author: THORNBERRY, Circuit Judge:

text:
    In the Matter of WILCO FOREST MACHINERY, INC., Bankrupt. A. Pope GORDON, Trustee of Wilco Forest Machinery, Inc., Bankrupt, Appellant-Cross Appellee. v. EATON CORPORATION et al., Appellees-Cross Appellants.
    No. 73-2118.
    United States Court of Appeals, Fifth Circuit.
    March 27, 1974.
    Rehearing Denied June 13, 1974.

      Oakley Melton, Jr., Montgomery Ala., for appellant-cross appellee.
    Richard A. Ball, Jr., Montgomery, Ala., for appellees-cross appellants.
    Before THORNBERRY, INGRAHAM and RONEY, Circuit Judges.
   THORNBERRY, Circuit Judge:

A. Pope Gordon, as trustee in bankruptcy of Wilco Forest Machinery, Inc., initiated this action for the return of certain Wilco property presently in the possession of Eaton Corporation, Eaton Yale, Ltd., and Timberjack of Alabama, Inc. (hereinafter collectively denominated “Eaton”). The district court upheld the referee’s finding that the security interest asserted by Eaton was valid, that its possession was not illegal as a preference under Section 60 of the Bankruptcy Act nor as a fraudulent transfer under Section 67d of that Act, and that an accounting was required to insure that Eaton had not appropriated unsecured property for its own benefit to the detriment of the general creditors. Eaton appeals the requirement of an accounting, and Gordon appeals everything else. We affirm.

Wileo Machines, Inc., a Tennessee corporation, (hereinafter “Wilco”) was engaged in the business of selling woodworking, heavy logging and forestry machinery. By the middle of 1969 the logging machinery sales division had become the most rapidly growing part of Wilco’s business and had evolved into a separate arm of the company. Wileo ranked first in the United States in sales of heavy logging machinery made by Timberjack Machines, Ltd., a subsidiary of Eaton Corporation.

Both Wilco and Timberjack were agreed that a better organized and financed sales organization was needed to take advantage of the sales opportunities offered by the growth of the timber industry and the use of heavier machinery. In accordance with a study by the Dealer Development Department of Timber jack Machines, Ltd., Wilco Forest Machinery, Inc. (WFM) was formed as a separate corporation on November 1, 1969, to be operated as a sales corporation under the terms of three documents—the Dealer Agreement, the Dealer Finance Agreement, and the Plan for Profit.

The Dealer Agreement outlined the general rights and duties of the parties, WFM and Timberjack Machines, Ltd. The Dealer Finance Agreement, signed a few months later, provided for the financing of WFM’s dealership operations by Eaton Yale & Towne Canada, Ltd. (EYTC). It established two kinds of accounts between WFM and EYTC, current accounts payable and a debenture notes payable account. The current accounts payable covered floor plan purchases of Timberjack machinery, fleet rental purchases, and all other open account transactions. WFM was required to pay such accounts as they became due or to transfer them to the debenture notes payable account on a monthly basis and issue debenture notes to EYTC in settlement. The debenture notes were convertible into common stock of WFM at the option of EYTC. The notes were covered by a security interest under Article 9 of the Uniform Commercial Code in all cash accounts, all inventory accounts including rental fleet units, all accounts receivable, and all asset accounts arising from collections of accounts receivable together with the proceeds of such assets. The Dealer Finance Agreement also contained extensive provisions giving EYTC control over certain aspects of the operation and financing of WFM’s business. The Plan for Profit was a series of reports, analyses and projection sheets to be kept by WFM and forwarded regularly to EYTC, all of which were designed to create added incentive for sales of Timberjack machinery.

WFM experienced financial difficulties from the beginning of its existence as a separate corporate entity. The first audited financial statement, dated January 31, 1970, which covered the first three months of operation, showed a net operating loss of $24,869. By July 31, 1970, the total loss was up to $212,053. The next financial statement, made on March 31, 1972, showed assets of $1,555,-123.84 and total liabilities of $1,994,916.-29. The net operating loss for the eight-month period ending March 31, 1971, was $552,139.97. The debenture notes payable account had reached $900,000. In addition, there was a total of $617,629.82 listed under current accounts payable. A severe shortage of operating cash existed, due to the very high repossession rate, increasing inventory and climbing age of receivables.

EYTC knew of WFM’s financial troubles from an early date. It periodically received copies of the audited financial statements, in addition to the various monthly reports submitted under the Plan for Profit. EYTC knew or should have known that WFM was insolvent, probably as early as June, 1970. In January, 1971, inventory discrepancies were discovered, later to be confirmed by the audit of march 31,1971.

Shortly after the March 31 audit, Eaton Yale, Ltd., decided to exercise its option under the Dealer Finance Agreement and take over control of WFM. On May 4, 1971, $439,000 worth of debentures were converted into common shares of WFM, making Eaton Yale, Ltd., the majority shareholder. That same day all the officers and all the directors except R. O. Wilson resigned and were replaced by representatives of Eaton Yale, Ltd.

Prior to the conversion into common shares, $900,000 worth of debentures had been issued. In addition, WFM owed Eaton Yale, Ltd., $617,000 under current accounts payable. By a resolution of the old stockholders and directors of WFM, the corporation could not issue more than $925,000 worth of debentures. On the day of the takeover by Eaton Yale, Ltd., however, that limit was increased to $1,525,000. New debentures were then issued to cover the additional $617,000 debt.

On June 11, 1971, the officers installed by Eaton Yale, Ltd., closed down WFM for the stated purpose of trying to pull together the assets of WFM, to reach agreement with WFM’s unsecured creditors, and to get the dealership off to a fresh start. A proposal was made to pay $164,988 in general unsecured debts with $64,593 in unencumbered assets. This proposed settlement of unsecured claims amounted to approximately thirty-eight cents on the dollar. It was rejected by the creditors, and the new officers promptly placed WFM in bankruptcy, filing the petition on July 19, 1971.

The WFM officers who placed it in bankruptcy were also officers, agents or employees of Eaton or some of its subsidiaries. Prior to filing the bankruptcy petition they organized Timber-jack of Alabama, Inc. It was formed to repossess the collateral security claimed by Eaton Yale, Ltd. The actual repossession took place on June 8, 1971, although Timber jack of Alabama, Inc., was not formally incorporated until the following day. The total value of the property repossessed was $705,394, including $466,084 in equipment and inventory, $81,310 in parts inventory, $6,981 in cash, $45,848 in cash from collections on accounts receivable, $98,171 in accounts receivable, and $7,000 in notes from corporate officers. These are the assets the trustee seeks to recover in this proceeding.

Gordon first contends that he was denied a hearing before the district court. This point is without merit. There was a lengthy discussion of the issues presented at the conference with the district judge attended by the referee and the attorneys for the parties. The district court’s order is cast in general terms, but that is no reason to assume, as Gordon does, that the court did not consider all of the issues, particularly when the order specifically recites that the points raised by counsel have been carefully considered. The district court afforded Gordon a fully adequate hearing.

Gordon next contends that EYTC’s security interest was not perfected because the financing statement was insufficient. The financing statement filed under the Alabama Uniform Commercial Code was signed on April 15, 1970, by Timberjack Machines, Ltd., as the secured party. However, that corporation’s separate existence had been ended by the merger of March 31, 1970, which created Eaton Yale & Towne Canada, Ltd., by amalgamating Timberjack Machines, Ltd., with five other corporations. Since Timberjack Machines, Ltd., was no longer in existence when the financing statement was signed, Gordon argues that the statement was insufficient to perfect EYTC’s security interest because it was not “signed ... by the secured party” as required by statute. Code of Ala., Tit. 7A, § 9-402.

Under the Code, the financing statement serves merely to put inquiring creditors on notice of a prior security interest. Section 9-402, which sets out the formal requisites of a financing statement, also states that strict compliance with all the formal requisites is not necessary. “A financing statement substantially complying with the requirements of this section is effective even though it contains minor errors which are not seriously misleading.” Code of Ala., Tit. 7A, § 9-402(5). Courts have consistently upheld the validity of financing statements that provide reasonable notice, despite minor errors in the description of the collateral, In re Varney Wood Products, Inc., 4 Cir. 1972, 458 F.2d 435, the name of the secured party, In re Colorado Mercantile Co., D.Colo.1969, 299 F.Supp. 55; In re Excel Stores, Inc., 2 Cir. 1965, 341 F.2d 961, or the address of the secured party, Silver v. Gulf City Body & Trailer Works, 5 Cir. 1970, 432 F.2d 992; In re King-Porter Co., 5 Cir. 1971, 446 F.2d 722; Rooney v. Mason, 10 Cir. 1968, 394 F.2d 250. The Alabama courts have adopted a similar liberal construction of § 9-402, approving financing statements that provide reasonable notice despite minor errors in the description of the collateral. Galleon Industries, Inc. v. Lewyn Machinery Co., 1973, 50 Ala.App. 334, 279 So.2d 137, cert. denied, 291 Ala. 779, 279 So.2d 142; Associates Capital Corp. v. Bank of Huntsville, 1973, 49 Ala.App. 523, 274 So.2d 80.

