author: BARRETT, Circuit Judge.

text:
    Gene W. and Jule C. REARDON, Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant.
    No. 73-1642.
    United States Court of Appeals, Tenth Circuit.
    Feb. 8, 1974.

      Gene W. Reardon, Denver, Colo. (Gene F. Reardon, Denver, Colo., on the brief), for appellees.
    William M. Brown, Dept. of Justice, Washington, D. C. (Meyer Rothwaeks, Richard W. Perkins, and Scott P. Crampton, Asst. Atty. Gen., Tax Div., Dept. of Justice, Washington, D. C., on the brief; James L. Treece, U. S. Atty., Denver, Colo, of counsel), for appellant.
    Before HILL, HOLLOWAY and BARRETT, Circuit Judges.
   BARRETT, Circuit Judge.

Gene W. and Jule C. Reardon brought this suit under 28 U.S.C.A. § 1346(a)(1) for a refund of federal income taxes for 1968 in the amount of $401.37. The District Court held that Reardon was entitled to the refund and that the two applicable treasury regulations were ineffective to deprive Rear-don of the benefits conferred in Section 105(d). The Government appeals.

Reardon (taxpayer) was employed 28y2 years as an attorney for the IRS when he was forced to retire at age 51 on September 1, 1958, on total disability. He began receiving a total disability pension and annually deducted $5,200, the maximum income exclusion, pursuant to Section 105(d) of the IRS Code. In December of 1966, he reached age 60, at which time he would have qualified for optional service retirement if he had continued employment and served for 30 years. Mandatory retirement age is 70 years. In 1967 and 1968 taxpayer excluded $5,200 per year of his pension payments under Section 105(d) on the theory that they qualified for the limited sick pay exclusion. The Commissioner disallowed the exclusions on the theory that taxpayer had reached retirement age in 1966. The IRS issued a tax statement for 1967 and 1968 which showed an overpayment of taxes for 1967 and a deficiency in 1968 resulting in a net balance due the IRS of $401.37. Taxpayer paid the deficiency and filed this claim for refund.

The Government contends that the District Court erred in: (1) holding that Treasury Regulations §§ 1.79-2(b)(3) and 1.105-4(a) (3) (i) add an unauthorized restriction on the disability payment exclusion provided by Section 105(d) of the Code; (2) holding that taxpayer’s testimony as to his intent to continue Government employment until mandatory retirement age should be given controlling significance; and (3) granting declaratory relief to taxpayer.

I.

The Government contends that its treasury regulations properly define “retirement age” to qualify for the Section 105(d) exclusion. Section 105(d), 26 U.S.C.A., states in part as follows:

(d) Wage continuation plans.— Gross income does not include amounts referred to in subsection (a) if such amounts constitute wages or payments in lieu of wages for a period during which the employee is absent from work on account of personal injuries or sickness; but this subsection shall not apply to the extent that such amounts exceed a weekly rate of $100.

Treasury regulations promulgated by the Commissioner of Internal Revenue provide that any pension received by the taxpayer after the earliest date taxpayer could have retired (in this case at the optional service retirement age of 60) is not entitled to the Section 105(d) exclusion.

Two recent decisions have held that the two regulations are invalid insofar as they deprive a disability retiree of the exclusion benefits before mandatory retirement age. Brooks v. United States, 473 F.2d 829 (6th Cir. 1973); Jovick v. United States, 492 F.2d 1215 (Ct.Claims 1973). See Commissioner of Internal Revenue v. Winter, 303 F.2d 150 (3rd Cir. 1962); Walsh v. United States, 322 F.Supp. 613 (E.D.N.Y.1970); Bigley v. United States, 252 F.Supp. 757 (E.D.Mo.1966); Keefe v. United States, 247 F.Supp. 589 (N.D.N.Y.1965). In Brooks the Court stated:

While it cannot be doubted that income received after the mandatory age will be taxable regardless of whether the pension began as a disability pension, we hold that the Government’s position, as outlined in the regulation, is untenable. The statute is clear and unambiguous in providing for an exclusion of payments made to any employee for a period of absence from work caused by illness. The money that this taxpayer receives between the age of 60, when he was forced to retire by illness, and 65, when he would have to retire whether or not healthy, is received because of his absence from work because of illness.

473 F.2d at 831.

Contemporaneous construction of a statute by an agency charged with its enforcement is entitled to great deference by the courts. Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971); Western Bancshares, Inc. v. Board of Governors of Federal Reserve System, 480 F.2d 749 (10th Cir. 1973). Administrative regulations are not absolute rules of law, however, and should not be followed when they conflict with the design of the Code or exceed the administrative authority granted. National Labor Relations Board v. Boeing Co., 412 U.S. 67, 93 S.Ct. 1952, 36 L.Ed.2d 752 (1973); Dorfman v. Commissioner of Internal Revenue, 394 F.2d 651 (2nd Cir. 1968). The Commissioner cannot promulgate regulations which impose a tax on the taxpayers which has not been imposed by legislative command. Commissioner of Internal Revenue v. Acker, 361 U.S. 87, 805 S.Ct. 144, 4 L.Ed.2d 127 (1959) ; Smith v. Commissioner of Internal Revenue, 332 F.2d 671 (9th Cir. 1964).

An employee who absents himself from work for retirement because of disability prior to mandatory retirement age is within the class of individuals intended to be benefited by Section 105(d). Taxpayer falls within that class of individuals. The subject treasury regulations are invalid and ineffective to deprive taxpayer of the exclusion benefits of Section 105(d).

II.

The Government argues that the District Court erred in crediting taxpayer’s testimony that he intended to work for the IRS until mandatory retirement age, and in viewing taxpayer’s intent as controlling. Taxpayer testified that he intended to continue his work with the Government until mandatory retirement age because his financial resources were limited and he needed the salary to raise his children. Following his retirement he formed a law firm with two of his children. He earned $51,356.93 in 1968. The Government argues that economic gain alone would have required his absence from employment with the IRS in 1968.

This contention is not developed by cogent authority or argument. We are not impelled, accordingly, to consider it seriously. Suffice it to note that appellate courts do not try cases de novo and that the resolution of conflicting evidence is particularly within the province of the trial court. United States v. 79.95 Acres Of Land, More Or Less, In Rogers County, State Of Oklahoma, 459 F.2d 185 (10th Cir. 1972); Davis v. Cities Service Oil Company, 420 F.2d 1278 (10th Cir. 1970).

Taxpayer is currently totally disabled and unable to work full time. He spends five hours or less a day in his law firm. The trial court did not err in finding that taxpayer intended to continue with his employment until mandatory retirement age.

III.

The Government contends that the District Court erred in granting declaratory relief to taxpayer. Taxpayer states that he did not request a declaratory judgment and that declaratory relief was not granted.

The trial court ordered that taxpayer was entitled to the refund of $401.37 arising from his joint 1967 and 1968 tax returns, and to the exclusion for 1969 and succeeding years until taxpayer reaches the age of 70. A declaratory judgment must declare the rights and duties of parties presented in justiciable controversy. The simple statement that taxpayer is entitled to the exclusion for 1969 and succeeding taxable years until he reaches the age of 70, does not constitute declaratory judgment relief. In any event, declaratory judgment relief is not authorized in refund suits against the United States. 28 U.S.C.A. § 2201.

Taxpayer is entitled to a refund of $401.37 plus statutory interest from April 15, 1971.

Affirmed.

      . Jule C. Reardon is a party to the suit because joint returns were filed for the two taxable years in dispute.

      . Regulation § 1.105-4(a) (3) (i) (a) states that the § 105(4) exclusion “does not apply to the payments which such an employee receives after he reaches such retirement age.”

        Regulation § 1.105-4(a) (3) (i) (b) states that retirement age has the same meaning as in Regulation § 1.79-2 (b) (3) which reads in part as follows:
      (3) Retirement age. For purposes of section 79 (b) (1) and this section, the meaning of the term “retirement age” is determined in accordance with the following rules—
      (i) (a) If the employee is covered under a written pension or annuity plan of the employer providing such individual group-term life insurance on his life (whether or not such plan is qualified under section 401(a) or 403(a)), then his retirement age shall be considered to be the earlier of—
      (1) The earliest age indicated by such plan at which an active employee has the right (or an inactive individual would have the right had he continued in employment) to retire without disability and without the consent of his employer and receive immediate retirement benefits computed at either the full rate or a rate proportionate to completed service as set forth in the normal retirement formula of the plan, i. e., without actuarial or similar reduction because of retirement before some later specified age, or—. . .


source: Caselaw Access Project

author: PELL, Circuit Judge.

license: Public Domain

text:
    Fernando GARZA, Plaintiff-Appellee, v. Maurice H. SIGLER, Chairman, U. S. Board of Parole, et al., Defendants-Appellants.

    Nos. 73-1570 to 1572, 1583, 1584, 1831, 1874, 1844, 2011, 1873, 2012.
    United States Court of Appeals, Seventh Circuit.
    Feb. 6, 1974.

      Henry A. Schwarz, U. S. Atty., William C. Evers, III, Asst. U. S. Atty., E. St. Louis, Ill., for defendants-appellants.
    Fernando Garza, Francisco Marizal, Carl McFadden, James D. Oree, Paul Kirby, Rogerio Bella, Dillard Morrison, Roy J. Travis, Salvador Cantu Vasquez, Ronald Bowman and Joe M. Mendoza, all pro se.
    Before CUMMINGS, PELL and STEVENS, Circuit Judges.

