text:
    DOLPHIN PLUMBING CO. OF FLORIDA, INC., Plaintiff-Appellee, v. The FINANCIAL CORPORATION OF NORTH AMERICA, a Missouri Corp., authorized to do business in Florida, Defendant-Appellant.
    No. 74-3502
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Feb. 27, 1975.
    Vincent E. Damian, Jr., Gary S. Brooks, Miami, Fla., for defendant-appellant.
    Henry J. Whelchel, Miami, Fla., for plaintiff-appellee.
    Before WISDOM, BELL and CLARK, Circuit Judges.

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

   PER CURIAM:

The Financial Corporation of North America, FINCO, asks us to reverse the district court’s denial of its motion to set aside a default and judgment of default entered in favor of Dolphin Plumbing Company of Florida. We affirm.

On April 4, 1974, Dolphin, a subcontractor, filed its complaint against FIN-CO, the developer, alleging breach of contract. On May 8, pursuant to a stipulation filed on behalf of both parties, Dolphin filed an amended complaint. The stipulation allowed FINCO an additional ten days, until May 18, to file responsive pleadings or motion. On May 24, FINCO’s attorney moved to withdraw. He explained that his law firm had rendered service to FINCO for almost a year but had never received any payment on account. His affidavit recited that FINCO owed his firm $20,000 which it had “failed to pay or indicated [sic] a willingness to pay.”

The court granted the motion to withdraw on June 7, 1974 and gave the defendant fourteen days to procure substitute counsel and to have him appear. Both the motion to withdraw and the order granting the motion were served on the defendant and on its general counsel. The defendant did not comply with the court’s order, and on June 25, 1974, on plaintiff’s motion, the court entered a default against FINCO, pursuant to Rule 55(b), Fed.R.Civ.P. Dolphin filed a motion for a default judgment, and served FINCO’s president and general counsel with copies of the motion. The court set July 5 as the date for the final hearing. At the hearing, FINCO’s former counsel was present but refused to make a formal appearance because he still had not been paid. The court proceeded with the hearing, examined witnesses, and, on July 10, in written findings of fact and conclusions of law, entered a default judgment against FIN-CO.

During the entire course of these proceedings, FINCO filed no motions or responsive pleadings. No representative of FINCO ever made an appearance, although both the corporation and its general counsel had been served with notice of all proceedings from the motion of withdrawal by its counsel through the entry of the final judgment. Only on July 18, thirteen days after the final hearing and eight days after the entry of the final judgment, did FINCO’s former counsel reenter the case by filing a motion for leave to enter an appearance, a motion for a rehearing, and a motion to set aside the default and judgment of default. The court granted the motion for leave to enter an appearance and denied the others.

The decision whether to set aside a default judgment is left to the sound discretion of the trial judge and will be reversed only for an abuse of discretion. Rule 60(b), Fed.R.Civ.P.; McGrady v. D’Andrea Electric, Inc., 5 Cir. 1970, 434 F.2d 1000. Although we are mindful of the strong policy in favor of trial on the merits, we are equally aware of the district court’s duty to protect the integrity of the judicial process. This Court will do nothing to sanction abuse of that process, particularly the unexplained failure to obey an order of court.

The defendant FINCO did not, we conclude, make a sufficient showing of good reason for its default. It made no factual showing of mistake, inadvertence, surprise, or excusable neglect. Its motion to set aside the default and default judgment cited, in conspicuously imprecise terms, general financial difficulties in paying its retained counsel. Its motion explained that FINCO asked the attorney who had withdrawn to resume representation, was informed that representation would be resumed if some payment on account was made before the final hearing on July 5th, and that it had “made every possible effort to affect [sic] payment by that time.” But, as this statement itself implies, and as the record demonstrates, these efforts began only after the default had been entered and after the final hearing had been scheduled.

There is no explanation whatever for FINCO’s failing to comply with the court’s order of June 7 to procure substitute counsel within two weeks, or for its default. Its efforts after default to pay its former counsel do not excuse the unexplained default.

On this record we must agree with the district court’s decision to refuse to set aside, under Rule 60(b), the judgment of default. Certainly we find no abuse of discretion.

Affirmed.

      . For example:
      “Generally, the Defendant has experienced difficulty in receiving its draws on time.”
      We are not told what draws were, in fact, late and what, if any, effect this had on the defendant’s ability to procure legal representation or to appear itself.

      . FINCO’s motion details other nonmeritorious explanations:
      “The problem is further compounded by the fact that the project is located in South Dade County, the lender is located in Sarasota, Florida, and the defendant’s main office is located in Kansas City, Missouri.” “More specifically, the problem here was created by the fact that, although the draw funds from which payment on account was to be made were deposited on Wednesday, July 3, 1974, no checks could be drawn against said deposit until the deposit cleared, and the deposit did not clear until after 11:00 A. M., July 5, 1974. This specific problem was compounded by the fact that one crucial business day of the week in question was lost, Thursday, being the Fourth of July. Therefore, although payment on account was made, it was made after the hearing.”

      . At the final hearing on July 5th, FINCO’s former counsel explained to the court:
      “Judge, on the 1st of July, I delivered a letter to your office with copy to Mr. Whel-chel. What happened was that our client came into the office that morning with a check and asked us if we would undertake to — reundertake, I should say, the representation, and I said that yes, but — after I found out that there was going to be a final hearing today — I said yes, but we will have to have either cash or his check or money, because we just can’t go into Federal Court and ask the Judge a huge favor like this and then not be paid, because it would be unfair to you and unfair to us if that were to happen, and I have not been paid, so I am afraid that my request is moot. I appreciate it being entertained.”


source: Caselaw Access Project

author: GIBSON, Chief Judge.

license: Public Domain

text:
    Walter J. ENTREKIN, Jr., Appellant, v. UNITED STATES of America, Appellee.
    Nos. 74-1574 and 74-1575.
    United States Court of Appeals, Eighth Circuit.
    Submitted Oct. 18, 1974.
    Decided Dec. 16, 1974.
    Rehearing and Rehearing En Bane Denied Jan. 20, 1975.

      Walter J. Entrekin, Jr., filed typewritten briefs pro se.
    Harold O. Bullís, U. S. Atty., and Gary Annear, Asst. U. S. Atty., Fargo, N. D., filed brief for appellee.
    Before GIBSON, Chief Judge, and LAY and STEPHENSON, Circuit Judges.
   GIBSON, Chief Judge.

Walter Entrekin, Jr. appeals the District Court’s denial without a hearing of his 28 U.S.C. § 2255 motions to vacate sentences imposed upon convictions for violation of 18 U.S.C. § 876 (extortion) and 18 U.S.C. § 2312 (Dyer Act). For the reasons hereafter expressed, we affirm the denial of § 2255 relief.

Conviction on the extortion charge was by a jury, a sentence of 15 years imprisonment was imposed, and the judgment was affirmed on direct appeal. United States v. Entrekin, 450 F.2d 1102 (8th Cir. 1971). Entrekin presented eight allegations to the trial court which he asserts justify § 2255 relief on this conviction.

First, he claims that he should have been charged with a violation of 18 U.S.C. § 875(b) (transmitting in interstate commerce any threatening communication) instead of § 876. His actions could have been considered a violation of either section and the United States is not required to offer a choice of charges to a defendant. Further, the sufficiency of the information is not subject to collateral attack when it does charge a violation of federal law and the sentencing court had jurisdiction. Houser v. United States, 508 F.2d 509 at 514 n. 20 (8th Cir. 1974).

He challenges venue in the trial court, asserting that pursuant to 18 U.S.C. § 3239 he was entitled to be tried in the district in which the threatening letter was mailed. Venue is not subject to collateral attack under § 2255. See Houser v. United States, supra at 515 n. 24. Moreover, no motion as required by 18 U.S.C. § 3239 was filed and venue was therefore properly in the District of North Dakota.

He challenges the failure of the trial court to sequester witnesses, the admission of evidence of other crimes, and the use of his prior felony convictions for impeachment. The trial court properly found that these claims were matters of trial error required to be challenged upon direct appeal. Houser v. United States, supra at 513 n. 4.

His claim of inadequate representation by counsel fails to establish a basis for collateral attack. More than a disagreement with tactical decisions of trial counsel must be shown. Houser v. United States, supra at 516 n. 46. Cf. United States v. Hager, 505 F.2d 737 (8th Cir. 1974). His claim of a more severe sentence than that received by his wife, a co-defendant, is not cognizable under § 2255. Houser v. United States, supra, 508 F.2d at 516 n. 52.

