author: ORIE L. PHILLIPS, Circuit Judge.

text:
    Gary B. JACKSON, Plaintiff-Appellant, v. P. J. GRIFFITH et al., Defendants-Appellees.
    No. 71-1277.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted April 11, 1973.
    Decided June 14, 1973.

      Michael Lerner, Kansas City, Kan. (Robert H. Waters, Kansas City, Kan., on the brief), for plaintiff-appellant.
    Edward G. Collister, Jr., Sp. Asst. Atty. Gen., State of Kan.. (Vern Miller, Atty. Gen., State of Kan., on the brief), for defendants-appellees.
    Before PHILLIPS, SETH and DOYLE, Circuit Judges.
   ORIE L. PHILLIPS, Circuit Judge.

Gary Dean Jackson brought this action against the above-named State Board of Regents of the University of Kansas and E. L. Chalmers, Jr., Chancellor of the University of Kansas, hereinafter referred to collectively as the defendants. From a summary judgment in favor of the defendants and a judgment against Jackson and in favor of the defendants, Jackson has appealed.

It is alleged in the complaint that jurisdiction is based upon allegations that the action arises under 42 U.S.C.A. § 1983 et seq., and Amendments 1, 5, and 14 of the Constitution of the United States.

The complaint, which was duly verified, alleged the following facts:

That the above-named defendants, other than E. L. Chalmers, Jr., are members of the State Board of Regents of the University of Kansas, and as such make and enforce the policies and regulations of the University.

That E. L. Chalmers, Jr., is the Chancellor of the University of Kansas, and as such has general administrative authority over the policies of the operations of the University.

That Gary Dean Jackson received his A.B. degree from the University of Kansas in June 1970. He enrolled for the summer session, commencing in early June at the College of Law of the University.

Jackson received an appointment as Graduate Assistant, Department of Black Studies, for the summer session, beginning June 1, 1970, and ending July 30, 1970. In addition, he received an appointment as Assistant to the Dean of Men for Black Students for the period beginning July 1, 1970, and ending June 30, 1971. His duties under the academic appointment consisted of teaching courses in the Black Studies Department. His duties under the administrative appointment consisted of working with and relating to the black student community. At all times, Jackson fulfilled the duties incident to his academic and administrative appointments in a superior manner.

Jackson was informed that his academic appointment as an instructor in the Department of Black Studies and his position as Assistant Dean of Men for Black Students would be renewed for the 1970-1971 academic year.

On July 27, 1970, in compliance with the directive of the State Board of Regents to Chancellor E. L. Chalmers, Jr., Jackson’s employment was terminated in all capacities.

On December 3, 1970, the defendants filed and served on Jackson certain requests for admissions, numbered 1 to 8, inclusive. On January 13, 1971, Jackson filed and served his answers to such requests. We set out each request and the answer thereto, as follows:

“Q. 1. You graduated from undergraduate school at the University of Kansas in the spring term of 1970 and on or about June 1, 1970, received an appointment at the University of Kansas as a graduate teaching assistant, Department of Black Studies, for the summer session beginning June 1, 1970, and ending Friday, July 31, 1970.
“A. 1. Plaintiff admits no. 1.
“Q. 2. On Monday, July 27, 1970, you were notified by officials at the University of Kansas that your employment by the University of Kansas was terminated.
“A. 2. Plaintiff cannot truthfully admit or deny request no. 2 for the reason that, his only notification was to receive, without comment, a copy of the memorandum of July 27, 1970 from Chancellor Chalmers to Vice Chancel- • lor Keith Nitcher. Said copy was directed to Plaintiff as indicated (photocopy of memorandum attached).
[The photocopy read :
‘MEMO TO: Vice Chancellor
Keith Nitcher
FROM: E.L.C. /&/ E.L. Chalmers Jr.
‘In compliance with the directive (attached) of the Board of Regents please terminate the employment of Mr. Gary Dean Jackson immediately.
* * -x- *
‘It was moved by Mr. Danenberger and seconded by Mr. Cromb that the Chancellor of the University of Kansas be directed to immediately remove Gary Dean Jackson from employment.’]
“Q. 3. You know that the act of terminating your employment was taken due to the fact that during the turmoil in Lawrence, Kansas, in July of 1970 you, on July 17, the day after Rick Dow-dell’s shooting death, purchased approximately 27 boxes of ammunition and took them back to Lawrence, Kansas, to be dispersed among various individuals.
“A. 3. Plaintiff denies request no. 3.
“Q. 4. When your employment as a graduate teaching assistant, Department of Black Studies, was terminated on Monday, July 27, 1970, you had five days remaining on your summer school teaching contract.
“A. 4. Plaintiff admits request no. 4.
“Q. 5. You were notified that on or about September 18, 1970, that the Kansas State Board of Regents met at Topeka, Kansas and determined that you should be reinstated in your position as a graduate teaching assistant, Department of Black Studies, for the remainder' of your contract which was from Monday, July 27, 1970, through Friday July 21, [sic] 1970, and further directed that you be paid for the remaining five days on your teaching contract in the amount of $42.90.
“A. 5. Plaintiff denies request no. 5.
“Q. 6. You were paid $42.90 after being reinstated for the remaining five days on your summer school teaching contract.
“A. 6. Plaintiff denies request no. 6.
“Q. 7. That attached hereto as Exhibit ‘A’ is a copy of the state warrant issued to you in the amount of $42.90 covering wages due for the five day period from July 27 through July 31, 1970, upon your contract as a graduate teaching assistant, Department of Black Studies.
“A. 7. Plaintiff cannot truthfully admit or deny defendant’s request no. 7 for the following reasons:
Plaintiff never saw the actual warrant referred to as Exhibit ‘A’. On November 5, 1970, he was advised that a deposit in the amount of Forty-two Dollars and Ninety Cents ($42.90) had been credited to his account at the Capital Federal Savings and Loan Assn. The source or reason for the deposit was not made known to the plaintiff, by Capital Federal or anyone else.
“Q. 8. That you have been fully paid for your services as a graduate teaching assistant, Department of Black Studies.
“A. 8. Plaintiff cannot truthfully admit or deny request no. 8 in view of the information available to him as indicated in his response to request nos. 6 and 7.”

On July 30, 1970, Jackson made a written request to the State Board of Regents and Chancellor E. L. Chalmers, Jr., that he be given:

“a. an enumeration of the charges on which the termination was based;
“b. a hearing before the Board of Regents on these charges with the opportunity to be heard and to present evidence;
“c. a review of the prior decision to terminate based upon the hearing results;
“d. an answer to the request of August 5, 1970 setting out charges and a hearing date.”

Up to October 26, 1970, the date of the filing of the complaint, Jackson’s request, as outlined in the communication of July 30, 1970, to the defendants, had gone unanswered.

At all times during his employment, both in his capacity as Assistant Dean of Men and as instructor in the Black Studies Department, Jackson was active in black student organizations, and in his capacity as instructor in the Black Studies Program, he was active in the development of a black studies curriculum.

In his complaint, Jackson alleged that the reason for the decision to terminate his employment under his academic and administrative appointments, and not to offer him an academic or administrative appointment for 1970-1971 was to retaliate against him for his expressions of opinion, in the exercise of his freedom guaranteed by the First and Fourteenth Amendments of the Constitution of the United States;

That the decision was not made under ascertainable and definite standards governing the defendants in making such decision;

That the decision had caused and would cause damage to Jackson’s professional reputation and standing;

That Jackson’s rights under the First, Fifth and Fourteenth Amendments to the Constitution of the United States had been violated by:

1. The defendants’ decision not to reemploy Jackson;

2. By failure of the defendants to provide a hearing as to the merits of the decision, with the opportunity to be heard and to present evidence thereon;

3. By failure of the defendants to provide an enumeration of the charges on which the termination was based;

4. By defendants’ failure to make such a decision under ascertainable and definite standards.

Jackson stated in the complaint that he suffered irreparable injury and was threatened with irreparable harm in the future by reason of the acts complained of.

On November 30, 1970, defendants filed a motion to dismiss the complaint on the ground of failure to state facts upon which any relief could be granted, and filed in support thereof a memorandum signed by Ray L. Borth, Assistant Attorney General, State of Kansas, which in part read:

“At page 4 of plaintiff’s complaint, he states that the reason for the decision to terminate his employment under his academic and administrative appointments and not to offer him said academic and administrative appointments for 1970-71 was to retaliate against him for his expressions of opinion and the exercise of his freedom guaranteed by the first and fourteenth amendments of the United States Constitution. It is defendants’ contention that plaintiff’s employment was terminated because during the turmoil in Lawrence, Kansas, in July of 1970 when Rick Dowdell was shot to death, plaintiff on July 27, 1970, subsequent to such shooting, came to Topeka, Kansas, bought 27 boxes of ammunition and took them back to Lawrence, Kansas.
* * -x- -x- * -X-
“Apparently the main thing that the plaintiff is complaining about in the case at bar is that there is no enumeration of the charges shown to him upon which his termination of employment was based and that there should have been a hearing upon these charges so that he would have had an opportunity to be heard and present evidence relative to his position. Directing the Court’s attention to that subject, the defendants have filed Exhibit ‘A’, which is some eight pages of copies of communications between plaintiff’s attorney, the Board of Regents, the Chancellor of the University of Kansas, and the Attorney General’s office. * * * ”

Included in such Exhibit “A” is what purports to be a telegram from Robert H. Waters, as attorney for Jackson, to Chancellor Chalmers and the Board of Regents of the University of Kansas, which reads:

“Request that you and the Board of Regents provide the following in connection with the termination of Gary Dean Jackson, Assistant to the Dean of Men:
“(1) An enumeration of the charges on which the termination was based.
“(2) A hearing before the Board of Regents on these charges, with the opportunity to be heard and to present evidence.
“(3) A review of the prior decision to terminate based upon the hearing results.
“(4) An answer to this request by August 5, 1970, setting out charges and hearing date.”

