text:
    The BUDD COMPANY, Petitioner in No. 74-1256, v. OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION, Respondent. INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE, AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW) and its Locals 813 and 92, Petitioners in No. 74-1781, v. OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION, Respondent.
    Nos. 74-1256, 74-1781.
    United States Court of Appeals, Third Circuit.
    Argued Feb. 4, 1975.
    Decided March 24, 1975.

      John C. Wright, Jr., Peter B. Broida, Philadelphia, Pa., for the Budd Co.; Montgomery, McCracken, Walker & Rhoads, Stephen I. Sehlossberg, Gen. Counsel, UAW, Washington, D. C., M. Jay Whitman, Asst. Gen. Counsel, UAW, Detroit, Mich., of counsel.
    Anne M. Trebilcock, for UAW.
    Carla A. Hills, Asst. Atty. Gen., Stephen F. Eilperin, Michael H. Stein, App. Section, Civ. Div., Dept, of Justice, Washington, D. C., for Occupational Safety and Health Review Commission.
    Before ADAMS, ROSENN and WEIS, Circuit Judges.
   OPINION OF THE COURT

PER CURIAM:

The principal issue on this appeal is' whether the Occupational Safety and Health Review Commission committed reversible error when it concluded that 29 C.F.R. § 1910.132(a), a safety regulation promulgated by the Secretary .of Labor pursuant to the Occupational Safety and Health Act, does not mandate that employers bear the cost of protective footwear required by the regulation.

In the autumn of 1971, compliance officers from the Occupational Safety and Health Administration inspected two Budd Company plants. Budd, cited for violating a series of the applicable safety standards issued by the Secretary, contested several of the citations. After the Secretary filed complaints against Budd with respect to the alleged violations, the cases regarding the two plants were consolidated and referred to a hearing examiner.

The only citation relevant to the present appeal concerned the alleged violation of § 1910.132(a) on the ground that Budd failed to provide protective footwear for certain of its employees. Before the hearing examiner, Budd moved to withdraw its notice of contest relating to the use of foot protection “specifically on condition that it is understood that the obligation to provide this foot protection does not include the obligation to pay for the protection. . ” The Secretary did not object to Budd’s motion but the union representing Budd’s employees did.

On August 22, 1972, the examiner entered an order provisionally denying Budd’s motion to withdraw its notice of contest and scheduled a hearing for September 13th on the question whether Budd’s motion should be granted. The examiner stated:

14. [W]ho shall be liable for the cost [of protective shoes is] not [a] proper subject for determination under the Act. [It is], rather [a] matter which must be privately resolved by the employer and his employees. .
15. It is improper therefore to impose on the employer’s duty to provide safety shoes whenever necessary under the standard at 29 C.F.R. 1910.132(a) and (b), the condition that it is not his obligation to pay for such shoes.

On August 28, 1972, the examiner vacated his August 22nd order and replaced it with a similar order denying Budd’s motion to withdraw its notice of contest and directing that a hearing on Budd’s motion take place September 13, 1972. The place of the hearing was changed, however, and the August 28th decision deleted the sentence previously appearing in the August 22nd order which referred to the cost of the shoes as a proper subject for private resolution.

The hearing previously scheduled for September 13th was finally held on October 19, 1972. On November 1, 1972, the administrative law judge ruled that 1910.132(a) “requires the employer to provide, require the use of and maintain in a sanitary and reliable condition, protective equipment, in this case safety shoes. . . . ” The November 1st decision made no further reference to the allocation of the cost of safety equipment, and denied Budd’s conditional motion to withdraw its notice of contest.

Budd sought and obtained discretionary review by the Occupational Safety and Health Review Commission of the order of November 1st.

The Commission, in an opinion announced March 4, 1974, decided that “subpart (a) [of 1910.132] imposes no duty on the employer to provide or pay for” the safety equipment at issue here. The Commission ruled that Budd had violated the standard by failing to see to it that Budd’s employees wore safety shoes when required, but that the hearing examiner erred in refusing to allow Budd to withdraw its notice of contest on the understanding that Budd was not required by the regulation to pay for the shoes. The Commission offered the following rationale:

Unlike other labor statutes with essentially economic purposes, the Act is concerned solely with safety and health in the work situation. Prescription of cost allocations is not essential to the effectuation of the Act’s objectives. . . . The question of cost allocation, on the other hand, is a question to be resolved between employer and employee. In our judgment, it is an appropriate subject for collective bargaining, [additional footnotes omitted]

In footnote 5 the Commission explained the scope of its decision:

5. We do not imply that an employer is not to bear the cost of things such as capital equipment which is ordinarily his responsibility to assume. We are here considering the cost allocation of personal equipment. [W]e note that the most universally used foot protective equipment is the steel-toed shoe. Thus, the most universally used type of protection is uniquely personal and may be used by the employee when he is away from the job.

In a concurring opinion, Commissioner Cleary indicated that under his interpretation of 1910.132, the employer has a duty to “provide” the safety shoes, but that the standard does not address the allocation of costs. He concluded, therefore, that “in my view the Commission lacks jurisdiction to provide relief as to costs.”

Budd petitioned this Court for review of the Commission’s decision with respect to an alleged violation relating to acetylene cylinders, an item that is no longer at issue. The union petitioned the District of Columbia Circuit to review the Commission’s ruling with respect to the issue of which party, the employer or the employee, was to bear the cost of protective shoes. On motion by the Commission, the union’s petition was transferred to this Court and consolidated with the Budd petition.

Jurisdiction.

Budd contends that this Court has no jurisdiction to consider the union’s objections to the Commission’s decision. The August 22nd opinion (or alternatively the August 28th opinion) of the hearing examiner, Budd asserts, became a final order of the Commission when the Commission did not grant review of that decision within 30 days. The examiner, according to Budd, had no authority to amend his decision on November 1st, since after issuance of the examiner’s decision, modifications could be made only by the Commission. Commission review of the examiner’s November 1st ruling, Budd continues, was a nullity, since the examiner’s August 22nd opinion had already, by operation of law, became the final ruling of the Commission, inasmuch as the Commission had not granted review of the August 22nd order within 30 days. Since the August 22nd decision had not been appealed to a court of appeals within 60 days of its becoming the final order of the Commission, Budd concludes, this Court has no jurisdiction.

The flaw in Budd’s jurisdictional argument is that the examiner’s orders of August 22nd and August 28th were only preliminary to the examiner’s hearing on Budd’s motion to withdraw its notice of contest. The November 1st decision, issued after the October 19th hearing, was the definitive order of the examiner contemplated by 29 U.S.C. § 661(i) and 29 C.F.R. § 2200.90, and the union’s petition for review was filed within sixty days of the issuance of the Commission’s November 1st decision.

The Interpretation of 1910.132(a).

On the substance of the union’s objection to the Commission’s ruling, the scope of this Court’s review is limited. As we said in Brennan v. Occupational Safety and Health Review Commission (Hanovia Lamp Div.):

[Ajside from findings of fact it seems clear that we can set aside Commission adjudicatory conclusions which we find to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

In dealing with questions regarding the interpretation of statutes or regulations which have been committed to a federal administrative agency for enforcement and implementation, the federal courts are obliged to accord “great deference” to the agency’s construction of the language in question. The Supreme Court described the principle in Udall v. Tallman:

When faced with a problem of statutory construction, this Court shows great deference to the interpretation given the statute by the officers or agency charged with its administration. . “Particularly is this respect due when the administrative practice at stake ‘involves a contemporaneous construction of a statute by the men charged with the responsibility of setting its machinery in motion; of making the parts work efficiently and smoothly while they are yet untried or new.’ ” . When the construction of an administrative regulation rather than a statute is in issue, deference is even more clearly in order.

Consequently, the agency’s interpretation of a regulation “is deemed of controlling weight as long as it is one of several reasonable interpretations even though the chosen exegesis may not appear quite as reasonable as some other construction.”

In this proceeding the union asserts that the Commission’s interpretation of 1910.132(a) — that the question of who should pay for the protective shoes is a matter for negotiation — is incorrect and contrary to the congressional purpose embodied in the Occupational Safety and Health Act. However, since the Commission and the Secretary of Labor are entrusted with the responsibility for administering the Act’s safety program, this Court must accord significant weight to their interpretation of the statute and the regulations promulgated thereunder by the Secretary.

The Commission and the Secretary, through their day-to-day experience with the subject matter, are cognizant of the existing industrial hazards, the prevalent safety practices, and the economic and safety consequences of adopting the accident-prevention measures available. The Commission and the Occupational Safety and Health Administration were assigned the task of administering the Act in order to take advantage of the expertise which only a specialized agency can develop. The members of the Commission are required to be specially qualified “by reason of previous training, education or experience in the field.” Therefore, the courts should yield to the Secretary and the Commission a relatively broad discretion in interpreting the Act and the Secretary’s regulations.