Lastly, he claims he was deprived of a fair trial because of prejudicial pretrial publicity. After Entrekin’s arrest the Grand Forks Herald carried a front page story complete with pictures and the details of the extortion plan. The matter received radio and television news coverage and was the subject of an editorial several days after the arrest which congratulated the police on their fine work in aborting the scheme. This hardly amounted to coverage which permeated the entire area. We have carefully considered the record of the voir dire and are satisfied that a fair and impartial jury was impaneled. The trial court recognized the possibility of prejudice and carefully screened prospective jurors to obtain an impartial venire. There is no basis for § 2255 relief on this claim.

Entrekin pled guilty to a Dyer Act charge and received a five year sentence of imprisonment concurrent with his 15 year sentence on the extortion conviction. His § 2255 motion sets forth four claims which he asserts justify relief. It appears to be an exercise in futility and a waste of judicial resources to consider this collateral attack on a concurrent sentence after denying relief on the first sentence. Our policy on direct appeals is not to indulge in a meaningless discourse on appeals when concurrent sentences were imposed. See, e. g., United States v. Morton, 483 F.2d 573, 576 (8th Cir. 1973); Kauffmann v. United States, 414 F.2d 1022, 1024 (8th Cir. 1969). And, as noted in Benton v. Maryland, 395 U.S. 784, 793 n. 11, 89 S.Ct. 2056, 2062, 23 L.Ed.2d 707 (1969):

A stronger case for total abolition of the concurrent sentence doctrine may well be made in cases on direct appeal, as compared to convictions attacked collaterally by suits for post-conviction relief.

However, since the District Court considered appellant’s contentions respecting the Dyer Act charge, we will proceed to consider them in this opinion. In the future, absent direction from the United States Supreme Court, we do not propose to consider collateral challenges to concurrent sentences that do not affect the length of the sentence to be served.

First, petitioner challenges the lack of a preliminary hearing. This, claim is not cognizable under § 2255. Houser v. United States, supra, 508 F.2d at 514 n. 13. He claims that court records are falsified and erroneous because, among other allegations, he never executed a waiver of indictment. The District Court found this contention to be frivolous. We agree. A signed waiver of indictment is in the record. Entre-kin’s self-serving lapse of memory affords no basis to attack his conviction.

Lastly, he claims the court failed to comply with Rule 11, Fed.R.Crim.P. in accepting his guilty plea and that his plea was involuntary. The record belies both contentions. There was full compliance with Rule 11 in accepting his plea and the transcript of the guilty plea proceedings establishes beyond any doubt the voluntariness of the plea.

The judgment of the District Court denying § 2255 relief on both convictions is affirmed.

      . The Honorable Ronald N. Davies, United States Senior District Judge, District of North Dakota.


author: PER CURIAM.

text:
    RAWLEIGH, MOSES & CO., INC., a corporation, Appellant, v. Herbert MARTIN, Jr., and William Leo McNeil, Appellees.
    No. 74-1486.
    United States Court of Appeals, Eighth Circuit.
    Submitted Jan. 7, 1975.
    Decided Jan. 13, 1975.
    David K. Breed, St. Louis, Mo., for appellant.
    Claude W. McElwee, Jr., St. Louis, Mo., for appellees.
    Before GIBSON, Chief Judge, and HEANEY and ROSS, Circuit Judges.
   PER CURIAM.

Upon a careful consideration of the record, the briefs and the oral arguments of the parties, the Court has concluded that the judgment of the district court is based upon findings that are not clearly erroneous, that no error of law appears and that an opinion by this Court would have no precedential value. For these reasons the judgment appealed from is hereby affirmed on the basis of the opinion of the trial court. Rawleigh, Moses & Co. v. Martin, 376 F.Supp. 107 (E.D. Mo.1974). See Rule 14 of the Rules of this Court.


author: PER CURIAM:

text:
    SECURITIES AND EXCHANGE COMMISSION, Plaintiff-Appellee, v. GENERAL HOST CORPORATION et al., Defendants, Seymour M. Lazar, Appellant.
    No. 34, Docket 73-2617.
    United States Court of Appeals, Second Circuit.
    Argued Jan. 9, 1975.
    Decided Jan. 10, 1975.
    Paul C. Warnke, Washington, D. C. (George Rowe, Jr., New York City, on the brief), for appellant.
    Paul Gonson, Asst. Gen. Counsel, Securities and Exchange Commission (Lawrence E. Nerheim, David Ferber, and Thomas L. Taylor III, Securities and Exchange Commission, on the brief), for plaintiff-appellee.
    Before KAUFMAN, Chief Judge, and SMITH and TIMBERS, Circuit Judges.
   PER CURIAM:

We believe that Judge Weinfeld correctly interpreted rule 13(g) of the Federal Rules of Civil Procedure in light of the considerations expressed in our decision in SEC v. Everest Management Corp., 475 F.2d 1236 (2d Cir. 1972). Accordingly, we affirm on his opinion, 60 F.R.D. 640 (S.D.N.Y.1973).


author: COWEN, Chief Judge:

text:
    John SARACENA, et al. v. The UNITED STATES.
    No. 216-74.
    United States Court of Claims.
    Jan. 22, 1975.
    Joseph M. Jacobs, East Orange, N. J., attorney of record, for plaintiffs.
    Theodore D. Peyser, Jr., Donald H. Olson, and Kenneth R. Pike, Washington, D. C., with whom was Asst. Atty. Gen. Scott P. Crampton, for defendant.
    Before COWEN, Chief Judge, and DAVIS and BENNETT, Judges.
   ON DEFENDANT’S MOTION TO DISMISS

COWEN, Chief Judge:

In 1962, plaintiffs found more than two million dollars in United States currency 'which they turned over to the Government. After the Internal Revenue Service had applied all the money to the recovery of income taxes, penalties, and fines due by the individual to whom the funds belonged, the District Director of the IRS paid each plaintiff a reward. They brought this action to recover additional amounts as rewards, claiming that the amounts paid were inadequate and that the determination of the amount of the reward was not made in compliance with 26 U.S.C. § 7623 and Treasury Regulation 26 C.F.R. 301.7623 — 1. The case is before the court on defendant’s motion to dismiss for failure to state a cause of action upon which relief can be granted. After considering the briefs of the parties and the facts admitted by defendant’s motion, we conclude that the amount of the reward was determined pursuant to a statute and regulation which vest broad discretion in the District Director of the Internal Revenue Service, and that plaintiffs have failed to show that his determination was an abuse of the discretion reposed in him. Therefore, we grant defendant’s motion to dismiss.

The plaintiffs are seven workmen who were employed during the summer of 1962 to remove old doors and install new ones in several garage buildings in Jersey City, New Jersey. In the course of their work on July 3, 1962, they found $2,438,110 in United States currency in the trunk of an old car in one of the garages. Upon finding the money, plaintiffs notified the Federal Bureau of Investigation, whereupon FBI agents took possession of the currency and turned it over to the United States Marshal for the District of New Jersey. Shortly after the money was found, it was discovered that it probably belonged to one Joseph V. Moriarty. On July 5, 1962, the Internal Revenue Service effected a jeopardy assessment for delinquent income taxes and interest due from Mr. Moriarty in an amount which exceeded the currency found by plaintiffs. Thereafter, the Internal Revenue Service caused a lien to be filed in Hudson County, New Jersey, and a notice of levy to be served upon the U.S. Marshal who, on July 16, 1962, paid the $2,438,110 into the Treasury of the United States.

On September 19, 1962, when Mr. Moriarty filed a tax return for 1961, he reported the $2,438,110 as “other income” and requested that any moneys refundable to him be used to reduce his back taxes. The entire sum, which the workmen turned over to the FBI, has been applied to income taxes, penalties, fines, and forfeitures owed by Mr. Moriarty.

Beginning in 1962, several law suits were filed by parties claiming an interest in the $2,438,110. The United States District Court for the District of New Jersey held that Hudson County, New Jersey, was entitled to the money. On February 25, 1969, the seven plaintiffs filed an application and a public voucher for a reward based on their having turned over the currency to Federal authorities and the fact that all of it was applied to the recovery of taxes, penalties, fines, and forfeitures owed by Mr. Moriarty. The application was not acted upon by the District Director of Internal Revenue pending a review of the District Court’s decision by the Court of Appeals for the Third Circuit. On January 25, 1972, the Court of Appeals reversed the judgment of the District Court, dismissed the complaint of Hudson County, and held that the United States was the owner of the money. See Stapleton v. Two Million Four Hundred Thirty-Eight Thousand, One Hundred and Ten Dollars, 454 F.2d 1210 (3rd Cir.), cert. denied, 409 U.S. 894, 93 S.Ct. 111, 34 L.Ed.2d 151 (1972).

On May 9, 1974, after it was firmly established that the United States would be able to retain the money and apply it to the taxes due by Mr. Moriarty, the District Director of the Internal Revenue Service awarded each of the plaintiffs or their heirs $4,590. The total amount of the reward was $32,131, which was approximately 1.32 percent of the amount recovered by the United States in taxes and other assessments against Mr. Moriarty.