Also included in such Exhibit “A” is a letter from J. Richard Foth, Assistant Attorney General, State of Kansas, to Waters, in part reading:

“The Chancellor of the University of Kansas and the Kansas State Board of Regents have referred your telegram to this office since we serve as legal counsel for the Board of Regents.
•X- -X- *
“The action of the Board of Regents in ordering Chancellor Chalmers to dismiss Mr. Jackson was predicated upon what was thought to be an uncontroverted set of facts: That on July 17, 1970, at a time when Mr. Jackson was employed as Assistant to the Dean of Students, he traveled from Lawrence to Topeka, Kansas, and purchased twenty-seven boxes of ammunition which were .subsequently returned to Lawrence and delivered to unknown individuals; that the action was taken on the day following the shooting death of Rick Dowdell and the ensuing turmoil which engulfed the community of Lawrence; that Mr. Jackson readily acknowledged that he had purchased the ammunition and delivered it to parties in Lawrence.
“Based upon the foregoing information, the Board of Regents determined that Mr. Jackson’s actions evidenced a lack of maturity and responsibility on his part that was incompatible with his duties involving the counseling of students and liaison between the University of Kansas and the Lawrence community in light of the events then transpiring in Lawrence.
* * * * * *
“It is the position of the Board of Regents that Mr. Jackson served at the will of the Chancellor and was thus subject to dismissal for any reason that might relate to his ability to fulfill the duties imposed upon him as Assistant to the Dean of Students. Under the fact situation set out above, the Board of Regents felt that Mr. Jackson should be dismissed for the reason indicated above.”

Also set out in such Exhibit “A” is what purports to be a telegram from Robert H. Waters and Michael Lerner, as attorneys for Jackson addressed to the Office of the Attorney General, Attn. J. Richard Foth, reading in part as follows:

“Our telegram of July 30, 1970 items one through four sets out fully and completely the request of the Chancellor and the Board of Regents as made by Garry Jackson. * * * We reaffirm the request made in communication of July 30, 1970.”

It will be recalled that in his complaint, Jackson alleged that he made a demand upon Chancellor Chalmers and the Board of Regents that he be given:

“a. an enumeration of the charges on which the termination was based;
“b. a hearing before the Board of Regents on these charges with the opportunity to be heard and to present evidence;
“c. a review of the prior decision to terminate based upon the hearing results;
“d. an answer to the request of August 5, 1970 setting out charges and a hearing date.”

It is obvious that what Jackson requested was that the charges and the grounds for his dismissal be made in writing and furnished to him, and that he be given a hearing and an opportunity to answer such charges and to present evidence.

A mere recital in a letter by the Assistant Attorney General, in which much other matter was included, was not a statement of the charges made by the Board of Regents against Jackson nor a basis for a hearing on the charges made against Jackson.

Moreover, the statement in the Attorney General’s letter was expressly denied by Jackson in his answer to No. 3 of the Request for Admissions, and also in the allegations of his complaint.

It is apparent that the court treated the matter, including Exhibit “A” to the memorandum of counsel for the defendants, as an affidavit, because he states in his memorandum, which precedes his decision and order, the following:

“Pursuant to Rule 12(b), Federal Rules of Civil Procedure, the court ruled on January 4, 1971 that defendants’ motion to dismiss for failure to state a claim upon which relief could be granted would be treated as one for summary judgment. Plaintiff was given ten days within which to answer defendants’ request for admissions and to file opposing affidavits. He has answered the request, but has filed no opposing affidavits.” (Italics ours.)

Certainly, there is no legitimate proof in the record that Jackson admitted he purchased ammunition and delivered it to parties in Lawrence, Kansas.

Surely, Jackson is not required to try his claim for relief, duly set forth in his verified complaint, and the issues tendered thereby on the basis of unauthenticated and unverified statements in what purports to be a letter from the defendants’ attorney to Jackson’s attorney.

It is true that Rule 56 of the Federal Rules of Civil Procedure does permit the filing of affidavits in support of a motion for summary judgment, but we do not think that authorizes the practice of filing affidavits denying the allegations of the complaint.

The pleadings must be construed liberally in favor of a party against whom a motion for summary judgment is interposed, under Rule 56 of the Federal Rules of Civil Procedure, “but the court may pierce the pleadings and determine from depositions, admissions and affidavits, if any, in the record whether material issues of fact actually exist. If, after such scrutiny, any issue as to a material fact dispositive of right or duty remains the case is not ripe for disposition by summary judgment.”

While the rule provides for the filing of affidavits, their sole purpose is to show whether any issue of material fact exists. The rule does not serve as a substitute for a trial and bona fide factual disputes may not be disposed of through the use of affidavits.

Here, Jackson alleged that he was employed by the University of Kansas as Assistant to the Dean of Men for Black Students for the period beginning on July 1, 1970, and ending June 30, 1971; that on July 27, 1970, in compliance with the directive of the State Board of Regents, the following memorandum was directed to him:

“MEMO TO: Vice Chancellor Keith Nitcher
“FROM: E.L.C. /s/ E. L. Chalmers, Jr.
“In compliance with the directive (attached) of the Board of Regents please terminate the employment of Mr. Gary Dean Jackson immediately.
“ELC :lje
“cc: Vice Chancellor Wm. Balfour Dean George Waggoner Mr. Max Bickford
“It was moved by Mr. Danenbarger and seconded by Mr. Cromb that the Chancellor of the University of Kansas be directed to immediately remove Gary Dean Jackson from employment.”

Jackson further alleged in his complaint that during his employment as Assistant Dean of Men for Black Students he was active in black student programs, and that the reason for the termination of his employment was to retaliate against him for belonging to and taking an active interest in black student organizations, and for expressing his opinion in the exercise of the freedom guaranteed to him by the First and Fourteenth Amendments to the Constitution of the United States.

Although neither the memorandum filed by counsel for the defendants in support of their motion to dismiss, nor Exhibit “A” attached thereto, were sworn to or otherwise verified, the court referred to such Exhibit “A” and such motion as affidavits and based the facts thereon, which he found and set forth in his memorandum decision on the motion for summary judgment.

The court sustained the motion for summary judgment on the ground that Jackson’s employment was terminated under the provisions of K.S.A.1972 Supp. 76-715, which was effective March 18, 1970, and which reads as follows:

“76-715. Appointment of employees; compensation. The chief executive officer of each university and college shall appoint such employees as are authorized by the board of regents. Employees in the unclassified service shall serve at the pleasure of the chief executive officer of the university or college, subject to policies approved by the board of regents. Unclassified employees shall receive such compensation as is prescribed by the chief executive officer of the university or college within authorizations by the board of regents. Employees of the universities and colleges, who are not in the unclassified service, shall be in the classified service of the Kansas civil service act. [L.1970, ch. 371, § 5; March 18.]” (Italics ours.)

Here, however, the contract provided that Jackson’s employment should continue from July 1, 1970, to June 30, 1971, and the determination to terminaté his employment under the contract and the ' order directing such termination were made by the State Board of Regents of the University of Kansas and not by the Chancellor. There is nothing in the record to show that it was the pleasure of the Chancellor to terminate Jackson’s employment as Assistant Dean of Men for Black Students. Moreover, the Chancellor expressly appointed Jackson to serve as Assistant Dean for a term of one year, and did so after the above-mentioned statute was enacted. The record is bare of any explanation of why the Chancellor appointed him for a specific term. There must have been some reason for that, but such reason does not appear in the record.

Moreover, the provision in the statute that “employees in the unclassified service shall serve at the pleasure of the chief executive officer of the university or college” is expressly made “subject to policies approved by the board of regents.” The record does not show whether the Board of Regents adopted any policy limiting the power of such chief executive to terminate the service of an Assistant Dean, and if so, what that policy was.

Counsel for Jackson attached an exhibit to the brief filed in opposition to the motion to dismiss, which stated in part that the Board of Regents adopted a Code of Conduct on July 10, 1970, reading in part as follows:

“In order to insure due process any student, faculty member or other employee suspended, or who might receive other disciplinary action on the ground of violating any of the premises of this resolution, as well as all other rules and regulations established by the Board of Regents and also those established by the institutions, shall have at his or her discretion the right of interview of the action by the governing board constituted at each institution to handle disciplinary matters.”

Like Exhibit “A”, attached to the memorandum filed by counsel for the defendants in support of their motion to dismiss, the above statement was not sworn to or otherwise verified and we cannot consider it as an established fact, notwithstanding the court, we think erroneously, fully used, considered and quoted from Exhibit “A” in stating the facts in the memorandum opinion supporting his order sustaining the motion for summary judgment.

We are of the opinion that the case was not ripe for summary judgment and that important facts were not properly brought before the court. What, if any, policy the Board of Regents adopted after the enactment of the statute which provided that employees in the unclassified service should serve at the pleasure of the chief executive officer of the university or college, subject to policies approved by the Board of Regents, was not brought before the court.

Why did the Chancellor provide that the appointment of Jackson as Assistant to the Dean of Men for Black Students should continue in effect from July 1, 1970, to June 30, 1971, which appointment was made after the statute was enacted? Why did the Board of Regents order the termination of Jackson’s employment, instead of the Chancellor? Was it the pleasure of the Chancellor that on July 27, 1970, Jackson’s appointment as Assistant Dean should be terminated immediately? Was the contract for a specific term entered into by the Chancellor with Jackson a valid exercise of the Chancellor’s powers? If it was, it created in Jackson a property right of which he could not be deprived except for cause, and he would be entitled to a hearing to review such order of termination. Was the reason Jackson’s employment was terminated before the end of its term to retaliate against him, because he exercised his constitutional right to belong to black organizations and to be active therein and in the development of black studies programs and curriculum, as he alleged in his complaint, or was it because of the alleged ammunition episode, which he denied in his answer to No. 3 of the Request for Admissions and impliedly in his complaint, when he alleged the reason why his employment was terminated ?