At least with respect to the question who should pay the cost of protective footwear — the issue here — the Commission’s interpretation of 29 C.F.R. § 1910.132(a) is not unreasonable. We need not now decide whether the Commission could reasonably conclude that the employer is not obligated to bear the cost of other mandatory protective equipment.

The provisions of the Act itself do not conflict with the Commission’s reading of the Secretary’s regulation. Congress did not explicitly require that the employer pay the price of personal protective equipment and clothing, though Congress has, both in this Act and in other job-safety legislation, specifically imposed on the employer certain expenditures promoting employee health and safety.

Moreover, the Commission’s interpretation of the regulation does not interfere with the attainment of the congressional purpose. This Act, unlike such legislation as the Fair Labor Standards Act, is not concerned with wages and hours, but rather with reducing the incidence of job-related injuries.

The decision of the Commission in no way diminishes the employer’s obligation to ensure that safety shoes are in fact worn when required. The use of protective equipment is not, as the union implies, made negotiable by the Commission’s ruling. Rather, the only negotiable issue is who will pay for the shoes that must be used. Moreover, the mandate of the regulation must be complied with immediately. The Commission’s order does not, as the union asserts, enable the employer to delay implementation of the standard during the bargaining over the economic issue.

The Commission’s ruling is a reasonable reading of the language of 1910.-132(a). This regulation, unlike others drafted by the Secretary pursuant to the Act, does not explicitly require that the employer finance the implementation of the safety measure. The verbs — “provided, used and maintained” — set forth in subsection (a), are all phrased in the passive voice, without specifying who is to perform these functions. At least one of the items of conduct — use—must be carried out by the employees. Furthermore, subpart (b) of 1910.132 clearly contemplates that employees will provide some protective equipment.

Accordingly, since we conclude that the Commission’s decision is not inconsistent with the statutory purpose, and its interpretation is a reasonable reading of the language of the safety, standard, the Commission’s order will be affirmed.

      . 29 C.F.R. § 1910.132(a) provides:
      § 1910.132 General Requirements.
      (a) Application. Protective equipment, including personal protective equipment for eyes, face, head, and extremities, protective clothing, respiratory devices, and protective shields and barriers, shall be provided, used, and maintained in a sanitary and reliable condition wherever it is necessary by reason of hazards of processes or environment, chemical hazards, radiological hazards, or mechanical irritants encountered in a manner capable of causing injury or impairment in the function of any part of the body through absorption, inhalation or physical contact.

      . Occupational Safety and Health Act § 6(a), 29 U.S.C. § 655(a) (Supp.1974).

      . Budd was cited for a number of violations of safety standards promulgated by the Secretary. The Secretary proposed penalties for each infraction ranging from $6.00 to $45.00. After the Secretary issued a complaint, Budd responded before the hearing examiner and admitted to all the citations except those relating to protective footwear and the storage of acetylene cylinders. The Commission concluded that Budd had not complied with 29 C.F.R. § 1910.252(a) relating to the positioning of such acetylene cylinders. However, after receiving a letter allowing the company to continue mounting the cylinders at an angle 30 degrees above horizontal, Budd chose not to continue the contest relating to the acetylene cylinders.

      . Chairman Moran joined the majority opinion with respect to allocating the cost of protective footwear, but dissented from the Commission’s decision on the required positioning of acetylene cylinders.

      . See footnote 3.

      . See 29 U.S.C. § 661(i) (Supp.1974), which provides in part:
      The report of the hearing examiner shall become the final order of the Commission within thirty days after such report by the hearing examiner, unless within such period any Commission member has directed that such report shall be reviewed by the Commission.

      . See 29 C.F.R. § 2200.90(b), which provides:
      (b) The judge shall sign and date the decision. Upon issuance of the decision, jurisdiction shall rest solely in the Commission, and all motions, petitions and other pleadings filed subsequent to such issuance shall be addressed to the Commission.

      . See 29 U.S.C. § 660(a) (Supp.1974).

      . 502 F.2d 946, 951 (3d Cir. 1974).

      . 380 U.S. 1, 16, 85 S.Ct. 792, 801 (1965), quoting Unemployment Commission v. Ara-gon, 329 U.S. 143, 153, 67 S.Ct. 245, 91 L.Ed. 136 (1946) and Power Reactor Co. v. Electricians, 367 U.S. 396, 408, 81 S.Ct. 1529, 6 L.Ed.2d 924 (1961).

      . Roy Bryant Cattle Co. v. United States, 463 F.2d 418, 420 (5th Cir. 1972). Accord, Udall, supra, at 16, 85 S.Ct. 792. See Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1970); United States v. Chicago, 400 U.S. 8, 91 S.Ct. 18, 27 L.Ed.2d 9 (1970); Ostheimer v. United States, 264 F.2d 789 (3d Cir. 1959).

      . -Because the Commission and the Secretary both agree that 1910.132(a) does not impose on the employer the financial burden of the required safety shoes, we need not address the question whether the court should afford greater respect to the Commission’s interpretation or to the Secretary’s when the two are unable to agree as to the proper construction of a safety standard. See, e. g., Dale M. Madden Construction Co. v. Hodgson, 502 F.2d 278 (9th Cir. 1974); Brennan v. Southern Contractors Service, 492 F.2d 498 (5th Cir. 1974); Brennan v. Occupational Safety & Health Review Comm’sn (Gerosa, Inc.), 491 F.2d 1340 (2d Cir. 1974); Brennan v. Gilles & Cotting, Inc., 504 F.2d 1255 (4th Cir. 1974).

      . See Brennan v. Gilles & Cotting, Inc., 504 F.2d at 1262.

      . See, e. g., Senate Subcommittee on Labor, Legislative History of the Occupational Safety and Health Act of 1970 (1971) at 146-47, 149, 462-651. Cf. Brennan v. Gilles & Cotting, Inc., 504 F.2d at 1262.

      . 29 U.S.C. § 661(a) (Supp.1974).

      . See Brennan v. Southern Contractors Service, 492 F.2d 498, 501 (5th Cir. 1974); Brennan v. Gilles & Cotting, Inc., 504 F.2d at 1261-62. But see Brennan v. Occupational Safety and Health Review Commission (Gerosa, Inc.), 491 F.2d 1340 (2d Cir. 1974).

      . 29 U.S.C. §§ 668(a), 655(b)(3) (Supp.1974).

      . See,' e. g., 33 U.S.C. § 941(a) (1970) (Longshoremen’s and Harbor Workers’ Compensation Act), 30 U.S.C. §§ 842, 877 (1971) (Federal Coal Mines Health and Safety Act).

      . 29 U.S.C. § 201 et seq.

      . See 29 U.S.C. § 651 (Supp.1974); S.Rep. 91-1282, 91st Cong., 2d Sess. (1970); Legislative History, supra, at 1420166, 297; U.S.Code Cong. & Adm.News, p. 5177 (1970); Brennan v. Southern Contractors Service, 492 F.2d at 501.
      The Act was intended to obviate the catastrophic loss of wages which often accompanies industrial accidents. This purpose, however, is not, as the union argues, inconsistent with the employees paying for their own safety shoes, as a result of collective bargaining. The expense of purchasing safety shoes is spread among all the workers, while the loss of wages resulting from a job-related injury is often concentrated on the victim alone. Moreover, the cost of the shoes may be compensated by other items in the collective bargaining settlement.

      . The Commission stated, “Construing the standard as a whole, we think subpart (a) means that where personal equipment is necessary, the employer shall insure that it is used.”

      . 29 C.F.R. § 1910.132(b) provides:
      (b) Employee-owned equipment. Where employees provide their own protective equipment, the employer shall be responsible to assure its adequacy including proper maintenance, and sanitation of such equipment.

      . The union offers the following argument as justification for setting aside the Commission’s decision: the wording of 1910.132(a) was taken verbatim from 41 C.F.R. § 50-204.7, a regulation promulgated under the Walsh-Healey Public Contractors Act [41 U.S.C. §§ 35, 38 (1965)]; the latter regulation, the union continues, places the financial burden of such safety equipment on the employer; therefore, the union concludes, 1910.132(a) should be interpreted as imposing the cost on the employer. The union’s position regarding 50-204.7 differs from Commissioner Cleary’s interpretation of that regulation in his dissenting opinion. Neither the union nor Commissioner Cleary cites any authority for their respective interpretations. Aside from these considerations, however, the relationship between 50-204.7 and 1910.132 is a matter properly left to the Commission’s resolution, and, in any event, does not provide a sufficient basis for this Court to conclude that the Commission’s interpretation of 1910.132(a) is unreasonable.

      . See, e. g., 29 C.F.R. §§ 1910.93(a)(d)(3), 1910.134(a). Cf. 29 C.F.R. § 1910.93g. It may also be noted, however, that the standard does not stipulate that the employer’s sole duty is to make such equipment available for purchase, as do some other regulations issued by the Secretary under the Longshoremen’s Act. See 29 C.F.R. §§ 1915.83(d), 1916.83(d), 1917.-83(d).


source: Caselaw Access Project

author: EAST, Senior District Judge:

license: Public Domain

text:
    C.I.T. CORPORATION, a New York Corporation, Plaintiff-Appellee, v. LEE PONTIAC, INC., etc., et al., Defendants, Ralph Gorringe, Defendant-Appellant.
    No. 73-3230.
    United States Court of Appeals, Ninth Circuit.
    April 4, 1975.

