author: RIVES, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Lonnie BANKS and Alexander Hepburn, Defendants-Appellants.
    No. 72-3135.
    United States Court of Appeals, Fifth Circuit.
    April 4, 1973.

      Brenda Abrams, Miami, Fla. (Court appointed under Act), Phillip Carlton, Jr., Miami, Fla., for defendants-appellants.
    Robert W. Rust, U. S. Atty., Lawrance B. Craig, III, Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee.
    Before RIVES, GOLDBERG and MORGAN, Circuit Judges.
   RIVES, Circuit Judge:

Hepburn and Banks were charged in a three-count indictment with conspiring to knowingly and intentionally possess with intent to distribute quantities of heroin and conspiring to knowingly and intentionally distribute the heroin, all in violation of 21 U.S.C. § 846, and with the substantive offenses of possessing with intent to distribute and of actually distributing 18.8 grams of heroin in violation of 21 U.S.C. § 841.

A jury returned separate verdicts as to each defendant finding him guilty as to each count of the indictment.

On trial each of the defendants testified in his own behalf. Hepburn denied that he did the acts charged. Banks admitted that he sold a bag of heroin to a Government agent, but claimed that he was entrapped into committing the offenses. On appeal each of the defendants urges a single but an entirely different issue. We affirm.

The district court refused to allow Hepburn to attempt impeachment of the testimony of Peter Gorin, the Government’s confidential informant, by calling witnesses to testify to specific sales of drugs by Gorin for which he had not been tried or convicted. As then Chief Judge Murrah noted in Foster v. United States, 10 Cir. 1960, 282 F.2d 222, 223, extrinsic testimony in respect to the character of a witness “tends to confuse the issues and promote unfair surprise and multifariousness.” It was clearly within the discretion of the district judge as “the governor of the trial” to exclude such testimony. 3A Wigmore on Evidence § 979 (Chadbourn rev. 1970).

The defendant Banks urges that but for the solicitation of the Government informant, he would be innocent. The district judge properly submitted to the jury the question of whether Banks was entrapped, and placed upon the Government the burden of disproving entrapment beyond a reasonable doubt. In his instructions to the jury, the district judge correctly spelled out the principles of entrapment:

“If then, the jury should find beyond a reasonable doubt from the evidence in the case that, before anything at all occurred respecting the alleged offense involved in this case, the defendant Banks was ready and willing to commit crimes such as charged in the indictment, whenever opportunity was afforded, and that government officers or their agents did no more than offer the opportunity, then the jury should find that the defendant Banks is not a victim of entrapment.
“On the other hand, if the evidence in the case should leave you with a reasonable doubt whether the defendant Banks had the previous intent or purpose to commit any offense of the character here charged, and did so only because he was induced or persuaded by some officer or agent of the government, then it is your duty to acquit him.”

(Tr. 374-75.)

The testimony of Peter Gorin and of Agents Medina and Heyman furnished ample basis for the jury to believe beyond a reasonable doubt that the criminal design originated in Banks’ own mind and was not implanted by the Government or by Gorin.

Banks recognizes as fatal to his entrapment defense, and attacks as simply “wrong,” the following statement in Groessel:

“There is no entrapment, however, if the accused is ready and willing to commit the crime whenever the. opportunity might be afforded — even if by government agents or informers acting under their supervision. Eisenhardt v. United States, supra [5 Cir.], 406 F.2d [449] at 451. It is well settled that the fact that government agents merely furnished opportunities or facilities for committing the offense does not defeat the prosecution. Artifice and stratagem may be employed to catch those engaged in criminal enterprises.”

United States v. Groessel, 5 Cir., 1971, 440 F.2d 602, 605. We reaffirm that statement, which we find to be eminently sound.

The judgments of conviction are

Affirmed.

      . Gorin’s testimony was corroborated in substantial part by the testimony of two agents of the Bureau of Narcotics and Dangerous Drugs.

      . The proposed new Federal Rules of Evidence, now under consideration by the Congress, provide that “Specific instances of the conduct of a witness, for the purpose of attacking or supporting his credibility, other than conviction of crime as provided in Rule 609, may not be proved by extrinsic evidence.” Rule 608(b).
      The Advisory Committee’s Note explains that provision as follows:

        “Subdivision (b). In conformity with Rule 405, which forecloses use of evidence of specific incidents as proof in chief of character unless character is an issue in the case, the present rule generally bars evidence of specific instances of conduct of a witness for the purpose of attacking or supporting his credibility. There are, however, two exceptions: (1) specific instances are provable when they have been the subject of criminal conviction, and (2) specific instances may be inquired into on cross-examination of the principal witness or of a witness giving an opinion of his character for truthfulness.”

      . See Pierce v. United States, 5 Cir. 1969, 414 F.2d 163, 168; United States v. Bigham, 5 Cir. 1970, 421 F.2d 1344, 1346; United States v. Groessel, 5 Cir. 1971, 440 F.2d 602, 606; United States v. Harper, 5 Cir. 1971, 450 F.2d 1032, 1045; United States v. Patterson, 5 Cir. 1972, 470 F.2d 731; United States v. Rodriguez, 5 Cir. 1973, 473 F.2d 587; United States v. Jones, 5 Cir. 1973, 473 F.2d 293; compare United States v. Russell, 9 Cir. 1972, 459 F.2d 671, now pending in Supreme Court, 409 U.S. 911, 93 S.Ct. 226, 34 L.Ed.2d 172, see 41 L.W. 3484. See also 2 Wright Federal Practice and Procedure, Criminal § 403, pp. 70, 71, 72.

      . See authorities cited n. 3, supra.


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    CHOTIN TRANSPORTATION, INC., Plaintiff-Appellant, Tenneco Chemical, Inc., Intervenor-Appellant, v. The M/V HUGH C. BLASKE, her engines, tackle, apparel, etc., in rem, and American Commercial Barge Line Company, in personam, Defendants-Appellees. AMERICAN COMMERCIAL LINES, INC., et al., Plaintiffs-Appellees, v. CHOTIN TRANSPORTATION, INC., in personam, et al., Defendants-Appellants. BUNGE CORPORATION, Plaintiff-Appellee, v. CHOTIN TRANSPORTATION, INC., the M/V PAT CHOTIN and the M/V JOEY CHOTIN, Defendants-Appellants.
    No. 72-3512
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    April 2, 1973.
    John Poitevant, John W. Sims, H. Barton Williams, New Orleans, La., for appellants.
    Robert B. Acomb, Jr., Francis Emmett, New Orleans, La., for appellees.
    Before BELL, GODBOLD and IN-GRAHAM, Circuit Judges.

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

   PER CURIAM:

We affirm on the opinion of the District Court, reported at 356 F.Supp. 388 (E.D.La.1972).


author: PER CURIAM: JOHN R. BROWN, Chief Judge INGRAHAM,--'Circuit Judge, with whom CLARK, Circuit Judge,

text:
    UNITED STATES of America, Plaintiff-Appellant-Cross-Appellee, and Chevron Oil Company et al., Additional Defendants-Appellants-Cross-Appellees, v. Leo BURAS, Jr., et al., Defendants (1-26)-Appellees-Cross-Appellants, v. Philibert BURAS et al., Intervenors-Appellants.
    No. 31115.
    United States Court of Appeals, Fifth Circuit.
    Dec. 26, 1972.
    Lawrence K. Benson, Charles D. Marshall, Wilson S. Shirley, Jr., Sidney C. Schoenberger, New Orleans, La., Luke A. Petrovich, Buras, La., Turner Hudson McBaine, Donald E. Peterson, San Francisco, Cal., Gerald J. Gallinghouse, U. S. Atty., New Orleans, La., Shiro Kashiwa, Asst. Atty. Gen., Edmund D. Clark, John J. Cain, Attys., Dept, of Justice, Land Div., Washington, D. C., for appellants.
    Phillip A. Wittmann, New Orleans, La., E. Drew McKinnis, Baton Rouge, La., S. W. Plauche, Jr., Lake Charles, La., John H. Tucker, Jr., Shreveport, La., for appellees.

       Judge Wisdom did not participate in this cause.

   ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC

(Opinion March 23, 1972, 5th Cir., 1972, 458 F.2d 346).

Before TUTTLE, GEWIN and GOLDBERG, Circuit Judges.

PER CURIAM:

The Petition for Rehearing and motion to file supplementary petition for rehearing are hereby denied and the Court having been polled at the request of one of the members of the Court and a majority of the Circuit Judges who are in regular active service not having voted in favor of it, (Rule 35 Federal Rules of Appellate Procedure; Local Fifth Circuit Rule 12) the Petition for rehearing En Banc is also denied.

Before JOHN R. BROWN, Chief Judge, and TUTTLE, WISDOM, GE-WIN, BELL, THORNBERRY, COLEMAN, GOLDBERG, AINSWORTH, GODBOLD, DYER, SIMPSON, MORGAN, CLARK, INGRAHAM and RON-EY, Circuit Judges.

JOHN R. BROWN, Chief Judge

(dissenting) :

With all due deference to the conscientious and scholarly approach of the panel to the intricate analysis of Louisiana land law required by this decision, I respectfully dissent from the Court’s denial of rehearing en banc.

I do not begin to offer even a faint whisper of a suggestion of possible criticism of the panel’s decision on the merits of the competing claims. Indeed, it is that the merits are inescapably shrouded in ancient history, Louisiana practices in the administration of state land patent grants, and the intricacies of Louisiana law and procedure, that makes it imperative that these difficult questions be certified to the Supreme Court of Louisiana for a determination which will have both authoritativeness and finality. Since the panel acted without so much as mentioning either the strong showing for or the present statutory availability of such certification, the only way for this to be accomplished at this level is for us to grant rehearing en banc and then order such certification.

Although I avoid the merits as such, they are important in my approach. To reach its decision that certain patents granted by the State of Louisiana in 1898 to Octave Barrois were invalid under the then applicable Louisiana law, the panel had to first leap the purposefully erected hurdle of Albritton v. Shaw, 1921, 148 La. 427, 87 So. 32 — a Louisiana Supreme Court opinion of long and unquestioned validity. To propel it over this formidable bulwark the panel had to reach a now severely attacked construction of a Louisiana evidentiary statute. Having surmounted the procedural obstacles in its course, the Court then had to proceed to explicate the now-ancient Louisiana land patent law and to delineate the scope of the Louisiana version of the cryptic doctrine of after-acquired title.