       Consolidated with; Francisco Marizal v. Sigler; Carl McFadden v. Pickett; James D. Oree v. Reed; Paul Kirby v. Pickett: Rogerio Bella v. Pickett; Dillard Morrison v. Sigler; Roy J. Travis v. Sigler; Salvador Cantu Vasquez v. Sigler; Ronald Bowman v. Sigler; Joe M. Mendoza v. Sigler.

   PELL, Circuit Judge.

In these eleven cases, consolidated for disposition, the Government appeals from district court orders, each of which concluded by ordering that the respondents provide the petitioner with a parole hearing, in accordance with law. Each of the petitioners was a prisoner confined in the United States Penitentiary at Marion, Illinois. Each had filed a pro se petition seeking to establish a claim for eligibility for parole. All but two of the petitions sought mandamus or, in the alternative, habeas corpus. Two sought only mandamus relief.

The respondents, although varying from case to case, had to do with the custody of the prisoners or with the determination that they were ineligible to be considered for parole. The petitioners named the warden or the chairman of the Board of Parole or, frequently, both. The Director of the Federal Bureau of Prisons was also named as a respondent in two petitions. The captions of most of the petitions contained an “et al.” designation, which received no further elaboration. The Government, however, does not claim that any of the petitions is defective for failing to name a party respondent having it in his power to carry out the order of the district court. In any event, inasmuch as the same result is reached on this appeal as to all of the cases, the matter of implementation by such further order as may be necessary can be handled on remand.

Each of the petitioners had been convicted of and sentenced for narcotics offenses prior to May 1, 1971, the effective date of the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. § 801 et seq. The Act had repealed the statutes under which petitioners had been convicted. All of the petitioners would have been eligible for parole consideration under 18 U.S.C. § 4202 if that section was no longer proscribed for those who were convicted under repealed sections 21 U.S.C. §§ 173, 174, and 176, and 26 U.S.C. §§ 4704 and 4705.

Inasmuch as the same question of statutory construction is involved in each of the appeals, which matter has been adequately briefed, pursuant to Rule 2, Fed.R.App.P., we dispense with further briefing and oral argument.

The impact of the repeal effected by 21 U.S.C. § 801 et seq., was before this court in United States v. McGarr, 461 F.2d 1, 4 (7th Cir. 1972), in which this court agreed with the Ninth Circuit “that the availability of probation under 18 U.S.C. § 3651, or, for that matter, parole under 18 U.S.C. § 4202 (both of which were unavailable by reason of 26 U.S.C. § 7237(d)), is not part of the penalty.” The present issue, however, was not directly involved in McGarr, Subsequent to the issuance of that opinion, the Supreme Court in Bradley v. United States, 410 U.S. 605, 93 S.Ct. 1151, 35 L.Ed.2d 528 (1973), held that a “prosecution” only terminates when sentence is imposed, and that under the specific saving clause of the Comprehensive Drug Abuse Prevention and Control Act of 1970, section 1103(a), a district court in sentencing one convicted under the repealed acts which were “saved” could not suspend sentence or place the prisoner on probation under 18 U.S.C. § 4208(a).

Mr. Justice Brennan and Mr. Justice White in a concurring opinion expressed the view that 1103(a) forecloses the availability of parole not only under 18 U.S.C. § 4208(a), permitting a court at sentencing to establish the time for parole eligibility, but also under 18 U.S.C. § 4202. The majority of the Court, however, speaking through Mr. Justice Marshall, declined to reach the § 4202 question stating, “[w]hether § 1103(a) or the general saving statute, 1 U.S.C. § 109, limits [the decision of the Board of Parole to grant parole at a time long subsequent to prosecution] is a question we cannot consider in this case.” 410 U.S. at 611 n. 6, 93 S.Ct. at 1156. The majority opinion also stated that the “disposition of this case has no bearing on the power of the Board of Parole to consider parole eligibility for petitioners under 18 U.S.C. § 4202.” 410 U.S. at 610 n. 5, 93 S.Ct. at 1155.

Subsequent to Bradley, at least five circuits have addressed themselves to the specific issue raised by the present appeals. No doubt others are being presented with the question. In any event, four of the circuits have decided the question adversely to the position of the Government, which coincides with the view expressed by Justices Brennan and White: United States ex rel. Marrero v. Warden, 483 F.2d 656 (3d Cir. 1973), cert. granted, 414 U.S. 1128, 94 S.Ct. 865, 38 L.Ed.2d 752; United States v. Marshall, 485 F.2d 1062 (D.C.Cir. 1973); Alvarado v. McLaughlin, 486 F.2d 541 (4th Cir. 1973); Amaya v. United States Board of Parole, 486 F.2d 940 (5th Cir. 1973). Contra: Perea v. United States Board of Parole, 480 F.2d 608 (10th Cir. 1973).

Not on a numerical basis but because we find the reasoning more persuasive in the four circuits which have decided the § 4202 issue adversely to the Government’s position, we adopt the conclusion of those circuits. Perea, which was the first in time of the cases cited above, reaches the opposite result on a rather cursory analysis of the impact of 1 U.S.C. § 109, the Code’s general saving clause. We accept, as did the court in Amaya, the analysis by Judge Rosenn in Marrero:

“The only remaining issue is the effect of 1 U.S.C. § 109, which provides in relevant part:
The repeal of any statute shall not have the effect to release or extinguish any penalty, forfeiture, or liability incurred under such statute, unless the repealing Act shall so provide, and such statute shall be treated as still remaining in force for the purpose of sustaining any proper action or prosecution for the enforcement of such penalty, forfeiture, or liability.
“The general savings statute was intended to obviate the common law’s technical abatement of a prosecution by the repeal of the statute under which it proceeded. Hamm v. Rock Hill, 379 U.S. 306, 314, 85 S.Ct. 384, 13 L.Ed.2d 300 (1964). Therefore, the statute’s purpose would not be furthered by applying it to preclude Marrero’s parole eligibility under § 4202. His conviction and sentence will remain intact even if he is paroled. We therefore hold that permanent parole ineligibility is not a ‘penalty’ incurred under § 7237(d). We read § 7237(d)’s preclusion of parole as a dated legislative judgment as to the manner by which the actual penalty, i. e., the prison sentence, should be effectuated. To read it otherwise would preclude carrying out the apparent congressional judgment, in repealing the parole ban, that the rehabilitative goals of the criminal justice system will be furthered by parole. Moreover, we can find no rational basis that would justify barring parole for persons convicted of crimes committed before the Act’s effective date, yet granting it to persons convicted of subsequent crimes. To the extent parole aids prisoner rehabilitation and consequently strengthens the tensile fabric of society, it is important that we avoid technical, purposeless construction which runs counter to the congressional plan to encourage prison rehabilitation.” 483 F.2d at 662-663 (footnote omitted).

This aspect of the issue was discussed by this court in McGarr, supra, and as to matters subsequent to the sentencing portion of prosecution we reaffirm what was said there:

“The fact that the penalty provisions of the individual sections of the old Act or the general penalty provisions of § 7237 survive does not mean that the procedural limitation of § 7237 (d) must survive. Unlike the situation of the penalty itself—where its repeal would leave no penalty at all for the ‘saved’ ‘prosecution,’ the repeal of § 7237(d) merely removed a procedural bar to the application of the independently existing provisions for. suspended sentence, probation and parole which apply generally to most offenses. The new statute restored the availability of the general provisions relating to probation and parole. The availability of these provisions in no way affects the prosecution under the old act and in no way eliminates the penalty.” 461 F.2d at 4-5 (footnote omitted).

We must also address the matter of the applicability of the exhaustion of administrative remedies doctrine because it is not entirely clear from the record that the petitioners did seek relief from the Board of Parole before instituting their actions. If they did not in fact, we would hold it unnecessary here and would accept the analysis of this issue by the Marrero court. We have a somewhat unusual situation, however, occasioned by a footnote in Bradley, supra, in which Mr. Justice Marshall stated,

“We were informed at oral argument that ‘the Board of Parole is now considering as eligible for parole only defendants who have been sentenced in the Seventh and Ninth Circuits for narcotics offenses.’ ” 410 U.S. at 610 n. 5, 93 S.Ct. at 1155.

At first blush, the statement about the Seventh Circuit might be taken as indicating that because the Board of Parole was considering narcotics offenders in the Seventh Circuit as being eligible for parole, the petitioners indeed should have exhausted their administrative remedies since the effort would have been crowned with success. However, if counsel, who is quoted in the footnote, used language exactly and precisely, the words would have no application to the present cases because, insofar as we can discern from the record, most, if not all, of the petitioners were sentenced in district courts in circuits other than the Seventh. In any event, it is obvious from the record that the Government is taking the position that these particular petitioners are not eligible under § 4202 and, following the Marrero reasoning, we do not require them to pursue an administrative remedy presently not available to them.

For the reasons hereinbefore indicated, we are of the opinion that the district court reached the correct conclusion as to the petitioners being eligible for consideration for parole under § 4202. We do not agree, however, that mandamus was proper under the circumstances here presented. Apparently, or it has been so represented to the Supreme Court, some narcotics prisoners with some connection with the Seventh Circuit are being considered eligible when they have met the time requirements of § 4202. We do not believe that the Board of Parole would ignore the holding of this court as to eligibility under the circumstances of these cases, which involve convictions occurring prior to the effective date of the Comprehensive Drug Abuse Prevention and Control Act of 1970. Nor do we deem it necessary at this time to provide for any conditional release. Rather, in the words of Judge Gee in Amaya, supra, “we vacate and remand to the District Court for further proceedings with the Board of Parole being required within a reasonable time to receive and thereafter consider and diligently process [the petitioners’ applications.] We emphasize that all we hold is that [they are] eligible to be considered for parole, and nothing said or unsaid is any judgment or intimation on what action the Board of Parole should or must take, or what, if any, judicial review may be available from such action, and if available, where or in what form.” 486 F.2d at 943 (emphasis in original).

