author: TRASK, Circuit Judge:

text:
    In re ESTATE of Marcellus L. JOSLYN, Deceased. Robert D. MacDONALD, Executor, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
    No. 72-2554.
    United States Court of Appeals, Ninth Circuit.
    June 24, 1974.
    Malcom George Smith (argued), Perry A. Lerner, Kindel & Anderson, Los Angeles, Cal., for petitioner.
    Scott P. Crampton, Asst. Atty. Gen., and Carleton D. Powell, Atty. (argued), Tax Div., U. S. Dept, of Justice, Washington, D. C., for respondent.
    Before KILKENNY, TRASK and CHOY, Circuit Judges.
   TRASK, Circuit Judge:

This is an appeal from a decision of the Tax Court that was adverse to the executor of the Estate of Marcellus L. Joslyn. Jurisdiction below was based upon section 6214 of the Internal Revenue Code of 1954; this court’s jurisdiction lies pursuant to section 7482 of the Code. The Tax Court’s opinion is reported at 57 T.C. 722 (1972).

Mr. Joslyn died testate, a resident of California, on June 30, 1963. The federal estate tax return for his estate was filed with the District Director of Internal Revenue at Los Angeles, California, on September 30,1964.

At his death, Mr. Joslyn owned 66,099 shares of the common stock of Joslyn Mfg. and Supply Co. The stock was not then listed on any national exchange but was traded on the “over the counter” market. The 66,099 shares were valued on the return at $3,040,554 as of the date of death. Upon audit by the Commissioner of Internal Revenue, the agent proposed an increase in the date-of-death value of the shares to $3,103,697.-43. His computation included an allowance for “blockage” elements in the amount of $366,500.07. These adjustments to the valuation were accepted by the Estate, were not in issue before the Tax Court, and are not in dispute here. The audit of the return had been in progress during the administration of the estate, but the deficiency notice on completion was dated August 25, 1967, almost 3 years after the return was filed. Before the audit was completed the Estate had experienced costly litigation resulting in extraordinary expenses. To meet these expenses and to pay taxes it was necessary to sell a portion of the Joslyn stock. In accomplishing the sale the stock was first split 4 for 1. The 250,000 shares selected to be sold out of the total 264,396 shares were registered with the Securities and Exchange Commission, and arrangements were made for a “secondary offering” through a national underwriter, Hornblower & Weeks-Hemphill, Noyes, who had assembled an underwriting group. The expenses of the secondary offering totaled $366,500.07. A portion of this sum was paid by estate check while the largest item, the underwriters’ fee of $288,750, was taken directly by the underwriters from the proceeds of the offering. The payment of the entire expense was allowed by the probate court of the State of California as an expense of administration. The Estate claimed a deduction in the federal estate tax return for the total expenses; the Commissioner disallowed $359,194.71 of the claim.

Following exhaustion of the administrative proceedings the single issue raised in the Tax Court was whether the underwriting expenses were deductible as expenses of administration under section 2053 of the Code. They were disallowed on the ground that “since the expenses of the secondary offering were clearly allowed in determining the value of the Joslyn stock to be included in the estate, the same expenses are not also deductible under section 2053(a).” This appeal followed.

Appellant argues that the adjustment for blockage is not a “deduction” in the ordinary sense but a recognition of the economic fact that a large block of stock dumped upon a market not having enough buyers to purchase it at its quoted price per share will have to be reduced in price in order to be sold. Its value if required to be sold as a block is therefore less than the value per share computed in market terms multiplied by the number of shares to be sold. Recognition of this trading fact is set out in the regulations. That this is a matter of valuation and not a deduction is apparent from its allowance regardless of whether or not the stock is subsequently sold. See Commissioner v. Stewart’s Estate, 153 F.2d 17, 18 (3d Cir. 1946); 10 Mertens, Law of Federal Income Taxation ¶ 59.15, at 53 (1970). The specific amount of the adjustment of value is normally computed by referring to a variety of evidentiary indices, including, for example, the book value of the stock, its corporate earnings, the value of any outstanding preferred stock and the amount of dividends payable thereon, and the volume of trading in the stock in question. See, e. g., Stewart’s Estate, supra at 18 & n. 1; Helvering v. Maytag, 125 F.2d 55, 61 (8th Cir.), cert. denied, 316 U.S. 689, 62 S.Ct. 1280, 86 L.Ed. 1760 (1942).

Here the logical fallacy of the “double deduction” rationale is a result of the fortuitous use of hindsight. When the stock was valued in the estate tax return its value was placed at $3,040,554. No explanation was offered in the return as to just how this value was reached. Obviously no exact figures of secondary offering costs were used because they were not then known. Nor is there any requirement that the amount of “blockage” be calculated by reference to such figures rather than by a consideration of earnings (past and projected), book value, or any other criteria that accurately reflect the true value of the stock. However, during the period of audit, which was not completed until August 1967, the secondary offering was accomplished and exact costs became known; whereupon, the IRS agent used those figures in his adjustment of valuation to reach a higher, but uncontested, figure of $3,103,697.43.' Appellee’s argument therefore becomes a contention that, since appellee (not the executor) has used the cost of sale figures made available by hindsight in its adjustment of valuation, this adjustment becomes a deduction precluding any other deduction for costs and expenses of sale.

The basis for the claimed deduction is section 2053(a)(2) and the regulations which implement it. The stipulation of facts before the Tax Court stated:

“A portion of the Joslyn stock held by petitioner was selected as one of the assets which was necessary to be sold to obtain cash to pay taxes and other expenses noted above.” C.T. at 45 (¶ 15).

It also noted that:

“[t]he expenses and fees incident to the sale of Joslyn stock have been approved by the Probate Court.” Id. at 47 (¶ 22).

On the face of it, the appellant has brought itself within the plain language of the statute and the regulations unless the method of valuation is considered to embrace a “deduction” that precludes the allowance of the administrative expense as a second claim for the same deduction.

The case law supports appellant’s contention that expenses of administration allowed by the Probate Court are generally allowable as a deduction for federal estate tax purposes under section 20-2053-1 (b) (2) of the Regulations. Estate of Louis Sternberger, 18 T.C. 836 (1952), aff’d, 207 F.2d 600 (2d Cir. 1953), rev’d on other grounds, 348 U.S. 187, 75 S.Ct. 229, 99 L.Ed. 246 (1955).’ In addition, when property must be sold in order to pay debts, expenses of administration, or taxes, the expenses of such a sale are likewise deductible, including brokerage fees incurred in the sale of securities. Estate of Viola E. Bray, 46 T.C. 577 (1966), aff’d mem., 396 F.2d 452 (6th Cir. 1968).

In declining to consider the deductibility of the expense under section 2053 of the Code, the Tax Court relied upon Haggart’s Estate v. Commissioner, 182 F.2d 514 (3d Cir. 1950), which reversed the Tax Court decision reported at 13 T.C. 14 (1949), Estate of Elizabeth W. Haggart. We do not find the decision to constitute a precedent for the issue here. In Haggart, the testatrix left her residuary estate to certain trustees after her life interest in an inter-vivos trust established by her had terminated. In computing the gross estate for federal estate tax purposes the Commissioner disallowed the expenses and attorney fee entailed as a cost of settling the inter-vivos trust in the Orphans’ Court of Philadelphia County. The Tax Court approved the disallowance but the Circuit Court reversed. It explained that it would be incongruous if the corpus of the trust was to be included in the taxable estate that the expenses in determining the net estate should be disregarded. The issue, however, was not that of a claimed double deduction but a choice of alternatives. Said Judge Goodrich concerning the deduction of expenses:

“Whether they are to be allowed as expenses of administration or whether they are to be allowed in diminution of the gross estate does not matter in this case. It comes out the same either way and, therefore, we refrain from committing ourselves to a choice.” 182 F.2d at 516 (footnotes omitted).

The comment of the court below that “[h]owever, the courts clearly had in mind that a choice would have to be made — they could not be both charged against the value of the property and deducted,” is not borne out by any language of the opinion in Haggart’s Estate. The case did not pose a problem of blockage. For the same reasons we find the case of Emma Peabody Abbett, 17 T.C. 1293 (1952), relied upon by the Tax Court here, to be inapposite.

Nor do we consider this to be a double deduction problem. In many cases the actual costs of a secondary offering would not be available prior to the filing of the return. The factors then considered in determining value under blockage conditions might well be entirely different. See Ivens Sherr, 20 P-H Tax Ct. Mem. ¶ 51,218 (1951).

In its brief appellee relies upon United States v. Skelly Oil Co., 394 U.S. 678, 89 S.Ct. 1379, 22 L.Ed.2d 642 (1969), an income tax case, as authority for the proposition that the 1954 Internal Revenue Code should not be interpreted to allow “the practical equivalent of double deduction,” as proscribed in Charles Ilfield Co. v. Hernandez, 292 U.S. 62, 68, 54 S.Ct. 596, 598, 78 L.Ed. 1127 (1934). But in Skelly as in Ilfield there was in fact a double deduction. Skelly concerned rebates which the corporation was required to refund to its customers for overcharges during 6 prior years. During the prior years it had been permitted to deduct from its gross income a “depletion allowance.” In the year in which the refund was made it deducted 100 percent of the amount of the overcharges without any allowance for the fact that in prior years it was not paying a tax on 100 percent of its income. The Court sustained the Commissioner’s reduction of the percentage of the depletion allowance from the total deduction claimed upon the theory that otherwise there would have been the “practical equivalent of double deduction.” 394 U.S. at 680, 685, 54 S.Ct. 596. But in Skelly, again, there was a deduction in fact in both instances. Here there is not. The question here is not the receipt of money (income) and a deduction from it in the first instance and an attempt to deduct the gross amount in a later return. It is a question of valuation of a particular asset. Here, the tax return submitted a valuation based upon a general appraisal report. The Commissioner then reappraised using subsequently available selling expense figures instead of other alternative methods and by so doing seeks to prevent the Estate from availing itself of the deduction of properly incurred expenses which would otherwise be allowable. To adopt the taxpayer’s position does not result in the Estate taking the “practical equivalent of double deduction”; rather, to do otherwise would allow the Commissioner by his selected method of determining value to deprive the taxpayer of a legitimate statutory deduction. We do not believe this was the intent of Congress or that it is a proper interpretation of the estate tax laws.

We therefore conclude that the Tax Court erred in deciding that the allowance of a deduction for payment of taxes and administration and other expenses was impermissible as a “double deduction.” A dispute still exists, however, as to whether the particular deductions claimed are within the purview of section 2053 and, if so, what is the extent of those deductions. The Tax Court did not decide these questions. In addition, the parties have stipulated that in any event the case should be remanded to the Tax Court to consider whether expenditures for legal fees may constitute allowable deductions.