Plaintiffs’ claims are based on 26 U.S.C. § 7623 and the implementing regulation, 26 C.F.R. § 301.7623 — 1, which provide:

§ 7623. Expenses of detection and punishment of frauds
The Secretary or his delegate, under regulations prescribed by the Secretary or his delegate, is authorized to pay such sums, not exceeding in the aggregate the sum appropriated therefor, as he may deem necessary for detecting and bringing to trial and punishment persons guilty of violating the internal revenue laws, or conniving at the same, in cases where such expenses are not otherwise provided for by law.
§ 301.7623 — 1 Rewards for information relating to violations of internal revenue laws.
(a) In general. A district director may approve such reward as he deems suitable for information that leads to the detection and punishment of any person guilty of violating any internal revenue law, or conniving at the same. The rewards provided for by section 7623 are limited in their aggregate to the sum appropriated therefor and shall be paid only in cases not otherwise provided for by law.
(c) Amount and payment of reward. All relevant factors, including the value of the information furnished in relation to the facts developed by the investigation of the violation, shall be taken into account by a district director in determining whether a reward shall be paid, and, if so, the amount thereof. The amount of a reward shall represent what the district director deems to be adequate compensation in the particular case, normally not to exceed 10 percent of the additional taxes, penalties, and fines which are recovered as a result of the information. No reward, however, shall be paid with respect to any additional interest that may be collected. Payment of a reward will be made as promptly as the circumstances of the case permit, but generally not until the taxes, penalties, or fines involved have been collected. However, the informant may waive any claim for reward with respect to an uncollected portion of the taxes, penalties, or fines involved, in which case the claim may be immediately processed. No person is authorized under these regulations to make any offer, or promise, or otherwise to bind a district director with respect to the payment of any reward or the amount thereof.

It is the position of the plaintiffs that once the District Director determined that a reward was due them, it was incumbent upon him to fix the amount upon a reasonable basis and that no reasonable basis has been shown. The argument continues that, since the regulation lays down a standard — 10 percent of the additional taxes, penalties, and fines involved — the small amount of the reward demonstrates, without more, that the decision was arbitrary and that the burden is on the defendant to show the propriety of such a deviation from the standard set forth in the regulation.

Unfortunately for plaintiffs’ contentions, the regulation before us gives the District Director of Internal Revenue Service such broad discretion that the scope of our review of his decision is very limited. In defining the narrow scope of judicial review in such cases, the Supreme Court stated:

* * * More than a half-century ago this Court declared that “where Congress has committed to the head of a department certain duties requiring the exercise of judgment and discretion, his action thereon, whether it involve questions of law or fact, will not be reviewed by the courts, unless he has exceeded his authority or this court should be of opinion that his action was clearly wrong.” * * * [United States v. Shimer, 367 U.S. 374, 381-382, 81 S.Ct. 1554, 1560, 6 L.Ed.2d 908 (1961)]

The rule there announced by the Supreme Court has been followed by many decisions of this court. See, e. g., Odian v. United States, 203 Ct.Cl. 306 (1973); Port Authority of St. Paul v. United States, 193 Ct.Cl. 108, 432 F.2d 455 (1970); Daniels v. United States, 187 Ct.Cl. 38, 407 F.2d 1345 (1969).

Stated another way, to sustain an administrative interpretation of such a broadly written regulation, it is not necessary to find that the agency construction is the only reasonable one or that it is the result the court would have reached had the question arisen in the first instance in judicial proceedings. Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965). The judicial function is exhausted when it is found that there is a rational basis for the conclusions of the administrative agency. Mississippi Valley Barge Line Co. v. United States, 292 U.S. 282, 286-287, 54 S.Ct. 692, 78 L.Ed. 1260 (1934).

It is clear from the language of the regulation that the District Director has complete discretion in the first instance to determine whether an award should be made and, in the second, to fix what, in his judgment, amounts to adequate compensation. There is no statutory or regulatory requirement for a hearing or a well reasoned explanation of the decision. The mere fact that the reward was less than the 10 percent mentioned in the regulation as a possible upper limit does not authorize the court to set aside the award and order a trial to determine adequate or reasonable compensation. Plainly, the amount of the reward was within the range contemplated by the statute and the regulation. The burden is on the plaintiffs to establish that there was no rational basis for the District Director’s decision, and they have failed to discharge that burden.

Moreover, there was no express contract to pay plaintiffs compensation, and it has been held that the regulation here involved, as well as similar regulations in force under prior laws, do not give rise to an implied contract. See Schein v. United States, 352 F.Supp. 182, 185-186 (E.D.N.Y.1972); Gordon v. United States, 92 Ct.Cl. 499, 36 F.Supp. 639 (1941); Katzberg v. United States, 93 Ct.Cl. 281, 36 F.Supp. 1023, cert. denied, 314 U.S. 620, 62 S.Ct. 61, 86 L.Ed. 498 (1941).

For the reasons stated, defendant’s motion to dismiss is granted, and plaintiffs’ petition is hereby dismissed.

      . One of the workmen, Edward Schiess, has died since the money was found, and is represented in this action by Grace Schiess, the administratrix of his estate.


author: RICH, Judge.

text:
    Application of IDEAL INDUSTRIES, INC.
    Patent Appeal No. 74-581.
    United States Court of Customs and Patent Appeals.
    Jan. 23, 1975.
    Alfred H. Plyer, Jr., Kinzer, Plyer, Dorn & McEachran, Chicago, III., attorney of record, for appellant.

      ' Before RICH, BALDWIN, LANE and MILLER, Judges.
   RICH, Judge.

This appeal is from the decision of the Patent Office Trademark Trial and Appeal Board, 180 USPQ 408 (1973), affirming the examiner’s ex parte refusal to register the wordmark WING-NUT for “connecting members for joining the ends of electric wires or conductors,” application serial No. 356,684, filed April 13, 1970, claiming first use June 12, 1959. We reverse.

The application as filed expressly claimed the benefit of § 2(f) of the Trademark Act of 1946 (15 U.S.C. § 1052(f)) by virtue of the inclusion, in the declaration by applicant’s president (see 37 CFR 2.20), of the following:

The mark has become distinctive of applicant’s goods as a result of substantially exclusive and continuous use in interstate commerce for the five years next preceding the date of filing of this application.

By attorney’s amendment filed June 29, 1972, the declaration was augmented by adding the following factual statement:

Additional proof of distinctiveness is of record in the file of this application.

The statutory basis of the refusal to register is that WING-NUT is “merely descriptive” within the meaning of § 2(e) of the Trademark Act (15 U.S.C. § 1052(e)). The involved statutory provisions read:

Sec. 2. Trade-marks registrable on the principal register
No trade-mark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it—
(e) Consists of a mark which, (1) when applied to the goods of the applicant is merely descriptive * * * of them * * * ;
(f) Except as expressly excluded in paragraphs (a)-(d) of this section, nothing [herein] shall prevent the registration of a mark used by the applicant which has become distinctive of the applicant’s goods in commerce. The Commissioner may accept as pri-ma facie evidence that the mark has become distinctive, as applied to the applicant’s goods in commerce, proof of substantially exclusive and continuous use thereof as a mark by the applicant in commerce for the five years next preceding the date of the filing of the application for its registration. [Emphasis added.]

Applicant submitted proofs as contemplated in § 2(f), but the Commissioner (acting through the examiner and the board), as the section permits him to do, declined to accept them as overcoming the prohibition of § 2(e). This case, therefore, presents another of those situations requiring resolution of the conflict between the prohibition of § 2(e) and the permission of § 2(f), which depends on the degree of the “descriptiveness” of the mark when applied to the goods named in the application and the impact of the evidence of distinctiveness.

On the descriptiveness question, the examiner deemed himself governed, and the case to be controlled, by a prior decision of the board on an application to register WING-NUT for these goods by this applicant, serial No. 85,867, filed Nov. 23, 1959, rendered on June 7, 1962, In re Ideal Industries, Inc., 134 USPQ 416. Notice is taken of the fact that that application was filed within about five months of the claimed first use of the mark and, perforce, there was no reliance on § 2(f) in that proceeding. The board decision herein disposed of the examiner’s controlling-effect argument as follows:

We agree with applicant to the extent that our prior decision is not binding in this proceeding in that we must consider all the evidence now on file in Order to determine whether or not registration is presently precluded under Section 2(e)(1) of the Act.

The board then considered the evidence and concluded that WING-NUT “serves as a part of the apt descriptive name for applicant’s goods” and, for that reason, cannot be registered.