We are of the opinion that the record before the trial judge left undetermined material facts upon which the right of Jackson to the relief he sought depended, and hence the case, as stated above, was not ripe for disposition by summary judgment.

The case is reversed and remanded, with instructions to set aside the judgment entered and proceed further, in accordance with the views expressed in this opinion.

      . Machinery Center, Inc. v. Anchor National Life Ins. Co., 10 Cir., 434 F.2d 1,6 (1970).

      . Machinery Center, Inc. v. Anchor National Life Ins. Co., 10 Cir., 434 F.2d 1, 6 (1970); Hanley v. Chrysler Motors Corporation, 10 Cir., 433 F.2d 708, 711 (1970).


source: Caselaw Access Project

author: HILL, Circuit Judge.

license: Public Domain

text:
    The SINGER COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
    No. 72-1800.
    United States Court of Appeals, Tenth Circuit.
    June 22, 1973.

      Robert C. Poole, Albuquerque, N. M., for petitioner.
    Fredric Sagan, Washington, D. C. (Peter G. Nash, Gen. Counsel, John S. Irving, Deputy Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Elliott Moore, Acting Asst. Gen. Counsel, Washington, D. C., on the brief) for respondent.
    Before PICKETT, HILL and DOYLE, United States Circuit Judges.
   HILL, Circuit Judge.

The Singer Company (Singer), petitions this court, pursuant to § 10(f) of the National Labor Relations Act, 29 U.S.C. § 160(f), to set aside the order of the NLRB issued on October 31, 1972, finding Singer to have violated §§ 8(a) (1) and (3) of the Act, 29 U.S.C. §§ 158 (a)(1) and (3), in the course of the Union’s representation campaign. The Board filed its cross-application pursuant to § 10(e) of the Act, 29 U.S.C. § 160(e), for enforcement of its order.

The Board found that Singer had violated §§ 8(a)(1) and (3) in prohibiting certain employees from wearing shirts displaying the insignia of the International Association of Machinists and Areospace Workers, AFL-CIO (IAM), the union involved in the representation campaign at Singer’s Albuquerque, New Mexico, plant. The Board additionally found that Singer, by its actions, statements and information disseminated during the campaign, had restrained and coerced its employees in violation of 29 U. S.C. § 158(a)(1).

Singer had operated a calculating machine production plant at San Leandro, California, where the Union had represented the employees of the plant for the preceding 25 years. In an effort to attain lower labor costs and thereby to compete more favorably with foreign-produced calculating machines which Singer asserted had caused a decline in its share of the domestic market from 60% to 6% between 1967 and 1970, Singer in 1969 established a new manufacturing facility at a temporary location in Albuquerque, New Mexico. The new plant was moved to its permanent facility in August, 1970. Tn June, 1970, the Union began its campaign to organize and represent the employees of the new plant. The campaign was characterized by the distribution of extensive literature and the numerous general meetings with the employees by both Singer and IAM. On September 11, 1970, the Union notified Singer of its campaign activities, and on October 22, 1970, the Union requested recognition on the basis of a card check. Singer refused and insisted on an election, which was held on December 10, 1970. The election resulted in the Union’s being rejected by a 63-44 margin. The Union filed its objection to certain preelection conduct by Singer and, following a hearing, the election was set aside and a second election was ordered. Singer maintains the Board’s resolution of the issues raised in regard to the alleged misconduct by Singer was either erroneous or not supported by substantial evidence.

The first alleged misconduct involved an incident on September 17, 1970, when seven employees reported to work wearing shirts colored in a manner and with insignia displayed to identify them as Union shirts. The men were told by an officer of Singer that they would not be permitted to work in the plant while wearing the shirts. It is clear that “[t]he right to wear union insignia on the employer’s premises during working hours in guaranteed by § 7 in the absence of special considerations.” Serv-Air, Inc. v. NLRB, 395 F.2d 557, 563 (10th Cir. 1968), cert. denied, 393 U.S. 840, 89 S.Ct. 121, 21 L.Ed.2d 112. Singer argued before the Board this prohibition was necessary in view of interfactional hostilities at the plant and the possibility of further disruption if the shirts were permitted in the plant. As proof, Singer points to a drop in production on this particular day. The Board, however, found the evidence to be inconclusive that the drop in production was due primarily to the wearing of the shirts. In fact, the Board found it reasonable to infer that any decrease in production was attributable to Singer’s actions in suppressing the wearing of the shirts.

The next allegation of misconduct regards an asserted coercive interrogation of employees by a company supervisor as to the union sympathies of employees under him. Singer maintains the alleged coercive interviews were nothing more than casual conversations. The Board, on the evidence presented, concluded the employees had been the subject of coercive interrogation by Singer.

Closely related is an allegation that Singer had exerted coercive pressure on its employees through statements made by it during its opposition campaign. Singer contends the statements made by it during its campaign were merely an attempt to disclose the economic facts as they existed and to indicate possible eventualities if the economic situation changed unfavorably for Singer. An employer’s statements which are not coercive are protected under 29 U.S.C. § 158(c) and cannot form the basis for a § 158(a)(1) violation. The test of whether it' is coercive speech is whether the employer’s statements convey a threat of economic reprisal taken solely on the employer’s volition in the event the union campaign proves successful. The Board found the dominant theme of Singer’s antiunion campaign was one of strikes, loss of jobs and closure of the plant itself, punctuated by statements attributing the loss of 14,000 jobs to unionization at various plants, and further illustrated by specific examples of other plants which had, after voting for union representation, been closed with an attendant loss of jobs to the work force. “The primary responsibility of determining whether statements are to be construed as threats or mere expressions of opinion lies with the Board . . . and the Board’s decision will not be disturbed on appeal unless the record as a whole does not reveal substantial evidence in support of the finding.” N. L. R. B. v. Acker Industries, Inc., 460 F.2d 649 (10th Cir. 1972).

On application for enforcement of the Board’s order, this court must “review the record as a whole to determine whether there exists substantial evidence to support the board . . ” that is, “such evidence as a reasonable mind might accept as adequate to support a conclusion.” N. L. R. B. v. Meinholdt Mfg., Inc., 451 F.2d 737, 738 (10th Cir. 1971). There is ample evidence to support the conclusions of the Board.

The relief requested by the petition for review is denied, and the Board’s cross-application for enforcement of its order is granted. A judgment shall be entered accordingly.

      . N.L.B..B. v. Automotive Controls Oorp., 406 F.2tl 221 (10th Cir. 1969).

      . X.L.R.B. v. Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969) ; X.U.R.B. v. Automotive Controls Oorp., supra.


author: CASTLE, Senior Circuit Judge.

text:
    UNITED STATES of America and Burnis Brown, Revenue Agent, Internal Revenue Service, Petitioners-Appellees, v. Herbert E. TURNER, Respondent-Appellant.
    No. 73-1193.
    United States Court of Appeals, Seventh Circuit.
    Argued April 23, 1973.
    Decided June 12, 1973.
    Rehearing Denied July 2, 1973.

      Edward Kaplan, Chicago, Ill., for respondent-appellant.
    Scott P. Crampton, Asst. Atty. Gen., Mary J. McGinn, Atty. Tax Div., Dept. of Justice, Washington, D. C., James R. Thompson, U. S. Atty., William T. Huyek, Asst. U. S. Atty., Chicago, Ill., for petitioners-appellees.
    Before CASTLE and MOORE, Senior Circuit Judges, and CUMMINGS, Circuit Judge.

       Senior Judge Leonard P. Moore of the United States Court of Appeals for the Second Circuit is sitting by designation.

   CASTLE, Senior Circuit Judge.

Appellant Herbert E. Turner appeals from an order of the district court granting enforcement to an Internal Revenue Service summons compelling him to produce the names and social security numbers of clients whose tax returns he had prepared for 1970-1971 so that the Service could determine the accuracy of these returns.

On September 28, 1972, Revenue Agent Burnis Brown served a summons upon Turner which ordered him to produce the names, addresses and social security numbers of the persons whose income tax returns he bad prepared for 1970 and 1971. Brown petitioned the district court for enforcement of the summons on December 18, 1972, alleging that he was conducting an investigation of “the correctness of income tax returns prepared by Herbert E. Turner for his customers and clients for the taxable periods 1970 and 1971. .” Turner’s response to this petition alleged as affirmative defenses that the investigation was being conducted to obtain evidence for a criminal proceeding against him, that the summons was too vague, and that the production of the documents would violate certain constitutional rights. Turner also moved under the Federal Rules of Civil Procedure for discovery of all reports and communications stating and reflecting upon the reasons for investigating him, and he filed a notice of deposition of Agent Brown. On February 16, 1973, the district court denied the requested discovery and quashed the notice of deposition.