The judgment of the Tax Court is reversed and the cause remanded for further consideration in accordance with this opinion.

      . All references herein are to the Internal Revenue Code of 1954 and the Regulations thereunder, unless otherwise noted.

      . The agent’s computation was as follows:
      “Item 32, Joslyn Mfg. Co. Discount was allowed up to the distribution expenses incurred as follows:
      Fair market value at date of death determined by taking the mean between the high and low
      Less: Travel expense $ 489.52
      Bond premium for underwriter 13,679.09
      Attorneys for underwriter 6,860.35
      Reimbursement to Joslyn Mfg. 46,366.66
      Additional cost for Joslyn Mfg. 1,081.30
      Costs of Kindel & Anderson 1,327.70
      Additional costs Kindel & Anderson 399.07
      Fees for registration 7,546.38
      Underwriters fees 288,750.00
      $3,470,197.50
      366,500.07
      $3,103,697.43”
      C.T. at 48.

      . See note 6 infra.

      . Section 20.2031-2 of the Regulations provides in pertinent part:
      “(b) ... If there is a market for stocks or bonds, on a stock exchange, in an over-the-counter market, or otherwise, the mean between the highest and lowest quoted selling prices on the valuation date is, the fair market value per share or bond. . . .
      “(e) . . . If it is established that the value of any bond or share of stock determined on the basis of selling or bid and asked prices . . . does not reflect the fair market value thereof, then some reasonable modification of that basis or other relevant facts and elements of value are considered in determining the fair market value .... In certain exceptional cases, the size of the block of stock to be valued in relation to the number of shares changing hands in sales may be relevant in determining whether selling prices reflect the fair market value of the block of stock to be valued.”

      . Petitioner’s Exhibit 9-1 is a letter from the Chicago brokerage firm of Swift, Henke & Co. to the executor dated January 14, 1964, giving information as to sales of Jos-lyn stock on dates near the date of death. The letter contains this statement:
      “In our opinion, if a block of 66,000 shares of Joslyn Manufacturing & Supply Company common stock was up for sale on June 30, 1963, such a block could not have been sold except at an average price below the quoted market. We, therefore, feel a fair evaluation for this block of stock would be between $43.00 and $46.00 per share.”
      The return shows that the executor used the figure of $46 per share for a total valuation of $3,040,554. Because the executor does not challenge the agent’s recomputation, the appraisal opinion is of no legal significance except to indicate that the valuation process used by the executor for purposes of the return was apparently not based upon a computation involving the expense of a secondary offering.

      . “§ 2053. Expenses, indebtedness, and taxes.

      “(a) General rule. — Eor purposes of the tax imposed by section 2001, the value of the taxable estate shall be determined by deducting from the value of the gross estate such amounts — •
      “(2) for administration expenses,
      as are allowable by the laws of the jurisdiction, whether within or without the United States, under which the estate is being administered.”
      The applicable regulations provide:
      “(2) Expenses for selling property of the estate are deductible if the sale is necessary in order to pay the decedent’s debts, expenses of administration, or taxes, to preserve the estate, or to effect distribution. The phrase ‘expenses for selling property’ includes brokerage fees and other expenses attending the sale, such as the fees of an auctioneer if it is reasonably necessary to employ one.” 26 C.F.R. § 20.2053-3 (d)(2).

      . Section 20.2053-1 (b) (2) of the Regulations provides:
      “The decision of a local court as to the amount and allowability under local law of a claim or administration expense will ordinarily be accepted if the court passes upon the facts upon which such deductibility depends.”
      Appellee does not challenge compliance with this regulation but properly points out that it is not conclusive. Pitner v. United States, 388 F.2d 651, 659 (5th Cir. 1967).


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    Mancel Paul QUINN, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee.
    No. 73-3568.
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 11, 1974.
    Mancel Paul Quinn, pro se.
    John W. Stokes, U. S. Atty., E. Ray Taylor, Asst. U. S. Atty., Atlanta, Ga., for respondent-appellee.
    Before BELL, SIMPSON and MORGAN, Circuit Judges.

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

   PER CURIAM:

This appeal is from the denial of relief to a federal prisoner who contended in a motion filed pursuant to 28 U.S.C. A. § 2255 that he was denied his right to appeal from his 1969 federal conviction. We affirm.

The facts developed on an evidentiary hearing in the district court and from the records in this court show without dispute that a notice of appeal was filed on his behalf; and that the clerk of the district court advised this court in 1969 that appellant had escaped from custody. The government then moved to dismiss the appeal. Court-appointed counsel for appellant thereupon advised that his information was that appellant had escaped and that counsel did not wish to pursue the appeal. The appeal was dismissed by this court on November 12, 1969.' The motion complaining of the denial of an appeal was filed in the district court on February 16,1973..

The district court was. of the view that the question presented was for this court rather than the district court and we agree. Cf. Van Blaricom v. Forscht, 5 Cir., 1974, 490 F.2d 461; United States v. Brown, 5 Cir., 1972, 456 F.2d 1112.

Affirmed.


text:
    UNITED STATES of America, Plaintiff Appellee, v. Harman Victor USHER, Defendant-Appellant.
    No. 73-4022
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 9, 1974.
    Rehearing Denied Oct. 10, 1974.
    Edward C. Stone, Atlanta, Ga. (Court-appointed), for defendant-appellant.
    William Schloth, U. S. A tty., Macon, Ga., for plaintiff-appellee.
    Before GEWIN, GODBOLD and CLARK, Circuit Judges.

       Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of N. Y. 431 F.2d 409, Part I (5th Cir. 1970).

   PER CURIAM:

Pursuant to this court’s remand under United States v. Dover, 489 F.2d 688 (5th Cir. 1974), the district judge who sentenced the defendant has supplemented the record in this cause with the statement “At the time I pronounced sentence in this case I determined and I now determine that the Defendant would not derive benefit from treatment under 18 U.S.C. § 5010(b) (The Youth Correction Act).” This statement complies with the district court’s duty under that act. Dorszynski v. United States, -U.S.-, 94 S.Ct. 3042, 41 L.Ed.2d -(1974).

Since Usher has never raised with the district court any question as to the propriety of his waiver of the right to be represented by counsel in that forum, we refuse to consider his contention to that effect on this appeal.

The judgment and commitment entered March 14, 1973 and the subsequent actions of the district court in this cause are

Affirmed.


text:
    Henry W. KNIGHT, Plaintiff-Appellant, v. J. D. HENDERSON, Warden, Defendant-Appellee.
    No. 73-1963
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 11, 1974.
    Henry W. Knight, pro se.
    John W. Stokes, Jr., U. S. Atty., Anthony M. Arnold, Asst. U. S. Atty., Atlanta, Ga., for defendant-appellee.
    Before BELL, SIMPSON and MORGAN, Circuit Judges.

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

   PER CURIAM:

This mandamus styled proceeding against the warden of the Atlanta Federal Penitentiary consists of three letters from appellant to the district court. Cf. McEachern v. Henderson, Warden, 5 Cir., 1974, 485 F.2d 694, on the problem posed in substituting letters for pleadings. The court ordered the letters filed in forma pauperis as a petition for mandamus and dismissed for failure to exhaust prison remedies. See Jones v. Carlson, 5 Cir., 1974, 495 F.2d 209; Thompson v. Federal Prison Industries, 5 Cir., 1974, 492 F.2d 1082, on the requirement of exhaustion in such cases.

Correspondence between appellant and the court continued and a subsequent order was issued also denying relief. Appellant then filed a formal petition for rehearing in which he interpreted his previous letters to some extent and requested the court to direct the clerk to file a notice of appeal to this court. The court at that point issued a rule nisi to the warden who, in turn, responded with respect to the claims asserted variously by appellant.

The district court then denied relief as to these same claims: (1) that prison officials were responsible for the loss of a $5.00 money order mailed by appellant’s mother to him, (2) that prison officials illegally interfered with appellant’s mail, and (3) that he was entitled to be transferred to another penitentiary.

Given the in extenso handling in the district court, we treat the response, including the supporting affidavit and documents, filed by the warden as a substitute for exhausting the prison administrative remedy which is ordinarily required. Jones v. Henderson, supra; Thompson v. Prison Industries, supra. Finding the claims assigned to be without merit, we can thus affirm rather than remanding with direction that the cause be dismissed for failure to exhaust prison remedies.

Affirmed.


text:
    In the Matter of NAVIERA AZTA, S.A., and Caribbean Trading & Marine Co., Bankrupts. JAN C. UITERWYK CO., INC., Appellant, v. Joseph H. BROCK, Trustee, Appellee.
    No. 74—1773
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 5, 1974.
    John L. Britton, Miami, Fla., for appellant.

      John H. Gunn, C. Peter Buhler, Miami, Fla., for trustee.
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, Circuit Judges.

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

   PER CURIAM:

Appellant Jan C. Uiterwyk Co., Inc., was directed by the referee in bankruptcy to show cause why it should not turn over accounts receivable and a cash fund allegedly in its possession as general agent for the bankrupt, Naviera Azta, S.A. Uiterwyk filed a petition to quash the order in which it objected to the summary jurisdiction of the court. After a hearing the referee upheld summary jurisdiction, and the district judge affirmed that ruling and denied Uiter-wyk’s petition for review. We affirm.

Generally speaking, the bankruptcy court, either in the person of the referee or the district judge, may adjudicate summarily all rights and claims pertaining to property in the actual or, constructive possession of the court. Hebert v. Crawford, 1913, 228 U.S. 204, 33 S.Ct. 484, 57 L.Ed. 800; Atlanta Flooring & Insulation Co. v. Russell, 5 Cir. 1945, 146 F.2d 884, cert. denied, 325 U.S. 862, 65 S.Ct. 1202, 89 L.Ed. 1983; Autin v. Piske, 5 Cir. 1928, 24 F.2d 626, cert. denied, 277 U.S. 601, 48 S.Ct. 562, 72 L.Ed. 1009. If there is a controversy involving property in the actual or constructive possession of a third person asserting a bona fide adverse claim, however, the bankruptcy court may not assert summary jurisdiction without the consent of the third person. A plenary suit must be brought in the court of appropriate jurisdiction. Harrison v. Chamberlin, 1926, 271 U.S. 191, 46 S.Ct. 467, 70 L.Ed. 897; In re Brokol Manufacturing Co., 3 Cir. 1955, 221 F.2d 640. See generally 1 Collier Bankruptcy Manual, ¶ 23.02 [2] (2d ed. 1973). Upon filing of the petition in bankruptcy, all the property of the alleged bankrupt passes at once into the custody of the court of bankruptcy and becomes subject to its summary jurisdiction. Thompson v. Magnolia Petroleum Co., 1940, 309 U.S. 478, 60 S.Ct. 628, 84 L.Ed. 876; Zamore v. Goldblatt, 2 Cir. 1952, 194 F.2d 933, cert. denied, 343 U.S. 979, 72 S.Ct. 1077, 96 L.Ed. 1370; Kapelus v. Joint Venture, 9 Cir. 1967, 377 F.2d 815. Similarly, property in the hands of the bankrupt’s agent passes into the constructive possession of the bankruptcy court and is subject to summary jurisdiction. May v. Henderson, 1925, 268 U.S. 111, 45 S.Ct. 456, 69 L.Ed. 870; Kyle v. Stewart, 5 Cir. 1966, 360 F.2d 753; 1 Collier Bankruptcy Manual, ¶ 23.03 (2d ed. 1973).

