author: McWILLIAMS, Circuit Judge.

text:
    James Kenneth JULIAN, Plaintiff-Appellant, v. C. E. HARRIS, Warden, United States Penitentiary, Leavenworth, Kansas, et al., Defendant-Appellee. James Kenneth JULIAN, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
    Nos. 72-1638, 72-1639.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted May 22, 1973.
    Decided July 31, 1973.
    Certiorari Denied Dec. 3, 1973.
    See 94 S.Ct 581.

      Sheldon K. Ginsberg, Denver, Colo., for plaintiff-appellant.
    Bruce E. Miller, Asst. U. S. Atty. (Robert J. Roth, U. S. Atty., on the brief), for defendants-appellees.
    Before PICKETT, McWILLIAMS and BARRETT, Circuit Judges.
   McWILLIAMS, Circuit Judge.

The central issue concerns the propriety of Julian's revocation hearing, he at the time being a mandatory releasee from the United States Penitentiary in Leavenworth, Kansas, and charged with violating the terms and conditions of his release from a sentence imposed in a Texas federal court. It is Julian’s contention that the aforesaid hearing was void and without effect since he was not afforded his Fifth and Sixth Amendment rights to the appointment of counsel to represent him at the revocation hearing, and for the further reason that shortly prior to the revocation hearing he had been declared by the United States District Court for the District of New Mexico to be mentally incompetent and unable to stand trial in that court and at the time of his revocation hearing had not been declared by that particular court to have been restored to reason and mentally competent to stand trial. Julian’s habeas corpus proceeding seeking immediate release was dismissed by the trial court after a full eviden-tiary hearing. Julian now appeals and we affirm.

The operative facts, as we see them, are not in dispute and will be summarized as follows:

1. On December 6, 1963, Julian was received at the United States Penitentiary at Leavenworth, Kansas, to serve a four-year sentence on a Texas Dyer Act conviction ;

2. On September 12, 1966, Julian was mandatorily released from a federal penal institution at Seagoville, Texas, with a balance of 414 days remaining on his original four-year sentence, the release order providing, among other things, that Julian should not leave the United States District for the Southern District of Texas without permission and that he should commit no crime;

3. On December 21, 1966, Julian was taken into custody by the United States Marshal in Reno, Nevada, and charged with a Dyer Act violation, and on February 8, 1967, was sentenced to a five-year term by the United States District Court for the District of Nevada for a violation of 18 U.S.C. § 2312;

4. On January 12, 1967, a mandatory release violator’s warrant was issued by the United States Board of Parole for the unserved portion of the judgment and commitment from the Texas court, which, as mentioned, was for a total of 414 days;

5. On June 5, 1970, Julian was man-datorily released from the sentence of the United States District Court for the District of Nevada and simultaneously therewith a mandatory release violator’s warrant in connection with the Texas commitment was executed and Julian remained in custody in the United States Penitentiary at Leavenworth, Kansas, under that warrant;

6. On June 11, 1970, Julian escaped from the United States Penitentiary at Leavenworth, Kansas, and was later arrested on July 1, 1970, in New Mexico;

7. As an outgrowth of his arrest in New Mexico, Julian was charged with a Dyer Act violation in the United States District Court for the District of New Mexico, and in connection therewith that court found on August 28, 1970, that Julian- because of mental incompetency was unable to then stand trial and was thereupon committed to the Medical Center for Federal Prisoners at Springfield, Missouri, for further examination;

8. On September 28, 1970, and also on October 16, 1970, Julian was found by the psychiatric staff at the Springfield, Missouri, institution to be mentally competent to stand trial;

9. On November 19, 1970, the revocation hearing which is here under attack was held at the Medical Center for Federal Prisoners at Springfield, Missouri, and by order dated December 4, 1970, Julian’s mandatory release from his commitment for the Texas Dyer Act violation was revoked for having left Texas without permission and for having committed a crime, namely, the Dyer Act violation in Nevada; and

10. On December 18, 1970, the United States District Court for the District of New Mexico determined that Julian was mentally competent to stand trial, and on January 29, 1971, Julian, having been convicted of this particular offense, was sentenced to five years imprisonment to be served concurrently with the remainder of the sentences resulting from his earlier conviction in Texas and from his mandatory release violation.

Julian initially contends that the revocation hearing on November 19, 1970, was void because he was not afforded counsel. Under the circumstances of this particular case, this argument is unavailing. We have previously held that early release, be it mandatory or otherwise, and revocation hearings are matters of legislative grace not constitutionally mandated, and that accordingly there is no constitutional right to retained or appointed counsel at such revocation hearing. Earnest v. Willingham, 406 F.2d 681 (10th Cir. 1969). In that same case, we recognized, nonetheless, that where, as here, the administrative practice is to permit one charged with violating the terms of his mandatory release to be represented by retained counsel, one thus accused may not under the Fifth Amendment be constitutionally denied counsel simply because he is financially unable to retain counsel.

In Cotner v. United States, 409 F.2d 853 (10th Cir. 1969), we later held, however, that there was no constitutional duty to appoint counsel to represent an indigent accused of violating the terms of his mandatory release where “he did not contest the operative facts of his violation.” And again, in Earnest v. Moseley, 426 F.2d 466 (10th Cir. 1970), when Earnest was before this court for a second time, we reaffirmed the rule of Cotner and again held that a mandatory releasee, even though indigent, was not constitutionally entitled to counsel “when the factual issues relating to whether or not he violated the conditions of his release were not contested.”

In the instant case, counsel suggests that Julian did not admit the operative facts pertaining to his alleged violation of the conditions of his mandatory release, and that therefore he was entitled to legal representation. This is not our view of the record. On the contrary, that Julian did in fact violate the terms of his mandatory release by leaving Texas without permission and by thereafter committing a crime in .the state of Nevada is not now in dispute, nor has it ever been in dispute. Julian himself admitted these violations in open court and the stipulations of counsel also admitted them. In such circumstance, we deem the “operative facts” to have been in truth and in fact admitted, and accordingly there was no constitutional requirement that Julian be appointed counsel to represent him at his revocation hearing. See also, United States ex rel. Halprin v. Parker, 418 F.2d 313 (3d Cir. 1969).

Julian next contends that his revocation hearing was void and of no effect because he was, as of the date of his hearing, namely, November 19, 1970, mentally incompetent. In our view, the record does not support this contention. Prior to the revocation hearing, the hearing examiner made a finding that Julian was mentally competent. In this regard, 28 C.F.R. § 2.49 provides that where there be a “reasonable doubt” as to the mental competency of a' person scheduled for a revocation proceeding, the examiner shall conduct a hearing and determine the mental competency of the person involved, taking into consideration the person’s ability to understand the nature of the scheduled proceedings and to participate therein. As above indicated, the doctors at the Medical Center in Springfield, Missouri, had in fact found Julian to be mentally competent on September 28, 1970, and again on October 16, 1970, and in determining that Julian as of November 19, 1970, was mentally competent and able to understand and participate in the revocation proceedings, the hearing examiner had before him these reports of the examining physicians. Without belaboring this matter, then, the hearing examiner’s finding of mental competency finds support in the record.

In this same regard, counsel next argues that the revocation hearing was void because the District Court of New Mexico did not make a formal determination that Julian was mentally competent to stand trial in that court till December 18, 1970, about one month subsequent to the date of the revocation hearing. In thus arguing, counsel relies primarily on Gunther v. United States, 94 U.S.App.D.C. 243, 215 F.2d 493 (1954). Such reliance we believe to be misplaced.

The holding in Gunther was that an accused who has been adjudged to be mentally incompetent to proceed to trial cannot thereafter be tried without a subsequent judicial detennination of his competency to stand trial. It is to be noted that in Gunther the conviction was not reversed, but the case only remanded for a hearing into whether the accused was in fact competent to stand trial when he did, with the direction that if it be determined that the accused was mentally competent to stand trial, then the error was harmless and the conviction should stand. In the instant case such a hearing before the parole board has already been held and, as indicated, resulted in a determination that Julian was mentally competent.

We fail to see how either the result or reasoning of Gunther operates to Julian’s benefit in the instant case. The revocation hearing here under attack was no part of the New Mexico proceeding. The medical authorities at the Medical Center in Springfield had examined Julian and had in fact twice found him mentally competent some four to six weeks prior to the revocation hearing. And then the hearing examiner, taking into consideration these medical reports as to Julian’s condition, made, in accordance with 28 C.F.R. § 2.49, a finding of mental competency as of November 19, 1970. The fact that the District Court of New Mexico did not make its determination of mental competency till December 18, 1970, does not in our view render inoperative the revocation hearing held one month earlier. In short, under all these circumstances, we find no reversible error in this regard.

Before leaving this particular matter of the overall propriety of Julian’s revocation hearing, brief mention should be made of the recent case of Morrissey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972). That case concerns a state parole revocation hearing and in connection therewith the Supreme Court held that though a parole revocation hearing is not, as such, a part of a criminal prosecution and accordingly does not invoke the full panoply of rights due a defendant in a criminal proceeding, nevertheless due process does require an orderly hearing, however informal, to give assurance that the finding of a parole violation is factually correct. We believe the instant revocation hearing meets that test.

Julian’s final contention is that he should have been given credit on the sentence imposed in connection with his New Mexico Dyer Act conviction for the time he was in custody subsequent to his arrest in New Mexico and up to the date when sentence was imposed. In thus arguing, counsel relies on 18 U.S.C. § 3568, which provides that credit shall be given “for any days spent in custody in connection with the offense or acts for which sentence was imposed.” The short answer to this contention is that Julian’s detention from July 1, 1970, the date of his arrest in New Mexico after his escape from the federal penitentiary in Leavenworth, Kansas, till January 29, 1971, when he was sentenced in the District Court of New Mexico, stemmed from the revocation of his mandatory release under the sentence imposed in connection with his earlier commitment on the Dyer Act violation in Texas, the unexpired term of which began to run from the date of custody under the violator’s warrant, Teague v. Looney, 268 F.2d 506 (10th Cir. 1959). See also, Noll v. Board of Parole for Government of District of Columbia, 89 U.S.App.D.C. 206, 191 F.2d 653 (1951), and Doherty v. United States, 280 F.2d 35 (9th Cir. 1960).