Given the complicated and unique nature of these substantive and procedural questions of Louisiana land law, the panel’s decision could have been no more than a guess — albeit an educated one. I, for one, quickly concede my inability to accurately expound on the occult peculiarities of Louisiana land law, as witnessed by my self-confessing concurrence in the 1960 en banc opinion, Butler v. Bazemore, 5 Cir., 1962, 303 F.2d 188, overruling my earlier 1957 effort for the panel in Bazemore v. Whittington, 5 Cir., 1957, 245 F.2d 943.

Of course I recognize that under Article III we do have the duty to decide even the most abstruse matters — even in diversity cases where there is no readily available means to secure authoritative state decisions except in the really important rare cases. But where there is a method and the case is vital to state interests, it is the part of judicial statesmanship to exploit such procedures fully.

The true pith of this litigation concerns the legal allocation of one of Louisiana’s most treasured natural resources —her gas and oil. The State of Louisiana, not just private litigants, has repeatedly sounded the state policy of exploiting and preserving her oil and gas reserves, and she continues to do so.

But oil and gas in Louisiana (and the oil-rich, off-shore reserves) is important not only to Louisiana. It is important to the United States, as witnessed by this very case and the important earlier one, Leiter Minerals, Inc. v. United States, 1957, 352 U.S. 220, 77 S.Ct. 287, 1 L.Ed.2d 267. With both protagonists being sovereigns of equal standing and asserting claims over these rich stakes on the basis of Louisiana domestic law, the demands of a healthy federalism make it more than ordinarily appropriate that the underlying questions of state law be resolved by the only Court which can give an authoritative answer — the Supreme Court of Louisiana. Indeed, the United States Supreme Court in the context of this struggle between sovereign giants has itself recognized the desirability of having Louisiana courts construe Louisiana law. Recognizing, as we must do here, that any federal construction of Louisiana law would be law only until an authoritative judgment by the Louisiana Supreme Court is rendered, the Court has expressed the following thoughts:

The answers to these questions [of state law] are or may be relevant, Before attempting to answer them and to decide their relation to the issues in the case, we think it advisable to have an interpretation, if possible, of the state statute by the only court that can interpret the statute with finality, the Louisiana Supreme Court.

Leiter Minerals, Inc. v. United States, supra, 352 U.S. at 229, 77 S.Ct. at 292, 1 L.Ed.2d at 267.

And, putting its words into action, the Supreme Court in Leiter required the federal court to stay its hand pending resolution of the State law via a separate proceeding to be brought in state court under the Louisiana declaratory judgment statute.

Louisiana’s claim to determine domestic legal principles bearing on the allocation and ownership of her oil and gas is no less a matter of great public policy than was the claim of the state of New Mexico to adjudicate cases and controversies involving her precious natural resource — water. See W. S. Ranch Co. v. Kaiser Steel Corporation, 10 Cir., 1967, 388 F.2d 257, 262-267 in which, as a dissenter on the petition for rehearing, I urged the Tenth Circuit, as I now do the Fifth, to give way to the courts of New Mexico. Following the reversal by the Supreme Court, 1968, 391 U.S. 593, 88 S.Ct. 1753, 20 L.Ed.2d 835, the Supreme Court of New Mexico expressly rejected the Tenth Circuit’s determination, 388 F.2d 257, of the decisive question of local law. See Kaiser Steel Corporation v. W. S. Ranch Co., 1970, 81 N.M. 414, 467 P.2d 986.

Fortunately for Louisiana, there is no longer a need to strain at parallel declaratory judgment proceedings as in Leiter or Kaiser Steel, supra. For Louisiana has recently adopted the now available, effective procedure which permits a federal appellate court to certify questions of state law to the Louisiana Supreme Court. Thus, the objective of an authoritative determination with finality can be attained with significantly reduced logistical problems.

In these times when comity and abstention have become the by-line for Federal Judges, it is unfortunate that the Fifth Circuit adopts this head-in-the-sand rejection of the State’s effort to alleviate our Erie burden. Our wide experience with certification to the Florida Supreme Court has not only proved its utility in sparing this Court — and more importantly, the litigants — the risk of a wrong decision, but it has recently evoked a most favorable response from that tribunal. See National Education Association, Inc. v. Lee County Board of Public Construction, Fla.1972, 260 So. 2d 206.

Believing that certification of the questions of state law in this case would foster the ends of federalism and contribute immeasurably to the correct interpretation of Louisiana law, I would grant rehearing en banc and certify the difficult questions of state law to the Louisiana Supreme Court.

I therefore dissent to the failure of the Court to grant rehearing en banc.

INGRAHAM,--'Circuit Judge, with whom CLARK, Circuit Judge,

joins specially concurring:

While I am in agreement with the panel opinion in United States v. Buras, 458 F.2d 346 (5 Cir., 1972), believe that it correctly analyzes and interprets the law on the subject, and voted against en banc review, I am in accord with Chief Judge Brown’s efforts to certify the questions of state law to the Louisiana Supreme Court if it is feasible to do so.

      . Although as note 9, infra, reflects, we have frequently used the Florida certification procedure with great success, the device is reserved for important cases involving Florida public policy. Literally hundreds of run-of-the-mill Florida diversify cases have routinely been handled by panels of the Court.
      Beleaguered as we are by an exponential docket increase, we have not allowed certification to become an escape or abdication.

      . In some ways, this same policy is reflected in our deference toward the views of the District Judge steeped as he is in local law, lore and legend. Judge Gewin recently recognized this:
      Judge Borah was a former Louisiana practitioner as was the district judge in this case before being appointed to a federal district judgeship in that state. Although we certainly do not base our decision in this case solely upon the expertise of other judges merely because complex questions of state law are involved, their personal acquaintance with the state law is a factor which weighs in favor of their conclusion as to state law. Such consideration is particularly appropriate where as here the state law is unclear and ambiguous.
      Tardan v. Chevron Oil Co., 5 Cir., 1972, 463 F.2d 651, 652 [1972].
      This is especially significant here where the panel comprising no Louisiana trained Judges rejects the conclusions of Judge Christenberry, a long-time Louisiana practitioner and federal trial judge.

      . Its importance was recognized by the Supreme Court in FPG v. Louisiana Power and Light Co., 3972, 406 U.S. 621, 92 S.Ct. 1S27, 32 L.Ed.2d 369, by its quotation from the state’s amicus brief:
      “12. The conflict between producing and consuming States over state or federal regulatory authority is highlighted in the contrast between Louisiana's amicus brief in this case and the statement of the Chairman of the New York Public Service Commission in another case. Louisiana, a producing State, submits:
      “Historically, gas producing states have certain advantages over states which do not have their own gas supply. Their very proximity to the source of production attracts industries which use gas as the raw material without which their plants could not operate. The lower transporation costs of delivering gas to other industrial and commercial users within the state makes its use particularly attractive for such applications. It is not surprising, therefore, that producing states have a higher proportion of industrial-commercial consumption of total gas consumed and of firm gas than consuming states. Louisiana utilizes 84% of the total quantity of firm gas sold in the state for industrial and power plant generation purposes, in comparison to a national average of only 37%.
      “Louisiana’s economy is heavily dependent upon' the availability of a firm, reliable and uninterrupted supply of natural gas. State-wide investment by industrial category clearly reflects the predominance of jietroleum, refineries and chemicals which represented §465,-297,370 or 76% of a total industrial investment of §609,578,850 in 1970. Apart from these industries which use natural gas as process gas without which their plants cannot function, the state’s electric utilities are completely dependent upon natural gas as fuel for electric generators.
      “Thus, the economic welfare of the state bingos upon the continued delivery of the volumes of gas it received and used prior to United’s curtailment and upon the ability to draw upon greater volumes. Otherwise, its economy will be frozen at or below its present level. This is not true of other states in which natural gas plays a subsidiary rather than a dominant role in the overall economy of the state and in which the electrical utilities have alternate power sources such as coal, imported liquefied natural gas and inexpensive hydroelectric power.” Brief of State of Louisiana Amicus Curiae pp 2-3.”

        Id. at 633 n. 12, 92 S.Ct. at 1,335 n. 12, 32 L.Ed.2d at 331 n. 12.

      . The same information, data and policy were put forward in the state’s brief more recently in Louisiana v. FPC, 5 Cir., 1973, 476 F.2d 140 [No. 72-1220, argued September 27, 1972, Atlanta, Georgia], and emphasized by counsel’s oral argument to this Court:
      “We are here to discuss heat and power. Heat and power that is essential to the economic welfare of the State of Louisiana. We hope to do it with light.
      “Louisiana is the largest gas-exporting state in the federal union. It is the second largest gas-producing state in the nation. It delivers to other states that cannot supply their own gas supplies 48 percent of all natural gas exported by producing states to states that cannot meet their own needs.
      “Now plainly, we submit to Your Honors, Louisiana contributes more than its fair share to the national pool of natural gas.

        “Now Louisiana is a producing state. It did not choose to become a producing state. It did not choose to have a wasting asset as its major natural resource. It would prefer to have capital that it could invest and have come back with increases in earnings.”
      Transcript of Oral Argument at 45-46.