The property sought here consists of accounts receivable and the proceeds of collection of such accounts arising from carriage of goods performed by the bankrupt. Uiterwyk holds this property by virtue of its duties as a general agent for the bankrupt, which included keeping of the -books regarding these accounts receivable and receiving payments. The fact that Uiterwyk was given the power to deduct from these accounts sums due itself for performance of its agent’s duties does not change the, fact that it had possession of the accounts and collections solely as agent for the bankrupt. Since it possessed the property in its role as agent, holding for the benefit of the bankrupt, its possession constructively passed to the bankruptcy court upon the filing of the petition in bankruptcy. The question of Uiterwyk’s claim against the bankrupt for services rendered is a wholly separate matter. It may presumably be settled along with other claims in the bankruptcy proceeding itself. We hold only that the accounts in Uiterwyk’s possession in its role as general agent for the bankrupt are constructively in the possession of the bankruptcy court. Therefore the referee was correct in holding that summary jurisdiction was appropriate.

Affirmed.


text:
    EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. The TIMES-PICAYUNE PUBLISHING CORPORATION, Defendant-Appellee.
    No. 73-3995.
    United States Court of Appeals, Fifth Circuit.
    Sept. 9, 1974.
    Rehearing Denied Oct. 7, 1974.
    Wm. A. Carey, Gen. Counsel, E. E. O. C., Isabelle R. Cappello, Acting Associate Gen. Counsel, Margaret C. Poles, Atty., Washington, D. C., Peter Sanchez-Navarro, Jr., Acting Reg. Atty., E. E. O. C., Mary J. Mullarkey, Asst. Reg. Atty., Walter W. Garnsey, Jr., Trial Atty., Denver, Colo., Charles White, Dist. Counsel, E. E. O. C., New Orleans, La., Beatrice Rosenberg, E. E. O. C., Washington, D. C., for plaintiff-appellant.
    Samuel Lang, New Orleans, La., for defendant-appellee.
    Before MOORE, AINSWORTH and RONEY, Circuit Judges.

       Hon. Leonard P. Moore, Senior Circuit Judge of the Second Circuit, sitting by designation.

   PER CURIAM:

Although we have been asked to render considerable advice as to what the EEOC must have done before it can prevail in this lawsuit, we regard this as a pleading case only, controlled by this Court’s recent decision in EEOC v. Standard Forge & Axle Co., 496 F.2d 1392 (5th Cir. 1974).

By following Standard Forge, we think the original complaint filed in this case by the EEOC, generally alleging that “all conditions precedent to the institution of the lawsuit have been fulfilled,” was sufficient to withstand a” motion to dismiss for lack of jurisdiction of the subject matter under Federal Rule of Civil Procedure 12(b)(1), and sufficiently complied with Rules 8(a) (1) and 9(c).

We need not concern ourselves whether the more limited allegations in the second complaint omit some condition precedent that may ultimately control the outcome of the case, inasmuch as this amended complaint was filed in an effort to meet the District Court’s erroneous view of the law.

We therefore vacate the orders and judgment of the District Court granting defendant’s motions to dismiss pursuant to Rule 12(b)(1), with directions to permit plaintiff to file a complaint alleging generally that all conditions precedent have been performed or have occurred, so that the litigation may proceed from that point, in accordance with our decision in Standard Forge.

The appellee shall bear the cost of this appeal.

Vacated and remanded with directions.


text:
    In the Matter of COUNTRY LAD FOODS, INC., Bankrupt. Marion B. STOKES, Trustee, Appellant, v. FIRST GEORGIA BANK, Appellee.
    No. 74-2374
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 6, 1974.
    Edwin G. Russell, Jr., Atlanta, Ga., for appellant.
    Ezra H. Cohen, Mack O. Butler, Jr., Atlanta, Ga., for appellee.
    Before COLEMAN, DYER and GEE, Circuit Judges.

       Rule 18, 9th Cir.; See Isbell Enterprises, Inc., v. Citizens Casualty Co. of N. Y. et al., 5th Cir. 1970, 431 F.2d 409, Part I.

   PER CURIAM:

This is an appeal from the judgment of the district court affirming the holding of the Bankruptcy Court that the First Georgia Bank’s security interest was not voidable by the Trustee under section 70(e) of the Bankruptcy Act. We affirm.

The First Georgia Bank had a perfected security interest in the Bankrupt’s personal property and trade fixtures. The Bankruptcy Court authorized the Trustee to sell the personal property and fixtures free and clear, and all liens were to attach to the proceeds. It was further ordered that each party asserting a claim of right, title or interest in the property was to file a complete statement of his claim, and that each claim not thus filed might be considered by the court to have been waived. After allowance of the prior secured claims, $44,312.79 remained in the estate, all of which was claimed by the Bank.

Bankrupt’s lessor had filed an unsecured proof of claim in the amount of $17,954.69 for unpaid rent and ad valo-rem tax, but it did not make any claim to the property of the Bankrupt and did not respond to the court’s order requiring all claims to the property to be filed. The Trustee, nonetheless, concluded that since there was no unequivocal waiver under Ga.Code Ann. § 109A-9-313C3), the Trustee could invoke the landlord’s rights through section 70(e) of the Bankruptcy Act, 11 U.S.C.A. § 110(e), to render the Bank’s security interest void.

The Bankruptcy Court held that the Bank’s security interest in the trade fixtures of the Bankrupt was not voidable under section 70(e) of the Act, finding inter alia that the lessor had not asserted a claim to the fixtures. The district court affirmed.

We deem it unnecessary to construe the provisions of the lease, or to construe the Georgia statute relied on by the Trustee, supra, or Ga.Code Ann. § 61-110, relied on by the court below. We are content to rest our decision on the failure of the landlord to assert any claim it may have had in the fixtures after it had been placed on notice to do so by the Bankruptcy Court. Such failure compels the conclusion that the landlord waived its claim, and having done so the Trustee cannot assert it.

Affirmed.

      . The statute provides :
      A security interest which attaches to goods after, they become fixtures is valid against all persons subsequently acquiring interests in the real estate except as stated in subsection (4) but is invalid against any person with an interest in the real estate at the time the security interest attaches to the goods who has not in writing consented to the security interest or disclaimed an interest in the goods as fixtures.

      . Ga.Code.Ann. § 61-110, provides :
      A tenant during the term or a continuation thereof, or while he is in possession under the landlord, may remove trade fixtures erected by him. After the term and possession are ended, they are regarded as abandoned to the use of the landlord and become the latter’s property.


text:
    Eugene Green GRIGSBY, Petitioner-Appellant, v. W. J. ESTELLE, Director, Texas Department of Corrections, Respondent-Appellee.
    No. 74-1626
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 9, 1974.

      Eugene Green Grigsby, pro se.
    Robert Darden, Jack Boone, Asst. At-tys. Gen., Austin, Tex., for respondent-appellee.
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, 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.

   PER CURIAM:

Appellant asserts his state murder conviction failed to conform to the standards of due process imposed by the Fourteenth Amendment because he was denied effective assistance of counsel. We express no opinion on the merits of his assertions, but remand for an evi-dentiary hearing.

In both the Court below and in a state habeas corpus proceeding, Grigsby particularized his complaints, (i) failure to subpoena several character witnesses requested by Grigsby, (ii) failure to interview those character witnesses, (iii) failure to cross-examine certain prosecution witnesses about alleged conflicts between their trial testimony and statements made to police at the scene, (iv) failure to object to the admission into evidence of the alleged murder weapon (on grounds no fingerprints or bloodstains were found on it), (v) failure to cross-examine a police officer called by the prosecution who allegedly was not the same officer as appeared at the scene, (vi) failure to object to the admission of, or rebut, an alleged confession by Grigsby, (vii) failure to present an adequate defense, (viii) failure to properly perfect the defendant’s appeal, and (ix) failure to properly handle the possibility of defendant’s testifying in his own behalf.

The District Court relied on the findings of the state court. The state court in turn relied on the affidavits of Grigs-by’s trial counsel and an attorney who generally vouched for counsel’s ability. Assuming that this procedure complies with constitutional strictures, an examination of this record shows only appellant’s contentions (viii) and (ix), concerning his own trial testimony and circumstances surrounding the failure to perfect a direct appeal were responded to by the affidavits. It does not appear that a transcript of the trial was available for consideration. Thus, the District Court was not entitled to rely on the state court’s findings with respect to the other contentions which, at least if all true, might warrant the relief sought. In the face of detailed factual allegations the record was inadequate, 28 U.S. C.A. § 2254(d)(3) and (6), so we vacate and remand for an appropriate eviden-tiary hearing.

Vacated and remanded.

      . In the District Court, Grigsby contended the following defenses should have been considered, (i) self-defense, (ii) intoxication, (iii) other reasonable explanations of the circumstantial evidence, and (iv) impeachment of key (but allegedly perjured) prosecution testimony.


text:
    Robert E. GOFF, Jr., Plaintiff-Appellant, v. Clarence JONES et al., Defendants-Appellees.
    No. 74-1755.
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 12, 1974.

      Robert E. Goff, Jr., pro se.
    Henry Wade, Grim. Dist. Atty., John B. Tolle, Asst. Dist. Atty., Dallas, Tex., for defendants-appellees.
    Before WISDOM, GOLDBERG and GEE, Circuit Judges.

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

   PER CURIAM:

Plaintiff Robert E. Goff, Jr., a Texas state prisoner presently incarcerated in the Dallas County jail, brought this pro se action under 42 U.S.C. § 1983, alleging that the Sheriff and two named deputies failed and refused to provide him with access to “legal research materials such as the 1974 Texas Criminal Code in order to adequately prepare himself” for a probation revocation hearing, thus depriving him of “access to the courts in a manner of reasonable preparedness to defend himself.” Plaintiff further alleged that, because he was not adequately prepared, the probation hearing scheduled for February 15, 1974, was postponed. He sought a judgment from the United States District Court ordering that research materials be made available and that written communications be allowed between prisoners to aid in preparation of legal papers; he also sought compensatory and punitive damages. The record reveals no motions or response of any kind on behalf of the defendants.