This entire argument overlooks the fact that as of June 5, 1970, Julian was confined in the federal penitentiary in Leavenworth, Kansas, as one who had violated the terms of his prior mandatory release, and he was in this status when some six days later he escaped from that institution. As of the time of his escape, Julian had time to serve on his Texas commitment which exceeded the time interval between his arrest in New Mexico and the date of his sentence on that particular Dyer Act charge. We find no error in this regard.

Judgment affirmed.

      . This conviction on appeal was reversed, Julian v. United States, 391 F.2d 279 (9th Cir. 1968). Upon retrial, Julian was again convicted and resentenced to five years.


source: Caselaw Access Project

author: ROSENN, Circuit Judge.

license: Public Domain

text:
    Michael Joseph PARADISO and Anthony Richard Bonnacci, Appellants, v. UNITED STATES of America.
    No. 72-1705.
    United States Court of Appeals, Third Circuit.
    Submitted April 2, 1973.
    Decided July 19, 1973.
    As Amended Aug. 1, 1973.

      Michael J. Paradiso and Anthony R. Bonnacci, pro se.
    Amos Gern, William T. Pizzi, Asst. U. S. Attys., Newark, N. J., for appellee.
    Before ROSENN and HUNTER, Circuit Judges, and BECHTLE, District Judge.
   OPINION OF THE COURT.

ROSENN, Circuit Judge.

This case raises recurring and important problems of what procedure constitutes compliance with Federal Rule of Criminal Procedure 11 and what circumstances justify the withdrawal of a guilty plea under federal rules and Santobello v. New York, 404 U.S. 257, 92 S.Ct. 495, 30 L.Ed.2d 427 (1972).

Appellants Paradiso and Bonnacci were indicted on April 16, 1969, along with several others, by a federal grand jury sitting in New Jersey, on a four count indictment charging conspiracy to possess stolen goods and possession of goods stolen from interstate commerce. They were later, on January 20, 1970, indicted by a federal grand jury sitting in the Eastern District of New York for possession of completely different stolen goods, also shipped in interstate commerce.

On April 22, 1970, appellants appeared with counsel before Judge Coolahan in the United States District Court for New Jersey, retracted their original pleas of not guilty, and entered a plea of guilty to count one (the conspiracy count) of the New Jersey charges. They also consented to a transfer under F.R.Cr.P. ■ 20 of the New York indictment and pled guilty to that charge.

Sentencing was scheduled for June 5, 1970, before Judge Whipple. Immediately after the court sentenced Bonnacci to 5 years on each count, the sentences to run consecutively, both appellants requested permission to withdraw their pleas, claiming they were under the impression that their sentences would be concurrent. The court vacated Bonnac-ci’s sentence, deferred sentencing both defendants, and ordered adjournment until June 12, 1970.

After hearing argument on the question whether to permit withdrawal of the pleas, on June 12, 1970, the court denied the defendants’ requests and sentenced both as Bonnacci had originally been sentenced. The court specifically stated to defense counsel that he had 120 days in which to petition the court for relief from the sentence. The court dismissed counts 2, 3, and 4 of the New Jersey indictment against both appellants.

On February 28, 1973, appellants filed motions in the district court under 28 U.S.C. § 2255 challenging their sentences and, alternatively, seeking under F. R.Cr.P. 32(d) to withdraw their guilty pleas. They appeal the denial of those motions. We affirm.

Appellants advance several legal theories, each articulating the theme that they are entitled to relief because they were under the impression at the time they pled guilty that they would be given concurrent sentences on the two counts. Essentially three legal bases are offered in support of this claim:

(1) the due process clause;
(2) F.R.Cr.P. 11; and
(3) F.R.Cr.P. 32(d).

1. DENIAL OF DUE PROCESS.

Santobello v. New York, 404 U.S. 257, 92 S.Ct. 495, 30 L.Ed.2d 427 (1972), declared that due process entitles a defendant pleading guilty to performance by the prosecutor of a promise that induced the plea. As could be expected, in view of the voluminous litigation in the civil law as to the definition and operation of a promise, Santobello, in turn, generated further litigation over what constitutes a promise, whether any promise had been made, and the effect of advice or assurance given by the defendant’s own counsel.

In Masciola v. United States, 469 F.2d 1057 (3d Cir. 1972), we held that the due process lesson of Santobello was inapplicable when no promise or understanding had been breached by Government prosecution. We rejected the contention that relief was compelled because there was an “assurance” only by the defendant’s counsel that a sentence would be imposed concurrently with a sentence Masciola was already serving. We also reasoned that such “predictions” by defendant’s counsel did not render the plea involuntary. Other courts have faced similar questions and reached varying solutions. Compare Wellnitz v. Page, 420 F.2d 935 (10th Cir. 1970), with Castro v. United States, 396 F.2d 345 (9th Cir. 1968).

At the June 12, 1970, hearing in this case, the court inquired into the facts underlying appellants’ alleged understanding that they would receive concurrent sentences. Their counsel, Samuel Bozza, testified that he never discussed any phase of the case with Assistant United States Attorney Koelzer, who represented the Government at the June 5, 1970, hearing. He explained that he initially was retained to represent the two defendants on the New Jersey charge. At that time, Assistant United States Attorney Goldstein, in New Jersey, was handling the prosecution. Attorney Bozza said he later learned of the New York charge and then called Assistant United States Attorney Boyd in Brooklyn. While Boyd did not make any commitment, Bozza alleges he stated that if the New Jersey charges were transferred to New York the usual policy in the Brooklyn office would be to recommend 5 year sentences to be imposed concurrently. Attorney Bozza then spoke to Goldstein, who mentioned that he had talked to Boyd and both had agreed to have the New York indictment transferred to New Jersey. Bozza said he assumed; by virtue of Boyd’s conversation with Goldstein, that the New York sentencing policy alluded to by Boyd would prevail in New Jersey.

When appellants asked Bozza what sentence he thought they would receive, he told them “there was a good probability of getting a concurrent sentence.” This is the sole basis for appellants’ claimed understanding. Assistant United States Attorney Boyd testified at the June 12 hearing that he never made any representation with regard to the “sentences to be granted to the defendants in this case.”

This situation is quite similar to that presented to us in Masciola. Appellants apparently pleaded guilty in the expectation they would receive concurrent sentences on the New York and New Jersey indictments. That expectation, however, was based solely on the advice of their counsel. Thus, the appellants, unlike the defendant in Santobello, have not been misled by the prosecution in pleading guilty. Nor did they rely upon an actual understanding or agreement with Government counsel, the breach of which renders the sentence fundamentally unfair or which renders their pleas involuntary. For these reasons, we think appellants have not been denied due process.

Nevertheless, we believe that our district courts should take affirmative action to curb recurring situations which give rise to defendants’ misapprehensions, although created by advice of their own counsel or otherwise, and produce an unwarranted and unrealized expectation of leniency. In this case, the court, at the hearing on June 5, inquired of both appellants whether “anybody promised you any leniency with regard to any sentence that this court might impose” and both replied in the negative. He further cautioned them:

If they have [promised you leniency] I am putting you on notice right now that it is not binding on this Court. This Court will sentence you according to its own conscience and following the law, right?

The court, thereupon, sentenced Bonnac-ci to consecutive five year sentences. Bonnacci immediately stated that he wished to withdraw the plea because:

It was supposed to run, altogether; otherwise, I’d go to trial.

Paradiso, too, quickly gave similar notice that he wanted to withdraw his plea because he expected to receive concurrent sentences on the two charges.

In Walters v. Harris, 460 F.2d 988 (4th Cir. 1972), the Fourth Circuit was also confronted with appellant’s contention that his plea of guilty was induced by an unkept promise of the Assistant United States Attorney. As a result, it urged district judges in its circuit thereafter to expand their rule 11 inquiry to ascertain the presence of plea negotiations, to advise the defendant that plea bargaining has been specifically approved by the United States Supreme Court, and that he may truthfully advise the court of any plea negotiations “without the slightest fear of incurring disapproval of the court.” We note that at least one other court has reacted to the rationale of Santobello by adopting a court rule that plea negotiations must be plainly made a matter of record. In an effort to meet realistically this growing practice of plea negotiation, the Supreme Court of Pennsylvania has adopted a comprehensive rule applicable throughout the state’s judicial system for plea bargaining on the record.

Even prior to Santobello, the California Supreme Court, although not imposing any specific procedure, required the terms of all plea bargains to appear of record. People v. West, 3 Cal.3d 595, 91 Cal.Rptr. 385, 477 P.2d 409 (1970). The desirability of making plea negotiations a matter of record before sentence, recognized by these courts, is also reflected in the American Bar Association Minimum Standards on Sentencing Alternatives and Procedures, approved draft, 1968, § 5.3 and ABA Standards, Pleas of Guilty, approved draft, 1968, § 1.5 and ABA Standards Relating to The Function of the Trial Judge, approved draft, 1972, § 4.1(b).

We believe that it is appropriate at this time for the district courts of this circuit to take similar prophylactic measures to cope with this problem. In connection with their rule 11 inquiry on a plea of guilty, district judges should in essence inform the defendant that plea bargaining is specifically approved by the court and that he may truthfully inform the court of any plea negotiations “without the slightest fear of incurring disapproval of the court.” Inquiry should also be made of counsel for the parties as to any plea negotiations. Should inquiry reveal the presence of plea negotiations, counsel for the parties should be required to state plainly the terms of record and the defendant should state of record whether he understands them and concurs. The court, of course, is not obligated to accept any recommendation or bargain reached by the parties, and it should so inform the defendant when any bargain is disclosed. Compliance with this procedure should avoid ostensible claims by defendants of unfairness in the guilty plea process and minimize the escalating number of cases complaining of aborted plea bargains, involuntary pleas, or frustrated plea expectations.

2. COMPLIANCE WITH RULE 11.

This case also presents issues relating to the requirements of rule 11 and the proper role of a reviewing court in implementing them. Rule 11, in part states:

The court may refuse to accept a plea of guilty, and shall not accept such plea . . . without first addressing the defendant personally and determining that the plea is made voluntarily with understanding of the nature of the charge and the consequences of the plea. . . . The court shall not enter a judgment upon a plea of guilty unless it is satisfied that there is a factual basis for the plea.

After a careful examination of the record we are satisfied that rule 11 was complied with under the standards we enunciated in United States v. Davis, 470 F.2d 1128 (3d Cir. 1972). In explaining the nature of the charges, the court read the substance of the indictments to which the defendants were pleading. This is the procedure that we approved in Davis. In Woodward v. United States, 426 F.2d 959 (3d Cir. 1970), this court stated:

To satisfy itself that the defendant actually does comprehend the charges, the court must explain the meaning of the charge and what basic acts must be proved to establish guilt.