On February 21, 1973, the court held a hearing on the petition for enforcement of the summons at which Turner and his counsel were allowed to cross-examine the Internal Revenue agents involved with his case. Myron Braunstein, a supervisory I.R.S. agent, testified that the planned examination of the returns prepared by Turner is a facet of the Service’s Tax Preparers Project, a nationwide program with three objectives: 1) the protection of uninformed and uneducated taxpayers who rely on tax preparers, 2) the identification of unscrupulous and incompetent tax preparers and the attempt to achieve their observance of the law through either warnings or prosecution, and 3) the collection of additional taxes or the refund of overpayments due on improperly-prepared returns. The principal means of deciding to investigate whether the returns compiled by a tax preparer are accurate, Braunstein testified, is through “shopping,” a process by which an agent visits a tax preparer and requests the preparation of a tax return from a standard set of facts. If the I. R.S. determines that the return obtained through “shopping” is inaccurate, it may seek to find out whether this inaccuracy pervades the other returns prepared by that person. According to Braunstein, the Preparers Project is directed particularly at individuals who subscribe to no “code of professional ethics”; accordingly, attorneys, CPA’s, and practitioners enrolled pursuant to I. R.S. regulations are not “shopped” to determine the accuracy of their work.

Braunstein also represented that summonses had been issued to about 175 tax preparers in the Chicago area to obtain the names of their clients after an initial “shopping” process, and that no criminal prosecution of Turner had been recommended. Even if Turner signed the returns he prepared, Braunstein said, it would be almost impossible for the I.R.S. to discover these returns among the 9.5 million filed in Chicago for the years in question without the names of the taxpayers involved.

Agent Burnis Brown testified that he was directed by his superiors to deliver a summons to Turner to obtain the names of the persons whose 1970 and 1971 returns he had prepared, and that he assured Turner that there was no criminal proceeding pending against him. Rosemary Jackson, an I.R.S. trainee who had accompanied Brown, verified his account. Although Turner’s counsel had indicated that Brown had told his client when he delivered the summons that the information was to be used in a criminal prosecution, neither Brown nor Jackson recalled any such statement.

Turner did not testify at the hearing. His counsel, however, represented to the court that his client had been subjected to harassment during previous years by the I.R.S.

The district court granted enforcement of the summons at the close of the hearing. The court delivered no opinion, but indicated in its remarks that the names of Turner’s clients could be revealed without violating his privilege against self-incrimination, that the I.R. S. had a valid civil purpose in seeking *production of the names, and that the respondent had not proven his affirmative defenses. The court also denied Turner’s attempts to learn the name of the agent who had “shopped” him, as well as his renewed motions for discovery of documents. This court granted a stay of the district court’s order pending appeal on March 2, 1973, and scheduled this case for expedited argument.

Turner poses essentially four arguments on this appeal: 1) the district court erred in drastically restricting his right to discover the motives of the I.R. S. in summoning his records, 2) the criminal purpose and self-incriminatory demands of the summons required the district court to deny enforcement of it, 3) the summons was illegally broad, and 4) the summons should have been denied because it was an instrument of government harassment.

1) Discovery

A summons enforcement proceeding, like any other civil action, is governed by the Federal Rules of Civil Procedure. Fed.R.Civ.P. 81(a) (3). Turner argues on this appeal that the liberal discovery provisions of these rules should have been made available to enable him to gather evidence in support of his defenses to the summons. Specifically, he complains about his inability to examine any memoranda or reports related to the I.R.S.’s reasons for seeking the names of his clients.

Our examination of the arguments presented by Turner indicates that he seeks discovery to aid him in establishing his claims that the summons was issued to obtain evidence against him for a criminal prosecution and/or that it was issued only to harass him. These two defenses asserting the bad faith of the Internal Revenue Service will be successful only if Turner can show that prosecution has been recommended or initiated against him, or if he can negate the existence of any valid civil purpose on the part of the I.R.S. in issuing the summons. Couch v. United States, 409 U.S. 322, 326, 93 S.Ct. 611, 614-615, 34 L.Ed.2d 548 (1973), Donaldson v. United States, 400 U.S. 517, 532-533, 91 S.Ct. 534, 27 L.Ed.2d 580 (1971), United States v. Moriarty, 435 F.2d 347, 359 (7th Cir. 1970). Thus, even though the summons might eventually produce criminal evidence against Turner or have harassing aspects, it may issue if it is also directed at ascertaining civil tax liabilities.

The federal rules allow a district court to suspend or limit discovery pursuant to rule 81(a)(3) in thé interest of obtaining an expedited disposition of a summons proceeding, 7 Moore’s Federal Practice j[ 81.01(6) at 4413 (2d Ed.1972), and our function as a reviewing court is to determine only whether the court has abused its discretion. United States v. National State Bank, 454 F.2d 1249, 1252 (7th Cir. 1972), United States v. Bell, 448 F.2d 40, 42 (9th Cir. 1971). Although the district court denied the production of government documents in this case, it did permit the in-court examination of the agents involved in summoning the names of Turner’s clients. It has been recognized that such an expedited substitute for complete discovery is an acceptable alternative. United States v. National State Bank, supra, United States v. Bell, supra, United States v. Bowman, 435 F.2d 467, 469 (3d Cir. 1970), Kennedy v. Rubin, 254 F.Supp. 190, 194 (N.D.Ill. 1966), and that unless a summoned party can introduce some evidence supporting his allegations of bad faith at the hearing, further discovery after the hearing may be denied. United States v. Salter, 432 F.2d 697, 700 (1st Cir. 1970).

Turner argues that the above-cited cases are inapposite to his situation because he seeks discovery to resist the compelled production of personal records possessed by himself and because previous cases have involved corporate records or third-party possession. We reject this distinction. It is true that Turner may be able to assert a fifth amendment defense to production of his records that is unavailable to a person holding corporate records or documents belonging to another. United States v. National State Bank, supra, 454 F.2d at 1252. But this defense depends upon the nature of the documents themselves rather than the reasons for which the government may wish to examine them. See United States v. Kordel, 397 U.S. 1, 90 S.Ct. 763, 25 L.Ed.2d 1 (1970). Therefore, the assertion of a fifth amendment defense by Turner does not make discovery any more important in this case so as to make its denial an abuse of discretion.

Turner also has argued that the district court abused its discretion in limiting discovery because he did establish some evidence of an improper I. R.S. purpose. He cites a remark during the February 21 hearing acknowledging that the government would certainly try to indict him if the summons turned up any indications of illegal activity. We find that this remark is insufficient evidence of improper purpose to justify further discovery, for it falls woefully short of indicating that the government’s only purpose was to obtain evidence against Turner for use in a criminal proceeding. Turner also complains that a limitation of discovery may shield the real purpose of the I.R.S. in delivering the summons, for the Service may produce agents at the evidentiary hearing who prevaricate, possess insufficient knowledge of the case, or who are unaware that an unrecorded decision to prosecute has been made. Of course, in limiting discovery a trial judge must be aware of the pitfalls suggested by the appellant regarding insufficient knowledge or prevarication, and should allow further discovery if the defendant raises doubts as to either. In the present case, however, Turner not only had ample opportunity to examine the director of the program under which he was investigated, but was also able to examine the two agents who performed the act of delivering the summons in an attempt to prove that they had admitted the existence of criminal charges against him. Their testimony on the valid civil purpose of the investigation, as well as their representation that no prosecution against Turner had been recommended, Donaldson v. United States, supra, 400 U.S. at 532-534, 91 S.Ct. 534, provided ample justification for the limitation of discovery.

We conclude, therefore, that the district court did not abuse its discretion in limiting discovery.

2) Protection Against Self-Incrimination

Turner has also interposed the defense that the production of the names and social security numbers of his clients will violate his fifth amendment privilege against self-incrimination. The district judge rejected this defense, intimating that the revelation of the persons for whom Turner conducted a tax preparation business would not be incriminating and was therefore not protected by the fifth amendment. The government supports this theory on appeal, and also argues that the I.R.S. could require the production of tax information from Turner without violating his fifth amendment rights because he is not a member of a “highly selective group inherently suspect of criminal activities.” Albertson v. Subversive Activities Control Board, 382 U.S. 70, 79, 86 S.Ct. 194, 199, 15 L.Ed.2d 165 (1965). It emphasizes that tax preparation is a legitimate undertaking and that the summons is primarily directed at determining whether any readjustments must be made in the tax liabilities of Turner’s clients because their returns for 1970 and 1971 contain inaccuracies. Turner, on the other hand, submits that the fact that a summons was directed at him proves that he was a member of a “highly suspect group” and that the government is investigating him to uncover criminal activities. Therefore, he argues, the production of the names of his clients will facilitate the government’s tasks of withdrawing from its files the returns which he prepared and of gathering criminal evidence against him.

At issue, then, is the conflict between a government’s demand for information for the ostensible purpose of operating a legitimate regulatory scheme and the individual’s interest in privacy. Our determination whether the information sought from Turner is protected by his fifth amendment privilege against self-incrimination requires a balancing of these competing interests. California v. Byers, 402 U.S. 424, 427, 91 S.Ct. 1535, 29 L.Ed.2d 9 (plurality opinion) and 454, 91 S.Ct. 1535 (Harlan, J. concurring). Although the history and policies supporting the privilege against self-incrimination provide little guidance to aid the balancing process (compare Murphy v. Waterfront Comm’n, 378 U.S. 52, 55, 84 S.Ct. 1594, 12 L.Ed.2d 678 (1964) with Schmerber v. California, 384 U.S. 757, 762-763, 86 S.Ct. 1826, 16 L.Ed.2d 908 (1966) and California v. Byers, supra, 402 U.S. at 450, 91 S.Ct. 1535 (Harlan, J. concurring)), our examination of past cases involving a conflict between regulatory schemes and the privilege against self-incrimination indicates that consideration must be made of both the nature of disclosure required and the regulatory purpose for which it is required. See California v. Byers, supra, 402 U.S. at 254, 91 S.Ct. 1535 (Harlan, J. concurring), Marchetti v. United States, 390 U.S. 39, 44-49, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968), Albertson v. Subversive Activities Control Board, supra, 382 U.S. at 77-79, 86 S.Ct. 194.

