author: SIMPSON, Circuit Judge:

text:
    CROWN CONSTRUCTION COMPANY, Plaintiff-Appellant, v. OPELIKA MANUFACTURING CORPORATION, Defendant-Third-Party Plaintiff-Appellee, v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND, Third-Party Defendant-Appellant.
    No. 72-2974.
    United States Court of Appeals, Fifth Circuit.
    June 4, 1973.
    Rehearing Denied June 28, 1973.
    Harry L. Griffin, Jr., Smith, Currie & Hancock, Atlanta, Ga., for appellants.
    A. Felton Jenkins, Jr., Kirk McAlpine, Atlanta, Ga., Stanton Schuman, Donald J. Ryan, Chicago, Ill., for appellee.
    Before BELL, GOLDBERG and SIMPSON, Circuit Judges.
   SIMPSON, Circuit Judge:

This appeal is from the district court’s grant of summary judgment on Motion of Opelika Manufacturing Corporation (Opelika) against Crown Construction Company (Crown) and the surety, Fidelity and Deposit Company of Maryland, (F. & D.) on Crown’s bid bond accompanying its low bid of $822,000 to construct two facilities in Georgia for Opelika, 343 F.Supp. 1266.

Crown brought action below against Opelika alleging breach of the construction contract. Opelika counterclaimed against Crown and F. & D. for breach of the same contract. Both parties moved for summary judgment on the question of liability for the respective breaches of contract alleged by the original suit and the counterclaim. The district court denied Crown’s motion for summary judgment and granted Opelika’s motion to affix liability on both Crown and F. & D., directing that judgment be entered against Crown and its surety jointly and severally for $28,000. We affirm the judgment against Crown and modify and affirm as to F. & D.

We summarize the undisputed supportive facts upon which summary judgment was granted. Opelika, through its architect, Robert and Company Associates (Robert), invited Crown and other general contractors to submit bid proposals on forms prepared by the architect for the construction of a bleaching and finishing addition and a new warehouse addition to its sewing and finishing plant located in Hawkinsville, Georgia. At the bid opening on March 2, 1971, Crown’s bid of 822,000 dollars was determined to be the lowest responsible and responsive bid proposal. On March 31, 1971, Robert, acting for Opelika, accepted Crown’s bid proposal by telegram thereby completing the formation of a construction contract with Crown. On or about April 2, 1971, Robert sent a formal construction contract to Crown. On April 13, Crown returned this contract to Robert for the correction of certain technical errors therein. In the meantime, Crown began preparing to perform construction. As part of this preparation Crown inquired of Robert when it could expect to receive the assignment of certain separately let mechanical, fire protection and electrical subcontracts referred to in the contract documents. Robert informed Crown that Opelika had decided not to assign these subcontracts to the general contractor for management but rather had decided to allow the architect to coordinate construction. Crown then, informed Opelika that it would not build the projects without^ assignment of the subcontracts, and Opelika advised Crown it would not assign the subcontracts. No formal contract was ever signed. Subsequently, Opelika entered into a contract with the next lowest bidder, Fiske-Carter Construction Company, for a price of 850,000 dollars.

The district court concluded that the bid proposal clause dealing with the assignment of subcontracts was not ambiguous, holding that under the Georgia jurisprudence generally and expressly under Manget v. Carlton, 1925, 34 Ga. App. 556, 130 S.E. 604, and Cooley v. Moss, 1905, 123 Ga. 707, 51 S.E. 625, “one who ‘agrees to accept’ an obligation cannot expect or require the fulfillment of that obligation from the other party in the absence of the expressed intention of both parties that they are to be mutually obligated.” Citing Lowery Lock Co. v. Wright, 1923, 154 Ga. 867, 115 S.E. 801; Palmer Brick Co. v. Woodward, 1912, 138 Ga. 289, 75 S.E. 480; Ellis v. Dodge Bros., 5 Cir., 246 F. 764, Crown urges that Georgia law does not in these circumstances bar a finding of implied contractual obligations, and that the emphasized clause (note 1 supra) when read in the context of the whole contract obligated Opelika to assign the subcontracts.

We agree with the district court that the “ ‘agreement to accept’ the subcontracts did not in turn obligate the defendant to a required assignment of those subcontracts. This particular phrase of the contract is totally unilateral and not binding on both parties .” The lower court went on to note that applicable cases “infer the principle that one who ‘agrees to accept’ an obligation cannot expect or require the fulfillment of that obligation from the other party in absence of the express intention of both parties that they are to be mutually obligated,” citing Manget, supra.

Crown alternatively contends that the district court should have considered the relevance of Crown’s several discussions with an officer of Robert, the architect, asserting that it was led to believe (or was not corrected in its belief) that the subcontracts would be assigned. Robert had no right to bind Opelika, and in the absence of ambiguity in the contractual terms, such interpretations by Robert would be entirely irrelevant.

Summary judgment was properly granted.

One minor modification is required. F. & D.’s bid bond liability was expressly limited to 2% of Crown’s bid of $822,000, or $16,440. The district court’s award of damages jointly and severally against Crown and F. & D. is modified so as to limit the recovery against F. & D. to $16,440. Fixing Crown’s judgment liability of $28,000, based on the difference between its bid and the next higher bid of $850,000, was proper.

Modified, and as modified, affirmed.

      . The disputed clause is as follows:
      In addition to the above, the undersigned bidder agrees that he will accept assignment from the Owner, of the mechanical, fire protection and electrical subcontracts for management under the General Construction Contract, marked up from the net subcontract price by the following percentages:
      Heating, Ventilating and Air Conditioning Five percent 5%
      Fire Protection Five percent 5%
      Electrical Five percent 5%
      In addition to the above, the undersigned bidder agrees that he will accept the adjustment of mechanical, fire protection and electrical subcontracts on account of work to be added to the Contract, by the following percentages:
      Heating, Ventilating, and Air Conditioning Eight percent 8%
      Fire Protection Eight percent 8%

      Electrical Eight percent 8%

      The basic construction commitment was couched in similar language :
      The undersigned bidder further declares that he will do all the work called for or implied . . . and that he will accept as complete compensation therefor, the sums as listed in the following schedule .

      . Crown also asserts on appeal that if permitted, it would have shown the custom of the trade to be that agreements to accept assignments of subcontracts are treated as mutually binding. Our holding that there is no ambiguity present is the answer to this contention since recourse to usages and customs would be available only to resolve an ambiguity.


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Roman CASEY, aka Melvin Ward, Defendant-Appellant.
    No. 72-3693
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    June 12, 1973.
    Rehearing Denied July 17, 1973.

      Brooks Taylor, Crestview, Fla., for defendant-appellant.
    William J. Schloth, U. S. Atty., J. Reese Franklin, Asst. U. S. Atty., Macon, Ga., for plaintiff-appellee.
    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:

Roman Casey' was indicted and convicted for conspiring to defraud and obtain property from certain pecan growers in a multi-state area. The sole issue on this appeal is whether or not the district court erred in refusing to grant Roman Casey’s motion for a continuance.

Casey was indicted on July 25, 1972. Arraignment was set for November 2, 1972, at which time Casey appeared with his retained counsel, a Mr. Thompson, and entered a plea of not guilty. The trial was set for November 27th and all parties were timely notified.

On the day of trial Mr. Casey employed an attorney for the sole and limited purpose of entering a motion for a continuance. The motion was denied and Mr. Casey proceeded to trial acting as his own counsel. It was admitted that Mr. Thompson, who had originally appeared with Casey, had given him notification that he would not be serving as his counsel on or about November 7, being at least twenty days before trial.