Vacated and remanded.

      . “§ 4202. Prisoners eligible
      A federal prisoner, other than a juvenile delinquent or a committed youth offender, wherever confined and serving a definite term or terms of over one hundred and eighty days, whose record shows that he has observed the rules of the institution in which he is confined, may be released on parole after serving one-third of such term or terms or after serving fifteen years of a life sentence or of a sentence of over forty-five years.”

      . The primary question in McGarr was whether, in light of the general and specific saving provisions, the mandatory minimum sentence provision of the repealed narcotics statute was still in effect.

      . This opinion has been circulated to the judges of this court in regular active service and no judge has requested that the determination of the issue reached in this opinion as to eligibility for parole should be heard en banc.

      . Inasmuch as botli the district court and this court have heretofore denied stays of the orders entered by the district court, it is entirely possible that consideration has been given by the Parole Board to granting parole to some at least of the petitioners-plaintiffs. The district court on remand will of necessity have to determine on a case-by-case basis which if any of the cases may have been rendered moot and which may require further proceedings consistent with the foregoing opinion.


author: EAST, Senior District Judge:

text:
    SOUTHERN PACIFIC TRANSPORTATION COMPANY, a corporation, Plaintiff-Appellee, v. UNITED TRANSPORTATION UNION, a labor organization, (UTU), A. H. Chesser, President, et al., Defendants-Appellants.
    No. 72-2013.
    United States Court of Appeals, Ninth Circuit.
    Feb. 1, 1974.
    Certiorari Denied May 13, 1974.
    See 94 S.Ct. 2389.

      Clifton Hildebrand (Argued), Hildebrand, McLeod & Nelson, Oakland, Cal., for defendants-appellants.
    Robert S. Bogason (Argued), William R. Denton, John J. Corrigan, San Francisco, Cal., for plaintiff-appellee.
    Before DUNIWAY and WRIGHT, Circuit Judges, and EAST, Senior District Judge.

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

   OPINION

EAST, Senior District Judge:

THE CASE

The defendants-appellants (Union) are, for our purposes, the representatives of the Switchmen employees of the plaintiff-appellee (Southern Pacific) and appeal from the District Court’s order dated April 3, 1972, granting a restraint of a strike called and being conducted by the Union against Southern Pacific.

A brief narration of background history is warranted. In November of 1961, certain herder agreements were entered into between Southern Pacific and the Switchmen, giving switchmen exclusive right to line switches in the performance of herding work and prohibiting the performance of this work by road crews. These agreements remained in effect until purportedly superseded by a National Agreement reached on August 2, 1971. The terms of the National Agreement were bargained for and negotiated over a period of nearly two years following a distressing national 18-day strike against the railroads, and the National Agreement was contentiously bargained for and provided that the national railroads would give the Union a 42 per cent wage hike in return for relaxation of a number of old contract work rules that had plagued the railroad industry by restricting work assignments to certain crafts within the Union. Because of a delay by proceedings for approval of the wage increases before the Pay Board, the 1971 agreement did not become effective until January 27, 1972. Immediately thereafter, the increases were paid to Union members and the nation’s railroads sought to implement the new work rules and enjoy the consequent productivity increases. Specifically, Southern Pacific abolished sixteen herder positions pursuant to Article IX of the National Agreement because they became unnecessary when Southern Pacific assigned its road crews (also represented by the Union) the work of attaching and detaching their engines to or from their road trains and line the switches necessary to move the engines between the engine service areas and the tracks where the trains rested, which work was theretofore performed by switchmen occupying the sixteen herder positions that were abolished.

The Union in turn called the subsequently enjoined .strike even though none of the switchmen employed in the sixteen positions were laid off but all were absorbed into other work activities.

The District Court found that the dispute out of which the strike arose involved the interpretation and application of existing collective bargained agreements and, therefore, was a “minor dispute” as that term is used and applied to matters under the jurisdiction, of the Railway Labor Act, 45 U.S.C. § 151 et seq. The injunction was to permit utilization of the compulsory arbitration procedures of Section 3 of the Act, 45 U.S. C. § 153, which provides for submission of such disputes to the National Railroad Adjustment Board (Adjustment Board). The dispute itself was submitted to the Adjustment Board on March 19, 1972, and is now pending before that forum.

ASSIGNMENT OF ERROR

The Union asserts that the District Court erred in that the undisputed record evidence required the District Court to deny all equitable relief to Southern Pacific because:

“(1) [Southern Pacific] should be by the conduct of its president estopped to claim such relief because of its misrepresentations and bad faith in connection with the inception of the agreement on which the railroad relies.
“(2) Because of fraudulent and mistaken representations so made at the inception of the agreement.”

PARTIES’ CONTENTIONS

We summarize Union’s contentions as follows:

(a) That Article IX does not incorporate a separate oral agreement with Southern Pacific concerning its herders and reached and made during the course of the national bargaining negotiations. Hence, Article IX is not a binding agreement between these parties under the rationale of Anaconda Wire and Cable Company v. National Labor Relations Board, 444 F.2d 1028 (7th Cir. 1971).

(b) Mr. Biaggini as president of Southern Pacific made certain false representations as to the number of herder positions which would be abolished under the proposed Article IX. That the Union relied in good faith upon those false representations and ceased further collective bargaining on the Article. Hence, Southern Pacific should be es-topped to implement the Article adverse to those representations under the rationale of Glus v. Brooklyn Eastern District Terminal, 359 U.S. 231, 79 S.Ct. 760, 3 L.Ed.2d 770, citing Insurance Co. v. Wilkinson, 13 Wall. 222, 20 L.Ed. 617.

Accordingly, Union urges that the 1961 herder agreements with Southern Pacific are legally still effective and the dispute looks to a new agreement concerning switchmen-herder duty assignments and falls within the “major dispute” category as delineated in Switchmen’s Union of North America v. Southern Pacific Co., 398 F.2d 443 (9th Cir. 1968) at page 445, citing Elgin, J. & E. Railway Co. v. Burley et al., 325 U.S. 711, 723, 65 S.Ct. 1282, 89 L.Ed. 1886. Therefore, the restraint is violative of the Norris-LaGuardia Act, 29 U.S.C. § 108.

Southern Pacific denies the actionable false statement factual premise urged by Union and further contends that:

(a) the National Agreement superseded the 1961 herder agreements, hence, Article IX is a valid subsisting agreement between the disputing parties, and

(b) the dispute arises from its reasonably susceptible implementation of Article IX and is a “minor dispute” within the jurisdiction of the Adjustment Board.

Accordingly, the restraint was proper under the rationale and holdings of International Brotherhood of Electrical Workers v. Washington Terminal Co., 154 U.S.App.D.C. 119, 473 F.2d 1156 (1972), cited and followed in Southern Pacific Transportation Co. v. International Brotherhood of Electrical Workers et al., 474 F.2d 696 (9th Cir. 1973). We agree and affirm.

DISCUSSION AND CONCLUSIONS

Union’s Contention (a)

We decline to burden this opinion with the details of the high level national character of the collective bargaining terminating in the National Agreement. Suffice, we have considered and conclude that Union’s contention (a) above is without merit in fact and at law.

Union’s Contention (b)

Manifestly the survival of this contention rests wholly and solely upon the factual picture presented by the evidentiary record. Our search of the record discloses that on January 31, 1972, after the agreement was signed, John Burge, General Chairman of Union on Southern Pacific’s lines, contended for the first time to L. D. Bush, Assistant Manager of Labor Relations for Southern Pacific, that Union believed Article IX was not national in scope and did not apply to Southern Pacific as it did to other railroads, and that the 1961 agreement was still in effect, relying on two short in duration bargaining telephone conversations had on or about August 16, 1971, first, between Mr. Biaggini and Mr. Luna, as President of Union, and secondly, between Mr. Biaggini and Mr. Burge. The substance of those two telephone conversations is reflected only through the affidavit form averments of the parties to the telephone conversations. The averments are in conflict as to the exact statements made by Mr. Biaggini.

On their face, the claimed conversations, viewed in a light most favorable to the union, do not support its claims. They relate only to the manner in which Southern Pacific proposed to implement the terms of Article IX, once it became effective. There was no misunderstanding as to what Article IX says. Thus the conversations relate only to the meaning of the language of Article IX as it applies to Southern Pacific and its union employees. The union does not seek recission or reformation of Article IX. It claims that, as between Southern Pacific and the union, Article IX does not exist. This is nonsense.

The District Court found and concluded “that the disputes and grievances which are the basis of [Union’s] strike and work stoppage do not concern changes in agreements, but instead concern the interpretation and o/pplication of existing agreements (italics supplied) covering rates of pay, rules and working conditions and are minor disputes for which [Union has] an appropriate administrative procedure for handling with [Southern Pacific].”

Finally, we conclude that:

(1) The District Court’s finding is not clearly erroneous. Rule 52(a), Federal Rules of Civil Procedure.