Id. at 962. That mandate does not preclude an explanation by reading the indictment. The district court should exercise its discretion in determining when additional explanation of the charge is necessary.

We are also satisfied that the trial court made an adequate inquiry into, the voluntariness of the plea. At the April 22, 1970, hearing, the court first questioned the defendants about the New Jersey indictment. Judge Coolahan explained to Bonnacci that he was entitled to a jury trial at which the Government would have to prove its case beyond a reasonable doubt; and that the guilty plea waived those rights. Similarly, he asked whether there were any promises or inducements or assurances of any sort, and whether the pleas were voluntary and of defendant’s own free will. Bonnaeci responded specifically to each inquiry, satisfying the court that the plea was freely and voluntarily made. The court then asked Paradiso whether he heard the questions addressed to Bon-nacci and whether his plea was of his own free will. Paradiso replied “yes” to both. The court then asked similar questions of both defendants with regard to the New York indictment.

As to the New York indictment, the court again at the hearing on June 5, 1970, advised the defendants of their rights to a jury trial and proof beyond a reasonable doubt. He also asked them whether there were any pleas, inducements, or other sort of coercion motivating their pleas. Again, each replied in the negative. At this point the court told defendants that it would not be bound by any agreement as to sentence or promise of leniency.

The trial court also made an adequate inquiry into the defendants’ understanding of the consequences of the pleas. At the April 22, 1970 hearing, the trial court asked both defendants whether they understood that the maximum possible sentence on count 1 of the New Jersey indictment was 5 years and a $10,000 fine. They both said “yes.” Similarly, both at that hearing and at the June 5 hearing, they said they understood that the maximum sentence on the New York charges was 10 years and a $5,000 fine.

We do not think rule 11 requires an explicit admonition by the court that sentences may be imposed consecutively. This power is implicit in the separate explanation of the possible sentence on each count. To avoid any possible misunderstanding and to minimize unnecessary appeals, it would be advisable for district courts to explicitly state that sentences can be consecutive; but we will not impose any rigid rule to that effect.

Rule 11 does not impose any requirement that the defendant be informed prior to the acceptance of his plea of the actual sentence he will receive. No question of ineligibility for probation and parole is raised in this case. See Berry v. United States, 412 F.2d 189 (3d Cir. 1969).

The final element of rule 11, ascertainment of the factual basis for the plea, was also sufficiently met. At the April 22 hearing, immediately after reading count 1 of the New Jersey indictment to Bonnaeci, the court asked him whether he understood that in entering a guilty plea he admitted guilt to that count. There was no specific questioning of Paradiso on this point with regard to the New Jersey charges, but the judge did ask Paradiso whether he had heard all the questions asked Bon-nacci. That count did recite the facts of the alleged offense. At that same hearing both defendants, after having the New York indictment read to them, including its recitation of the facts of the offense, said that they understood that a guilty plea meant they admitted that they did the things charged in the indictment.

As the Supreme Court noted in McCarthy v. United States, 394 U.S. 459, 467 n. 20, 89 S.Ct. 1166, 22 L.Ed.2d 418 (1969), and this circuit has previously affirmed, the inquiry required by rule 11 must necessarily vary from case to case, and “ ‘[m]atters of reality, and not mere ritual, should be controlling.’ ” See United States v. Davis, 470 F.2d at 1131. Reviewing the proceedings in this case, we are satisfied that there was an adequate inquiry into the factual basis for the plea. We decline to follow the precedents in several other courts that seem to indicate that a plea is invalid under rule 11 if the trial court does no more than read the indictment. The adequacy of reading from the indictment will depend on the facts of the particular case.

We do not reach the question whether the court’s possession of Bonnacci’s pre-sentence report at the sentencing hearing on June 5, 1970, would be sufficient compliance with the rule requirement that the court satisfy itself of the factual basis for the plea.

3. WITHDRAWAL OF PLEA UNDER RULE 32(d).

Paradiso and Bonnacci also argue that they are entitled under rule 32(d) to withdraw their pleas. That rule provides :

(d) Withdrawal of Plea of Guilty. A motion to withdraw a plea of guilty or of nolo contendere may be made only before sentence is imposed or imposition of sentence is suspended; but to correct manifest injustice the court after sentence may set aside the judgment of conviction and permit the defendant to withdraw his plea.

This circuit has established that different standards are to be applied in determining whether a plea may be withdrawn prior to sentencing than are to be applied to a request for withdrawal after the sentence. “In weighing motions for withdrawal of a guilty plea before sentencing, the test to be applied by the trial courts is fairness and justice.” United States v. Stayton, 408 F.2d 559, 561 (3d Cir. 1969). On the other hand, “a post-sentence motion should be denied unless ‘manifest injustice’ to the defendant will result.” Id. Thus, although both determinations are committed to the discretion of the district court, the standard by which a post-sentence motion is judged is more rigorous. The more severe standard is applied to avoid motions for withdrawal based on disappointment in the terms of the sentence. Id. at 560. In light of this purpose, although appellants have made an effort to cast this question in terms of pre-sentence standards, we believe the trial court properly applied the post-sentence standard. The reason for the request in this case was clearly disappointment in the sentence the appellants expected the trial court to impose. We find no abuse of discretion in its conclusion that “manifest injustice” would not result from a denial of the requests to withdraw the pleas.

In light of our disposition of the merits, we need not consider the Government’s contention that appellants waived their right to challenge their plea by failing to file an appeal within the 120 day time period that the court specified at the June 12, 1970, hearing. We note, however, that there is serious question whether the principle of United States ex rel. Callahan v. Follette, 418 F.2d 903 (2d Cir. 1969), applies because of Bon-nacei’s absence at the time the statement was made.

The judgment of the district court will be affirmed.

      . Rule 319(b) of Pennsylvania Rules of Criminal Procedure, 19 P.S.Appendix, adopted October 3, 1972, provides:
      (1) The trial judge shall not participate in the plea negotiations preceding an agreement.
      (2) When counsel for both sides have arrived at a plea agreement they shall state on the record in open court, in the presence of the defendant, the terms of the agreement. Thereupon the judge shall conduct an inquiry of the defendant on the record to determine whether he understands and concurs in the agreement.
      (3) If the judge is satisfied that the plea is understandingly and voluntarily tendered, he may accept the plea. If thereafter the judge decides not to concur in the plea agreement, he shall permit the defendant to withdraw his plea.

      . On April 22, 1970, the court first accepted guilty pleas to both counts. The judge addressed Bonnaeci as to the New Jersey charges as follows:
      The Court: Well, Count I of the indictment states that on or about the 21st day of May, 1968 and continuously thereafter, up to and including the 1st day of April, 1969, in this district, you, together with others named in the indictment did willfully and knowingly conspire and agree together with each other and with other persons whose names to the Grand Jury are unknown to commit an offense against the United States, that is to knowingly have in their possession good [sic] and chattels valued in excess of $100, knowing said goods and chattels to have been stolen. The said goods and chattels having been stolen and carried away from motor trucks while moving as being part of and constituting an interstate state shipment of freight, in violation of Section 659, Title 18 of the United States Code.
      In furtherance of said conspiracy and to effect the objects thereof, the defendants did commit the following overt acts.
      On April 1, 1969, the defendants Anthony Richard Bonnacci, Michael Joseph Paradiso and George Vincent Re-mini met at a warehouse located at 421 Schiller Street, Elizabeth. That on March 29th, 1969, the defendants Anthony Richard Bonnacci and George Vincent Remini, and others came to a warehouse located at 429 Schiller Street, Elizabeth, New Jersey, in violation of Section 371 of Title 18 of the United States Code.
      Now, in entering a plea of guilty, Mr. Bonnacci, you admit that you were guilty to this first count, do you understand that?
      Defendant Bonnacci: Yes.
      The court then asked Paradiso whether he heard all the questions asked of Bon-nacci, to which Paradiso responded in the affirmative and said that he had nothing to say with regard to the questions.
      The court addressed both defendants with regard to the New York charges as follows:
      The Court: Do you understand that this indictment charges both of you that on or about the 13th day of December, 1969, within the Eastern District of New York, the defendant, Michael Par-adiso, and the defendant, Anthony Bon-nacci and other named defendants therein had in their possession approximately 100 unfinished pieced goods and cut goods and various cartons and packages valued in excess of $100 which merchandise then stolen was moving as and constituted an interstate shipment of freight from New York to Miami, Florida, the defendants knowing the same to be stolen, and in violation of Title 18, United States Code, Section 659 and 2.
      Now, gentlemen, you understand that if the Court accepts this transfer, the only thing for you to do is enter a plea of guilty to this indictment which your counsel has indicated that you intend to do. Do you understand that?
      Both defendants responded affirmatively.

      . At least one other circuit has approved the procedure of reading the indictment in order to satisfy this element of rule 11. See Kress v. United States, 411 F.2d 16, 21 (8th Cir. 1969). Two circuits seem to say that reading the indictment is not enough to satisfy the requirement that the trial court ascertain the factual basis of the plea. See Majko v. United States, 457 F.2d 790, 791 (7th Cir. 1972); United States v. Cody, 438 F.2d 287 (8th Cir. 1971). There is, however, no indication that they would extend this holding to the element of the defendant’s understanding of the nature of the charges. Halliday v. United States, 380 F.2d 270 (1st Cir. 1967), relied upon by appellants, is inapposite because the court did not in that case read the indictment in open court. Rather, it appears that the court merely determined that the defendant’s counsel had reviewed the indictment with him.

      . See, e. g., Majko v. United States, 457 F.2d 790, 791 (7th Cir. 1972); United States v. Cody, 438 F.2d 287 (8th Cir. 1971); United States v. Steele, 413 F.2d 967 (2d Cir. 1969).

      . In Santobello v. New York, 404 U.S. 257, 261, 92 S.Ct. 495, 30 L.Ed.2d 427 (1972), the Supreme Court stated in dictum that rule 11 “makes clear that the sentencing judge must develop on the record, the factual basis for the plea, as, for example, by having the accused describe the conduct that gave rise to the charge.” Although the suggested example is not compulsory, its merits are obvious and such procedure is highly desirable.


author: SIMPSON, Circuit Judge:

text:
    Henry L. BOONE and Nancy M. Boone, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.
    No. 73-1271
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    July 24, 1973.

      Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Atty., Fred B. Ugast, Acting Asst. Atty. Gen., Tax Div., Dept, of Justice, Lee H. Henkel, Jr., Acting Chief Counsel, Internal Rev. Service, Murray Horwitz, App. Section, Tax Div., Dept, of Justice, Washington, D. C., Robert E. Hauberg, U. S. Atty., Joseph E. Brown, Jr., Asst. U. S. Atty., Jackson, Miss., for defendant-appellant.
    Mr. and Mrs. Henry L. Boone per se.
    Before JOHN R. BROWN, Chief Judge, and DYER and SIMPSON, Circuit Judges.

       Rule 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.

   SIMPSON, Circuit Judge:

The United States appeals from a directed jury verdict for the taxpayer in a civil income tax refund suit. On facts mostly stipulated and none in dispute, both the plaintiffs-taxpayers and wife (Boone or taxpayer) and the United States moved for directed verdict at the close of the evidence. The trial judge denied the government’s motion and granted that of the taxpayer. We reverse and direct that judgment be entered for the United States.

The taxable year involved was 1966. During the time in question, taxpayer, a pipe fitter and a member of Local 568, Plumbers and Steam Fitters Union, resided in Pascagoula, Mississippi. He worked in and around Pascagoula when work there was assigned by the Union Hall, but would go wherever there was employment. When he was free to work, he would list his name at the Union Hall and wait for a call. When his name came up he would report to the jobsite and continue to go directly there until the job was finished, when he would again report to the Union hiring hall and again wait for a call for employment at a new jobsite.

No work was available in or near Pas-cagoula in May of 1965, and Boone was referred to work with the Koppers Company at Picayune, Mississippi in May 1965. He worked there until August 27, 1966, first as pipe fitter and later promoted to welder inspector. During this 15 or 16 months he commuted to work every working day by automobile from Pasca-goula to Picayune and return, a round trip of about 160 miles. He did this instead of moving closer to the jobsite to avoid disturbing his family and having to change his children’s public school. The employment at Picayune was indefinite. Boone was never told how long the Kop-pers job was expected to last and did not learn of his termination until an hour before it occurred. Termination was based on the fact that his job was finished and Koppers no longer needed his services.

Taxpayer claimed his daily travel expense as a deduction on his 1966 income tax return. The Commissioner disallowed the deduction on the ground that it was a non-deductible personal expense and assessed additional taxes of $494.11. Boone paid the assessment with interest, and when his claim for refund was denied, timely filed refund suit in the court below. The district court by granting a directed verdict for the taxpayer, overruled the Commissioner’s determination.

Under Section 161 of the Internal Revenue Code of 1954, (Title 26 U.S.C. See. 161), a generic section, a taxpayer is entitled to take various itemized deductions in reducing gross income to taxable income. Included is the deduction allowed under Section 162(a) of the 1954 code for ordinary and necessary expenses paid or incurred in carrying on any trade or business. But the allowance of such a deduction is “subject to the exceptions provided in * * * [sections 261 et seq.]” Treasury Regulations on Income Tax (1954 Code), Sec. 1.161-1. One of these superseding provisions which affect every relevant deduction section is Sec. 262, which disallows deductions for “personal, living, or family expenses.” The cost of daily travel from one’s residence to work and return is such a non-deductible personal expenditure. An exception to this well established rule, which the district judge appeared to believe applicable to this case, takes effect when the taxpayer’s employment is “temporary” rather than “indefinite” or “indeterminate”. Peurifoy v. Commissioner of Internal Revenue, 1958, 358 U.S. 59, 79 S.Ct. 104, 3 L.Ed.2d 30 aff’g 254 F.2d 483 (4 Cir. 1957); Claunch v. Commissioner of Internal Revenue, 5 Cir. 1959, 264 F.2d 309; Coburn v. Commissioner of Internal Revenue, 2 Cir. 1943, 138 F.2d 763 (under Revenue Act, 1938 Sec. 23(e), Int.Rev.Code Sec. 23(e)). A temporary employment is one which is foreseeably for a short period of time or for a fixed duration. Stricker v. Commissioner of Internal Revenue, 6 Cir. 1971, 438 F.2d 1216; Claunch v. Commissioner of Internal Revenue, 5 Cir. 1969, supra; Rev.Rul. 61-95, 1961-1 Cumulative Bulletin 749. In contrast, an indefinite or indeterminate employment is one where the prospect is that the work will continue for an indeterminate and substantially long period of time. Cockrell v. Commissioner of Internal Revenue, 8 Cir. 1963, 321 F.2d 504; Wright v. Hartsell, 9 Cir. 1962, 305 F.2d 221. We think the district court misapplied the law to the uncontroverted facts in evidence and directed a verdict for the wrong party.

When the undisputed facts are examined in the light of the foregoing cases it becomes obvious that there was no question presented upon which a jury decision was required. Only a judge’s decision applying the law to the facts was necessary. It is manifest that Boone’s employment in Picayune was indefinite rather than temporary:

—It was of such a nature that it could be terminated at any time;
—He had no way of knowing how long it would last when he was hired;
—He was actually employed for over 15 months, well over the one-year “usual line of demarcation between temporary and non-temporary employment,” Rev.Rul. 60-189, supra, Note 4;
—According to the taxpayer’s testimony his commuting expenses were incurred solely for the convenience of his family; he decided to establish a residence and not move his children about so they could receive, an uninterrupted and better education; and
• — -The indefinite nature of the employment was further indicated by a promotion from pipe fitter to welder inspector within three months of his initial employment, increasing his chances of working until the job ended, as opposed to termination upon the first reduction in work force.

This is not the usual case appropriate for submission to a jury because some of the evidentiary facts, even though undisputed, point to one illation and some to another. It was not even a situation where differing inferences may be drawn from the same facts. Here all the relevant facts led to a single conclusion: Boone’s employment was non-temporary, it was indefinite, and the taxpayer’s expenses of going to and from the jobsite daily did not qualify for the ordinary and necessary business expense deduction claimed under Section 162(a).

The motion for directed verdict of the United States was due to be granted.

The judgment appealed from is reversed, with directions to the district court to enter judgment for the United States.

Reversed.

      . The taxpayer has the burden of placing himself within the appropriate Code section relating to the claimed deduction. The district court was in error in stating as one of its grounds for directed verdict that the government had the burden as to disallowance of the deduction. United States v. Woodall, 10 Cir. 1958, 255 F.2d 370.

      . The expenses of one day round trips, if deductible, are deductible under Sec. 162 (a), rather than Sec. 162(a) (2). United States v. Correll, 1967, 389 U.S. 299, 88 S.Ct. 445, 19 L.Ed.2d 537; United States v. Tauferner, 10 Cir. 1969, 407 F.2d 243, cert. denied 1969, 396 U.S. 824, 90 S.Ct. 66, 24 L.Ed.2d 74. Tauferner notes the reason for this is that the Supreme Court “has held in effect that Section 162(a) (2) does not apply to trips not overnight not requiring rest or sleep.” 407 F.2d at 245. See also, Sanders v. Commissioner of Internal Revenue, 9 Cir. 1971, 439 F.2d 296, 298, where it is held that “the [automobile] expenses incurred on the daily trips * * * can no longer be deductible under § 162 (a) (2), and a deduction, if any, must come under § 162 (a).” Since Boone never remained at Picayune overnight he did not fulfill the “away from home” requirement of Sec. 162(a)(2). The deduction, if allowable therefore, must come within Sec. 162(a) as an ordinary and necessary business expense, and is not a “personal, living, or family expense” under Sec. 262.

      . C.I.R. v. Flowers, 1945, 326 U.S. 465, 66 S.Ct. 250, 90 L.Ed.2d 203; Steinhort v. C.I.R., 5 Cir. 1964, 335 F.2d 496, 503, 506 (dissent); Heuer v. Commissioner of Internal Revenue, 1959, 32 T.C. 947, aff’d, mem., 5 Cir. 1960, 283 F.2d 865; Fausner v. Commissioner of Internal Revenue, 5 Cir. 1973, 472 F.2d 561; Sanders v. Commissioner of Internal Revenue, 9 Cir. 1971, 439 F.2d 296; Treasury Regulations on Income Tax (1954 Code) Secs. 1.62-1 (g), 1.162-2(e), 1.212-1(f), and 1.262-1(g)(5); S.Rep. No. 1632, 83rd Cong., 2d Sess., p. 169 (3 U.S.Cong. and Adm.News (1954) pp. 4621, 4804). Equally applicable to Section 62 expenses is the Section 262 disallowance of the deduction of personal commuting expenses. Before an expense qualifies under Section 62(2) as an adjustment to gross income of an employee it must be an allowable deduction under Sections 161 et seq. See Treasury Regulations on Income Tax (1954 Code) Sec. 1.162-1 (g).

      . It is further clear that employment which was at first temporary may become indefinite where it extends beyond a short term, Bark v. Commissioner of Internal Revenue, 6 T.C. 851 (1946); and also that employment which merely lacks permanence is indefinite rather than temporary unless termination is foreseeable within a short period of time, Albert v. Commissioner of Internal Revenue, 13 T.C. 129 (1949), which has been interpreted to mean one year or less. Rev.Rul. 60-189, 1960-1 Cum.Bull. 60, 63.

      . “The job, not the taxpayer’s pattern of living, must require the travelling expenses.” O’Toole v. Commissioner of Internal Revenue, 2 Cir. 1957, 243 F.2d 302, 303.

      . The record shows, in fact, that the taxpayer was one of the last pipe welders to be let go by Koppers.

      . Our analysis of the evidence demonstrates that the case was ripe for directed verdict under the test that Judge Ainsworth enunciated for us en banc in Boeing v. Shipman, 5 Cir. 1969, 411 F.2d 365, 374-375: “If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict, granting of the motions is proper. * * * A mere scintilla of evidence is insufficient to present a question for the jury. The motion (s) for directed verdict * * * should not be decided by which side has the better of the case, nor should they be granted only when there is a complete absence of probative facts to support a jury verdict. There must be a conflict in substantial evidence to create a jury question. However, it is the function of the jury as the traditional finder of the facts, and not the Court, to weigh conflicting evidence and inferences, and determine the credibility of witnesses.”


author: LEVIN H. CAMPBELL, Circuit Judge.

text:
    H. K. PORTER COMPANY, INC., Plaintiff-Appellee, v. NICHOLSON FILE COMPANY et al., Defendants-Appellants. H. K. PORTER COMPANY, INC., Plaintiff-Appellant, v. NICHOLSON FILE COMPANY et al., Defendants-Appellees.
    Nos. 73-1023, 73-1024.
    United States Court of Appeals, First Circuit.
    Heard and Argued April 10, 1973.
    Decided July 30, 1973.