The facts of a particular case determine whether or not the denial of a request for continuance to obtain counsel is a violation of a person’s Sixth Amendment guarantee. Ungar v. Sarafite, 376 U.S. 575, 84 S.Ct. 841, 11 L.Ed. 2d 921 (1964).

We agree with the lower court that Casey had a reasonable time to procure counsel and was financially able to do so. His failure to retain an attorney was properly treated by the court as a waiver of his right to counsel. The freedom to choose one’s counsel may not be used as a device to manipulate or subvert the orderly procedure of the courts or the fair administration of justice. United States v. Terry, 449 F.2d 727 (5th Cir. 1971), and cases cited therein; United States v. Sexton, 473 F.2d 512 (5th Cir. 1973). The grant of a continuance is a question vested in the discretion of the district court, United States v. Hollis, 450 F.2d 1207 (5th Cir. 1971). In the instant case the district court has not abused its discretion.

The judgment of the district court is affirmed.


author: PER CURIAM.

text:
    The COCA-COLA COMPANY, a corporation, Plaintiff-Appellee, v. Jack CAHILL, an Individual, d/b/a Dairy Maid and/or Cahill’s Dairy Maid, Defendant, and Triple “AAA” Company, a corporation, Defendant-Appellant.
    No. 72-1657.
    United States Court of Appeals, Tenth Circuit.
    May 31, 1973.
    See also D.C., 330 F.Supp. 354.
    John B. Ogden, Oklahoma City, Okl., for defendant-appellant.
    Fred G. Stowers, Atlanta, Ga. (Julius It. Lunsford, Jr., Atlanta, Ga., and John W. Swinford, Oklahoma City, Okl., with him on the brief), for plaintiff-appellee.
    Before MURRAH, Circuit Judge, DURFEE, Judge, Court of Claims, and McWILLIAMS, Circuit Judge.

       Sitting by designation.

   PER CURIAM.

This is another of the legion of eases brought by Coca-Cola Company against competing beverage manufacturers for unfair competition and trademark infringement. Triple “AAA” Company produces and markets a soft drink similar in color and taste to Coca-Cola. Jack Cahill, doing business as Cahill’s Dairy Maid, sold the Triple “AAA” beverage to the public under the names “Tacóla” and “Tacola-Cola.” Coca-Cola Company, owner of valid registered trademarks for the brand names “Coca-Cola” and “Coke,” brought suit against Cahill for unfair competition and trademark infringement, alleging that Cahill substituted and “passed off” Triple “AAA” ’s beverage when Coca-Cola was asked for. Triple “AAA” was subsequently made a party defendant. A consent judgment was entered against Ca-hill, and the only contest now is between Coca-Cola and Triple “AAA.” The triable issue is framed by the amended complaint, in which Coca-Cola contends that Triple “AAA” ’s very use of the brand names “Tacóla” and “Tacola-Cola” is deceptive, is unfair competition, and causes confusion with the trademark “Coca-Cola.” Coca-Cola sought appropriate injunctive relief against use of the brand names “Tacóla” and “TacolaCola” in connection with the sale of any beverage.

Jurisdiction is well founded on the Lanham Trade-Mark Act, 15 U.S.C. § 1051, et seq., and 28 U.S.C. § 1338. On the trial of the case the court granted permanent injunctive relief against Triple “AAA” ’s use of the words “Ta-cola” and “Tacola-Cola” based on the finding that the words are confusingly similar to “Coca-Cola,” that users of Coca-Cola would be deceived by their use as beverage names, and that Triple “AAA” ’s marketing of the names constituted trademark infringement and unfair competition.

We agree with the findings and conclusions of the trial court, for the reasons so well stated in its published opinion. See Coca-Cola Company v. Cahill, 350 F.Supp. 1231 (W.D.Okl.1972).


text:
    UNITED STATES of America, Plaintiff and Appellee, v. Thomas Lee TAYLOR, Defendant and Appellant.
    No. 72-1854.
    United States Court of Appeals, Ninth Circuit.
    June 6, 1973.
    Rehearing Denied July 24, 1973.
    Martha Goldin, Atty. (argued), Alan Saltzman, Saltzman & Goldin, Hollywood, Cal., for defendant and appellant.
    Michael C. Solner, Asst. U. S. Atty. (argued), William D. Keller, U. S. Atty., Eric A. Nobles, Lawrence W. Campbell, Asst. U. S. Attys., Los Angeles, Cal., for plaintiff and appellee.
    Before CHAMBERS and HUFSTEDLER, Circuit Judges, and EAST, District Judge.

       The Honorable William G. East, Senior District Judge of District of Oregon, sitting by designation.

   OPINION

PER CURIAM:

The judgment of conviction in this stolen credit card case is reversed.

The defendant is obviously guilty of something, but the lapse of time (over two years after the card was mailed) is just too great a lapse of time, without more, to convict him of having stolen it from the mails or of possessing it knowing it to be stolen. Of course, we do not intend to impair any of our cases on the inferences that can be drawn from the possession of recently stolen property.

This is a case that belonged on the state side of the street. Unless the government now has something more in the way of evidence to offer, the indictment should be dismissed.


text:
    Clyde R. CHURCH and Mrs. Rosie M. Church, Plaintiffs-Appellants, v. Aldon COCHRAN, Defendant-Appellee.
    No. 72-3046.
    United States Court of Appeals, Fifth Circuit.
    June 20, 1973.
    Rehearing Denied July 12, 1973.
    C. James Jessee, Jr., Earnest H. DeLong, Jr., Atlanta, Ga., for plaintiffs-appellants.
    Warner S. Currie, J. Alexander Porter, Atlanta, Ga., for defendant-appellee.
    Before BELL, GOLDBERG and SIMPSON, Circuit Judges.
   PER CURIAM:

Plaintiff, Clyde R. Church, brought this diversity suit against defendant, Al-don Cochran, for damages suffered when defendant’s automobile allegedly struck plaintiff while he was walking in an A & P parking lot in McCaysville, Georgia. Following a full trial, the jury found for the defendant. Plaintiff appeals on several grounds. We affirm.

We have reviewed the record and we find that although the evidence was conflicting there was sufficient evidence to support the verdict and therefore it was not error for the district court to refuse to set aside the verdict and grant a new trial. See Boeing Co. v. Shipman, 5 Cir. 1969, 411 F.2d 365. The trial court charge — which instructed that the traffic signs and customs in the parking lot could be considered and that both the driver and the pedestrian owed each other a duty of care — adequately apprised the jury of what appears to be a somewhat unsettled area of Georgia law. Plaintiff’s contention that the district court should have charged that the driver owed the pedestrian a greater duty of care rather than that they simply both owed a duty is not squarely supported by the former cases and we believe that the charge as a whole, particularly that part which permitted the jury to consider the customary traffic pattern of the lot, was clear enough that had the jury believed the plaintiff or disbelieved the defendant (who claimed, inter alia, that he wasn’t sure he even struck the plaintiff), the verdict would have so reflected.

Finally, we find that the court properly excluded the defendant’s remark at the scene of the accident to the effect that he was covered by insurance. The remark is hardly an admission of negligence and the potential prejudice flowing from the admission to the jury of such a statement far outweighs whatever probative value, if any, it might have.

Affirmed.


text:
    Sam NAMY and Fatima Namy, his wife, Plaintiffs-Appellants, v. GENERAL TIRE & RUBBER COMPANY, an Ohio corporation, Defendant-Appellee.
    No. 72-2001.
    United States Court of Appeals, Sixth Circuit.
    Argued April 17, 1973.
    Decided June 8, 1973.
    Norman P. Ochs, Detroit, Mich., on brief, for plaintiffs-appellants.
    Robert R. Rekiel, Detroit, Mich., for defendant-appellee; Davidson, Gotshall, Kohl, Nelson, Secrest, Wardle & Lynch, John R. Secrest, Detroit, Mich., on brief.
    Before EDWARDS, PECK and KENT, Circuit Judges.