      . Of course an Erie-based judgment of this Court or on certiorari by the Supreme Court is authoritative in the sense that it determines the cause and constitutes res judicata or collateral estoppel as to the parties. But its stare deeisis effect is entirely within the control of the Supreme Court of Louisiana under its power to alter, modify or reverse its prior holdings on which the Brie-bound federal court has acted. And perhaps even more important, without changing its law it may, as have many of the Supreme Courts within this Circuit, reject the reading which the Fifth Circuit has given to the pertinent state law. See, e. g., Truck Ins. Exchange v. Seelbach, 1960, 161 Tex. 250, 339 S.W.2d 521, expressly rejecting National Surety Corp. v. Bellah, 5 Cir., 1957, 245 F.2d 936; Food Fair Stores, Inc. v. Trusell, Fla., 1961, 131 So.2d 730, expressly disapproving Pogue v. Great Atlantic & Pacific Tea Co., 5 Cir., 1957, 242 F.2d 575.
      I exposed this fact in my 1967 dissent in W. S. Ranch Co. v. Kaiser Steel Corporation, 10 Cir., 1967, 388 F.2d 257:
      “To me the sound approach continues to be the one reflected in the unreversed action of the Court in Delaney.7 And experience since that time continues to bear -out the strong note sounded by the concurring opinion 8 that real injustice is done to litigants and, worse, more damage is done to the states’ jurisprudence and its policies by a headstrong, resolute, inflexible determination on the part of a federal court to barge ahead in a sort of ascetic, misguided [Meredith v.] Winter Haven [, 320 U.S. 228, 64 S.Ct. 7, 88 L.Ed. 9] impulse, than will likely result from the slight delay occasioned by invoking state adjudication of the controlling issues.9 For the simple fact is that more and more,lo more federal courts are being overruled by more state courts on local issues upon which such federal courts have undertaken to read the Erie signs in the quest of the Winter Haven grail.
      Texas, for example, continues on its path of independence in a number of instances it not the least of which was the Fifth Circuit’s Delaney prediction itself.12 But, this is not an infirmity of the Fifth Circuit alone.13 And the experience in Florida demonstrates that state court reversals of Federal appellate decisions occur both in appeals of state cases 14 and on Olay certification (see note 5 supra) to the Supreme Court of Florida, the latter with some spectacular results.15
      7. United Services Life Ins. Co. v. Delaney, 5 Cir., 328 F.2d 483 (en banc), cert. denied, [Paul Revere Life Ins. Co. v. First Nat. Bank in Dallas,] 1964, 377 U.S. 935, 84 S.Ct. 1335, 12 L.Ed.2d 298, on motion for rehearing en banc, 5 Cir., 358 F.2d 714, cert. denied, 1966, 385 U.S. 846, 87 S.Ct. 39, 17 L.Ed.2d 77.
      8. See United Services Life Ins. Co. v. Delaney, supra, 328 F.2d at 485 (concurring opinion). The Delaney abstention procedure and the justification for it sought to be articulated by the concurring opinion have come in for some spirited criticism. See Agata, Delaney, Diversity, and Delay: Abstention or Abdication?, 4 Houston L.Rev. 422 (1966) (Special Fifth Circuit Issue).
      3- Subsequent Delaney judicial events in neither the Texas State Courts nor the Fifth Circuit (traced in note 5, Aetna Life Ins. Co. v. Barnes, 5 Cir., 1966, 361 F.2d 685, 687) prove that when employed with a little enlightened resourcefulness on on the part of either counsel, trial court, or appellate court the Delaney abstention is unworkable or administratively unsound. It is safe to say that no one on the Fifth Circuit, majority or dissenting, entertained for the briefest fraction of a possible division of a moment the idea that on recourse to the state courts after remand either counsel or the Texas courts would suppose that the single critical issue be excised for a sort of law-school academic inquiry in the declaratory judgment proceeding.
      10. In the score sheet which follows (notes 11, 12, 13 and 14 infra), I do not repeat the cases documented in Delaney.

      11. See, e. g., Felmont Oil Corp. v. Pan American Pet. Corp., Tex.Civ.App., 1960, 334 S.W.2d 449, error ref’d n. r. e., which expressly refuses to follow Sinclair Oil & Gas Co. v. Masterson, 5 Cir., 1959, 271 F.2d 310; see E. Brown, Law of Oil & Gas Leases, 1958: 1966 Cumulative Supplement, p. 293; Weymouth v. Colorado Interstate Gas Co., 5 Cir., 1966, 367 F.2d 84, 102 n. 57.
      12. Prof. Agata points this out “Additionally and ironically, Judge Brown can now add Delaney to the list of wrong guesses. Concluding that ‘judicial statesmanship of the highest and proper order’ dictated permitting Texas courts to decide the legal issue, and noting that Texas ‘has a judicial system which will permit adjudication with dispatch and speed’ and ‘with its full arsenal of procedural devices * * * will enable the parties to have a prompt and completely sufficient determination,’ Judge Brown and his colleagues had again failed to anticipate the state court ruling. Texas refused to hear the case.” (Citing United Services Life Ins. Co. v. Delaney, Tex.Civ.App., 386 S.W.2d 648, aff’d., Tex., 1965, 396 S.W.2d 855). Agata, supra note 8, at 424.
      13. See Yarrington v. Thornburg, Del., 1964, 205 A.2d 1, 11 A.L.R.3d 1110, rejecting Truitt v. Gaines, D.Del., 1961, 199 F.Supp. 143; Travelers Ins. Co. v. Auto-Owners (Mut.) Ins. Co., 1964, 1 Ohio App.2d 65, 203 N.E.2d 846, rejecting American Fid. & Cas. Co. v. Indemnity Ins. Co. of North America, 6 Cir., 1962, 308 F.2d 697; Kelly v. State Auto Ins. Ass’n, 6 Cir., 1961, 288 F.2d 734, and Travelers Ins. Co. v. Ohio Farmers Indem. Co., 6 Cir., 1958, 262 F.2d 132.
      14. Weed v. Bilbrey, Fla.App., 2d Dist., 1967, 201 So.2d 771, rejecting outright Emerson v. Holloway Concrete Prods. Co., 5 Cir., 1960, 282 F.2d 271, cert. denied, 1961, 364 U.S. 941, 81 S.Ct. 459, 5 L.Ed.2d 372, and expressly adopting the dissent of Brown, J. in the Emerson case, 282 F.2d at 278.
      15. See, e. g., Life Ins. Co. of Va. v. Shifflet, 5 Cir., 1966, 359 F.2d 501, upholding a jury verdict against the insurance company under the construction of the Florida Insurance Statutes on fraudulent misrepresentation. But then see, 5 Cir., 1967, 370 F.2d 555, granting a motion for rehearing and certifying the question to the Supreme Court of Florida, which in Life Ins. Co. of Va. v. Shifflet, Fla., 1967, 201 So.2d 715, reached a result opposite from the one reached in the original Fifth Circuit opinion. On receipt of the answer to the certified question, the Fifth Circuit vacated the earlier judgment and remanded the case to the district court. See 380 F.2d 375.
      And see especially Hopkins v. Lockheed Aircraft Corp., 5 Cir., 1966, 358 F.2d 347 in which the Court certified to the Supreme Court of Florida the controlling question of the dollar limitation on damages for wrongful death, a problem presenting fundamental and serious questions of state policy with only fragmentary case materials with which to work. The determination of the question was so difficult, not only for the Federal Court in the light of intervening developments in the law of conflicts but also for the Supreme Court of Florida, that it resulted actually in two opinions before the question was settled. See the opinion at 201 So.2d 743 holding that the situs state dollar limitation was contrary to Florida policy and the opinion at 201 So.2d 749 where, on rehearing, the Court reversed itself to validate the Illinois recovery limitation. No amount of prescience, including that thought by some to come from a Federal Commission, enables a non-Florida Judge authoritatively to determine Florida policy.”
      388 F.2d 264-265 (original footnotes retained). Since Kaiser Steel the list has continued to grow.

      . With a like recognition of deference due a sovereign the Supreme Court of Louisiana proceeded to determine the case even though it was much concerned whether it was rendering what would, under its jurisprudence, be an impermissible advisory opinion. See Leiter Minerals v. California Co., 1961, 241 La. 915, 132 So.2d 845.

      . Act 84 of 1972, Louisiana Legislature.

      . See Leiter Minerals, supra; Kaiser Steel, supra; and the famed February Sextet: Younger v. Harris, 1971, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669; Samuels v. Mackell, 1971, 401 U.S. 66, 91 S.Ct. 764, 27 L.Ed.2d 688; Boyle v. Landry, 1971, 401 U.S. 77, 91 S.Ct. 758, 27 L.Ed.2d 696; Perez v. Ledesma, 1971, 401 U.S. 82, 91 S.Ct. 674, 27 L.Ed.2d 701; Dyson v. Stein, 1971, 401 U.S. 200, 91 S.Ct. 769, 27 L.Ed.2d 781; Byrne v. Karalexis, 1971, 401 U.S. 216, 91 S.Ct. 777, 27 L.Ed.2d 792.

      . It started with Clay v. Sun Ins. Office, Ltd., 1960, 363 U.S. 207, 80 S.Ct. 1222, 4 L.Ed.2d 1170, on certification upon remand, Fla., 1961, 133 So.2d 735, on receipt of answers to certification, 5 Cir., 1963, 319 F.2d 505, reversed, 1964, 377 U.S. 179, 84 S.Ct. 1197, 12 L.Ed.2d 229.
      Thereafter we have used it frequently. See, Gordon v. John Deere Company, 5 Cir., 1971, 451 F.2d 234, on certification, Fla., 1972, 264 So.2d 419 (1972), on receipt of answers to the certification, 5 Cir., 1972, 466 F.2d 1200 (1972); National Education Association, Inc. v. Lee County Board of Public Instruction, 5 Cir., 1971, 448 F.2d 451, on certification, Fla., 1972, 260 So.2d 206, on receipt of answers to certification, 5 Cir., 467 F.2d 447; Allen v. Estate of Carman, 5 Cir., 1971, 446 F.2d 1276; Boyd v. Bowman, 5 Cir., 1971, 443 F.2d 848, on certification, Fla., 1971, 256 So.2d 1 (1971); A. R. Moyer, Inc. v. Graham, 5 Cir., 1971, 443 F.2d 434; Martinez v. Rodriquez, 5 Cir., 1968, 394 F.2d 156, on certification, Fla., 1968, 215 So.2d 305, on receipt of answers to certification, 5 Cir., 1969, 410 F.2d 729; Life Ins. Co. of Va. v. Shifflet, 5 Cir., 1967, 370 F.2d 555, on certification, Fla., 1967, 201 So.2d 715, on receipt of answers to certification, 5 Cir., 1967, 380 F.2d 375; Hopkins v. Lockheed Aircraft Corp., 5 Cir., 1966, 358 F.2d 347, on certification, Fla., 1967, 201 So.2d 743, on receipt of answers to certification, 5 Cir., 1968, 394 F.2d 656; Green v. American Tobacco Co., 5 Cir., 1962, 304 F.2d 70, on rehearing 304 F.2d 85, on certification, Fla., 1963, 154 So.2d 169, on receipt of answers to certification, 5 Cir., 1963, 325 F.2d 673, cert. denied, 1964, 377 U.S. 943, 84 S.Ct. 1349, 12 L.Ed.2d 306, on appeal after retrial, 391 F.2d 97, rev’d on rehearing en banc, 1969, 409 F.2d 1166.