Despite the fact that Timberjack Machines, Ltd., had ceased its separate corporate existence at the time the financing statement was signed, the statement was sufficient to put potential creditors of WFM on notice of EYTC’s prior security interest. Timberjack was still in business as a division of EYTC. The address for Timberjack listed in the financing statement, though different from that for the EYTC headquarters, was the proper address for the Timber-jack division of EYTC and was the location of the records evidencing EYTC’s security interest. The referee properly found that an inquiring creditor would have been put on sufficient notice by the financing statement. Therefore, the statement was sufficient to perfect EYTC’s security interest.

Gordon next argues that the transfer to Eaton, via Timberjack of Alabama, Inc., of WFM assets was a voidable preference under 11 U.S.C. § 96(a)(1), since the transfer “left only nominal assets for all the other 123 general creditors . . . (Emphasis added.) However, Eaton was not a general creditor, since it held a valid, perfected security interest in WFM’s assets. Consequently, the transfer was not a preference, since it did not enable Eaton “to obtain a greater percentage of [its] debt than some other creditor of the same class.” 11 U.S.C. § 96(a)(1) (emphasis added).

While admitting that the transfer of assets properly subject to the security interest would not be a preference, Gordon does argue that there was a $461,000 limit on the amount of such assets, and that, since Eaton actually took $705,394 worth of assets, it is at least liable to return the $244,394 difference. His argument starts with the premise that there was a $925,000 limit on the debenture note program, which was imposed by the directors and shareholders of WFM. At the time of the May 4 takeover, EYTC held $900,000 worth of debentures, of which $439,000 was converted into common shares to effect the transfer of control to EYTC. After the takeover, the new directors and shareholders of WFM voted to raise the debenture ceiling and to issue an additional $617,000 of debentures to EYTC, since that was the amount then outstanding on WFM’s current accounts payable to EYTC. Gordon argues that this new debenture issue was in violation of the previously approved limit and was thus insufficient to give EYTC any further security interest in WFM assets. If only $900,000 worth of debentures were properly secured, and if $439,000 of that was given up in exchange for common shares, Gordon reasons that EYTC had a maximum of $461,000 security interest properly remaining.

The flaw in this reasoning is that the WFM directors and shareholders had no power to impose any limit on EYTC’s security interest in the first place. The security interest was created by the Dealer Finance Agreement, a contract between EYTC and WFM. It contained no such limit. Instead, it bound WFM either to pay the current accounts payable monthly or to transfer unpaid sums to the debenture notes payable account and issue secured debentures to cover those sums. WFM had no power unilaterally to avoid the' requirement to issue secured debentures for the $617,000 worth of current accounts payable. In raising the debenture limit and issuing the additional $617,000 of secured debentures, the new directors and shareholders of WFM were doing no more than they were already contractually bound to do. Therefore, the new debentures gave Eaton a legitimate security interest, and its recovery by repossession of the collateral assets was not a voidable preference.

In re King-Porter Co., 5 Cir. 1971, 446 F.2d 722, provides an independent rationale for holding that there was no voidable preference here. That case involved the precisely analogous case of a bankrupt dealer and a security interest in his inventory in favor of his supplier that was created by an after-acquired property clause in the security agreement. The trustee there claimed, as does the trustee here, that the secured party’s repossession of the collateral shortly before the bankruptcy petition was filed constituted a voidable preference. We noted that a transfer of property, to be a “preference,” must occur within four months of the filing of the bankruptcy petition. 11 U.S.C. § 96(a)(1). The “property” in question is not the collateral but rather the secured party’s security interest, and that interest is transferred once it is “so far perfected that no subsequent lien upon such property obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee.” 11 U.S.C. § 96(a)(2). Thus, for purposes of that section, a “transfer” is “equated with the act by which priority over later creditors is achieved and not with the event which attaches or perfects the security interest in a specific item of property.” 446 F.2d at 730. Therefore, the transfer of a security interest in after-acquired property occurs when the secured party completes the filing requirements under the Code. In this case, that occurred on April 15, 1970, which is more than four months before the filing of the petition for bankruptcy on July 17, 1971. Therefore, 'the statutory requirements for a preference are not met here.

Gordon next argues that the transfer of WFM assets to Eaton is voidable as a fraudulent transfer under 11 U.S.C. § 107(d). Under the King-Porter case, however, the transfer involved here occurred when the filing requirements were met, which was over a year prior to the filing of the petition for bankruptcy. Therefore it was too remote in time to constitute a fraudulent transfer under 11 U.S.C. § 107(d).

Gordon’s final complaint is that he has not been granted relief on equitable principles, as he should have been in view of Eaton’s “inequitable” conduct in taking over WFM and manipulating its financial structure to Eaton’s advantage. The referee did find that Gordon might be entitled to some relief, since the testimony indicated that Eaton

intended to inherit whatever [it] possibly could from this bankrupt corporation not only in the way of shop machinery and'equipment but in the way of real estate and good will, items in which [it] did not have a security interest.

In order to untangle Eaton’s dealings with WFM, so as to assess accurately what relief might be appropriate, the referee ordered a full accounting of all assets recovered by Eaton between May 4, 1971, the day of the takeover, and June 19, 1971, the day the bankruptcy petition was filed. The accounting is also to take into account all other relevant transactions, including those between Eaton and Wilco which involved equipment and machinery later assigned to WFM.

Gordon finds this inadequate, while Eaton complains of the expense involved in such a full accounting. It is obvious, however, that the referee must have the full picture before he can assess what, if any, relief should be granted. It would be premature to grant the further relief Gordon asks, in the absence of complete information. Considering the possibility of inequitable exploitation of Eaton’s controlling position over WFM, however, it is only prudent to require such an accounting. The referee has chosen a very sensible approach to this very complicated and difficult problem.

Affirmed.

      . The various Eaton enterprises involved are as follows:
      a. Eaton Corporation—The parent company, with its principal place of business in Cleveland, Ohio.
      b. Timberjack Machines, Ltd.—A Canadian subsidiary of Eaton Corporation. Its existence as a separate corporation was ended by merger on March 31, 1970.
      c. Eaton Yale & Towne Canada, Ltd.— Another Canadian subsidiary of Eaton Corporation. It was formed on March 31, 1970, by the merger of Timberjack Machines, Ltd., and five other Canadian corporations.
      d. Eaton Yale, Ltd.—The new name adopted by Eaton Yale & Towne Canada, Ltd.
      e. Timberjack of Alabama, Inc.—An Alabama corporation formed on June 9, 1971, as a subsidiary of Eaton Yale, Ltd. It was formed to repossess the bankrupt’s property and continue its business, since Eaton Yale, Ltd., was not at that time authorized to do business in Alabama.

      . Although Gordon assigns this as a reason for voiding the repossession, his point is not well taken. Assuming, arguendo, that Timberjack of Alabama, Inc., could not have validly possessd the assets prior to its date of incorporation, that technical difficulty was cured by its incorporation on June 9, 1971, after which time the corporation can be deemed to have adopted the repossession action, thus curing any problems regarding the lawfulness of its possession. H. Henn, Law of Corporations, § 111 (2d ed. 1970).

      . 11 U.S.C. § 96. Preferred creditors
      (a) (1) A preference is a transfer, as defined in this title, of any of the property of a debtor to or for the benefit of a creditor for or on account of an antecedent debt, made or suffered by such debtor while insolvent and within four months before the filing by or against him of the petition initiating a proceeding under this title, the effect of which transfer will he to enable such creditor to obtain a greater percentage of his debt than some other creditor of the same class.


source: Caselaw Access Project

author: GODBOLD, Circuit Judge:

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellant, v. Michael John MOON, Defendant-Appellee (two cases).
    Nos. 73-1529, 73-1532.
    United States Court of Appeals, Fifth Circuit.
    March 29, 1974.

      John L. Briggs, U. S. Atty., Jacksonville, Fla., Claude H. Tison, Jr., Asst. U. S. Atty., Tampa, Fla., for plaintiff-appellant.
    David G. Hanlon, Tampa, Fla. (court-appointed), for defendant-appellee.
    Before GODBOLD, DYER and GEE, Circuit Judges.
   GODBOLD, Circuit Judge:

The defendant Moon was indicted on a federal bank robbery charge. At his first trial a telephone company repairman testified to inadvertently plugging in to a conversation in which one of those engaged in the conversation related his part in the bank robbery. The repairman had reported the conversation to a telephone company security officer and later related it to the FBI, and the call was traced to a woman. She testified at Moon’s first trial that appellant had told her of plans for the robbery, and, in the overheard call, had told her of its successful completion.

During the trial a mistrial was declared because of the illness of defense counsel. Subsequently a new indictment was returned charging appellant with conspiracy to commit the robbery. The two indictments were consolidated for a second trial, and new counsel was appointed for Moon. At an omnibus hearing this defense counsel indicated he had no motions to suppress evidence. At a later motion hearing defense counsel gave no indication that he intended to present any motion with respect to testimony given at the first trial (of which he had had a transcript for several months).

At the second trial, in September 1972, before the jury was chosen defendant’s attorney notified the trial judge that he desired to bring a matter to his attention after the jury was selected. As soon as the jury was selected and sworn, at which time jeopardy had attached, Illinois v. Somerville, 410 U.S. 458, 93 S.Ct. 1066, 35 L.Ed.2d 425 (1973); Downum v. United States, 372 U.S. 734, 83 S.Ct. 1033, 10 L.Ed.2d 100 (1963), defendant made an oral motion to suppress the anticipated testimony of the telephone repairman on the ground it had been unlawfully intercepted in violation of 47 U.S.C. § 605 and of Florida state law.