       Judge Kent participated in the decision in this case and concurred in this opinion prior to his death on May 28,1973.

   PER CURIAM.

This case was tried before a jury in the United States District Court for the Eastern District of Michigan. At the end of plaintiffs’ proofs, on defendant’s motion, the District Judge directed a verdict against plaintiffs, holding that Mrs. Namy’s proofs of negligent injury were too speculative to provide a basis for submission to the jury. We reverse.

At trial plaintiff, Mrs. Namy, testified, albeit in somewhat broken English, that she stopped at the General Tire Store at Thirteen Mile Road and Woodward Avenue in Royal Oak, Michigan and purchased three tires and had them installed and that thereafter she drove two or three blocks on Woodward Avenue when the ear turned around three times and she was thrown forward, hitting her chest on the steering wheel. She testified in effect that the left rear wheel had' fallen off her car and was in the middle of Woodward Avenue. Her testimony continues:

Q. What did you do then, Mrs. Namy?
A. He take me, that boy — I says, please, Honey, I can’t walk. Just take me to General Tire because he just put me tire right on, you know. He drive me, that boy, over there to manager. He see me. He see me, you know, just different, you know person. He says, Mrs. Namy, what happened? I just got — I said, you know —he said, what’s the matter? You got accident? I say worse than accident. He say, what happened?
I say, one of my tire, you know, no screw, no bolt in it. Nothing. She fall in the middle of Woodward.
Q. You mean there were no screws on the tire ?
A. Nothing, sir.
Q. Nothing.
A. He said, what are you talking about ?
I say, come on look for yourself.
I go over there. Right away, my car, he pulled from me on Woodward. He pulled in the side.
Q. He pulled it up in the median there ?
A. Yes, sir. Policeman and road service.
Q. What happened after they pulled your car away ?
A. Well, he come, you know, manager. Even he ask service man, he say, you know, how you put the car? How tire coming off? He say, I look myself; I no find nothing, you know, in the tire. The tire is off from car.
Q. Did you drive home in that car that night?
A. No, because all bend up, you can’t drive. Manager, he told me, I going to send one of my man; he going to drive you home. I fix your car. — I bring it myself. (Emphasis supplied.)

In addition, we note that the pretrial order entered by the District Judge in this case said as follows:

“III. Stipulation of Facts:
Defendant will stipulate as to jurisdiction that the wheel became loose on that date, that same was repaired.
IV. Issues of Facts Which Remain to Be Litigated.

All other facts must be litigated.” We believe that Mrs. Namy’s testimony, particularly against the background of the stipulation, represented evidence from which the jury could have found that she had testified in effect that the tire which came off was one which she had bought from and had installed by General Tire and that the company had tacitly conceded as much by its actions on inspection and repair of the car.

We take judicial notice that, under the facts of this case, defendant would have been able on the inspection of the car positively to identify its tires by appearance, by trademark, and by identification numbers. The jury could have found that if defendant had not installed the tire which came off Mrs. Namy’s car, it would not have assumed responsibility for supplying repair and transportation services to her. Nor, of course, would it have entered into the pretrial stipulation recited above.

Under the time sequence in this case, the jury had ample evidence from which to infer (if it saw fit to do so) that defendant’s failure to install or tighten the lugs on the left rear wheel was negligence which caused the wheel to come off. Such an inference is well within the Michigan rule as exemplified in Kaminski v. Grand Trunk W. R. Co., 347 Mich. 417, 79 N.W.2d 899 (1956).

The judgment of the District Court is vacated and the case is remanded for new trial.


text:
    Gaines LASHLEY and Gaines Lashley as next friend of his seven minor children, Plaintiffs-Appellants, v. FORD MOTOR COMPANY et al., Defendants-Appellees.
    No. 72-3724.
    United States Court of Appeals, Fifth Circuit.
    May 30, 1973.
    Rehearing Denied June 22, 1973.
    G. Gerald Kunes, G. G. Joseph Kunes, Jr., Seymour Owens, Tifton, Ga., for plaintiffs-appellants.
    F. Thomas Young, Cam U. Young, Valdosta, Ga., for Ford Motor.
    Glenn Whitley, Tifton, Ga., for Richardson Ford Co.
    Before GOLDBERG, AINSWORTH and DYER, Circuit Judges.
   PER CURIAM:

This is a Georgia diversity suit for wrongful death brought by the husband and seven minor children of the deceased against the defendant Ford Motor Company and one of its dealers Richardson Ford Motor Company.

The matter is a products liability case involving a Ford automobile sold by Richardson Ford to Gaines Lashley. His wife Margaret Lashley was driving the car alone when it was involved in an accident, not observed by any eyewitness, which resulted in her death. She was found in a field near the road on which she had been traveling. In the same field was the vehicle. However, the right rear tire, wheel, braking assembly, backing plate and portion of the axle which was broken were found in the road. At the close of the evidence the district court directed a verdict in favor of Richardson Ford but submitted the case to the jury for consideration as against Ford Motor Company. The jury could not agree on a verdict and was discharged, after which the court granted Ford Motor Company’s motion for a directed verdict.

In a detailed and well-reasoned opinion the trial court, 359 F.Supp. 363, correctly held in each instance that a directed verdict was proper. Plaintiffs’ suit was predicated upon allegations of negligence in design and manufacture of the vehicle and on implied warranty of merchantability. The trial judge was correct in his ruling that in Georgia one cannot recover for wrongful death on a theory of breach of implied warranty, either under the Uniform Commercial Code or prior law. See Horne v. Armstrong Products Corporation, 5 Cir., 1969, 416 F.2d 1329.

As to plaintiffs’ allegations that defendant Ford Motor Company was guilty of negligence in design and manufacture, we agree with the district judge that there was no evidence of negligence introduced by plaintiffs sufficient to sustain their burden of proof in this regard. The testimony was unsubstantiated as to what defect, if any, caused the fracture of the axle of the involved vehicle The expert’s opinion that “the overall processing of this axle was improper,” without evidence as to why or in what respect it was improper, is not sufficient, under the circumstances, to warrant acceptance. The court did not rely only on its finding that the design of the rear end was that used by all other passenger car manufacturers, but more on the absence of proof against defendants of any negligence or defect.

In Whitaker v. Harvell-Kilgore Corporation, 5 Cir., 1969, 418 F.2d 1010, 1017-1018, we held that Georgia is not a strict liability state. See also Stovall & Company v. Tate, 124 Ga.App. 605, 614, 184 S.E.2d 834, 840 (1971); Poppell v. Waters, 126 Ga.App. 385, 190 S.E.2d 815, 817 (1972). Thus the burden was on plaintiffs to prove negligence on the part of the defendants which proximately caused the accident.

Under the circumstances, therefore, and because plaintiffs failed to prove their case or offer sufficient evidence to warrant submission to the jury, the directed verdicts against them were proper.

Affirmed.


text:
    Robert MANN, Plaintiff-Appellant, v. Elmer T. KLASSEN, Postmaster General of the United States and George W. Camp, etc., et al., Defendants-Appellees.
    No. 73-1474
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    June 11, 1973.
    Rehearing and Rehearing En Banc Denied Aug. 8, 1973.

      David A. Webster, Atlanta, Ga., for plaintiff-appellant.
    John W. Stokes, Jr., U. S. Atty., Beverly B. Bates, Chamey K. Berger, Asst. U. S. Attys., Atlanta, Ga., for defendants-appellees.
    Before GEWIN, COLEMAN and MORGAN, Circuit Judges.