      Gordon S. Thatcher (argued), Rexburg, Idaho, for defendant-appellant.
    Michael A. Greene (argued), Boise, Idaho, for plaintiff-appellee.
    Before BARNES and CHOY, Circuit Judges, and EAST, Senior District Judge.

       Honorable William G. East, Senior United States District Judge for the District of Oregon, sitting by designation.

   OPINION

EAST, Senior District Judge:

THE CASE

This diversity action was brought by C.I.T. Corporation (C.I.T.) against Lee Pontiac, Inc. (Pontiac) and its guarantors for a judgment on a deficiency on two secured transactions after the repossession and sale of the collateral.

The defendants in the District Court counterclaimed against C.I.T. and inter-plead Dick Nolan seeking damages resulting from an alleged conspiracy between C.I.T. and Nolan to minimize the sale price of the collateral involved in this action.

The action was tried to the District Court without a jury. The District Court filed its memorandum decision in which it resolved all factual and legal issues against the defendants and on July 20, 1973 entered its findings of fact, conclusions of law and judgment in favor of C.I.T. and against the defendants for the sum of $89,076.97 plus interest and costs. From that judgment, defendant Ralph Gorringe appeals. We affirm.

STATEMENT OF FACTS

On March 10, 1969, Pontiac purchased a 1969 Piper Navajo aircraft (88-Y aircraft) and in return executed and delivered to C.I.T. a negotiable promissory note for $149,600 and an amended aircraft chattel mortgage securing that note. As part of this secured transaction, Gorringe and others executed and delivered an agreement to C.I.T. guaranteeing the payment of all Pontiac’s obligations.

On June 3, 1969, Pontiac purchased a second aircraft (94-L aircraft) from In-termountain Piper, Inc. under an installment purchase security agreement. On the same date, Intermountain Piper assigned this aircraft security agreement to C.I.T. For convenience, the aforesaid promissory note and chattel mortgage and the installment purchase security agreement will be referred to jointly as aircraft security agreements.

Pontiac leased the two airplanes to Transmagic Airlines. On August 24 and September 3, 1971, Pontiac and its lessee failed to make the payments accruing under the aircraft security agreements. On November 29, following and pursuant to the terms and provisions of the aircraft security agreements and by written notice to Pontiac on November 29, C.I.T. accelerated the payment dates and declared the entire amount of unpaid principal of each of the aircraft security agreements to be immediately due and payable and demanded possession of the aircraft.

C.I.T. directed Dick Nolan, an aircraft dealer, to pick up the aircraft in Twin Falls, Idaho and ultimately deliver them to Boise, Idaho.

C.I.T. then gave notice to the defendants of its intention to sell the aircraft at a public sale in Boise on January 28, 1972. C.I.T. gave notice of the sale to 43 prospective buyers and requested suggestions from defendants as to prospective buyers. C.I.T. placed a notice of sale in General Aviations News, Trade-a-Plane, and The Idaho Statesman advertising the sale to be held on January 28, 1972.

Dick Nolan attempted to return both aircraft to Boise for the sale, but due to a combination of bad weather and mechanical failure, only the 88-Y aircraft was present at the sale. Several bidders appeared at the sale and bid on both aircraft. Dick Nolan, the highest bidder, purchased the aircraft for a combined price of $111,000.

After deducting costs, unpaid interest and reducing principal, there was a deficiency owing on the aircraft security agreements.

DISCUSSION

Gorringe asserts that the District Court’s findings of the reasonable value of the two, aircraft, being a great undervaluation of the true reasonable value, were erroneous and not supported by sufficient evidence.

It appears from the record that the evidence concerning the reasonable market value of the aircraft at the time of sale was conflicting. ■ The District Court had the advantage of seeing and hearing the witnesses and had full opportunity to judge their credibility. The District Court’s findings of value indicate that it accepted the valuation of the two aircraft at $109,000 as testified to by C.I.T.’s witness, Dick Nolan, a dealer in aircraft with 25 years experience, and rejected higher valuation placed by other witnesses. That choice was the prerogative of the District Court and we are not convinced that the findings are clearly erroneous. Fed.R.Civ.P. 52(a); Sessions, Inc. v. Morton, 491 F.2d 854, 858 (9th Cir. 1974).

Gorringe contends the District Court erred in finding and concluding that the Idaho usury statute was not applicable to the installment purchase security agreement covering the 94-L aircraft. We reject the contention. Idaho Code § 28-22-105 prohibits the charging of interest in excess of 12 percent on loans, and § 28-22-107 provides for a monetary penalty.

The time price under the 94-L aircraft purchase agreement was 13.1 percent above the cash price. The defendants at trial urged that the seller of the 94-L aircraft and Pontiac agreed on a cash price without any terms of installment sale being agreed upon and that C.I.T. was fully aware of that situation and involved in arranging the terms of the financing. The District' Court found and concluded to the contrary because the terms of the installment purchase security agreement unambiguously stated the cash price, down payment, adjustments and finance charges, and presented a time purchase price. Under the Idaho authorities, a sale of personal property is not usurious when the sale is made for one price if cash is paid and for a higher payment if payment is deferred or if payment is made in future installments. Smith v. Sherwood and Roberts, Spokane, Inc., 92 Idaho 248, 441 P.2d 158 (1968); Petersen v. Philco Finance Corporation, 91 Idaho 644, 428 P.2d 961 (1967).

There is no evidence that C.I.T. and the seller colluded or conspired to circumvent the usury law by using the aircraft security agreements for the financing of the purchase of the 94-L aircraft. We conclude that the District Court’s ruling was correct.

Gorringe next contends that the District Court erred in holding that the repossession sale at Boise was commercially reasonable since the absence of the 94-L aircraft made inspection by prospective purchasers impossible. We are satisfied that Gorringe relied upon archaic law and misconstrues Section 28-9-504(3) of the Idaho Code which provides:

“Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms but every aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. . . . ”

“Commercially reasonable,” although repeatedly used in the Code, is not specifically defined. Draftsmen deferred to case law for development of the precise meaning. 1 Coogan, Hogan & Vagts, Secured Transactions Under U.C.C., § 8.04(2)(a) (1968). This development is just underway. We are cited to no Idaho authority and our independent search reveals none defining “commercially reasonable.” In re Zsa Zsa Limited, 352 F.Supp. 665 (S.D.N.Y.1972), the court said at 670:

“It is the aggregate of circumstances in each case — rather than specific details of the sale taken in isolation— that should be emphasized in a review of the sale. The facets of manner, method, time, place and terms cited by the Code are to be viewed as necessary and interrelated parts of the whole transaction.”

We believe the Supreme Court of Idaho if called upon would agree to the rationale of Zsa Zsa. The record reveals ample evidence to support the District Court’s findings that the sale was commercially reasonable under the rationale of Zsa Zsa. Good and sufficient notice was timely given to a reasonable number of prospective buyers. No prospective bidders present at the public sale questioned the absence of the plane and asked for inspection. The circumstances attending the absence of the plane were beyond the control of C.I.T. and excusable. The holding of the sale at the time and place scheduled was to the best interests of all and a fair price was secured. Coupled with the complete absence of any showing or evidence on the part of Gorringe that a better price would have been received had the sale been continued until the second aircraft was available for inspection, we conclude that the District Court’s findings were not clearly erroneous. Fed.R.Civ.P. 52(a); Sessions, Inc. v. Morton, supra.

Lastly, Gorringe’s claim of C.I.T.’s bad faith application of the proceeds of the sale and assertions and claims of deficiency under the security agreements are without substance in fact and merit.

We reserve the appellee’s motion for attorney fees on appeal for later disposition.

Affirmed.


author: PHILLIPS, Chief Judge.

text:
    Irma L. WOKOJANCE, Plaintiff-Appellant, v. Caspar WEINBERGER, Secretary of Health, Education and Welfare, Defendant-Appellee.
    No. 74-2105.
    United States Court of Appeals, Sixth Circuit.
    April 2, 1975.

      Irwin W. Barkan (argued), Barkan, Barkan & Neff, Columbus, Ohio, for plaintiff-appellant.
    William W. Milligan, U. S. Atty., Thomas D. Thompson, Arthur D. Jackson, Jr., Asst. U. S. Atty., Columbus, Ohio, for defendant-appellee.
    Before PHILLIPS, Chief Judge, and MILLER and LIVELY, Circuit Judges.
   PHILLIPS, Chief Judge.