The disclosure required from Turner is vastly different from the information which has been protected by the fifth amendment from compelled disclosure in other regulatory cases. First, the disclosure of the names of persons whose tax returns one has prepared, although helpful to the government in locating the returns filed by these persons, certainly does not involve a substantial risk of self-incrimination similar to the virtual admissions of criminal activity compelled by the government, in Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923 (1968) or Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968). Cf. Williams v. Florida, 399 U.S. 78, 90 S.Ct. 1893, 26 L.Ed.2d 446 (1970) (The fifth amendment does not protect compelled production of names of persons expected to support alibi defense at trial despite the possibility that production will supply leads for obtaining evidence against defendant.). At this stage of the proceedings it is impossible to determine what information the disclosure of the names will lead to; it may be that the government will find few significant errors, or that Turner merely fears the disclosure to his clients that he made mistakes in preparing their tax returns. United States v. St. Pierre, 128 F.2d 979, 980-981 (2d Cir. 1942), cf. Malloy v. Hogan, 378 U.S. 1, 13, 84 S.Ct. 1489, 12 L.Ed.2d 653 (1964). Even if the disclosure of the names will enable the government to locate the returns prepared by Turner and to determine that they are inaccurate, the government must still bear the burden of making the main evidentiary case against Turner as a willful violator of the internal revenue laws. California v. Byers, supra, 402 U.S. at 457-458, 91 S.Ct. 1535 (Harlan, J. concurring.). Secondly, the nature of the evidence sought from Turner does not indicate that he had an expectation of protected privacy or confidentiality which the fifth amendment would protect. Couch v. United States, supra, 409 U.S. at 335-336, 93 S.Ct. at 619. As a condition of engaging in the business of preparing tax returns, Turner was required to sign his name to all returns he prepared. 26 C.F.R. § 1-6065-1 (b) (1970). This requirement undoubtedly created the expectation that the government would learn of his responsibility for the preparation of the information contained in them. Without considering whether Turner’s signing of the returns (if he did comply with the requirement) amounted to a waiver of his fifth amendment privilege or fell under a public document/required record exception to the privilege against self-incrimination, we note that compelling Turner to resubmit information that he already has supplied is certainly less of an encroachment upon the human personality than securing admissions of criminal activity under the threat of criminal penalties.

Our evaluation of the regulatory scheme involved indicates that the government has a legitimate purpose in seeking the determination of tax liability of those whose returns Turner may have incorrectly prepared. United States v. Sullivan, 274 U.S. 259, 47 S.Ct. 607, 71 L.Ed. 1037 (1927). In cases such as Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923 (1968), Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968), Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968) and Albertson v. Subversive Activities Control Board, 382 U.S. 70, 86 S.Ct. 194, 15 L.Ed.2d 165 (1965), the government asked for certain persons to admit activity which was arguably unlawful under either federal or state statutes. Because the Court realized that these admissions would “substantially increase the likelihood of . prosecution” under these statutory schemes, Haynes v. United States, supra, 390 U.S. at 97, 88 S.Ct. at 730, and because the Court perceived that the regulatory scheme was basically criminal, it held that disclosure could be refused on the basis of the privilege against self-incrimination. Albertson v. Subversive Activities Control Board, supra, 382 U.S. at 79, 86 S.Ct. 194. In the instant case, the summons is directed at an essentially civil area of inquiry — the determination of the civil tax liabilities of Turner’s clients — where the revelation of clients’ identities will pose only a “mere possibility of incrimination” that is insufficient to defeat the strong policies in favor of disclosure. California v. Byers, supra, 402 U.S. at 428, 91 S.Ct. 1535, United States v. Sullivan, supra. We hold, then, that Turner cannot invoke his privilege against self-incrimination to refuse to produce the records demanded by the summons.

3) Protection Against Unreasonable Seizures

Turner argues that the summons violates his fourth amendment protection against unreasonable searches and seizures because, being outside the scope of 26 U.S.C. § 7602 (1970), it is illegal. He contends that the summons is too broad because it is a fishing expedition seeking to examine the returns of all of his clients, and that it is legally insufficient because it fails to name the persons whose returns are to be examined pursuant to that statute.

The Internal Revenue is given broad summons power under 26 U.S.C. § 7602 which provides, in part:

For the purpose of ascertaining the correctness of any return, the Secretary or his delegate is authorized—
(a) To examine any books, papers, records, or other data which may be relevant or material to such injury:

The power given the Internal Revenue Service under this section has been characterized as an inquisitorial power, similar to that of a grand jury. United States v. McKay, 372 F.2d 174, 176 (5th Cir. 1967). The government need only show that the records it seeks are relevant and material to its investigation, i. e., that the inspection of the desired records might throw light upon the correctness of a taxpayer’s return. United States v. Shlom, 420 F.2d 263, 265 (2d Cir. 1969), cert. denied, 397 U.S. 1074, 90 S.Ct. 1521, 25 L.Ed.2d 809 (1970). We find that the Internal Revenue Service made such a showing of materiality and relevancy to justify production of Turner’s records. Supervisor Braunstein testified that the “shopping” process disclosed that Turner prepared an incorrect return and that his performance caused the Service to suspect the correctness of the other returns he prepared for his clients in 1970 and 1971. The Service need not demonstrate probable cause to suspect inaccuracies, United States v. Powell, 379 U.S. 48, 51, 85 S. Ct. 248, 13 L.Ed.2d 112 (1964), nor need it specifically name in the summons the persons whose returns it wishes to examine, DiPazza v. United States, 415 F. 2d 99, 103 (6th Cir. 1969), cert. denied, 402 U.S. 949, 91 S.Ct. 1606, 29 L.Ed.2d 119 (1971), Tillotson v. Boughner, 225 F.Supp. 45, 46 (N.D.Ill.1963), aff’d, 333 F.2d 515 (7th Cir.), cert. denied, 379 U. S. 913, 85 S.Ct. 260, 13 L.Ed.2d 184 (1964), for a “John Doe” summons is sufficient. United States v. Theodore, 347 F.Supp. 1070, 1075 (D.S.C.1972). We find that the government made a sufficient showing of its reasons to scrutinize the tax returns of particular unnamed persons and to redetermine their tax liabilities, cf. United States v. Humble Oil & Refining Co., 346 F.Supp. 944, 947 (S.D.Tex.1972), to satisfy the requirements of materiality and relevancy imposed by 26 U.S.C. § 7602.

U) Protection Against Harassment

Turner has also objected that the summons was served upon him as part of a continuing ‘program of I.R.S. harassment against him. At the hearing on February 21 his counsel represented that Revenue Agents had investigated Turner several times in past years and that Turner had been barred from practice as an unenrolled tax preparer six or seven years ago under questionable circumstances. Turner did not take the stand to testify to these facts.

We find that this defense does not negate the valid civil purpose of the government for examining the returns of people other than Mr. Turner. The law gives no immunity to any person from investigation to determine the competency of his tax computations. United States v. Learner, 298 F.Supp. 1104, 1108 (S.D.Ill.1969). The circumstances of this case justify further I.R. S. efforts to determine the accuracy of Turner’s tax computations.

The order of the district court granting enforcement of the subpoena is affirmed.

Affirmed.

      . The government argued in the district court that, should the disclosure of the identity of the persons for whom Turner prepared 1970 and 1971 tax returns produce incriminating information and lead to criminal charges, Turner could seek to have the evidence suppressed on the basis that it was self-incriminating. The parties have not ax-gued this point on appeal, so we do not reach it in our disposition of this case.


author: PER CURIAM:

text:
    James A. BURKE, and on behalf of all others similarly situated, Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees.
    No. 71-2807.
    United States Court of Appeals, Ninth Circuit.
    June 20, 1973.

      James A. Burke, pro. per.
    James L. Browning, Jr., U. S. Atty., Richard F. Locke, Asst. U. S. Atty., San Francisco, Cal., for defendants-appellees.
    Before CHAMBERS, TRASK and WALLACE, Circuit Judges.
   PER CURIAM:

Appellant challenges the constitutionality of 38 U.S.C. § 1795 which limits the amount of aggregate benefits a person may receive under two or more veterans’ assistance laws. Appellant had received benefits under the War Orphans’ & Widows’ Educational Assistance Act, 38 U.S.C. § 1700 et seq., (chapter 35) of $110 per month for a total of 31% months and thereafter applied for benefits under the Veterans’ Educational Assistance Act, 38 U.S.C. § 1651 et seq., (chapter 34) which provides for a possible maximum entitlement of 36 months of benefits. With the 31% months under chapter 35, the benefits would have aggregated 67¼ months. Under 38 U.S.C. § 1795, supra, he was limited to a maximum aggregate of 48 months under both chapters. It is this limitation of which he complains. He contends that it violates his right to equal protection of the laws as well as his rights guaranteed by the due process clause. The district court found otherwise and dismissed the action. We affirm.

Two procedural issues were raised by a request for a three-judge court and for a class action. Both requests were denied and we believe properly. In order that a three-judge court be convened pursuant to 28 U.S.C. § 2282 et seq. the federal question must be a substantial one. California Water Service Co. v. Redding, 304 U.S. 252, 254, 58 S.Ct. 865, 82 L.Ed. 1323 (1938); Howfield, Inc. v. United States, 409 F. 2d 694, 697 (9th Cir. 1969); Carlough v. Finch, 309 F.Supp. 1025, 1027 (S.D. Fla. 1969). The appellant has failed to establish this as we shall presently show. The request for a class action be-’ comes moot when the merits are determined against the appellant and we do not pass on that issue.

To determine whether a statute violates the Equal Protection Clause, we first examine three criteria:

“[T]he character of the classification in question; the individual interests affected by the classification; and the governmental interests asserted in support of the classification.” Dunn v. Blumstein, 405 U.S. 330, 335, 92 S.Ct. 995, 999, 31 L.Ed.2d 274 (1972).