The trial court granted the motion to suppress. The government then moved for a mistrial urging surprise and the fact that it was deprived of its right to appeal the adverse ruling before trial. The defendant declined to either object or consent to the granting of a mistrial. The District Judge granted a mistrial, cautioning the prosecution that to do so might preclude retrial. Thereafter, defendant moved to dismiss the indictments on the ground that the proceedings at the second trial constituted former jeopardy. The trial judge granted the motion to dismiss. In his order he recognized that the motion to suppress may have been untimely, but, applying the case-by-case evaluation employed since United States v. Perez, 22 U.S. (9 Wheat.) 579, 6 L.Ed. 165 (1824), he considered that the overriding interest of protecting a defendant from successive prosecutions must prevail.

As we have recently observed, the conclusion that jeopardy attaches once the jury is selected and sworn begins rather than ends the inquiry as to whether the double jeopardy clause bars retrial. Smith v. Mississippi, 478 F.2d 89, 93 (CA5, 1973). If it was properly within the discretion of the trial judge to find that a mistrial was required by “manifest necessity” or by the “ends of public justice,” id. 478 F.2d at 94; United States v. Perez, supra 22 U.S. at 580, 6 L.Ed. at 165, retrial is not precluded. Otherwise it is precluded by the Fifth Amendment’s double jeopardy provision. There is no mechanical formula to be applied, but rather the focus is upon the propriety of the trial judge’s exercise of his discretion in granting the mistrial, taking into account all circumstances relevant to the particular trial. Smith v. Mississippi, supra 478 F.2d at 94.

Under 18 U.S.C. § 2518(10) (a), a provision of § 802 of the Omnibus Crime Control and Safe Streets Act of 1968, a motion to suppress intercepted wire or oral communication on, among other grounds, that the communication was unlawfully intercepted “shall be made before the trial, hearing, or proceeding unless there was no opportunity to make such motion or the person was not aware of the grounds of the motion.” The “unless” clause is not apposite in this case. Section 2518(10) (b) provides that the government shall have a right to appeal from orders granting such motions to suppress. The Senate Report accompanying the Act noted that “The motion must be made before the trial,” unless there was no opportunity or the defendant was unaware of the grounds and cautioned that, “Care must be exercised to avoid having a defendant defeat the right of appeal ... by waiting until trial.” 1968 U.S.Code Cong, and Admin.News p. 2195.

We conclude that the motion should not have been heard and that the action of the court in hearing and granting Moon’s motion denied the government its statutory right to appeal. That being so, implementation of the government’s right to appeal required that a mistrial be granted, as a matter of “manifest necessity” and the “ends of public justice.”

We do not go so far as to say that error in simply granting a motion which was within the province of the trial court to grant is sufficient to justify a mistrial that does not create jeopardy. Here the court’s error lay not simply in granting the motion but in hearing it at all in violation of a stated Congressional policy. In many other instances of erroneous trial court rulings the government is left without an appellate remedy, but in this instance there is an explicit Congressional directive that the particular motion be made in such manner as to be appealable by the government. Underlying this requirement was a desire for uniform interpretation of the standards to be applied to motions to suppress intercepted communications. See U.S. Code Cong, and Admin.News, supra, at p. 2196. The uniformity interest is not served by allowing motions improperly heard during trial to be forever insulated from the appellate review Congress sought to assure. The better course would seem to be to leave open to the trial court the option of granting a mistrial and retrial if it subsequently realized that it should never have heard the motion in the first place.

Theoretically mandamus to the trial court directing it to refuse to hear the motion after trial commences might be available to effectuate § 2518, thus making a mistrial unnecessary. Even if mandamus were available it would be of little utility in the present context where the trial was under way and a jury in the box.

This is not a case of the type of Downum v. United States, supra, where declaration of a mistrial has been based on a rule or a defective procedure lending itself to prosecutorial manipulation. The timing of the motion to suppress was within the control of defendant Moon. Nor is this a case presenting “important countervailing considerations that an accused be not harrassed by a series of aborted criminal proceedings which necessarily entail financial, physical and psychological burdens of enormous dimensions and which give rise to danger that with enough opportunities the prosecution will convict the innocent.” Smith v. Mississippi, supra 478 F.2d at 93. This trial had progressed no further than the swearing of the jury.

The government argued to the trial judge that Fed.R.Crim.P. 41 forbade his considering the motion to suppress once trial began. The last sentence of the version of 41(e) in effect when the motion was made permitted the court in its discretion to entertain the motion at trial. To the extent that § 2518, supra, mandates pre-trial presentation, the Congressional enactment of the Omnibus Crime Control Act supersedes or modifies an inconsistent federal rule. See 2 Moore’s Federal Practice 1.02 [5]; 7 Moore’s Federal Practice ¶ 86.04 [4]; United States v. Gustin-Bacon Div., Certainteed Products Corp., 426 F.2d 539 (CA10, 1970) (dictum).

On remand the District Court should vacate its order granting the motion to suppress, and the matter can then proceed in normal channels.

Reversed and remanded with directions.

      . Which since 1968 has been subject to the amendments contained in 18 U.S.C. §§ 2510-2520.

      . The defendant’s motion to suppress was on federal and state statutory grounds. There was no claim that the overhear violated the Fourth Amendment. It is not, therefore, necessary for us to consider whether Congress can constitutionally require that evidentiary objections made on constitutional grounds be asserted before trial.

      . Such a rule might enable the government to litigate on appeal or at a second trial the validity of the ruling on the motion.

      . It is by no means clear that it would be. See generally Will v. United States, 389 U.S. 90, 96-98, 88 S.Ct. 269, 274-275, 19 L.Ed.2d 305, 311-312 (1967) and Hart & Wechsler, Federal Courts and the Federal System (2d Ed. 1973) at 1570-72.

      . Except, to reiterate, we pretermit consideration of Congressional power to control presentation of objections to evidentiary matters based on constitutional grounds.


author: COLEMAN, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Daniel Clarence COLLINS, Jr., Defendant-Appellant.
    No. 73-2407.
    United States Court of Appeals, Fifth Circuit.
    April 1, 1974.

      Robert J. Kelly, Oxford, Miss, (court-appointed) , for defendant-appellant.
    H. M. Ray., U. S. Atty., Alfred E. Moreton, III, Asst. U. S. Atty., Oxford, Miss., for plaintiff-appellee.
    Before COLEMAN, CLARK and GEE, Circuit Judges.
   COLEMAN, Circuit Judge:

Daniel Clarence Collins was convicted on a jury verdict of the armed robbery of a bank, the deposits of which were insured by the Federal Deposit Insurance Corporation. That Collins was a participant in the robbery is undisputed; the defense was built around the proposition that as a result of mental disease or defect Collins lacked substantial capacity either to appreciate the wrongfulness of his conduct or to conform it to the requirements of the law, Blake v. United States, 5 Cir., 1969, 407 F.2d 908 (en banc).

This defense provoked some interesting skirmishes, launched from several procedural or evidentiary salients. Nevertheless, we affirm.

The defense was not altogether without merit. Collins had been discharged from military service on account of schizophrenia. The medical evidence reveals increasing psychiatrical care in the two years immediately preceding the robbery. There was further evidence, however, that the mental abnormality from which the defendant suffered was marked by periods of remission. The prosecution insisted that at the time of the robbery the schizophrenia was, in fact, in remission. Both sides introduced evidence in support of their positions but we need not go into detail since the jury believed one and rejected the other.

When raised as a defense to a criminal prosecution, the issue of a defendant’s sanity is a question for the trier of the fact, to be determined from all the evidence, United States v. Harper, 5 Cir., 1971, 450 F.2d 1032. As to the considerable expert testimony introduced by the government and the defendant, it must be said that questions of credibility and the weight of expert testimony are for the jury. Such expert testimony is ordinarily not conclusive, even when uncontradicted, Mims v. United States, 5 Cir., 1967, 375 F.2d 135; United States v. Pitts, 5 Cir., 1970, 428 F.2d 534, cert. den., 400 U.S. 910, 91 S.Ct. 154, 27 L.Ed.2d 149 (1970).

There was no error in the denial of the motions for a directed verdict of not guilty.

This remands us to the consideration of other points raised by this appeal.

First, it is argued that the District Court erred in declining to determine Collins’ lack of legal responsibility on the date of the robbery in a pretrial motion to dismiss under the Federal Rules of Criminal Procedure. We disagree. As already indicated, an allegation of mental incapacity as a defense goes to the merits and is for the determination of the trier of the fact. See, also, United States v. Huff, 5 Cir., 1969, 409 F.2d 1225, cert. den., 396 U.S. 857, 90 S.Ct. 123, 24 L.Ed.2d 108 (1969). It necessarily follows that Rule 12(b)(1) of the Federal Rules of Criminal Procedure invests the trial judge with no authority to decide this issue as a matter of law rather than submitting it to factual exploration and decision. Even if this were not so, matters which may be decided under a Rule 12(b)(1) pre-trial motion may, in the discretion of the trial judge, be postponed to the trial on the merits, United States v. Covington, 1969, 395 U.S. 57, 89 S.Ct. 1559, 23 L.Ed.2d 94.

