their liability is based. To hold otherwise would be to insulate Pipefitters from the consequences of their illegal acts merely because they were successful in driving appellees from the work that was rightfully theirs. Thus, plaintiffs may recover their attorney’s fees incurred in the NLRB hearing, but not those incurred in the instant suit.

Affirmed in part, and reversed and remanded in part.

      . Cf. Mason-Rust v. Laborers’ International Union of North America, 435 F.2d 939 (8 Cir. 1970), wherein the court allowed as damages attorney’s fees incurred after the work had been resumed because it was clear that the legal action played a decisive role in the union’s decision to terminate its illegal activity.


source: Caselaw Access Project

author: AINSWORTH, Circuit Judge:

license: Public Domain

text:
    David G. WHITE, Plaintiff-Appellant, v. Howard H. CALLAWAY, Secretary of the Army, et al., Defendants-Appellees.
    No. 74-1693
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Oct. 2, 1974.
    Rehearing and Rehearing En Banc Denied Oct. 29, 1974.

      Joel W. Westbrook, Waco, Tex., James A. Hazlitt, Houston, Tex., for plaintiff-appellant.
    Anthony J. P. Farris, U. S. Atty., 01-ney G. Wallis, James R. Gough, Asst. U. S. Attys., Houston, Tex., for defendants-appellees.
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, Circuit Judges.

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

   AINSWORTH, Circuit Judge:

Reserve Private David White brought this action against the Secretary of the Army and White’s Reserve Company Commander, seeking injunctive and declaratory relief from an order directing White to enter involuntarily upon active duty in the Army due to unsatisfactory performance of his Reserve duties. We affirm the district court’s denial of relief from this order.

White was notified on August 5, 1972, by his Company Commander, Captain Robert L. Carlyle, to prepare for involuntary active duty for a period of eighteen months and seven days because of his absence without authority from annual active duty training during the period July 22, 1972 to August 5, 1972. Appellant concedes that there was a sufficient factual basis for the Army’s decision here that there was no valid medical excuse for White’s absence from summer camp. The crux of White’s appeal is that the order to report for involuntary active duty was nonetheless void because the Army failed to follow its own regulations in determining that White should be ordered to active duty.

Two provisions of Army Regulation [AR] 135-91 are relevant to this dispute. AR 135-91, H5(d)(3), C 8 (Aug. 28, 1970), defined “satisfactory participation” in Reserve activities (such as would avoid involuntary activation) to include

Attendance at and satisfactory completion of annual training (AT), unless ■ excused by proper authority as provided herein, or the member fails to attend or satisfactorily complete AT for reasons that are not within his control. (Emphasis in original)

AR 135-91, [[11(b)(1), C 9 (April 8, 1971) read in pertinent part as follows:

11. Unexcused absences from annual training. .
b. The following procedures will apply:
(1) The commander (unit or CO, US A AC) will determine if the member was notified in sufficient time to comply, and whether or not emergency or cogent reasons existed for his absence. (Emphasis added)

Synthesizing the regulations, it is apparent that they required Capt. Carlyle to “determine” that Reserve Private White’s absence was for reasons “within his [White’s] control” before the Captain' concluded that White’s absence from annual training was unexcused and that involuntary activation was indicated. White claims that Capt. Carlyle did not make the determination required by the regulations prior to issuing the notice to prepare for active duty because “he made no inquiry of Reserve Private White himself, or conducted anything like an adequate investigation in order to make the necessary determination.” Appellant’s Brief at 9.

It is generally accepted that federal courts should decline invitations to review the discretionary rulings of the military. See, e. g., Orloff v. Willoughby, 1953, 345 U.S. 83, 73 S.Ct. 534, 97 L.Ed. 842; O’Mara v. Zebrowski, 3 Cir., 1971, 447 F.2d 1085, 1087 and cases cited. Nonetheless; where the military takes action against a serviceman, and that action is governed by applicable regulations, the military must adhere to its own regulations in taking such action. Antonuk v. United States, 6 Cir., 1971, 445 F.2d 592, 595; Schatten v. United States, 6 Cir., 1969, 419 F.2d 187, 191; Smith v. Resor, 2 Cir., 1969, 406 F.2d 141, 146; cf. United States v. Joseph G. Moretti, Inc., 5 Cir., 1973, 478 F.2d 418, 425. “When [military] regulations prescribe specific steps to be taken to insure due process they must be substantially observed.” Friedberg v. Resor, 2 Cir., 1971, 453 F.2d 935, 938. Thus, we may properly require of Capt. Carlyle and the Army a “determination,” that is, a good faith review of White’s record and a consideration of the surrounding facts and circumstances, prior to White’s involuntary activation.

On this record, Capt. Carlyle clearly made a proper determination as required by AR 135-91. Before making his decision, Capt. Carlyle was aware that White had been attempting to obtain a medical discharge from the service, that White had taken a physical examination only eleven days before summer camp which showed him to be medically qualified for military service, that White had signed a statement acknowledging his obligation to attend annual training less than two weeks before the summer camp session began, that White had failed to appear for summer camp as required, that White knew he was subject to involuntary activation if he did not satisfactorily perform his Reserve obligation, that White had been contacted by a member of Capt. Carlyle’s staff about his absence, that White had stated he was not going to summer camp because he had a discharge due him, and that White had not contacted his commanding officer to give any “emergency or cogent reasons” for his absence. To require, notwithstanding all this, that Capt. Carlyle secure additional information, speak with White personally, or undertake some kind of formalized investí-' gation would be to revise substantially the meaning of AR-135-91. It would be an improper, ad hoc construction of procedural niceties for a court to say the Army should have done things differently here. Holding the Army to its own regulations is one thing; imputing unnecessary procedural prerequisites into a regulation is something entirely different. As the Supreme Court said in Or-loff v. Willoughby, supra, “[J]udges are not given the task of running the Army.” 345 U.S. at 93, 73 S.Ct. at 540, 97 L.Ed. at 849. There was clearly a ■proper basis for ordering the active duty sanction, and thus the decision of the district court is

Affirmed.

      . White also asserts that the trial court erred in denying his motion for taking additional testimony and for reconsideration. The only evidence introduced by White in support of this motion was a letter dated Sept. 28, which was introduced into evidence at the first trial but which White’s present counsel was not aware of until after the hearing before the district court. Since no substantial new evidence was proffered to the trial court, it did not abuse its discretion in denying the motion.

      . White did subsequently attempt to speak with Capt. 'Carlyle, an attempt which the Captain rebuffed. However, this occurred only after White was alerted for involuntary active duty because of his failure to submit a cogent excuse for his nonparticipation in summer camp.


author: PELL, Circuit Judge.

text:
    EDWIN’S, INC., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.
    No. 73-1262.
    United States Court of Appeals, Seventh Circuit.
    Argued Jan. 18, 1974.
    Decided Sept. 4, 1974.
    Scott P. Crampton, Asst. Atty. Gen., Michael L. Paup, Atty., Dept, of Justice, Tax Div., Washington, D. C., John O. Olson, U. S. Atty., Madison, Wis., for defendant-appellant.
    Samuel Goldenberg, Milwaukee, Wis., for plaintiff-appellee.

      Before SWYGERT, Chief Judge, PELL, Circuit Judge, and ESCHBACH, District Judge.

       Judge Jesse E. Eschbach of the Northern District of Indiana is sitting by designation.

   PELL, Circuit Judge.

This is an appeal by the United States of America from the district court’s decision that the amount of compensation paid by the taxpayer corporation to certain employees was “reasonable compensation” and, therefore, fully deductible from taxable income.

The taxpayer, Edwin’s Incorporated, is a women’s specialty store in Eau Claire, Wisconsin. Edwin and Rose Marcus originally purchased the store in 1950 and operated it as a partnership for five years. In 1955, the partnership assets were turned over to the taxpayer corporation, with Edwin and Rose each taking 50% of the taxpayer’s stock.

During the period in question, Edwin Marcus was the taxpayer’s president and acted as its general manager, credit manager, buyer, financial director and merchandise manager. Rose Marcus was the taxpayer’s vice-president and acted as store manager when Edwin was absent; managed the Bridal Shop; wrote, directed, and performed in the taxpayer’s television advertising; and purchased certain merchandise for the store. Rose and Edwin’s son, Jeff Marcus, worked for the taxpayer as assistant manager.