Appellant asserts that he is classified differently from other eligible veterans because he is a war orphan, having lost his father as a combat casualty in 1945. Thus a limitation of benefits is imposed upon him which is not imposed upon others, in that he does not receive the maximum benefits under chapter 34 (Veterans’ Educational Assistance) although he does receive an aggregate benefit in excess of the total allowable chapter 34 benefits. The governmental interests served by the classification appear to be prompted by considerations of economy, budget and legislative judgment as to what is desirable and proper under the circumstances. No more explicit legislative history has been cited.

Both appellant and appellee agree that the test to be applied to the classification for the purpose of determining its validity is whether it is arbitrary and without rational justification. In a slightly different context, that of termination of Social Security benefits, the Court said in Flemming v. Nestor, 363 U.S. 603, 611, 80 S.Ct. 1367, 1373, 4 L. Ed.2d 1435 (1960):

“The interest of a covered employee under the Act is of sufficient substance to fall within the protection from arbitrary governmental action afforded by the Due Process Clause. In judging the permissibility of the cut-off provisions of § 202(n) from this standpoint, it is not within our authority to determine whether the Congressional judgment expressed in that section is sound or equitable, or whether it comports well or ill with the purposes of the Act. ‘Whether wisdom or unwisdom resides in the scheme of benefits set forth in Title II, it is not for us to say. The answer to such inquiries must come from Congress, not the courts. Our concern here, as often, is with power, not with wisdom.’ Helvering v. Davis, supra, [301 U.S. 619] at 644 [57 S.Ct. 904, at 910, 81 L.Ed. 1307]. Particularly when we deal with a withholding of a noncontractual benefit under a social welfare program such as this, we must recognize that the Due Process Clause can be thought to interpose a bar only if the statute manifests a patently arbitrary classification, utterly lacking in rational justification.”

Appellant relies upon Shapiro v. Thompson, 394 U.S. 618, 633, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969), to support his contention that a classification based upon a “financial saving alone” will not justify an otherwise invidious classification. The classification which was invidious in Shapiro was one based upon length of residence in order to qualify for welfare benefits. The reason a residence requirement imposed an invidious discrimination was that it interfered to an intolerable degree with a constitutional right to travel. No such situation prevails here. On the contrary, all eligible veterans may obtain benefits. Requirements of eligibility do not conflict with any basic constitutional right and are not conditioned upon relinquishment of any fundamental right. Reliance by appellant upon Rinaldi v. Yeager, 384 U.S. 305, 86 S.Ct. 1497, 16 L.Ed. 2d 577 (1966), is equally inapposite. There an in forma pauperis appellant in a criminal case was by statute required to repay the cost of a transcript used in his unsuccessful appeal while others in a similar position were not required to repay. The authority is not in point. Congress here has simply fixed a maximum aggregate limitation on the entitlements a person may receive from several different programs of assistance to veterans and widows and orphans of veterans. No suspect classification is made and there is no invidious discrimination. The basic governmental interest in each program in issue is the furtherance of educational opportunities for those to be benefited. Both the purpose of the programs and the limitations upon the total entitlements support a rational and reasonable governmental interest.

The judgment is affirmed.

      . Section 1795 (as renumbered and amended from section 1791) provides in pertinent part:
      “The aggregate period for which any person may receive assistance under two or more of the laws listed below—
      * * * *
      “(4) chapters 31, 34, 35, and 36 of this title, and the former chapter 33 may not exceed 48 months . . . . ”

      . The purposes of Chapter 34 benefits are stated in 38 U.S.C. § 1651 to be as follows :
      “The Congress of the United States hereby declares that the education program created by this chapter is for the purpose of (1) enhancing and making more attractive service in the Armed Forces of the United States, (2) extending the benefits of a higher education to qualified and deserving young persons who might not otherwise be able to afford such an education, (3) providing vocational readjustment and restoring lost educational opportunities to those servicemen and women whose careers have been interrupted or impeded by reason of active duty after January 31, 1955, and (4) aiding such persons in attaining the vocational and educational status which they might normally have aspired to and obtained had they not served their country.”
      The purposes of Chapter 35 benefits are recited in 38 U.S.C. § 1700 as follows:
      “The Congress hereby declares that the educational program established by this chapter is for the purpose of providing opportunities for education to children whose education would otherwise be impeded or interrupted by reason of the disability or death of a parent from a disease or injury incurred or aggravated in the Armed Forces after the beginning of the Spanish-Ameriean War, and for the purpose of aiding such children in attaining the educational status which they might normally have aspired to and obtained but for the disability or death of such parent.”


author: DURFEE, Senior Judge.

text:
    Joseph C. HERRON and Quintus H. Herron, Trustees of the Herron Trust, Plaintiffs-Appellees and Cross-Appellants, v. F. McQueen ROZELLE, Defendant-Appellant and Cross-Appellee, and Francis De Bogory Horton et al., Additional Defendants-Appellees, Second Cross-Appellants.
    Nos. 72-1083, 72-1084.
    United States Court of Appeals, Tenth Circuit.
    June 14, 1973.

      Joe Stamper, Antlers, Okl. and Winfrey D. Houston, Stillwater, Okl. (Stamper & Otis, Antlers, Okl., and Fitzgerald, Houston & Worthington, Stillwater, Okl., on the brief), for plaintiffs-appellees and cross-appellants.
    John Romig Smith, Ponca City, Okl. (F. McQueen Rozelle, pro se, on the brief), for defendant-appellant and cross-appellee.
    Before BREITENSTEIN, Circuit Judge, DURFEE, Senior Judge United States Court of Claims , and DOYLE, Circuit Judge.

       Sitting by designation.

   DURFEE, Senior Judge.

No. 72-1083 is an appeal by defendant, Rozelle, from a judgment of the U. S. District Court for the Eastern District of Oklahoma rendered in the net sum of $10,000 in favor of plaintiffs, Joseph C. Herron and Quintus H. Herron, in a nonjury trial. The award was based upon defendant’s destruction of plaintiffs’ and additional defendants’ timber interest. No. 72-1084 is a cross-appeal which has been abandoned and need not be considered. We affirm the judgment.

In March 1962 defendant-appellant Rozelle obtained all interest except the timber interest in certain land in Pushmataha County, Oklahoma. Rozelle’s second predecessors in interest to the land had obtained the land in 1950 by warranty and quitclaim deeds. By language which was for all purposes identical, the warranty deed by exception and the quitclaim deed by reservation excluded the timber growing on or to grow on the land from the interest conveyed. The language in the warranty deed was as follows:

“[Reserving] * * * all '' * * timber that is now standing and growing on said premises and all of such timber that may in the future grow on said premises, with the right of ingress and egress for the purpose of removing said timber and the right to erect and operate and maintain suitable milling facilities to manufacture said timber into lumber or other products. In other words, the grantor does not sell the timber now standing on said premises or that may grow on said premises and he, regardless of anything contained in this instrument, owns said timber now, and will own any future timber, that may in the future grow on said premises. Provided, however, * * * if and when the grantees elect to put any of said land into a bona fide farm, that is cultivating same as a farm that they may remove any and all timber that may be situated on said portion of the above tract that they bona fide are putting into cultivation, notifying, however, the grantors of said purpose and said timber so removed shall be the property of said grantors. * * * "

Rozelle, as a subsequent grantee, took the land subject to the same reserved timber interest and under the same conditions permitting timber removal.

In 1952 the additional defendants in this case had acquired the reserved timber interest and in 1958 the additional defendants had granted plaintiffs a 99-year lease of the timber on the Pushmataha County land, including the right to harvest and sell the timber.

In June, 1966 Rozelle advised the timber owners that he intended to clear 9,900 acres of the land of timber for the purpose of cultivating the land pursuant to the aforementioned deed provision. In August 1968 Rozelle caused 320 acres to be cleared of timber by means of pulling down the trees with chains and tractors. The cleared timber was put in windrows in such a manner as to make the harvesting of the timber by plaintiffs not economically feasible.

The district court found that plaintiffs-appellees, who were entitled to the timber cleared by appellant and whose timber rights had been defeated, had been damaged in the sum of $13,000. The court allowed Rozelle $3,000 on a counterclaim for damages to the land and fences caused by logging operations conducted by plaintiffs from 1968 to 1970.

Preliminarily, appellees claim that Rozelle’s pro se appeal suffers from one or more defects requiring its dismissal. Appellees argue thát the appeal is limited to the questions actually raised in Rozelle’s Motion for New Trial, or Alternative Motion to Alter or Amend Findings and Judgment since Rozelle’s Notice of Appeal “designated” for appeal only the order denying these motions. F.R.App.P., Rule 3(c). Appellees urge that the questions briefed on appeal are not within the scope of the issues raised by the aforementioned motions and hence we should not consider appellant’s questions of error. Scaramucei v. Dresser Industries, Inc., 427 F. 2d 1309, 1318 (10th Cir. 1970).

Appellee’s argument is not well taken. We think the appeal from denial of the motions was “an effective, although inept attempt to appeal” from the final judgment. Foman v. Davis, 371 U.S. 178, 181, 83 S.Ct. 227, 9 L.Ed. 2d 222 (1962). See State Farm Mutual Auto Ins. Co. v. Palmer, 350 U.S. 944, 76 S.Ct. 321, 100 L.Ed. 823 (1956); Vigil v. United States, 430 F.2d 1357, 1358 (10th Cir. 1970). An appeal from a final judgment draws into question all rulings producing the judgment. 9 Moore’s Federal Practice (]' 203.18. The Notice of Appeal did not mislead or prejudice appellees and appellant’s docketing statement, submitted to both appellees and the court pursuant to local Rule 7, fairly apprised appellees of the issues to be briefed and argued.