In rebuttal, the government offered and the Court admitted a statement which Collins gave the F.B.I. soon after the commission of the offense. The statement was neither offered nor admitted as proof that Collins committed the offense. That he did so was undisputed. Its purpose was to show the mental condition of the appellant at the time he gave the statement, i. e. to rebut the defense of insanity. The District Judge first held a Jackson v. Denno hearing and found that the appellant freely and voluntarily gave the statement in question. The defense strongly contended that the defendant’s mental condition foreclosed any notion of voluntariness. A reading of the statement, however, demonstrates no irrationality or lack of contact with reality. Rather, it shows that Collins was keenly aware of what he needed to say in order to exculpate himself. The finding of voluntariness will not fit into the clearly erroneous mould. At the point offered, the statement was admissible for the purpose for which it was introduced, United States v. Roberts, 5 Cir., 1972, 470 F.2d 1190.

This brings us to the final point. At a very early stage in the ease, Collins was given a competency hearing and was found at that date to be incompetent to stand trial. Two months later, another hearing resulted in a finding to the contrary. At the trial on the merits, the defense unsuccessfully attempted to spread before the jury the original order adjudging Collins incompetent to stand trial. Appellant advances the argument that the failure to admit the order was error. We think not. Competency to stand trial at a particular time goes not to the mental condition existing at the time of the alleged offense; it is concerned solely with whether the defendant is then able to confer intelligently with counsel and to competently participate in the trial of his case. More specifically, it has nothing to do with the merits of the case; it is a separate issue. This is somewhat implicit in the rule which denied the government the right to introduce in evidence an order finding the defendant competent to stand trial, 18 U.S.C., § 4244.

This does not mean, of course, that the defendant may not introduce at the trial on the merits any competent evidence adduced at the hearing to determine competency to stand trial. It means only that the defense may not becloud the issue which the jury is to decide by the introduction of the result reached on an entirely different issue, decided as to a different time frame and governed by different standards of decision.

It is suggested, also, that the appellant may not have had the effective representation of competent counsel. Our reading of the record compels us to exactly the opposite view. As may be discerned from the preceding portions of this opinion, counsel allowed no hopeful contention to escape his attention; on the way down the cliff toward conviction he seized hold of every bush or rock which offered any hope of breaking or preventing the fall. In fact, counsel did such a good job that up until the jury so decided, the conviction of his client was, as the Duke of Wellington said after the Battle of Waterloo, a very “near thing”.

The evidence abundantly supports the belief, implicit in the verdict, that this unfortunate young man did suffer from schizophrenia, but that on the day of the robbery he was in remission and his behaviour, other than the robbery itself, was that of a normal person.

The judgment of the District Court is Affirmed.


author:
GEWIN, Circuit Judge: BROWN, Chief Judge, CLARK, Circuit Judge RONEY, Circuit Judge,
      COLEMAN, Circuit Judge GEE, Circuit Judge

text:
    Willie L. MORROW and Jerome Mangum, Individually and on behalf of all others similarly situated, Plaintiffs-Appellants-Cross Appellees, v. Giles CRISLER, Commissioner of Public Safety of Mississippi et al., Defendants-Appellees-Cross Appellants.
    No. 72-1136.
    United States Court of Appeals, Fifth Circuit.
    March 27, 1974.

      Frank R. Parker, Constance Iona Slaughter, Jackson, Miss., for plaintiffs-appellants-cross appellees.
    David L. Rose, Chief, Employment Section, William B. Fenton, Dept. of Justice, Civ. Rights Div., Washington, D. C., Morris S. Dees, Jr., Joseph J. Levin, Jr., Montgomery, Ala., for amicus curiae.
    William A. Allain, First Asst. Atty. Gen., P. Roger Googe, Jr., Special Asst. Atty. Gen., Charles A. Marx, Heber Ladner, Jr., Jackson, Miss., for defendantsappellees-cross appellants.
    Before BROWN, Chief Judge, and-WISDOM, GEWIN, BELL, THORN-BERRY, COLEMAN, GOLDBERG, AINSWORTH, GODBOLD, DYER, SIMPSON, MORGAN, CLARK, RONEY and GEE, Circuit Judges.
   GEWIN, Circuit Judge:

This case involves racial discrimination in the employment practices of the Mississippi Highway Patrol. There being no question that the Highway Patrol has historically engaged in unconstitutional discrimination in the employment of patrolmen, the only question that brought this case en banc is whether the District Court ordered sufficient affirmative relief to eradicate the State’s unconstitutional employment' practices and their effects.

Experience since the entry of the decree provides this Court on rehearing with the hindsight to determine what was fathomed by foresight in the dissent from the panel opinion: the relief ordered by the District Court is insufficient. When this case was heard by the original panel in June 1972, the Highway Patrol had four black patrolmen. By the time the case was heard by the en banc Court in October 1973, there were six black patrolmen —six black patrolmen hired since entry of the decree during a period when 91 patrolmen were added to a total force of approximately 500 troopers.

These figures alone negate the State’s argument that its present practices are nondiseriminatory, and give no support whatsoever to any argument that the decree appealed from is sufficient to eliminate the effects of past racial discrimination. Although we have difficulty seeing how any good faith argument could be made that the State has fulfilled the spirit, intent, and purpose of the District Court decree, counsel reported at oral argument before the en banc Court that the Highway Patrol has fully complied with the precise terms of the order. This illuminates plaintiffs’ argument that the District Court must order additional specific relief if the Mississippi Highway Patrol’s employment practices are ever to pass constitutional muster.

The controlling facts of the case and the District Court’s decree are fully set forth in the panel opinions reported at 479 F.2d 960 (5th Cir. 1973). The majority affirmed the decree on the ground that it did not appear that the relief granted was inadequate to remedy the constitutional wrong. It was noted that

Time may prove that the District Court was wrong, i. e., that the relief ordered was not sufficient to achieve a nondiseriminatory system and eliminate the effects of past discrimination. . . . The Court has retained jurisdiction to make the decree work. If it has ordered too much, it may modify the decree when it appears necessary. If it has not ordered enough, it may change the decree to require such additional relief as it determines to be necessary to remedy the wrong.

479 F.2d at 964. The undisputed results of the decree as reported to us on rehearing prove that the District Court was wrong, and the en banc Court now decides that the case should have been and must now be remanded for the District Court, in the first instance, to fashion an appropriate decree which will have the certain result of increasing the number of blacks on the Highway Patrol. Although we are mindful of our limited role in fashioning equitable decrees, we deem it fitting to adumbrate guidelines to aid the District Court.

The appellees represent that they have hired every black applicant who has met qualifications for employment. If this be true, it is apparent that either the qualifications are discriminatory in effect, or the State has not conducted a sufficient recruitment campaign to enlist blacks who meet those requirements. It is the recruitment and the hiring criteria that the District Court should scrutinize on remand.

The reputation of the Patrol in the black community as a discriminatory employer has posed a formidable obstacle to the achievement of a Patrol which has eradicated all of the effects of past discriminatory practices. To counteract this reputation, the District Court ordered the Patrol to conduct an affirmative recruitment program. The efficacy of this program is belied by appellees’ assertion that qualified blacks are not in fact applying for positions. Since we are not sanguine enough to be of the view that benign recruitment programs can purge in two years a reputation which discriminatory practices of approximately 30 years have entrenched in the minds of blacks in Mississippi, on remand the District Court should order that additional appropriate recruitment measures be taken to insure that black applicants will be attracted to the force.

The Department’s hiring criteria should also be reexamined. Employment is presently conditioned upon possession of a high school diploma and passage of the Army General Classification Test, neither of which has been validated as a proper job requirement despite the fact that their propriety has been called into question. It may be that the diploma and test score requirements (a score of 110) are higher than needed to qualify those applicants who can perform the work of a Highway Patrolman. Such tests should be job validated. Moreover, the state should be required to defend by clear and convincing evidence the necessity of any additional objective requirements which black applicants have difficulty in satisfying.

Beyond insuring that objective hiring criteria are utilized, it will be incumbent on the District Court to order some affirmative hiring relief. It may, within the bounds of discretion, order temporary one-to-one or one-to-two hiring, the creation of hiring pools, or a freeze on white hiring, or any other form of affirmative hiring relief until the Patrol is effectively integrated. We emphasize, however, that the imposition of some affirmative hiring relief need not inexorably lead to the dilution of valid employment qualifications.

The duration of the affirmative hiring relief shall be determined by the District Court. When it is convinced that the measures undertaken by the Patrol effectively offset the effects of past discrimination, such affirmative hiring relief can be terminated. It is not required that the proportion of blacks on the Patrol mirror the proportion of blacks in the population. However, in view of the protracted and pervasive discrimination practiced by the Department and the inefficacy of the prior decree in producing a more integrated Patrol, the burden will be upon the Patrol to prove that the residual effect of past discrimination has in fact been eliminated. Moreover, prior to the cessation of affirmative hiring programs, where any black individual challenges the Patrol’s refusal to employ him, the Patrol must show that such refusal was for legitimate job related reasons.

Upon completion of its scrutiny of the recruitment program and hiring criteria consistent with the aforementioned principles, the District Court-should require the Department to fashion and submit for immediate approval and subsequent periodic review a plan which incorporates the District Court’s mandates. As we have said in other contexts involving discrimination, the plan submitted to the District Court and subject to its ultimate enforcement must be one that works and works now. Discriminatory hiring policies must be eliminated and the evils of their existence eradicated. Nothing less is countenanced by the applicable law.

Competition is keen for able and competent blacks in the law enforcement area. Salaries are limited by legislative enactment. Public bodies cannot fully engage in salary and benefit competition which is available to the private sector. From the record in this ease, it is obvious that the Highway Patrol probably cannot successfully engage in this competition through mere mechanical obedience to the words of a judicial decree. Imaginative initiative is needed from all present members of the Highway Patrol.