In 1970, Mrs. Irma L. Wokojance applied to the Social Security Administration for widow’s disability insurance benefits under 42 U.S.C. § 402(e). Mrs. Wo-kojance’s claim was disallowed by the Administration on the ground that she was not disabled within the meaning of 42 U.S.C. § 423(d) and the regulations promulgated thereunder, 20 C.F.R. §§ 404.1504-404.1506 and appendix to Subpart P. After a hearing, the administrative law judge similarly concluded that Mrs. Wokojance was not disabled, and the Appeals Council affirmed this determination, which constitutes the final decision of the Secretary of Health, Education and Welfare. Mrs. Woko-jance subsequently filed an action in the District Court under 42 U.S.C. § 405(g), alleging that the administrative decision was not supported by substantial evidence and that § 423(d)(2)(B) violates the due process clause of the fifth amendment. District Judge Joseph P. Kin-neary rejected both contentions, granting the Secretary’s motion for summary judgment. This appeal followed.

An individual cannot qualify for widow’s disability benefits unless she suffers from an impairment listed in the appendix to 20 C.F.R. Subpart P, or she suffers from one or more unlisted impairments that singly or in combination are the medical equivalent of a listed impairment. In this case Mrs. Wokojance was afflicted with arthritis, psoriasis, obesity, and certain mental disorders resulting at least in part from her physical ailments. There was a definite conflict in the medical evidence relating to the severity of plaintiff’s mental and physical impairments. A psychiatrist, a clinical psychologist, and a psychiatric social worker reported that Mrs. Wokojance suffers from a severe mental disturbance that renders her unemployable or unable to work. Another psychiatrist, however, examined Mrs. Wokojance and found her apathetic but not mentally ill.

Two internists examined plaintiff and diagnosed mild, generalized psoriasis, mild or moderate degenerative joint disease, and exogenous obesity. One of these doctors stated his conclusion that plaintiff’s conditions do not meet the requirements for widow’s disability benefits. On the other hand, an osteopathic physician diagnosed Mrs. Wokojance’s condition as acute psoriasis and acute rheumatoid arthritis and concluded that she is incapable of' working. Finally, a medical consultant and a medical officer of the Social Security Administration each reviewed and evaluated Mrs. Woko-jance’s medical file and concluded that she does not suffer from any of the impairments listed in the appendix to 20 C.F.R. Subpart P, nor from the medical equivalent of any listed impairment.

The scope of judicial review is limited in Social Security cases. It is for the Secretary to resolve conflicts in the evidence and to decide questions of credibility. Myers v. Richardson, 471 F.2d 1265 (6th Cir. 1972). The findings of the Secretary are conclusive if supported by substantial evidence. Randolph v. Richardson, 486 F.2d 1046 (6th Cir. 1973). We conclude that the record in this case contains substantial evidence in support of the administrative finding that Mrs. Wokojance does not suffer from any impairment listed in the applicable regulations and that her ailments are not the medical equivalent of any listed impairment. Accordingly, we cannot disturb the Secretary’s determination that plaintiff is not disabled for purposes of widow’s disability insurance benefits.

Mrs. Wokojance’s constitutional attack is directed to the different standards of disability that Congress has imposed upon wage earners and upon widows of wage earners. Under 42 U.S.C. § 423(d)(2)(A), a wage earner is considered disabled if his impairment precludes him from engaging in any substantial gainful activity. Under § 423(d)(2)(B), however, a widow applying for benefits on the basis of her spouse’s record as a wage earner must show that she suffers from an impairment deemed by the Secretary to preclude her from engaging in any gainful activity. Moreover, in assessing a wage earner’s ability to work, the Secretary must consider the claimant’s age, education, and work experience. By contrast, a widow’s claim of disability is judged solely by medical criteria.

It is evident that Congress has established a stricter test of disability for widows than for wage earners. Plaintiff contends that this legislative classification is arbitrary and irrational, and that it deprives her of equal protection of the laws.

There can be no doubt that the Social Security Act is subject to scrutiny under equal protection concepts implicit in the due process clause of the fifth amendment. Weinberger v. Wiesenfeld, - U.S. -, 95 S.Ct. 1225, 1228 n. 2, 43 L.Ed.2d 514 (1975); Jimenez v. Weinberger, 417 U.S. 628, 637, 94 S.Ct. 2496, 41 L.Ed.2d 363 (1974). However, Congress has wide latitude in the area of social welfare legislation, and there is no constitutional infirmity in a statutory classification that is rationally based and free from invidious discrimination. Richardson v. Belcher, 404 U.S. 78, 81, 92 S.Ct. 254, 30 L.Ed.2d 231 (1971); see Geduldig v. Aiello, 417 U.S. 484, 494-95, 94 S.Ct. 2485, 41 L.Ed.2d 256 (1974). In this case we believe that Congress has acted neither irrationally nor unconstitutionally in extending disability benefits to widows of insured wage earners upon more stringent conditions than those upon which the same benefits are extended to the wage earners themselves. These are distinct classes of claimants — a wage earner is entitled to benefits on the basis of his own work record, while a widow enjoys only a derivative right to benefits by virtue of the insured status of her deceased spouse. We find nothing in the Constitution that requires Congress to treat all classes of claimants alike.

Before 1967, disability benefits were not available at all to widows as such. The 1967 amendments to the Social Security Act provided benefits to widows, but only to those who are severely disabled. Plaintiff seems to be arguing that Congress was constitutionally obliged to go further and to extend benefits also to widows less severely disabled. We disagree. Congress need not remedy all phases of a social problem; it may move one step at a time, attacking first those aspects of the problem that it deems most urgent. See Dandridge v. Williams, 397 U.S. 471, 486-87, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970).

Finally, we note that the Fifth Circuit Court of Appeals recently considered and rejected the same constitutional argument that Mrs. Wokojance presses here. Sullivan v. Weinberger, 493 F.2d 855, 862-63 (5th Cir. 1974).

The judgment of the District Court is affirmed. No costs are taxed. Each party will bear his own costs.


author: PER CURIAM.

text:
    Benjamin KIRVELAITIS, Petitioner-Appellant, v. Frank GRAY, Supt., Respondent-Appellee.
    No. 74-1472.
    United States Court of Appeals, Sixth Circuit.
    March 31, 1975.

      Benjamin Kirvelaitis, pro se, William P. Meehan, Columbus, Ohio (Court Appointed — CJA), for appellant.
    William J. Brown, Atty. Gen., Leo J. Conway, Simon B. Karas, Columbus, Ohio, for appellee.
    Before WEICK, McCREE, and MILLER, Circuit Judges.
   PER CURIAM.

This appeal is from an order of the district court denying habeas corpus relief under 28 U.S.C. § 2254. On May 5, 1971, appellant was convicted by an Ohio Common Pleas Court jury of first degree murder in the shooting death of a Cleveland taxi driver. He was sentenced to life imprisonment. On February 15, 1973, the Ohio Court of Appeals affirmed the judgment, and on June 14, 1973, the Ohio Supreme Court overruled appellant’s motion for leave to appeal.

Appellant then sought habeas corpus relief from the U. S. District Court, contending that several constitutional errors occurred during his trial for murder. Instead of conducting an evidentiary hearing, the district court appropriately relied upon the state court trial transcript and the appellate court decision. The court carefully reviewed each of the issues presented in respect to which state remedies had been exhausted, and determined that no constitutional rights had been violated.

On . appeal, the principal issue is whether a search and the seizure of a gun from the apartment in which appellant was living constituted a violation of his Fourth Amendment rights.

The facts surrounding the search indicate that at about 3:30 a. m. on September 15, 1970, about 24 hours after the murder, several officers of the Cleveland Police Department acting on a tip that appellant would be found there, arrived at an apartment building located at 1190 East 79th Street in Cleveland. They did not see appellant’s name listed on the mail boxes at the multi-unit dwelling. However, they spoke to Mr. and Mrs. Ferree, ground floor tenants, who indicated that earlier in the evening they had smelled gas possibly coming from the apartment in which appellant was living. The officers then attempted to telephone the apartment but received no answer after permitting the instrument to ring 50 to 60 times. After unsuccessful attempts to gain entrance by knocking on the door and using a key provided by Mrs. Ferree, the officers broke down the door.

Once in the apartment, the officers discovered a Mr. Riboczi, the tenant of the flat, lying asleep in his bed. Mr. Riboczi had not heard the commotion because he was hard of hearing and had removed his hearing aid for the night. The officers ' awakened Riboczi, showed him a photograph of appellant, and asked whether he lived at that address. Riboczi responded that appellant lived in the next room of the apartment. The officers, with guns drawn, entered the room and found appellant dressed only-in a T-shirt and undershorts under the bed. The police officers kept their guns out while Lt. Joyce placed appellant under arrest and advised him of his rights.

Then, Lt. Joyce asked Riboczi for permission to look around the apartment. Saying he had “nothing to hide,” Riboczi consented to the search. The officer also asked appellant for permission, and the officer’s testimony at trial was that appellant said, “Go ahead. Look around.” During the search, the officers found a loaded gun in the closet about 25 feet from appellant’s room.