Appellees also argue that this appeal was dismissed on June 6, 1972, and never reinstated. On the contrary, by order of September 26, 1972, Rozelle was allowed to reinstate his appeal and permitted to present his appeal pro se. Appellees other claimed procedural defects of this appeal are incorrect and deserve no further consideration.

After this case was briefed and argued on appeal, appellees moved this court to dismiss three of the four complaints of error raised by the appellant because these propositions related exclusively to appellant’s rights as the landowner, and the rights of appellant as landowner had been terminated by a foreclosure and sale through the U. S. District Court for the Eastern District of Oklahoma, the foreclosure having been affirmed by this court and certiorari denied by the United States Supreme Court. The motion is denied except as hereinafter discussed with respect to appellant’s third assignment of error. An in personam judgment was entered against Rozelle and that judgment is not affected by a change of title to the land after the occurrences which gave rise to the net award of $10,000.

As his first assignment of error appellant Rozelle asserts that the district court failed to rule that as a matter of law his interest in the Pushmataha County land was subject to and encumbered by a “terminable estate in timber” and not a “timber estate in fee simple;” that when no specific and definite time in years for the removal of timber is written into a terminable timber estate, the holder of the timber reservation has only a reasonable time in which to remove the timber; and that a reasonable time had expired. Rozelle argues that therefore he acquired title to and the right to possession of the timber.

Without characterizing the timber right here involved as either a “terminable estate” or an “estate in fee simple,” the district court held that: “This right was neither lost nor abandoned through failure to harvest the timber, or otherwise, and the plaintiffs * * * acquired a valid right to such timber *X- *X* -X-

Appellant cites the Oklahoma case of State v. Smith, Okl., 317 P.2d 219 (1957) as controlling on the issue of terminable timber estates. In that case the Atlas Powder Company deeded 240 acres of land to the State of Oklahoma in 1938 with the following provisions in the habendum clause:

“Excepting and Reserving in the above described parcel of land all the oil, gas and other minerals, together with timber on the surface thereof, with the right of ingress and egress over and under the surface of land herein conveyed for purpose of removing the items reserved.”

The State of Oklahoma brought action to quiet title to the 240 acres of land. The State asserted, as does Rozelle, that after the expiration of a reasonable time for the grantor or his successors in interest to the timber reservation to cut and remove the timber, the grantee (or his successors in interest) acquires title to and the right to possession of the timber growing on the land. Under the foregoing provision in the habendum clause, the Oklahoma Supreme Court in State v. Smith found that only a terminable estate in timber and not a right in perpetuity had been created and that eighteen years was more than a reasonable time within which to remove the timber.

State v. Smith involved a deed provision quite different and far less precise than the timber reservation in the instant case. In State v. Smith the deed spoke ambiguously of the “ * * * timber on the surface * * * ”, leaving in doubt whether the timber referred to was all standing timber or all standing and further growths of timber. In the instant case the deed speaks clearly and unambiguously of a reservation of all timber “ * * * standing and growing on said premises and all of such timber that may in the future grow on said premises * * To belay any doubt that the retained timber interest was to be perpetual the deed repeats : “In other words, the grantor does not sell the timber now standing on said premises or that may grow on said premises and he, regardless of anything contained in this instrument, owns said timber now, and will own any future timber, that may in the future grow on said premises. * * * ”

As a general rule:
“(A) grant or reservation of timber will not be construed as giving a perpetual right, unless it is plainly manifest that such was the intent of the parties, since such rights are extremely burdensome.” State v. Smith, 317 P.2d at 223.

We think the timber reservation encumbering Rozelle’s interest gave a perpetual right in clear, unmistakable, and unambiguous terms. See Franke v. Welch, 254 Or. 149, 458 P.2d 441 (1969); Baker v. Kenney, 145 Iowa 638, 124 N.W. 901 (1910); Baxter v. Mattox, 106 Ga. 344, 32 S.E. 94 (1898).

The rule invoked in State v. Smith is plainly inapposite here. A rule that “a timber deed or contract, conveying all of the growing timber on specified land, * * * creates a ‘terminable’ estate in the growing timber” [emphasis added], State v. Smith, supra, 317 P.2d at 221, cannot be whittled to fit a deed provision applying to all timber “ *. * * standing * * * growing * * * and * * * that may in the future grow The Oklahoma eases relied upon in State v. Smith for derivation of the stated rule involve only instances of standing or existing timber.

Appellant Rozelle argues that appellees’ timber interest was terminable because he was given the power to “terminate the estate” by the provision allowing him to remove any and all timber that may be situated on a tract which he elects to put into a bona fide farm and cultivate. Appellant has cited no authority for his proposition and we think the argument is semantic. Rozelle could not “terminate the estate” by electing to cultivate the land and sever (“terminate”) the trees from the land. The timber reservation is quite clear that the “timber removed shall be the property of said grantors”, appellees being the successors to this grantors’ interest. The timber reservation is further clear in reserving to the grantors (appellees) further growths of timber, apart from standing timber that may be severed from the land.

We assign no significance to the fact that the timber reservation fails to mention “heirs.” Appellant conceded that Oklahoma statutes do not require such terminology in order to convey a perpetual right. 16 O.S. § 29 (1951).

In his second assignment of error Rozelle attacks the conclusion of the district court that if he intended to clear timber for the purpose of cultivating the land as a farm, he was obligated “ * * * to give the plaintiffs adequate notice of the areas to be cleared, to enable them to harvest such of the timber as they desired prior thereto, and also required that the areas designated for clearing should be sufficiently limited as not to defeat the feasibility of haresting the area. The notice given by Rozelle to the plaintiffs of his. intended clearing operations did not meet this test.”

The district court erred in concluding that appellant was obligated to give such notice of “sufficiently limited” areas as to allow timber removal by plaintiffs-appellees first. Upon electing to put the land into a bona fide farm, Rozelle was entitled to remove any and all timber from the tract to be cultivated, “ * * * notifying, however, the grantors [plaintiffs] of said purpose.” There is no requirement which would compel Rozelle to give such notice as to provide the plaintiffs-appellees the prior opportunity to harvest.

A deed is to be interpreted and the intention of the parties ascertained in the same manner as other written contracts. Gray v. Stillman, 365 P.2d 369 (Okla.1961). The notice conditions of thé timber reservation cannot be rewritten by the court to give the successors to the grantors’ interest broader rights and better notice than the grantors expressed and reserved to themselves. See Houston Oilers, Inc. v. Neely, 361 F.2d 36 (10th Cir. 1966), cert. denied, 385 U.S. 840, 87 S.Ct. 92, 17 L.Ed.2d 74, reh. denied, 385 U.S. 942; Kelso v. Kelso, 225 F.2d 918 (10th Cir. 1955); Rist v. Westhoma Oil Co., 385 P.2d 791 (Okla.1963); Western Oil & Gas Co. v. Mitchell, 326 P.2d 794 (Okla. 1958); Cities Service Oil Co. v. Geolograph Co., 208 Okl. 179, 254 P.2d 775 (Okla.1953).

In his third assignment of error appellant lists a series of questions regarding the prospective rights of each party which he claims the trial court should have answered pursuant to his cross-complaint for a declaratory judgment, and lists certain “equivocal or ambiguous” terms in the district court’s Findings of Fact and Conclusions of Law which he claims the court should have clarified. The gist of appellant’s complaint of error is that he still does not know his rights to the use of the land. Since Rozelle is no longer the landowner because of a foreclosure action and sale and the claimed error related to appellant’s prospective rights in the land, the point is moot.

In his last assignment of error appellant asserts the district court’s finding of fact that he was damaged in the amount of $3,000 due to 1968-1970 logging operations conducted by plaintiffs-appellees was clearly erroneous.

Rule 10(b) of the Federal Rules of Appellate Procedure provides in part:

If the appellant intends to urge on appeal that a finding or conclusion is unsupported by the evidence or is contrary to the evidence, he shall include in the record a transcript of all evidence relevant to such finding or conclusion.

Appellant has failed to bring up a transcript of all evidence bearing on the issue of damages to him. We decline review since we cannot make a meaningful evaluation of the claim of error.

We have considered several other peripheral points raised incidentally by appellant and deem them without merit.

In each appeal the judgment is affirmed.

      . Mitchell-Crittenden Tie Co. v. Crawford, 61 Okl. 191, 160 P. 917 (1916), (“ * * * all timber * * * standing or being on the following described lands * * * ”); Faulkner v. Allen, 70 Okl. 280, 173 P. 1133, 1134 (1918), (“ * * * all trees and timber of every and any description, felled, windfall, standing and growing or being upon the premises * * * ”); Ross v. Choctaw Lumber Co., 176 Okl. 399, 55 P.2d 1041 (1936), (“ * * * timber of whatsoever kind and character standing, growing, lying, fallen, or being upon the following described land * * * ”); Blake v. Burnett-Hauert Lumber Co., 192 Okl. 244, 135 P.2d 325, 326 (1943), (“ * * * timber of whatsoever kind and character growing on the land therein described * * * ”) ; Dierks Lumber & Coal Co. v. Fry, 203 Okl. 467, 223 P.2d 113, 114 (1950), (“ * * * * * *”). standing timber


author: WISDOM, Circuit Judge:

text:
    Paul L. BATH and Mary M. Bath, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.
    No. 73-1384
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    June 25, 1973.
    Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Atty., Tax Div., Dept. of Justice, Washington, D. C., Lynn Ross, Jr., Tax Div., Dept. of Justice, Dallas, Tex., Roby Hadden, U. S. Atty., Tyler, Tex., Lee H. Henkel, Jr., Chief Counsel, IRS, Washington, D. C., for defendant-appellant.
    Jack N. Price, Longview, Tex., for plaintiffs-appellees.
    Before WISDOM, AINSWORTH and CLARK, Circuit Judges.