To achieve success in this case, the plaintiffs and the defendants need to fully cooperate with each other and with the Court. The plaintiffs, as a class, seeking equity must do equity and might well be required to give full assistance in the recruitment of qualified black applicants.

This case is remanded to the District Court for such immediate interim orders, further proceedings, and final action as may be consistent with this opinion.

The panel opinion is affirmed as to the individual appeals. The District Court shall reconsider the award of the amount of attorney’s fees, and shall award such fees as may be appropriate for this appeal and further proceedings. See Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974); Clark v. American Marine Corp., 320 F.Supp. 709, aff’d, 437 F.2d 959 (5th Cir. 1971).

Remanded.

BROWN, Chief Judge,

with whom WISDOM, Circuit Judge, joins (concurring) ;

Although I have joined, without reservation in Judge Gewin’s opinion for us, I write this concurrence to respond to Judge Clark’s concurrence. Although perhaps literally directed to race-selective hiring his insistence that by this action “we break judicial new ground in this Circuit” leads me to read it broadly as asserting that this is so wholly unprecedented that were it not for the vast body of law from sister Circuits his doubts “that its constitutional validity can be reasonably articulated” would have led him to dissent. But this is not new and startling. Rather than followers we have been in the van. We are not Johnny-come-latelys to the eradication of racial discrimination through race conscious means.

I wish to put the Court’s decision in proper historical perspective. In voting rights cases of the early 1960’s, this Court adopted what has been characterized as the deep freeze principle, a remedy designed to ensure that until all traces of discrimination against blacks were removed, blacks would be accorded the same treatment as that accorded whites in the era of discrimination. The object was to give blacks this right to catch up. To achieve that goal, blacks had to be dealt with as blacks.

While Judge Clark recognizes the Court’s use of “color conscious” relief to remedy discrimination in the schools, we have imposed ratios in hiring of teachers and replacement of those displaced by desegregation orders.

Similarly, under Title VII we have frequently sanctioned use of the race conscious “rightful place theory” under which incumbent black employees may use plant, company or terminal seniority despite a collective bargaining agreement mandate of job, unit or craft seniority in order to eradicate the present effects of past discrimination. Furthermore we have approved of an interim one-for-one black-white referral system pending the development of objective Union membership criteria.

Likewise in grand and petit jury selection cases we have many times held that to achieve the constitutional goal of a fair cross section of the community the state must consciously take into account identifiable groups such as blacks.

Use of race consciousness as a part of the judicial remedy to overcome or alleviate past discrimination is neither new to the Fifth Circuit nor in need of outside assistance from our sister Circuits, much as we welcome it.

CLARK, Circuit Judge

(concurring):

Insofar as our mandate permits the district court in its discretion to require the use of quotas or other forms of race-conscious hiring relief here, we break judicial new ground in this circuit. Not only the novelty but also the sweep of today’s precedent—applying as it does to all appointed officials—persuades me to record this concurrence.

Unfortunately, no court has ever adequately rationalized the constitutional infirmities suggested in Judge Gee’s dissent that are inherent in requiring “affirmative hiring practices” based upon race. When the first Mr. Justice Harlan dissented in Plessy v. Ferguson, 163 U.S. 537, 554-555, 16 S.Ct. 1138, 1145, 41 L.Ed. 256 (1896), he put this side of my problem more aptly than I can.

In respect of civil rights, common to all citizens, the constitution of the United States does not, I think, permit any public authority to know the race of those entitled to be protected in the enjoyment of such rights. Every true man has pride of race, and under appropriate circumstances, when the rights of others, his equals before the law, are not to be affected, it is his privilege to express such pride and to take such action based upon it as to him seems proper. But I deny that any legislative body or judicial tribunal may have regard to the race of citizens when the civil rights of those citizens are involved.

It is logically inconsistent to propound in one breath the ideal abstraction that “[o]ur Constitution is color-blind, and neither knows nor tolerates classes among citizens . . . [who] are equal before the law,” Plessy v. Ferguson, supra, 163 U.S. at 559, and in the next to assert that the same document allows an appellate tribunal to mandate the utilization of overt classification by race as a remedy for past wrongs. Yet I recognize that in the context of integrating public educational institutions this court has stated:

The Constitution is both color blind and color conscious. To avoid conflict with the equal protection clause, a classification that denies a benefit, causes harm, or imposes a burden must not be based on race. In that sense, the Constitution is color blind. But the Constitution is color conscious to prevent discrimination being perpetuated and to undo the effects of past discrimination. The criterion is the relevancy of color to a legitimate governmental purpose.

United States v. Jefferson County Board of Education, 372 F.2d 836, 876 (5th Cir. 1966), aff’d en banc, 380 F.2d 385 (1967), cert. denied, Caddo Parish School Bd. v. United States, 389 U.S. 840, 88 S.Ct. 67, 19 L.Ed.2d 103 (1967). In the same context, the Supreme Court has clearly affirmed the use of “mathematical ratios” by a federal chancellor as a “useful starting point in shaping a remedy to correct past constitutional violations.” Swann v. Charlotte-Mecklenburg Board of Education, 402 U.S. 1, 26, 91 S.Ct. 1267, 1280, 28 L.Ed.2d 554 (1971).

Despite congressional proscriptions against preferential treatment or utilization of race as a factor in the decision not to hire, 42 U.S.C. § 2000e-2(a), (j); see also Griggs v. Duke Power Company, 401 U.S. 424, 431-432, 91 S.Ct. 849, 853, 28 L.Ed.2d 158 (1971), other circuits have not hesitated either to affirm, approve or institute orders requiring affirmative hiring relief when deemed necessary to eradicate the present effects of past discrimination in suits brought under Title VII of the Civil Rights Act of 1964. See, e. g., United States v. N. L. Industries, Inc., 479 F.2d 354 (8th Cir. 1973); United States v. IBEW Local No. 212, 472 F.2d 634 (6th Cir. 1973); United States v. Wood Lathers Local No. 46, 471 F.2d 408 (2d Cir.), cert. denied, 412 U.S. 939, 93 S.Ct. 2773, 37 L.Ed.2d 398 (1973); United States v. Carpenters Local No. 169, 457 F.2d 210 (7th Cir.), cert. denied, 409 U.S. 851, 93 S.Ct. 63, 34 L.Ed.2d 94 (1972); United States v. Ironworkers Local No. 86, 443 F.2d 544 (9th Cir.), cert. denied, 404 U.S. 984, 92 S.Ct. 447, 30 L.Ed.2d 367 (1971); United States v. IBEW Local No. 38, 428 F.2d 144 (6th Cir,), cert. denied, 400 U.S. 943, 91 S.Ct. 245, 27 L.Ed.2d 248 (1970). We have too. Asbestos Workers Local No. 53 v. Vogler, 407 F.2d 1047 (5th Cir. 1969).

The Philadelphia Plan and other similar programs, which pursuant to Executive Order require minority representation in federally-assisted construction projects, have been specifically approved. See, e. g., Southern Illinois Builders Association v. Ogilvie, 471 F.2d 680 (7th Cir. 1972); Contractors Association v. Shultz, 442 F.2d 159 (3d Cir.), cert. denied, 404 U.S. 854, 92 S.Ct. 98, 30 L.Ed.2d 95 (1971); Joyce v. McCrane, 320 F.Supp. 1284 (D.N.J., 1970); see also Associated General Contractors v. Altshuler, 490 F.2d 9 (1st Cir. 1973).

Four of our sister circuits have approved requiring the use of affirmative hiring relief by public agencies that have engaged in employment practices which have been shown to have a racially discriminatory effect. See, e. g. Vulcan Society v. Civil Service Commission, 490 F.2d 387 (2d Cir. 1973); Bridgeport Guardians, Inc. v. Bridgeport Civil Service Commission, 482 F.2d 1333 (2d Cir. 1973); Pennsylvania v. O’Neill, 473 F.2d 1029 (3d Cir. 1973) (en banc); Castro v. Beecher, 459 F.2d 725 (1st Cir. 1972); Carter v. Gallagher, 452 F.2d 315 (8th Cir. 1971) (en banc), cert. denied, 406 U.S. 950, 92 S.Ct. 2045, 32 L.Ed.2d 338 (1972); but see Harper v. Kloster, 486 F.2d 1134 (4th Cir. 1973). Despite my doubts that its constitutional validity can be reasonably articulated, this overwhelming precedent constrains me to concur in holding that the imposition of quota hiring relief is a permissible exercise of the federal chancellor’s discretion.

The statistics which Judge Coleman has developed as to other similar agencies cogently demonstrate that Mississippi is not unique, but they also reinforce by belief that, given the legal power to impose it, this powerful discretion should be vested in the trial court here. This is especially true in light of the fact that the Mississippi Highway Patrol urges on oral argument that it is already engaging in the practice of hiring every qualified black applicant.

I do not understand the majority opinion to require the dilution of any valid employment qualification as an adjunct of achieving the intergration it requires and would not concur if it did, for such a proviso or consequence would be contrary to common sense and every prior precedent. Surely, too, it is implicit in what we say that if any affirmative relief provision imposed should prove unworkable, the defendant officials would petition for and be entitled to supplemental relief. Therefore, I find no refuge in Judge Roney’s suggestion of preferential black hiring, which is obviously encompassed in the majority’s “affirmative hiring relief” anyway.