The district judge determined that the consents of both appellant and Riboczi were voluntary and uncoerced. Accordingly, he held that the search did not violate appellant’s Fourth Amendment rights. We find nothing in the record to support the conclusion that appellant’s consent given at gunpoint was voluntary. See Bumper v. North Carolina, 391 U.S. 543, 88 S.Ct. 1788, 20 L.Ed.2d 797 (1968). However, we affirm the holding that Mr. Riboczi’s consent was untainted.

The trial transcript shows that Riboczi leased the apartment, and, in turn, rented one of its rooms to appellant. The closet in which the gun was found was under the joint control of both appellant and Riboczi. In Frazier v. Cupp, 394 U.S. 731, 89 S.Ct. 1420, 22 L.Ed.2d 684 (1969), the Supreme Court rejected a petitioner’s claim of an illegal search where Rawls, a friend of petitioner, consented to the search of a duffel bag jointly used by petitioner and Rawls. “Petitioner, in allowing Rawls to use the bag and in leaving it in his house, must be taken to have assumed the risk that Rawls would allow someone else to look inside.” 394 U.S. at 740, 89 S.Ct. at 1425. See McCravy v. Moore, 476 F.2d 281 (6th Cir. 1973), United States v. Gar-giso, 456 F.2d 584 (2d Cir. 1972), United States v. Alloway, 397 F.2d 105 (6th Cir. 1968). Here, appellant assumed the risk that his co-occupant would consent to a search of apartment areas shared by both.

Appellant also contends that the search was a product of the unlawful entry of the officers. Cf. Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963). In reviewing the record, the district court determined that the police officers had probable cause to arrest appellant for the murder of the taxi driver, but that the officers had violated appellant’s Fourth Amendment rights by failing to announce their presence and purpose before breaking down the door. The district court upheld the subsequent search because the “consent to search was not the product of the arguably unlawful entry.”

In United States v. Williams, 351 F.2d 475 (6th Cir. 1965), cert. denied, 383 U.S. 917, 86 S.Ct. 910, 15 L.Ed.2d 671 (1966), we held that narcotics agents’ entry into an apartment through an open door without invitation and without announcing their purpose was legal and did not taint a later search and seizure of narcotics. Observing that the Fourth Amendment prohibits unreasonable searches and seizures, we said that “ ‘[reasonableness’ is to be determined in the light of the ‘total atmosphere of the case.’ ” 351 F.2d at 477, citing Go-Bart Importing Co. v. United States, 282 U.S. 344, 51 S.Ct. 153, 75 L.Ed. 374 (1931) and United States v. Rabinowitz, 339 U.S. 56, 70 S.Ct. 430, 94 L.Ed. 653 (1950).

We uphold the legality of the seizure in this case because the entry by the police was reasonable under the circumstances. The police had probable cause to believe that appellant was the murderer and that he was living in the apartment with Riboczi. Also, the officers tried to call the occupants of the apartment on the telephone. They called from the Ferrees’ apartment located immediately below Riboczi’s apartment and heard the phone ringing 50-60 times in the apartment above. After receiving no answer, they knocked on the door and tried a key that did not fit the lock before they broke down the door. We hold that it was not unreasonable to dispense with an announcement of presence and purpose under these circumstances.

Affirmed.

      . Appellant’s brief argues that his consent was involuntary because he had not been advised of his right to refuse permission. In Schneckloth v. Bustamonte, 412 U.S. 218, 227, 93 S.Ct. 2041, 2048, 36 L.Ed.2d 854 (1973), the Supreme Court said, “While knowledge of the right to refuse consent is one factor to be taken into account, the government need not establish such knowledge as the sine qua non of an effective consent.” Here, however, the overpowering armed police presence requires additional evidence that the choice was uncoerced beyond appellant’s mere assent to the search to permit a finding of voluntariness.


author: DONALD RUSSELL, Circuit Judge:

text:
    PATRICIAN TOWERS OWNERS, INC., a Delaware Corporation, et al., Appellees, v. Charles M. FAIRCHILD (Individually and as general partner, Patrician Towers limited partnership), Appellant.
    No. 73-2182.
    United States Court of Appeals, Fourth Circuit.
    Argued Feb. 6, 1975.
    Decided March 26, 1975.

      Fred C. Alexander, Jr., Alexandria, Va. (Boothe, Prichard & Dudley, Alexandria, Va., on brief), for appellant.
    Henry J. Cappello, Washington, D. C. (Rothwell, Cappello & Berndtson, Washington, D. C., on brief), for appellees.
    Before RUSSELL, FIELD and WIDENER, Circuit Judges.
   DONALD RUSSELL, Circuit Judge:

This is a suit on behalf of the owners of units in a condominium, constructed at Rehoboth Beach, Delaware, to recover costs of making allegedly necessary repairs to the condominium due to defects in the original construction as well as to recover assessments levied against the builder as the owner of certain unsold units.

Federal jurisdiction rests on diversity.

After a trial without a jury, the District Court granted judgment in favor of the plaintiffs and the defendant has appealed. We vacate the judgment and remand for more specific and detailed findings in conformity with Rule 52(a), Rules of Civil Procedure, 28 U.S.C.

The initial issue is the threshold one of jurisdiction and standing. An understanding of this issue requires some elaboration of the facts.

The condominium, which is the subject of this controversy, began initially as a project of a partnership composed of the defendant Fairchild and another. A few months after construction had commenced but not before the partnership had entered into a number of sales contracts with prospective unit owners with a warranty of “the building and the mechanical equipment therein for a period of one year from completion,” the partnership secured a charter for a Delaware corporation, Patrician Towers, Inc. All the stock in the corporation was owned by the partnership. The condominium property was thereupon transferred to the corporation and the building of the condominium proceeded in the ^ame of the corporation as owner. When the corporation thereafter executed sales contracts, it, unlike the partnership, included therein no express warranty.

At some point during the construction, the defendant Fairchild purchased the interests of his co-partner and became the sole general partner in the partnership and the owner of all the stock in the corporation Patrician Towers, Inc.

The purchasers of units in the condominium early constituted themselves an unincorporated association under the authority of the Delaware Unit Property Act, and, as provided in that Act, elected a Council with the powers defined in the Act. The members of this Council, which might under Delaware law number from 3 to 5, were required to be either citizens of Delaware or unit owners. The Council was authorized and empowered in the name of the Association and for its benefit to maintain, repair or replace the common areas or “elements” of the condominium, to assess and collect from the unit owners all common expenses, and to pay all common expenses and obligations. For these purposes, it was constituted a legal entity, authorized under the Act to sue for and on behalf of the unit owners to recover for any assessments made or obligations undertaken.

When construction of the condominium was completed in 1970 and the unit owners entered into possession of their respective units, a number of complaints quickly developed because of leaks throughout the building. After the defendant failed to correct the alleged defects, the Council retained counsel, and through such counsel, notified the defendant that unless the alleged defects in the building were corrected, it would proceed “to have the defects corrected and would look to defendant for reimbursement.” The plaintiffs claimed the builder failed to correct the defects as requested. By reason of the builder’s failure, the Council claims it was forced to contract for the correction of the “defects in the buildings” and in so doing incurred expenses in discharging what was alleged to have been a breach of the builder’s obligation to construct the condominium in “a good workmanlike manner * * * suitable for human habitation.”

This suit was instituted to recover the expenses incurred by the Council, in making the repairs to the common areas of the condominium. In addition, recovery was sought for the assessments made by the Council against defendant, as owner of six units which had been retained by the defendant, for its pro rata share of common operating expenses. Though filed to recover items which were thus clearly recoverable by the Council, the action named three plaintiffs and recovery was sought jointly on their behalf. One of these plaintiffs was the Council of the Patrician Towers Condominium Association, described in the complaint as an “unincorporated association.” Another was a Delaware corporation formed by the Council, to which it had assigned its right and title in the “real property” and its “rights and duties * * * to manage the condominium property.” The third plaintiff consisted of two individuals, one a citizen of the District of Columbia and the other a citizen of Maryland, who identified themselves as “members of the Council [Association] and, as such, [could] fairly and adequately protect the interests of the Association and its members,” in maintaining this action “under provisions of Rule 23.2 Federal Rules of Civil Procedure” “individually in their own right as representatives of the class of property owners in Patrician Towers Condominium.”

The defendant, named in the complaint, is alleged to be a citizen of Virginia. In his answer to the suit, the defendant expressly denied among other allegations, the allegations of federal jurisdiction, stating explicitly that there was an absence of diversity between the members of the plaintiff Association (Council) and the defendant. He, also, challenged the standing of the representative plaintiffs as a party plaintiff. The answer made a somewhat ambiguous reference in its assault on the jurisdiction to the status of the corporate plaintiff, which was alleged to be an assignee of the Council. Both the plaintiffs and the defendant have disregarded this plaintiff in their discussion of the issue and in the present posture of the case we do so, too, though it may be necessary on remand to consider its status for jurisdictional purposes.