(2) The National Agreement superseded the 1961 herder agreements and that Article IX thereof is a valid subsisting agreement between the parties hereto.

(3) “[Article IX is] reasonable susceptible to the interpretation sought [implementation thereof] by [Southern Pacific]” and the District Court’s conclusion that the dispute leading to the strike involved herein is a minor dispute suitable for resolution by the Adjustment Board is right and sound. International, 473 F.2d at 1173.

Affirmed.

      . “Herders are taken from the ranks of switchmen and in fact, are switchmen, who perform yard service, usually by working alone, detaching engines from arriving road trains; lining necessary switches for movement of road engines to and from trains and roundhouse facilities; to allow trains and light engines to move into and out of tracks at ends of yards and line switches in roundhouse areas for movement of engines within such areas.” Bush Affidavit dated March 10, 1972.

      . The pertinent parts are:

        “ARTICLE IX—ROAD-YARD MOVEMENTS

        Section 1. Road freight crews may be required at any point where yard crews are employed to do any of the following as part of tlie road trip, paid for as such without any additional compensation and without penalty payments to yard crews, holsters, etc.: . . . handle engines to and from train to ready track and engine house including all units coupled and connected in multiple; . . . . ”


author: HILL, Circuit Judge.

text:
    C. F. LYTLE CO., a Texas corporation, Plaintiff-Appellant, v. Harold CLARK, the Building Inspector of Pitkin County, Colorado, et al., Defendants-Appellees.
    No. 73-1625.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted Jan. 9, 1974.
    Decided Feb. 12, 1974.

      Jordan Hochstadt, Denver, Colo. (Jerome R. Strickland, Denver, Colo., on the brief), for plaintiff-appellant.
    J. Nicholas McGrath, Jr., Aspen, Colo., for defendants-appellees.
    Before HILL, BARRETT and DOYLE, Circuit Judges.
   HILL, Circuit Judge.

This is an appeal from denial of a mandatory injunction sought to compel the issuance of a building permit to allow completion of construction on a condominium project.

Appellant C. F. Lytle Co. is a Texas corporation with its principal place of business in that state. Appellees are the Building Inspector, the Board of Adjustment and its individual members, and the Board of County Commissioners, of Pitkin County, Colorado. On June 18, 1965, appellant purchased 7.01 acres of land near Aspen, in Pitkin County, for the purpose of building a condominium resort lodge. At the time of the conveyanee a lodge was a permitted use of the land, which was zoned “Agricultural & Forestry” (AF). In order to get a building permit, and to comply with zoning regulations then in effect, appellant obtained a height variance from the Board of Adjustment on August 3, 1965, and a building permit for the construction of 123 resort lodge condominium units the following day.

On July 22, 1965, prior to the granting of appellant’s height variance, the Pitkin County Planning & Zoning Commission recommended changing various definition sections of the county zoning regulations. One such recommendation deleted the use “lodges” from permitted uses in areas zoned AF. On August 18, 1965, two weeks after appellant’s building permit was issued, the changes were adopted and appellant’s intended use became non-conforming.

Nevertheless, appellant commenced construction and recorded a Condominium Map and a Condominium Declaration. In accordance with the declaration the entire tract of land was set aside for the condominium resort lodge. By March, 1966, appellant had substantially completed a resort lodge, a lobby and management area, and twenty-four of the condominium units. Financial difficulties arose, however, and disputes between appellant and its co-venturer resulted in the dissolution and winding up of the coventure. Appellant ceased construction and had no contact with appellees until November, 1971.

At that time appellant filed an application for a building permit, the application stating in part that appellant wished to finish work under its original permit. The application was denied by the Building Inspector because the original building permit had expired and was no longer valid and because the use “resort lodge” was nonconforming. Appellant appealed the decision to the Board of Adjustment, and requested the Board to advise the Building Inspector to reissue or replace the original building permit. A hearing was held and the decision was affirmed.

Appellant then filed suit in the Pitkin County District Court seeking relief from the Board’s order. However, the suit was dismissed without prejudice at appellant’s request and another application for a building permit was filed. Aspen Park Owners Association Limited, an association of the twenty-four owners of the completed condominium units, filed a separate application. Both applications were denied, and were affirmed by the Board of Adjustment. The Association then filed suit in Pitkin County District Court, seeking a review of the Board’s action.

Appellant commenced suit in federal district court in Colorado, seeking a declaratory judgment and for $500,000 damages and/or an injunction. The case was submitted to the trial court upon briefs and an agreed statement of facts. Finding that appellant had abandoned the project and that its building permit had expired, the trial court rendered judgment for the appelleees.

The first argument is that the trial court erred in holding appellant’s building permit expired pursuant to § 302(d) of the Uniform Building Code, in effect in Pitkin County. Appellant contends § 302(d) is inapplicable because it deals only with procedures for and the cost of obtaining a new building permit after a cessation of work. Section 302(d) provides :

(d) Expiration. Every permit issued by the Building Official under the provisions of this Code expire by limitation and become null and void, if the building or work authorized by such permit is not commenced within 60 days from the date of such permit, or if the building or work authorized by such permit is suspended or abandoned at any time after the work is commenced for a period of 120 days. Before such work can be recommenced a new permit shall be first obtained so to do, and the fee therefor shall be one-half the amount required for a new permit for such work, provided no changes have been made or will be made in the original plans and specifications for such work; and provided, further, that such suspension or abandonment has not exceeded one year.

Appellant concedes that work on the project stopped for over 120 days, and that the original building permit expired. However, appellant contends the provision should be interpreted to mean that between the time work has ceased for 120 days, and for one year thereafter, a builder may apply for a new permit and pay only one-half the fee required; after work has ceased for one year, a builder must apply for a new permit and pay the full fee. Urging the doctrine of relation back, appellant would construe the provision to revalidate the original permit at any time in the future merely by paying the appropriate fee. Under such a theory zoning regulations in effect at the time the original permit was issued would be controlling, and not present zoning regulations.

Construing § 302(d) to accomplish its plain purpose, we find appellant’s argument to be without merit. Clearly the provision does not contemplate reviving an old permit and its attendant zoning laws after the passage of an unknown number of years. The section cannot be extended to privileges not embraced in it. 101 C.J.S. Zoning § 241 (1958). The provision, captioned “Expiration”, specifically states a building permit shall expire by limitation and become null and void after a given set of events. Such language leaves no doubt that a builder who thereafter applies for a new permit is subject to zoning regulations currently in effect. The trial court was correct in its interpretation of § 302(d) and its subsequent conclusion that appellant’s building permit expired thereunder.

Appellant next contends the trial court erred in holding the project had been abandoned within the meaning of § 10.3 of the Pitkin County Zoning Resolution. That section provides: .

10.3 ABANDONMENT
Whenever a non-conforming use has been discontinued for a period of one year, such use shall not thereafter be re-established, and any further use shall be in conformance with the provisions of this resolution or any amendment thereof.

Discontinuance of a non-conforming use, appellant argues, requires intent and a voluntary act, and neither of these elements were established. Based on the fact appellant had ceased construction and all communications with appellees from March, 1966, to November, 1971, the trial court found these elements to exist. However it was not necessary to do so to conclude appellant abandoned the project. Intent is an element with regard to a use-terminating provision that fails to specify a time period. Under some provisions, however, non-use for a stated period of time is conclusively deemed to be an abandonment of the non-conforming use. See 101 C.J.S. Zoning § 199 (1958), citing Beszedes v. Board of Comm’r, 116 Colo. 123, 178 P.2d 950 (Colo.1947). In Beszedes the provision, in pertinent part, provided that “if such non-conforming use is discontinued for a period of one year . . . any further use of said premises shall be in conformity with the provisions of this resolution.” Section 10.3 of the Pitkin County Zoning Resolution is phrased in virtually the same language. We believe no intent to abandon need be shown thereunder.

Appellant’s next argument is that enforcement of the amended zoning ordinance, adopted subsequent to the commencement of construction, and appellees’ refusal to issue a building permit based thereon, amounts to an illegal taking of property.

Appellant recorded condominium declarations, setting aside the real estate for condominium purposes. This precludes the undeveloped land from being used for anything else, notwithstanding other allowable uses under the AF zoning now in effect. When the zoning ordinance, which now prohibits condominiums, is considered, the result is that appellant can do nothing with the land.

The due process and just compensation clauses of the state and federal constitutions do not require that zoning ordinances permit a landowner to make the most profitable use of his property. For there to be a taking the landowner must show he has been deprived of all reasonable uses of his land. Although appellant cannot develop the remainder of its land, we do not believe there has been an illegal taking. A landowner cannot create his own hardship and then require that zoning regulations be changed to meet that hardship. Madis v. Higginson, 164 Colo. 320, 434 P.2d 705 (1967). It was unnecessary for appellant to record condominium declarations on all units and all the land, before he had completed any of the construction. Because appellant’s own voluntary acts caused the hardship, we find the “taking” argument to be without merit.

Finally, appellant argues appellees are estopped from refusing to issue a building permit for the completion of construction, and contends the issuance of the permit was a representation that the development was a permitted use under the then-existing zoning regulations and that it has changed its position materially in reliance thereon. .

Although the defense of equitable estoppel may be applied against government agencies to prevent injustice, Crawford v. McLaughlin, 172 Colo. 366, 473 P.2d 725 (1970), we do not believe the facts in this case merit the doctrine’s application. At the time the building permit was issued, appellant’s proposed condominium development was a proper use of the land. Appellant was authorized to, and did in fact, commence construction under the permit, completing only a portion of the total project. However, his subsequent 5 Yz year delay in construction, coupled with the expiration of the permit and failure to communicate with appellees, negates application of the equitable estoppel doctrine.