The district court, adopting the findings and conclusions of the magistrate, dismissed plaintiff’s complaint “for failure to state a claim for which relief can be granted in light of the provision by the state of counsel at state expense to represent the Plaintiff in connection with his probation revocation hearing.” The court apparently gleaned the information that the state had provided counsel from a complaint filed by plaintiff in a separate habeas corpus proceeding (N.D.Tex., Dallas Division, CA 3-74-194D). In that complaint plaintiff alleged :

19. On February 15, 1974, Petitioner was suddenly taken to court where he was told a hearing for revocation was being held. Upon arriving at court he was met by a probation officer who stated that probation was going to be revoked and Petitioner was going to Texas Department of Corrections for three (3) years.
20. At this time Petitioner asked if counsel would be appointed and a Mr. Sucherman was introduced. He stated that Petitioner would have to sign “some papers” before the hearing could begin. It was discovered that these “papers” constituted a waiver of right to appeal .... Not wanting to waiver his right of appeal Petitioner returned to jail.

Plaintiff was not afforded any opportunity to expand or amend his complaint in order to respond to the unexpected consideration of the habeas petition as evidence in this case.

It is, of course, firmly established that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 1957, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80; see Cook & Nichol, Inc. v. Plimsoll Club, 5 Cir. 1971, 451 F.2d 505, 506, and cases cited therein. Courts must adhere to this rule with particular care in considering the allegations of a pro se complaint, which are held to “less stringent standards than formal pleadings drafted by lawyers.” Haines v. Kerner, 1972, 404 U.S. 519, 520, 92 S.Ct. 594, 596, 30 L.Ed.2d 652.

Although probation revocation is not a stage of a criminal prosecution, it does result in a loss of liberty; consequently, a probationer must be accorded due process of law. Gagnon v. Scarpelli, 1973, 411 U.S. 778, 782, 93 S.Ct. 1756, 36 L.Ed.2d 656. And the Constitution requires that prisoners be granted “reasonable access to the courts,” including “the tools necessary to receive adequate hearing in the courts.” Gilmore v. Lynch, N.D.Cal.1970, 319 F.Supp. 105, 109 (three-judge court), aff’d, 1971, 401 U.S. 906, 91 S.Ct. 864, 27 L.Ed.2d 804. By his pleadings in the case at bar, plaintiff alleges, in effect, that the Sheriff and his deputies denied him due process and reasonable access to the courts by failing to provide him with legal materials with which to prepare his defense. Clearly, under some sets of facts plaintiff would be entitled to relief.

Possibly the presence of a lawyer at the probation revocation hearing is sufficient to defeat plaintiff’s claim. However, given the nature of the legal assistance provided, as it appears from the allegations of plaintiff’s habeas complaint, it is at least questionable whether counsel was an adequate substitute for legal materials as “the tools necessary” to prepare his case. Moreover, we are particularly reluctant to uphold a dismissal for failure to state a claim when it is based on material which is not within the public knowledge and which has been neither pleaded nor offered in evidence. See Martin v. Johnson, 6 Cir. 1973, 471 F.2d 704.

We therefore reverse the judgment below and remand for further proceedings. We intimate no view as to what will be the final outcome or even as to how far the case will proceed. All we have determined is that the complaint states a claim and cannot be disposed of on the pleadings.

Reversed and remanded.


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Jerry BUCHANAN and Frank Anthony Fiorini, a/k/a Frank Sturgis, Defendants-Appellants.
    No. 73-3951
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 12, 1974.
    Aram P. Goshgarian, Miami Beach, Fla. (Court-appointed), for Buchanan.
    Ellis S. Rubin, Miami Beach, Fla. (Court-appointed), for Fiorini.
    Robert W. Rust, U. S. Atty., William R. Northcutt, Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee.
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, Circuit Judges.

       Rule 18, 5th Cir.; see Isbell Enterprises, Inc., v. Citizens Casualty Co. of N. Y. et al., 5th Cir. 1970, 431 F.2d 409, Part I.

   PER CURIAM:

In this appeal from their convictions for transportation of stolen motor vehicles in interstate commerce, 18 U.S.C. §§ 2312, 2313, § 2, appellants allege that the evidence against them was insufficient and that their Sixth Amendment rights to confrontation of witnesses against them were denied. We find these contentions to be without merit and affirm the convictions.

Appellants allege they were training members of the International Anti-Communist Brigade for an invasion of Cuba. The government’s theory was that this was just a guise to hide a conspiracy to transport stolen motor vehicles into Mexico. Taking the view most favorable to the government, a reasonably minded jury could accept the relevant evidence as sufficient to support appellants’ guilt beyond a reasonable doubt. United States v. Warner, 5 Cir., 1971, 441 F.2d 821.

Appellants’ other contentions deal with the cross-examination of the final witness at trial, Agent Gibbons of the FBI. Gibbons’ direct testimony dealt exclusively with another defendant, Gonzales, except for a reference to appellant Sturgis as the leader of the brigade. On cross-examination, appellant’s counsel sought to elicite testimony about a statement given to Gibbons by Sturgis, This question was ruled beyond the scope of direct examination.

The fact that Sturgis was the leader of the brigade had already been established by other witnesses Appellant’s contentions that he was denied the right to confrontation are without merit. He could have called the agent as his own witness, or taken the stand himself on this point. Any prejudice that might have resulted was harmless. See United States v. Resnick, 5 Cir., 1974, 488 F.2d 1165 at 1168 quoting from Kotteakos v. United States, 1946, 328 U.S. 750, 66 S.Ct. 1239, 10 L.Ed. 1557.

Affirmed.


author: ALFRED T. GOODWIN, Circuit Judge:

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. NELLO PISTORESI & SON, INC. (S & D Trucking Co., Inc.), Respondent.
    No. 73-2253.
    United States Court of Appeals, Ninth Circuit.
    July 1, 1974.

      Elliott Moore, Acting Asst. Gen. Counsel, NLRB, Washington, D. C., Charles M. Henderson, Director, Region 19, NLRB, Seattle, Wash., for petitioner.
    Wesley M. Wilson, Yakima, Wash., for respondent.
    Before HUFSTEDLER and GOODWIN, Circuit Judges, and SKOPIL District Judge.

       The Honorable Otto R. Skopil, United States District Judge for the District of Oregon.

   OPINION

ALFRED T. GOODWIN, Circuit Judge:

The National Labor Relations Board seeks enforcement of its order against Nello Pistoresi and Son, Inc., reported at 203 N.L.R.B. No. 108, 83 L.R.R.M. 1212 (1973).

Reversing the administrative-law judge, a divided panel of the Board held that, by unilaterally discontinuing its Christmas bonus in 1971, Pistoresi violated sections 8(a)(5) and 8(a)(1) of the National Labor Relations Act, 29 U.S.C. § 158(a)(5) and (1). Because the Board’s finding that the bonuses were wages, hours, or other terms and conditions of employment is not supported by substantial evidence, enforcement of its order is denied.

An employer violates sections 8(a)(5) and 8(a)(1) of the Act when he unilaterally alters “wages, hours, and other terms and conditions of employment,” National Labor Relations Act § 8(d), 29 U.S.C. § 158(d), without first consulting and negotiating with the bargaining representative of his employees. NLRB v. Katz, 369 U.S. 736, 742-743, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962); American Smelting & Refining Co. v. NLRB, 406 F.2d 552 (9th Cir.), cert. denied, 395 U.S. 935, 89 S.Ct. 1998, 23 L.Ed.2d 450 (1969). Bonuses such as the one here at issue are considered wages if they are of such a fixed nature and have been paid over a sufficient length of time to have become a reasonable expectation of the employees and, therefore, part of their anticipated remuneration. Century Electric Motor Co. v. NLRB, 447 F.2d 10, 14 (8th Cir. 1971); NLRB v. Harrah’s Club, 403 F.2d 865, 874 (9th Cir. 1968); Beacon-Journal Publishing Co. v. NLRB, 401 F.2d 366, 367 (6th Cir. 1968); NLRB v. Wonder State Mfg. Co., 344 F.2d 210, 213 (8th Cir. 1965); NLRB v. Niles-Bement-Pond Co., 199 F.2d 713, 714 (2nd Cir. 1952).

Pistoresi has been operating a livestock-hauling business since 1958, employing approximately 25 employees on a fluctuating basis. Pistoresi has paid Christmas bonuses only twice: in 1969, and in 1970. The amounts of these bonuses were determined entirely by Pisto-resi’s operations manager and ranged from $25.00 to $150.00. The manager testified that he fixed the bonuses by considering each employee’s customer relations and performance as a representative of the company, his diligence, and, to some extent, his seniority. There was no evidence that the amount of a bonus was in any way tied to the size of an employee’s salary.

In 1971 Pistoresi failed to pay any bonus because it was negotiating with the union and had made an offer of a 5% percent wage increase. It reasonably believed that payment also of a bonus might have been a violation of the wage-price controls then in effect. Moreover, Pistoresi was somewhat dissatisfied with general employee performance during the year.

The administrative-law judge held that since Christmas bonuses had been paid for only two years and followed no formula they had not become part of the compensation structure so as to require bargaining over their discontinuance. Therefore, he recommended dismissing the complaint. However, a panel of the Board, over the dissent of Member Kennedy, held that payment over a two-year period was sufficient to make the matter bargainable. The Board ordered Pistoresi to cease and desist from refusing to bargain with the union by unilaterally changing terms and conditions of employment and to make the employees whole for monetary losses suffered by reason of the termination of the 1971 bonuses.

This Court is bound to accept the Board’s findings unless they are not supported by substantial evidence in the record taken as a whole. Universal Camera Corp. v. NLRB, 340 U.S. 474, 477-491, 71 S.Ct. 456, 95 L.Ed. 456 (1951). Here, however, because of the short history and indefinite nature of the bonuses, we conclude that the Board’s finding that the bonuses constituted wages, the discontinuance of which must be bargained with the union, is not supported by substantial evidence. See NLRB v. Wonder State Mfg. Co., 344 F.2d at 212-214 in which the Court of Appeals for the Eighth Circuit denied enforcement of a Board order under similar circumstances.

NLRB v. Harrah’s Club, supra, in which we held that there was substantial evidence to support the Board’s finding that the unilateral discontinuance of “tokes” or tips paid to stage technicians constituted an unfair labor practice, is clearly distinguishable on its facts from this case. In that case there was evidence that tokes had been customarily received by stage technicians in amounts in excess of $300.00 per year, that toking was general practice in the entertainment business, and that the termination of tokes was in retribution for union activities.