      Edward L. Maggiacomo, and John F. Corrigan, Providence, R. I., with whom Adler, Pollock & Sheehan, Providence, R. I., was on briefs, for H. K. Porter Company, Inc.
    Edward F. Hindle, Providence, R. I., with whom John H. Blish, and Edwards & Angelí, Providence, R. I., were on briefs, for Nicholson File Co. and others.
    Before COFFIN, Chief Judge, Mc-ENTEE and CAMPBELL, Circuit Judges.
   LEVIN H. CAMPBELL, Circuit Judge.

On March 7, 1972, the H. K. Porter Company (Porter) mailed tender offers to the stockholders of Nicholson File Company (Nicholson), obligating itself to buy 437,000 shares of Nicholson common stock at $42 per share by April 4, 1972, or any extension of that date. Only 132,292 shares were tendered by the actual closing date, April 14, 1972, which shares Porter bought. Porter brought this action for damages in the district court against Nicholson and its directors and officers, alleging that to defeat Porter’s request for tenders, they had issued false, fraudulent and misleading statements to Nicholson stockholders to induce them not to tender, in violation of § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j, and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5, and of § 14(e) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(e).

Defendants filed a motion to dismiss under F.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. The district court, pursuant to careful opinions, dismissed the § 10(b) and 10b-5 claim, 341 F.Supp. 508, but denied the motion with respect to the § 14(e) claim. 353 F.Supp. 153 (D.R.I. 1972; supplemental opinion, Id. 1973). Both sides have appealed, the defendants having been granted permission to do so by the district,court. 28 U.S.C. § 1292 (b). We affirm.

The deceptive activities of which Porter complains may be summarized, from the complaint, as follows:

First, the defendants mailed a letter to the Nicholson stockholders telling them that Nicholson’s directors had endorsed a merger with Walco National Corporation, which the directors considered a better alternative than selling shares to Porter. This proposed merger, it is alleged, was a sham. Second, the defendants brought a securities laws action against Porter and obtained a temporary restraining order against Porter’s acceptance of tenders pending a hearing on a motion for a preliminary injunction. It is alleged that the directors mailed a misleading statement to the stockholders, informing them that Porter’s offer had been “blocked” by an injunction and urging them not to turn in their shares and to retrieve shares already tendered, but omitting to tell them that the injunction was a temporary restraining order and did not constitute a finding that Porter had violated the law. The statement was allegedly further misleading in that it conveyed the false impression that stockholders had the right to take back their shares. Finally, the directors told the stockholders by mail of a merger proposal from VLN Corporation, preferable to both the Wal-co and Porter proposals. It is alleged that this statement was misleading in omitting relevant facts about the value of VLN stock.

I. The § 14(&) Claim

Section 14(e), like other anti-fraud provisions of the securities laws, e. g., § 14(a), 15 U.S.C. § 78n(a), and § 10(b), does not by its terms confer a right of action on anyone for violation of its provisions. This silence, however, is no bar to implying a private cause of action. J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964). It “is the duty of the courts to be alert to provide such remedies as are necessary to make effective the congressional purpose.” Id. at 433, 84 S.Ct. at 1560. Nicholson, conceding that a nontendering stockholder would have a right of action against it for damages, see Neuman v. Electronic Specialty Co., [1969-1970 Transfer Binder] CCH Fed.Sec.L.Rep. ¶ 92,591, at 98,705 (N.D.Ill.1969), and that Porter would have a right to sue for injunctive relief, see Electronic Specialty Co. v. International Controls Corp., 409 F.2d 937 (2d Cir. 1969); Butler Aviation Int’l, Inc. v. Comprehensive Designers, Inc., 425 F.2d 842 (2d Cir. 1970), insists that Porter’s is not the interest which § 14(e) was designed to protect and that therefore we should not imply for it a right of action for damages. But we think that such a right of action for damages, properly circumscribed, would effectuate the purposes of § 14(e).

Section 14(e) was part of the 1968 amendments, known as the Williams Act, to the Securities Exchange Act of 1934. The purpose of the Williams Act was to regulate the emerging “tender offer” takeover device in the interest of the investor — just as proxy solicitation had earlier been so regulated. See Note, Cash Tender Offers, 83 Harv.L.Rev. 377 (1969). “[The] bill is designed to make the relevant facts known so that the shareholders have a fair opportunity to make [this] decision.” H.R.Rep.No. 1711, 90th Cong., 2d Sess., 1968 U.S. Code Cong. & Admin.News pp. 2811, 2813 (1968). Little in the legislative history suggests that Congress was motiviated by concern for the plight of frustrated tender offerors or, for that matter, the incumbent management of the target. On the other hand, Senator Williams, sponsor of the amendments, expressed a desire “to avoid tipping the balance of regulatory burden in favor of management or in favor of the offeror.” 113 Cong.Rec. 854 (1967). The Senator stated,

“The purpose of this bill is to require full and fair disclosure for the benefit of stockholders while at the. same time providing the offeror and management equal opportunity to fairly present their case.” Id. at 854-55.

In furtherance of these aims, the statute requires the tender offeror to disclose to the stockholders he solicits information about his identity, plans, resources, etc. § 14(d)(1), 15 U.S.C. § 78n(d)(1), see § 13(d), 15 U.S.C. § 78m(d); in turn, the target’s management is subject to SEC regulation of its efforts to influence stockholder acceptance or rejection and to repurchase its own securities defensively. § 14(d)(4), 15 U.S.C. § 78n(d)(4); § 13(e)(1), 15 U.S.C. § 78m(e)(1).

From the statutory scheme and the legislative history, it seems clear that the overriding purpose of § 14(e) is the protection of the investor. Yet affording for the offeror and the target’s management a cause of action for damages would in many instances further that purpose. With an obvious economic stake in the outcome of the tender offer battle, they have the incentive to detect violations and vigorously pursue remedies. See Bromberg, Securities Law, supra, § 6.3(1040) at 124. Nicholson concedes Porter’s right to sue in equity; but the threat of a damages action no less than an equitable suit may stimulate compliance, to the benefit of the investor. The Supreme Court said in Borak that “[pjrivate enforcement of the proxy rules provides a necessary supplement to [Securities & Exchange] Commission action . . . [T]he possibility of civil damages or injunctive relief serves as a most effective weapon in the enforcement of the proxy requirements.” 377 U.S. at 432, 84 S.Ct. at 1560. This proposition is no less applicable to the tender offer situation. We see no reason why actions by the protagonists in the battle, as well as by the stockholders themselves, would not be effective enforcement weapons.

We find further support for this construction when we look to the context in which § 14(e) was enacted. Rule 10b-5 already covered exchanges of stock generally, including tender offers, but rights of action under it were commonly limited to purchasers and sellers. See Birnbaum v. Newport Steel Corp., 193 F.2d 461 (2d Cir. 1952), cert. denied, 343 U.S. 956, 72 S.Ct. 1051, 96 L.Ed. 1356 (1952). See infra, part II. Since § 14(e) substantially tracks the language of 10b-5 except for its omission of the purchase and sale requirement, it seems reasonable to conclude that its “major contribution [was] a broader standing to sue — accorded both to the offeror and to the opposition.” Chris-Craft Industries, Inc. v. Bangor Punta Corp., 480 F.2d 341, at 361 (2d Cir., 1973). See also Electronic Specialty Co. v. International Controls Corp., supra, 409 F.2d at 940-941.

Finally, implying for the offeror and the target’s management reciprocal rights of action for damages seems only fair given that each has a heavy economic stake, and that each is subject to what has been aptly described as “symmetrical” statutory obligations. Bromberg, Securities Law, supra, § 6.3(1040) at 124. Each is victimized when the other commits illegal acts to defeat or accomplish takeover bids. Tortious interference with a “prospective advantage” or inducement not to enter into a contract are wrongs long recognized at common law, giving rise to actions for damages. See W. Prosser, Law of Torts, c. 25 § 130 at 949 ff., esp. 956-60 (4th ed. 1971); Restatement of Torts § 766; Chris-Craft, supra, 480 F.2d at 360.

Thus, we infer a § 14(e) civil damages remedy for the tender offeror. Accord, Chris-Craft, supra. See Dyer v. Eastern Trust & Banking Co., 336 F.Supp. 890 (D.Me.1971). See also Note, The Developing Meaning of “Tender Offer” Under the Securities Exchange Act of 1934, 86 Harv.L.Rev. 1250, 1259-60 (1973).

It follows, however from the overriding investor-protection purpose of § 14(e) that damages should be denied to a tender offeror to the extent they are inconsistent with that purpose. The statute, in other words, may not be diverted from one designed to assist the investor to one operated principally to benefit one or another of the rival management or control groups jockeying for power.

The district court ruled that Porter (assuming liability is proven) could recover from the corporation itself. We do not disturb that ruling now. A motion to dismiss should not be granted unless it appears beyond doubt that the plaintiff can prove no set of facts in support of its claim which would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). We cannot yet know the theory of damages to be established, nor how and to what extent recovery from Nicholson might affect the various Nicholson shareholders (of whom Porter has been one), nor what right of recovery may be available to the other Nicholson stockholders to offset the effect of any corporate loss. In the event Porter establishes a violation of § 14(e), the district court should make findings of the probable impact of recovery from Nicholson on its shareholders. Any recovery in damages from the corporation must be consistent with the primary congressional aim of protecting investors, and the district court would be warranted in denying damages, otherwise established, if it should conclude that to award them would be to subvert that purpose.

Recovery from the individual defendants is, of course, on a different footing. The individual defendants have not yet advanced any good reason why they should not be accountable in damages for illegal action, if any. Permitting them to be held civilly liable for illegal conduct has no greater “chilling” effect than permitting enforcement of the securities law in other respects. If their argument is that § 14(e) imposes unreasonably high standards, it is better directed to Congress. Appellant’s other argument- — -that recovery will lead to indemnification of the individuals by the corporation and hence ultimately will burden its stockholders — assumes much more than we need to assume at this juncture. The posture of the case is presently like Borak when that case was decided by the Supreme Court. We hold simply that the district court has power to grant appropriate relief to Porter should it prove its case. We leave to the district court’s later determination what relief is necessary and appropriate in light of the objects of § 14(e).