The basis of our disagreement with the board’s conclusion is fairly simple and clearcut but its explanation requires further factual background. We do not agree that WING-NUT is the “apt descriptive name,” or any part of it, in the sense that “banana” is the name of that elongated, usually tapering tropical fruit with soft, pulpy flesh enclosed in a soft usually yellow rind (see Webster’s Seventh New Collegiate Dictionary). There is often, as here, a subtle distinction between trademarks and the names of things. (See, for examples of this perplexity, the dissenting opinion in In re Cooper, 254 F.2d 611, 45 CCPA 923 (1958), especially the recitation of well-known trademarks which seemed to the dissenter to be names.) The distinction is one which must be carefully maintained or many valuable trademark rights will be lost. The burden rests particularly on the judiciary, which not only has the last word on the matter but also has the obligation to protect the public in its right to use the language.

Turning now to the background, we have to delve into the meaning of WING-NUT in the relevant trade — that is to say, its descriptive vis-a-vis its trademark or origin-indicating aspects— and compare it with the actual “name” of the goods.

“Wing nut” is, as many people know and as may be seen in any good American dictionary, the name of a type of nut (in the mechanical sense of a perforated block, usually of metal, having an internal screw thread to be used on a bolt or screw) which has wings affording a grip for the thumb and finger. It is not contended by the Patent Office that the goods here involved are wing nuts in this sense. Appellant is, therefore, not being denied registration because it is attempting to register WING-NUT for the goods commonly known by that name.

As filed, the application described the goods as “electrical connectors,” and this was amended to the statement above quoted, “connecting members for joining the ends of electric wires or conductors,” which appears to mean much the same thing but to be more specific. Other evidence of record shows that the goods are marketed under the name “wire connector” or simply “connector.” In the broad sense of those terms, there are, of course, many types of connectors, but in the common parlance of the electrician a wire connector is a small, thimble-like device made of electrical insulating material on the inside of which is a conical, spirally-grooved, metallic core, usually made of coiled spring wire. Two or more bare wire ends are joined by forcing them together into the end of the connector which is then twisted onto them, which twists the wires together and secures them in a wire-crushing grip, at the same time covering the joint with insulation. An illustration of such a device appears at the center of the trademark “Wire Nut” with design as hereinafter reproduced.

Prior to adoption and use of the WING-NUT mark at bar, appellant was using the marks “Wire Nuts” and “Wire Nut” on which it or a predecessor in business obtained several registrations, the first of which was obtained under the Act of March 19, 1920, registered Sept. 17, 1946, No. 424,062, claiming first use Feb. 1, 1939. The same mark was re-registered under the 1946 Act, Reg. No. 531,715, claiming the benefit of § 2(f). Both of these registrations included a design similar to that below. Reg. No. 624,837, Apr. 10, 1956, covered WIRE — NUTS as a wordmark. The mark was changed to the singular form in 1946, and WIRE NUT was registered Oct. 25, 1960, Reg. No. 706,232. “Wire Nut” with design, as follows,

was registered Aug. 27, 1963, Reg. No. 755,386. It is thus seen that in this field the term “Wire Nut” has long been the trademark of the appellant who claims that no one else in the industry uses the word “nut” in connection with wire connectors. The Patent Office has produced no evidence to the contrary. Nothing of record suggests that anyone other than appellant refers to these connectors as nuts, nor do they meet the dictionary definitions of nuts.

In 1959 — accepting the allegation of the application as true — appellant came out with a new connector provided with integral opposed side flanges or wings, similar, at least functionally, to the wings of a true wing nut, using thereon the mark WING-NUT. As appellant’s brief puts it:

Thus, the selection of “WING-NUT” for the 1959 form of screw-on connector was a natural outgrowth from its “WIRE-NUT” parent some twenty years earlier.
There is no evidence that anyone other than Appellant, has ever used “nut” alone, or in combination either with “wire” or “wing” for any type of electrical connector. So it is clear that Appellant’s use of “WING — NUT” has been exclusive since its adoption.

We find the record is in accord with those assertions.

The allegation of exclusive and continuous use by appellant contained in the application, referring to the 5-year period prior to its filing date, has not been challenged by the Patent Office. There is no indication that the actual length of the period was not 11 years. Further evidence submitted shows sales of goods under the WING-NUT mark from 1962 through 1969 amounting to $2,679,886. Since the item is very inexpensive, it is not surprising that in that period 1,226,-676,000 WING — NUT connectors were sold. A total of $122,427 is said to have been spent on advertising WING-NUT connectors during the same period.

Of course, every mark sought to be registered by taking advantage of § 2(f) involves descriptiveness to some degree. WING-NUT does so in the word “wing” because appellant’s goods admittedly have wings. Since they are “screwed” onto wire ends, the word “nut” might be said to be somewhat descriptive too, and this led the board to conclude that WING-NUT was an “apt descriptive name,” or at least “a part of the apt descriptive name,” presumably thinking of the expression “WING-NUT wire connectors.” Aptness cannot be gainsaid. On the other hand, the undisputed facts according to the record before us are that the name of the goods is wire connectors, that in the trade they are not descriptively called nuts, that WIRE NUT is the registered trademark of appellant, who is presumed under § 7(b) of the Trademark Act (15 U.S.C. § 1057(b)) to have the exclusive right to use the mark in commerce, and that at least since April 1965 and probably longer appellant alone and extensively has used WING-NUT on flanged wire connectors. It is obviously not necessary to call them wire nuts in order to give them a name. Accurately and according to trade custom, they are connectors and, having flanges or wings, they can be specifically designated as flanged or winged, or even called wing connectors.

Fundamentally, it is our view that since the goods are not nuts or known as nuts (unless they originate with appellant), the board erred in holding WING-NUT to be so descriptive under § 2(e) as to be unable to distinguish appellant’s goods and to become distinctive within the meaning of § 2(f).

The facts in this case, as shown by the present record, distinguish it from the case cited by the examiner in his final rejection, In re Dade Reagents, Inc., 130 USPQ 352 (TTAB 1961), which held SPECIFIC ALBUMIN to be the common descriptive name of the product, which name was also in use by a competitor. The board cited no further cases in support of the refusal to register. The solicitor relies on two of our decisions: In re Preformed Line Products Co., 323 F.2d 1007, 51 CCPA 775 (1963), and Roselux Chemical Co. v. Parsons Ammonia Co., 299 F.2d 855, 49 CCPA 931 (1962). In Preformed, we held the single word “preformed” sought to be registered to be merely descriptive of certain of appellant’s goods which had been “helically shaped in advance” and that the primary function of the word was to describe a characteristic of the product. In Rose-lux, the Parsons Ammonia Company sought to register “sudsy” for “aqueous ammonium hydroxide composition” — its well-known “Household Ammonia” to which some detergent had been added which made it sudsy. We held “sudsy” to be purely descriptive, and “sudsy ammonia” to be a common name for the product. In that opposition proceeding the evidence also showed that others were using “sudsy” to describe similar ammonia products. The factual differences distinguish these two cases from the case at bar in which we are dealing with a two-word mark, WING — NUT, half of which is clearly not descriptive.

There is evidence in the form of letters from electrical contractors who use appellant’s WING-NUT wire connectors which, though not free from ambiguity, tends, we believe, to show that users recognize WING-NUT as a trademark. This, taken with the allegation of exclusive and continuous use and the evidence of the volume of that use, suffices to show that WING-NUT has in fact become prima facie distinctive of appellant’s goods.

The decision refusing registration is therefore reversed.

Reversed.

MARKEY, C. J., took no part in the consideration or decision of this case.


author: BALDWIN, Judge.

text:
    NISHIMOTO TRADING COMPANY, LTD., and Arthur J. Fritz Company, Appellants, v. The UNITED STATES, Appellee.
    Customs Appeal No. 74-29.
    United States Court of Customs and Patent Appeals.
    Jan. 23, 1975.
    Edward N. Glad, Glad, Tuttle & White, San Francisco, Cal., attorney of record, for appellants.

      APPLICATION OF UNITED OIL MANUFACTURING CO. Cite as 508 3T.2d 1341 (1975)
    Carla A. Hills, Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Steven P. Florsheim, New York City, for the United States.
    Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE and MILLER, Judges.
   BALDWIN, Judge.

This appeal is from the judgment of the Customs Court overruling appellants’ claim against the classification of certain merchandise imported from Japan, and described on the invoice as “Japanese style alimentary paste ‘Sapporo Ichiban.’ ” The opinion of the Customs Court, familiarity with which is assumed, appears at 72 Cust.Ct. 53, C.D. 4504 (1974). The Customs Court held that the merchandise was correctly classified by the customs officials as “[e]dible preparations not specially provided for (including prepared meals individually packaged)”, item 182.95 TSUS. Appellants contest the classification and claim the merchandise is properly classifiable under item 182.52 TSUS as “[s]oups, soup rolls, soup tablets or cubes, and other soup preparations.” We affirm.