During the fiscal years ending January 1, 1966 and 1967, the taxpayer paid Edwin and Rose each a salary of $24,000 per year. In addition, Edwin and Rose each received an annual bonus equal to 20% of the corporation’s net income before taxes. Jeff Marcus was paid a straight salary of $15,000 in 1966 and $18,000 in 1967 but received no bonus. The taxpayer also contributed amounts to a pension plan for all three Marcuses, the total of such pension payments being $8,905.01 in 1966 and $12,322.49 in 1967. The total deductions taken by the taxpayer as compensation on behalf of the Marcuses were $88,277.47 in 1966 and $93,041.35 in 1967. The Commissioner determined that reasonable compensation would be $65,200.00 for each year. The taxpayer paid the additional tax assertedly due and sued for a refund.

Following a bench trial, the district court found that the salaries and bonuses paid to Edwin and Rose and the salary paid to Jeff were reasonable. The district court also concluded that it need not consider the payments made by the corporation to the pension plan as compensation in determining whether the Marcuses were unreasonably compensated. The Government, appealing from this decision, raises essentially two issues: (1) whether the district court erred in finding the salaries and bonuses reasonable in amount; (2) whether the district court erred in excluding the taxpayer’s payments to a pension plan in determining whether the compensation paid to the Marcuses was reasonable. The Government would seem to suggest that we should not disassociate the two issues and that a determination of reversible error on the second issue would taint the finding on the first issue. We disagree.

We turn first to the question of whether the salaries and bonuses paid to the Marcuses were reasonable. Section 162(a)(1) of the Internal Revenue Code of 1954 permits a taxpayer to deduct as ordinary and necessary business expenses “a reasonable allowance for salaries or other compensation for personal services actually rendered.” The finding of the district court that the salaries and bonuses paid to the Marcuses were reasonable and, therefore, deductible by the taxpayer under § 162(a)(1), can only be set aside if “clearly erroneous.” Commissioner v. Duberstein, 363 U.S. 278, 291, 80 S.Ct. 1190, 4 L.Ed.2d. 1218 (1960).

In determining whether compensation is reasonable, a number of factors must be considered, including: the type and extent of the services rendered; the scarcity of qualified employees; the qualifications and prior earning capacity of the employee; the contributions of the employee to the business venture; the net earnings of the taxpayer; the prevailing compensation paid to employees with comparable jobs; the peculiar characteristics of the taxpayer’s business. 4A J. Mertens, Law of Federal Income Taxation § 25.69 (1972) ; Hammond Lead Products, Inc. v. Commissioner, 425 F.2d 31, 33 (7th Cir. 1970). For any given position, moreover, there will, of course, be a range, not unduly narrow, of compensation that could properly be considered “reasonable.”

The evidence indicated that all of the Marcuses worked long hours and performed their jobs exceedingly well. All three Marcuses worked 60 to 70 hours a week at the store and performed work which would normally require five or six persons. At least one member of the Marcus family was always present at the store during business hours. Each of the Marcuses, moreover, had considerable experience in the field of merchandising. Even before they bought the store in 1950, Edwin and Rose had each worked with women’s apparel. After purchasing the store, Edwin and Rose both worked there full-time. Jeff Marcus had worked at his parents’ store after school and during summers while he was growing up and had gained substantial experience in the business. The skill and time which the Marcuses devoted to the store were clearly reflected in the store’s success. The gross sales increased from $50,000 in 1950, when the Marcuses purchased the store, to $650,000 in the years in question. The inventory at the store, furthermore, turned over at a significantly faster rate than in the average specialty store. The net profit was in excess of 20% of the invested capital.

The taxpayer, despite its success, has, admittedly, never paid dividends. The Government, moreover, introduced testimony showing that certain employees in two stores similar to the taxpayer were paid less than the Marcuses. While such evidence is relevant, it is not conclusive. The Marcuses could justifiably claim larger salaries since the evidence indicated that Edwin’s, Incorporated was a more successful store than the two stores to which it was compared and that this success was directly due to the amount and quality of the services rendered by the Marcus-es.

While the Marcuses cannot justify the compensation paid to them greater than that paid to the personnel in the stores which were the subject of the Government testimony on the basis that they, the Marcuses, were owners rather than hired employees, nevertheless the ownership is not a factor to be ignored. Whether it would be true in every case or not, it is a fair general assumption that the owners of a business, particularly one which they have built up from scratch, will have the personal incentive not necessarily shared by hired help, and will devote those extra ounces of energy, thought, and devotion that will spell not merely the difference between success and failure but the difference between success and extraordinary success. Such would appear to be the situation in the case before us.

The Government on this appeal does not appear to emphasize any differences between the compensation that should have been paid to Edwin, who had the title of general manager, and Rose, who only served as manager during Edwin’s absence. Nevertheless, in fixing reasonable compensation, the Commissioner set the figure for Rose at $3000.00 less than Edwin. We will assume this had had no male chauvinistic aspects but was derived from titles. In looking at the record, however, we attach little significance to the job appellations which Edwin accorded himself in his testimony. It is obvious that the two owners were shoulder to shoulder in the enterprise. Further, there is ample evidence to support a determination that Rose through her efforts in television — writing, directing, producing, and performing— contributed very substantially to the growth of the store’s business, particularly in its bridal department.

Television had come to Eau Claire some twenty years earlier and the store was the first retail establishment using the medium. People responded to this epithalamic advertising from a radius of 100 miles including some from outside Wisconsin. Rose prepared the scripts and memorized them after store hours. She worked with the photographers. The commercials were generally run five evenings a week. She established an -unusual personal relationship in this line of merchandising which itself is highly personal and not to be equated with the sale of a pair of faded jeans. Customers would come in especially to see her. She perhaps unwittingly anticipated a popular recent television jingle, for as she put it, “I closed my program with holding the merchandise toward the camera, and the camera came in on it, and I would say, ‘Try it on.’ ”

We decline to attribute any differentiation between the reasonableness of the compensation paid Edwin and that paid Rose.

Furthermore, we note that the Government conceded that the “salaries found reasonable below were on the very fringes of reasonableness.” This concession was made in connection with the impropriety of the exclusion of the deferred compensation but nevertheless, in the somewhat flexible area of determining what exactly is or is not reasonable compensation, would cause us to hesitate further to disagree with the district court on the matter of the reasonableness of the non-deferred compensation.

Finally, the bonuses paid to Edwin and Rose were not a recent invention but had been established in 1955 and the percentage for the bonus had been set at 20% for at least six years prior to the years in question.

Having reviewed the record, we cannot say that the conclusion of the district court was “clearly erroneous.” We affirm that part of the district court’s ruling which found the salaries and bonuses paid to the Marcuses to be reasonable compensation and, therefore, deductible by the taxpayer.

The Government next contends that the district court erred, as a matter of law, in holding that it need not consider the taxpayer’s contributions to the pension plan as compensation in determining whether the Marcuses were unreasonably compensated. We agree with the Government that the district court erred in excluding the pension payments from its consideration.

Deferred compensation, such as contribution to a pension plan, is, nonetheless, compensation. The underlying reason, in fact, for allowing an employer to deduct payments to a pension plan from taxable income is that such payments are in the nature of additional compensation for services rendered by the employee. That the employee’s receipt of the money is deferred does not change the payments into something other than compensation. The sum of all compensation, deferred as well as direct, must meet the requirement of § 162 that it be reasonable in amount.

The language of the Code clearly requires such a result. Section 404(a) of the Internal Revenue Code of 1954 permits the deduction of contributions made by an employer to a qualified pension plan only if those contributions satisfy the conditions for deductibility set out in § 162, which, in turn, requires that the contributions be “reasonable compensation.” The Treasury Regulation reiterates this requirement:

“In no case is a deduction allowable under section 404(a) for the amount of any contribution for the benefit of an employee in excess of the amount which, together with other deductions allowed for compensation for such em-’ ployee’s services, constitutes a reasonable allowance for compensation for the services actually rendered.” Treas.Reg. § 1.404 (a)-l(b).

Courts and a leading commentator have, likewise, noted that pension payments- constitute compensation which must be considered in determining whether the total compensation paid to an employee is reasonable. Charles E. Smith & Sons Co. v. Commissioner, 184 F.2d 1011 (6th Cir. 1950), cert. denied, 340 U.S. 953, 71 S.Ct. 572, 95 L.Ed. 687 (1951); Leonard J. Ruck, Inc., 28 T.C.M. 63 (1969); 4A J. Mertens, Law of Federal Income Taxation §§ 25.87, 25B.-25 (1972).