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

   PER CURIAM:

In this ease, the appellant Robert Mann was discharged from his job as a postal employee in Atlanta, Georgia. After unsuccessfully trying to reverse the discharge decision through the administrative review procedures available to him, he sought judicial relief in federal district court, including reinstatement and backpay. Mann’s basic contention was that the administrative procedures employed in reviewing his claim of wrongful discharge violated both his statutory and constitutional due process rights. The district court granted summary judgment in favor of the defendants-appellees. We have carefully reviewed the briefs and record in this case and are convinced that the district court correctly disposed of this case. A copy of the district court order is attached hereto as Appendix A.

Judgment affirmed.

APPENDIX A

United States District Court Northern District of Georgia Atlanta Division

Robert Mann

versus C.A. No. 16,005

Elmer T. Klassen, et al

Filed: Nov. 16, 1972

ORDER

In this suit for the alleged wrongful discharge of the plaintiff by the Post Office Department, the defendants have filed a motion to dismiss or in the alternative, a motion for summary judgment.

The plaintiff, a former postal employee, brings this suit for “reinstatement and back pay”. By letter dated November 14, 1969, the defendant, George W. Camp, Postmaster of the Atlanta Post Office Division of the United States Post Office Department, notified the plaintiff of proposed adverse action resulting from an investigative report indicating that he (plaintiff) had threatened the life of his supervisor. The postmaster found the charge to be supported by substantial evidence and warranted disciplinary action, namely, the plaintiff’s dismissal from the postal service.

The plaintiff appealed and the matter was heard by a hearing officer appointed for that purpose. The hearing officer found that the plaintiff did not make the alleged threat and that the adverse action of the postmaster was unwarranted. Pursuant to Article X-G5b of the 1968 National Agreement, the postmaster objected to the hearing officer’s findings and the Acting Regional Director reviewed the evidence and finding of facts, concluding that the removal action was warranted and supported by the record.

The plaintiff then appealed to the Post Office Board of Appeals [1968 National Agreement, Article X(H)] and finally, to the Civil Service Board of Appeals. Both of these boards upheld the Acting Regional Director and found that the dismissal was warranted. During the time of the Post Office Board of Appeals action, the plaintiff also instituted an equal employment opportunity complaint, alleging racial discrimination in his removal. This charge was reviewed by the Post Office’s Director of Equal Employment Opportunity, who found no evidence that race was a factor considered in the Regional Director’s decision or in the postmaster’s recommendation of dismissal.

It is clear that the district court does not have the authority to review the facts of the plaintiff’s dismissal, except to inquire as to whether the administrative proceedings, which resulted in his discharge, conformed to the requirements of administrative due process. Vitarelli v. Seaton, 359 U.S. 535, 79 S. Ct. 968, 3 L.Ed.2d 1012 (1959); Charles v. Blount, 430 F.2d 665 (7th Cir. 1970), cert. den. 401 U.S. 909, 91 S.Ct. 870, 27 L.Ed.2d 807; Toohey v. Nitze, 429 F.2d 1332 (9th Cir. 1970); McGhee v. Johnson, 420 F.2d 445 (10th Cir. 1969); West v. Macy, 284 F.Supp. 105 (S.D. Miss.1968) and authorities cited therein.

The plaintiff contends he was not afforded administrative due process in the review by the Regional Director. The provision for review by the Regional Director at thr request of either party does not contemplate a full blown hearing at this level but merely a review of the hearing officer’s findings; see, 1968 National Agreement X5b; X7. There is no requirement for notice, briefs or other additional appellate procedure at this level because it is only a review of the record below upon the filing of an objection.

The defendants submit an affidavit of the Regional Director who reviewed the hearing of the plaintiff. The affidavit states that only the administrative hearing record was used to review the case as set forth in the 1968 National Agreement. No additional evidence was introduced as the plaintiff claims. The plaintiff merely alleges that “[o]n information and belief of the plaintiff, the Post Office Department did submit to the Regional Office of the Post Office Department further argument and possibly documents purporting to substantiate the claims of the Post Office Department”. Such an allegation is not persuasive in light of the affidavit of the Regional Director and the fact that plaintiff’s file is an “open record” (Federal Personnel Manual Part 771, Sub-chapter 1, § 10). Furthermore, the plaintiff appealed with no mention or claim of procedural errors, to either the Post Office Board of Appeals or the Civil Service Board of Appeals, both of which upheld the Regional Director. Bare allegations and conclusions do not establish a denial of due process or arbitrary action. Gadsden v. United States, 100 F.Supp. 455, 199 Ct.Cl. 86 (1951), cert. den. 342 U.S. 856, 72 S.Ct. 83, 96 L.Ed. 645; Watson v. Pace, 101 F.Supp. 477, aff’d, 201 F.2d 713 (D.C.Cir. 1953). The plaintiff received proper notice of all proceedings required by administrative due process and had access at all times to his file. He has not established his allegation that extra evidence was relied upon to uphold his dismissal.

The argument of the plaintiff that he relied, to his detriment, upon statements of postal officials that they would accept the findings of the hearing officer is wholly without merit. The only mention of assurance is made in letters to and from the office of Congressman Fletcher Thompson. Clearly, the congressman had no power to bind the Postal Department by his assurances.

Finally, the plaintiff alleges that he had no opportunity to see his appeal record after the decision of the Acting Regional Director and before his appeal to Board of Appeals and Review. From the record it is apparent that this alleged deprivation was not brought to the attention of the Board. This court is not the proper forum in which to raise this alleged procedural error for the first time. Instead, the plaintiff must pursue his administrative remedy to finality before resorting to the courts for relief of procedural irregularities. Charles v. Blount, supra; Davis v. Nelson, 329 F.2d 840, 847 (9th Cir. 1964).

Therefore, for the foregoing reasons, the defendants’ motion to dismiss or, in the alternative, for summary judgment is hereby granted.

So ordered this the 15 day of November, 1972.

/a/ ALBERT J. HENDERSON, JR. Judge, United States District Court for the Northern District of Georgia


author: GEWIN, Circuit Judge:

text:
    AR-CON BUILDING SPECIALTIES, INC., Plaintiff-Appellee, v. FAMCO, INC., et al., Defendants-Appellants.
    No. 72-3806.
    United States Court of Appeals, Fifth Circuit.
    June 25, 1973.
    Rehearing Denied Aug. 3, 1973.

      J. Edward Thornton, Mobile, Ala., for defendants-appellants.
    Charles J. Fleming, Mobile, Ala., for plaintiff-appellee.
    Before WISDOM, GEWIN and CLARK, Circuit Judges.
   GEWIN, Circuit Judge:

Ar-Con Building Specialties, Inc. (Ar-Con) brought this diversity action in the United States District Court for the Southern District of Alabama seeking to collect a commission it had allegedly earned while acting as sales agent for appellant Famco, Inc. (Famco). Service of process upon Famco, a Mississippi corporation, was accomplished pursuant to one of the Alabama long-arm statutes. After each side had been afforded a full opportunity to present its ease, the district court granted Ar-Con’s motion for a directed verdict. It is from this action by the trial court that Famco appeals. For the reasons developed in the remainder of this opinion, we reverse the judgment of the district court and remand the case for a new trial.

Famco is a Mississippi corporation engaged iff the manufacture of wall panels for use in the construction industry. It employs commissioned sales agents to solicit orders for its products; the agents are independent operators over whom the appellant exercises little control. Upon obtaining an order they submit it to Famco’s headquarters in Jackson, Mississippi for acceptance. If an order is approved, Famco then arranges for the goods sold to be delivered to the purchaser. Famco has made several substantial sales to Alabama purchasers in this fashion, and it employs a number of sales agents to solicit business in Alabama.