We find that we have little to add to Judge Re’s careful opinion below. The court heard nine of appellants’ witnesses and eight of appellee’s witnesses. Forty-one exhibits were introduced. The court noted that ,“[e]ven on the question whether saimin or ramen is a soup, or a soup preparation, plaintiffs’ witnesses were divided, and offered varying opinions of doubtful reliability.”

The Customs Court heard the witnesses, judged the credibility of their testimony and the weight to be given thereto. The judgment of the court below will not be disturbed, unless it is contrary to the weight of the evidence. Johnson v. United States, 21 CCPA 129, T.D. 46464 (1933).

Accordingly, the judgment of the Customs Court is affirmed.

Affirmed.


text:
    Application of UNITED OIL MANUFACTURING CO.
    Patent Appeal No. 74-574.
    United States Court of Customs and Patent Appeals.
    Jan. 30, 1975.

      J. Preston Swecker and Robert S. Swecker, Washington, D. C., attys. of record, for appellant.
    Joseph F. Nakamura, Washington, D. C., for the Commissioner of Patents, Jack E. Armore, Associate Sol., Washington, D. C.
    Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE and MILLER, Judges.
   BALDWIN, Judge.

This appeal is from the decision of the Trademark Trial and Appeal Board affirming the examiner’s refusal to register UNITED, as a trademark for gasoline, on the Principal Register. We reverse.

The examiner refused registration under section 2(d) of the Lanham Act (15 U.S.C. § 1052(d)) on the ground that contemporaneous use of the registered mark UNITED for lubricating oils and greases, and appellant’s UNITED mark for gasoline, is likely to cause confusion, mistake, or deception. The reference registration is owned by the United Oil Co. which alleges a first use of the trademark UNITED on April 16, 1908, while appellant alleges first use “during or about” February 1922.

Appellant has made of record in the Patent Office, the following letter:

UNITED OIL COMPANY
Highest Quality Lubricants Preble Ave. and North Franklin St.
Pittsburgh, Pa. 15233
UNITED Telephone 231-1269
(Area Code 412)
September 30, 1971
Mr. Jack Wendell Executive Vice President United Refining Company P. 0. Box 780
Warren, Pennsylvania 16365
Dear Mr. Wendell:
We will confirm our telephone conversation on August 30, wherein we advised you that our lubricating oils and greases, sold under the UNITED trademark, according to trademark registration No. 222,559, are not of the character which are sold through gasoline service stations.
Additionally, we have relinquished and do hereby release to United Refining Company and its subsidiary, United Oil Manufacturing Company, any right which we might have under our registered UNITED trademark for the use thereby of the trademark UNITED for gasoline, fuel oil and diesel fuel and we consent to the registration of this trademark UNITED for said goods by the United States Patent Office.
Our patents and trademarks are handled by Blenko, Leonard & Buell, North American Rockwell Building, Fifth Avenue, Pittsburgh, Pennsylvania 15222.
If further confirmation and information are required, we will be pleased to reply.
Sincerely yours,
UNITED OIL COMPANY H. KENNETH SIEFERS H. Kenneth Siefers Vice President

The board conceded that in view of the letter of consent, the goods of appellant and registrant are sold in different trade channels. However, the board, one member dissenting, sustained the examiner’s refusal to register appellant’s trademark in view of its position that “identification of goods in the cited registration is broad enough to comprehend lubricating oils and greases of any and all descriptions including such oils and greases as are customarily sold through service stations.” Thus, the board concluded that “since . . . it is the identification of goods in the application and/or registration which is controlling rather than what the evidence shows the goods to be, registrant’s goods must here be considered as encompassing lubricating oils and greases which move through the same trade channels as those of applicant.”

In an attempt to counter the position that the terms “lubricating oils and greases” encompass motor oils and similar products sold in service stations, appellant submitted a Motor Oil Guide, published by the Lubrication Subcommittee of the American Petroleum Institute and numerous trademark registrations. In so doing, appellant attempted to show that the type of oil sold at automobile service stations is motor oil, not lubricating oil. The board in its opinion on reconsideration reaffirmed its position stating:

As pointed out in the decision in question, the identification of goods in the reference registration is broad enough to comprehend motor oils and greases, and that, in determining the question of likelihood of confusion, it is the identification of goods in a registration or application which is controlling rather than what the evidence shows the goods to be. And, since motor oils and greases and gasoline are more often than not produced by the same oil companies and move through the same trade channels to the same average purchasers, there can be no question but that their sale under the identical mark “UNITED” would be likely to cause confusion or mistake or to deceive.

OPINION

We recognize that registration has been refused under § 2(d) of trademarks for gasoline based upon confusingly similar registrations for lubricating oils. We further recognize that a mere letter of consent by the registrant of the reference trademark registration has been held insufficient to overcome the prohibition of § 2(d) if applicant’s mark so resembles the mark of the reference registration as to be likely, when applied to applicant’s goods, to cause confusion, mistake or deception of purchasers. However, in this case, much more is of record than a mere consent to register.

The board has taken the position that the cited UNITED registration describes the goods it encompasses so broadly that oils and greases normally sold at service stations would be included. Thus, a consumer may be faced with a situation where a single service station is selling gasoline under appellant’s UNITED mark and oils and greases under registrant’s UNITED mark. In this regard, the letter of consent cannot be ignored. This letter clearly expresses the view that the lubricating oils and greases, sold under the UNITED trademark, are not of the character which are sold through gasoline service stations. Further, the cited letter clearly relinquishes any right which the registrant may have under its UNITED trademark, for its use on gasoline, fuel oil and diesel fuel. As stated in In re E. I. du Pont de Nemours & Co., 476 F.2d 1357, 1363 (Oust. & Pat.App.1973):

Thus when those most familiar with use in the marketplace and most interested in precluding confusion enter agreements designed to avoid it, the scales of evidence are clearly tilted. It is at least difficult to maintain a subjective view that confusion will occur when those directly concerned say it won’t. A mere assumption that confusion is likely will rarely prevail against uncontroverted evidence from those on the firing line that it is not.

The instant letter of consent is not a “naked” consent as alleged by the Patent Office. The registrant has affirmed appellant’s position that lubricating oils and greases sold under the UNITED registration are not those of the character which are sold through gasoline service stations. This, coupled with registrant’s consent to register represents a position which could only be taken if the registrant firmly believed that there exists no likelihood of confusion.

The board cited a number of prior decisions of this court in support of the proposition that it is the identification of goods in the application or registration which is controlling on the issue of likelihood of confusion, rather than what the evidence shows the goods to be. We do not find the cited decisions to be relevant to the instant situation. The secondary evidence submitted by appellant merely defines what is encompassed by the terms “lubricating oils and greases”, and does not attempt to alter or limit identification of the goods in the reference registration. It has been the consistent position of appellant that motor oils, sold through service stations, are separate and distinct from lubricating oils and greases which are used for industrial purposes. The evidence submitted by appellant, consisting of a Motor Oil Guide by the Lubrication Subcommittee of the American Petroleum Institute and numerous trademark registrations, does not attempt to re-define the goods of the reference registration, but merely establishes what is meant by a description of the goods found in the registration to those most familar with them. The letter of consent merely reaffirms appellant’s position. Thus the secondary evidence, when taken as a whole, establishes that the nature of the goods and mode of distribution are such as to render confusion unlikely. See In re Superior Outdoor Display, Inc., 478 F.2d 1388 (Oust. & Pat.App.1973).

We thus hold that there exists such a marketplace disparity between appellant’s gasoline and registrant’s lubricating oils and greases as to render confusion, mistake or deception unlikely. The board’s decision is, therefore, reversed.

Reversed.

      . 180 USPQ 349 (1973).

      . Application serial No. 366,425, filed July 27, 1970.

      . Reg.No. 222,559 issued January 4, 1927, renewed January 4, 1947, to United Oil Company, of Pittsburgh, Pennsylvania.

      . In re Tidewater Oil Co., 124 USPQ 516 (TTAB 1960); In re British American Oil Co., 128 USPQ 45 (TTAB 1960).

      . In re Tidewater Oil Co., supra, at 517; In re Driehuizen Bros., 127 USPQ 341 (TTAB 1960).

      . As fully described in its registration the goods are lubricating oils and greases made from crude petroleum and lubricating oils and greases manufactured from crude petroleum products and other mineral, vegetable and animal products.