The taxpayer, however, urges us to affirm as to the deferred compensation by way of pension plan payments apparently on what is some sort of a harmless error basis. Indeed, the taxpayer asserts that the district court held that all amounts expended for compensation are reasonable. If the taxpayer is suggesting that the payments into the pension plan were held reasonable, the record simply does not support its position. The district court made it explicitly clear that “the court does not consider those payments as a part of the compensation for the purpose of determining whether the compensation was reasonable.” We could only say the pension payment amounts were reasonable when added to other compensation by making at the appellate level a factual determination which was not made by the trial court. Because of the clear impact of the law cited above we cannot say the error was harmless.

Therefore, although we affirm the district court’s judgment with respect to the reasonableness of the salaries and bonuses, we reverse that part of the court’s order dealing with payments to the pension plan. The case is remanded to the district court to determine what part, if any, of the taxpayer’s contributions to the pension plan were unreasonable and, therefore, nondeductible. In reversing, we do not in any way intimate any opinion on the question of reasonableness of the pension plan payments; we simply decline to engage in the fact finding process.

Affirmed in part; reversed and remanded in part.

      . Edwin and Rose Marcus each received as a bonus $8,186.23 in 1966 and $7,359.43 in 1967. The total salary plus bonus for each was, therefore, $32,186.23 in 1966 and $31,-359.43 in 1967.

      . The pension payments for the Marcuses were broken down as follows:
      1966 1967
      Edwin $4,012.57 $5,860.45
      Rose 3,618.62 5,385.18
      Jeff 1,273.82 1,076.86
      Total $8,905.01 $12,322.49

      . The total compensation — including salary, bonus, and pension payments — paid to each Marcus was as follows :
      1966 1967
      Edwin $36,198.80 $37,219.88
      Rose 35,804.85 36,744.61
      Jeff ' 16,273.82 19,076.86
      Total $88,277.47 $93,041.35

      . The Government broke these figures down as follows:
      1966 and 1967
      Edwin $28,000.00
      Rose 25,000.00
      Jeff 12,200,00
      Total $65,200.00

      . This fact no doubt was a motivational factor in the Government’s case on the theory that a part of the compensation was a cloak for the return of equity capital. Cf. Charles McCandless Tile Serv. v. United States, 422 F.2d 1336 (Ct.Cl.1970). While the absence of dividends might be a red flag, it should not deprive compensation demonstrated to be reasonable under all of the circumstances of the status of reasonableness.

      . “Devotion” as a generic term is broad enough not only to encompass long hours and hard work but if sufficiently enlightened o,ould include matters such as putting economies into effect, good personal relationships with employees and customers, and, in fact, all of the procedures that tend to make a business successful.

      . The Government admits that the taxpayer’s pension plan was a qualified pension plan under § 401 and payments to it would, therefore, be deductible if reasonable in amount.

      . Pursuant to this court’s authority under Circuit Rule 23,'this case is remanded to the district court judge who originally tried the case since that judge has already heard the evidence pertaining to the nature and quality of the work performed by the Marcuses.


author: ' SIMPSON, Circuit Judge:

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MUELLER BRASS CO., a subsidiary of U. V. Industries, Inc., Respondent.
    No. 73-3014.
    United States Court of Appeals, Fifth Circuit.
    Oct. 4, 1974.

      Elliott Moore, Deputy Associate Gen. Counsel, N. L. R. B., Washington, D. C., John J. A. Reynolds, Jr., Director, Region 26, N. L. R. B., Memphis, Tenn., Aileen A. Armstrong, Washington, D. C., for petitioner.
    Emile C. Ott, M. Curtiss McKee, Jackson, Miss., for respondent.
    Before GEWIN, THORNBERRY and SIMPSON, Circuit Judges.
   ' SIMPSON, Circuit Judge:

We review a decision of the National Labor Relations Board (the Board) adjudging the respondent, Mueller Brass Company, a subsidiary bf U. Y. Industries, Inc. (Company) guilty of violations of Sec. 8(a)(1) & (3) of the National Labor Relations Act, Title 29, U.S.C., Sec. 158(a)(1) & (3) (the Act). The Board petitions for enforcement of its Decision and Order requiring (1) that the respondent employer cease its violations of the Act, and (2) grant reinstatement with back pay to its employee George Blanton who was found to have been discharged in violation of the Act. We grant the petition in each respect.

The Facts

This ease began with an alleged violation by employee Blanton of Mueller’s “no-solieitation” rule, which provided as follows:

No employee shall solicit or promote subscriptions, pledges, memberships or other types of support for any drives, campaigns, causes or organizations on company property during working time without express written permission from the Company.

The incident in question occurred the night of September 12, 1972, as Blanton and others working the “graveyard” shift (11 P.M. to 7 A.M.) were reporting for work at the plant in Fulton, Mississippi. Blanton’s duty that evening was as a member of the crew assigned to the Number One Block in the Mueller plant. It was routine procedure for the members of this crew to clock in on the way from the dressing room to the Number One Block area and then to wait in the block area to receive their work assignments for the evening from their supervisor, Larry Gray. The crew members did not know in advance of receiving their assignments what they were to do on any given evening.

On the night in question, Blanton testified that he had been to a Union meeting at 7:30 P.M. The meeting resulted in a decision by several members of the graveyard shift that they would wear union badges and other union insignia to work that evening as a show of open support for unionization of the Mueller plant. This was apparently the first time during this particular organizational campaign that employees had openly demonstrated union support.

Blanton testified that he reported to work on the night of the 12th sometime between 10:45 and 11:00 P.M. He clocked in and then proceeded to the vending machine area where he purchased a cup of coffee. As he was standing in the vending machine area, he was approached by a fellow crew member Randy Reich. According to Blanton, Reich inquired where Blanton had gotten his Union button. Blanton responded that he had gotten it at the union meeting and asked Reich whether he wanted one. Reich answered that he did and Blanton took an extra pin from his pocket and gave it to Reich. This is not the only version of events that evening, however.

Supervisor Larry Gray’s account of the incident was that Blanton passed the button to Reich after the two men had reported to the Number One Block area and just prior to their receiving their shift work assignments from Gray. Blanton testified that he did not pass the button to Reich in the work area. He did ask Reich where his button was when he noticed that Reich was not wearing it, and Reich supposedly showed the button in an extended hand to Blan-ton. Whatever the correct version, Blanton was instructed by Gray to report to the office of the night foreman, Paul Stamper, as the other men were given their work assignments. After a brief time, Stamper arrived and confronted Blanton with the accusation that he had passed the union button to Reich during work time in violation of the company no-solicitation rule. Blanton denied this and asserted that he had given Reich the button in the vending machine area. Stamper thereafter questioned both Gray and Reich. Reich apparently told Stamper that Blanton had given him the button in the dressing room, which was at variance with Blan-ton’s statement that the button had been passed in the vending machine area, but still supported Blanton’s denial that the button had been passed in the Number One Block area. Stamper decided that Blanton’s conduct required suspension, in accordance with company regulations, pending an investigation into the incident and resolution of the inconsistent explanations of the occurrence. Stamper, accordingly, ordered Blanton to clock out and go home for the evening.

On his way out of the building, Blan-ton sought out Gray in the Number One Block area and accused him of being a “damn liar.” He further abused Gray verbally and invited him outside to settle matters between them. Gray declined the invitation. Blanton thereafter returned to Stamper’s office and asked that he be fired rather than suspended because he did not want the uncertainty whether he would be discharged hanging over his head. Stamper replied that company rules required that a hearing be held before a discharge could be ordered, and again instructed Blanton to leave the plant. A hearing was subsequently held on September 25th, which Blanton did not attend. He testified that he was unable to attend because of the funeral of a friend. The decision was made to discharge Blanton on grounds: (i) that he had violated the company’s no-solicitation rule; (ii) that Blanton had been insubordinate to his supervisor, Gray, after his suspension; and (iii) that Blanton had requested that he be discharged in his post-suspension encounter with foreman Stamper.