II. The § 10(b) Claim

The district court ruled that Porter’s separate § 10(b) and Rule 10b-5 claim must be dismissed on the basis that Porter was not a purchaser or seller, a requirement for 10b-5 actions first established in Birnbaum v. Newport Steel Corp., supra, and applied to the tender offer situation in Iroquois Industries v. Syracuse China Corp., 417 F.2d 963 (2d Cir. 1969), cert. denied, 399 U.S. 909, 90 S.Ct. 2199, 26 L.Ed.2d 561 (1970).“ The Supreme Court has refrained from deciding whether a party, not a purchaser or seller, has a right of action under 10b-5. Superintendent of Insurance v. Bankers Life & Casualty Co., 404 U.S. 6, 13 n. 10, 92 S.Ct. 165, 30 L.Ed.2d 128 (1971), but the Birnbaum doctrine, with modifications, has generally been adopted by the circuits, at least with regard to actions for damages. See, e. g., Herpich v. Wallace, 430 F.2d 792 (5th Cir. 1970); Mount Clemens Industries, Inc. v. Bell, 464 F.2d 339 (9th Cir. 1972); City Nat’l Bank v. Vanderboom, 422 F.2d 221 (8th Cir.), cert. denied, 399 U.S. 905, 90 S.Ct. 2196, 26 L.Ed.2d 560 (1970); Knauff v. Utah Construction & Mining Co., 408 F.2d 958 (10th Cir.), cert. denied, 396 U.S. 831, 90 S.Ct. 83, 24 L.Ed.2d 81 (1969); Simmons v. Wolfson, 428 F.2d 455 (6th Cir. 1970), cert. denied, 400 U.S. 999, 91 S.Ct. 459, 27 L.Ed.2d 450 (1971).

We interpret the enactment of § 14(e) in 1968, dealing specifically with tender offers, as recognition of the inadequacy of other provisions of securities laws, especially § 10(b) and Rule 10b-5, to provide a comprehensive and sure remedy, at least for those who were not purchasers or sellers of securities. Possibly if Congress had not acted, tender offer activity would have stimulated courts to a broader application of Rule 10b-5. We cannot know. But Congress has acted, and we think it both unnecessary and confusing to encourage, at this time, and especially in view of the Supreme Court’s silence, the parallel development of alternative remedies. Here we are not faced with conduct occurring before the enactment of § 14(e) nor some other situation where the injured offeror lacks any possible remedy except under Rule 10b-5. Cf. SEC v. Nat’l Securities, Inc., 393 U.S. 453, 468-469, 89 S.Ct. 564, 21 L.Ed.2d 668 (1969). Absent such special circumstances, we decline to embark upon a re-examination of the purchaser-seller requirement of 10b-5. We hold that § 14(e) provides the exclusive civil remedy available to Porter, and that the district court did not err in dismissing its claim under § 10(b) and Rule 10b-5.

Affirmed.

      . Section 10, 15 U.S.C. § 78j:
      It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange—
      * * * * *
      (b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
      17 C.F.R. § 240.10b-5:
      It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
      (a) To employ any device, scheme, or article to defraud,
      (b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
      (c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.
      Section 14(e), 15 U.S.C. § 78n(e) :
      It shall be unlawful for any person to make any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or to engage in any fraudulent, deceptive, or manipulative acts or practices, in connection with any tender offer or request or invitation for tenders, or any solicitation of security holders in opposition to or in favor of any such offer, request, or invitation. The Commission shall, for the purposes of this subsection, by rules and regulations define, and prescribe means reasonably designed to prevent, such acts and practices as are fraudulent, deceptive, or manipulative.

      . Some proponents expressed sympathy for the target companies, but the “Congress insisted it was not playing favorites.” I. A. Bromberg, Securities Law: Fraud—SEC Rule 10b-5 § 6.3(122), at 116.3-116.4 (1971).

      . Porter says that Iroquois conflicts with Crane Co. v. Westinghouse Air Brake Co., 419 F.2d 787 (2d Cir. 1969), cert. denied, 400 U.S. 822, 91 S.Ct. 41, 27 L.Ed.2d 50 (1970). Others have said that Crane merely represents an example of the “forced seller” modification of Birnbaum. See Mount Clemens, supra, 464 F.2d at 346; cf. Kahan v. Rosenstiel, 424 F.2d 161, 171-172 (3d Cir.), cert. denied, 398 U.S. 950, 90 S.Ct. 1870, 26 L.Ed.2d 290 (1970). In any event, it appears from subsequent Second Circuit cases that the purchaser-seller requirement, however relaxed, still exists. See Drachman v. Harvey, 453 F.2d 722 (2d Cir. 1972).


author: JAMES M. CARTER, Circuit Judge:

text:
    The ROBBINS COMPANY, Plaintiff-Appellee, v. LAWRENCE MANUFACTURING COMPANY, Defendant-Appellant.
    No. 71-2944.
    United States Court of Appeals, Ninth Circuit.
    July 24, 1973.

      John M. Calimafde (argued), Stephen B. Judlowe, of Sandoe, Hopgood & Cali-mafde, New York City, Bruce M. Pym, of Graham, McCord, Dunn, Moen, Johnston & Rosenquist, Seattle, Wash., for defendant-appellant.
    John O. Graybeal (argued), James R. Uhlir, of Graybeal, Barnard, Uhlir & Hughes, Seattle, Wash., for plaintiff-ap-pellee.
    Before MERRILL, CARTER and CHOY, Circuit Judges.
   OPINION

JAMES M. CARTER, Circuit Judge:

Appellee The Robbins Company (hereafter Robbins) brought suit against appellant Lawrence Manufacturing Company (hereafter Lawrence), a competitor in the field of tunnel boring machines, for infringement of Robbins’ Patent No. 3,216,513. Lawrence moved for summary judgment. This appeal is from an order of the district court denying that motion.

Ordinarily such an order would not be a final judgment and, hence, not appeal-able. However, the trial court granted appellant’s petition to certify the question for appeal and a panel of this court, pursuant to 28 U.S.C. § 1292(b), granted appellant’s motion to hear the interlocutory appeal.

The sole question on appeal is whether the patented subject matter, rock cutter assemblies, was “on sale” in this country more than a year prior to application for the patent, thereby rendering the patent invalid. We reverse.

The statute involved, 35 U.S.C. § 102(b), reads as follows:

“§ 102. Conditions for patentability; novelty and loss of right to patent
A person shall be entitled to a patent unless—
(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.” [Emphasis added]

No question is presented as to the description of the patent in any printed publication in this country or elsewhere, or as to public use.

Facts

The patent concerns cutters which are designed for attachment to tunnel boring machines. The boring machine has at its front a rotating headplate to which an array of cutters are attached. The remainder of the machine is a locomotive-like device for driving the front end into the face of the earth while rotating the headplate. The patent does not concern anything but the cutters.

An application for the patent was filed on January 6, 1964, and Patent No. 3,216,513 issued on November 9, 1965. The patent specification refers to an earlier application dated February 18, 1963. Appellant assumes that the patent is entitled to the earlier filing date of February 18, 1963. Thus the patent is invalid under 35 U.S.C. § 102(b) if it was “on sale” more than one year prior to February 18, 1963, that is, prior to February 18, 1962, the critical date.

The prior cutters used slightly different seal and bearing arrangements. The patented version uses inclined, instead of arcuately disposed, roller bearings, and metal-to-metal seals instead of metal-to-rubber or gasket seals. Inclined roller bearings and metal-to-metal seals were, however, merely standard items purchased in the market place.

The appellant relies upon two transactions, claimed to be within the “on sale” prohibition, before the critical date: (1) the Hydro-Electric Commission transaction, and (2) the M. J. Bles Construction Company transaction.

The Hydro-Electric Commission Transaction

In 1959, the Hydro-Electric Commission of Tasmania, Australia, invited offers from manufacturers who had successfully built tunnel boring machines, for a machine to be custom built to detailed specifications for use in constructing the Great Lake Power Development, near Poatina in northern Tasmania. The terms of the bid made the successful manufacturer responsible for shop testing the boring machine before shipping; placed delivery f. o. b. the shipping port; reserved the right to cancel if the April 1, 1961 delivery date were not met; required a specific boring rate of 40 feet per day; and demanded a guarantee of performance.

In December 1959, Robbins submitted a detailed written offer for sale of such a machine. The Commission accepted. A contract was executed in June 1960, which specifically provided for a list of machine components and a price schedule, and required delivery f. o. b. Seattle, Washington by March 18, 1961. Time was made of the essence, with a penalty for late delivery and a bonus for early delivery.

Robbins guaranteed a tunneling rate of five feet per hour, against a $21,550 penalty for breach thereof. Robbins was to receive 95 percent of the total price, which was $453,705.05, when the goods were delivered in Seattle. The remainder was due after 500 feet of tunneling, or six months after on-site acceptance. There was no mention in the offer of the patented cutter; an earlier version was listed. However, the Commission’s design acceptance under the contract, in September 1960, did specify the later-patented D-1053 cutter. Nothing in the contract mentioned experimentation, and the Commission had no obligation to supply test or other data to Robbins.

The assembled machine, with 50 of the D-1053 cutters, was assembled, shop tested, disassembled, packed and then delivered on shipboard in Seattle on January 30, 1961 — more than one year prior to the critical date of February 18, 1962. Robbins received 95 percent of the price, in U.S. dollars. The machine was publicized in the newsletter of its fabricator, Pacific Car & Foundry Company, in February 1961, without reference to experimentation. It arrived in Australia, was assembled and tested under Robbins’ supervision, and the Commission certified it acceptable on May 5, 1961. Robbins received the remaining five percent of the purchase price. The machine was then used to bore thousands of feet of tunnel, prior to the critical date.

Thus, well before the critical date Robbins competitively sought and obtained a “time of the essence” contract for 50 cutters, had them manufactured and delivered to it, sold and received payment for them, and the customer received, successfully used, and accepted the equipment.