Had appellant continued construction it would have been permitted to complete the project, regardless of the change in the zoning laws. But equitable estoppel does not arise when the actions complained of are a result of the complainants own actions and not the product of the defendants’ acts. 31 C.J. S. Estoppel § 75 (1964).

The judgment is affirmed.

      . Appellant cites Service Oil Co. v. Rhodus, 500 P.2d 807 (Colo.1972), where the Colorado supreme court said an intent to abandon a non-conforming use was required. The case is inapplicable, however, because the provision there concerned restoration of a non-conforming use which had been damaged by “fire and other causes.

      . The Condominium Ownership Declaration provides in part: “That this Declaration shall not be revoked or any of the provisions herein amended unless 80% of all of the votes of the owners of the General Common Elements, and 100% of all of the mortgagees or beneficiaries of all of the mortgagees or deeds of trust on the condominium units are cast in favor of and agree to such revocation. . . ”


author: DANAHER, Senior Circuit Judge:

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. LOCAL UNION NO. 25, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, Respondent.
    No. 295, Docket 73-1858.
    United States Court of Appeals, Second Circuit.
    Argued Jan. 8, 1974.
    Decided Feb. 11, 1974.

      Edmund D. Cooke, Jr., Atty., N. L. R. B. (Peter G. Nash, Gen. Counsel; John S. Irving, Deputy Gen. Counsel; Patrick Hardin, Associate Gen. Counsel; Elliott Moore, Asst. Gen. Counsel; John D. Burgoyne and Douglas S. McDowell, Washington, D. C. (on the brief), for petitioner.
    Ralph P. Katz, New York City (Del-son & Gordon, Ernest Fleischman, New York City, on the brief), for respondent.
    Before DANAHER, LUMBARD and TIMBERS, Circuit Judges.
   DANAHER, Senior Circuit Judge:

Vinyl Masters, Inc., (herein, Vinyl) in January, 1972, acquired a plant in Deer Park, Long Island, and thereafter contracted with Sparks Electric Company, Inc., (herein, Sparks) for the performance of electrical work such as the wiring of machinery, lights and transformers. Sparks placed some eleven electricians at the jobsite, all of whom with electrical foreman, Richard Deasy, were members of Respondent, Local Union No. 25, International Brotherhood of Electrical Workers, AFL-CIO (herein, Local 25). The Vinyl-Sparks contract involved some $102,000.

Thereafter Vinyl entered into a separate contract involving some $702 with Telaction Phone Corporation, (herein, Telaction), for the installation of a paging and internal communication system. When two Telaction employees appeared at the jobsite, it developed that they were non-union, and they left the premises upon learning that they had barged into a union job. Vinyl’s foreman, Charles Brown, reported to his superior, Charles Clementi, that Deasy had challenged the Telaction employees who thereupon stopped their work and left the Deer Park site. Clementi, trying to clear up the impasse, talked with Deasy and with Local 25’s representative, one Fisher, both of whom told Clementi that there would be no problem if Telaction’s employees secured a permit from Local 25. Clementi instructed foreman Brown that if Telaction’s men returned to go forward with installation of the intercom and paging system, they were not to start work unless they secured clearance from Local 25.

Now, to complete the cast of characters, Telaction’s Vice President Vobis, upon realizing that he could not perform the contract with non-union employees, entered into a subcontract for the performanee of the work, with Comtech Telephone Contractors Corporation, (herein, Comtech), which employed union members of CWA Local 1156. However, when the two Comtech employees arrived at Deer Park, on August 10, 1972, Vinyl’s foreman Brown told them that clearance from Local 25 was required and then brought Deasy into the conference. Deasy informed the Comtech men that a work permit from Local 25 was essential and gave them the name and telephone number of Local 25’s delegate Fisher. A telephone call to Local 25’s headquarters resulted only in a further assertion that a Local 25 permit was a prerequisite to Comtech’s performance of work at Deer Park.

Then, CWA’s representative Watkins talked with one Stafford, the business representative of Local 25, who disputed CWA’s right to work, claiming that Local 25 also did installations, and added that the “inter-connecting work is IBEW work, not CWA”, and if Watkins insisted on going forward, IBEW “will pull the electricians off the job”.

That was the last thing Vinyl wanted. In furtherance of additional efforts by Comtech men to get on with their contract, the CWA men appeared at Deer Park and encountered Deasy. He identified himself as “shop steward for Local 25 and the foreman on the job.” He insisted that “we had to get written permission from Local 25 before we could proceed to work”. Deasy then turned to Brown and stated “if they do the work, I’m going to take my electricians off the job”. Watkins was induced by Brown to talk with Vinyl Vice President Clementi. The latter, by this time quite aware of the warnings by Deasy and Stafford, told Watkins that the CWA men were not to continue on the job without written permission from IBEW, Local 25. The posture in which Vinyl found itself placed was not lost on Clementi who decided that'he could not “afford to take any chances and have them walk out on me”.

The CWA men, unwilling to seek a permit from Local 25, and being unable to work on the job without the Local 25 permit, left the premises. Comtech, two days later, as charging party, instituted the unfair labor practice charges here under consideration.

I.

Although compendiously stated, the foregoing facts make sufficiently clear the background for the findings and conclusions of the administrative law judge. The Board in its “Decision and Order” affirmed. In addition to a requirement for the posting of the usual notices, the order as recommended provided that Local No. 25 shall:

Cease and desist from threatening, coercing, or restraining Vinyl Masters, Inc., or any other person engaged in commerce or in an industry affecting commerce, where an object thereof is to force or require Vinyl Masters, Inc., or such other person, to cease doing business with Comtech Telephone Contractors Corporation or with any other person.

Although Deasy at the outset took it upon himself to challenge the two nonunion Telaction workers, events mounted rapidly after Comtech’s CWA members appeared. From that time on, Local 25 business agents as well as Deasy actively participated in an insistence upon preserving their claim to exclusive jurisdiction over the intercom work, even though Sparks had never been engaged to install that system. It became clear that Local 25 as an entity was aware of and participated in the secondary boycott aspect of the situation we have described. N.L.R.B. v. Local U. No. 3, Int. Bro. of Elec. Wkrs. AFL-CIO, 467 F.2d 1158, 1159-1160 (2d Cir. 1972); cf. Woodwork Manufacturers v. NLRB, 386 U.S. 612, 625 et seq., 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967).

We find ourselves satisfied that there is sufficient evidence in the record as a whole to support the finding that Local 25 has violated § 8(b)(4)(ii)(B) of the Act. N.L.R.B. v. Local Union No. 3. Internat’l Bro. of Elect. Wkrs., 339 F.2d 145, 146 (2d Cir. 1964); Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456 (1951). There is nothing in the record to indicate that the Board acted arbitrarily or capriciously in reaching its conclusion to affirm the decision of the administrative law judge. N.L.R.B. v. Local 25, International Bro. of Electrical Workers, 396 F.2d 591 (2d Cir. 1968). It fairly may be doubted that Local 25 has seriously contended to the contrary. The main thrust of the Board’s action must be affirmed.

II.

There remains for consideration the argument of Local 25 that the Board’s order is too broad. We find no evidence on the instant record that Local 25 had engaged in a violation against the employees of any employer other than Comtech.

In a dissimilar situation to be sure but in stating a principle here applicable in light of the facts of record, the Supreme Court said:

[W]e find neither justification nor necessity for extending the coverage of the order generally by the inclusion therein of the phrase “any other employer.”

The Court continued:

It would seem . . . clear that the authority conferred on the Board to restrain the practice which it has found ... to have [been] committed is not an authority to restrain generally all other unlawful practices which it has neither found to have been pursued nor persuasively to be related to the proven unlawful conduct (citations omitted).

The Board may submit an appropriate order which will take account of our observations. The order heretofore entered by the Board will be modified by deleting “any other person”, “such other person”, and “with any other person”. As and when so modified, the Board’s order will be enforced.

       Senior Circuit Judge of the District of Columbia Circuit, sitting by designation pursuant to 28 U.S.C. § 294(d) (1970).

      . Administrative Law Judge Singer specifically found that he did not credit Deasy’s testimony to the effect that it was not he, but it was Clementi who issued the ultimatum that the intercom job would have to be cleared through Local 25.

      . The Communications Workers of America had as its representative one Ted J. Watkins, administrative assistant to the vice president for District 1.

      . It seems obvious beyond peradventure that Vinyl Was interested solely in getting on with a job already five months under way.

      . Communications Workers v. N. L. R. B., 362 U.S. 479, 480, 80 S.Ct. 838, 4 L.Ed.2d 896 (I960).

      . Id., 362 U.S. 480-481, 80 S.Ct. 839-840; cf. United Brotherhood of Carpenters, Etc. v. N. L. R. B., 286 F.2d 533, 539 (D.C.Cir. 1960), and see discussion in N. L. R. B. v. Enterprise Association, Inc., 285 F.2d 642, 646 (2d Cir. 1961), and compare N. L. R. B. v. Local U. No. 3, Int. Bro. of Elec. Wkrs., AFL-CIO, 477 F.2d 260, 268-269 (1973).


author: ADAMS, Circuit Judge.

text:
    In the Matter of TIME SALES FINANCE CORPORATION and its wholly owned subsidiary corporations, et al., Debtors. Appeal of CENTRAL PENN NATIONAL BANK.
    No. 73-1759.
    United States Court of Appeals, Third Circuit.
    Submitted Under Third Circuit Rule 12(6). Jan. 7, 1974.
    Decided Feb. 7, 1974.