With the issues as made by the answer of the defendant, the representative plaintiffs were placed under the burden of establishing their standing to maintain the action under Rule 23.2. In addition, the Council representing the Association and dependent on whether it was found to have standing, the representative plaintiffs, in turn, had the burden of establishing diversity of citizenship between them, on the one hand, and the defendant, on the other. And, in resolving after trial the material issues of jurisdiction and standing thus made by the pleadings, the District Court was obligated under Rule 52(a) to set forth in this nonjury case its decision in the form of detailed findings of fact and conclusions of law. In the normal course of the proceedings, such findings and conclusions should have preceded any decision on the substantive merits of the case.

In their proposed findings of fact and conclusions of law, counsel for the plaintiffs, and the District Court in its original findings and conclusions, however, made no reference whatsoever to the material issues of standing and jurisdiction but dealt exclusively with the substantive merits of the case. It was only after the defendant moved for a “New Trial and to Amend or Alter the Judgment” given, that the District Court took any note of the challenge either to standing or jurisdiction. In dismissing that motion, the Court did state as to standing:

“The arguments relative to the standing of the plaintiffs are answered by reference to Rule 23.2, F.R.Civ.P., the Court finding that the named individual plaintiffs will fairly and adequately protect the interests of the plaintiff association and its members. While there may be some uncertainty, as among the plaintiffs, which plaintiff is entitled to the award in this case, collectively the plaintiffs comprise all the entities which could have an interest in that award.”

This statement is, however, no more than a bare conclusory finding in the language of the Rule itself. Expressed in absolute terms, it is predicated on no articulated subsidiary findings or reasoning. In their complaint the plaintiffs seemingly would have justified a finding that the representative plaintiffs could “fairly and adequately protect the interests of the plaintiff association and its members” under Rule 23.2 — the conclu-sory finding made by the District Court — on the fact that the representative plaintiffs were members of the Council. But the trial court did not allude to this circumstance in its concluso-ry declaration and we have no reason to assume that such fact influenced in any way the conclusion reached by the District Court. Perhaps, but this is only conjecture, the District Court was prompted to disregard this fact because of evidence in the record contradictory of the allegation that both representative plaintiffs were members of the Council. The representative plaintiff Bucher was not a resident of Delaware and, if the exhibit included in the agreed appendix is correct, his wife, and not he, was the owner of unit 106. He was accordingly not qualified to be a member of the Council. But the District Court neither relied on the alleged membership of the representative parties in the Council nor on any other stated facts in support of its finding of standing.

Beyond the absence of any factual statement in support of its finding of standing is the failure of the District Court to express the legal basis for its conclusion. It will be observed that, in its opinion, the District Court refers to the representative plaintiffs as constituting proper representatives to protect the “plaintiff association and its members.” (Italics added) It thus recognizes that the unincorporated association through its elected Council is a party plaintiff, capable of suing on behalf of its members; in fact, it is the jural entity declared entitled under Delaware law to maintain this cause of action. But if the association is a proper party plaintiff entitled to recover for expenses it has incurred from the defendant, the conclusion of the District Court is contradictory of the construction of Rule 23.2, as phrased in Suchem, Inc. v. Central Aguirre Sugar Co. (D.C.Puerto Rico, 1971) 52 F.R.D. 348, 355, which would deny class representation under Rule 23.2 on behalf of any unincorporated association if the association is legally empowered to sue on its own behalf. In Suchem the Court declared that:

“ * * * when the law of the state in a particular case does not provide an unincorporated association with capacity as a jural person to sue or to be sued, then and only then does the mechanism of Rule 23.2 come into operation and is available as a way of overcoming this lack of capacity by suing the individual representatives of the unincorporated association.”

It is true that the construction of Rule 23.2, as declared in Suchem, has been viewed with some skepticism by both Moore and Wright and Miller, but it finds strong support in the Advisory Committee’s notes. But whether Suchem be considered a correct construction of Rule 23.2 or not is not determinative of standing in favor of the representative plaintiffs. We manifestly have a situation that, it is fair to conclude, was never contemplated or intended in the application of Rule 23.2. That Rule was intended to provide, if we accept the reasoning of Suchem, as a practically automatic device whereby an unincorporated association, unable by state law to sue as a jural entity, might sue by means of a class action, thereby both avoiding the difficulties created by Bouligny and the more stringent requirements of Rule 23 for a class action, or, on the other hand, if we take the broader construction suggested in Wright and Miller and Moore, as a readily available substitute for an action by the unincorporated association satisfying the established requirements of Rule 23 for qualification as a class action.

Under neither construction, however, could it be argued that the representative plaintiffs here have standing. As we have seen, Suehem would clearly preclude Rule 23.2 as a basis for class standing in this case. But the contrary broader construction of the Rule would be no more availing as a basis for investing the representative plaintiffs with standing under Rule 23.2. And this latter statement is so because the representative plaintiffs are not suing as plaintiffs by way of a substitute for or in lieu of an action by the unincorporated association itself; they are suing along with— jointly with — the unincorporated association itself, for whose benefit the action is prosecuted, to recover on a single, identical cause of action for obligations incurred by the unincorporated association itself acting, through its jural entity, the Council. In short, we are confronted here with the question whether in a single cause of action a representative action is maintainable under Rule 23.2 when joined (and joined voluntarily by the plaintiffs themselves) with an action brought by the party for whose benefit the representative action is sought to be asserted. Coniglio v. Highwood Services, Inc. (D.C.N.Y.1972) 60 F.R.D. 359, 364, aff. 495 F.2d 1286, though involving a situation where the unincorporated association and the class representatives under Rule 23.2 were defendants rather than plaintiffs, indicates that the class action is not maintainable under such circumstances. It is obvious that the right of the representative plaintiffs to sue for the benefit of the unincorporated association under 23.2 has considerable similarity to a class derivative suit. A derivative action would ordinarily not be maintainable if the real party’s interest, the corporate principal, for instance, had brought suit in its own name. Why should there be a different rule where, under largely similar circumstances, a class action under 23.2 is pressed on behalf of an unincorporated association if the very entity the class representative is seeking to represent (i. e., the unincorporated association) is itself a party, asserting in good faith the very same claim that the class representative is asserting? We apprehend none in principle.

It follows that we have neither factual findings nor legal reasoning to support the District Court’s finding of standing. Rule 52(a), as we have observed, demands that the District Court set forth its factual and legal basis for its final conclusion on standing in such detail that the appellate court may understand the basis for the District Court’s conclusion. The single con'clusory sentence in the order dismissing defendant’s motion for a new trial will manifestly not satisfy the mandates of the Rule. It provides this Court with mere conjectures as to the reasoning, both factually and legally, used by the District Court in reaching its conclusion. The cause must be remanded for more specific and detailed findings and conclusions on the issue of standing.

Even if the findings and conclusions on standing could be approved as meeting the requirement of Rule 52(a), we could not affirm the judgment below on the record now before us or find compliance on the part of the District Court with Rule 52(a). There is no ruling of any kind on the defendant’s denial of jurisdiction and this issue remains, whether the representative parties have standing or not. If, for instance, the representative plaintiffs have standing, that would mean simply that the citizenship of those representatives would be considered for diversity purposes. But this would by no means be tantamount to a decision, even by implication, that there was diversity jurisdiction in this case. The representative plaintiffs are not the sole plaintiff and their citizenship is not the only one to be considered in determining whether there is diversity between the plaintiffs and the defendant. These representative plaintiffs have voluntarily chosen to join as party plaintiff with them the unincorporated association itself. They have thus vouched for the standing of the unincorporated association as a proper joint plaintiff with them. And the District Court has itself recognized the propriety of the appearance of the Association as a party plaintiff. The judgment it granted runs in favor of the Association as well as the representative plaintiffs. Even when it made its finding of standing in favor of the representative plaintiffs, it recognized and denominated the Association as a party plaintiff. In this state of the record the unincorporated association must be considered a proper party plaintiff in this action; and the citizenship of the members of that unincorporated association must be considered on the issue of diversity jurisdiction, or some valid reasoning, predicated on adequate findings of fact, must be given for disregarding them and their citizenship. The opinion below offers no justification for so disregarding the unincorporated association as a party plaintiff in ascertaining jurisdiction.

Normally, the absence of any finding that would warrant disregarding the Association as a plaintiff might be ground for dismissing the action on jurisdictional grounds, provided it is conceded that there is not complete diversity between all the members of the Association and the defendant. We prefer, however, to remand in order that the District Court may make specific and detailed findings on jurisdiction and standing, with the right on the part of any of the parties to offer any additional testimony deemed relevant by the trial court and with the right on the part of the District Court to enter any other and further orders as justice may demand.

We have foregone any discussion of the merits of the controversy, regarding their consideration premature until the issues of standing and jurisdiction are resolved.

Remanded with directions.

      . § 220X et seq., Title 25, Delaware Laws.

      . 25 DeLLaws, § 2202(5).

      . 25 Del.Laws, § 2211.

      . 25 DetLaws, § 2234.