NLRB v. Progress Bulletin Publishing Co., 443 F.2d 1369 (9th Cir. 1971), is similarly distinguishable. There, Christmas bonuses had been paid regularly for 20 of the previous 21 years, and bonus amounts varied with the seniority of the employees. See 182 N.L.R.B. 904, 905-07 (1970).

Enforcement of the Board’s order is denied.


author: PER CURIAM.

text:
    Richard HAMAN and Beverly Haman, Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Appellee.
    No. 73-1083.
    United States Court of Appeals, Ninth Circuit.
    May 28, 1974.
    As Amended June 17, 1974.
    Rehearing Denied Aug. 15, 1974.

      Richard & Beverly Haman in pro per.
    Richard W. Perkins (argued), Scott P. Crampton, Asst. Atty. Gen., Tax Div., U. S. Dept, of Justice, Washington, D. C., Lee H. Henkel, Jr., Chief Counsel, I. R.S., Washington, D. C., for appellee.
    Before ELY and WRIGHT, Circuit Judges, and McGOVERN, District Judge.

       Honorable Walter T. McGovern, United States District Judge, Seattle, Washington, sitting by designation.

   PER CURIAM.

OPINION

The taxpayers, husband and wife, filed joint federal income tax returns for the taxable years 1966 and 1967. The Commissioner determined deficiencies in the taxes, $2,646.32 for 1966 and $3,930.75 for 1967. Additionally, he added penalties in the amounts of $132.-31 and $196.53 under the provisions of section 6653(a) of the Internal Revenue Code of 1954. The Tax Court, in an opinion reported at P-H Tax Ct. Mem. If 72,118, upheld the Commissioner’s determination as to some items and increased allowable amounts as to certain other items. The taxpayers appeal.

The taxpayers first argue that the Commissioner’s notice of deficiency constituted an infringement of their constitutional rights. They had refused to produce their books and records for examination by representatives of the Internal Revenue Service. This argument is without merit. The Commissioner was under no obligation to issue an administrative summons or to initiate District Court proceedings to enforce such a summons. His decision as to whether to so proceed is discretionary. See generally, Donaldson v. United States, 400 U.S. 517, 523-525, 91 S.Ct. 534, 27 L.Ed.2d 580 (1971).

There is nothing in the record to support the taxpayers’ contention that the Commissioner’s issuance of the notice of deficiency was arbitrary or capricious.

The taxpayers also seem to argue that the burden rested upon the Commissioner to prove the deficiencies claimed in his notice. If the burden rested upon them, so they argue, they would be required to produce books and records which might be self-incriminating. It has long been held that it is presumed that the Commissioner’s determinations are correct and that since deductions are allowed as a matter of legislative grace, the burden is upon taxpayers to establish every element of their claimed deductions. Welch v. Helvering, 290 U.S. 111, 54 S.Ct. 8, 78 L.Ed. 212 (1933); Interstate Transit Lines v. Commissioner, 319 U.S. 590, 63 S.Ct. 1279, 87 L.Ed. 1607 (1943); rehearing denied, 320 U.S. 809 (1943); DeMink v. United States, 448 F.2d 867 (9th Cir. 1971).

As to the factual issues, the taxpayers do not attack the decision of the Tax Court. And, in any event, our scope of review in a case such as this is limited. We are not empowered to set aside the Tax Court’s factual findings unless they are without support of substantial evidence or, upon the basis of the whole record, we are left with the firm conviction that justice has miscarried.

In one respect, we do think that both the Commissioner and the Tax Court were mistaken. This has to do with the assessment of the penalties under section 6653(a). That section allows the assessment of such penalties only when a taxpayer’s underpayment “is due to negligence or intentional disregard of rules and regulations . ” Our review of the whole record, including the taxpayers’ briefs (prepared by themselves), and the attitude of the husband taxpayer, who argued before us, convinces us that while the taxpayers were misguided and unsophisticated in the realm of tax law, they acted in good faith, without negligence and without “intentional disregard” of applicable rules and regulations. Accordingly, the judgment of the Tax Court is modified by reducing the judgment for the Commissioner to the extent of the amount of the penalties, 5% of the amounts of income taxes found by the Tax Court to be owed by the taxpayers for the years 1966 and 1967. As so modified, the judgment of the Tax Court is

Affirmed.

      . After carefully reviewing all of the evidence, the Tax Court allowed to the taxpayers as 1966 business deductions, $3,464.68 more than the amount allowed by the Commissioner. Of the $11,261.17 which the taxpayers claimed as business deductions for 1967, the Tax Court allowed $7,993.69, $5,-272.52 more than the Commissioner’s notice of deficiency.


text:
    In re Evelyn WILLIAMS, Appellant.
    No. 1081, Docket 74-1227.
    United States Court of Appeals, Second Circuit.
    Argued June 11, 1974.
    Decided July 29, 1974.

      LeRoy D. Clark, New York City (Evelyn Williams, pro se, James Larson, Arthur Kinoy, National Lawyers Guild, O. T. Wells, National Bar Ass’n, William M. Kunstler, Center for Constitutional Rights, Haywood Burns, National Conference of Black Lawyers, New York City, on the brief), for appellant.
    John D. Gordan, III, Asst. U. S. Atty., New York City (Paul J. Curran, U. S. Atty., New York City, on the brief), for appellee U. S.
    Before HAYS and MANSFIELD, Circuit Judges, and BAUMAN, District Judge.

       Honorable Arnold Bauman of the United States District Court for the Southern District of New York, sitting by designation.

   PER CURIAM:

Appellant, Evelyn Williams, an attorney, was cited for contempt of court by the District Court for the Southern District of New York for her conduct while acting as defense counsel to Joanne Chesimard at the first of two trials of Chesimard and Freddie Hilton for bank robbery. In his certificate of contempt dated December 5, 1973, Judge Gagliardi adjudged Williams guilty of criminal contempt under Rule 42(a) of the Federal Rules of Criminal Procedure and certified that the following events took place in his presence:

“On December 4, 1973, shortly before the conclusion of the Court’s afternoon session, the defendant Joanne Chesimard was excluded from the courtroom following a series of outbursts on her part. After the defendant Chesimard was escorted from the courtroom, Ms. Williams engaged in a colloquy with the court concerning the exclusion of the defendant and the court’s ruling concerning the form in which objections were to be made in the presence of the jury. During the course of this colloquy Ms. Williams not only took formal exception to the court’s ruling but announced that she would not submit to the direction of the court in this regard. Towards the conclusion of this exchange Ms. Williams, although insisting that she continued to represent the defendant Chesimard, stated that she would not participate further in the proceedings. Having made this statement and despite the explicit direction by the court to remain in the courtroom, seated at the counsel table and a warning by the court as to consequences of her contumacious conduct, Ms. Williams left the courtroom. At the time Ms. Williams absented herself, court was in session and the jury selection was in progress. Shortly after Ms. Williams left the courtroom, the trial was adjourned until 9:30 A. M. the following morning.
“Court resumed on the morning of December 5, 1973; Ms. Williams did not appear. Ms. Williams was contacted during the course of the morning and directed to be in court at 2 P.M. During the course of the proceeding, defendant Chesimard was again removed from the courtroom following a repetition of her outbursts of the previous afternoon. After the removal of defendant Chesimard, Ms. Williams again engaged in a colloquy with the court. Ms. Williams told the court that she would not listen to any statement made by the court and despite repeated direction to remain at the counsel table she made her way to the rear door in an attempt to leave the courtroom. At this juncture, the marshals, acting at the court’s direction, locked the exits to the courtroom. The colloquy continued with Ms. Williams standing at the rear door of the courtroom. The court directed Ms. Williams to return to the counsel table; she refused. The court warned Ms. Williams that she would be cited for contempt if she persisted in her conduct; she indicated that she was aware of the possible consequences of her actions. The court offered Ms. Williams the opportunity to purge herself of her contempt; she declined. The court asked Ms. Williams if she had anything to say in defense of her contumacious conduct; she stated that she did not consider her conduct contumacious. At this point, the court held Ms. Williams in summary contempt for failure to obey the legal order and directive of the court.”

On February 5, 1974, the court issued a judgment and commitment effective nunc pro tunc January 3, 1974, in which it restated its finding that Williams was guilty of criminal contempt, and sentenced her to ten days imprisonment. Williams appeals.

Williams does not contend that her behavior at the trial was not disruptive and contumacious. Rather, she claims that Judge Gagliardi was personally en-broiled in the discourse resulting in the contempt, and that he thus erred in denying her application to refer the contempt proceeding to another judge. See Offutt v. United States, 348 U.S. 11, 18, 75 S.Ct. 11, 99 L.Ed. 11 (1954); Mayberry v. Pennsylvania, 400 U.S. 455, 91 S.Ct. 499, 27 L.Ed.2d 532 (1971). However, on reading the record it is clear to us that Judge Gagliardi was not personally embroiled in any dispute with Williams. He exhibited patience and restraint in the face of stratagems calculated to bring the trial to a halt. Judge Gagliardi used the district court’s summary contempt power only as a last resort to prevent Williams from in effect terminating the trial. His action was a perfectly appropriate response to an immediate challenge to the court’s dignity and authority.

Williams claims that Judge Gagliardi was vilified at the trial to such an extent that he could not exercise independent judgment of the contempt. The record shows that the trial judge was indeed subjected to verbal abuse by Chesi-mard who called him “corrupt,” “bigoted,” “a racist” and “an agent for the CIA.” But the record shows that he did not attribute Chesimard’s remarks to Williams.

None of the other points advanced by the appellant has any merit.

Affirmed.

      . Upon oral argument Williams’s counsel contended for the first time that Judge Gagliardi’s Certificate of Contempt, -which describes the background and conduct of Williams at the trial and the conduct found to be contemptuous, had not singled out the contumacious conduct relied upon as the basis for the Court’s summary adjudication for contempt, thus hampering her ability to defend against the charge of contempt. This contention is meritless. The record is clear that Judge Gagliardi found Williams in contempt because she repeatedly refused to obey the Court’s order to return to the counsel table, absenting herself from the Courtroom in defiance of that order.


author: SCHWARTZ, District Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Clifton Patton COSBY, M.D., Defendant-Appellant.
    No. 74-1035.
    United States Court of Appeals, Ninth Circuit.
    June 24, 1974.
    Rehearing Denied Aug. 15, 1974.

      Joseph Sack (argued), Fullerton, Cal., for defendant-appellant.
    Richard J. Henry, Asst. U. S. Atty. (argued), Los Angeles, Cal., for plaintiff-appellee.
    Before CHAMBERS and CARTER, Circuit Judges, and SCHWARTZ, District Judge.