      . On numerous times, separate panels of our Court have expressed their yearning for a Florida-type certification procedure to resolve unsettled points of pure state law. E. g., Lee v. Great Northern Nekoosa Corp., 5 Cir., 465 F.2d 1132, n. 1 [1972]:
      We regret our inability to certify the questions to the Supreme Court of Alabama for its authoritative resolution as would be possible if the case involved Florida law. Section 25.031, Florida Statutes Annotated as implemented by Rule 4.61 of the Florida Appellate Rules, 32 F.S.A. See Clay v. Sun Insurance Office, [Ltd.], 1960, 363 U.S. 207, 212, 80 S.Ct. 1222, 4 L.Ed.2d 1170.
      Our efforts to do this in Texas were aborted by the Supreme Court of Texas because it concluded the partial declaratory proceeding would constitute an advisory opinion. See United Services Life Ins. Co. v. Delaney, 5 Cir., 1964, 328 F.2d 483 (en banc) (abstaining), dismissed, Tex., 1965, 396 S.W.2d 855, decided, 5 Cir., 1966, 358 F.2d 714. See, generally, Agata, Delaney, Diversity, and Delay: Abstention or Abdication?, 4 Hou.L.Rev. 422 (1966); Gowen and Izlar, Federal Court Abstention in Diversity of Citizenship Litigation, 43 Tex.L.Rev. 194 (1964); Comment, Abstention under Delaney: A Current Appraisal, 49 Tex. L.Rev. 247 (1971). In order to allow the State of Texas to construe her own law, we must, under the current view, dismiss the federal litigation. Barrett v. Atlantic Richfield Co., 5 Cir., 1971, 444 F. 2d 38.


author: BENNETT, Judge. NICHOLS, Judge DAVIS, Judge

text:
    UNITED STATES FIDELITY & GUARANTY CO. et al. v. The UNITED STATES.
    No. 183-70.
    United States Court of Claims.
    March 16, 1973.

      Peter J. Gagne, Boston, Mass., for plaintiffs. Samuel H. Cohen, Boston, Mass., attorney of record for plaintiffs.
    Leslie H. Wiesenfelder, Washington, D. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant.
    Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges.
   ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT AND PLAINTIFFS’ CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AND ON DEFENDANT’S MOTION TO DISMISS ALL PLAINTIFFS BUT THE SURETY

BENNETT, Judge.

Plaintiff USF&G was a Miller Act surety on contract No. NBy-58920 in which Premier Contractors, Inc., the prime contractor, had agreed to make modifications to building No. 36, Barracks and Mess, at the United States Naval Station, Boston, Massachusetts. The contract was awarded on February 10, 1965, on a bid of $255,204. The plaintiff executed a payment bond in' the amount of $127,602 and a performance bond in the amount of $255,204 on that same day. The prime contractor entered into performance of the contract and began to encounter financial difficulties soon thereafter.

By the summer of 1965, several of the subcontractors had begun to complain verbally of nonpayment of bills by the prime. These complaints were soon formalized by the filing of notices of nonpayment with the surety. Thus, the surety knew at this point that the prime contractor was not properly paying the labor and material obligations being generated under the contract.

By September 27, 1965, the Government had made six progress payments to the prime contractor, totaling $182,000. Just prior to the preparation of the seventh progress payment, the surety, on December 3, 1965, sent the contracting officer two telegrams notifying him that the prime had not made the proper payments to the laborers and suppliers and was, therefore, in default on the subject contract and demanding that the Government refrain from making any further progress payments to the prime contractor.

On that same day, the Navy representative telephoned the agent of the surety and notified him that there was insufficient basis on which to warrant the stopping of further progress payments to the prime, and that the work on the site was progressing and was expected to be completed shortly. A telegram to this effect was sent to confirm the telephone conversation. Thereafter, on December 8, 1965, the seventh progress payment was made to the prime contractor for $29,000.

On December 9, 1965, the Navy sent the surety a letter notifying it that the Government did not consider the prime to be in default on the contract, and that the nonpayment of bills was considered a matter between the surety and the prime. The surety responded on December 17, 1965, in a letter in which it reaffirmed its demand that no further payments be made to Premier and advising the contracting officer that it had notice of unpaid bills in excess of its liability on the payment bond, including three lawsuits filed by the subcontractors against Premier and the plaintiff-surety.

Approximately 3 weeks later, on January 10, 1966, the Navy notified the prime contractor that it would make no further progress payments until it could be shown that the Government would not sustain liability to subcontractors. Premier was likewise informed that its progress was now considered unsatisfactory and unless this was remedied by January 17, 1966, the contract would be closed out by a deductive change order with new contracts to be let in order to finish the project. This action would serve effectively to terminate the contract.

Premier responded to this letter by informing the Government that without further progress payments it would be unable to complete the contract. The surety likewise told the Navy that in the event of a default by the prime it would not complete the project, risking possible liability under its performance bond.

Following the receipt of these letters, the Navy bn January 18, 1966, issued a change order deleting the work yet to be finished on the project, thereby reducing the total contract price by some $18,585. At the same time, the Navy entered into direct contracts with several of the subcontractors to finish the work on the project at a cost approximately the same as that saved by canceling the contract with Premier. Thus, the surety suffered no liability on the performance bond.

On January 16, 1966, the plaintiff-surety filed a suit in interpleader in the District Coui’t of Massachusetts (Civ. Action No. 66-175-C) in which it deposited $127,602, the limit of its obligation under the payment bond. This amount was used to pay, on a pro rata basis, $165,090 in unpaid bills, plus interest. The difference was not paid by the surety and has not been paid by Premier.

On January 3, 1967, the Internal Revenue Service (IRS) served the Navy with a notice of a levy of $7,946.78 for taxes owed by the contractor. This amount was paid by the Navy out of funds still unexpended under the contract.

As the case comes before the court, it is in a somewhat unusual form. The original petition was filed by the plaintiff-surety joining all 23 subcontractor laborers and materialmen with unpaid claims as co-plaintiffs. In the petition, United States Fidelity & Guaranty Co. claimed that the $29,000 progress payment made December 8, 1965, by the Navy was improper since the surety had given the Navy adequate notice of the unpaid bills. Therefore, payment to the prime, despite this notice was urged as violation of the surety’s right of subrogation. The surety likewise contended that the payment to the IRS of the portion of the funds unexpended under the contract was improper since either the surety or the subcontractors had a prior right to those funds ahead of the IRS. The surety also claimed that there was approximately $25,000 left unexpended under the contract to which it or the subcontractors have a prior right. In its answer, the Government asserted that the amount unexpended under the contract was only $4,445.22 after the tax levy and liquidated damages were deducted. This contention has not been refuted by the plaintiffs and has apparently been accepted as true by them since that time.

The Government’s initial response to this suit was the filing of a motion to dismiss all the plaintiffs but the surety for lack of standing to sue. This court subsequently suspended action on the motion until the surety’s claim was disposed of by the court. This issue must now be dealt with along with the merits of the various claims raised by the plaintiffs.

The Government has also filed a contingent cross-claim against the third-party contractor (Premier), should it be found liable with respect to the making of the December 8, 1965 progress payment.

The claims presented by the plaintiffs divide into three distinct issues. First, the court must decide if the $29,000 progress payment made over the surety’s protest was proper or a violation of the surety’s right of subrogation. Second, the court must consider the relative priorities between the plaintiffs and defendant with respect to the $7,946.78 paid by the Navy to the IRS to cover tax obligations owed by the prime contractor. Finally, the court must decide which of the parties has a prior right to the $4,445.22 still held by the defendant and unexpended under the contract. This issue really concerns the measure of the rights subcontractors have to assert an equitable claim against the United States, and is linked closely to the issue raised by the Government's motion to dismiss the subcontractors for not having standing to sue at all. This last issue will be dealt with first.

The Government in its briefs and on oral argument has conceded that the $4,445 still unexpended under the subject contract is not its to keep. The United States clearly has no further interest under the contract. The buildings are complete and all the pertinent debts owed by the contractor to the Government in the way of taxes have been paid. In this position, the defendant is merely a stakeholder of the retained fund. The issue is, quite simply, to whom should the Government pay this fund? The fund would ordinarily be owed to the prime contractor had it paid all of its obligations to the subcontractors, but when the Government is in the position of a stakeholder, it is not free simply to pay the contractor when the surety has given adequate notice of other competing claims to the fund. Fireman’s Fund Ins. Co. v. United States, 421 F.2d 706, 190 Ct.Cl. 804 (1970); Home Indem. Co. v. United States, 376 F.2d 890, 180 Ct.Cl. 173 (1967); Newark Ins. Co. v. United States, 169 F.Supp. 955, 144 Ct.Cl. 655 (1959). The Government in this situation must ordinarily await a judicial determination or an agreement between the parties before it may safely pay a contested amount.

Under the facts in this case, it is also quite clear that the surety has no claim of priority to the fund unexpended under this contract. Even though the surety was not required to make any payments on its performance bond, it did deposit the full value of its payment bond in the Massachusetts District Court. As it turned out, the payment bond was insufficient to cover all of the subcontractors’ claims, so there still remains $43,657.57 in debts incurred by the prime contractor which were not and have not been paid. In North Denver Bank v. United States, 432 F.2d 466, 193 Ct.Cl. 225 (1970), this court followed the rule laid down in American Sur. Co. v. Westinghouse Elec. Mfg. Co., 296 U.S. 133, 56 S.Ct. 9, 80 L.Ed. 105 (1935), in which it was held that the surety was 3’equired to show that it had fully paid the claims of the laborers and material-men arising out of the contract before it could share in the unexpended sums retained under the contract. See also, National Union Fire Ins. Co. v. United States, 304 F.2d 465, 157 Ct.Cl. 696 (1962). The North Denver Bank case with the rule it follows is clearly applicable to this sui-ety with respect to the $4,445 amount still in the Government’s hands. Until this surety undertakes to pay all of the outstanding claims owed by Premier, it will not be permitted to share in retainages still held by the Government.

The more difficult issue concerns the rights of the laborers and materialmen. Clearly, they are entitled to this fund on the equities, but the troublesome issue is whether they actually have standing to sue for the amount in this court. It has long been the rule that “laborers and materialmen do not have enforceable rights against the United States for their compensation.” United States v. Munsey Trust Co., 332 U.S. 234, 241, 67 S.Ct. 1599, 1602, 91 L.Ed. 2022 (1947). As a result, laborers and materialmen do not acquire liens on the Government buildings or property to which they have contributed. In recognition of this fact, the Miller Act and its predecessors were passed in order to protect the laborers and suppliers in situations in which the prime contractor fails to meet his obligations. Continental Cas. Co. v. United States, 164 Ct.Cl. 160, 163 (1964). At the same time, the Court has recognized that the Government does owe the subcontractors an equitable obligation to see that they are paid, and to the extent the surety pays these subcontractors the Government is released from this equitable obligation. Henningsen v. United States Fidelity & Guar. Co., 208 U.S. 404, 410, 28 S.Ct. 389, 52 L.Ed. 547 (1908).