The Hearing Below

A hearing was held before an Administrative Law Judge (ALJ) in early January 1973 regarding Blanton’s discharge and other alleged violations of the Act, supra. The ALJ found that Blanton’s suspension and discharge for violation of the company no-solicitation rule constituted violations of Sec. 8(a)(1) of the Act. The judge concluded that, even accepting supervision Gray’s account of the button-passing incident as true, the period during which Blanton gave Reich the union button was “non-work” time under the rules announced in NLRB v. Monarch Tool Co., 6 Cir. 1954, 210 F.2d 183, cert. denied 347 U.S. 967, 74 S.Ct. 778, 98 L.Ed. 1109, and NLRB v. Essex Wire Corp., 9 Cir. 1957, 245 F.2d 589. The ALJ further concluded that the discharge could not be justified either on the basis of Blanton’s post-suspension outburst against supervisor Gray or on the basis of his request to general foreman Stamper that he be discharged since this conduct was precipitated by the unlawful suspension. NLRB v. M & B Headwear Co., Inc., 4 Cir. 1965, 349 F.2d 170.

The ALJ found additionally that the suspension and discharge constituted violations of Sec. 8(a)(3) of the Act. She based this conclusion on a finding that the company had a distinct anti-union animus and that, absent this animus, it would not have applied the no-solicitation rule so strictly as to reach Blanton’s handing a union button to a fellow employee during the period that the two were waiting to receive their work assignments. The finding of anti-union animus was predicated upon testimony of plant manager Charles Lymburner that he “[had] not made it any secret of my opinion that we do not need a union at Mueller Brass Company,” and upon a finding that plant industrial relations manager Farris Gregory had made statements to at least two employees indicating that Union organizers were being blacklisted by employers in the area and that Mueller Brass might be forced to shut down if it were unionized.

Based on her findings and conclusions, the ALJ issued a cease and desist order with posting of notice requirements. The order directed that Blanton be offered reinstatement with back pay from the date of his unlawful suspension. On application to the Board by both parties, the Board adopted the findings and conclusions of the Administrative Law Judge and directed the Company to comply with the Order.

This case presents close questions in several respects. Enforcement of the Board’s order should follow if its findings are supported by substantial evidence in the record considered as a whole and are correct as a matter of law. Title 29, U.S.C., Sec. 160; NLRB v. Universal Camera Corp., 1950, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456. It is not our function to overturn a Board choice between two equally plausible inferences from the facts if the choice is reasonable, even though we might reach a contrary result if deciding the case de novo. NLRB v. United Insurance Co., 1968, 390 U.S. 254, 88 S.Ct. 988, 19 L.Ed.2d 1083; NLRB v. Standard Forge & Axle Co., 5 Cir. 1969, 420 F.2d 508, cert. denied 400 U.S. 903, 91 S.Ct. 140, 27 L.Ed.2d 140. We turn to a review of the Board’s Decision and Order in the light of these rubrics.

Blanton’s Suspension and Discharge

The Sec. 8(a)(1) Violation. The Company disputes the ALJ’s finding that its suspension and discharge of Blanton violated Sec. 8(a)(1) of the Act because the alleged infraction of the Company no-solicitation rule occurred during non-working time. It emphasizes that the rule applies by its terms to solicitation “during working time or in working areas,” and argues that because the solicitation here occurred in what was unquestionably a working area, the Board finding must be reversed under our prior decision in Patio Foods v. NLRB, 5 Cir. 1969, 415 F.2d 1001. The ALJ and the Board rely upon the fact that Blanton and Reich had not yet received their work assignments for the evening and had not engaged in actual work, arguing that their Sec. 8(a)(1) finding is supported by the rationale underlying the Fourth Circuit decision in Exide Alkaline Battery Division of E. S. B., Inc. v. NLRB, 4 Cir. 1970, 423 F.2d 663, enf’g 177 NLRB 778.

In Patio Foods this court was faced with handbilling on an extensive scale in a truck loading area where employees were actively at work. Attempts by the plant manager to halt the distribution met with resistance, and there was evidence that both the distribution and the argument between the plant manager and the handbilling employees resulted in distraction and interruption of employees working in the truck loading area. On these facts, we overruled the Board’s finding that the distribution took place in a non-work area and refused enforcement of the Board’s order, despite the fact that the employees distributing and receiving the handbills had apparently clocked out for the day.

In Exide Alkaline Battery, the Fourth Circuit was faced with a less blatant case of solicitation. They noted, in upholding a Board finding of 8(a)(1) & (3) violations, that one employee had been discharged for violating a no-solicitation rule while waiting in line to clock out at the end of the work day. The court emphasized that the Company had a strong anti-union animus which. had manifested itself in the interrogation and threatening of employees. Accordingly the court granted enforcement of the Board order.

We view the facts of the instant case more closely aligned with those in Exide Alkaline Battery, and hold that the period during which Blanton passed the union button to Reich, accepting the Company version of the incident, constituted nonworking time. Even though the alleged solicitation, under the Company version, occurred in a working area, the two individuals involved, Blanton and Reich, had not yet received their work assignments, and there was no evidence introduced that the mere passing of a union button resulted in or had the potential for the type of disruption which took place in the Patio Foods situation. See NLRB v. Peyton Packing Co., Inc., 5 Cir. 1944, 142 F.2d 1009, enf’g 49 NLRB 828, cert. denied 323 U.S. 730, 65 S.Ct. 66, 89 L.Ed. 585. Accordingly, we determine that the board’s finding of violation of Sec. 8(a)(1) of the Act by Blanton’s suspension and subsequent discharge (to the extent based on violation of the Company’s no-solicitation rule) is supported by substantial record evidence and is correct as a matter of law.

The Sec. 8(a)(8) Violation. The Company contends that the record does not support the Board’s finding that Blanton’s suspension and discharge constituted discrimination in violation of Sec. 8(a)(3) of the Act. As the ALJ recognized, the record contains only scant evidence regarding prior Company policy under the no-solicitation rule. It appears that no one had ever applied for permission to solicit from the Company. Nonetheless, there was some evidence that employees had sold cigarettes and other items during work time, although it is not clear that such practice was ever brought to the attention of management. No one had ever been discharged for violation of the rule, and there was no indication that it had ever been applied. The ALJ found that the application of the rule to Blanton’s button passing before the commencement of work would not have been made absent the Company’s strong anti-union animus, indicating that the Company had a discriminatory intent in suspending and later discharging Blanton for violation of the rule.

There is no question from the record that the Company was strongly anti-union. Nonetheless, we have held that a finding of discriminatory intent is not supported solely by a showing that a discharged employee was pro-union and his employer anti-union. Nix v. NLRB, 5 Cir. 1969, 418 F.2d 1001, 1008. A finding of discriminatory motive is not dependent on a showing of prior practice under a particular company rule, NLRB v. Hertz Corp., 5 Cir. 1971, 449 F.2d 711 (sick leave provision), and discriminatory motive may be found even where the company has a valid ground for discharge, NLRB v. Linda Jo Shoe Co., 5 Cir. 1962, 307 F.2d 355. As we noted earlier, we will not disturb a Board choice between two equally plausible inferences of discriminatory or nondiscriminatory conduct. NLRB v. United Insurance Co., supra; NLRB v. Standard Forge & Axle Co., supra; NLRB v. Coats & Clark, Inc., 5 Cir. 1956, 231 F.2d 567. On this record we are not justified in a conclusion that the Board finding is unreasonable or without substantial support. Accordingly, we affirm that portion of the Board’s Decision and Order finding Blanton’s suspension and discharge to have been in violation of Sec. 8(a)(3) of the Act.

The Provoked Insubordination. The Company also contends that its discharge of Blanton was in any event justified by Blanton’s abusive confrontation with supervisor Gray following Blanton’s suspension for solicitation, citing NLRB v. Soft Water Laundry, Inc., 5 Cir. 1965, 346 F.2d 930; and NLRB v. Louisiana Mfg. Co., 8 Cir. 1967, 374 F.2d 696. The Company further argues that the Board’s order for reinstatement of Blanton with back pay is inappropriate in the circumstances of his insubordination under NLRB v. R. C. Can Co., 5 Cir. 1965, 340 F.2d 433.