       Honorable Edward J. Schwartz, United States sitting by designation. District Judge, Southern District of California,

   SCHWARTZ, District Judge:

Appellant was charged in an eight-count indictment with possession and distribution of cocaine, in violation of 21 U.S.C. § 841(a)(1), and with using communication facilities to facilitate dis- ■ tribution in violation of 21 U.S.C. § 843 (b). The jury returned a verdict of guilty on all eight counts.

Although appellant raises thirteen assignments of error, only three warrant discussion:

1. admissibility of tape-recorded telephone conversations between appellant and a government informant;

2. admissibility of evidence regarding prior purchases of cocaine; and

3. propriety of limitation on cross-examination of a government witness.

Appellant contends that the taping of conversations between government informant Teply and himself was an unreasonable invasion of privacy, violative of his Fourth Amendment rights. Teply consented to the taping, thus eliminating any constitutional overtones. United States v. White, 401 U.S. 745, 91 S.Ct. 1122, 28 L.Ed.2d 453 (1971); United States v. King, 472 F.2d 1 (9th Cir. 1972). Transcripts of the tapes were also properly admitted. Fountain v. United States, 384 F.2d 624 (5th Cir. 1967); cert. denied 390 U.S. 1005, 88 S.Ct. 1246, 20 L.Ed.2d 105 (1968). Further, a proper foundation was laid for the introduction of the tapes and transcripts at trial. Agent Ketchum testified that she was present at the taping, could identify the voices and made accurate transcripts.

The second assignment of error involves the introduction of evidence showing purchases of cocaine by appellant prior to the sales alleged in the indictment. Appellant argues that such evidence was irrelevant and prejudicial. The evidence was relevant to the issues of the case since it tended to show possession by appellant of quantities of cocaine substantially in excess of his needs as a practicing physician.

Finally, appellant claims that he should have been permitted to inquire into the specific address of the informant. However, Smith v. Illinois, 390 U.S. 129, 88 S.Ct. 748, 19 L.Ed.2d 956 (1968), does not establish a rigid rule of disclosure, but rather discusses disclosure against a background of factors weighing conversely, such as personal safety of the witness. In the instant ■ case, the government met its burden by making an adequate representation that the informant’s life had been threatened, causing him to relocate his family. United States v. Ellis, 468 F.2d 638 (9th Cir. 1972).

The court finds no merit in any of appellant’s other contentions and affirms the conviction on all counts.

Affirmed.


author: BOREMAN, Senior Circuit Judge:

text:
    Marcus BLACK, Plaintiff, Louis McGiboney et al., Plaintiffs-Intervenors-Appellants, v. CENTRAL MOTOR LINES, INC., Appellee.
    No. 74-1061.
    United States Court of Appeals, Fourth Circuit.
    Argued May 8, 1974.
    Decided July 19, 1974.
    Walter H. Bennett, Jr., Charlotte, N. C. (George S. Daly, Jr., and Casey & Daly, Charlotte, N. C., on brief), for appellants.
    W. P. Sandridge, Winston-Salem, N. C. (Charles F. Vance, Jr., Winston-Salem, N. C., on brief), for appellee.
    Before BOREMAN, Senior Circuit Judge, CRAVEN and BUTZNER, Circuit Judges.
   BOREMAN, Senior Circuit Judge:

On May 22, 1973, twelve black employees (hereinafter appellants) moved to intervene in the consent judgment for back pay obtained by Marcus Black against his employer, Central Motor Lines, Inc. In denying the motion the district court noted that the request for intervention was filed almost one year after the judgment in Black’s case had been entered, a final judgment from which no appeal had been taken. The court concluded that “the Intervenors have not been diligent in asserting their rights, if any they have, and that to allow their intervention would unduly prejudice the rights of the defendant.”

Intervention is ancillary and subordinate to a main cause and whenever an action is terminated, for whatever reason, there no longer remains an action in which there can be intervention. Becton v. Greene County Board of Education, 32 F.R.D. 220 (E.D.N.C. 1963). By its very nature intervention presupposes pendency of an action in a court of competent jurisdiction. See In Re V-I-D, Inc., 177 F.2d 234 (7 Cir. 1949). “An existing suit within the court’s jurisdiction is a prerequisite of an intervention, which is an ancillary proceeding in an already instituted suit. . ” Kendrick v. Kendrick, 16 F.2d 744, 745 (5 Cir. 1926). Since Black’s action had been terminated for almost one year and there was no pending litigation in which appellants could intervene, their motion was untimely.

Rule 24 of the Federal Rules of Civil Procedure controls intervention. Regardless of whether appellants are seeking intervention as a matter of right [Rule 24(a)(2)] or permissive intervention [Rule 24(b)(2)] it is clear that both subsections of the Rule require that the application to intervene be timely filed. Rule 24 is silent as to what constitutes a timely application and the question must therefore be answered in each case by the exercise of the sound discretion of the court.

Appellants argue that in a number of cases intervention has been allowed even after entry of judgment. Admittedly those cases involved unique factual situations; in a majority of them intervention was permitted so that the interve-nor could prosecute an appeal which an existing party had decided not to take. See Smuck v. Hobson, 132 U.S.App.D.C., 372, 408 F.2d 175 (1969); Pellegrino v. Nesbit, 203 F.2d 463 (9 Cir. 1953); Wolpe v. Poretsky, 49 U.S.App.D.C. 141, 144 F.2d 505 (1944). Such cases are inapplicable here since the time for an appeal in the instant case has long since run.

Upon consideration of the record we conclude that there has been no showing by appellants that the district court abused its discretion in denying the motion to intervene as untimely. Therefore, the judgment below will not be disturbed.

Affirmed.

      . In his action Black had claimed Central Motor Lines engaged in racially discriminatory employment practices in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., and 42 Ü.S.C. § 1981.

      . Neither Rule 24(a) (1) nor Rule 24(b) (1) is applicable in this case. Rule 24(a) (1) provides for intervention as of right when a statute of the United States confers an unconditional right to intervene; pursuant to Rule 24(b) (1) there can be permissive intervention when a statute of the United States confers a conditional right to intervene. All parties agree that there is no statute here involved that would bring into play either Rule 24(a) (1) or Rule 24(b) (1).

      . Subsections (a) and (b) of Rule 24 of the Federal Rules of Civil Procedure begin with language as follows: “Upon timely application . ”

      . Roberts v. Kimbrough, 206 F.2d 257 (4 Cir. 1953); Simms v. Andrews, 118 F.2d 803 (10 Cir. 1941); 2 W. Barron & A. Holtzoff, Federal Practice and Procedure § 594, at 364-65 (1961); 3B J. Moore, Federal Practice ¶ 24.13, at 24-521 (2d ed. 1974); Wright & Miller, Federal Practice and Procedure: Civil § 1916 (1972).


author: MEDINA, Circuit Judge: OAKES, Circuit Judge

text:
    DEMSEY & ASSOCIATES, INC., and Interstate Steel Company, Plaintiffs, v. S.S. SEA STAR, her engines, boilers, etc., et al., Defendants-Appellants. PITTSTON STEVEDORING CORP., Defendant-Appellee, v. The JORDAN INTERNATIONAL CO., Defendant-Impleaded-Appellee.
    Nos. 968, 969, Dockets 73-2847, 74-1017.
    United States Court of Appeals, Second Circuit.
    Argued May 17, 1974.
    Decided June 21, 1974.
    Edwin K. Reid, New York City (Charles E. Duross and Zock, Petrie, Sheneman & Reid, New York City, on the brief), for defendants-appellants and cross-claimants Atlantic Marine Enterprises, Inc. and S.S. Sea Star.
    Renato C. Giallorenzi, New York City, for defendant-appellant World Bulk Shipping Ltd.
    Paul Falick, New York City ( John L. Quinlan and Bigham Englar Jones & Houston, New York City, on the brief), for defendant-appellee.
    Morris Rosoff, New York City (Ro-soff & Rosoff, New York City, on the brief), for defendant-impleaded-appellee.
    Before MEDINA, HAYS and OAKES, Circuit Judges.
   MEDINA, Circuit Judge:

Defendants and cross-claimants Atlantic Marine Enterprises, Inc. and S.S. Sea Star'appeal from an order denying their application as against defendants World Bulk Shipping Ltd., Pittston Stevedoring Corp. and the impleaded defendant The Jordan International Co. for legal fees and disbursements; and defendant World Bulk Shipping Ltd. appeals from an order denying its application as against defendant Pittston Stevedoring Corp. and impleaded defendant The Jordan International Co. for legal fees and disbursements.

We shall assume familiarity with Judge Bonsai’s opinion of June 3, 1970, 321 F.Supp. 663 (S.D.N.Y.1970) and with our opinion on the appeal from Judge Bonsai’s decision, 461 F.2d 1009 (2d Cir. 1972).

Cargo damage cases have a way of becoming complicated and difficult. But this one surpasses by far in its complexity and its maze of conflicting cross-claims and miscellaneous issues of law and fact anything in our experience. The shipowner, the stevedoring company, as well as both the time and voyage charterers, are involved in this litigation. It would seem that the parties did everything in their power to make mistakes and confuse the issues. The cargo owners delivered several hundreds of steel coils that were rusted, some of them deeply pitted. In the hurry to provide clean-on-board bills of lading for banking purposes, Jordan, the voyage charterer, requested World Bulk, the time charterer of the Sea Star, to issue clean-on-board bills of lading despite the fact that the vessel had not yet been loaded, and the rust was plainly visible on the coils as they were stacked on the pier. Each bill of lading was signed by World Bulk’s agent, Representaciones, “for the Master” although neither World Bulk nor Representaciones had the authority to sign bills of lading on behalf of the Master. The Sea Star was plainly unseaworthy as the hatch covers in the ’tween decks were old and dry and could not hold the heavy steel coils. The stowage in the hold and in the ’tween deck was in many ways defective and the coils rolled about damaging one another and some fell through the hatch covers to the hold below causing further damage. There was extensive further damage to the coils because of negligent discharge.

The cargo owners sued the Sea Star in rem, Atlantic (owner of the Sea Star), World Bulk and Pittston in the Southern District of New York in January of 1964. Jordan was impleaded by Atlantic and World Bulk. Jordan in turn filed cross-claims against World Bulk, Atlantic and Pittston. Atlantic and World Bulk asserted cross-claims against each other and against Pittston. It was a real Donnybrook and no quarter was given. The trial before Judge Bonsai did not begin until October of 1969. In the interim, some eight different District Court judges ruled on various motions in the case.