In order to define precisely the rights of each of the parties in this case, two leading cases, United States v. Munsey Trust Co., supra, and Pearlman v. Reliance Ins. Co., 371 U.S. 132, 83 S.Ct. 232, 9 L.Ed.2d 190 (1962), which reaffirmed Henningsen, must be examined further. In Munsey the issue was whether the United States or a payment bond surety had superior right to retained funds held by the Government. The Comptroller General was asserting priority to collect excess reprocurement costs owed by the contractor ahead of the surety. In the process of holding for the Government, the Court based its opinion in part on the fact that laborers and materialmen had no assertible rights against the Government to which the surety could be subrogated. In Pearlman the contest again involved priority to the retained fund, but this time the parties were the contractor’s trustee in bankruptcy and a Miller Act surety. In holding for the surety, the Court followed Henningsen and said;

We therefore hold * * * that the Government had a right to use the retained fund to pay laborers and materialmen; that the laborers and materialmen had a right to be paid out of the fund; that the contractor, had he completed his job and paid his laborers and materialmen, would have become entitled to the fund; and that the surety, having paid the laborers and materialmen, is entitled to the benefit of all these rights to the extent necessary to reimburse it. [371 U.S. at 141, 83 S.Ct. at 237]

Thus, by subrogation the surety obtained superior rights to the retained funds. There is, however, a problem in reconciling Munsey and Pearlman with respect to their discussions of the measure of the rights of the laborers and materialmen, even though the cases stand side-by-side. It is a short step from Pearlman to infer that if the subcontractors have rights to which the surety may be subrogated, then the subcontractors should be able to assert their rights directly, which is in complete conflict with the language in Munsey, as recognized by Justice Clark’s concurring opinion in Pearlman.

The dilemma may be resolved in a number of ways, but. the most apparent might be by noting that the Court in Pearlman stated that the surety was entitled to the benefit of all the rights of the laborers and materialmen whose claims it paid and those of the contractor whose debts it paid. The surety then is subrogated to the rights of the contractor who could sue the Government since it was in privity of contract with the United States. The surety is likewise subrogated to the rights of the laborers and materialmen who might have superior equitable rights to the retainage but no right to sue the defendant. If this interpretation of Pearlman is adopted then Munsey is in complete harmony with it and the Pearlman decision is of no aid to these subcontractors. This conclusion likewise follows our decision in Continental Cas. Co. v. United States, supra, in which we stated:

-x- * -x- The United States had the right to use the money in its hands to pay laborers and materialmen (Pearlman v. Reliance Insurance Company, 371 U.S. 132 [83 S.Ct. 232, 9 L.Ed.2d 190] (1962); National Surety Corp. v. United States, 133 F.Supp. 381, 132 Ct.Cl. 724 (1955)), but the laborers and materialmen could not force it to do so. [Citing Munsey Trust.].” [164 Ct.Cl. at 162.]

Closely linked to this view is the fact that in all the cases touching on this issue the rights of the various parties have been defined in situations in which the issue is one of priority between competing interests in the fund held by the Government. None have involved a plaintiff-subcontractor directly asserting a claim to money held by the Government. The subcontractors do possess equitable rights to the retained funds vis-á-vis other claimants to the money, but their rights cited by the courts in deciding, for example, that a surety who pays the subcontractors on a contract has priority via subrogation to the retained funds over an assignee of the prime contractor, do not necessarily include or imply a right in the subcontractor itself to sue the Government. The language that has been used by the courts in this respect is broad, but not so broad as to open a whole new area of litigation to parties that have consistently been found to have no standing to sue the United States. For this reason the court declines to grant the subcontractors’ standing to sue for the amount retained by the Government under the contract.

The plaintiff-subcontractors contend that if they are not allowed to bring suit and the surety is likewise unable to claim the fund since it has not paid all of the contractor’s outstanding debts under this contract, then no one will be able to claim the money, which would permit the Government to retain both the benefits of the contract and the funds that were to be used to pay for them. This certainly looks like a windfall at the expense of the uncompensated subcontractors, but this is not necessarily the case. Had this contractor been declared bankrupt, his trustee would have a valid claim to the unexpended funds to which the subcontractors would then have a claim. There also appears to be nothing to prevent the Navy in this case from filing an action in inter-pleader by depositing the unexpended fund in a District Court. Since there has already been an adjudication on this matter in the District Court of Massachusetts in which it was found that the prime contractor (Premier) did in fact still owe the plaintiffs in this case $43,697.57, plus interest, the distribution pro rata of the unexpended contract fund would be little more than a formality, whether done by the District Court itself or by the Navy direct.

There is still further reason for the court to find that the plaintiff-subcontractors do not have standing in this case. The claim of the subcontractors is a debt owed them by the prime contractor, not the defendant. The plaintiffs seek to make this court a means of collecting this debt thereby embroiling it in the controversy between those parties. The bar to allowing direct subcontractor suits against the Government is aimed at preventing precisely this type of problem, particularly where there are alternative means of getting the money from the Treasury to the plaintiffs. In an effort to dispose of this problem once and for all, this court recommends that the Navy simply pay the contesting laborers and materialmen according to the pro rata division employed by the Massachusetts District Court or file an action in interpleader in that or another appropriate court (28 U.S.C. §§ 1335, 1397, 2361; F.R.Civ.P. 22) in order to see to it that the Government does not retain possession of funds to which the subcontractors have an equitable claim. This court has recommended before that when the Government is a stakeholder it should resort to the interpleader procedure. Newark Ins. Co. v. United States, 169 F.Supp. 955, 957, 144 Ct.Cl. 655, 658 (1959).

Plaintiffs’ cross-motion for partial summary judgment is denied as to this issue and defendant’s motion is granted.

The second important issue raised by the plaintiff-surety questions the defendant’s right to collect a tax obligation of the prime contractor out of the unexpended funds under the contract ahead of the other creditors of the prime contractor, including itself and the subcontractors.

This matter was most recently handled by the court in Aetna Ins. Co. v. United States, 456 F.2d 773, 197 Ct.Cl. 713 (1972), in which the rule originally expressed in United States v. Munsey Trust Co., supra, was followed. A surety that pays on a performance bond in order to complete the subject contract has priority over the United States to the retainages in its hands. A surety that pays on its payment bond, however, does not have priority when the United States is asserting a tax or other obligation owed by the prime contractor. Since the surety in this case paid only on its payment bond, it falls in the latter category, and must claim the retain-age subject to the tax claim of the United States. See, Trinity Universal Ins. Co. v. United States, 382 F.2d 317 (5th Cir. 1967), cert. denied, 390 U.S. 906, 88 S.Ct. 820, 19 L.Ed.2d 873 (1968); Barrett v. United States, 367 F.2d 834, 177 Ct.Cl. 380 (1966).

The plaintiffs’ attorney has also strongly urged that whereas the surety may not have priority to the retained contract fund ahead of the IRS, the subcontractors should have priority. This of course may be disposed of by finding that the subcontractors do not have standing to sue for this amount, but even if they did it would not appear to alter the result. The policy behind the decision in United States v. Munsey Trust Co., supra, which denied priority to a surety to retained contract funds in the face of a claim asserted by the Government, likewise applies to these subcontractors. The United States stands in the same position as any general creditor. “He is not compelled to lessen his own chance of recovering what is due him by setting up a fund undiminished by his claim, so that others may share it with him. In fact, he is the best secured of creditors; his security is his own justified refusal to pay what he owes until he is paid what is due him.” 332 U.S. at 240, 67 S.Ct. at 1602. Though the subcontractors may have an equitable right to the retained funds, their claim to it, like the surety’s, is subservient to the tax lien of the United States.

For the reasons given, the defendant’s motion for summary judgment with respect to this issue is granted.

The final issue to be discussed concerns the claim that the progress payment made by the Navy to Premier on December 8, 1965, over the surety’s protest was improper and a violation of the surety’s right of subrogation. The plaintiff cites numerous cases in which the payment of a contract sum over a surety’s protest has resulted in liability on the part of the Government. There is a critical difference however, which distinguishes those cases from the one presently at issue, and that is the fact that at the time this surety notified the contracting officer that the contractor was not paying his bills, the contract was still in operation with the project not yet complete. In the cases cited by the plaintiff, the work under the contract was complete and the issue centered on who should receive the final payment. In other words the Government in those cases was merely a stakeholder, its interest being satisfied once the project was completed.

The case with which we are now concerned involves the Government’s receiving a notice to stop payments to a contractor who was still performing under the contract. The United States in this situation is primarily concerned with completion of performance under the contract and is far from being a simple stakeholder. It was this distinction which led the court in Argonaut Ins. Co. v. United States, 434 F.2d 1362, 193 Ct.Cl. 483 (1970), involving facts similar to those presented in this case, to reject the surety’s argument that onCe the surety notified the defendant of the contractor’s failure to meet its obligations the Government was under a legal obligation to stop making payments which were inconsistent with the surety’s rights. The court said:

* * to hold the Government .liable to plaintiff under the circumstances in this case grants the payment bond surety economic control of both the decision to terminate and the completion of the contract. [434 F.2d at 1367, 193 Ct.Cl. at 492.]

Thus, where the Government representative is notified of the contractor’s nonpayment of obligations during the performance of the contract, the representative is faced with the task of balancing the Government’s interests in proceeding with the contract, against possible harm to the surety. The court in Argonaut stated that: “During the performance of the contract, the Government has a duty to exercise its discretion responsibly and to consider the surety’s interest in conjunction with other problems encountered in the administration of the contract.” 434 F.2d at 1368, 193 Ct.Cl. at 495. The key question then becomes whether the Navy’s contracting officer did in fact responsibly exercise the discretion given him.

In Argonaut the court found that there was no abuse of discretion on the part of the Government’s contracting officer. In so holding, the court noted several facts that seemed to indicate the contracting officer had exercised reasonable discretion in not terminating the performing contractor merely because the surety had notified it of some outstanding debts the contractor had not paid. Initially, the contracting officer noted, at the time termination was requested, the progress charts indicated that the contractor was progressing satisfactorily. In addition, the payment that was made over the surety’s objection was paid to an assignee of the contractor where it was put in trust to pay the obligations being generated under that contract. The money actually went to pay the laborers and materialmen. Finally, the court found that it would have cost more and taken longer for the Government to terminate the existing contractor and then substitute a new one. It was therefore clearly within the interests of the Government not to terminate the contractor, and since the money paid over the surety’s objection did go to pay the subcontractors, the surety was not appreciably injured when the payment was made.