With regard to Blanton’s insubordination as a ground for discharge, we think that this case is closer factually to NLRB v. M & B Headwear Co., Inc., 4 Cir. 1965, 349 F.2d 170, than to Soft Water Laundry and Louisiana Mfg. In M <& B Headwear the discharged employee had been transferred from one section of the plant to another at the beginning of the work day. At the close of the day she was informed that she was being laid off because there was insufficient work in the section to which she had been transferred. Several days later, she was refused employment in response to an ad in which the employer sought applicants for a different position than the one to which she had been transferred. Both at the time of her lay-off and at the time of her response to the advertisement, the employee engaged in insubordinate and vituperative attacks upon her superiors, especially her immediate supervisor in the department to which she had been transferred. In rejecting the company’s citation of this conduct as a valid ground for discharge, the majority opinion of the Fourth Circuit stated:

An employer cannot provoke an employee to the point where she commits such an indiscretion as is shown here and then rely on this to terminate her employment. . . . The more extreme an employer’s wrongful provocation the greater would be the employee’s justified sense of indignation and the more likely its excessive expression. To accept the argument addressed to us by the company would be to provide employers a method of immunizing themselves from the only real sanction against violations of section 8(a) (3).
■X v>* -X ■X -X* -X-
We hold only that when a layoff is discriminatory a rehiring of the injured employee cannot be avoided by reliance on her later unpremeditated and quite understandable outburst of anger that in no way harms or inconveniences the employer.

349 F.2d at 174 (citations omitted). A similar approach is appropriate here.

Blanton’s abusive outburst at Gray immediately following upon Blanton’s suspension on grounds which he hotly contested. His indignation at Gray was understandable. Expression of his anger in the language of the mill is not nearly as shocking to us as respondent’s counsel would suggest. What we find more significant is Blanton’s return to the plant two days later for a lengthy and unheated discussion with plant industrial relations manager Gregory. Blanton’s acrimony at his suspension was not manifested in uncivil fashion at this or any subsequent time. In sum, Blanton’s outburst was spontaneous and was provoked by the unlawful conduct of his employer.

The cases relied on by the Company are distinguished on the basis of these circumstances. NLRB v. Soft Water Laundry, supra, and NLRB v. Louisiana Mfg. Co., supra, both involved unprovoked outbursts of abusive and threatening language by the discharged employees. The element of justification is not present in either case. In NLRB v. R. C. Can Co., supra, it was established by the Hearing Examiner that the use of abusive and threatening language was made several days after the employee had been discharged and was “deliberate and premeditated.” R. C. Can hence involved no spontaneous outburst of the type with which we are concerned here. We therefore grant enforcement of that portion of the Board order requiring the respondent Company to offer reinstatement with accrued back pay and interest to Blanton from the time of his unlawful suspension and discharge.

Finally, we perceive no serious merit in the Company’s contention that the statements made by Industrial Relations Manager Gregory to employees Blanton and Rogers were not coercive in violation of Sec. 8(a)(1) of the Act. See Radio Officers’ Union v. NLRB, 1954, 347 U.S. 17, 44-45, 74 S.Ct. 323, 338, 98 L.Ed. 455, 479-480.

The Board’s Order is directed to be enforced in all respects.

Enforced.

      . Reported at 204 NLRB No. 105.

      . United Steelworkers of America, AFL-CIO-CLC (Union).

      . The Union had conducted a prior organizational campaign in 1971 and had lost a representation election in September 1971. The union again initiated organizational efforts during the summer of 1972.

      . These comments by Gregory, some of which were made to Blanton during the course of an interview several days after his suspension, were made the basis of a separate Sec. 8(a)(1) violation in the NLRB order.

      . The Board in its decision and order at 177 NLRB 778 found that the Company’s interpretation of the no-solicitation rule “unlawfully restricted solicitation.” The interpretation was deemed unlawful because it: “allow [ed] solicitation during times when the employees were on scheduled nonwork time such as coffee and lunch breaks, but not when they were on other nonwork time.” Id. This is precisely the situation with which we are here confronted.

      . The Company argues that the Board approach equates work time with time during which manual labor is actually being performed and that, under this approach, solicitation would be permitted during such events as company meetings. We do not so construe the Board’s finding. Here there was a customary nonworking interval after the employees on the Number One Block crew reported to their work area and before they were given their work assignments for the night by the supervisor Gray. This customary nonwork interval is fairly indistinguishible from the time period before clocking out in Ewide Alkaline Battery and from customary breaks and lunch periods. Moreover, we note that the Comj)any’s fears concerning undue extension of the nonworking time concept would be blocked by our ruling in Patio Foods, supra that an employer is justified in enforcing a no-solicitation rule against disruptive activities in an area where em-pdoyees are working or performing company functions.


author: MANSFIELD, Circuit Judge:

text:
    Jewelle GRESHAM, Individually and on behalf of all others similarly situated, Appellant, v. Dr. George CHAMBERS, Individually and in his capacity as President of Nassau Community College, and A. Holly Patterson, Individually and in his capacity as Chairman of the Board of Trustees of Nassau Community College, Appellees.
    No. 985, Docket 73-2733.
    United States Court of Appeals, Second Circuit.
    Argued June 13, 1974.
    Decided Aug. 13, 1974.

      Judith T. Pierce, New York City (Charles T. McKinney, New York City, of counsel), for appellant.
    William S. Norden, Mineóla, N.Y. (Joseph Jaspan, County Atty. of Nassau County, Mineóla, N.Y., of counsel), for appellees.
    Before HAYS and MANSFIELD, Circuit Judges, and BAUMAN, District Judge.

       Of the United States District Court for the Southern District of New York, sitting by designation.

   MANSFIELD, Circuit Judge:

The principal issue raised by this appeal is whether the president of a community college, which admittedly is subject to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., must, in exercising the power to appoint members of his staff at the level of Associate Dean, use open recruiting as the method of selection. On August 31, 1973, appellant, a black member of the faculty of the Nassau Community College (“the College”), instituted this action under long-standing civil rights laws, 42 U.S.C. §§ 1981 and 1983, in the Eastern District of New York against the President of the College, Dr. George Chambers, and the Chairman of its Board of Trustees, A. Holly Patterson, seeking an injunction restraining the appointment of Ms. Esther Kronovet, a white person, as Associate Dean, on the ground that the President, by selecting her through informal word-of-mouth methods rather than by open and formal recruiting, had precluded appellant from being considered, which allegedly violated her rights. Preliminary relief was denied by Judge John F. Dooling who, after a four-day hearing, at which testimony was taken, made extensive findings in a 65-page opinion. We affirm.

The essential facts are as follows. The College was established by the County of Nassau pursuant to the Education Law of the State of New York, § 6301 et seq., McKinney’s Consol.Laws, c. 16. Its President, Dr. Chambers, is admittedly vested with the power to select those persons to be employed as members of his presidential staff which has consisted of nine persons. The College has approximately 450 members of the faculty and 18,000 day and evening students.

In the latter part of 1972 Dr. Chambers and various members of his staff and of the faculty concluded that the College was obligated to comply with Executive Order 11246, which had recently been amended. That Order provides that a “contractor” (a term which covers all public educational institutions such as the College, 41 C.F.R. § 60-1.-5(a)(4)) must not discriminate against any employee or applicant for employment because of race, color, religion, sex or national origin and that affirmative action programs to implement this objective must be undertaken. Fed.Reg. 41 C.F.R. § 60-2.22(a) provides for the appointment by the contractor of a director or manager of Equal Opportunity Programs, a position generally referred to as “Affirmative Action Officer.”

Having concluded that the College was governed by these Federal Regulations, President Chambers took steps to comply. Pending selection and appointment of an Affirmative Action Officer, he designated a member of his staff, Robert. Lukitch, to perform the functions of that office on a temporary or transitional basis. Dr. Chambers had already planned to expand his staff to include a woman as Associate Dean because he believed that more female representation at the administrative level of the College was advisable. At some point he concluded that, by selecting a woman to serve as Associate Dean with the added duties of Affirmative Action Officer, he could achieve his objective and also satisfy the requirements of Executive Order 11246.

In the meantime Mr. Lukitch, through his assistant, asked campus and faculty organizations to assist in formulating an affirmative action plan for the College. In mid-January, 1973, an ad hoc Affirmative Action Committee was founded by the faculty, which advised Dr. Chambers that the permanent Affirmative Action Officer to be appointed by him should be a full-time official and that the appointment should be “affirmed,” i.e., screened and approved, by it. With this Dr. Chambers disagreed, expressing the intention to appoint a qualified woman, chosen by him in the normal fashion employed by him, to serve as Associate Dean, with duties that would include those of an Affirmative Action Officer.