It would be tedious to attempt to enumerate the number of digressions that have occurred in this case since 1964. There was an arbitration claim by Jordan arising out of one of the clauses in the voyage charter. There was a dispute over who was “the carrier” under the Carriage of Goods by Sea Act. There was a lengthy and confusing dispute over who planned and who actually supervised the loading and stowage of the cargo.

As a result of several months of study, we finally reduced the conflicting claims to some semblance of order. While it is asserted that World Bulk was blameless, we found World Bulk was “the carrier” and responsible for all the damage because the plaintiffs had established a prima facie case and that this prima facie case had not been rebutted. This ruling applied to both the Sea Star and World Bulk. It was clear to us that part of the damage to the cargo was caused by the unseaworthiness of the Sea Star and a greater part due to the faulty loading and stowage.

In other words, the cargo owners had been held off for some nine years while the energies of the various parties had been devoted chiefly to establishing that someone else was liable. Judge Bonsai in his order below denying counsel fees found that “While for over nine years the lawyers for the defendants have acted in concert to defeat plaintiffs’ legitimate claims, each has sought to avoid any liability.” (Emphasis added). We suspect furthermore that most of the legal fees in this case were expended either in prosecuting or defending against claims of other defendants.

After our decision, there remained a number of thorny questions of fact still to be resolved on the remand that we ordered. A settlement was finally effected but not without further prodding. We had urged that the relatively • small amount of damages involved be stipulated, but the parties could not agree on the amount or the allocation of the damages. The court below on the petition of the plaintiffs appointed a Special Master whose report was subsequently approved without objection.

There is clearly no statute requiring or authorizing the payment of legal fees and disbursements in this type of proceeding in admiralty. It is also clear that in the absence of statute or contractual authorization, attorney’s fees are not generally recoverable either as part of costs or of damages. Hall v. Cole, 412 U.S. 1, 93 S.Ct. 1943, 36 L.Ed.2d 702 (1973); Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 87 S.Ct. 1404, 18 L.Ed.2d 475 (1967).

In indemnity cases, the courts have regularly required the indemnitor to reimburse the indemnitee for the costs of defending the original suit, and the appellants argue that this case is just one of these common garden variety of indemnity cases. Thus, we are told that if a longshoreman is injured and sues the shipowner for unseaworthiness and the shipowner asserts a third party claim against‘the stevedore who created the unseaworthy condition, the shipowner who loses after defending the action may generally recover the costs of defending the lawsuit because the stevedore breached his express or implied guarantee of workmanlike service and thus in effect agreed to indemnify the shipowner. We are also told that the same principle applies to cargo damage cases. These references lead up to an extensive discussion of the theoretical basis for such recoveries. Are they part of the damages for breach of the contract of indemnity? Are such recoveries discretionary? Paliaga v. Luckenbach Steamship Company, 301 F.2d 403 (2d Cir. 1962); Massa v. C. A. Venezuelan Navigacion, 332 F.2d 779 (2d Cir.), cert. denied, 379 U.S. 914, 85 S.Ct. 262, 13 L.Ed.2d 186 (1964). Does Judge Cannella’s ruling in Consolidated Cork Corporation v. Jugoslavenska Linijska Plovidba, International Terminal Operating Co., Inc., and the M/V Slovenija, 1971 A.M.C. 1193 (S.D.N.Y.1970), apply to the effect that to justify the exercise of discretion in favor of attorney’s fees the court must find some “ ‘overriding considerations of justice’ which compel awarding attorney’s fees” ?

These considerations must be weighed, but all are subject to the horn-book doctrine that equitable principles are part and parcel of the law administered in admiralty. This case presents unusual if not unprecedented complexities. In light of the particular history of this case, we think it would be unconscionable and a gross miscarriage of justice to direct the payment of any sums by any of the parties to reimburse any of the other parties for payments to their lawyers for legal fees or disbursements.

Affirmed.

OAKES, Circuit Judge

(concurring):

I concur in the result.


author: MANSFIELD, Circuit Judge. FEINBERG, Circuit Judge

text:
    UNITED STATES of America ex rel. Harry L. SANNEY, Petitioner-Appellant, v. Hon. Ernest L. MONTANYE, Superintendent Attica Correctional Facility, Attica, New York, Respondent-Appellee.
    No. 709, Docket 73-2534.
    United States Court of Appeals, Second Circuit.
    Argued May 6, 1974.
    Decided June 20, 1974.
    Certiorari Denied Nov. 18, 1974.
    See 95 S.Ct. 506.

      Herman Schwartz, Amherst, N. Y. (Edward I. Koren, New York Civil Liberties Union, Amherst, N.Y., of counsel), for petitioner-appellant.
    Margery Evans Reifler, Asst. Atty. Gen. (Louis J. Lefkowitz, Atty. Gen., of N. Y., Samuel A. Hirshowitz, First Asst. Atty. Gen., New York City, of counsel), for respondent-appellee.

      Before ANDERSON, FEINBERG and MANSFIELD, Circuit Judges.
   MANSFIELD, Circuit Judge.

Petitioner Harry L. Sanney is presently serving a five to ten year sentence in the Attica Correctional Facility based on his plea of guilty in the Niagara County Court on May 25, 1970, to a charge of assault in the first degree. He challenges that conviction and the underlying indictment on the ground that they were the product of incriminating statements which he was compelled to make on the occasion of an interview for private employment. The district court denied a writ of habeas corpus, without evidentiary hearing. We affirm.

The facts surrounding petitioner’s conviction are undisputed. In December 1965 Sanney reported to the police that he had discovered the body of Charles Reynolds in a coal yard in Lockport, New York. Sanney admitted to the police that he and Reynolds had been together the night before; he naturally became a leading suspect in the murder case. The police questioned him at length, but did not arrest him.

In February 1966 Sanney applied for a position at the Reid Petroleum Corporation in Lockport and was hired. As part of the normal pre-employment testing, a company employee, John Bewick, on February 5, 1966, administered a polygraph examination. During this test Sanney stated that he had been a suspect in a murder case and moreover that he had not told the police the full story of his involvement, omitting the fact that he had hit or pushed the victim. According to the interrogator (Be-wick) Sanney was nervous before this disclosure but appeared to experience a sense of relief at having made it, although he also seemed to be worried about losing his prospective job.

Bewick relayed this information to the police. At their request Bewick agreed to conduct a second polygraph session to explore further the role of Sanney in the murder. The district attorney and police also arranged with Bewick to carry a concealed transmitter so that they could in an adjoining room hear and record the conversation.

After Sanney had been on the job a day or two he was asked to submit to a second polygraph examination in connection with his qualifying for the position. On February 8, 1966, the second examination was conducted in Bewick’s office, where Bewick pursued in depth the question of Sanney’s involvement with Reynolds. Under Bewick’s questioning Sanney admitted that he had dealt Reynolds a blow with a 2 x 4 piece of wood that lay about the coal yard. The police overheard the entire discussion and arrested Sanney shortly thereafter.

On the strength of his admissions to Bewick, Sanny was charged with manslaughter in the first degree. Sanney moved to dismiss the indictment on the grounds that his admissions to Bewick were the product of an interrogation that violated his Fourth and Fifth Amendment rights. The state court agreed and dismissed the indictment. On appeal the indictment was re-instated. The Appellate Division ruled that Miranda warnings were not required because Sanney was not in custody at the time of the polygraph test and that Sanney’s Fourth Amendment rights had not been violated by the electronic transmission of his conversation with Bewick. People v. Sanney, 32 A.D.2d 737, 301 N.Y.S.2d 899 (4th Dept.1969).

Eventually Sanney pleaded guilty to a charge of assault in the first degree in satisfaction of the manslaughter indictment. He also pleaded guilty to a charge of assault in the second degree in satisfaction of a second set of charges lodged against him while he was free on bail. In June of 1970 Sanney was sentenced to a term ranging from a minimum of five to a maximum of ten years on the first charge and concurrently to a maximum of seven years on the second charge.

Sanney appealed from his conviction on the first charge, again raising the argument that his admissions were the product of illegal interrogation. The conviction was affirmed by the Appellate Division without opinion and leave to appeal to the Court of Appeals denied. Certiorari was denied by the Supreme Court. Sanney v. New York, 404 U.S. 978, 92 S.Ct. 344, 30 L.Ed.2d 294 (1971). Sanney then filed this petition for a writ of habeas corpus.

Discussion

As a threshold matter the state maintains that Sanney waived any objection he might have to the admission of his confession by pleading guilty to the charge. See McMann v. Richardson, 397 U.S. 759, 90 S.Ct. 1441, 25 L.Ed.2d 763 (1970). However, under New York law an accused, despite his guilty plea, may challenge his conviction if he has sought to suppress the confession prior to his plea. N.Y.Crim.Proc.Law § 710.70(2) (McKinney 1971). The district court reasoned that Sanney had in substance met the requirements of the New York law by his earlier motion directed against the indictment which “raised the claims upon which a motion to suppress would have been based,” 352 F.Supp. 947, 948 (W.D.N.Y.1973), and concluded that the state courts had rejected Sanney’s later appeal on the merits and not for the failure to meet a technical requirement under the criminal procedure code, 352 F.Supp. at 948-949. We agree and hold that Sanney did not waive the constitutional claims asserted here.

Turning to the merits, petitioner first urges, principally on the basis -of Garrity v. New Jersey, 385 U.S. 493, 87 S.Ct. 616, 17 L.Ed.2d 562 (1967), and Spevack v. Klein, 385 U.S. 511, 87 S.Ct. 625, 17 L.Ed.2d 574 (1967), that his incriminating admissions were the inadmissible product of economic coercion imposed by an agent of the state (Bewick), since Sanney’s continued employment at Reid Petroleum Corporation was conditioned upon his submitting to the second polygraph test, during the course of which he furnished the damaging evidence. In Garrity the Court held that statements obtained by the State of New Jersey from police officers under the threat that, unless they waived their privilege against self-incrimination, they would be removed from office pursuant to a state statute, were involuntary and inadmissible in state criminal proceedings later instituted against them, since the statements had been obtained by unconstitutionally coercive means. Spevack extended the same principle to a state’s threatened disbarment of a practicing attorney for refusal to furnish incriminating statements and documents. The district court held Garrity and Spevack inapplicable to the present case on the ground that they applied only to threatened “forfeiture of a governmental benefit, public employment” and not to the loss of private employment. Although we agree with the result reached by the court we cannot, in view of the Supreme Court’s more recent decision in Lefkowitz v. Turley, 414 U.S. 70, 94 S.Ct. 316, 38 L.Ed.2d 274 (1973), share its reasoning, which restricts the principle of these cases too narrowly.