On April 29, 1971 Ar-Con, an Alabama corporation, was hired by Famco to be its exclusive sales representative in certain designated counties of Alabama and Mississippi. In the employment contract signed by both parties it was agreed that for each purchase order obtained Ar-Con would earn a commission of ten percent on the gross selling price less freight. The agreement provided that “When Famco is paid in full, your commission is paid in full.” But nowhere in the contract was there any discussion of what was to happen with respect to Ar-Con’s commission if a sale it arranged was not accepted by Famco or for some other reason was never consummated.

Operating under this employment contract, Ar-Con procured a purchaser for some of Famco’s wall panels. The Jordan Construction Company (Jordan), a subcontractor working on the construction of the Albert P. Brewer Developmental Center in Mobile, decided to use Famco’s product in its work on the project. After several rounds of preliminary negotiations among representatives of Famco, Ar-Con, and Jordan, a purchase agreement was finally signed. According to its terms Famco was to furnish at a fixed price the panels required by Jordan in order to complete work on the project. The panels were guaranteed by Famco to be free from defects for at least seven years. In addition Famco agreed to furnish a material supply bond. During the preliminary negotiations Jordan had requested Fameo to agree to obtain, in addition to a material supply bond, a seven year products warranty bond. As initially drafted by Jordan, the purchase agreement required Famco to supply such a bond. But Famco resisted this requirement and ultimately must have prevailed because the final purchase agreement made no mention of a products warranty bond. Jordan was apparently satisfied with nothing more than Famco’s own seven year guarantee of its product. The final clause of the purchase agreement did provide, however, that “This agreement is contingent upon approval by the contractor and architect of the bonds, shop drawings and samples.”

The sale generated by Ar-Con and agreed upon by Famco and_ Jordan ~was never consummated. As yet it has not been determined exactly why the sale was aborted. It is undisputed that the project’s architect, upon whose approval the sale was contingent, refused to authorize the use of Fameo’s panels unless a seven year products warranty bond was furnished. When Famco learned that the architect was insisting upon a products warranty bond, it made efforts to obtain one but was unable to do so. At trial Famco presented evidence in support of its contention that Jordan cancelled the purchase order upon being informed that it was impossible for Famco to obtain the products warranty bond required by the architect. Famco took the position that there was never any question about its ability to obtain the material supply bond specifically required by the purchase agreement. On the other hand Ar-Con contended that upon learning of the architect’s insistence on a products warranty bond Famco promised to obtain one and that the contract was not cancelled until it became apparent that Famco could furnish neither a material supply bond nor a products warranty bond.

In any event in spite of the failure to complete tne sale, Ar-Con demanded its commission from Famco. It took the position that a commission was earned once a ready, willing and able purchaser was found and a purchase agreement reached and that Famco could not defeat the right to a commission by breaching the agreement and failing to complete the sale. When Famco refused to pay on the grounds that under the employment agreement a commission was earned only if the sale was consummated and the purchase price received, this action was initiated.

Before determining whether the district court properly granted a directed verdict in favor of Ar-Con, we must first consider Famco’s contention that the district court never acquired personal jurisdiction over it and accordingly erred in denying its motion to quash service of process. Famco was served in accordance with one of Alabama’s long-arm statutes, Title 7, § 193, Alabama Code 1940 (Recomp.1958). Famco argues that it is not amenable to suit in Alabama because it is not “transacting business” within the state and because the conclusory affidavit filed with the Secretary of State by Ar-Con did not meet the requirements of Title 7, § 193. But Alabama courts have never held that anything more than a conclusory affidavit is required by their long-arm statutes. Furthermore they have frequently held that a foreign corporation “transacts business” within the meaning of the long-arm statutes if it solicits orders for its products within the state, either through agents or independent dealers, warrants the fitness of the products it sells, and then arranges for the products sold to be delivered to the purchasers. At the minimum Famco’s activities in Alabama fall within this definition of “transacting business.” In addition the contracts which gave rise to this suit were made in Alabama. In these circumstances we are confident that Famco is amenable to suit in Alabama under Title 7, § 193 and that the district court correctly denied the motion to quash service of process.

More meritorious is appellant Famco’s contention that the district court erred in granting a directed verdict in favor of Ar-Con. By directing a verdict the trial court in effect decided that under the law applicable to this case and the evidence adduced at trial reasonable minds could arrive at no other conclusion but that Ar-Con was entitled to its commission. It reached this decision in spite of the fact that the sale upon which Ar-Con bases its claim for a commission was never consummated. Famco argues that the trial court’s decision ignores the terms of the employment agreement between the parties. Its position is that under the agreement a commission is earned only if a sale is completed and the purchase price received. In support of its position Famco points to the provision in the contract which states that “When Famco is paid in full, your commission is paid in full.”

But the quoted provision does nothing more than specify the time of payment once a commission has been earned, e. g. when Famco is paid in full. As indicated earlier neither it nor any other provision in the contract addresses the question of what is to be done about Ar-Con’s commission in the event a sale is arranged with a ready, willing and able purchaser but is thwarted by Famco. To answer that question we must turn to the law of the forum state.

Ar-Con refers us to a line of cases in which the Alabama courts have been called upon to resolve disputes between real estate brokers and land owners over commissions. Penney v. Speake is a typical example. A land owner had assigned a price to each one of several pieces of property he owned and then had authorized a real estate broker to sell them. The broker located a purchaser willing to buy on the owner’s terms, but the sale was never consummated because the owner reneged. When the owner refused to pay the commission agreed upon, the broker sued for it. In affirming a judgment for the broker, the Alabama Supreme Court responded to the owner’s contention that a commission was earned only if a sale was completed with these words:

While there is a distinction between contracts by which a broker is employed to procure a purchaser for property and contracts by which he is employed to effect a sale or to sell, the rule in this jurisdiction is that brokers employed under the latter type of contract, as well as those employed under the first-mentioned type, are entitled to their compensation where they have procured a purchaser ready, able and willing to perform the terms specified or agreed upon, notwithstanding no actual transfer takes place because of the refusal of the seller to convey.

In Alabama, then, a real estate broker earns his commission when he finds a purchaser ready, willíñg and able to buy onthe owner’s terms; at that time the sale is treated as constructively consummated insofar as the broker’s right to a commission is concerned.

This rule of law is well-established and has been reaffirmed on numerous occasions. Furthermore it has been applied to an ordinary contract between a commissioned sales agent and his principal such as the one presently before us. For instance in Alabama Fuel & Iron Co. v. Adams Rowe & Norman a coal manufacturer had employed a sales agent to dispose of the entire output of its coal mines. A dispute arose over the agent’s right to commissions on certain sales. In affirming a judgment in favor of the agent, the Alabama Supreme Court quoted the rule applicable to real estate brokers and then said: “We are persuaded the foregoing principle is applicable to the agency contract here considered.” Similarly in (/Barber-Greene Co. v. Gould a sales agent sbught“to“recover its commission on a sale of goods which the purchaser had returned to the seller because they were defective. The Court held that the seller’s default in supplying defective goods could not serve to relieve him of the obligation to compensate the agent for arranging the sale in good faith. A careful reading of these cases inexorably leads us to the conclusion that in Alabama a commissioned^ sales agent is treated no differently than a real estate broker with respect to compensation; once he produces a buyer ready, willing and able to purchase on the seller’s terms, he has jearned ,.a_cj^mission,_and the seller cannot deprive him of it by aborting the sale.