The M. J. Bles Construction Company Transaction

In the summer of 1960, the M. J. Bles Construction Company of McLean, Virginia, had obtained a contract from the District of Columbia to build an underground tunnel for a Potomac sewer project. Robbins contacted Bles in July 1961 to persuade Bles to lease or rent Robbins’ tunneling equipment for the project. Robbins made a detailed pro-nosal, offering to lease or rent to Bles its Model 71 machine. Bles accepted, and an agreement, lease and option to purchase were executed on November 10, 1961, prior to the critical date of February 18, 1962.

The document provided for use of the machine in tunneling 7,900 feet for the sewer project, with an advance rental of $30,000 plus an amount based on tunneling footage. A minimum royalty of $154,050 was specified for 7,900 feet. Robbins guaranteed a boring rate of at least three feet per hour, within 30 days after the work commenced. Bles was to have exclusive control over the machine, and bear the expense of any necessary technical assistance. The document, at Bles’ request, contained an option to purchase the machine, including the cutters, for an additional $175,000.

As with the Commission contract, nowhere was “experimental use” mentioned in the Bles transaction.

Robbins ordered D-1142 cutters, which were within the later patent, from its subcontractor, and the cutters were delivered to Robbins on January 16, 1962, prior to the critical date. Thereafter, in March 1962, the machine and cutters were delivered to Bles. The machine was unsuccessful, for reasons unrelated to the cutters. On June 22, 1962, the lease agreement was terminated, and Bles’ advance rental was returned to it.

Discussion

The fact that this is an appeal from an order denying the motion for summary judgment marks the case as an unusual one. Of course, such orders are interlocutory and not appealable without compliance with 28 U.S.C. § 1292(b). Here an able trial judge acceded to Lawrence’s desires and certified the matter under the statute, stating that “the . . . order [denying summary judgment] involves a controlling question of law . . . and that an immediate appeal from this order as authorized by 28 U.S.C. § 1292(b) may materially advance the ultimate termination of this litigation.” The Court of Appeals will grant such interlocutory review only in extraordinary cases where decision might avoid protracted and expensive litigation. United States Rubber Co. v. Wright (9 Cir. 1966) 359 F.2d 784, 785 (per curiam).

Robbins contends that the use of the patented device in the two transactions set forth above, was an experimental use and thus within an exception to 35 U.S. C. § 102(b), supra. The case law makes clear that an experimental use is not within the “public use” provisions of the statute, Smith & Griggs Mfg. Co. v. Sprague, 123 U.S. 249, 256, 8 S.Ct. 122, 31 L.Ed. 141 (1887); FMC Corp. v. The F. E. Myers & Bro. Co. (6 Cir. 1967) 384 F.2d 4, 9-10, cert. denied, 390 U.S. 988, 88 S.Ct. 1183, 19 L.Ed.2d 1291 (1968), nor is such experimental use within the “on sale” provisions. Watson v. Allen (1958) 103 U.S.App.D.C. 5, 254 F.2d 342, 346 (Burger, Circuit Judge).

There were no provisions in either the Hydro-Electric or the Bles transactions which stated that the sale was for experimentation, or required secrecy in the use of the device or reporting the results of the supposed experimentation.

After Lawrence filed its motion for summary judgment, Robbins for the first time contended that its offers for sale and sales were solely for experimental use. Robbins submitted three affidavits, two by James S. Robbins, its president and the inventor, and one by Sugden, a friend and sales agent for Robbins in Australia and a former employee of the Hydro-Electric Commission. These affidavits contained eonclu-sory characterizations of the cutters as having been supplied in the two transactions for experimental purposes, based on the subjective intent of Robbins and Sugden.

Even if we were inclined to credit these conelusory and subjective statements, they do not establish that the transactions were substantially for purposes of experimentation. Smith & Griggs Mfg. Co., supra; FMC Corp., supra.

At best, the import of the affidavits is that fully developed prototypes of the new cutters were sold for commercial exploitation; but because the particular configuration of bearings and seals (the innovations covered in the patent) had not been placed into such use before, Robbins and Sugden, as prudent engineers, considered the new cutters to be experimental. However, similar cutters had previously been successfully used to cut rock, and the innovations in seals and bearings, both obtained from suppliers’ stock, were apparently not anticipated to have a fatal effect upon that ultimate function. Indeed, they did not, as seen from the Tasmania experience prior to the critical date herein.

An inventor’s testimony of his subjective intent has no probative force against overwhelming evidence to the contrary. Super Mold Corp. v. Clapp’s Equipment Div., Inc. (9 Cir. 1968) 397 F.2d 932, 935. Such testimony is insufficient to raise a genuine issue of material fact to defeat an adverse summary judgment.

Even considering the alleged experimentation in this case, it does not meet the requirements of the many cases which have dealt with the experimentation defense. Examination of those cases has brought us to another theory which supports our decision, to which we now turn.

When a later-patented item is sold prior to the critical date, the passing of title by that sale does not end the inquiry. “A sale which is primarily for the purpose of experiment will not bar patentability.” Watson v. Allen, supra, 254 F.2d at 346; Austin Machinery Co. v. Buckeye Traction Ditcher Co. (6 Cir. 1926) 13 F.2d 697, 700. Kerner Incinerator Co. v. Townsend Estates, Inc. (N.D.Ohio 1926) 27 F.2d 599, 604, aff’d, 27 F.2d 606 (6 Cir. 1928) (per curiam), cert. den., 279 U.S. 843, 49 S.Ct. 264, 73 L.Ed. 989 (1929), holds there can be an experimental use even though title passed. The patent was accordingly held valid.

Activity not resulting in a sale can constitute an “on sale” defense. “ ‘On sale’ does not mean an actual accomplished sale but activity by the inventor or his company in attempting to sell the patented idea.” Amphenol Corp. v. General Time Corp. (7 Cir. 1968) 397 F.2d 431, 433; Kraus v. Emhart Corp. (N.D.Calif.1970) 320 F.Supp. 60, 63. A simple placing on sale is sufficient to establish the “on sale” defense — even an executory contract under which the patented matter is delivered after the critical date. Tucker Aluminum Products, Inc. v. Grossman (9 Cir. 1963) 312 F.2d 293, 295; see also Amerio Contact Plate Freezers, Inc. v. Belt-Ice Corp. (9 Cir. 1963) 316 F.2d 459, 465, cert. denied, 375 U.S. 902, 84 S.Ct. 191, 11 L.Ed.2d 143.

The underlying policy appears to be that an unconditional placing “on sale” creates an opportunity for public use. “ ‘The putting “on sale” intended by the statute is more or less analogous to a public use . . . .’” B. F. Sturte-vant Co. v. Massachusetts Hair & Felt Co. (1 Cir. 1941) 124 F.2d 95, 97 (on denial of rehearing), cert. denied, 315 U.S. 823, 62 S.Ct. 917, 86 L.Ed. 1219; Dart Industries, Inc. v. E. I. du Pont de Nemours & Co. (N.D.Ill.1972) 348 F.Supp. 1338, 1358.

However, strictly speaking, the word “public” in the phrase “in public use or on sale” modifies only the word “use.” Piet v. United States (S.D.Cal.1959) 176 F.Supp. 576, 584, aff’d, 283 F.2d 693 (9 Cir. 1960); Hobbs v. United States (5 Cir. 1971) 451 F.2d 849, 860.

There are certain categories in which it is clear that the fact of a sale, or an offering for sale, does not eliminate the experimental exception.

(a) Conditional sales.

“A sale which reserves to the inventor a right of experimentation and substitution does not place the invention on sale .” 2 Deller’s Walker on Patents § 147, at 711 (2d ed. 1964). Austin Machinery Co. v. Buckeye Traction Ditcher Co., supra, 13 F.2d at 699-700, is such a case. There was a sale and use, supervised by the inventor as a joint vendee, which was held to be a conditional sale. The lower court’s judgment, holding the patent invalid because of sale or use, was reversed. In Ushakoff v. United States (1964), 164 Ct.Cl. 455, 327 F.2d 669, a purchase by the Air Force prior to the critical date, stated the purchase was to be an “experimental procurement” for comparative or service tests, id. at 677, and the defense of invalidity of the patent was rejected.

(b) Sales with no requirements of secrecy or reporting.

Wilkie v. Manhattan Rubber Mfg. Co. (3 Cir. 1926) 14 F.2d 811, 812, held a patent invalid under both the “public use” and “on sale” defenses to an infringement action. The court said:

“[T]he inference of the inventor’s intention, before the grant of the patent, to abandon his invention to the public is established (and the patent subsequently granted is invalid) unless successfully controverted by full, unequivocal and convincing proof that such use and sale were not of the completed and commercially operative device subsequently patented, or that such use and sale were not absolute and unconditional but were principally and primarily for the purpose of perfecting the uncompleted invention by tests and experiments.” 14 F.2d at 812. [Emphasis added]

The court noted that although both the inventor and the buyer may have hopefully awaited reports on the success of the invention, there was no showing of actual follow-up by the inventor, nor of' conditions on the sale. The court said “there is no indication that the rolls were sold . . . for durability tests or experiments of any kind.” The rolls were sold “absolutely and unconditionally . . .” There was no followup by the inventor. I,d. at 812. “To that extent the use was problematical rather than experimental.” Id. at 813.

Ajem Laboratories, Inc. v. C. M. Ladd (6 Cir. 1970) 424 F.2d 1124, 1125-1126, 1128, cert. den., 400 U.S. 830, 91 S.Ct. 59, 27 L.Ed.2d 60, held a patent invalid because of prior sales. There were six offers for sale; the sales were solely for profit; none of the machines were offered for sale for experimental purposes ; no requirement was imposed that the machines be kept secret or in confidence; there were no requirements that reports be made on their operation. It was held that the trial court was fully justified in rejecting the argument that the machines sold were “experimental” within the rule of Austin, supra. The patent was'held invalid. There was a sale, not experimentation.

In Cataphote Corp. v. De Soto Chemical Coatings, Inc. (N.D.Cal.1964) 235 F.Supp. 936, aff’d, 356 F.2d 24, 26-27 (9 Cir. 1966), cert. den., 385 U.S. 832, 87 S.Ct. 71, 17 L.Ed.2d 67 there were sales prior to the critical date, with “all the earmarks of ordinary commercial sales without any contemporaneous indication of a limitation that the sales were for the purpose of further experimentation or testing . . . 235 F.Supp. at 938. The trial court found the sales were not experimental and held the patent invalid.