      . The defendant argues that the plaintiffs seek recovery also for damages due to leakage sustained by the individual unit owners in their separate units. The plaintiffs deny any such intention and assert that their claims relate exclusively to damage to common areas of the condominium, in which all unit owners have an indivisible common interest. A hasty review of the record suggests that the plaintiffs are correct. It seems that all the bills for which recovery is sought have to do with the common areas. There is, however, some language in the amended complaint which would give support to the argument that recovery for damage to the individual units is sought. In any event, on remand the District Court might well clarify this issue and make clear whether any claims for damages other than the common areas are pressed.
      If the plaintiffs should be found to be advancing claims for damages to individual units, it would be necessary in ascertaining whether or not such claims meet the test of the jurisdictional amount to consider them in the light of Snyder v. Harris (1969) 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 and Zahn v. International Paper Co. (1973) 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511.

      . This is actually an amended complaint. The first complaint, we were told in argument, named the corporation formed by the defendant and his co-partner as a co-defendant but the corporation was dropped to avoid dismissal on jurisdictional grounds.

      . Cf. Kramer v. Caribbean Mills, Inc. (1969) 394 U.S. 823, 829-830, 89 S.Ct. 1487, 23 L.Ed.2d 9; Ferrara v. Philadelphia Laboratories, Inc. (D.C.Vt.1967) 272 F.Supp. 1000, 1014-1015, aff. 393 F.2d 934.

      . Cook County College Teachers U., Loc. 1600, A.F.T. v. Byrd (7th Cir. 1972) 456 F.2d 882, 885, cert. denied 409 U.S. 848, 93 S.Ct. 56, 34 L.Ed.2d 90, reh. denied 414 U.S. 883, 94 S.Ct. 29, 38 L.Ed.2d 131.

      . McNutt v. General Motors Acceptance Corp. (1936) 298 U.S. 178, 190, 56 S.Ct. 780, 80 L.Ed. 1135.

      . Mosley v. United States (4th Cir. 1974) 499 F.2d 1361, 1363; Servo Corporation of America v. General Electric Company (4th Cir. 1968) 393 F.2d 551, 556. It is true that, as the Court said in Commissioner v. Duberstein (1960) 363 U.S. 278, 292, 80 S.Ct. 1190, 1200, 4 L.Ed.2d 1218, “conciseness is to be strived for, and prolixity avoided, in findings; ” they must be stated “in such detail and exactness” on all material issues that the reviewing court may understand clearly the factual basis for the trial court’s findings and conclusions. See, Kelley v. Everglades District (1943) 319 U.S. 415, 420, 63 S.Ct. 1141, 87 L.Ed. 1485, reh. denied 320 U.S. 214, 63 S.Ct. 1444, 87 L.Ed. 1851.
      In short, “ ‘[T]here must be such subsidiary findings of fact as will support the ultimate conclusion reached by the court. * * * ’” Kweskin v. Finkelstein (7th Cir. 1955) 223 F.2d 677, 678-9, rev. on other grounds 232 F.2d 801.
      For an excellent statement of the purposes of the Rule, see Lemelson v. Kellogg Company (2d Cir. 1971) 440 F.2d 986, 988:
      “ * * * The requirement embodied in that Rule serves many masters. It aids ‘the appellate court by affording it a clear understanding of the ground or basis of the decision of the trial court,’ Barron & Holtzoff, Federal Practice and Procedure, § 1121 (Wright Revision 1961), see Fuchstadt v. United States, 434 F.2d 367 (2 Cir. 1970); it makes definite what was decided by the case, Wright, Federal Courts (1963) § 96; and it serves to evoke ‘care on the part of the trial judge in ascertaining the facts.’ ”

      . 3B Moore, Federal Practice, 1974 Supp., p. 145.

      . 7A Wright and Miller, Federal Practice and Procedure, § 1861, pp. 459-60 (1972).
      This text states the purpose of Rule 23.2 as “a procedural device that provides a supplementary method for unincorporated associations to litigate in a federal court * *

      . See Note, 14 A.L.R.Fed. 849, at p. 854:
      “ * * * Indeed, the notes of the Advisory Committee on the 1966 amendments to the Federal Rules of Procedure following 23.2 (which was added in 1966) point out that although an action by or against representatives of the membership of an unincorporated association has often been viewed as a class action, the real or main purpose of this characterization has been to give ‘entity treatment’ to the association, when, for formal reasons, it could not sue or be sued as a jural person under Rule 17(b), which restricts the capacity of unincorporated associations, when suing or being sued, to the capacity given them by the law of the state where the District Court is held.”

      . Steelworkers v. Bouligny, Inc. (1965) 382 U.S. 145, 149-53, 86 S.Ct. 272, 15 L.Ed.2d 217.

      . Calagaz v. Calhoun (5th Cir. 1962) 309 F.2d 248, 251-53; Boesenberg v. Chicago Title & Trust Co. (7th Cir. 1942) 128 F.2d 245, 246, 141 A.L.R. 565; McGarry v. Lentz (D.C.Ohio 1925) 9 F.2d 680, 683, aff. 13 F.2d 51, cert. denied 273 U.S. 716, 47 S.Ct. 108, 71 L.Ed. 855.

      . Steelworkers v. Bouligny, Inc., supra, at p.153, 86 S.Ct. 272.


text:
    Geneva RUFFIN et al., Plaintiffs-Appellants, v. MERCURY RECORD PRODUCTIONS, INC., and Mercury Record Corporation, Defendants-Appellees.
    No. 74-2127.
    United States Court of Appeals, Sixth Circuit.
    March 31, 1975.

      James Leonard Elsman, Robert E. McFarland, Elsman, Young & O’Rourke, Birmingham, Mich., for plaintiffs-appellants.
    S. Lawrence Stein, Kass & Stein, Southfield, Mich., Leonard L. Levin, Chicago, 111., for defendants-appellees.
    Before PHILLIPS, Chief Judge, and PECK and MeCREE, Circuit Judges.
   PER CURIAM.

This is an appeal from an order granting defendants’ motion for judgment n. o. v. in an action for breach of contract, both oral and written, brought by four young women, former members of a vocal group, the “Chalfontes,” against Mercury Productions, Inc. and Mercury Record Corporation (Mercury). The district court had diversity jurisdiction and the substantive law of Michigan applies.

The case was tried before a jury which, in response to special interrogatories, determined that Mercury had not breached the written recording contract but that it had breached certain oral promises allegedly made to appellants to provide them with national advertising and with singing tours in addition to its undertakings in the written agreement. A verdict of $125,000 was awarded.

After trial Mercury moved for judgment n. o. v. The district court, in granting the motion, determined without specific reference to Michigan law, that the oral promises made by Mercury’s agent were unenforceable for several reasons: (1) because the agent had no authority, either express or implied, to make them on behalf of Mercury; (2) because the promises were indefinite and constituted “commercial puffing”; and (3) because they violated the parol evidence rule.

Appellants assign as error each of these determinations. They also argue that even if oral promises made before the signing of the contract are unenforceable under the parol evidence rule, Mercury’s agent made similar oral promises after the contract had been signed and that these are enforceable.

We conclude that the district court was correct in holding that the parol evidence rule barred the introduction into evidence of the oral promises made before the contract was signed and precludes their enforcement. We also hold that any promises made after the contract had been signed were not supported by consideration and are, accordingly, unenforceable. Because of these determinations, we need not decide whether the agent was authorized or whether his statements were mere puffing.

In Michigan the parol evidence rule renders oral agreements unenforceable and precludes their admission into evidence when they add to or change a subsequent written contract that is integrated. Brady v. Central Excavators, Inc., 316 Mich. 594, 25 N.W.2d 630 (1947). In that case, the Michigan Supreme Court quoted with approval the following statement:

“The test of the completeness of the writing proposed as a contract is the writing itself. If this bears evidence of careful preparation, of a deliberate regard for the many questions which would naturally arise out of the subject-matter of the contract, and if it is reasonable to conclude from it that the parties have therein expressed their final intentions in regard to the matters within the scope of the writing, then it will be deemed a complete and unalterable exposition of such intentions. If, on the other hand, the writing shows its informality on its face, there will be no presumption that it contains all the terms of the contract. In every case, therefore, the writing must be critically examined in the light of its surrounding circumstances, with a view of determining whether it is a memorial of the transaction.”

Id. at 606, 25 N.W.2d at 635. There is no doubt in this case that the written agreement which set out carefully and in great detail the rights and obligations of the parties was, as a matter of law, an integrated contract. Accordingly, “all prior negotiations pertaining to that subject matter . . . [were] merged in the written contract and parol evidence is inadmissible to show that the contract does not conform with the verbal agreements made prior to its execution.” Id. at 607, 25 N.W.2d at 635.

Any oral promises made after the contract had been signed were unenforceable because they were not supported by consideration. E. g., Green v. Millman Brothers, Inc., 7 Mich.App. 450, 151 N.W.2d 860 (1967). In that case the court, in explaining the law of Michigan, stated that “[t]he general rule is that a promise to do that which the' promisor is legally bound to do, or the performance of an existing legal obligation, does not constitute consideration, or sufficient consideration, for a contract.” Id. at 455, 151 N.W.2d at 863. Appellants have not asserted any reason why this rule should not render unenforceable the oral promises made after the execution of the contract.