With deference to Chief Judge Brown and Judge Wisdom, I had not the slightest intention of underbilling the pioneer spirit which has marked this circuit’s broad range of integration ratio and other race-based relief orders. However, today our national concepts of a proper solution to the chronic problem of race relations are in a state of flux. At a time when conservative resistance to mandates for social change has begun to melt, the liberal elite openly voice doubts that past remedies are efficacious and suggest that egalite be pursued in forms that differ from “separate but equal” in name only. In such a situation I deem it important to record that (1) no holding by this or any other court has yet spelled out how quota relief can be squared with constitutional fundamentals, (2) employment quotas have never been ordered by this circuit, and (3) if precedent did not compel concurrence, I would opt for a different course.

RONEY, Circuit Judge,

with whom BELL and AINSWORTH, Circuit Judges, join (concurring specially):

I concur in the result and in most of the text of the above opinion. I do not concur, however, in that portion of the opinion which indicates approval of a temporary hiring quota.

Although the opinion rejects the idea that a hiring quota would dilute valid employment qualifications, that result seems inevitable to me in the context of this case. The record does not indicate the availability of blacks meeting present qualifications. The State reported at oral argument that since the decree the Patrol has hired every black applicant found qualified under present standards. We do not yet know the potential availability of blacks meeting the minimal employment qualifications that will eventually be approved by the District Court. Until qualified blacks become available for employment, a hiring quota will either require employment of underqualified or nonqualified blacks or effect a freeze on hiring. Yet the majority disclaims any suggestion of hiring unqualified people. Moreover, an effective freeze on hiring could subvert the Patrol’s primary purpose of protecting the public.

A temporary requirement that the Patrol hire every black applicant who meets the minimal qualifications which the Court may finally determine to be valid would not invite such an adverse result. Relief of that nature might be in order until a sufficient number of blacks have been hired to overcome the effects of the past discriminatory employment practices on the Patrol. Hiring goals, hiring timetables, and the provision of additional training are all worthy of consideration by the District Court, but a fixed quota, temporary or permanent, could well prove counter-productive.

COLEMAN, Circuit Judge

(dissenting) :

I agree that no properly qualified person should be denied appointment to the Mississippi Highway Safety Patrol on account of race, color, religion, national origin, or any other factor contrary to the basic principles protected by the Fourteenth Amendment. That is not my difficulty with this appeal. It appears clear to me that the majority opinion incorrectly travels beyond Constitutional requirements in several respects; therefore, I must respectfully dissent to much of the language appearing therein. I have particular reference to the open hints that minimum requirements for eligibility may be reduced, that the requirement of a high school diploma or its equivalent may be dispensed with, and that the State may not really satisfy itself of the intelligence of those who are to be trusted with such crucial responsibility. Finally, I do not wish to be understood as agreeing to “quota hiring”, temporary or otherwise.

With deference, the fundamental error of the majority opinion is in its approach to intelligence and educational qualifications for Mississippi state highway patrolmen as if they were mere “jobholders” or “employees”, performing routine activities, when the truth is that they are state officials, charged with the execution of duties vital to the enforcement of the law and the preservation of human life on the highways, demanding the daily exercise of sound discretion.

By an Act approved April 1, 1938, Chapter 143, Laws of Mississippi of 1938, the Mississippi Legislature created a highway safety patrol, to be composed of not more than 53 men (now expanded to 425), to be elected after an examination as to physical and mental fitness, knowledge of traffic laws, the law of arrest, and acquaintance with the rules and regulations of the State Highway Commission, the Public Service Commission, and the Motor Vehicle Commissioner (emphasis added). Each patrolman was required to furnish bond in the sum of $5,000 for the faithful performance “of the duties of his office” (emphasis added). After twelve months service, no patrolman may be dismissed except upon written order of the governor, after a hearing on charges filed not less than ten days in advance.

These factors made these men officials, not employees or jobholders, State v. McLaurin, 159 Miss. 188, 131 So. 89 (1930); Golding v. Armstrong, 231 Miss. 889, 97 So.2d 379 (1957).

Certain classes of patrolmen are vested with general peace officer jurisdiction throughout the State, as in the case of the Texas Rangers. By the duly published proclamation of the governor, all patrolmen may be assigned general peace officer jurisdiction in order to suppress mob violence, crimes of violence, riots, and acts of intimidation or terror. All patrolmen are armed with .357 magnum pistols and other highly effective weapons. Moreover, in their enforcement of the highway safety laws they encounter every year hundreds of deaths and thousands of personal injuries on the highways.

Patrolmen are generally on duty for twelve hours a day, for specified days of the week, and may be transferred at the discretion of the Commissioner to any point in the State where it is believed that their services may best be utilized. These officers deal constantly and continuously with interstate and intra-state travellers, law abiding or otherwise. They are subjected to all the hazards of any uniformed police officer and, regretfully, some in the line of duty have lost their lives since 1938. An unintelligent, untrained officer, possessed of less than average judgment and ability, armed as he has to be, may be a hazard to the travelling public. I believe that these officers perform functions which are of compelling state interest.

I cannot agree that the Fourteenth Amendment was ever intended to mean, nor that it requires, that citizenry and visitors, travelling under the protective cloak provided by the Constitution of the United States, must be subjected to arrest, imprisonment, and even more deadly dangers at the hands of incompetent officers cf. whatever race.

Every state in the Fifth Circuit requires that its highway patrolmen shall have a high school education or its equivalent, except Texas, which requires 45 semester hours of college.

It is too late to weep when some under-educated, subnormally intelligent individual, white or black, armed with deadly weapons, unjustifiably launches a human being into eternity or severely wounds him or impermissibly deprives him of his liberty simply because that officer was thrust into a position for which he lacked the education, the intelligence, and the sound judgment to deal with problems which highway patrolmen have to encounter every day. Moreover, it is too late to weep for the officer’s wife and children when he is brought home a corpse, the victim of a criminal who had the mental advantage of him from the start. So, as a court of equity, as we are in this case, we should be extremely wary of the exercise of our own discretion to downgrade the quality of enforcement and protection which the people are entitled to expect on the highways.

That is not all. I believe that under the binding precepts of federal-state relations, the state has the right to prescribe the qualifications and duties of those state officials who are charged with the performance of purely state functions, certainly so, as long as those qualifications are neither arbitrary, nor unreasonable, nor capricious, nor racially discriminatory.

I refer to the language of the Supreme Court in Carter v. Jury Commission of Greene County, 396 U.S. 320, 90 S.Ct. 518, 24 L.Ed.2d 549 (1970):

“It has long been accepted that the Constitution does not forbid the States to prescribe relevant qualifications for their jurors. The States remain free to confine the selection to citizens, to persons meeting specified qualifications of age and educational attainment, and to those possessing good intelligence, sound judgment, and fair character. ‘Our duty to protect' the federal constitutional rights of all does not mean we must or should impose on states our conception of the proper source of jury lists, so long as the source reasonably reflects a crpsssection of the population suitable' in character and intelligence for that civic duty’.” [Emphasis aded and footnotes omitted]. 90 S.Ct. at 525.

If this may be said of those who are to perform the comparatively safe functions of a juror, and under the directions of a presiding judge, then how much more true should it be of those who are to spend their days in the highly transitory conditions of the highways, apprehending criminals, succoring the injured, handling fatalities, and trying to improve driving practices.

The test is whether the qualifications are “capable of being carried out with no racial discrimination whatsoever”. Id., at 526.

There is nothing in this record to suggest that Mississippi is so bereft of Negro high school graduates and college trained persons that it has no adequate pool of qualified individuals for highway patrol service. I think common knowledge shouts loudly to the contrary. Of course, one cannot be drafted into the patrol, as he can be for military service, and there are many who are reluctant to undertake this dangerous work. There are many who do not like twelve hour days or transfers to strange territory. That, in a free society, is their privilege. It should not, however, be converted into an engine for the employment of individuals, of any race, who, unfortunately, are of inadequate intelligence or handicapped by lack of a reasonable education. Indeed, it smacks of judicially asserted notions of racial inferiority to suggest that standards of intelligence and education have to be relaxed if the Negro applicant is to be able to meet the requirements. I am sure the majority had no such thought in mind.

The majority opinion states that the District Court “may, within the bounds of discretion, order temporary one-to-one or one-to-two hiring, the creation of hiring pools, or a freeze on white hiring, or any other form of affirmative hiring relief until the Patrol is effectively integrated”.

If “temporary” quotas are permissible, I fail to see why a “permanent” quota would be impermissible. Relying on Harper v. Foster, 4 Cir., 1973, 386 F.2d 1134, and especially in view of our dealing with state officials rather than mere employees performing routine tasks, I would make it clear to the District Court that hiring quotas and “white freezes” are not appropriate tools in the resolution of this problem. I agree with what the District Court said in Harper v. Mayor and City Council of Baltimore, 359 F.Supp. 1187, 1213-1215, affirmed in Harper v. Floster, supra, that the Supreme Court has not dealt with the granting of favors or the creation of rights on a racial basis as part of a court’s remedial powers, that, without regard to race, all prospective employees and all prospective state officials have the right to consideration for selection and that the courts should not reenforce the view that it is the race of applicants which is important rather than their qualifications. In other words, the public is not required to sacrifice the qualifications of those who serve it and the qualified are not .to be denied appointment or employment because of their race.