Piet v. United States, supra, held a patent invalid because there were no restrictions or conditions on the sale. The court stated, “Restricted or secret sales do not result in ‘public use’. This protects the inventor against having a sale for experimental purposes turned by others, without his consent, into a public use.” 176 F.Supp. at 582. In affirming, we stated, “Plaintiff-inventor chose [not] to . restrict or limit the use of the valves by others. By his own actions he has prevented the protection ordinarily granted by a patent to apply to him . . . .” 283 F.2d at 693.

(c) Sales where device not complete

In Amerio Contact Plate Freezers, Inc. v. Belt-Ice Corp. (9 Cir. 1963) 316 F.2d 459, the Ninth Circuit recognized that where no fully operative device is in existence prior to the critical date, a contract to sell the device, prior to that date, is not a placing of the invention on sale under the statute. Id. at 464. The court held no contract existed, and there were no special circumstances requiring the court, absent a prototype, to hold that the invention was “on sale.” In B. F. Sturtevant Co., supra, 124 F.2d at 97, a contract to construct from plans and deliver in the future, a machine not proven to have been previously completed, did not constitute putting the invention “on sale.”

Certain other cases, less clear in their application to our problem, are set forth in the margin.

Accordingly, we adopt the following rule to determine whether a sale or offering for sale precludes patentability.

A sale or an offering for sale

precludes any inquiry into the experimental nature of the sale unless the contract of sale or. the offering for sale contains an express or clearly implied condition that the sale or offering is made primarily for experimental use.
Thus the sale or offering would not ipso facto invalidate the patent nor preclude further inquiry into the experimental nature of the use where the contract or the offer stated that the sale was for experimental purposes (Austin and Ushakoff, supra); or showed that the device was still experimental and that no workable prototype had been made (Americo Contact Plate Freezers, supra); or required that the invention should be kept confidential or from public view, or that reports on the use of the invention should be supplied to the inventor (Ajem Laboratories, Cata-phote, and Piet, supra); or other similar statements appeared from which it could clearly be implied that the sale or the offering was made for an experimental purpose.
In cases where the exceptions did not appear in the sale or offering for sale, summary judgment would be permissible and proper. If the exceptions did appear, then a trial on the merits could dispose of exceptions made falsely or collusivély and, generally, the merits of the claimed exceptions.
Where there has been commercial exploitation, the courts have generally found there was “public use” and not experimental use. Smith & Griggs Mfg. Co. and FMC Corp., supra. But even in case of a sale where the real purpose was experimentation, the patent is still valid. Watson v. Nelson, supra. Thus obtaining some monetary return from a sale made primarily for experimental purposes may not constitute in every case a “commercial exploitation” which invalidates the patent.

Under this rule, where there was some commercial exploitation, a showing that a sale or offering for sale was conditioned upon experimentation would preclude summary judgment against patent-ability. The court could then hear proof on the merits and determine whether the case came within the experimental exception.

The rule we rely on clarifies the problem for inventors. The sale or offering for sale of a later-patented item places it “on sale,” within the statute, unless there is the express or clearly implied condition of experimentation.

Applying this rule to the facts of this case, it is clear that in both the Hydro-Electric and the Bles transactions there were sales and offerings for sale, with no express or clearly implied condition that they were for an experimental purpose. The device had been completed and was in existence. No requirements of secrecy were imposed on Hydro-Electric or Bles, nor were they required to report on the results of the supposed experimentation. Summary judgment was therefore proper.

Several other contentions deserve brief comment. Robbins argues that the Bles transaction was a rental, and not a placing on sale, because the purchase option was merely a trade practice to prevent Bles’ competitors from obtaining the use of the machine. Robbins does not argue that if Bles had exercised the option, Robbins would have refused to sell.

Robbins further argues that the Tasmania sale did not occur in this country, and that therefore the sale was outside the scope of 35 U.S.C. § 102(b), as noted above. We believe the cutters were placed “on sale” in this country, within the meaning of the statute. It is undisputed that Robbins’ offer was made here. Although Robbins’ offer did not specify the later-patented D-1053 cutters, the Commission’s design acceptance under the contract, in September 1960, did so specify them. Whether the sale was completed in the United States or in Tasmania, the D-1053 cutters were “on sale” in the United States in September 1960, long before the critical date of February 18, 1962.

Neither counsel for the parties nor we have found a case passing on the status of goods made in the United States and sold for export trade vis-a-vis the statutory proscription. Gandy v. Main Belting Co., 143 U.S. 587, 12 S.Ct. 598, 36 L.Ed. 272 (1892), and Hunt Industries, Inc. v. Fibra Boats, Inc. (S.D.Fla.1969) 299 F.Supp. 1145, were both cases where the manufacture and sale occurred abroad.

There is dictum in Cataphote Corp. v. De Soto Chemical Coatings, Inc., supra, 235 F.Supp. at 940, to the effect that a “foreign ‘on sale’ transaction does not fall within the provisions of Title 35 Sec. 102 . . . .” [Emphasis added.] However, the matter was not mentioned in the Circuit decision.

Whether or not such a sale is consummated in a foreign country, we hold that the product is “on sale” in the United States, within the proscription of the statute, if substantial activity prefatory to a sale occurs in the United States. An offer for sale, made in this country, is sufficient prefatory activity occurring here, to bring the matter within the statute. See Amphenol Corp., Kraus, and Tucker Aluminum Products Co., supra. Sugden was in Seattle in the summer of 1960 to negotiate the contract with Robbins, and his affidavit detailed his activities. He was also present in Seattle during shop testing, disassembly and packing of the machine. He remained here until the machine was placed aboard ship in Seattle. Robbins then received 95 percent of the purchase price.

The judgment is reversed and the cause is remanded to the district court with directions to enter summary judgment for appellant Lawrence.

      . Robbins’ brief states that Bles was never advised of the specific nature of the disc cutters to be incorporated in its Model 71 machine prior to its delivery. But the brief also states, “The particular cutter which Robbins had decided to test on the Bles machine was the Model D-1142, which cutter included a bearing and seal configuration similar to the D-1053 cutters as well as a removable cutter ring.” Robbins does not contend that the D-1142 cutters were not within the terms of the later patent.
      The D-1142 cutters were the ones which were placed on the Bles machine and which were later delivered. The option to purchase thus included the D-1142 cutters.

      . Sugden’s affidavit states that at the time of the sale, he was the plant engineer of the Hydro-Electric Commission of Tasmania. He was responsible for equipping all tunneling operations for them. In that capacity, he negotiated with Robbins to provide for installation of earlier-type cutters, if tl>e new (and later patented) cutters proved unsatisfactory.
      Sugden regarded the new cutters as experimental, to the extent that any equipment not field-tested must be so regarded. All of the new cutters supplied by Robbins were expended in the first 2,000 feet of tunneling, and were not really tested in hard rock. (In about July 1902, after the critical date herein, other, similar cutters furnished by Robbins were tested in hard rock, and found useless.)
      Robbins, in his first affidavit, confirmed Sugden’s statements in blanket fashion. He added that both Robbins and the Hydro-Electric Commission fully understood that the 50 cutters originally supplied with the machine, which were of the later-patented type, “were experimental and untested.” He said that Robbins had no means to evaluate the new design, except to furnish a quantity to its customer to “use and evaluate . in the course of its operation of the machine . . . . ” The machine was assertedly incomplete and nonoperational prior to assembly and testing in Tasmania. (But the patent concerned cutters, not the machine.)
      Both Robbins and Sugden said that the machine was specifically built to accommodate earlier-type cutters, should the new ones prove unsatisfactory.
      Robbins’ second affidavit largely related to the Bles transaction. Robbins said that the proposal to Bles did not specify any particular cutter, and Robbins did not recall that he or his firm specifically advised Bles about the type of cutter to be furnished. At the time of this proposal, and of the later construction of the Bles machine, there had been no substantial testing of the cutters originally supplied to Tasmania. The affidavit further asserted that Bles desired an option to buy the machine, which option ran out prior to the contractual delivery date, solely in pursuant of a trade practice to take such options as a means of foreclosing the equipment to the use of competitors. If Bles had actually been expected to buy the machine, it would not have included certain experimental features which it in fact incorporated, and which Robbins intended to test and perhaps use in later mining operations. The Bles machine was delivered to the job site on April 11, 1962. It proved unsatisfactory, for reasons unrelated to the cutters, and the agreement was ended by mutual consent on June 22, 1962.
      It is evident that nowhere in these three affidavits does it appear that any reports of experimental use were required to be made to Robbins by the users. There were no express provisions nor informal arrangements which would indicate that a substantial purpose of the transactions was the field testing of experimental cutters. Although Robbins’ first affidavit states, and Sugden’s implies, that the cutters “were experimental and untested,” and so understood by all parties, nothing except the sworn subjective statements of Sugden and Robbins indicates that the primary or even a substantial purpose of the transactions was for experimentation with the cutters. If such had been the purpose, it would certainly be singular for that purpose not to have appeared in any recorded form until after the motion for summary judgment in this litigation, which occurred approximately eight years after the critical date. Moreover, when that purpose did appear, it was attested to in a con-elusory and subjective manner, and solely by an interested party, Robbins, and his friend and former sales agent, Sugden.

      . Less dear cases relating to the problem are: Hall v. Macneale, 107 U.S. 90, 96-97, 2 S.Ct. 73, 27 L.Ed. 367 (1882) (sale of safes not experimental—arose as an afterthought); Nicholson v. Carl W. Mullis Engrg. & Mfg. Co. (4 Cir. 1962) 315 F.2d 532, 535, cert. den., 375 U.S. 828, 84 S.Ct. 72, 11 L.Ed.2d 60 (1963) (invention reduced to practice and sales not conditional); George R. Churchill Co. v. American Buff Co. (7 Cir. 1966) 365 F.2d 129, 133-134 (distribution to jobbers and sales to customers indicated market acceptance testing, rather than an experimental use; findings of “public use” and “on sale” supported) ; Magee v. Coca-Cola Co. (7 Cir. 1956) 232 F.2d 596, 600 (offer to sell, made after experimental stage, is a placing “on sale”; no evidence of experimentation) ; Hunt Industries, Inc. v. Fibra Boats, Inc. (S.D.Fla.1969) 299 F.Supp. 1145, 1150 (dicta that facts such as experimental use, which may be fatal to patentability after experimentation, are frequently excused if they occur beforehand).