In their brief, appellants have charged that the trial court was prejudiced against their claim and, as evidence of its alleged bias, they point to the district court’s failure to cite any authorities to support the conclusions in its order granting the motion for judgment n. o. v. It would have been helpful if the district court had stated for the assistance of the reviewing court not only the reasons for its decision but also supporting authorities therefor. We are, from our experience, sympathetically aware of the docket problems of trial courts, but we observe that the statement of reasons and authority is not only an appropriate self-discipline but also serves as a safeguard against charges of bias and arbitrariness. We have examined the entire record on appeal and find no basis for the claim of bias against appellants.

Affirmed.


author: HASTINGS, Senior Circuit Judge.

text:
    Charles N. HAVERLY and Ruth L. Haverly, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.
    No. 74-1457.
    United States Court of Appeals, Seventh Circuit.
    Argued Jan. 10, 1975.
    Decided March 20, 1975.
    Rehearing En Banc Denied May 5, 1975.

      Scott P. Crampton, Asst. Atty. Gen., Jonathan S. Cohen, Atty., Tax Div., Dept, of Justice, Washington, D. C., Hon. James R. Thompson, U. S. Atty., Gary L. Starkman, Asst. U. S. Atty., Chicago, 111., for defendant-appellant.
    Ronald S. Supena, Chicago, 111., for plaintiffs-appellees.
    Before HASTINGS, Senior Circuit Judge, SWYGERT and CUMMINGS, Circuit Judges.
   HASTINGS, Senior Circuit Judge.

This case presents for resolution a single question of law which is of first impression: whether the value of unsolicited sample textbooks sent by publishers to a principal of a public elementary school, which he subsequently donated to the school’s library and for which he claimed a charitable deduction, constitutes gross income to the principal within the meaning of Section 61 of the Internal Revenue Code of 1954, 26 U.S.C. § 61.

This action was brought by the plaintiffs in the district court for recovery of income taxes paid to the United States. Jurisdiction was based on 28 U.S.C. § 1346(a)(1). The parties stipulated to the relevant facts.

During the years 1967 and 1968 Charles N. Haverly was the principal of the Alice L. Barnard Elementary School in Chicago, Illinois. In each of these years publishers sent to the taxpayer unsolicited sample copies of textbooks which had a total fair market value at the time of receipt of $400. The samples were given to taxpayer for his personal retention or for whatever disposition he wished to make. The samples were provided, in the hope of receiving favorable consideration, to give taxpayer an opportunity to examine the books and determine whether they were suitable for the instructional unit for which he was responsible. The publishers did not intend that the books serve as compensation.

In 1968 taxpayer donated the books to the Alice L. Barnard Elementary School Library. The parties agreed that the donation entitled the taxpayer to a charitable deduction under 26 U.S.C. § 170, in the amount of $400, the value of the books at the time of the contribution.

The parties further stipulated that the textbooks received from the publishers did not constitute gifts within the meaning of 26 U.S.C. § 102 since their transfer to the taxpayer did not proceed from a detached and disinterested generosity nor out of affection, respect, admiration, charity or like impulses.

Taxpayer’s report of his 1968 income did not include the value of the textbooks received, but it did include a charitable deduction for the value of the books donated to the school library. The Internal Revenue Service assessed a deficiency against the taxpayer representing income taxes on the value of the textbooks received. Taxpayer paid the amount of the deficiency, filed a claim for refund and subsequently instituted this action to recover that amount.

The amount of income, if any, and the time of its receipt are not issues here since the parties stipulated that if the contested issue of law was decided in the taxpayer’s favor, his taxable income for 1968 as determined by the Internal Revenue Service would be reduced by $400.00.

Upon agreement of the parties, the case was submitted to the district court on the uncontested facts and briefs for decision without trial. The district court issued a memorandum opinion which held that receipt of the samples did not constitute income. Haverly v. United States, N.D.Ill., 374 F.Supp. 1041 (1974). The court subsequently ordered, in accordance with its decision, that plaintiffs recover from the United States the sum of $120.40 plus interest. The United States appeals from that judgment. We reverse.

Section 61(a) of Title 26 of the United States Code provides: “Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:” The section thereafter enumerates fifteen items none of which, the government concedes, encompass the receipt of sample textbooks. The taxpayer concedes that receipt of the books does not fall within any of the specific exclusions from gross income set out in Sections 101 through 124 of Title 26. The only question remaining is whether the value of the textbooks received is included within “all income from whatever source derived.”

The Supreme Court has frequently reiterated that it was the intention of Congress “to use the full measure of its taxing power” and “to tax all gains except those specifically exempted.” James v. United States, 366 U.S. 213, 218-219, 81 S.Ct. 1052, 1054-1055, 6 L.Ed.2d 246 (1961). The Supreme Court has also held that the language of Section 61(a) encompasses all “accessions to wealth, clearly realized, and over which the taxpayers have complete dominion.” Id. at 219, 81 S.Ct. at 1055; Commissioner of Internal Revenue v. Glenshaw Glass Co., 348 U.S. 426, 431, 75 S.Ct. 473, 99 L.Ed. 483 (1955).

There are no reported cases which have applied these definitions of income to the question of the receipt of unsolicited samples. The parties have cited to the court a number of cases applying income definitions to other fact situations. We have considered these cases, but we find them of no particular assistance in resolving the question before us. In view of the comprehensive conception of income embodied in the statutory language and the Supreme Court’s interpretation of that language, we conclude that when the intent to exercise complete dominion over unsolicited samples is demonstrated by donating those samples to a charitable institution and taking a tax deduction therefor, the value of the samples received constitutes gross income.

The receipt of textbooks is unquestionably an “accession to wealth.” Taxpayer recognized the value of the books when he donated them and took a $400 deduction therefor. Possession of the books increased the taxpayer’s weal h. Taxpayer’s receipt and possession of the books indicate that the income was “clearly realized.” Taxpayer admitted that the books were given to him for his personal retention or whatever disposition he saw fit to make of them. Although the receipt of unsolicited samples may sometimes raise the question of whether the taxpayer manifested an intent to accept the property or exercised “complete dominion” over it, there is no question that this element is satisfied by the unequivocal act of taking a charitable deduction for donation of the property-

The district court recognized that the act of claiming a charitable deduction does manifest an intent to accept the property as one’s own. It nevertheless declined to label receipt of the property as income because it considered such an act indistinguishable from other acts unrelated to the tax laws which also evidence an intent to accept property as one’s own, such as a school principal donating his sample texts to the library without claiming a deduction. We need not resolve the question of the tax consequences of this and other hypothetical cases discussed by the district court and suggested by the taxpayer. To decide the case before us we need only hold, as we do, that when a tax deduction is taken for the donation of unsolicited samples the value of the samples received must be included in the taxpayer’s gross income.

This conclusion is consistent with Revenue Ruling 70-498, 1970-2 Cum.Bull. 6, in which the Internal Revenue Service held that a newspaper’s book reviewer must include in his gross income the value of unsolicited books received from publishers which are donated to a charitable organization and for which a charitable deduction is taken. This ruling was issued to supercede an earlier ruling, Rev.Rul. 70-330, 1970-1 Cum.Bull. 14, that mere retention of unsolicited books was sufficient to cause them to be gross income.

The Internal Revenue Service has apparently made an administrative decision to be concerned with the taxation of unsolicited samples only when failure to tax those samples would provide taxpayers with double tax benefits. It is not for the courts to quarrel with an agency’s rational allocation of its administrative resources.

In light of the foregoing, the judgment appealed from is reversed and the case is remanded to the district court with directions to enter judgment for the United States.

Reversed.

      . References to the taxpayer are to the husband alone. Ruth L. Haverly is a party to this appeal solely because she filed a joint income tax return with her husband for the taxable year 1968.

      . Since the tax year at issue in this litigation is 1968, the amount of the charitable deduction which could be taken was unaffected by 26 U.S.C. § 170(e)(1) which was added by the Tax Reform Act of 1969, Pub.L.No. 91-172, 83 Stat. 487.

      . Taxpayer originally sought a refund of $288.76 and sought to recover that amount in this action. This amount reflected taxpayer’s contentions that the books were not income and that he was entitled to a charitable deduction for $430 worth of books which had been given directly to the school by the publishers. In proceedings in the district court, taxpayer conceded that he was not entitled to a deduction for the books which the publishers had sent to the school.

      . The district court considered Revenue Ruling 70-498 distinguishable from the facts of the instant case on the ground that, for the book reviewer, the books were the tools of his trade. The district court did not explain why “tools of the trade” should be a significant factor in determining what is income, but even if it were, textbooks would seem to be a tool of the trade of being a school principal. The facts here indicate that it was one of taxpayer’s functions as a principal to review sample textbooks to determine their suitability for his students.