Applying the Alabama rule to the facts of the ease at bar, we are persuaded that the district court erred in directing a verdict for Ar-Con. The evidence presented at trial was by no means so overwhelming as to admit of no other conclusion but that Ar-Con was entitled to the commission. It is true that the purchase agreement between Jordan and Famco is evidence that Ar-Con had found a ready, willing and able purchaser, but the agreement was contingent upon the approval of the project’s architect. Apparently the architect refused to approve the purchase in the absence of a products warranty bond. Although Famco made efforts to obtain such a bond, it was not contractually bound to do so. It had resisted this requirement from the beginning and had successfully prevented its inclusion in the purchase agreement. Famco cannot rightfully be charged with aborting the sale because it was unable to obtain a bond it had never agreed to provide. As long as the architect continued to demand a products warranty bond, Jordan was unable to purchase on Famco’s terms, and the sale could not be completed. At this stage of the case the evidence points overwhelmingly to the conclusion that it was the architect’s insistence upon a products warranty bond, rather than Famco’s inability to provide one, which aborted the sale and deprived Ar-Con of the commission it might have earned.

In reaching its decision, the trial court seems to have been influenced by Ar-Con’s argument that Famco was never able to obtain the supply bond it had promised. But the record evidence is inconclusive on whether or not Famco was able to furnish the supply bond. Moreover it is far from clear, considering, all of the evidence, that this failure, even assuming that it did occur, thwarted the sale. There is strong evidence that even if a supply bond had been furnished the architect nevertheless would not have approved the sale unless a products warranty bond was also furnished. As long as the architect remained adamant in his insistence on a products warranty bond, there was no purchaser ready, willing, and able to buy on Famco’s terms, and Ar-Con had not earned a commission. In these circumstances it would have been more appropriate to direct a verdict in favor of Famco.

Ar-Con argues, however, that the architect’s insistence on a products warranty bond was no real barrier to the sale because he could have been persuaded to waive the requirement. It suggests that the sale foundered before such a waiver could be obtained because Famco was unable to furnish the supply bond it had definitely promised. 'Alternatively Ar-Con takes the position that upon learning of the architect’s intransigence Famco made an additional promise to obtain the warranty bond demanded. Ar-Con in effect contends that in spite of its earlier resistance Famco eventually succumbed to the purchaser’s demands, orally agreed to vary the terms of the purchase agreement, and committed itself to supply a products warranty bond. If any of these contentions are proven, then the sale’s miscarriage could rightfully be attributed to Famco’s failure to keep its commitments, and Ar-Con’s claim to a commission would be valid. Although the record before us lends little support to Ar-Con’s position, it is not our function to resolve these issues in the first instance. The case must be remanded to the district court for a new trial at which Ar-Con will have an opportunity to prove its contentions. If it produces sufficient evidence in support of its contentions to create issues of fact, then the case should be submitted to a jury. Otherwise Ar-Con has no right to a commission and a verdict should be directed in favor of Famco.

Reversed and remanded with directions.

      . Title 7, § 193 Alabama Code 1940 (Recomp.1958).

      . New York Times Co. v. Sullivan, 273 Ala. 656, 144 So.2d 25 (1962), rev’d on other grounds, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1963).

      . King Homes, Inc. v. Roberts, 46 Ala. App. 257, 240 So.2d 679, cert. denied 286 Ala. 736, 240 So.2d 689 (1970). See also King & Hatch v. Southern Pipe and Supply Co., 435 F.2d 43 (5th Cir. 1970); Elkhart Engineering Co. v. Dornier Werke, 343 F.2d 861 (5th Cir. 1965); Orange-Crush Grapico Bottling Co. v. Seven-Up Company, 128 F.Supp. 174 (N.D.Ala.1955), and Boyd v. Warren Paint & Color Co., 254 Ala. 687, 49 So. 2d 559 (1950).

      . Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir. 1969).

      . 256 Ala. 359, 54 So.2d 709 (1951).

      . Id. at 714.

      . Taylor v. Riley, 272 Ala. 690, 133 So. 2d 869 (1961). Accord Terry Realty Co. v. Martin, 220 Ala. 282, 124 So. 901 (1929); De Briere v. Yeend Bros. Realty Co., 204 Ala. 647, 86 So. 528 (1920), and Handley v. Schaffer, 177 Ala. 636, 59 So. 286 (1912).

      . 216 Ala. 403, 113 So. 265 (1927).

      . Id. at 269.

      . 215 Ala. 73, 109 So. 364 (1926).

      . Other jurisdictions have fashioned a ^ similar rule. See generally 3 Am.Jur.2d Agency § 250 (1962) and 1 Corbin on Contracts § 50 (1963).

      . With respect to the claim that the contract was varied by a subsequent parol agreement, Ar-Con would have to offer proof in support of its position in accordance with the requirements of the substantive law of Alabama applicable to changing written contracts by subsequent oral agreement. We do not make the slightest suggestion as to what principles of Alabama contract law may be applicable upon proof of this contention.


author: KILEY, Circuit Judge.

text:
    Patsy RICCIARDI, Plaintiff-Appellant, v. James R. THOMPSON, etc., et al., Defendants-Appellees. UNITED STATES of America, Petitioner-Appellee, v. Patrick RICCIARDI et al., Respondents-Appellants. UNITED STATES of America, Petitioner-Appellee, v. Sean O’CONNOR and Bijou Theatre, Respondents-Appellants.
    Nos. 72-1665, 72-1666 and 72-1677.
    United States Court of Appeals, Seventh Circuit.
    Argued Feb. 14, 1973.
    Decided June 25, 1973.

      Patrick A. Tuite, Melvin B. Lewis, Chicago, Ill., for plaintiffs-appellants.
    James R. Thompson, U. S. Atty., William T. Huyck, Asst. U. S. Atty., Chicago, Ill., John L. Murphy, Donald Feige, Crim.Div., Dept, of Justice, Washington, D. C., for petitioner-appellee.
    Before SWYGERT, Chief Judge, HASTINGS, Senior Circuit Judge, and KILEY, Circuit Judge.
   KILEY, Circuit Judge.

These appeals, all of which arise out of the government’s seizure of allegedly obscene films for use in impending prosecutions of the theater owners for violation of 18 U.S.C. § 1462, present a common challenge to the procedure used to effect the seizures. Although the factual situations are somewhat different, each appeal asserts that the district court’s issuance of a rule to “show cause” why a search warrant should not be issued and an order compelling the appellants to produce in court the offending films for a hearing into the question of probable cause for the issuance of a search warrant, violated the First, Fourth and Fifth Amendments. Because of the common question this court ordered the appeals consolidated. We shall treat them together for convenience in this opinion. We hold that the district court procedure violated appellants’ First Amendment rights and that the district court erred in denying their motions for return of the films.

In the Ricciardi appeal No. 72-1666 and in the O’Connor appeal No. 72-1677 the United States Attorney for the Northern District of Illinois on July 24, 1972 petitioned the district court for an “Order to Show Cause” why a search warrant should not be issued for the seizure of specified films and an order to “appear forthwith before this court and then and there produce said films in their present condition . . . ” for exhibition before the court. In Ricciardi the order stated that a warrant for the seizure of three films, “Deep Throat,” “Vacation in Hot Pants,” and “Kiss This Miss” had already been issued. A photocopy of a dated but unsigned warrant was appended to the order, as was an affidavit by an FBI agent which described certain sexually explicit scenes in the films. The agent asserted that the films were obscene and had been unlawfully transported in interstate commerce. The order in O’Connor was accompanied by a similar affidavit and ordered the production of a film entitled “Ranch Slaves” and several untitled “featurettes.” The appellants in both cases were ordered to appear on the afternoon of service, and did appear with the specified films.