The facts in this case do not present as clear a basis on which to test a possible abuse of discretion. In fact, although the parties are both moving for some type of summary judgment, there seems to be a paucity of facts sufficient to measure the discretion exercised by the Navy’s contracting officer. For example, the plaintiff contends the Navy knew on December 3, 1965, when the surety voiced its objection to the payment, that the contractor had not paid over $100,000 in labor and material bills. The Navy denies they were told anything other than that this contractor had not paid “some” bills, which standing alone is not uncommon and no reason to terminate the whole contract which at that point was 85-95% completed. The truth of the matter on this point bears heavily on just what evidence the contracting officer had before him when he decided to make the progress payment now at issue. There is also considerable confusion as to the actual progress the contractor was making as of December 3. In the telegram sent by the Navy representative on that date to the surety, it was stated: “The work at the site is progressing and it is expected that the work will be completed shortly.” Nevertheless, by January 10, 1966, the Navy was sending a letter to the contractor stating that “[y]our daily progress is unsatisfactory” while referring to the expiration of a contract deadline which the contractor missed as far back as October of 1965. Clearly, the Navy was having difficulties with the contractor before the notification by the surety on December 3, which was not the case under the' Argonaut facts.

However, even if the court would allow evidence to be received which clearly proved that the contracting officer abused his discretion in making the progress payment after being given notice by the surety of the contractor’s default in paying the subcontractors, we would be powerless under the authorities cited, supra, to require that the Government make a payment of $29,000 to the surety when it is clear that the surety has not paid these subcontractors in full. Accordingly, plaintiffs’ motion for summary judgment for the December 8, 1965 progress payment is denied and defendant’s cross-motion is granted. In consideration, however, of the general equitable obligation that the Government owes, under proper circumstances, to the subcontractors who are the laborers and materialmen, the court is willing to entertain a motion for rehearing and new trial (Rule 151) and relief from this judgment as to the progress payment (Rule 152) if within 60 days from entry of this judgment the surety shows to the court that it has paid the subcontractors in full. In that event, we will reopen the case and remand it to the Trial Division for the taking of proof on the issue of proper exercise of discretion by the contracting officer.

CONCLUSION

To recapitulate, defendant’s motion to dismiss all plaintiffs but the surety, United States Fidelity & Guaranty Co., is granted.

Defendant’s motion for summary judgment is granted as to the $4,445.22 in net unexpended contract funds still held by it. Plaintiffs’ cross-motion for partial summary judgment is denied as to this issue.

Defendant’s motion for summary judgment is granted as to its right to have collected a tax obligation of the prime contractor, Premier Contractors, Inc., in the sum of $7,946.78 out of unexpended contract funds.

As to the plaintiffs’ motion for summary judgment on the claim to the December 8, 1965 progress payment of $29,000 made by defendant to the prime contractor, Premier, after notice from the surety, the said motion is denied and defendant’s cross-motion is granted. Plaintiffs are given 60 days from entry of judgment within which time to move the court pursuant to Rules 151 and 152 for rehearing, new trial, and relief from judgment, if it can be shown to the satisfaction of the court that the surety has paid all subcontractors in full.

Defendant’s contingent cross-claim against the third-party prime contractor, Premier, is denied without prejudice. If the case is reopened under the circumstances outlined in the paragraph above defendant may renew its cross-claim if it desires to do so.

NICHOLS, Judge

(concurring):

With respect to the disposition of the unexpended $4,445 balance and the defendant’s right to collect a tax obligation out of retained funds, ahead of other creditors, I agree with the court and join in its opinion. As to the $29,000 payment, T think no trial should be necessary if the surety pays all claims of labor and materialmen. This court in Argonaut Ins. Co. v. United States, 434 F.2d 1362, 193 Ct.Cl. 483 (1970) held that if asked to make a progress payment to a shaky contractor over a surety’s protest, the Government’s duty was to exercise discretion responsibly. The undisputed facts are that in paying out the $29,000, defendant denied it had any discretion. Its position was, so long as the work progressed, whether labor and materialmen were paid was not its concern. By implication, whether unpaid labor and materialmen were likely to continue working, was not its concern either. It is undisputed that not a cent of the $29,000 went to labor and materialmen, as defendant must have anticipated it would not. It seems futile to me to inquire whether defendant exercised its discretion responsibly when it did not purport to be exercising discretion at all. If I saw any lawful way to get the $29,000 directly into the hands of unpaid labor and materialmen, I would get it there now. The court is not offering the surety much of a deal: if it pays a much larger sum than $29,000 it gets a trial which may or may not obtain it $29,000 and no more. The court postulates that this surety, its officers and attorneys, are exceedingly fond of litigation or else attach large value to the establishment of a principle. If we held, as I think we should, that the $29,000 payment was on its face improper, we might entertain more optimism as to the money’s going the right place, for principle would not have such heavy odds running against it.

DAVIS, Judge

(dissenting in part):

The only aspect of this ease in which I disagree with the court is as to the disposition of the $4,445.22 in net unexpended contract funds still held by the Government. Although of the view (which I join) that the subcontractors are entitled to that money, the majority sees no proper way in which this court can effectuate that conclusion. Agreeing that the subcontractors cannot on their own sue the United States directly, I would use the mechanism of our third-party practice, in the circumstances of this case, to give judgments to the various subcontractors in proper proportions. Our Rule 41(a)(1) provides :

The court, on its own motion or on the motion of a party, may notify any person with legal capacity to sue and be sued and who appears to have an interest in the subject matter of any pending suit to appear as a party and assert his interest therein.

To the extent of the residue of $4,445.-22, the subcontractors plainly “have an interest in the subject matter” of this suit, since they claim, and are found, to have the right to that money, and they wish it paid to them. As I understand the rule, the defendant could have moved that this notice be given them. Defendant has not done that — indeed, it has fought all along to keep the subcontractors entirely out of the case — but the court can do so on its own motion. The purpose of the third-party practice is to clear up in one litigation, so far as possible, monetary claims against the Government. Multiple or repetitious litigation is to be avoided where feasible. We can implement that purpose by treating the subcontractor plaintiffs, who are already here through their petition, as having been noticed in by the court under the rule, and as each having demanded his share of the $4,445.22. I would follow that route instead of dismissing them entirely from this case — a path which leaves them wholly dependent upon the future good-will of the defendant (either in paying out the money itself, or in bringing an interpleader suit, as the court recommends).

      . 40 U.S.C. §§ 270a-270e (1964).

      . Pearlman v. Reliance Ins. Co., 371 U.S. 132, 83 S.Ct. 232, 9 L.Ed.2d 190 (1982); United States v. Munsey Trust Co., 332 U.S. 234, 67 S.Ct. 1599, 91 L.Ed. 2022 (1947); Henningsen v. United States Fidelity & Guar. Co., 208 U.S. 404, 28 S.Ct. 389, 52 L.Ed. 547 (1908); Prairie State Bank v. United States, 164 U.S. 227, 17 S.Ct. 142, 41 L.Ed. 412 (1896); In re Dutcher Constr. Corp., 378 F.2d 866 (2d Cir. 1967); Barrett v. United States, 367 F.2d 834, 177 Ct.Cl. 380 (1966); National Sur. Corp. v. United States, 133 F.Supp. 381, 132 Ct.Cl. 724 cert. denied, 350 U.S. 902, 76 S.Ct. 181, 100 L.Ed. 793 (1955).

      . Firemen’s Fund Ins. Co. v. United States, 421 F.2d 706, 190 Ct.Cl. 804 (1970); Home Indem. Co. v. United states, 370 F.2d 890, 180 Ct.Cl. 173, (1967).

      . The surety has clearly indicated that it is unwilling to pay the remainder of the subcontractors’ claims (some $40,000) in order to obtain the $4,445.22, and there is no showing, and no reason to believe, that anyone else has a better claim to the residue than the subcontractors.

      . I do not read the rule as limited to persons who could, on their own, sue the United States directly in this court, so long as the noticed person appears to have an interest in the subject matter of the suit and is noticed in by the court on its own motion or at the behest of a proper party.

      . Cf. Bowser, Inc. v. United States, 420 F.2d 1057, 1063, 190 Ct.Cl. 441, 451 (1970) (Davis, J., concurring).


author: LANE, Judge.

text:
    Application of Albert D. SUMMERS and John A. Wagoner.
    Patent Appeal No. 8890.
    United States Court of Customs and Patent Appeals.
    April 19, 1973.

      Fred S. Lockwood (Greist, Lockwood, Greenawalt & Dewey), Chicago, Ill., William H. Magidson, Columbus, Ohio, Howard J. Barnett, Milwaukee, Wis., attorneys of record, for appellants.
    S. Wm. Cochran, Washington, D. C., for Commissioner of Patents; Fred E. McKelvey, Washington, D. C., of counsel.
    Before MARKEY, Chief Judge and RICH, ALMOND, BALDWIN, and LANE, Judges.
   LANE, Judge.

This is an appeal from the decision of the Board of Appeals, adhered to on reconsideration, sustaining the rejections of claims 1-15 of appellants’ application entitled “Lamination of Amylose to Cellulosie Substrate” as unpatentable under 35 U.S.C. § 103. We affirm.

The claims are directed to a method of bonding a preformed amylose film to a cellulosic substrate, such as paper, by wetting either the amylose film or the substrate and laminating under pressure. The resulting laminate is useful as a packaging material.

Claim 1 exemplifies the claims here on appeal and reads as follows:

1. The process of laminating a preformed amylose film to a cellulosic substrate which comprises bringing together a preformed amylose film and a cellulosic substrate in face to face relationship, the contacting surface of at least one of said articles having been wetted with water, and subjecting the resulting element to sufficient pressure of at least about 10 pounds per lineal inch to firmly bond said amylose film to said cellulosic substrate.

The § 103 rejections before us are:

(1) Claims 1, 2, 4 and 5 as obvious from Barger et al. (Barger) taken with Wurzburg et al. (Wurzburg);

(2) Claims 6-9, 11 and 12 as obvious from Barger, Wurzburg and Strawinski; and

(3) Claims 3, 10 and 13-15 as obvious from Barger, Wurzburg, Strawinski and Best et al. (Best).

Wurzburg discloses resilient self-supporting starch films which may be heat-sealed or made adhesive by water-activation. The films find utility, inter alia, in the manufacture of laminates, such as with paper, for packaging material. Wurzburg defines the term “starch” as including “any amylaceous substance” and discloses that such amylaceous films are self-supporting and heat-sealable when compounded in admixture with 50 to 100% based on the weight of the starch of plasticizer (either sorbitol or a mixture of sorbitol and glycerine).