Dr. Chambers proceeded to consider seven women who might be eligible for the position as he conceived of it. Five were employees of the College. A sixth, Mrs. King, was the wife of a former administrative employee of Nassau, and a seventh, Dr. Esther Kronovet, was the wife of a member of Vice-President Lu-kitch’s staff. In July, 1973, Dr. Chambers, without engaging in public recruiting or obtaining the faculty’s approval, appointed Dr. Kronovet as Associate Dean and assigned to her the duty, among others, of formulating an affirmative action plan as required by Executive Order 11246. Dr. Kronovet is apparently well qualified to perform these duties and it is not suggested that if open recruiting had been used she could not properly have been selected by Dr. Chambers in the exercise of his appointing power as President. This lawsuit, however, attacks the method of selection followed by Dr. Chambers. Appellant contends that Dr. Chambers was required to undertake a formal search or open recruitment, which would have enabled her and others to apply and to be considered for the position.

DISCUSSION

At the outset we face the threshold question of whether the district court had jurisdiction over this action. Appellees argue that the suit, insofar as it is based on 42 U.S.C. § 1983, should have been dismissed for lack of jurisdiction for the reason that it is in reality an action against the county, a municipal corporation, which is not a “person” 'within the meaning of the Civil Rights Acts, see City of Kenosha v. Bruno, 412 U.S. 507, 93 S.Ct. 2222, 37 L.Ed.2d 109 (1973); Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961), and that the appointment of members of the president’s staff is a representative, not an individual, function of the Board of Trustees and of the President, its appointee. See N.Y. Education Law §§ 6301, 6304(1)(b), and 6306. The College, they further point out, has been created by the County of Nassau pursuant to the Education Law, with a nine-member board, five appointed by the Nassau County Board of Supervisors and four by the Governor of New York. This contention must be rejected, however, since the complaint names Dr. Chambers and Mr. Patterson individually, which for jurisdictional purposes is sufficient to preclude the action from being classified solely as one against the county. Cf. Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1943).

There remains a further jurisdictional issue, not raised by appellees, although appellant did anticipate it in her brief. That is whether appellant, before bringing this civil rights suit under 42 U.S.C. §§ 1981, 1983, was required to exhaust her administrative remedies before the Equal Employment Opportunities Commission, 42 U.S.C. § 2000e-5. Although the issue was not raised by the appellees, we are duty bound to consider it. John Birch Society v. National Broadcasting Co., 377 F.2d 194, 199 (2d Cir. 1967); Rule 12(h)(3), F.R.Civ.P.

In support of the position that jurisdiction should have been refused for non-exhaustion of administrative remedies it may be argued that to permit Title VII to be bypassed through an independent lawsuit under § 1981 would frustrate the purpose of Title VII, which was to establish an inexpensive conciliatory framework utilizing administrative expertise to resolve differences of the type before us. On the other hand, we must recognize that a private person had the right to sue under § 1981 for racial discrimination in employment prior to the enactment of Title VII, see Jones v. Alfred H. Mayer Co., 392 U.S. 409, 427, 442 n. 78, 88 S.Ct. 2186, 20 L.Ed.2d 1189 (1968); Macklin v. Spector Freight Systems, Inc., 156 U.S.App.D.C. 69, 478 F.2d 979 (1973); Sanders v. Dobbs Houses, Inc., 431 F.2d 1097 (5th Cir. 1970), cert. denied, 401 U.S. 948, 91 S.Ct. 935, 28 L.Ed.2d 231 (1971), and that nothing in the language of Title VII purports expressly to require recourse to the Commission before such a suit may be brought. Furthermore, starting with the premise that repeals by implication are not favored, United States v. Borden, 308 U.S. 188, 60 S.Ct. 182, 84 L.Ed. 181 (1949), Title VII does not meet the conditions precedent to such a repeal, see Posadas v. National City Bank, 296 U.S. 497, 56 S.Ct. 349, 80 L.Ed. 351 (1936). Title VII is not in irreconcilable conflict with § 1981, and it does not cover the entire subject matter of that section. If anything, the legislative history of Title VII indicates that it was intended to buttress and supplement § 1981 in a specific area rather than to serve as a substitute for § 1981 itself. See 110 Cong.Ree. 13650-52 (1964); Sullivan v. Little Hunting Park, 396 U.S. 229, 90 S.Ct. 400, 24 L.Ed.2d 386 (1969). For these reasons we are satisfied that Title VII has neither preempted § 1981 nor precluded an independent lawsuit based on a violation of that statute. Macklin v. Spector Freight Systems, Inc., 156 U.S.App.D.C. 69, 478 F.2d 979 (1973) ; Brady v. Bristol-Meyers, Inc., 459 F.2d 621 (8th Cir. 1972); Sanders v. Dobbs Houses, Inc., 431 F.2d 1097 (5th Cir. 1970); Caldwell v. National Brewing Co., 443 F.2d 1044 (5th Cir. 1971), cert. denied, 405 U.S. 916, 92 S.Ct. 931, 30 L.Ed.2d 785 (1972); Young v. International Telephone and Telegraph Co., 438 F.2d 757 (3d Cir. 1971).

Turning to the merits, we are guided by the basic principle that the district court’s denial of preliminary relief may be reversed only if found to be a clear abuse of discretion. “The settled rule is that a preliminary injunction should issue only upon a clear showing of either (1) probable success on the merits and possible irreparable injury, or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief.” Sonesta Int’l Hotels Corp. v. Wellington Associates, 483 F.2d 247, 250 (2d Cir. 1973) . See Gulf & Western Industries, Inc. v. The Great Atlantic and Pacific Tea Company, Inc., 476 F.2d 687 (2d Cir. 1973); Checker Motors Corp. v. Chrysler Corp., 405 F.2d 319 (2d Cir.), cert. denied, 394 U.S. 999, 89 S.Ct. 1595, 22 L.Ed.2d 777 (1969); Dino De-Laurentiis Cinematografica, S.p.A. v. D-150, Inc., 366 F.2d 373 (2d Cir. 1966).

It is readily apparent that appellant has not satisfied any of these requirements for granting the extraordinary relief of a preliminary injunction. Only upon a showing of unlawful discrimination will formal open recruiting or some other recruiting method be mandated in lieu of word-of-mouth recruiting. Where a pattern of past discrimination appears, recruitment procedures that might otherwise be classified as neutral will no longer be accepted as non-discriminatory. Additional methods must then be devised to compensate for the effects of past discriminatory practices and to guard against their perpetuation or recurrence. Rios v. Enterprise Association Steamfitters Local 638, et al., 501 F.2d 622, 629 et seq. (2d Cir. 1974) ; United States v. Georgia Power Company, 474 F.2d 906 (5th Cir. 1973); Brown v. Gaston County Dyeing Machine Company, 457 F.2d 1377 (4th Cir.), cert. denied, 409 U.S. 982, 93 S.Ct. 319, 34 L.Ed.2d 246 (1972); Rowe v. General Motors Corporation, 457 F.2d 348 (5th Cir. 1970); Sparham v. Southwestern Bell Telephone Co., 433 F.2d 421 (8th Cir. 1970). However, absent such a showing, word-of-mouth recruiting will not be barred.

In the present case appellant has failed to prove that a pattern of discrimination against blacks existed at the College. On the contrary the evidence established, and Judge Dooling found, an absence of any such discrimination, purposeful or otherwise. About 5% of Nassau County’s population is black and of the 18,000 day and evening students attending the College approximately 650 or 3.6% are black. Of approximately 450 teaching faculty members at the College, 44, or 9.8%, are black, of whom 20 are tenured, with 3 out of the 26 department heads being black. Lastly, 1 of the 9 members of the President’s own staff is black. Thus the black percentage of staff and faculty members far exceeds the black percentage of the community’s population and study body. On this record we cannot disagree with Judge Pooling’s observation that “these figures together ... do not spell out statistical discrimination.”

Nor was the claim of discrimination established through other proof. On the contrary, here again the evidence supports Judge Pooling’s finding that the differences between Dr. Chambers and some members of the College’s faculty amounted to a “family quarrel” rather than a dispute over racial discrimination. Unlike some of its counterparts the College has successfully established an Afro-American studies program. Although there was “friction” 'in the formulation of that program, some of it involving appellant, Judge Dooling found that it was not “discriminatory friction.” He further found that there was no substance to allegations of racial discrimination in faculty appointments, concluding:

“ . . . the whole case dealing with Miss Kronovich’s [sic] appointment is not oriented to the problem of discrimination, it seems to me, but is oriented to the older and deeper dispute between faculty and administration over their respective roles.”

On this record these findings can hardly be labelled clearly erroneous.