      Wouter Keesing, LeRoy E. Perper, White & Williams, Philadelphia, Pa., for appellant.
    Marvin Krasny, Adelman & Lavine, Philadelphia, Pa., for appellee.
    Before ADAMS, HUNTER and WEIS, Circuit Judges.
   OPINION OF THE COURT

ADAMS, Circuit Judge.

A creditor’s claim for interest accruing after the date a petition was filed for an arrangement under the Bankruptcy Act prompts this appeal.

On April 5, 1968, Time Sales Finance Corporation (the bankrupt) filed a petition for an arrangement under Chapter XI of the Bankruptcy Act. The bankrupt’s indebtedness to Central Penn, amounting to $51,754.71, was evidenced by three notes, due respectively on April 10, 1968, May 27, 1968, and June 4, 1968, each providing for payment of principal “with interest from date.”

One group of creditors, who had advanced money to the bankrupt prior to the filing of the petition for an arrangement, had accepted five-year debenture notes containing the following subordination provision:

In the event of any liquidation, dissolution or winding up of the company or of any receivership, insolvency, bankruptcy, liquidation, readjustment, reorganization or other similar proceedings relative to the company or its creditors or its property, all principal and interest owing on all superior indebtedness of the company shall be paid in full before any payment is made on Five Year Debenture Notes. (Emphasis added)

After the Chapter XI proceedings failed, an adjudication in bankruptcy followed, and the referee in bankruptcy issued an order of partial distribution dated July 20, 1971. Under the order, which gave effect to the subordination provision of the debenture notes, Central Penn received $51,754.71, the full amount owed to it on the date of the filing of the petition and as demonstrated by its proof of claim filed on April 29, 1968. The holders of the subordinated debenture notes received an amount equal to 10 per cent of the bankrupt’s indebtedness to them.

Central Penn, however, requested an additional $11,311.06, representing interest claimed to be due from the date of the petition up to the date of the order of partial distribution. The assets of the bankrupt’s estate remaining undistributed, although exceeding the value of $11,311.06, are not sufficient to compensate fully the holders of the subordinated debenture notes and to satisfy Central Penn’s claim for the additional interest. Central Penn, nonetheless, contends that the subordination provisions of the debenture notes require the trustee to distribute $11,311.06 to it.

* The referee refused to allow Central Penn’s claim for the additional interest for two reasons. First, the referee referred to section 63(a)(1) of the Bankruptcy Act, which provides, in part, that “[djebts of the bankrupt may be proved and allowed . . . which are founded upon ... a fixed liability . owing at the time of the filing of the petition . . . with any interest thereon which would have been recoverable at that date. . . . ”, and concluded that none of the cases cited by Central Penn justified ignoring the limitation on allowable interest implicit in section 63(a)(1). Second, the referee found that Central Penn’s proof of claim failed to conform with General Order 21(1) of the Supreme Court with respect to its claim for interest allegedly accruing after the filing of the petition, and held that Central Penn’s tardiness in subsequently asserting its claim for post-petition interest itself precluded satisfaction.

Central Penn petitioned for review in the district court of the referee’s order disallowing its claim for interest accruing after the petition was filed. The district court affirmed the referee’s order, although on slightly different grounds. First, noting the implicit limitation on post-petition interest in section 63(a)(1), the district court declined to make an exception to that limitation and to allow payment of interest to the date of distribution, especially since the provision of the debenture notes relating to the bankruptcy situation was not sufficiently precise “to alert the [debenture] note holders that interest would be paid [to Central Penn] up to the date of payment of the claim.” Second, the district court found that Central Penn’s proof of claim with regard to the post-petition interest did not comply with section 57 (a) of the Bankruptcy Act, and held that this finding of noncomplianee supported the referee’s decision. Third, the district court stated that “[t]he action of the referee in this case was in strict accordance with equitable practices.”

Central Penn contends that, in the specific circumstances here, the referee and the district court erred in reading section 63(a)(1) to prevent post-petition interest. It asserts that the general rule articulated in section 63(a)(1) —the bankrupt’s financial position on the date of the filing of the petition controls during the subsequent winding up of its affairs—is not immutable, and in certain situations interest accruing subsequent to the filing of the petition is recoverable.

Further, it is clear, according to Central Penn, that it is within the equity-powers of the bankruptcy court to give effect to a subordination agreement during the distribution of a bankrupt’s assets. Central Penn strongly urges that the class of exceptions to the general rule be extended to include post-petition interest where, as here, there is a subordination agreement.

Addressing the requirements relating to proof of claim in section 57(a) and General Order 21(1), Central Penn also asserts that at the time it filed its proof of claim there was attached the three notes payable to it that had been execut ing by the bankrupt providing for “interest from date,” and that, therefore, its proof of claim regarding post-petition interest did conform to the requirements of section 57(a) and (general Order 21(1).

We need not decide, at this time, whether the narrow group of exceptions to the general rule that “everything stops” at the date the petition is filed is to be expanded to include the situation here. Neither do we need to decide whether Central Penn’s proof of claim adequately presented its demand for post-petition interest or, if such demand is to be regarded as insufficient, whether the insufficiency is to operate to bar Central Penn from otherwise assert-' ing its claim.

Instead, the district court’s conclusion that the subordination provision contained in the debenture notes did not appropriately apprise the debenture note holders that their claims against the bankrupt would be subordinated to Central Penn’s demand for post-petition interest is not incorrect and, thus, is adequate to sustain its order denying Central Penn’s claim for post-petition interest. Certainly, in light of this conclusion of the district court, we cannot say that its refusal to allow post-petition interest constituted an abuse of the discretion it has with regard to the exercise of its equitable power. If a creditor desires to establish a right to post-petition interest and a concomitant reduction in the dividends due to subordinated creditors, the agreement should clearly show that the general rule that interest stops on the date of the filing of the petition is to be suspended, at least vis-a-vis these parties.

When we are confronted with an instrument that satisfactorily indicates that subordinated creditors were put on notice that superior creditors may be entitled to interest up to the date of actual distribution and, of course, the rules regarding the assertion of the claim have been complied with, we may then be called upon to determine whether the language of section 63(a)(1) and the policies underpinning the Bankruptcy Act permit the payment of post-petition interest from the bankrupt’s estate where some of the creditors have agreed to subordinate their claims against the bankrupt to those of other creditors.

Accordingly the judgment of the district court will be affirmed.

      . 11 U.S.C. §§ 701-799.

      . The trustee does not dispute Central Penn’s status as a holder of superior indebtedness under the following provision of the notes:
      The indebtedness evidenced by this Five Tear Note shall be subordinate and junior in right of payment, in all respects, to any and all indebtedness of the company now existing or hereafter incurred not expressly incurred on an equality with Five Year Notes or subordinate or junior thereto, (hereinafter called Superior Indebtedness) as more fully hereinafter set forth.

      . Stipulation of Counsel filed February 15, 1972, ¶¶ 5 & 6.

      . 11 U.S.C. § 103(a) (1).

      . General Order 21(1) provides as follows: A proof of claim against an estate shall be correctly entitled in the court and in the cause. When made to prove a debt due to a partnership it shall state that the deponent is a member of the partnership; when made by an agent, it shall state the reason the proof is not made by the claimant in person; and when made to prove a debt due to a corporation, the proof shall be made by a duly authorized officer of the corporation. A proof of claim for a debt founded upon an open account shall state when the debt became or will become due; and if it consists of items maturing at different dates the average due date shall be stated, in default of which no interest shall be allowed. Each . such proof of claim shall state whether a note or other negotiable instrument has been received for such account or any part thereof, or whether any judgment has been rendered thereon. If a note or other negotiable instrument has been received, it shall be filed with the proof of claim. Proofs of claim received by any trustee shall be delivered to the referee to whom the cause is referred.

      . Section 57(a) provides as follows:
      A proof of claim shall consist of a statement, in writing and signed by a creditor, setting forth the claim; the consideration therefor; whether any, and if so, what securities are held therefor; and whether any and, if so, what payments have been made thereon; and that the claim is justly owing from the bankrupt to the creditor. A proof of claim filed in accordance with the requirements of this title, the General Orders of the Supreme Court, and the official forms, even though not verified under oath, shall constitute prima facie evidence of the validity and the amount of the claim.

      . See United States v. Bass, 271 F.2d 129, 130 (9th Cir. 1959), and authorities cited therein.

      . See, e. g., Bird & Sons Sales Corp. v. Tobin, 78 F.2d 371, 373 (8th Cir. 1935).

      . Sexton v. Dreyfus, 219 U.S. 339, 31 S.Ct. 256, 55 L.Ed. 244 (1911).