If I had the right to decide this ease on my own, I would remand it to the District Court with the following directions :

1. The right of the State to prescribe the qualifications of those who are to perform highway patrol functions shall be undisturbed;

2. The District Court will supervise the compilation of a racially neutral intelligence test from which the State can, and will be required to, fairly and impartially determine the intelligence of its prospective officers;

3. The Mississippi Highway Safety Patrol will be required semi-annually to visit every high school graduating class and every college campus in the State for the purpose of announcing that it is seeking to recruit highway patrolmen, without regard to race or color, from among those qualified to undertake the work, explaining the qualifications in a thoroughly understandable manner. Similar announcements should be made in the press, on the radio, and by television ;

4. No qualified black applicant may be passed over for an appointment in the Mississippi Highway Safety Patrol except for an applicant who clearly and objectively possesses higher qualifications for that particular appointment;

5. Appropriate quarterly reports shall be required to insure that no duly qualified black person has been denied an appointment on account of race.

This approach should banish race as a factor in the appointment of highway patrolmen, without sacrificing the competency of the organization.

It is noted from the figures in this record that in 1972, forty-seven white applicants and one black applicant were rejected for failure to pass the physical examination, while sixty-six white applicants and fifty-four black applicants failed the prescribed intelligence test, the racially neutral character of which has not been established. In any event, there is plenty of room to' say that in the search for high quality patrol officers, both whites and blacks have been rejected in substantial numbers. It only remains for the highway patrol, in the pursuit of competence, to immunize itself in an indisputable manner from all appearances of racial discrimination. Certainly, in the proper application of racially neutral intelligence tests, plus the requirement of a high school education or its equivalent, that goal can be achieved.

I close by pointing out that we are not here dealing with a problem peculiar to Mississsippi. Depressing the competency of the Mississippi Highway Patrol will prove to be a bad precedent for the other states of this Circuit. According to the best records publicly available, on February 11, 1974 the racial composition of the highway patrols in these six states was as follows:

State White Black
Alabama 335 13
Florida 1088 12
Georgia 677 7
Louisiana 689 11
Mississippi 543 5
Texas 1356 16

If the education and the intelligence of the Mississippi Highway Patrol are to be diminished by judicial decree, no prophet is required to name the next on the schedule for similar treatment.

I would remand the case for a more meaningful effort to recruit qualified patrolmen of the Negro race, but not by the methods hinted by the majority opinion. As to those features of the opinion, I respectfully dissent.

GEE, Circuit Judge

(concurring in part and dissenting in part):

Agreeing as I do with almost the entire text of the majority opinion, and troubled moreover by a progress toward racial parity in hiring practices of such glacial slowness as to suggest the possibility of recalcitrance, I am yet unable to concur in the opinion’s approval of racial hiring quotas or a freeze on white hiring as remedies appropriate for application by the district court. That they would be effective is plain. That they are constitutional, to me, less so.

As to these remedies, it is a strangely familiar message which the Court finds the Fourteenth Amendment has today for the qualified white applicant who is rejected solely because of his race. Indeed, it is the same message which the Constitution had only yesterday for the qualified but segregated Negro schoolchild : all people are equal, but some are more equal than others.

Today, integration is seen as an overriding end, yesterday segregation. The Constitution should be above the day’s fashion in moral imperatives. We here advance some distance along what seems to me a wrong turning, but it may be that another cross-roads is at hand. See DeFunis v. Odegaard, 82 Wash.2d 11, 507 P.2d 1169 (1973), cert. g’td, 414 U.S. 1038, 94 S.Ct. 538, 38 L.Ed.2d 329 (1973).

      . United States v. Duke, 5 Cir., 1964, 332 F.2d 759; United States v. Mississippi, 5 Cir., 1964, 339 F.2d 679; United States v. Ward (Miss.), 5 Cir., 1965, 345 F.2d 857; United States v. Ramsey, 5 Cir., 1965, 353 F.2d 650; United States v. Mississippi (Walthall County), 5 Cir., 1964, 339 F.2d 679; United States v. Ward (Louisiana), 5 Cir., 1965, 349 F.2d 795, modified on rehearing, 352 F.2d 329; United States v. Lynd, 5 Cir., 1962, 301 F.2d 818, cert. denied, 1963, 371 U.S. 893, 83 S.Ct. 187, 9 L.Ed.2d 125; Kennedy v. Lynd, 5 Cir., 306 F.2d 222, cert. denied, 371 U.S. 952, 83 S.Ct. 507, 9 L.Ed.2d 500; United States v. Lynd, 5 Cir., 1965, 349 F.2d 785; United States v. Alabama, 5 Cir., 304 F.2d 583, cert. granted, judgment affirmed, 371 U.S. 37, 83 S.Ct. 145, 9 L.Ed.2d 112; United States v. Dogan, 5 Cir., 1963, 314 F.2d 767; Toney v. White, 5 Cir., 1973, 476 F.2d 203, modified and affirmed en banc, 488 F.2d 310. Similar relief was made available through three-Judge courts within the Circuit. See United States v. Louisiana, E.D.Louisiana, 3-Judge, 1963, 225 F.Supp. 353, affirmed, 380 U.S. 145, 155-156, 85 S.Ct. 817, 823, 13 L.Ed.2d 709, 716; United States v. Mississippi, S.D.Miss., 3-Judge, 1964, 229 F.Supp. 925, reversed and remanded, 1965, 380 U.S. 128, 85 S.Ct. 808, 13 L.Ed.2d 717. This principle of freezing was legislatively prescribed in the Voting Rights Act of 1965, 79 Stat. 437, 42 U.S.C.A. §§ 1973b(a), 1973c.

      . United States v. Jefferson County Board of Education, 5 Cir., 1966, 372 F.2d 836, affirmed en banc, 1967, 380 F.2d 385, 394; Singleton v. Jackson Municipal Separate School Dist., 5 Cir., 1969, 419 F.2d 1211, 1217-1218 (Singleton III) (en banc) ; McLaurin v. Columbia Municipal Separate School Dist., 5 Cir., 1973, 478 F.2d 348, en banc court dissolved, 486 F.2d 1049; Adams v. Rankin County School Board, 5 Cir., 1973, 485 F.2d 324; Lee v. Macon County Board of Educ., 5 Cir., 1971, 453 F.2d 1104.

      . Local 189, United Papermakers and Paperworkers v. United States, 5 Cir., 1969, 416 F.2d 980, 988, cert. denied, 397 U.S. 919, 90 S.Ct. 926, 25 L.Ed.2d 100; United States v. Jacksonville Terminal Co., 5 Cir., 1971, 451 F.2d 418, cert. denied, 406 U.S. 906, 92 S.Ct. 1607, 31 L.Ed.2d 815 (1972) ; United States v. Hayes International Corporation, 5 Cir., 1972, 456 F.2d 112; Bing v. Roadway Express, Inc., 5 Cir., 1973, 485 F.2d 441 and 444 F.2d 687.

      . Local 53 Asbestos Workers v. Vogler, 5 Cir., 1969, 407 F.2d 1047.

      . Brooks v. Beto, 5 Cir., 1966, 366 F.2d 1, cert. denied, 386 U.S. 975, 87 S.Ct. 1169, 18 L.Ed.2d 135, reh. den., 386 U.S. 1043, 87 S.Ct. 1489, 18 L.Ed.2d 618; Rabinowitz v. United States, 5 Cir., 1966, 366 F.2d 34; Labat v. Bennett, 5 Cir., 1966, 365 F.2d 698, cert. den., 386 U.S. 991, 87 S.Ct. 1303, 18 L.Ed.2d 334; Mack v. Walker, 5 Cir., 1966, 372 F.2d 170, cert. den., 393 U.S. 1030, 89 S.Ct. 641, 21 L.Ed.2d 573; James v. United States, 5 Cir., 1969, 416 F.2d 467, cert. den., 397 U.S. 907, 90 S.Ct. 902, 25 L.Ed.2d 87.

      . In which is raised as well the question whether the rule of a state law school requiring white students, solely on the basis of race, to meet higher admission standards than others violates 42 U.S.C. § 2000d, which forbids discrimination on racial grounds in federally assisted activities.


author: PER CURIAM:

text:
    O. S. C. CORPORATION and O.S.C. Corporation of California, Appellants, v. TOSHIBA AMERICA, INC. and Tokyo Shibaura Electric Co., Ltd., Appellees.
    No. 72-1372.
    United States Court of Appeals, Ninth Circuit.
    Feb. 4, 1974.

      Willard D. Horwich (argued) Beverly Hills, Cal., for appellants.
    Peter J. Garland (argued) of Knapp, Gill, Hibbert & Stevens, Los Angeles, Cal., Wender, Murase, White & Briger, New York City, for appellees.
    Before BARNES and CHOY, Circuit Judges, and SCHWARTZ, District Judge.

       The Honorable Edward J. Schwartz, Chief Judge, United States District Court for the Southern District of California, sitting by designation.

   OPINION

PER CURIAM:

This is an appeal from an order of the District Court dismissing appellants’ claim against one defendant, Tokyo Shibaura Electric Co., Ltd., pursuant to Rule 12 of the Federal Rules of Civil Procedure, on grounds of improper venue and lack of personal jurisdiction in the District Court.