Absent proof of discrimination the informal word-of-mouth method used by Dr. Chambers in the selection of Dr. Kronovet as Associate Dean cannot be condemned as violative of plaintiff’s civil rights. Furthermore, in addition to her failure to show probability of success on the merits, appellant has failed to show that she would suffer irreparable harm as a result of denial of preliminary injunctive relief. She has not shown that Dr. Kronovet is unqualified for the position to which she • was appointed or that, should Dr. Kronovet be enjoined from holding that position, appellant or some better qualified person would be selected as Associate Dean.

Thus a grant of preliminary injunc-tive relief would only deprive the College of a qualified officer pending final disposition of the suit. Should appellant ultimately succeed on the merits, denial of a preliminary injunction would not bar the court from granting appropriate final relief.

The order of the district court is affirmed.

      . Executive Order 11246, as amended September, 1972, provides in pertinent part:

        “Subpart B-Contractors’ Agreements

      “Sec. 202. Except in contracts exempted in accordance with Section 204 of this Order, all Government contracting agencies shall include in every government contract hereafter entered into the following provisions:
      “ ‘During the performance of this contract the contractor agrees as follows: (1) The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex or national origin. Such action shall include,, but not be limited to the following : employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause. (2) The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex or national origin. (3) The contractor will send to each labor union or representative of workers labor union or representative workers with which he has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer, advising the labor union or workers’ representative of the contractor’s commitments under Section 202 of Executive Order No. 11246 of September 24, 1965, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.’ ”

      . 41 C.F.R. § 60-1.5 provides in pertinent part:
      “(4) Contracts with State or local governments. The requirements of the equal opportunity clause in any contract or subcontract with a State or local government (or any agency, instrumentality or subdivision thereof) shall not be applicable to any agency, instrumentality or subdivision of such government which does not participate in work on or under 'the contract or subcontract. In addition, any agency, instrumentality or subdivision of such government, except for educational institutions and medical facilities, are exempt from the requirements of filing the annual compliance report provided for by § 60-1.-7(a)(1) and maintaining a written affirmative action compliance program prescribed by § 60-1.40 and Part 60-2 of this chapter.”

      . 41 C.F.R. § 60-2.22 provides in pertinent part:
      “(a) An executive of the contractor should be appointed as director or manager of company Equal Opportunity Programs. Depending upon the size and geographical alignment of the company, this may be his or her sole responsibility. He or she should be given the necessary top management support and staffing to execute the assignment. His or her identity should appear on all internal and external communications on the company’s Equal Opportunity Programs. His or her responsibilities should include, but not necessarily be limited to : .... ”

      . Judge Dooling did not rule on the validity of Dr. Kronovet’s appointment insofar as it related to the. teachers’ union contract. Nor did he formally rule on the question of whether the Affirmative Action Officer should be a full-time or part-time position, although by implication he indicated that Dr. Kronovet would be expected, as Associate Dean, to perform the duties of Affirmative Action Officer and other duties.


author: GODBOLD, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. WHITEHOUSE PLASTICS d/b/a Aladdin Amusement Products et al., Defendants-Appellants.
    No. 73-3610.
    United States Court of Appeals, Fifth Circuit.
    Sept. 27, 1974.
    Rehearing Denied Oct. 30, 1974.

      Henry O. Getchell, John W. Mc-Mackin, Fort Worth, Tex., for defendants-appellants.
    Frank D. McCown, U. S. Atty., William L. Johnson, Jr., Asst. U. S. Atty., Fort Worth, Tex., for plaintiff-appellee.
    John B. Garrett, Forth Worth, Tex., for Whitehouse.

      Sam J. Day, Fort Worth, Tex., for Weiner.
    Before BROWN, Chief Judge, and GODBOLD and RONEY, Circuit Judges.
   GODBOLD, Circuit Judge:

This action, arises from an effort by the Small Business Administration, ap-pellee, to collect under guaranty agreements signed by E. L. Baker, Jr., and Henry Simon, Jr., appellants, in connection with a 1970 loan of $200,000 to Whitehouse Plastics Corporation. Whitehouse defaulted, and SBA foreclosed and sold at public auction the personal property securing the Whitehouse note. Then SBA brought this suit seeking to establish a deficiency judgment against appellants and others.

Appellants moved for a directed verdict contending, inter alia, that the government had failed to show reasonable notice to appellants of the time and place of sale, failed to show that the sale was commercially reasonable, and thus failed to prove its right to a deficiency. By special interrogatories the jury found that appellants had reasonable notice of the sale; that the method, manner, time, place and terms of the disposition were commercially reasonable; and that the value of the collateral at the time and place of sale was $31,696.98. Based on the jury’s findings, the District Judge entered judgment against appellants. On appeal, appellants’ basic contention is that the evidence is insufficient to support each of the jury’s findings and that thus they were entitled to a directed verdict. Within this contention they assert as supporting arguments that they were entitled to notice of the sale; that the evidence was insufficient to prove notice; that absent notice the governing law would either bar a deficiency judgment or at the least shift to the SBA the burden of proving that the value of the property did not exceed the amount received from the sale; and that if the second (burden shift) rule is the appropriate one, there was insufficient evidence to conclude that the SBA met its burden. As part of this final argument, appellants submit that one exhibit should not have been admitted under the business records exception to the hearsay rule. We address each argument in turn.

We may assume, without the necessity of deciding,, that Texas courts would find correct the following contentions of the appellants: (1) that as guarantors where the primary debtor was a business no longer in operation they were “debtors” within the meaning of Vernon’s Texas Codes Annotated, Business & Commerce [hereinafter V.T.C.A., Bus. & C.] § 9.504(c) requiring notice to “debtors” of the time and place of any public sale; (2) that under V.T.C.A., Bus. & C. § 9.501(c) the right to notice was non-waivable; and (3) that there was insufficient evidence on which to predicate a finding of reasonable notice with respect to either Baker or Simon.

The first question thus squarely presented is whether failure to give notice precluded the SBA from recovering a deficiency judgment. Neither we nor the parties have discovered any Texas case on point, but as Erie prognosticators we believe that Texas would answer in the negative. The version of V.T.C.A., Bus. & C. § 9.504(e) in force at the time the parties contracted and at the time of disposition of the collateral tracked the language of the Uniform Commercial Code § 9-504(3). Thus we look for guidance to the decisions of other jurisdictions deciding the effect of failure to comply with the provisions of their own statutes enacting U.C.C. § 9-504(3). Examination of those decisions reveals two conflicting lines of authority. One line holds that in the absence of compliance with the notice requirement the secured party may not obtain a deficiency judgment. The other line holds that such failure does not act as a bar to recovery of a deficiency but creates at most a rebuttable presumption that the value of the collateral equals the amount of the debt, thus placing on the secured party the burden of proving that the fair market value of the goods sold was less than this amount. We believe this second line of cases to be the better rule and the one which Texas would adopt.

The “no notice, no deficiency” rule undoubtedly serves as an incentive to compliance with the notice provisions of § 9-504(3), but the alternative of creating a rebuttable presumption favoring the debtor would also tend to serve this function and appears more in keeping with the scheme of the Code. U.C.C. § 9-507(1) [V.T.C.A., Bus. & C. § 9-507(a)] delineates the results of failure to comply with, inter alia, § 9-504 as follows:

If it is established that the secured party is not proceeding in accordance with the provisions of this Part disposition may be ordered or restrained on appropriate terms and conditions. If the disposition has occurred the debt- or or any person entitled to notification or whose security interest has been made known to the secured party prior to the disposition has a right to recover from the secured party any loss caused by a failure to comply with the provisions of this Part.

In view of this specific statutory remedy we doubt that the Code’s drafters intended that failure to give notice would bar the creditor’s right to a deficiency judgment. Other courts have reached the same conclusion, see, e. g., Grant County Tractor Co. v. Nuss, 6 Wash. App. 866, 496 P.2d 966 (1972), as have at least two commentators. This conclusion is strengthened by the discussion in' Norton v. National Bank of Commerce, 240 Ark. 143, 398 S.W.2d 538, 539-540 (1966), which indicates that amicus briefs filed in that case for the Permanent Editorial Board of the U.C. C. concluded that improper disposition by the secured party made the secured party liable for damages suffered as a result.