      . In re Keller, Heumann & Thompson Co., 81 F.2d 399, 23 CCPA 837 (1936); Kalart Co. v. Camera-Mart, Inc., 258 F.2d 956, 46 CCPA 711 (1958); Hunt Foods & Industries, Inc. v. Gerson Stewart Corp., 367 F.2d 431, 54 CCPA 751 (1966); J. C. Hall Co. v. Hallmark Cards, Inc., 340 F.2d 960, 52 CCPA 981 (1965); General Shoe Corp. v. Lerner Bros. Mfg. Co., 254 F.2d 154, 45 CCPA 872 (1958); In re Superior Outdoor Display, Inc., 478 F.2d 1388 (Cust. & Pat.App.1973).


author: SETH, Circuit Judge.

text:
    AMERICAN OIL COMPANY, a corporation, Appellee, v. Lawrence S. McMULLIN, Appellant.
    No. 73-1459.
    United States Court of Appeals, Tenth Circuit.
    Argued July 8, 1974.
    Decided Jan. 6, 1975.

      David S. Cook, Salt Lake City, Utah (Arthur H. Nielsen, Earl Jay Peck, and Nielsen, Conder, Hansen & Henriod, Salt Lake City, Utah, with him on the brief), for appellant.
    Walter T. Kuhlmey, Kirkland & Ellis, Chicago, 111. (Richard J. Goetsch, Chicago, 111., and Wayne C. Durham, Durham & Swan, Salt Lake City, Utah, with him on the brief), for appellee.,
    Before LEWIS, Chief Judge, and BREITEN STEIN and SETH, Circuit Judges.
   SETH, Circuit Judge.

This litigation involves the several problems arising from various contractual relationships between American Oil Company and Lawrence S. McMullin relating to the operation of a bulk distribution point, retail truck stop and service station, and cafe at Elko, Nevada. According to the characterizations developed in the several contracts, McMullin leased the facility. from American, was its commissioned employee-agent insofar as operation of the bulk distribution plant was concerned, and was a branded American dealer as to operation of the truck stop, service station, and cafe. McMullin operated the facility for approximately two years until he became insolvent and American cancelled the lease and retook possession of the facility-

This action originally began as simultaneous attachment proceedings in the state courts of Nevada and Utah which were removed and purportedly consolidated in the United States District Court for the District of Utah. The removal and consolidation created some procedural difficulties which were discussed in a prior opinion reported at 433 F.2d 1091. The case is now before us on the merits, having taken the form of a suit by American to recover various contractual obligations allegedly owed by McMullin with McMullin counterclaiming and asserting that American has violated provisions of the Sherman and Robinson-Pat-man Antitrust Acts and has made fraudulent misrepresentations to him in the course of their dealings. After allowing McMullin various setoffs, the trial court entered judgment in favor of American in the amount of $98,840.84 and against McMullin on his counterclaims. McMul-lin appeals from that judgment.

Prior to January 1967 the Elko facilities were owned and operated by Slim Olson, a large independent jobber who also operated similar facilities in Ely and Winnemucca, Nevada, and Bountiful, Utah. Olson customarily purchased his liquid fuels from American at its Salt Lake City refinery for wholesale and retail distribution from his four operations. Olson was the only distributor of American branded products in northern Nevada. While he billed his operations as “cut-rate,” Olson was free to set both his wholesale distribution prices and his retail station prices.

Early in 1967 American determined that it would be to its advantage to acquire control of Olson’s bulk distribution operations, and it purchased substantially all of Olson’s assets at the four locations. The company thus assumed operation of the Elko facilities until it could find a suitable bulk plant agent and station operator. That person was the defendant McMullin, a longtime employee and truck driver for American.

The negotiations between American and McMullin commenced in April 1967. American outlined the operation to him and showed him its projections as to sales volumes and profit margins from the bulk distribution point, the service station, and the cafe. McMullin was told that he would be required to make a minimum capital investment of $10,000. He decided to accept the proposals and assumed operation of the Elko facilities on May 26, 1967, after receiving training in bulk plant procedures and truck stop operations. In accepting, McMullin executed several form agreements with American which established a multifaceted relationship between the parties. These contracts can best be examined as they relate to the different phases of the Elko operation.

McMullin executed American’s standard lease agreement by virtue of which he became the lessee of all of the Elko facilities, including the truck stop, the cafe, the bulk distribution point, and all buildings, tanks, pumps, and other fixtures. The rental was in the form of a one cent per gallon charge on all retail gasoline sales and five per cent of the gross receipts from the restaurant operation. The lease was for a term of one year.

The two principal agreements relating to the bulk distribution operation denominated McMullin as an employee-agent of American for the sale of petroleum products other than liquefied petroleum gas (LPG), and for the sale of LPG respectively. Under these agreements American retained ownership and risk of loss as to all products at the bulk plant. McMullin was compensated by a commission on all bulk plant sales, the amount of the commission varying according to the distance from the plant to the customer. The record shows that most of the bulk plant customers were consumers, that is, farmers, ranchers, and other commercial users. There were, however, some retailer customers, the principal one being McMullin himself. American retained the authority to establish the bulk plant prices, which were customarily lower to consumer users than to dealers such as McMullin. American also limited the geographical area in which bulk sales could be made. Under the agreements McMullin assumed the operational expenses of the bulk plant which included any additional necessary employees. McMullin was also required to provide delivery trucks, which he purchased from Slim Olson. Under his employment contracts McMullin could make two types of credit sales from the bulk plant. The first was to established American customers with authorized credit, and on these American assumed the credit risk. McMullin could also extend credit to any other customer. These accounts were carried by American but the ultimate risk was on McMul-lin. The employment contracts could be terminated on thirty days’ notice.

The remaining group of contracts pertained to McMullin’s retail dealership. The Elko station was the only American branded station within a forty-mile radius. American’s signs were prominently displayed, and its trademarks were on the fuel pumps as well as in various other places in the station area. Under the retail agreements, McMullin was treated as an independent dealer with the latitude to set his own retail prices and to deal in products other than American’s if he wished. His fuel pumps were, however, connected directly to the bulk storage tanks, and, since American controlled access to those tanks, the physical arrangement was such that, absent any substantial alterations, his gasoline and diesel fuel came from the bulk plant which he also operated. American recommended retail prices to McMullin, but he was free to set his own prices independently, and he did this on more than one occasion. McMullin’s status as an American branded dealer allowed him the option of participating in a variety of programs sponsored by American. Perhaps the one of most significance to this lawsuit was the Trucker’s or Yellow Credit Card program. This was a contract pricing arrangement that American offered fleet or trucking accounts whereby American agreed to supply fuels to the fleet customer at a specified price. The customer was issued a yellow credit card as evidence of the agreement. As a participating dealer McMullin would supply fuels to the yellow credit card holders and bill them at the contract prices. American would then replace the fuels so supplied by McMullin and pay him a service fee for handling the transaction. McMullin’s participation in the Yellow Credit Card program, as well as in American’s standard credit card program, was voluntary. McMullin also contracted with American to purchase a minimum of 100,000 gallons of regular gasoline annually in return for certain discounts, and contracted to keep the station open on a twenty-four-hour basis and to pay a surcharge on all gasoline in return for which American would pay all utility bills.

In addition to the above agreements, American also provided McMullin with the necessary financing to assume the operation. As was mentioned, McMullin had to make an initial capital investment of $10,000. American then advanced an additional $30,096.96 in the form of a Dealer Stock Loan and $14,743.08 in the form of an Agent Truck Loan. Both of these loans were secured by McMullin’s inventory and personal property at the site. Monthly installments were set forth in both loans, but McMullin also entered into liquidation agreements providing that the installments could be paid by way of a surcharge applied to his fuel purchases and by withheld commissions on his bulk plant sales.

The record shows that while McMullin continued his operation of the Elko facilities for slightly over two years, his financial difficulties became apparent from the outset. Under the arrangement with American, McMullin’s pump prices were essentially at the levels established by Olson, the prior owner, but the price at which McMullin purchased fuels was higher. In short, because of his various arrangements with American, McMullin could never have hoped to realize the margins obtained by Olson.

However, as the trial court found, McMullin’s limited marketing position was not the only source of his difficulties. Finding 28 by the trial court contained the following observations:

“McMullin’s financial failure at Elko resulted from his having abnormally large and uncontrolled costs and expenses, from his being badly under-capitalized, McMullin’s only capital contribution being a $10,000 loan from a bank which was paid off from gross receipts of the business in 1968, from his having inadequate books and records which did not permit McMullin to know where he stood financially at anytime, and from large withdrawals from the business by McMullin. These withdrawals were at least $75,000 and may have amounted to as much as $115,000 during the 25V2 months of McMullin’s operations in Elko.”