Both Ricciardi and O’Connor (appellants), in response to the show cause order, contended unsuccessfully that the films were protected material under the First Amendment and that the order requiring production violated appellants’ privilege against self-incrimination. After denying these motions, the court ordered an “adversary hearing” with the government to present evidence on the question of probable cause. Hearings were held on July 25, 28 and 31, 1972. The only evidence provided was the agent’s affidavit attached to the show cause order. Based upon the affidavit, the court found that the government had established a prima facie case and shifted the burden to the appellants. The agent did not testify, and the appellants were given no opportunity to cross-examine him on the affidavit until and unless they first consented to have films viewed by the court. Appellants objected to these procedures but ultimately agreed to have the court view the films. The appellants were then permitted to call the agent and cross-examine him.

After the agent testified, the court continued the cause, but ordered the appellants to “retain” possession of the films until further order of the court. No restriction was placed upon the appellants’ right to exhibit the films. On July 31, 1972 the court held that probable cause existed and ordered the warrant issued and the films seized. Federal agents immediately seized the films. The next day appellants moved, pursuant to Rule 41(e) of the Federal Rules of Criminal Procedure, for the return of the films. The court denied the motion. These appeals followed. The films are still in the possession of the government.

Appellants contend, among other things, that they were denied due process because the procedures used by the trial judge lacked sufficient guidelines and rules, denied the protections of the First Amendment by having the burden of proof improperly shifted to them, denied the protections of the Fourth Amendment by the issuance of a warrant on evidence alleged to be insufficient to support a probable cause finding, and denied a fair trial by the improper selection of the trial judge. Because we find that the procedures employed in effecting the seizure and retention of material— which was arguably protected by the First Amendment — were constitutionally infirm, we do not reach all of appellants’ contentions.

Apparently the government was attempting to invoke the New York statutory procedure sustained in Kingsley Books, Inc. v. Brown, 354 U.S. 436, 77 S.Ct. 1325, 1 L.Ed.2d 1469 (1957), when it initiated the show cause proceeding now before us. The State of New York there sought, under the New York obscenity statute, an injunction to restrain the sale of Kingsley’s “booklets.” Attached to the complaint was a sample of the booklets alleged to be obscene. Based upon the complaint and the sample material the court issued a rule requiring Kingsley to show cause why an injunction should not be issued. Kingsley’s prompt response raised the issue of obscenity, and the court, within the time limited by the statute, made a final determination that the books were obscene. That procedure, however, is unworkable in a situation where, as here, the alleged offending material cannot be procured by the government and made available to the court without a seizure.

The district court was misled — by the unlawful show cause procedure initiated by the government — into an anomalous proceeding which denied appellants First Amendment rights.

Appellant Rieciardi properly characterizes the court’s procedure, “the proceedings began with an attempt to seize the films in order to determine whether they might be seized.” The trial court, under the misapprehension — caused by the government’s unconstitutional procedure — that a prior adversary hearing was a constitutional prerequisite to the issuance of the warrant, attempted to devise an appropriate legal method by which to compel the production of the films for the probable cause determination and at the same time avoid seizure without the obscenity hearing prior to the issuance of the warrant. There was no necessity, however, for the court to avoid the customary ex parte probable cause procedure simply because motion picture films were subject of the proposed search and seizure.

The search and seizure sought by the government was for the purpose of prosecution under § 1462. That statute is not an obscenity statute in the sense that various state laws are. There is no federal obscenity statute in that sense. The federal element in § 1462 is the interstate transportation of obscene films. In a prosecution under § 1462, proof of obscenity, absent proof of the unlawful interstate transportation, does not alone support a conviction. The question of obscenity may not even be reached in unsuccessful prosecutions under § 1462.

We recognize, however, the difficulty facing district courts in disposing of applications for warrants to search for and seize motion picture films. There is the need of avoiding the Seylla of interfering with the prosecutorial process necessary in enforcement of § 1462; there is the need of avoiding the Charybdis on the other side of undue inhibition of film owners in the exercise of their First Amendment rights. We condemn the show cause procedure used in the cases before us.

In future cases, the government shall have 24 hours after seizure of the films in which to copy the alleged offending films and in which to return them to the persons from whom they were seized. If the government needs additional time for copying the films, it must, within the 24 hour period make application to the district court for an extension of time, with notice to the owners. Because of the important First Amendment interests involved, no such extension shall be granted except to a specified hour, after an immediate hearing with respect to a good faith showing which justifies the extension. If the court finds the additional time requested by the government to be unreasonable in light of the restraint being imposed upon the owner’s First Amendment right to display the film, it shall order the film returned forthwith. If the extension is granted, the government shall return the property to the persons entitled thereto at the close of the extended period without further delay.

The judgments denying plaintiffs’ motion under Rule 41(e) are reversed and the causes are remanded with directions to grant the motions and order the films returned to plaintiffs forthwith.

Reversed and remanded with directions.

      . 18 U.S.C. § 1462 makes it a crime to “knowingly use any express company or other common carrier, for carriage in interstate or foreign commerce any obscene, lewd, lascivious, or filthy book, pamphlet, picture, motion-picture film, paper, letter, writing, print, or other matter of indecent character. . . .”

      . The affidavit stated that the agent had seen the films in question at the Bijou Theatre and that he believed that they were obscene. To support this conclusion the agent described several sexually explicit scenes involving homosexual activity. In addition, the affidavit stated that the agent had learned that the film “Ranch Slaves” had been shipped by Novo Air-Freight from Hollywood, California to the Bijou Theatre in Chicago shortly before the agent viewed it. However, following the hearing, but prior to the issuance of the warrant, the government amended the affidavit by deleting all reference to the title of the particular film shipped by Novo Air-Freight.

      . Pursuant to that warrant, agents searched the Admiral Theatre but did not find the films. Upon return of the unexecuted warrant the government peti- ' tioned the court for an order to show cause why Ricciardi should not be held in contempt. Following a hearing, Ricciardi was found in contempt and incarcerated until the films were produced. Shortly thereafter the films were delivered to the prosecutor and Ricciardi was released. Ricciardi immediately filed an action for the return of the films, and their suppression as evidence. The court denied and dismissed this action, holding that the finding made at the time the search warrant issued was res judicata. Ricciardi appealed in No. 72-1665 from the dismissal.


author: ALFRED T. GOODWIN, Circuit Judge:

text:
    ESTATE of Daisy F. CHRIST, Deceased, Robert Johnson Christ, Executor, Petitioner-Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
    Nos. 71-1229 to 71-1231.
    United States Court of Appeals, Ninth Circuit.
    May 9, 1973.
    Charles J. Leighton, Jr. (argued), Donald B. Falconer, Helzel, Leighton, Brunn & Deal, Oakland, Cal., for petitioner-appellant.
    Stephen Schwartz (argued), Johnnie M. Walters, Asst. U. S. Atty., Meyer Rothwacks, Richard W. Perkins, Tax Div., Dept, of Justice, Washington, D. C., for respondent-appellee.
    Before GOODWIN and WALLACE, Circuit Judges, and CURTIS, District Judge.

       The Honorable Jesse W. Curtis, United States District Judge for the Central District of California, sitting by designation.

   ALFRED T. GOODWIN, Circuit Judge:

The only issue in these consolidated income and estate tax cases is the value of the interest received by the decedent, Daisy F. Christ, when she elected to take under the will of her deceased husband, Andrew, in 1952. The Tax Court resolved the issue adversely to the taxpayer, 54 T.C. 493 (1970). We affirm.

When her husband died, Mrs. Christ was faced with a choice open to many California widows: whether to take her share of the community property by operation of-state law, or elect to allow her share of the community property to pass under her husband’s will to a trust under which she would receive income for life with limited rights in the principal of all the property of the community. She elected to take under the trust.