Section 9-507 clearly gives the debtor the right to recover “any loss caused by a failure” to give notice, including necessarily any prejudice to the debtor from any loss of his right of redemption under § 9-506 or from loss of opportunities either to encourage bidders to attend the sale or to sell off some of the property piecemeal before the ■ date set for the sale. In short, the defendants were free to submit to the jury under § 9-507 any evidence that they were prejudiced by the lack of notice, and under the second line of cases noted above the burden would be on the secured party to rebut such evidence by showing that the fair market value of the goods was no more than the amount received at the sale. Particularly where, as here, the transactions were commercial dealings between reasonably experienced businessmen, we believe that the Texas courts would not invoke a harsher rule. “No sound policy requires us to inject a drastic punitive element into a commercial context.” Cornett v. White Motor Corp., 190 Neb. 496, 209 N.W.2d 341, 344 (1973).

Assuming as we do that Texas would adopt a rule no harsher than that shifting to the secured party the burden of proving the fair market value of the property sold, we find that there was adequate evidence from which the jury could, as it did, infer that the fair market value of the property did not exceed the amount received from the sale. Gresham, SBA’s representative at the sale, testifiéd that he put in a “protective bid” of $17,500 for all of the property to be sold, the purpose of which he described as “to insure that the equipment does not sell at less than its under-the-hammer value; that it doesn’t sell too cheaply.” He further testified that he had been appraising property for the SBA for about 12 years and that he could have entered a higher “protective bid” up to a maximum of $25,000. While Gresham’s assessment is subject to attack on grounds that as an employee of the secured party he was not disinterested and that the assessment was hastily made, we cannot say that it was so lacking in substance that the jury was not entitled to give it weight. The only higher assessment of the value of the goods was that of defendant Baker, whose testimony suggests that his valuation was based on the initial cost of the property sold. The jury was entitled to reject Baker’s assessment as not probative of the fair value of the property at the time and place of sale. In addition to the testimony of Gresham and Baker the jury had before it an exhibit consisting of SBA’s record of the auction sale prepared by the company which conducted the auction. The exhibit contained copies of advertisements placed by the auction company concerning the sale, records of expenses incurred in conducting the sale and invoices to buyers at the sale with a description of and the prices received for the property sold. On the basis of the advertisements and Gresham’s testimony that about 140 to 145 registered bidders were present, “some 30 or 40 of whom must have bid on one or more lots of property,” the jury could find, as it did, that the sale was “commercially reasonable.” And having so found, the jury was entitled to infer that the total amount received at the sale was evidentiary of the fair value of the goods. This inference combined with Gresham’s lower assessment of their minimum fair value is sufficient to support the conclusion that the government met its burden of proving by a preponderance of the evidence that the fair value of the goods at the time and place of sale did not exceed $31,696.98, the net amount received from the sale.

The contention that the exhibit discussed above was not properly within the business records exception to the hearsay rule is without merit. The nature of the exhibit plus the testimony of Gresham brought it within the federal business records statute, 28 U.S.C. § 1732(a). “The Act does not require that the foundation testimony come from the one who kept the books or had supervision over them.” Sabatino v. Curtis National Bank, 415 F.2d 632, 635 (CA 5, 1969).

Affirmed.

      . The security agreement involved here provided that Texas law would govern the transaction. We need not decide, therefore, whether in the absence of such a provision Texas law or some form of federal common law would govern.

      . (c) Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms but every aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, and except in the case of consumer goods to any other person who has a security interest in the collateral and who has duly filed a financing statement indexed in the name of the debtor in this state or who is known by the secured party to have a security interest in the collateral. The secured party may buy at any public sale and if the collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations he may buy at private sale.

      . See, e. g., Atlas Thrift Co. v. Horan, 27 Cal.App.3d 999, 104 Cal.Rptr. 315 (1972) ; Commercial Credit Corp. v. Lloyd, 12 U.C.C.R. 15 (Dist.Col.Sup.Ct.1973) ; Turk v. St. Petersburg Bank & Trust Co., 281 So.2d 534 (Fla.Dist.Ct.App.1973) ; Edmondson v. Air Service Co., 123 Ga.App. 263, 180 S.E.2d 589 (1971) ; Braswell v. American National Bank, 117 Ga.App. 699, 161 S.E.2d 420 (1968) ; Twin Bridges Truck City, Inc. v. Halling, 205 N.W.2d 736 (Iowa 1973) ; One Twenty Credit Union v. Darcy, 40 Mass.App. 64 (1968) ; Camden National Bank v. St. Clair, 309 A.2d 329 (Me.1973) ; Foundation Discounts, Inc. v. Serna, 81 N.M. 474, 468 P.2d 875 (1970) ; Leasco Data Processing Equipment Corp. v. Atlas Shirt Co., 66 Misc.2d 1089, 323 N.Y.S.2d 13 (N.Y.C.Civ.Ct.1971) ; Skeels v. Universal CIT Credit Corp., 222 F.Supp. 696 (W.D.Pa.1963), vacated on other grounds, 335 F.2d 846 (CA 3, 1964) ; Aimonetto v. Keepes, 501 P.2d 1017 (Wyo.1972).

      . See, e. g., Weaver v. O’Meara Motor Co., 452 P.2d 87 (Alaska 1969) ; Universal CIT Credit Co. v. Rone, 248 Ark. 665, 453 S.W. 2d 37 (1970) ; Norton v. National Bank of Commerce, 240 Ark. 143, 398 S.W.2d 538 (1968) ; Leasing Associates V. Slaughter & Son, 450 F.2d 174 (CA 8, 1971) (applying Arkansas law) ; Community Management Ass’n of Colorado Siirings, Inc. v. Tousley, 505 P.2d 1314 (Colo.App.1973) ; Tauber v. Johnson, 8 Ill.App.3d 789, 291 N.E.2d 180 (1972) ; Abbott Motors, Inc. v. Ralston, 28 Mass.App. 35 (1964) ; Cornett v. White Motor Corp., 190 Neb. 496, 209 N.W.2d 341 (1973) ; Conti Causeway Ford v. Jarossy, 114 N.J.Super. 382, 276 A.2d 402 (Dist.Ct. 1971), aff’d 118 N.J.Super. 521, 288 A.2d 872 (Sup.Ct., App.Div.1972) ; T & W Ice Cream, Inc. v. Carriage Barn, Inc., 107 N.J. Super. 328, 258 A.2d 162 (County Ct.1969) ; Lincoln Rochester Trust Co. v. Howard, 347 N.Y.S.2d 306 (Rochester City Ct.1973) ; Chase Manhattan Bank v. Lyon Air, Inc., N.Y.L.J., March 15, 1971, p. 2, col. 4 (Sup. Ct.N.Y.1971) ; Investors Acceptance Co. v. James Talcott Inc., 61 Tenn.App. 307, 454 S.W.2d 130 (1970) ; Mallicoat v. Volunteer Finance & Loan Corp., 57 Tenn.App. 106, 415 S.W.2d 347 (1966) ; Grant County Tractor Co., Inc. v. Nuss, 6 Wash.App. 866, 496 P.2d 966 (1972).

      . “Since the Code specifies in Section 9-507 that the secured party is liable in .damages, there seems to be no need to add through judicial gap-filling the additional penalty of a right to recover the deficiency.”
      Clovis, Secured Transactions Under the U. C.C. [Vol. 1 of Bender’s U.C.C. Service] 74 (Supp.1972).
      “[S]ection 9-507 has in it a specific provision for a penalty in the event of a defective disposition. The sensible thing is to apply the Code penalty and no more. Hogan, Pitfalls in Default Procedure, 2 U. C.C.L.J. 244, 257 (1969).

      . We also note that in the consumer goods case, § 9-507 provides for a minimum penalty of the amount of the finance charge plus 10% of the cash price. It seems highly unlikely that the U.C.C.’s drafters would have included such a provision or that the Texas legislature would have enacted it had they intended that the secured party also lose his right to recover any deficiency.

      . At least it was entitled to find that except as to notice to Baker and Simon the sale was “commercially reasonable,” that is, that in all other respects it was conducted so as to return a fair price for the property.

      . Of., Kolbo v. Blair, 379 S.W.2d 125 (Tex. Ot.Civ.App.1964).

      . We do not imply that a secured party may bootstrap its way to a verdict based on the price received at the foreclosure sale where that is the only evidence' of the value of the goods or where the sale is less well publicized or conducted than this one. See Barker v. Horn, 245 Ark. 315, 432 S.W.2d 21 (1968) (evidence of the amount received at a private sale, without more, is not sufficient to meet the secured party’s burden where no notice is given). No such case is before us.