In Lefkowitz the Supreme Court held that a state could not compel incriminatory answers from independent contractors under the threat that unless they waived immunity they would be disqualified from contracting with state agencies for a period of five years. It found no constitutional significance in the fact tiiat the statements were sought or obtained through coercion practiced upon members of the private, as distinguished from public, sector. The controlling factor is not the public or private status of the person from whom the information is sought but the fact that the state has involved itself in the use of a substantial economic threat to coerce a person into furnishing an incriminating statement. Nor do we perceive any consequence flowing from the fact that the threat in the present case was conveyed through a private employer, admittedly acting as an agent for the police, rather than through a person on the public payroll. The state’s involvement is no less real for having been indirect and no less impermissible for having been concealed. The state is prohibited in either event from compelling a statement through economically coercive means, whether they are direct or indirect.

Petitioner’s reliance upon the Garrity-Spevack line of cases is misplaced, however, for a different reason. He erroneously assumes that the mere risk of any adverse economic consequence, however slight or insubstantial, that might result from failure to furnish a statement will automatically call for application of the principle. We disagree. A statement challenged on the ground that it was obtained as the result of economic sanctions must be rejected as involuntary only where the pressure reasonably appears to have been of sufficiently appreciable size and substance to deprive the accused of his “free choice to admit, to deny, or to refuse to answer.” Garrity, supra, 385 U.S. at 496, 87 S.Ct. at 618, quoting from Lisenba v. California, 314 U.S. 219, 241, 62 S.Ct. 280, 86 L.Ed. 166. It must amount to a choice “between the rock and the whirlpool,” 385 U.S. at 498, 87 S.Ct. at 619. As the Supreme Court recognized in Lefkowitz, supra, the economic sanctions calling for application of the principle of Garrity must be “substantial,” 414 U.S. at 82, 94 S.Ct. 316. For the policemen in Garrity, for instance, the loss of their positions could be objectively viewed as amounting to the end of their police careers. Similarly disbarment usually entails enormously adverse economic consequences for a practicing lawyer. As Justice Douglas pointed out in Spevack “[t]he threat of disbarment and the loss of professional standing, professional reputation, and of livelihood are powerful forms of compulsion to make a law-er relinquish the privilege.” 385 U.S. at 516, 87 S.Ct. at 628. Likewise the loss of civil service jobs by public employees in Uniformed Sanitation Men Assn., Inc. v. Commissioner of Sanitation of the City of New York, 392 U.S. 280, 88 S.Ct. 1917, 20 L.Ed.2d 1089 (1968), could reasonably be viewed as threatening an economic catastrophe for those faced with the “choice” of waiving constitutional rights or losing status and benefits as public employees.

Turning to the present case, Be-wick admittedly sought to use Sanney’s prospective employment relationship as a means of obtaining incriminating information from him. But the threat of discharge from a job as a driver’s assistant, which Sanney had held for one or two days, can hardly be labelled a “substantial economic sanction” rendering his statement involuntary. Sanney was not a policeman or public employee with many years of public service who faced the loss of pension rights, seniority status or other privileges if he refused to cooperate. See, e. g., Garrity, supra, and Sanitation Men, supra. Nor was he a professional who would lose his license, see, e. g., Spevack, supra, or be permanently foreclosed from an important segment of industry, see, e. g., Lefkowitz, supra, unless he confessed. Sanney was a transient manual laborer who had been on the job for at most a couple of days. Moreover, the record supports the district court’s finding that his statements, judged against the totality of the circumstances, were in fact voluntary. Although Bewick, at his initial interview of Sanney, thought that Sanney may have been worried about losing his prospective job (upon which he apparently had not started, it being a Saturday), Bewick also testified that Sanney “was actually getting a sense of relief or release from having told me this.” Thus the interrogation was similar to the “situation where one who is anxious to make a clean breast of the whole affair volunteers the information,” Garrity, supra, 385 U.S. at 499, 87 S.Ct. at 619. In short, his statement was not the product of a will overborne by threats or pressure.

We likewise find no error in the district court’s disposition of petitioner’s other claims. Petitioner maintains that his statements are inadmissible against him because they were made without the benefit of warnings required by Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). The simple and complete answer is that he was not in custody when he was questioned by Bewick. United States v. Viviano, 437 F.2d 295 (2d Cir.), cert. denied, 402 U.S. 983, 91 S.Ct. 1659, 29 L.Ed.2d 149 (1971); United States v. Hall, 421 F.2d 540 (2d Cir. 1969), cert. denied, 397 U.S. 990, 90 S.Ct. 1123, 25 L.Ed.2d 398 (1970). Custody cannot be said to arise solely from the fact that a suspect is being questioned by a police agent, covert or otherwise. United States v. Viviano, supra; United States v. DiLorenzo, 429 F.2d 216, 219 (2d Cir. 1970), cert. denied, 402 U.S. 950, 91 S.Ct. 1609, 29 L.Ed.2d 120 (1971); United States v. Knohl, 379 F.2d 427, 442 (2d Cir.), cert. denied, 389 U.S. 973, 88 S.Ct. 472, 19 L.Ed.2d 465 (1967). The measure of custody for purposes of Miranda is whether the suspect was “deprived of his freedom of action in any significant way.” 384 U.S. at 444, 86 S.Ct. at 1612. Here there was no restriction on Sanney’s liberty. Had he declined to answer any questions or desired at any point to depart Be-wick’s office, Bewick would not have attempted to restrain him and, equally important, Sanney had no reason to believe that Bewick would do so. See United States v. Hall, supra. Sanney was thus not in custody.

Finally, there is petitioner’s claim that the transmission of his conversation with Bewick to police in an adjoining room violated his Fourth Amendment rights. Under Desist v. United States, 394 U.S. 244, 89 S.Ct. 1030, 22 L.Ed.2d 248 (1969), we would be compelled to reject petitioner’s claim if only because the electronic surveillance in question here, occurring prior to Katz v. United States, 389 U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967), was free from any hint of a trespass. Even if Katz governed, however, we would reject petitioner’s claim for the reason that the statements were voluntarily made to Bewick without any “constitutional expectation of privacy.” See United States v. White, 401 U.S. 745, 91 S.Ct. 1122, 28 L.Ed.2d 453 (1971); Hoffa v. United States, 385 U.S. 293, 87 S.Ct. 970, 17 L.Ed.2d 374 (1966); On Lee v. United States, 343 U.S. 747, 72 S.Ct. 967, 96 L.Ed. 1270 (1952).

The judgment of the district court is affirmed.

FEINBERG, Circuit Judge

(dissenting) :

Since I agree with much of the majority’s thinking, I dissent with regret. But I find it necessary to do so because the majority’s sound premises have unaccountably led to the wrong conclusion.

I turn first to those matters where happily we all agree. I concur in the finding that Sanney did not waive his constitutional claims. With respect to the merits, moreover, I have no quarrel with my brothers’ holdings on the fourth amendment and Miranda contentions. Furthermore, I heartily adopt the majority’s views on the existence of government action here. The “controlling factor” is not the state’s role as employer (absent in the present case) but rather “the fact that the state has involved itself in the use of a substantial economic threat to coerce” incriminating disclosures. Equally correct is the conclusion that the Government may not compel “a statement through economically coercive means, whether direct or indirect,” whether open or concealed.

We are all in accord that under the Garrity line of cases, the threatened economic sanctions must be “substantial,” Lefkowitz v. Turley, 414 U.S. 70, 82, 94 S.Ct. 316, 38 L.Ed.2d 274 (1973), but I part company with my brothers on the question whether this test has here been met. Unlike them, I cannot say that the loss of a driver’s assistant job is constitutionally insignificant. Our secure niche in. the professional world should not cause us, as judges, to ignore what most people know: Even a menial position might be coveted by a man like Sanney — of marginal intelligence, and seemingly emotionally troubled as well. But we need not speculate on this point because Bewick testified that even at the initial interview, Sanney “was worried about losing his job” and “kind of completely crushed or emotional.”

Moreover, the short term of employment should not make any difference. True, Sanney did not stand to lose pension rights or other benefits that sometimes accrue to senior workers; nor did he face deprivation of profitable government contracts or of a license to practice his chosen profession. See Lefkowitz v. Turley, supra; Spevack v. Klein, 385 U.S. 511, 87 S.Ct. 625, 17 L.Ed.2d 574 (1967). But many a man works the whole of his life without material advancement in status and with no “vested” rights except to his wages earned that week. Such positions are often “transient” or seasonal in nature, yet they are nonetheless crucial to those whose livelihood depends upon them. I reject both the notion that a menial job is somehow beneath constitutional notice and the not unrelated idea that discharge from recently begun employment must be an insubstantial loss. I also note that differentiation of jobs, and hence of economically coercive effects, on the basis of length of time at work would force the courts to make ad hoc decisions in every case — in the absence of any clear criteria — as to how long a tenure is “long enough” to invoke the protective rule of Garrity. Such expenditure of effort is not, to my mind, justified by any compensating benefit.

Finally, I do not understand the majority’s view that the “sense of relief,” which Sanney may have experiencd as a result of his admissions, weakens a finding of coercion. A man with a guilty conscience may feel even greater release upon yielding to coercive interrogation than upon spontaneously admitting the facts since, at the end, he will have freed himself not only from the buried secret but also from the relentless prob-er. The issue is not how a suspect feels after he “reveals” his guilt, but how he was made to do so. The Constitution prohibits certain means of obtaining information even from those apparently guilty, because we do not believe that the end justifies any means. That noble idea has not been followed here.

For these reasons, I would hold that Sanney was unconstitutionally coerced into incriminating himself and that his confession was improperly received in evidence. Accordingly, I would reverse.

      . No evidentiary hearing was required or requested because the essential facts are uncontested.

      . The predecessor to § 710.70(2) in effect at the time of Sanney’s plea and appeal was § 813-g of the Code of Criminal Procedure (McKinney Supp.1970). It read in pertinent part:
      “If the motion [to suppress a confession or admission] is denied, the order denying such may be reviewed on appeal from a judgment of conviction notwithstanding the fact that such judgment of conviction is predicated upon a plea of guilty.”

      . Our Brother Judge Feinberg in his dissent suggests that because of what he characterizes as the “secure niche in the professional world” of federal judges we overlook the significance of appellant’s “menial” position and treat it as “beneath constitutional notice”. This is plainly wrong. Our holding is not based on the meniality of appellant’s position but upon the insubstantiality of the alleged economic sanction faced by him. Were he a pampered professional or high-paid businessman with a similar transient employment history and no assurance of tenure, the result would be tbe same. The recent resignations of some federal judges because of inadequacy of their compensation should, if anything, suggest a community of interest, not a lack of appreciation, on the part of federal judges.