This election created several federal tax consequences. The widow’s surrender of her share of the community property to a trust which will pay her the income from the property for life constitutes a “transfer” under Int.Rev.Code of 1954, § 2036(a)(1). Unless the transfer is a “bona fide sale for an adequate and full consideration in money or money’s worth,” the property is includible in the widow’s gross estate at the time of her death. If the property is included in the widow’s estate, it is included at its market value on the date of her death. But the date-of-transfer value of any property received through the exercise of the widow’s election is subtracted from the amount included. Int.Rev.Code of 1954, § 2043.

The value placed upon the property received under the election may also be important for federal-income-tax purposes. It has been held in this circuit that the widow’s election can be a “purchase,” for income tax purposes, of her rights under the trust, justifying amortization deductions from the income she receives from the trust. Gist v. United States, 296 F.Supp. 526 (S.D.Cal.1969), aff’d, 423 F.2d 1118 (9th Cir. 1970).

The amount of the “purchase” price, however, is usually not deemed to be the value of the community property surrendered to the trust, but rather is deemed to be the present discounted value of the right to receive income obtained in the election. The reason for so fixing the value is that where the value of the rights surrendered exceeds the value of the rights received, only a portion of what is surrendered is allocated to the “purchase price” of the rights received and the rest is presumed to be a gift to the remaindermen. It is therefore to the advantage of the taxpayer to have a high value assigned to the right to receive income, for three reasons: (1) a sufficiently high value assures that the transfer will be a “bona fide sale,” rendering § 2036 inapplicable and removing the trust corpus from the gross estate altogether; (2) a high value will also reduce the size of the gross estate through the operation of § 2043; and (3) a high value will equal a high “purchase price” for the life income and thereby support larger amortization deductions from that income.

Because the issue before the court is the value of the right to receive income at the time of the exchange, the anticipated value of the income is used, rather than its demonstrated value as viewed from the vantage point of hindsight.

The Commissioner has prepared tables for use in calculating the anticipated values of life estates. The tables were followed in this case.

The taxpayer contends that the Commissioner and the Tax Court should not have used the tables. First, the taxpayer argues that the reasonably anticipated yield of the securities in the trust, by any educated estimate, so greatly exceeded the yield forecast in the Commissioner’s tables that the use of the tables was unreasonable. Second, he argues that the fair rental value of the residence given in trust, rather than the “table” value, should have been used. Third, he argues that even if the anticipated yield given in the tables could be defended the implicit life expectancies of the table are outmoded and erroneous. He suggests that the Commissioner’s tables for annuitants should be used.

The Tax Court adopted the standard of Hanley v. United States, 63 F.Supp. 73, 81, 105 Ct.Cl. 638 (1945), holding that the Commissioner’s tables should be used unless their use would produce “a result substantially at variance with the facts.” This standard is essentially the same as that previously enunciated in this circuit. United States v. Past, 347 F.2d 7, 13 n. 3 (9th Cir. 1965); Koshland’s Estate v. Commissioner, 177 F.2d 851 (9th Cir. 1949). The taxpayer agrees that this is the correct standard, but urges that the Tax Court either made an error of law or was “clearly erroneous” in finding the facts. There was no error.

The Tax Court held that the taxpayer did not satisfy the burden of proving the tables inapplicable. First, the Tax Court rejected the taxpayer’s contention that the past return of the trust was 8.2%, a figure well above the implicit return of 3½% then used in the tables. The 8.2% figure was arrived at by valuing the trust as of April 15, 1952, the date of Andrew Christ’s death. The correct valuation date, however, was September 30, 1953, the date of the distribution to the trust and the date Daisy’s election became irrevocable. Using the correct date, the gross yield for 1953 was 6.18%, and for the period 1948-1953 was 5.48%.

The second reason the Tax Court held that the taxpayer did not satisfy his burden was that the figures produced by the taxpayer were based on the gross income of the trust, while the relevant figure was the net income available to Daisy. Thus the court was left to speculate whether the net income of the trust would substantially exceed the yields given in the tables.

Third, the Tax Court held that the past income of the trust could not be expected to continue at a fixed rate because the trust assets might be changed. The Tax Court noted that one large block of stock in a closely held corporation had no ready market value, but ignored this because the trustee intended to and did exchange the stock for listed stock in a tax-free exchange. The Tax Court also noted that the trustee, Daisy’s son, was the sole remainderman of the trust. The Tax Court believed that, while not a controlling factor, one evaluating the trust might well consider whether the trustee in this situation would be likely to favor the remainder at the expense of the income recipient.

It is to these last-mentioned considerations, those of uncertainty, that the parties devote most of their argument. Both sides seek to have this court enunciate a hard and fast rule to apply in all such cases. The taxpayer argues as if the Tax Court’s third rationale were the only basis for the decision. “Normal” uncertainty, the taxpayer urges, should be ignored. At the very least, it is argued, ordinary uncertainty should never be used to force a value based upon an anticipated yield below that which the trust had once earned. The government, too, urges an absolute rule. Citing many cases, none of which supports its proposition, the government urges that “the * * * [tables] may not be disregarded unless their use is highly unreasonable under the circumstances.” A mere difference in anticipated yield, it argues, is never enough to meet this standard. The government would also have this court adopt an absolute rule that whenever the investments of the trust are subject to change the tables should apply. We decline to accept the invitations of the parties.

The government’s argument that use of the tables fosters certainty is attractive, but the government itself is the party best able to create certainty in this area. Clarification of the conflicting regulations (compare Treas.Reg. § 20.-2031-1 (b) with Treas.Reg, § 20.2031-7) and government abstention from arguing for different standards in different cases depending upon the short-run effect upon the revenue (see Rosen v. Commissioner, 397 F.2d 245 (4th Cir. 1968); Hipp v. United States, 215 F.Supp. 222 (W.D. S.C.1962)) would be helpful.

The arguments of both sides not only slight most of the bases for the Tax Court’s decision, but ignore the ambiguous nature of an unusually high return from trust assets. A high return may reflect good luck, or it may reflect a deliberate policy to favor current income over capital growth. To the extent that a high return reflects the former, it may not necessarily be expected to continue over the long term; to the extent that it reflects the latter it may indeed be expected to continue. The effect of uncertainty is thus a question of fact; it would be improper to establish an absolute rule either denying any weight to uncertainty or assigning it controlling importance.

The Tax Court was not in error in holding that the Commissioner’s tables should apply, based on the factors listed in its opinion.

The taxpayer also urges that, based on the “uncontradicted” testimony of his expert, the tables should not have been applied to value a life estate in a dwelling house that became a trust asset. The Tax Court rejected the testimony of the expert because the expert was not qualified with respect to the property in question at the relevant times. (He claimed some familiarity with the property, as broker or appraiser, after 1960 or 1961.) The Tax Court was free to decide what weight if any, to give the expert’s testimony.

The life expectancy as well as the yield assumptions of the Commissioner’s tables were attacked, but the taxpayer presented none of the expert actuarial testimony that would be necessary successfully to attack old or outmoded tables. Miami Beach First National Bank v. United States, 443 F.2d 116, 119 (5th Cir. 1971); Dunigan v. United States, 434 F.2d 892 (5th Cir. 1970).

The taxpayer also argues that the right of Mrs. Christ to draw upon the principal of the trust, if necessary for her support, had value not properly recognized. The taxpayer also argues that the value of certain sums Mrs. Christ received from her husband’s estate during its administration should have been included in computing the total value of the rights she received when she made her election. The effect upon over-all value of the trust interest of the value of support rights was never presented to the Tax Court, and is not timely here. The amount received during the administration of the estate was to be determined by a computation under Rule 50 in the Tax Court, but the taxpayer never submitted the requested computation. We are not persuaded that the interests of justice require us at this late date to allow the taxpayer to reopen the case here to raise either of these issues.

Affirmed.