The record shows that American made a number of concessions to McMullin in order to help him overcome his difficulties. By various riders to the lease agreement, American forgave all rent otherwise accruing on the cafe and portions of the rent accruing from gasoline sales. This totaled in excess of $28,000. American also permitted McMullin to haul petroleum products from its Salt Lake City refinery and paid him common carrier rates therefor, allowed him a higher commission retroactively on his bulk plant sales, and increased his service fees on yellow credit card sales.

By the spring of 1969, however, McMullin’s position had deteriorated to the point that American offered him a mutual cancellation of their agreements and a return to his former employment. McMullin refused, and, as a final effort, American loaned him an additional $31,-200 to meet current tax obligations. This last measure was to no avail, and McMullin’s position continued to deteriorate until July 16, 1969, when the Internal Revenue Service closed and padlocked the Elko facilities for nonpayment of taxes. At approximately the same .time American learned that McMullin had been diverting proceeds from the bulk plant sales to meet his current business obligations rather than forwarding them to American as required by his employment contract. Based upon this latter activity and the IRS seizure, American terminated the employment contracts and the lease agreements. It then paid the asserted tax indebtedness and, after making inventory of the stock and equipment on hand, commenced operation of the business.

We have indulged in this rather lengthy exposition of the facts of this case in order to bring the legal issues more clearly into focus. The appellant has thrown up a barrage of assorted arguments, most of which depend upon a fact situation fundamentally different from that found below. We believe the foregoing recitation of the facts accords with the findings of the trial court as those findings were in turn developed by the record. The remainder of our discussion will be divided into three basic parts: the claims upon which American was granted judgment, the antitrust counterclaims, and the other claims asserted by McMullin.

AMERICAN’S CLAIMS.

The various claims on which American recovered totaled $121,407.33. Against this there were offset items totaling $22,566.49, leaving a net judgment of $98,840.84. American does not challenge any of the offset items. The judgment awarded American was divided into several components.

A. The IRS Lien Account: American was awarded $18,067.19 as the amount which it paid to obtain release of the tax lien against the Elko premises. As found by the district court, payment of the lien amount was the only method by which American could obtain possession and resume business operations without extensive delay. McMullin apparently challenges this portion of the award only on the basis that American’s payment was made voluntarily, with no express contractual right or obligation to assume McMullin’s tax indebtedness, and without properly seeking to contest the amount of the lien. These contentions are without merit. It was McMullin himself who first notified the Internal Revenue Service that he would be unable to meet his tax liabilities, and the trial court found that this was done with the hope of forcing American to assume his tax liabilities. Even though American’s interest in the facilities and the secured collateral could not have been subjected to the tax lien, it nevertheless had a strong interest in keeping the business operating. Thus its actions were more than those of an intermed-dler, and it was properly subrogated to the tax claim. See generally New York Casualty Co. v. Sinclair Refining Co., 108 F.2d 65 (10th Cir.).

B. Cash Shortages Account: American was awarded $12,164.41 as the amount which McMullin owed for sales from the bulk plant to his own retail operation. Because the retail pumps were connected directly to the bulk storage tanks, McMullin was not billed for purchases from the bulk plant until the fuel was actually dispensed to retail customers. He was required to submit weekly reports of the fuels so purchased, and at the time the Internal Revenue Service closed McMullin’s operation this amount, which includes the amount of a check drawn by McMullin and returned for insufficient funds, was owed. McMullin challenges only the sufficiency of the evidence to support this award. We find that it was supported by the evidence and testimony.

C. Unauthorized Credit Accounts: The terms of McMullin’s employment contracts required him to assume the risk of credit extended to customers who had not been approved by American. At the time his contracts were terminated, McMullin was carrying over $100,000 in such “unauthorized” credit sales. By the time of trial American had succeeded in collecting all but $31,560.91. At that point American elected to exercise its right under the contracts to proceed against McMullin for the balance then owing. McMullin does not dispute the construction or effect given to the contractual provision, but challenges only the sufficiency of the evidence to support the amount of the award. Again, we find sufficient evidence to support the award of $31,560.91 on the unauthorized credit account.

D. Attachment Account: As mentioned, this action was originally commenced by American as simultaneous attachment proceedings in the state courts of Nevada and Utah. The actions were removed, and the parties attempted to consolidate them in the trial court below. On the previous interlocutory appeal in this matter, we held that the consolidation was improper, and ordered the Nevada action remanded to the United States District Court for the District of Nevada. American Oil Co. v. McMullin, 433 F.2d 1091 (10th Cir.). The record indicates that the Nevada writs of attachment were subsequently quashed, which order was affirmed by the Ninth Circuit in an unpublished order of affirmance. American Oil Co. v. McMullin, No. 72 — 1043 (Ninth Circuit, August 6, 1973). The trial court in this action did not rule expressly on the Utah attachments.

The court below awarded a total of $15,207.85 to American as reimbursement for expenses incurred in connection with the attached property items. Most of these expenses were incurred in satisfying the claims of prior lienholders on the property, mostly trucks, attached. From our examination of the record, it appears that most of the property items were actually attached in Nevada by authority of the Nevada writs. In view of our previous decision and the decision of the Ninth Circuit, we cannot consider the expenses related to those attachments a proper subject of this action. We find insufficient evidence otherwise to justify any award attributable to attachment expenses, and the portion of the judgment below so attributed is set aside. We express no opinion on the validity of the Utah attachments.

E. Remaining Accounts and Offsets: The remainder of American’s award included uncontested amounts of $2,212.57, owed by McMullin on his personal credit account with American, and $42,194.40. The latter amount represents collections which McMullin received as bulk plant agent, but which he diverted to his own use rather than remitting to American as required by his contract. McMullin was awarded various offsets totaling $22,566.49 which are also uncontested.

Based on the foregoing discussion, then, the judgment awarded American must be reduced by $15,207.85 to a total of $83,632.99. It is otherwise affirmed.

THE ANTITRUST COUNTERCLAIMS.

Most of McMullin’s arguments on appeal are directed to the trial court’s rejection of his antitrust counterclaims. As mentioned previously the counterclaims alleged violations of both the Sherman Act and the Robinson-Patman Act, but the allegations principally concern monopolization in violation of sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 and 2).

In studying McMullin’s complaints and the record made below, we are convinced that he has confused the elements of a business arrangement, restrictive upon him, with practices condemned by the antitrust laws. McMullin repeatedly accuses American of “monopolizing his business.” In a sense that accusation might be true, in that there is “monopolization” in every form of ownership. The record shows that with a capital investment of $10,000, McMullin took the reins of an operation in which American had invested over $900,000. It would be inconceivable in such circumstances that American would not retain a substantial interest in and control ovér the business. McMullin’s antitrust allegations must, therefore, be considered against this background.

McMullin bases his Sherman Act arguments largely on three cases: Standard 011 Co. v. United States, 337 U.S. 293, 69 S.Ct. 1051, 93 L.Ed. 1371; Simpson v. Union Oil Co., 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 98; and United States v. Arnold, Schwinn & Co., 388 U.S. 365, 87 S.Ct. 1856, 18 L.Ed.2d 1249. He also argues vigorously that, with respect to the bulk distribution operation, he should be characterized as some type of independent dealer or contractor rather than as an employee-agent, as he was described in his contract with American. The thrust of his case is that American subjected him to illegal territorial and price restrictions stemming from its control over the bulk distribution operation and prevented him from competing for customers which he might otherwise attract. In other words, McMullin argues that by nominally separating the Elko operation into two distinct components and contracting with McMullin as employee-agent on the one hand and as lessee-dealer on the other, American sought to accomplish an illegal objective by a purely formal arrangement.

The record suggests that American’s principal objective in acquiring the Elko facilities from Slim Olson was to assure its continued control over the bulk distribution point. American had obviously determined that it would realize greater returns by operating the bulk plant itself as opposed to continuing to sell to Olson as an independent jobber from its Salt Lake City refinery. It would thus follow that American’s contracts with McMullin would be designed to protect this control over the bulk distributions.

There would be little benefit derived from enumerating the various indicators of an employer-employee relationship as they are manifested in McMullin’s bulk agent contract with American. The mere fact that McMullin as an employee assumed some of the operational expenses and certain business risks associated with the bulk plant does not compel us to disregard this characterization. Furthermore, we find ample justification for segregating the bulk plant operation from the truck stop. Despite their presence at the same site, they were naturally two distinct operations, and each was well established in the industry. We note that the contracts executed by McMullin were basically form agreements. We find nothing which would persuade us to characterize the relationship of the parties other than as they characterized it themselves.

Neither can we find anything in American’s ownership and operation of the bulk plan violative of the Sherman Act. McMullin has never challenged American’s acquisition of the Elko facility. To the contrary, the record indicates that during the year in question, American’s share of branded motor fuel sales in Nevada never exceeded two per cent, a figure which hardly suggests monopoly power. American does not deny that it established bulk sales prices and limited the territory served by the plant. While these practices would obviously create problems were McMullin an independent distributor, we do not find anything in Simpson v. Union Oil Co., 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 98, or in United States v. Arnold, Schwinn & Co., 388 U.S. 365, 87 S.Ct. 1856, 18 L.Ed.2d 1249, which would condemn them in the case of a producer wholesaling its own product.