Barger discloses self-supporting films made from amylosic material which is defined as “any mixture of film-forming solids which includes at least 50% by weight of pure amylose or amylose derivatives such as hydroxyethyl amylose, and amylose ethers, esters and anhydrides.” The composition extruded into film contains water and may also contain a plasticizer. The resultant film is described by Barger as “strong, flexible, transparent * * *, potentially water soluble and edible.” Barger also states that “[depending on the ingredients selected, the films can be made water soluble * *

OPINION

The board concluded that it would have been obvious to use the Barger amylosic film for the starch film of Wurzburg and prepare laminates by the claimed process in accordance with the Wurzburg teachings. Appellants strenuously assert that the Barger films, which are the same as appellants’ amylose films, are different from those contemplated by Wurzburg and contend that evidence of record supports that assertion. We do not necessarily disagree with appellants as to the scope of materials encompassed by Wurzburg’s definition of “starch” either in Wurzburg’s contemplation or in that of one skilled in the art reading Wurzburg’s patent specification. Our view is that even if the Barger films are outside the purview of Wurzburg’s definition, one of ordinary skill in the art having the Barger and Wurzburg teachings before him would have found them sufficient to suggest the use of the Barger films in the Wurzburg lamination method. See In re Lintner, 458 F.2d 1013, 59 CCPA-(1972). We have been offered nothing which convinces us to the contrary.

Appellants also urge that there are differences between the Barger and Wurzburg films in actual and potential water solubility. Accepting the existence of such differences, we nevertheless find no teaching in the references which would suggest that the moistening of Barger's films to assist in the preparation of laminates with cellulosic substrates, in the manner disclosed by Wurzburg, would not aeually result in such laminates.

Appellants rely upon affidavit evidence of record as demonstrating the need for the application of both moisture and pressure to produce firmly bonded laminates which include an amylosic layer. We agree with the board and solicitor that the application of sufficient pressure to insure bonding would have been obvious to one of ordinary skill in the art. Given the disclosure in Wurzburg of moistening to effect adhesion, we agree that the process defined in claims 1, 2, 4 and 5 would have been obvious from Barger and Wurzburg. The board correctly sustained rejection (1).

Appellants argue the significance of various limitations in the remaining claims, and the solicitor has carefully explained the manner in which the references would apply under 35 U.S.C. § 103 to those claims. We have considered the various arguments presented, but we are in agreement with the Patent Office position. Once it has been determined that it would have been obvious to manufacture laminates by the method defined in claim 1, we think the prior art as applied clearly establishes the obviousness of the additional limitations imposed in the other claims. The board’s action in sustaining rejections (2) and (3) was also correct.

For the reasons set forth herein, the decision of the Board of Appeals is affirmed.

Affirmed.

      . Serial No. 520,047 filed January 12, 1966.

      . U. S. Patent No. 3,243,308 issued March 29, 1966, on an application filed October 23, 1963.

      . U. S. Patent No. 3,071,485 issued January 1, 1963.

      . U. S. Patent No. 2,867,560 issued January 6, 1959.

      . U. S. Patent No. 3,329,523 issued July 4, 1967, on an application filed June 29, 1964.


author: MARKEY, Chief Judge.

text:
    Application of John Nicholson GARDNER.
    Patent Appeal No. 8923.
    United States Court of Customs and Patent Appeals.
    April 5, 1973.
    Rehearing Denied June 14, 1973.

      Alan D. Lourie, Philadelphia, Pa., of record, for appellant; William A. Smith, Jr., Washington, D. C., of counsel.
    S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents; Jack E. Armore, Washington, D. C., of counsel.
    Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
   MARKEY, Chief Judge.

This appeal is from the decision of the Board of Appeals, affirming the rejection under the first paragraph of 35 U.S.C. § 112 of claim 2 of appellant’s application, serial No. 679,670, filed November 1, 1967, for “Guanidinoalkylbenzodioxan Derivatives.” We reverse.

THE INVENTION

The application is directed to a class of guanidinoalkyl-l:4-benzodioxan compounds which are useful as antihypertensive agents. Claim 2 reads:

2. A compound selected from the group consisting of a base of the formula:
and a nontoxic, pharmaceutically acceptable acid addition salt thereof, wherein Rr is a member of the group consisting of hydrogen, methyl, methoxy, chlorine and bromine.

THE REJECTION

The examiner’s rejection under 35 U. S.C. § 112 was couched in general terms, the claim being described as “too broad” in view of the lack of support in the specification for all the compounds encompassed by the substituent group Ri and the floating position thereof. Express mention was made in the Answer of the lack of a “showing that all of the compounds * * * would possess the asserted utility.”

The board stated:

We think the Examiner has made it clear, considering his various statements in context, that his rejection is based upon the requirements of the first paragraph of 35 U.S.C. 112 as to the “written description of the invention” and “the manner of - using it.”

So interpreted, the rejection was sustained “for the reasons set forth in our decision in the parent case Serial No. 251,471 * * The fact that the present claim was considerably reduced in scope from the parent claims was not felt to render the prior reasons inapplicable. In this earlier opinion, made of record here, the basis for affirming the 112 rejection was applicant’s failure to establish that the substituents on the basic guanidinoalkyl-l:4-benzodioxan nucleus had no profound effect on the antihypertensive activity of the compounds. Certain disclosure in that specification was deemed adequate support for the examiner’s doubts as to the universal applicability of the asserted utility.

OPINION

We approach the rejection as structured by the board and argued by the solicitor. Accordingly, the issues lie in whether the separate but' related description and how-to-use requirements of the first paragraph of 35 U.S.C. § 112 have been satisfied.

Claim 2 covers a total of 17 compounds and in fact delineates a subgenus of the broad class of guanidinoalkyl1:4-benzodioxan derivatives disclosed in the application. Only three of the five possible Ri substituents are specifically exemplified and substitution in these examples is always in the 7-position of the benzodioxan nucleus. As pointed out by the solicitor at oral hearing, no explicit language is found in the main body of the specification corresponding to the subgenus defined by the claim.

But we see no need for either additional representative examples or more definite language to satisfy the description requirement. Claim 2, which apparently was an original claim, in itself constituted a description in the original disclosure equivalent in scope and identical in language to the total subject matter now being claimed. See In re Anderson, 471 F.2d 1237 (CCPA 1973). Nothing more is necessary for compliance with the description requirement of the first paragraph of 35 U.S.C. § 112.

The major question centers around the sufficiency of the disclosure with respect to the how-to-use requirement. The primary contention of the Patent Office is that reasonable basis exists for doubting that all of the compounds encompassed by claim 2 have the asserted utility, i. e. antihypertensive activity. As in the parent case, appellant’s own disclosure is said to provide the basis for doubt.

Adequate support for the Office’s assertions is an essential requirement for sustaining his rejection under In re Marzocchi, 439 F.2d 220, 58 CCPA 1069 (1971) and In re Cook, 439 F.2d 730, 58 CCPA 1049 (1971). If such support be sufficient, appellant’s failure to provide rebuttal evidence would require affirmance. In re Fouche, 439 F.2d 1237, 58 CCPA 1086 (1971).

The case thus turns on the pertinent disclosures in the specification. The first statements concerning utility read:

The generic group of compounds of this invention is characterized by having the basic guanidinoalkyl-l,4-benzodioxan nucleus which imparts anti-hypertensive activity to such compounds. The substituents on the basic structure may be any of those common to the art, such as those disclosed in U. S. Patent No. 2,979,511 without changing the qualitative hypotensive activity of these compounds.
The compounds of this generic invention demonstrate antihypertensive activity by blockage of adrenergic nerve after intravenous administration of doses of 5-25 mg./kg. in the standard ehloralose anesthecized [sic] dog procedure * * * Further quantitative properties of this group of compounds will be elaborated on hereafter.

The mentioned quantitative properties are set forth in this paragraph which has become the focal point of the rejection:

The new l:4-benzodioxan derivatives of the invention have been found to exhibit varied pharmacological activity in the animal body. Thus compounds falling within the definition of Formula 1 have been found to exercise pharmacological actions on the peripheral nervous system, particularly on the sympathetic and parasympathetic nervous systems. For instance, some of the compounds such as 2-1'— guanidinoethyl-1:4-benzodioxan have very pronounced adrenergic nerve blocking activity, some such as 5:8-dimethyl - 2' - guanidinomethyl -1:4-benzodioxan have pronounced ganglion blocking activity and antihistaminic activity. All have these activities to a certain degree.

That variations in the substitutents on the basic guanidinoalkyl-1:4-benzodioxan nucleus result in diverse pharmacological activities formed the basis for the Office’s position that these substituents may well be critical to the asserted antihypertensive activity. Statements that “some of the compounds have very pronounced adrenergic nerve blocking activity” and “some . have pronounced ganglion blocking activity and anithistaminic activity” were interpreted as indications that different substituents lead not just to quantitatively distinguishable effects but to qualitative differences. The fact that “all” are said to have “these activities to a certain degree” was not believed to require a conclusion of universal usefulness as antihypertensive agents, the possibility of zero effectiveness still existing.

The rejection under consideration, as we have said, centers on the how-to-use requirement of § 112. It is not based on the utility requirement of § 101. But as this court pointed out in Fouche, absence of the asserted utility may properly lead to a rejection under either provision. Hence the only matter to be determined is the reasonableness of the Patent Office’s doubts. The standard to be applied, however, is just that — the absence of utility. As we said in Fouche, there is no requirement in § 112 that all of the claimed compounds have the same degree of utility. Some antihypertensive activity coupled with knowledge as to the employment of this activity is all that is necessary to satisfy the how-to-use requirement.

Considering the utility disclosure as a whole, we can find no reasonable basis for concluding that the compounds encompassed by claim 2 would not have at least some antihypertensive activity. As pointed out by appellant, the present specification contains an augmented disclosure over the parent case. The positive statements at the beginning of the specification that variances in the substituents will not qualitatively affect the asserted activity cannot be ignored. Nor is the later disclosure of varied activities inconsistent with the existence of basic antihypertensive activity. Whether the additionally described ganglion blocking activity is merely another mechanism for achieving the antihypertensive effect, as argued by appellant, or is a distinct activity is immaterial. We think the only reasonable interpretation that can be given to the concluding sentence of the controversial paragraph is that all of the compounds possess each of the aforementioned activities, although in varying degrees. A zero level of antihypertensive effectiveness is neither realistic nor consistent with the rest of the disclosure, considering particularly the specific dosages described for the compounds in general at the beginning of the specification.

The Patent Office having shown inadequate support for its doubts as to the asserted utility, the decision of the board must be reversed.

Reversed.