Appellants, O. S. C. Corporation and O. S. C. Corporation of California, have their principal place of business in Los Angeles, California. O .S. C. Corporation acts as a purchasing company and O. S. C. Corporation of California acts as a sales company. Appellants brought an antitrust action against Toshiba America, Inc. (hereinafter “Toshiba”) and the sole appellee, Tokyo Shibaura Electric Co., Ltd. (hereinafter “Tokyo Shibaura”) seeking damages, injunctive relief, forfeiture of inventory and a count for breach of contract. (R 1-11).

Toshiba is a New York corporation, with its principal place of business in New York City, which has branch offices and warehouses in Chicago, Illinois and Los Angeles, California. Toshiba is a wholly-owned subsidiary of appellee, Tokyo Shibaura. Toshiba sells electronic desk calculators at wholesale. These calculators are made in Japan.

The record shows and appellants concede the fact that the sale of the electronic calculators made by Tokyo Shibaura to Toshiba takes place in Japan. Toshiba imports such products into the United States, and sells and delivers such products to purchasers from Toshiba in the United States.

The dismissal of appellants’ claims against Tokyo Shibaura for improper venue was under the statutory authority of 15 U.S.C. § 22.

15U.S.C. § 22 states:

“Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or where-ever it may be found.”

Appellants contend in this appeal that by selling its electronic calculators to Toshiba, Tokyo Shibaura “transacts business” in the Central District of California because Toshiba makes sales and deliveries of such calculators there, and that sales and deliveries of the products of Tokyo Shibaura find their way into Los Angeles, California through the presence of a branch office of a wholly-owned subsidiary. These transactions, it is argued, on the part of Tokyo Shibaura, constitute a practical everyday business or commercial concept of doing or carrying on business of a substantial character. United States v. Scophony Corporation of America, 333 U.S. 795, 68 S.Ct. 855, 92 L.Ed. 1091 (1948).

We reject appellants’ arguments on the venue issue, observing that to find otherwise would do violence to the due process limitations imposed by the Fourteenth Amendment of the United States Constitution on the question of what constitutes “transacting business.” (See e. g., International Shoe v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).)

The record does show as appellee alleges and appellant agrees that:

“1. Tokyo Shibaura has never registered to do business in California;
2. Tokyo Shibaura does not own or lease any property in California;
3. Tokyo Shibaura has no bank account in California;
4. Tokyo Shibaura has never sold its electronic calculators to either plaintiff and in fact it sells only to Toshiba, in Japan pursuant to letter of credit;
6. Tokyo Shibaura does not sell electronic calculators in California;
7. Tokyo Shibaura has no officer, director, employee or other representative in California for any business purpose;
8. Tokyo Shibaura has no agent, salesman or resident representative in California, nor has it any dealers or jobbers in California;
9. Tokyo Shibaura has not solicited any business in California; and
10. Tokyo Shibaura has no branch office, warehouse, or other place of business in California.” (R. 41-43.) Appellants’ sole basis for alleging that

Tokyo Shibaura transacts business in the Central District of California is stated in Plaintiffs’ Answer to Interrogatories that it is believed by the plaintiffs (appellants here) that shipments are directly made by Tokyo Shibaura to Toshiba in the Central District of California. We have scanned the record and find no evidentiary basis for this allegation, nor have we been referred to any facts in support for such assertion although a request was made therefor on oral argument.

In Hayashi v. Sunshine Garden Products, Inc., 285 F.Supp. 632 (W.D.Wash. 1967), aff’d 396 F.2d 13 (9th Cir. 1968), we affirmed a finding that where a foreign corporation had no offices within the jurisdiction of the District Court and did not conduct any business within the state, the mere fact that a wholly-owned subsidiary did business within the state and had some common officers with the parent was insufficient to establish venue in the absence of a showing that the foreign corporation in fact controlled and managed the subsidiary to subject the foreign corporation to venue in the district. We held in Hayashi that the burden was on the plaintiff under the venue provisions of section 12 of the Clayton Antitrust Act, 15 U.S.C. § 22.

Appellants contend that the test of 15 U.S.C. § 22 is not the corporate separateness of the parent and subsidiary, but rather the everyday concept of transacting business. They rely on Sun-bury Wire Rope Mfg. Co. v. United States Steel Corp., 129 F.Supp. 425 (E. D.Pa.1955), and contend that there is no difference in substance to the facts in the present case and suggest we follow Sunbury’s holding. However, we find that the present factual situation can be readily distinguished from that in Sun-bury. In Sunbury, substantial merchandise of the defendant (a Michigan corporation which had never registered to do business in Pennsylvania) found its way into the Eastern District of Pennsylvania. The defendant had no agent for service of process in Pennsylvania, nor did it have' any officers, resident salesmen, telephone listings or bank accounts in Pennsylvania. However, as part of its sales transactions, it had delivered a substantial amount of its product in the Eastern District of Pennsylvania as a result of orders solicited and obtained elsewhere.

Stressing the “delivery” end of the sale of the product the court concluded that a delivery by the defendant of almost $600,000 worth of a company’s product into the Eastern District of Pennsylvania within less than two years as part of sales transactions, constitutes the transacting of business in the district. The court relied on the “practical everyday business or commercial concept” test of United States v. Scophony, supra. However, in Sunbury, the delivery was made directly by the defendant into the Eastern District of Pennsylvania. Here, Tokyo Shibaura sells to Toshiba, its wholly-owned subsidiary, in Japan, and delivers to Toshiba which in turn delivers electronic calculators to customers in the Central District of California. Appellants even admit such distinction between Sunbury and the present case in testimony in the District Court (R.T. pp. 5-6), but argues that through technical niceties, Tokyo Shibaura has shielded itself from the court’s jurisdiction. Appellants in their briefs do not make the argument that the corporate separateness between parent and subsidiary should be pierced. Indeed the evidence supports the finding that Toshiba and Tokyo Shibaura are separate entities. Wireline, Inc. v. Byron Jackson Tools, Inc., 239 F.Supp. 955, 960 (D. Montana 1964), aff’d 344 F.2d 331 (9th Cir. 1965).

The case of Cannon Manufacturing Co. v. Cudahy Packing Co., 267 U.S. 333, 45 S.Ct. 250, 69 L.Ed. 634 (1925) is more akin to the issue at hand. In Cudahy, the Court was concerned with the question of whether, in a breach of contract action, the defendant, a Maine corporation was doing business within the State of North Carolina to such an extent as to be present for purposes of jurisdiction. The foreign corporation was shown to dominate the business decisions and activities of its subsidiary corporation in North Carolina, which bought from the parents and sold to dealers and collected the purchase price, although, in contrast to the facts in the present case, the parent shipped directly to the dealers. The Court held that the defendant corporation did not thereby do business in North Carolina so as to be present there and suable in the federal court. “The corporate separation, though perhaps merely formal, was real. It was not pure fiction.” Id. at 337, 45 S.Ct. at 251.

The principles enunciated in Cudahy were recognized in Intermountain Ford Tractor Sales Co. v. Massey-Ferguson, Ltd., 210 F.Supp. 930 (C.D. Utah 1962). In Massey-Ferguson, the defendant was ultimately held subject to jurisdiction in the Central District of Utah on a strong showing of domination and control of the affairs of a subsidiary. However, one of plaintiffs’ arguments was that the foreign corporation was directly doing business within the Central District of Utah because “as shipper it sent goods into the state w;hich were directed not to its subsidiary as the purchaser but to the stores operated by the subsidiary or to other dealers.” Id. at 932. The court rejected this reasoning and applying the Cudahy case stated:

“There is no merit to the claim that because shipping documents covering equipment sold by the Canadian company to its subsidiary showed the Canadian company to be the ‘shipper’ and because on occasion the equipment went directly to the local stores or the customers of the subsidiary, the Canadian company itself was transacting business directly in the district of Utah. The evidence indicates that property shipped into Utah by the Canadian company was sold prior to shipment to the subsidiary and that shipments were made as directed by the latter. Ordinary business practices completely removed from the local scene could not be so magnified in their supposed local effect without subjecting almost every foreign manufacturer to the consequences of local operations merely because their products eventually reach local dealers or consumers. The most loose concept of liberalized venue and service requirements would not countenance such result. And besides, as I read the Cudahy case a similar argument was clearly rejected there.” (Emphasis added.) Id.

See also Ohio-Midland Light & Power Co. v. Ohio Brass Co., 221 F.Supp. 405 (S.D.Ohio 1962).

Even assuming we were to find that the Scophony definition of “transacting business” has limited the Cudahy holding, we do not find that the appellants have sufficiently established that Tokyo Shibaura transacted such an amount, or any, business within the Central District of California, as to be within the practical everyday business or commercial concept of doing or carrying on business of a substantial character.

We do not find it necessary to resolve the issue of whether the specific venue statute, 15 U.S.C. § 22, is superseded by or is complemented by the general venue statute, 28 U.S.C. § 1391(d), because a necessary step toward reaching that issue is lacking. Appellants rest their contention on the premise that if Tokyo Shibaura may be sued at all in the United States, under section 1391(d) as an alien corporation it can be sued in any district (Appellants’ Reply Brief p. 1). However, it asserts no new facts supporting the contention that Tokyo Shibaura can be sued anywhere in the United States, nor do we find any in the record. Consistent with our conclusion above concerning Tokyo Shibaura’s contact with the Central District of California, we find no evidence that Tokyo Shibaura “transacted business”, as that term has been construed in 15 U.S.C. § 22, in the United States.

We therefore affirm the District Court’s Order.