      . “It is manifest that the touchstone of each decision on allowance of interest in bankruptcy, receivership and reorganization has been a balance of equities between creditor and creditor or between creditors and the debtor.” Vanston Bondholders Protective Committee v. Green, 329 U.S. 156, 165, 67 S.Ct. 237, 241, 91 L.Ed. 162 (1946). See In re Magnus Harmonica Corp., 262 F.2d 515, 518 (3d Cir. 1959).


author: PER CURIAM:

text:
    The NATIONAL NUTRITIONAL FOODS ASSOCIATION and Solgar Co., Inc., Plaintiffs-Appellants, v. Caspar W. WEINBERGER, Secretary of Health, Education and Welfare, and Alexander M. Schmidt, Commissioner of Food and Drugs, Defendants-Appellees.
    No. 439, Docket 73-2430.
    United States Court of Appeals, Second Circuit.
    Argued Oct. 19, 1973.
    Decided Dec. 11, 1973.
    Milton A. Bass, New York City (Bass & Ullman, New York City, on the brief), for plaintiffs-appellants.
    Naomi L. Reice, Asst. U. S. Atty., New York City (Paul J. Curran, U. S. Atty., and John W. Nields, Jr., Asst. U. S. Atty., on the brief), for defendantsappellees.
    Before MEDINA, LUMBARD and TIMBERS, Circuit Judges.
   PER CURIAM:

The sole issue on this appeal from an order entered September 25, 1973 in the Southern District of New York by Marvin E. Frankel, District Judge, which denied plaintiffs’ motion for a preliminary injunction to enjoin regulations of the Food and Drug Administration concerning Vitamins A and D from becoming effective, is whether, under the well established standards in this Circuit applicable to the extraordinary remedy of a preliminary injunction, the district court abused its discretion in denying it. We affirm.

Appellants are the National Nutritional Foods Association, a trade association of manufacturers, wholesalers and retailers of vitamins and dietary supplements, and Solgar, Co., Inc., a manufacturer, distributor and seller of vitamin supplements. Appellees are the Secretary of HEW and the Commissioner of Food and Drugs.

On December 19, 1972, the Commissioner proposed, by publishing in the Federal Register, certain regulations of the Food and Drug Administration requiring that preparations of Vitamin A and Vitamin D in excess of 10,000 I.U. (international units) per dosage unit and 400 I.U. per dosage unit, respectively, be restricted to prescription sale and that such vitamins be labelled accordingly. 37 Fed.Reg. 26618 (1972), as amended, 38 Fed.Reg. 799 (1973). The regulations were proposed to implement the “efficient enforcement” of Sections 502 (a), (f) and (j) and 503(b) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. §§ 352(a), (f) and (j) and 353(b) (1970), as authorized by 21 U.S.C. § 371(a) (1970), and pursuant to powers delegated to the Commissioner by 21 C.F.R. § 2.120(a)(1) (1973).

Consideration of the proposed regulations followed standard rule making procedure prescribed by the Administrative Procedure Act, 5 U.S.C. § 553 (1970), including requirements as to notice and public participation. Among the 2500 comments received in response to the Commissioner’s invitation were comments from the two appellants herein, each of which submitted voluminous factual material and expert opinions opposing the proposed regulations. After due consideration, the Commissioner concluded that the regulations should be adopted. Accordingly, they were promulgated on July 25, 1973, to become effective October 1, 1973. 38 Fed.Reg. 20723, 20725 (1973).

Having failed to dissuade the Commissioner from promulgating the regulations, appellants on August 6, 1973 commenced the instant action in the Southern District of New York seeking declaratory and injunctive relief. Jurisdiction was invoked pursuant to 28 U.S.C. § 1331(a) (1970). A week later, appellants filed their motion for a preliminary injunction which Judge Frankel denied on September 25, 1973 in an opinion setting forth his findings of fact and conclusions of law. On September 26, we ordered an expedited appeal and heard it on October 19.

Our careful examination of the record satisfies us that it fully supports the district court’s denial of a preliminary injunction under the well established standards in this Circuit applicable to the extraordinary relief sought. See Gulf & Western Industries, Inc. v. Great Atlantic & Pacific Tea Company, Inc., 476 F.2d 687, 692-93 (2 Cir. 1973), and authorities there cited.

We affirm for the reasons stated in Judge Frankel’s comprehensive opinion. 366 F.Supp. 1341 (S.D.N.Y.1973).

Affirmed.


author: LIVELY, Circuit Judge. EDWARDS, Circuit Judge

text:
    Roberta J. HUBER, aka Roberta Chris Holter, Plaintiff-Appellant, v. UNION PLANTERS NATIONAL BANK OF MEMPHIS, Defendant-Appellee.
    No. 73-1314.
    United States Court of Appeals, Sixth Circuit.
    Argued Dec. 10, 1973.
    Decided Feb. 7, 1974.

      C. M. Murphy, Memphis, Tenn., for plaintiff-appellant.
    Robert M. Johnson, Canada, Russell & Turner, Memphis, Tenn., for defendantappellee.
    Before PHILLIPS, Chief Judge, and EDWARDS and LIVELY, Circuit Judges.
   LIVELY, Circuit Judge.

Plaintiff sought damages pursuant to 42 U.S.C. § 1983 and 28 U.S.C. § 1343 for violation of rights guaranteed to her by the Fourth and Fourteenth Amendments to the Constitution of the United States. The alleged deprivation consisted of taking possession of and withholding from the plaintiff a 1971 Chevrolet Malibu automobile. Both parties moved for summary judgment. The plaintiff filed three depositions and two sworn statements with her motion. The district court granted the motion of the defendant and entered judgment accordingly.

In September 1971 the plaintiff purchased a Chevrolet from a dealer in Albuquerque, New Mexico under a “New Mexico Motor Vehicle Installment Contract” by which she agreed to make a payment on the fifth day of each month for 36 months. The contract was subsequently assigned to the First National Bank of Albuquerque. In May 1972 when she was in default on one payment under the contract, plaintiff drove the car from Albuquerque to Memphis, Tennessee without advising the Albuquerque bank of her departure. On June 5, 1972 plaintiff missed her second payment.

On June 9, 1972 an employee of the defendant Memphis bank, at the request of the Albuquerque bank, took possession of the car and had it towed to a storage lot. No judicial process was employed by the defendant. Instead, possession was taken pursuant to a “self-help” article of the contract which provided, in part:

In the event Buyer defaults in any payment . . . Seller shall have all the rights and remedies of a Secured Party under the Uniform Commercial Code, including the right to repossess the Property wherever the same may be found with free right of entry. . . .

Plaintiff admitted having signed the contract, though she stated in her deposition that she had not read it.

After learning from the Memphis police that the defendant was holding her automobile, plaintiff went to the Memphis bank and talked with Mr. Burkett, the collection manager. After some discussion, it was agreed that plaintiff could remove her possessions from the car. She refused to leave the keys with the bank and continued to demand the return of the car. A few days later plaintiff went to the storage lot where the car was parked and drove it away. She took it to the Millington Naval Air Station near Memphis where her husband was stationed. The car was left parked within the Navy base and was ticketed for illegal parking on June 12. The next day the Navy had the car towed off the base for having no pass. It was removed to a nearby service station by a wrecker company which contracted with the Navy for such services. The traffic court judge at the Navy Air Station directed the operator of the wrecker service not to release the ear to anyone without a court order. The wrecker operator, who also owned the service station lot where the car was stored after removal from the Navy base, stated that he was holding the car for the Navy after towing it to the lot.

An attorney in Memphis stated in his deposition that he was contacted by Mr. Burkett and requested to bring an action for possession of the car on behalf of the Albuquerque bank. He was told that plaintiff was in default and that the automobile was on the storage lot near the Air Station. The attorney had no direct contact with the Albuquerque bank before filing a replevin action on June 15, though he did receive a copy of the contract and discuss the case with several employees of the Albuquerque, bank before the hearing on June 21 at which a “Judgment in Replevin” was entered by a judge of the General Sessions Court of Shelby County, Tennessee. The attorney stated that he represented the Albuquerque bank only in the replevin action and that bank paid his entire fee. At the replevin hearing an employee of the Memphis bank testified as an agent of the Albuquerque bank as to the contract provisions and plaintiff’s default. Following entry of judgment in favor of the Albuquerque bank the car was returned to Albuquerque and eventually sold. Prior to the sale an attorney for plaintiff was advised in writing that plaintiff had ten days to submit a bid on the car or pay her account in full.

In its memorandum decision, the district court wrote that—“Counsel for plaintiff made it clear at argument on the motions for summary judgment that he does not base his claim under § 1983 on the self-help repossession made by defendant Union Planters Bank on June 9, 1972.” Nevertheless, in argument and brief in this court plaintiff has attacked the non-judicial repossession carried out by the Memphis bank and seeks to have us declare Tennessee Code Annotated (TCA) § 47-9-503 (§ 9-503 of the Uniform Commercial Code) unconstitutional. In her brief the plaintiff described her position in the district court as follows:

Plaintiff advised the Court, during argument, that she did not predicate her action for damages upon that first taking, for the sole reason that plaintiff had thereafter reacquired the possession of her automobile. The pleading and proof as to such action was offered solely to show the quantum of involvement herein by the defendant bank.

Since plaintiff did not contest the legality of the first taking, and did not base her only claim for relief upon it, we may not examine its legality on appeal. Therefore the constitutionality of Tennessee’s “self-help” Uniform Commercial Code provision is not before us. We thus begin our consideration of this case at the point where the automobile was in the rightful possession of the Memphis bank as agent of the Albuquerque bank pursuant to the contract executed by-plaintiff.