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

   WISDOM, Circuit Judge:

The payment to the taxpayer that is the subject matter of this action is a square peg that will not fit into any neat, round tax hole. The issue in this case is whether a payment received by a taxpayer from his mother’s estate was a tax-free bequest or taxable compensation for services performed during his mother’s life. The difficulty in the case arises from the fact that the payment has some of the characteristics of a bequest and some of the characteristics of a settlement of a claim for services rendered. At the same time the payment is antithetical to both a bequest and to compensation for services rendered. In the district court a jury concluded that the payment was a bequest. The United States has appealed the denial of its motions for directed verdict and for judgment notwithstanding the verdict. We conclude that because there was a conflict in substantial evidence as to the nature of the payment the district court correctly denied the motions by the United States. The holding should not be extended beyond the peculiar facts of this case.

I.

Paul Bath, the taxpayer, is the brother of Tisbey Bath and Blossom Bath Grossblatt, and is the son of Gertrude Bath. Gertrude Bath died in 1966. She left a will written in 1960 devising one-third of her estate outright to Tisbey Bath and two-thirds to Tisbey Bath in trust, one-third for the benefit of Paul and one-third for the benefit of Blossom. Paul and Blossom were to receive the income during their lives with the remainder going to their children. Paul Bath unsuccessfully attacked the validity of the will on the basis that his mother was incompetent and was under the influence of Tisbey. Having failed with those theories, he then asserted that he and his mother had entered into a contract for services in 1946 whereby she agreed to will him a full one-third interest in her estate in return for his managing her business. Paul in fact performed those services for her from 1933 until 1957, except for a four year period during World War II. Paul alleged that in 1946, at the time of this contract, his mother drafted a will devising one-third of her property outright to him. The 1960 will omitted that provision.

Paul prevailed in his attack upon the will by what appears to be, in light of all the evidence, a settlement. More precisely, the executor, Tisbey, tacitly waived opposition. Paul testified in the probate court as to his alleged contract with his mother. He was not cross-examined, nor was the 1946 will, allegedly supportive of their contract, introduced into evidence. The attorney for Tisbey did not raise the “dead man statute” which prevents heirs from testifying about transactions with a deceased. Vernon’s Ann.Tex.Civil Rev.Stat., Art. 3716. Moreover, that attorney testified that he had agreed not to appeal the state trial court's ruling. At the conclusion of a brief probate hearing, a judgment was immediately presented to the judge for his signature. '

It seems clear that Tisbey could have presented substantial defenses to the claim by Paul. Indeed, in a lengthy letter to the attorney for the children, Tisbey catalogued the defenses he might have interposed. He chose not to do so. In the district court, Paul testified, and Tisbey agreed, that at the time of Gertrude Bath’s death there were no uncompensated services outstanding; Paul had been paid a salary as he had performed the work for his mother. Paul stated that he attacked the trust feature of the will because he feared arbitrary treatment by Tisbey. Paul testified that Tisbey had warned him: “If you do just exactly like I tell you, and Blossom does, I will give you a little of it.” Paul also testified that he had great difficulty in receiving any benefits from another trust that Gertrude Bath had created for his benefit during her life, with Tisbey as trustee. Paul was apprehensive about future altercations with Tisbey. Indeed, when Paul first began his attack upon the will, Tisbey moved to have Paul declared insane and requested that a guardian be appointed for him.

Though Tisbey testified that the judgment was not the result of a settlement, Paul stated that it was, and that the simulation of adversary litigation was necessary because of Tisbey’s duty as executor to defend the provisions of the will naming Paul’s children as remaindermen.

Further evidence of an understanding between the parties is that Paul was charged with a portion of the estate taxes and expenses of the administration of the estate, and paid one-third of the estate’s attorneys’ fees.

II.

In Lyeth v. Hoey, 1938, 305 U.S. 188, 59 S.Ct. 155, 83 L.Ed. 119, the Supreme Court held that where an heir successfully challenged a will for lack of testamentary capacity, a payment received as the result of a settlement was nontaxable as inheritance. Later, this Court in Cotnam v. Commissioner of Internal Revenue, 5 Cir., 1959, 263 F.2d 119, held that where a personal attendant successfully enforced a contract for services against the estate of her employer, the payment was taxable as compensation. These eases are instructive but not conclusive.

In Cotnam the plaintiff had faithfully served as an attendant to the decedent for the last four years of his life in exchange for his promise to will her one-fifth of his estate. When her employer died without a will, the plaintiff engaged in a “long, hard-fought suit against the Administrator of the Estate,” which eventually reached the Supreme Court of Alabama. In concluding that this payment to her was taxable as compensation we stated: “The nature of the transaction imderlying the judgment, not the judgment itself, controls the tax effects. . . . The amount received is taxable or nontaxable according to what it represents. Thus in order to acquire property by inheritance, a party must bring suit against the estate as an heir.” Cotnam, 263 F.2d at 122. “The law does not stop at the form of a transaction, it goes to its substance. Thus, income received is taxable or nontaxable according to what it represents.” Id. at 124.

In Cotnam the singular reason for the plaintiff having received a payment from the estate was because of the services she had performed, and in Lyeth the singular reason for the compromise was because of the plaintiff’s status as an heir. There was no suggestion that anything less than a bona fide claim was made in either case. In contrast, it is not possible from the substance of this transaction to say that Paul received a payment from the estate solely because of the services he performed or that he was in good faith asserting a claim for uncompensated services.

Both Paul and Tisbey testified that no compensation was due to Paul at the time of his mother’s death, because he had received a salary as he had performed the services during her life. Moreover, in contrast to the extensive litigation in Cotnam, here Tisbey did not assert any of the available, and perhaps meritorious, defenses which he could have presented against Paul’s suit. The true “nature of the transaction underlying the judgment” was neither bequest nor inheritance, but was Tisbey’s acquiescence in Paul’s colorable claim. Paul’s actual motivation in seeking to receive his interest free of trust was not to receive a payment justly owed to him, but was to reduce the opportunity for future conflict between him and Tisbey. There was convincing evidence of past animosity between the brothers which gave weight to Paul’s fears of Tisbey acting arbitrarily in his capacity as trustee. Tisbey, apparently, wanted to put an end to unseemly family strife.

Paul and his family did not eventually receive any more than they were granted by the will, though they did receive it free of the division between life and remainder interests. It might be said, therefore, that he received at least the value of a life interest in one-third of the estate by tax free inheritance. The government, however, asserts a tax on the full amount of the claim. Moreover, Paul shared equally as an heir in the expenses of the estate.

As stated in Cotnam, “the amount received is taxable or nontaxable according to what it represents.” We reassert this principle. The tax treatment of proceeds from a will contest must reflect the character of the claim upon which a judgment or settlement is based. Here Paul’s claim was insubstantial by his own admission, and there is a strong likelihood that it might have failed had a genuine opposition been presented. Certainly the tax effect of a judgment or settlement based upon a bona fide claim will be determined by the character of the claim made. But, in the light of the absence of true adversary litigation, the total waiver of substantial defenses, and an admission by the parties that the compensation claimed had already been paid, it is not possible to determine conclusively the nature of this payment solely by the character of the claim. Nor does a label applied in a state court judgment conclusively determine what a payment “represents.” Characterization as bequest or compensation is to be determined by federal law, not local characterization. Lyeth, 305 U.S. 193, 59 S.Ct. 155, 83 L. Ed. 119. Even where federal tax liability turns upon local characterization, federal authorities are not bound by determinations by a state trial court. Commissioner of Internal Revenue v. Bosch, 1967, 387 U.S. 456, 87 S.Ct. 1776, 18 L.Ed.2d 886. Especially suspect are characterizations, such as we have here, not the result of bona fide adversary proceedings. See Bosch, 387 U.S. at 462, 87 S.Ct. 1776.

III.

To be entitled to a directed verdict or a judgment notwithstanding the verdict, “the facts and inferences [must] point so strongly and overwhelmingly in favor of one party that reasonable men could not arrive at a contrary verdict. . . .” Boeing v. Shipman, 5 Cir. 1969, 411 F.2d 365, 374. Granting either of these motions is improper where there is a “conflict in substantial evidence,” that is, where there is “evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions. . . .” Boeing, 411 F.2d at 374. Because of the conflict in substantial evidence as to the nature of this payment we conclude that a jury issue was created and that the government’s motions were properly denied.

Affirmed.

      . The judgment of the state court provided tliat Paul would receive one-third of the estate “after all debts, taxes, costs, attorneys’ fees and expenses of administration have been fully paid . . . .”

      . Justice Douglas, dissenting in Bosch, stated: “A federal court might not be bound by a consent decree, for it does not propose to be a declaration of state law; it may be merely a judicial stamp placed upon the parties’ contractual settlement. Nor need the federal court defer to a state court decree obtained by fraud or collusion.” Bosch, 387 U.S. at 470-471, 87 S.Ct. at 1785.

      . Since the taxpayer herein and the estate treated the payment to the taxpayer in inconsistent manners on their respective tax returns (i. e., taxpayer maintained that the payment wás a tax-free bequest, while the executor reported the payment as a deductible claim against the estate), the Commissioner assessed deficiencies against both taxpayers in order to protect the revenue. The estate tax deficiency is presently the subject of litigation in the Tax Court. The Government’s brief states that should the judgment below ultimately be reversed, the Government will concede that no deficiency exists against the estate with respect to this issue.