McMullin strongly urges that his bulk agent arrangement with American is analogous to the consignment arrangement condemned in Simpson v. Union Oil Co. While it is not difficult to discover many similarities in the arrangements, one significant distinction is equally apparent. The particular evil which was identified in Simpson was the use of a product consignment plan whereby the supplier, by ostensibly retaining ownership of the various products while in the hands of otherwise independent dealers, was able to control retail prices. The result was that dealers who were tied to the particular supplier were unable to participate effectively in a highly competitive market. But it must be emphasized that the dealer involved in the Simpson case was in most respects an independent businessman, and the Court found that the consignment arrangement existed only for the purpose of controlling retail prices. Thus the Court was not making a blanket condemnation of consignment arrangements, but, rather, it was holding that a formal consignment contract could not bé used to conceal an illegal price-fixing agreement.

We have already concluded that as to the bulk plant operation, McMullin was an employee of American and not an independent businessman. Not only did American retain title to the products until sold, but the sales were made in its name as well. In fact, McMullin as dealer made purchases from the bulk plant in the same manner as any other dealer-customer. While the arrangement between Simpson and Union Oil was limited to the consigned products, McMullin contracted with American as an employee. American provided the facilities and equipment with the exception of the delivery trucks which it leased from McMullin. He continued his retirement plan, health and accident insurance, and employee savings plan. It is true that McMullin’s compensation was in the form of sales commissions rather than a salary, and that from these commissions he had to deduct various operating expenses. Nevertheless, it must be presumed that the bargained rate of commission was intended to embrace those expenses and still provide adequate compensation to McMullin as sales agent. That McMullin in his capacity as employee assumed some of the overhead and received compensation in the form of commission rather than salary does not make his status as an employee a sham. We find nothing in Simpson which would prohibit a manufacturer from distributing its own products and thereby controlling wholesale distribution prices. Simpson v. Union Oil Co., 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 98, merely established the boundaries of the General Electric holding; it did not overrule it. United States v. General Electric Co., 272 U.S. 476, 47 S.Ct. 192, 71 L.Ed. 362. See also United States v. Arnold, Schwinn & Co., 388 U.S. 365, 87 S.Ct. 1856, 18 L.Ed.2d 1249.

McMullin in his capacity as the operator of the truck stop was clearly an independent businessman. There is no evidence of an attempt by American to coerce him to maintain any particular retail price. Prices were suggested by American, but the evidence shows that McMullin did not always adhere to them, and no reprisals against him were taken. This condition existed also through a brief price support period. This is not a Lehrman v. Gulf Oil Corp., 464 F.2d 26 (5th Cir.), type of case.

The contract for the station operation did not require McMullin to buy all his products from American, and no evidence was offered that there was any such requirement. Furthermore, McMul-lin did not contend it was an exclusive dealing contract. He did sell other motor oils and other products not provided by American. There was no evidence of coercion by the seller or contractual requirement for exclusive dealing. The fact that the pumps were connected directly to the bulk plant is obviously a factor to consider, but we do not regard it to be determinative in the face of the other facts and conditions. There is no indication that McMullin wanted to buy gasoline or diesel fuel from any other source. This station was the only American brand retail facility within forty miles in any direction along the principal roads. As indicated above, American had something less than two per cent of the market in the area in question.

McMullin also alleges a variety of other Sherman Act transgressions, many of which are resolved as a result of our decision on the distribution arrangement. Additional comment on these allegations is unnecessary. We have considered them and found that they are without merit.

We shall also comment briefly on the Robinson-Patman price discrimination allegations. These allegations are directed at two levels. First, McMullin contends that American violated 15 U.S.C. § 13 by making products available to other major oil companies at its Salt Lake City refinery at prices lower than those at which McMullin could purchase. Second, McMullin alleges a similar violation in American’s practice of selling products from the bulk plant to consumer customers at prices lower than those available to McMullin as a dealer. The same fallacy infects both contentions. An essential element of price discrimination violative of the Robinson-Patman Act is a deleterious effect on competition. Courts have traditionally interpreted this requirement as meaning the discrimination in prices must be between potential competitors or at least result in a discriminatory price differential as between potential competitors. See Chicago Sugar Co. v. American Sugar Refining Co., 176 F.2d 1 (7th Cir.); 16H Business Organizations, Von Kalinowski, Antitrust Laws and Trade Regulations § 68.04, and cases cited therein. A brief examination of McMullin’s complaints shows that requirement is not satisfied.

At its Salt Lake City refinery, American supplies petroleum products to other major oil companies under an exchange arrangement by which it gets reciprocal treatment at their refineries. The record does not show that these transactions are actually sales. The arrangement is for the obvious purpose of avoiding the need for each company to maintain a refinery in each geographical area in which it operates. If they are customers of American’s, these companies are not prospective retailers, or even wholesale distributors. Rather they are first level purchasers who will dispense their products through jobbers or distributor-agents to various retail outlets. As such they are not in competition with McMullin directly, and if anything, they are competitors of American. Furthermore, if it is significant, there has been no showing or allegation that the “prices” available to such companies are of such magnitude as to enable their various retailers or distributor-agents to compete in a more favorable position than McMullin. Thus the discount prices are at most representative of the recognized legitimate practices of functional level pricing. See Von Kalinowski, supra, at § 68.04[1].

A similar analysis applies to American’s bulk distribution pricing. McMul-lin objects because consumer customers of the bulk plant received a more favorable price than did McMullin as a dealer. McMullin neither alleged nor proved that his dealer tankwagon price varied from that given other dealers. By definition the consumer customers would not be involved in the resale of the products which they purchased. Thus they were not in competition with McMullin as a dealer, nor, obviously, could McMullin expect to compete with American for their business. Von Kalinowski, supra, at § 68.04[3], Therefore, in neither instance has McMullin demonstrated any adverse effect on competition resulting from the alleged price discrimination.

McMULLIN’S OTHER CLAIMS.

The remaining claims asserted by McMullin are resolved for the most part by reference to our earlier summary of the facts. McMullin contends that he was fraudulently or deceptively induced to assume the business by reason of various misrepresentations as to the expected profitability of the venture, and that the resultant contracts, by reason of the disparity in bargaining positions of the parties, are unconscionable and therefore unenforceable. We find no merit in either contention.

American apparently did offer McMul-lin some predictions as to operating expenses, receipts, and profitability of the Elko operation. However, the trial court’s specific finding, supported by the evidence, was that those predictions were offered only as estimates .based on American’s study of Slim Olson’s operation and projected bulk plant and truck stop sales. Furthermore, a period of some four months elapsed between the time McMullin first expressed interest in the business and the signing of the contracts. During this time McMullin had free access to the business records and physical facilities, and presumably he had ample opportunity to make whatever independent evaluation he desired. Nor can we find, evidence to support McMullin’s contentions that any of the figures were knowingly exaggerated, or that pertinent information was otherwise knowingly concealed. In fact, the trial court found that in some respects American’s projected sales volumes were exceeded by McMullin’s actual experience.

Likewise, we are unable to find that McMullin was coerced to enter the various contracts, or that their provisions were unconscionable. Again, the record shows that McMullin had ample time to deliberate before consenting to the various agreements. While the contracts were, for the most part, form agreements, McMullin could presumably have bargained for material alterations. That presumption is further supported by American’s subsequent adjustment of commission rates and rentals in an effort to assist McMullin in resolving his financial problems.

Finally, we find no evidence whatever to support McMullin’s contentions that American wrongfully took possession of the premises or converted his property. American did not act until the Internal Revenue Service had padlocked the facility. From that point, as the trial court found, its actions were based on its contractual rights as governed by the Nevada version of the Uniform Commercial Code.

In closing, we would add these final observations: It has been over five years since this action was commenced. The proceedings have been delayed on several occasions to enable the defendant McMullin to engage in extensive and unlimited discovery. Trial in the district court consumed seven days, and those days included proceedings lasting well into the evening. We are convinced that McMullin has been afforded ample opportunity to present his claims. In the last analysis, we must agree that he entered a bargain with unfortunate consequences both for him and American. Nevertheless, neither the antitrust laws nor other statutory or common law provides refuge from the results of an unfortunate bargain when it has knowingly and willingly been formed by the parties.

The portion of the judgment attributable to the attachment account is reversed, and the judgment in favor of American is ordered to be reduced to $83,682.99. The decision and judgment of the district court is otherwise affirmed.