      . A continuation-in-part of serial No. 251,471, filed January 15, 1968, now TJ.S. 3,360,529.


author: GODBOLD, Circuit Judge:

text:
    GFI COMPUTER INDUSTRIES, INC., Plaintiff-Appellee, v. Errol D. FRY et al., Defendants-Appellants.
    No. 72-2269.
    United States Court of Appeals, Fifth Circuit.
    March 16, 1973.
    As Modified on Denial of Rehearing June 11, 1973.

      Jay M. Vogelson, Carl Generes, Dallas, Tex., for defendants-appellants.
    Ray Besing, Gerald P. Urbach, Dallas, Tex., for plaintiff-appellee.
    Carl Abramson, Dallas, Tex., for other interested parties.
    Before JONES, GODBOLD and INGRAHAM, Circuit Judges.
   GODBOLD, Circuit Judge:

Appellant Fry was sued by GFI, a corporation of which he had been an officer and director. A default judgment on liability was entered against him by the court, and a jury then assessed damages of $471,803. We reverse and remand.

Fry was a resident of Dallas, Texas, from the filing of suit in December 1970 until around April 1971, when he removed to Spanish Wells, a small island in the Bahamas some 1500 miles distant from Dallas, the situs of the lawsuit.

The default judgment on liability was predicated upon Fry’s failure to comply with an order of court entered April 12, 1972, directing him, (1) to appear at the trial of the case in Dallas five days thereafter, (2) to remain for the balance of the trial or until excused by the court, (3) to submit himself as a witness in the case, and (4) to produce all documents previously requested by plaintiff in a request filed under Rule 34, Fed.R.Civ.P. The case must be reversed and remanded because the trial judge, who had just taken over the case from another judge, predicated the April 12 order upon an erroneous impression that defendant had failed to discharge the obligations placed upon him by the plaintiff’s discovery efforts.

Plaintiff had pursued three routes to discover from Fry — the taking of his deposition under Rule 26, interrogatories under Rule 33, and a request for production of documents under Rule 34. On March 2, 1972, plaintiff filed notice that it would take Fry’s deposition on March 3, and that Fry produce documents at the time and place of taking; which was the offices of plaintiff’s counsel in Dallas. In fact the deposition was never taken, but the responsibility cannot be charged to Fry. Anticipating that Fry would object, plaintiff contemporaneously filed a motion to expedite the disposition of any objections. Fry promptly filed a request for a protective order, and on March 6 the judge originally handling the case granted a protective order requiring that the deposition be taken and the documents produced by Fry at his place of residence, Spanish Wells, Bahamas, with each party to bear his own expenses, and also ordered the deposition be given forthwith. After abortive negotiations in which plaintiff attempted to have the place of taking moved by agreement to a more convenient place, plaintiff elected to forego the expense and trouble of a deposition in the Bahamas and to employ interrogatories instead.

Plaintiff served interrogatories on March 15, pursuant to Rule 33. Under that rule Fry was not required to answer until April 14, four days after trial of the case was scheduled to commence. No order was ever entered shortening the time for answer to less than 30 days, as permitted by Rule 33. On April 4 plaintiff moved that Fry be compelled to answer by April 6. The record does not disclose that the court ever acted on the motion; nevertheless, on April 6 Fry’s answers were filed.

Meanwhile, on March 13, in spite of the earlier protective order requiring that production by Fry of his records should only take place in the Bahamas, plaintiff filed a Rule 34 request that Fry produce his records in Dallas on March 30 for inspection, examination and copying. Fry did not produce on March 30. The protective order previously granted in response to plaintiff’s Rule 26 discovery was not necessarily dispositive of whether Fry would be required to produce in Dallas under Rule 34, but it was at least persuasive authority that defendant was not required to bring his records 1500 miles to Dallas (and at a date before expiration of the time allowed him for filing objections). Obviously, his first objection would have been that the court already had judicially determined that he was protected against having to produce his records at any place except at his residence in the Bahamas, and that no change in circumstances had been shown other than plaintiff’s election to forego the expense and trouble of journeying to the Caribbean.

Plaintiff’s remedy for incomplete or otherwise objectionable answers to interrogatories, and for failure to produce pursuant to a Rule 34 request, was to file a motion under Rule 37(a) for an order requiring defendant to answer and to produce documents for inspection. If such an order were issued and defendant failed to comply, the court could then invoke sanctions under Rule 37(b). On April 10, the date on which the trial was set, plaintiff had no viable Rule 37(a) motion before the court. As we have pointed out, plaintiff had filed a Rule 37(a) motion on April 4, asking that defendant’s time for answering interrogatories be shortened and that defendant be directed to file his answers on or before April 6. That motion is not shown by the record ever to have been acted upon, nevertheless defendant filed answers on April 6. The motion, directed to time of filing and not made the subject of an order requiring defendant to answer, could not serve to put defendant in default at a subsequent time based on alleged insufficiency of his answers as filed. When the case was called defendant did not appear. A jury was selected, impaneled and sworn, and court was recessed to April 12.

On April 11 plaintiff filed a motion, overleaping 37(a) and asking instead for application of 37(b) sanctions.

When court convened on April 12, after a colloquy with counsel and testimony from Fry’s counsel, the court referred to Fry’s “failure to comply with discovery,” and announced that Fry must “make himself available and be here with his documents” on April 17 or a default judgment would be entered against him. Later that day the court entered a formal order finding that Fry had wilfully refused to comply with discovery obligations with respect to both answers to interrogatories and production of documents, had wilfully evaded giving evidence, had failed to appear for trial, and was beyond the reach of process of the court. The order directed that default judgment be entered unless Fry complied with the four conditions set out above in the third paragraph of this opinion.

Plaintiff began putting on its case, and testimony was taken on that day and the two days following.

Fry did not appear on April 17, nor were his documents produced. His counsel moved the court to reconsider the April 12 order on the ground, inter alia, that no law or rule required a civil defendant to be present at trial. In response the court stated that absent default in discovery by Fry it could not require his presence, but that Fry was in default of his obligations on April 12, and the order that he appear and produce documents and testify in the ease was a concession permitting him to cure his default rather than a penalty. The court denied defendant’s motion, entered the default judgment on liability, the plaintiff then put on its evidence of damages, and the jury returned a verdict in the amount of $471,803.

It is clear that there was a breakdown in discovery which the judge newly on the scene feared would jeopardize the trial. But the breakdown was not the fault of Fry alone. As we have pointed out, plaintiff had voluntarily abandoned the taking of Fry’s deposition and production of documents in the Bahamas when the court’s protective order was unsatisfactory to plaintiff, had secured no order shortening the time for answering interrogatories, had then sought to avoid the impact of the protective order by seeking production of documents in Dallas under a different rule, had failed to protect its position by pursuing a remedy until after the commencement of trial and at a time when defendant’s allowable time of 30 days had not expired, and then by proceeding directly for sanctions and not for an order requiring defendant to answer and to produce. Additionally, it must be noted that before the pretrial, held on February 12, Fry had availed himself of some discovery, but GFI of none. Around the time of pretrial both sides employed additional trial counsel. Though the trial date set at pretrial was less than 60 days away, plaintiff waited at least two weeks to February 28 (and possibly to March 2) to even begin to move on discovery.

Plaintiff claims that there were extra-judicial agreements between counsel with which defendant did not comply. However, in material respects the testimony of counsel on this matter is in conflict. Additionally, the court made no finding regarding agreements of counsel or even indicated that he based his conclusions on failure to honor extra-judicial agreements. The impression conveyed by the record is that, during plaintiff’s last minute scramble to effectuate discovery, defendant’s counsel, in the normal and informal manner often employed by lawyers in like circumstances, made an effort to cooperate with plaintiff’s counsel rather than to stand on strict compliance with the rules, but that Fry was uncooperative, and even overbearing, with his own counsel. Short of enforceable agreements between counsel and authorized orders of the court compelling Fry to depart from the Rules, he was not in default for standing on the Rules or for taking a hardnosed position. He was not required to make smooth the pathway of an adversary who had waited until late in the day to discover — from a defendant residing 1500 miles away and in another country — matters which the adversary considered essential to its case.

This Circuit permits the drastic sanction of dismissal or judgment by default only in extreme situations where there is a clear record of contumacious conduct. Durham v. Florida East Coast Ry. Co., 385 F.2d 366 (5th Cir. 1967); Flaksa v. Little River Marine Construction Co., 389 F.2d 885 (5th Cir. 1968). The April 12 order, issued under an erroneous view of the facts, should not be the predicate for the extreme sanction imposed in this instance.

' The order of April 12 was incorrect for a second reason as well. As appellant points out and as the trial judge recognized, the court had no power to force a civil defendant outside its subpoena jurisdiction to appear personally at the trial and there submit to examination, not to speak of remaining personally present throughout trial unless excused. The theory that the court was only benefitting Fry by ordering him to do what he could not otherwise be required to do, as a condition to avoiding a default judgment to be imposed for his earlier defaults, falls with the determination that the court’s basis for entering the order in the first instance was a misapprehension of the relative responsibilities of the parties for the breakdown in discovery.

The case must be, and it is, reversed and remanded.

      . Apparently, earlier served on Fry’s counsel on February 28.

      . The request was for a default judgment, or that Fry be barred from defending against plaintiff's claim, or barred from introducing evidence, or that his pleadings be stricken.

      . Not all was recalcitrance from Fry’s side of tlie table. In February, and again in April, defendant entered into stipulations with plaintiff covering numerous facts and the authentication of nearly 200 documents.
      An argument can be constructed that Fry was in default on April 11 or 12. It goes as follows: that he had not properly answered the interrogatories, that by answering in less than 30 days he had waived his right to later file objections within the 30-day period, that the court treated the April 11 motion and the April 12 hearing as though under Rule 37(a), and that the April 12 order was an order requiring compliance by Fry but in a form different than giving additional answers to interrogatories. Even if the proceedings are so regarded, we are unable to say that the judge would have issued his order of April 12 on the sole basis of insufficient answers to interrogatories, because at all times he coupled the duty to answer them and the duty to produce documents, and with respect to the latter Fry was not in default on April 12.

      . Also to be noted is that on April 6, GFI filed a motion for continuance of the trial, on two grounds. One was that Fry had failed to answer interrogatories, and that the answers were highly material since it was “impractical to depose Fry in the Bahamas.” As previously pointed out Fry’s answers were filed that same day, April 6. The other ground was that plaintiff’s chief witness was ill, could not appear at trial, and plaintiff had not taken his deposition either. On April 10, when the case was called for trial, this motion for continuance was denied.