The question before us is whether the defendant Memphis bank violated plaintiff’s constitutional rights by causing a replevin action to be brought in the name of the Albuquerque bank by which the sheriff took possession of the car before a hearing. The plaintiff relies principally on Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972), in which the Supreme Court held that “ . . . the Florida and Pennsylvania prejudgment replevin provisions work a deprivation of property without due process of law insofar as they deny the right to a prior opportunity to be heard before chattels are taken from their possessor.” (emphasis added) 407 U.S. at 96, 92 S.Ct. at 2002. The Tennessee replevin statutes were held unconstitutional “insofar as they authorize a deprivation of property without the right to a prior opportunity to be heard before chattels are taken from their possessor” (emphasis added) in Mitchell v. State of Tennessee, 351 F. Supp. 846, 847 (W.D.Tenn.1972). Admittedly the sheriff took possession of the Chevrolet on June 15 prior to any judicial hearing though the car was not delivered to the bank until after the hearing. The plaintiff was named a defendant along with T. & R. Wrecker Service in the replevin action (plaintiff’s name was incorrectly spelled and the only address given for her on the writ of replevin was that of the wrecker service), but she was not served with the writ. At the hearing on June 21, 1972 the judge of the General Sessions Court entered a non-suit as to plaintiff. She testified in her deposition that she had no notice of the hearing.

Replevin is the proper action when a party from whom personal property has been taken contests the validity of the taking and seeks the return of the property in kind rather than asking for damages. Lillard v. Yellow Mfg. Acceptance Corp., 195 Tenn. 686, 263 S.W. 2d 520 (1953); Pritchard v. Carter County Motor Co., 197 Tenn. 222, 270 S.W.2d 642 (1954). Since possession is the heart of a replevin action, and since the Supreme Court stated in Fuentes that the possessor of the property is entitled to a hearing before chattels are taken from him, we must determine whether plaintiff was the “possessor” of the automobile which was taken by the sheriff pursuant to the replevin action. So far as the record discloses, on June 15, 1972 the plaintiff had not had actual possession of the car for three days, since it was first ticketed on the Navy base on June 12 and hauled away by T. & R. Wrecker on the 13th. She continued to have title to the automobile, but had lost possession of it on June 9 when it was repossessed under a contract provision, which repossession was expressly declared to the trial court not to be the basis for her claim for damages in this action. Her brief possession of the car on June 12 between the time she removed it from the storage lot of the Memphis bank until she parked it at the Navy base was unauthorized.

On June 15 both the plaintiff and a representative of the defendant Memphis bank requested the Navy to release the car to them. The Navy took the position that it could not release the automobile to the owner or the bank without a court order. The person who had actual possession of the car, the owner of T. & R. Wrecker Service, stated that he was holding the car for the Navy and had been instructed by the Navy authorities not to release it to anyone without a court order. He did not contest the replevin action. At this point possession of the car was denied to plaintiff by T. & R. Wrecker Service, acting under instructions from the Navy, not by the defendant Memphis bank. The replevin action was then filed in the name of the Albuquerque bank. Under these circumstances we do not believe that the plaintiff Roberta J. Huber was the “possessor” of the automobile within the meaning of Fuentes and Mitchell, or that she was deprived of possession by the sheriff’s actions under the replevin writ. She was undoubt edly deprived of her property when the ear was repossessed pursuant to the self-help provisions of the installment contract. However, she chose not to contest that taking by legal action, but instead made an unauthorized “self-help” recovery of the property. Even this tenuously held possession was lost when plaintiff left the car in an unauthorized area of the Navy base, causing the Navy to deliver it to T. & R. Wrecker Service, the defendant in the replevin action. Thus the plaintiff suffered no deprivation of constitutional rights when the sheriff took possession of the automobile or when the court subsequently restored possession to the Albuquerque bank. This conclusion makes it unnecessary for us to decide whether the Memphis bank, in acting on behalf of the Albuquerque bank, would have been liable for damages if plaintiff’s constitutional rights had been violated.

The judgment of the district court is affirmed. Costs will be taxed to the appellant.

EDWARDS, Circuit Judge

(dissenting).

In this ease the District Judge granted a summary judgment to defendant Union Planters National Bank of Memphis dismissing appellant Huber’s 42 U.S.C. § 1983 (1970) suit for deprivation of constitutional rights resulting from the bank’s repossession of her automobile.

Appellant had bought the automobile from a dealer in Albuquerque, New Mexico, and the sales contract (not title retaining) was assigned to the First National Bank of Albuquerque. After she defaulted on two monthly payments and moved to Memphis, Tennessee, in order to be near her husband who was stationed at a naval air base there, the car was taken from her possession surreptitiously and without notice by an employee of the Union Planters Bank. Appellant found the car on the bank parking lot and took it back. She drove it to the naval air station and left it there on a parking lot. It was illegally parked and consequently was removed to a wrecking service garage by authority of the naval air base.

While the car was in that garage, the same Union Planters Bank employee, Burkett, got a Union Planters Bank lawyer, Norville, to seek a writ of replevin, while he, Burkett, was at the garage waiting to receive the writ. On its receipt Burkett took the car and it is undisputed that it subsequently was sent to the First National Bank of Albuquerque and was sold there.

Appellant paid up the two missing installments on the same day, June 15, 1972, that the writ of replevin was issued.

Plaintiff relies upon the doctrine of Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972), and her claim is that she was denied due process of law in that she was never served with any notice of the replevin proceedings and had no actual knowledge of them.

Under these facts I believe that plaintiff was the lawful owner and possessor of the automobile in question at the time of the replevin action and that she was deprived of her automobile by defendant Union Planters Bank and its agents without notice and in violation of the due process clause of the United States Constitution as construed in Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972).

I would reverse.


author: HEANEY, Circuit Judge.

text:
    UNITED STATES of America, Appellee, v. CITY NATIONAL BANK & TRUST CO., Appellant.
    No. 73-1015.
    United States Court of Appeals, Eighth Circuit.
    Submitted Sept. 10, 1973.
    Decided Jan. 21, 1974.
    Ann M. Whittier, Kansas City, Mo., for appellant.
    Robert Mandel, Atty., Dept. of Justice, Washington, D. C., for appellee.
    Before HEANEY, STEPHENSON and WEBSTER, Circuit Judges.
   HEANEY, Circuit Judge.

City National Bank and Trust Company appeals from a judgment of the United States District Court for the Western District of Missouri. It contends that the trial court erred in holding that the United States was entitled to indemnification for checks paid by the United States upon presentment by the Bank with prior endorsements guaranteed. The decision of the trial court is reported at 349 F.Supp. 1188 (W.D.Mo.1972).

The following facts are undisputed. Fletcher Davis, a retired soldier, received disability payments from the United States commencing on November 30, 1946. He died February 27, 1954, in the Veteran’s Administration Hospital in Wadsworth, Kansas. Notice of his death was given to the Central Office of the Veteran’s Administration in Washington, D. C., on March 5, 1954. Application for burial allowance was made to the Veteran’s Administration and an award was made. No notice of Davis’death, however, was given to the Department of the Army Financial Center, Retired Pay Division, either by the Veteran’s Administration or Davis’ family, nor was the Retired Pay Division otherwise informed of Davis’ death.

After his death, the Department of Army continued to issue Treasury checks payable to Fletcher Davis. Each of these checks was cashed at the Grand Avenue Bank by Georgia Mae Davis, Davis’ “common-law” wife. Mrs. Davis later admitted to endorsing Fletcher Davis’ name on the checks.

The Grand Avenue Bank endorsed the checks to the City National Bank and Trust Company which, in turn, presented the checks to the United States Treasury Department for payment. Both banks guaranteed all prior endorsements on each cheek.

On February 16, 1967, the Veteran’s Administration received, by an anonymous telephone call, information that Davis was dead and that Georgia Mae Davis was cashing the Treasury checks. After investigation, this information was communicated to the Department of the Army, Retired Pay Division, on March 10, 1967. On April 20, 1967, the Treasury was requested to stop payment on the checks. The Treasurer thereupon made three sets of reclamation demands upon City National. When the demands were not honored, the United States brought an action against City National to recover $16,413, the amount of seventy-two pension checks submitted by City National to the government in the previous six years with guarantees of prior endorsements.

The District Court entered judgment in favor of the United States. It held that National Metropolitan Bank v. United States, 323 U.S. 454, 65 S.Ct. 354, 89 L.Ed. 383 (1945), controlled and that under its teachings, the negligence of the United States in failing to discover fraud prior to the guarantee of the genuineness of prior endorsements did not absolve City National from -liability where the prior endorsements had been forged. It alternatively held that the United States was entitled to recover on the warranty implied in federal law, see, e. g., United States v. Bank of America National T. & S. Ass’n, 288 F.Supp. 343 (N.D.Cal.1968), aff’d, 438 F.2d 1213 (9th Cir.), cert. denied, 404 U.S. 864, 92 S.Ct. 54, 30 L.Ed.2d 108 (1971), and on the warranty required by a Treasury regulation, 31 C.F.R. § 360.4 (1967).

City National contends on appeal that: (1) National Metropolitan Bank is no longer controlling; (2) the Uniform Commercial Code has now been adopted by forty-nine of the fifty states and should be looked to as the “new national law of commerce;” and (3) the Code, particularly § 3-406, precludes the United States from asserting the forgery as its negligence substantially contributed to the making of the unauthorized signatures.

We cannot agree that § 3-406 of the Code is determinative of the rights of the parties in this case. National Metropolitan Bank v. United States, supra 323 U.S. at 458, 65 S.Ct. 354, and Clearfield Trust Co. v. United States, 318 U.S. 363, 366, 63 S.Ct. 573, 87 L.Ed. 838 (1943), require a contrary result. Both of these cases noted that Treasury regulations govern the payment and endorsement of government cheeks. These regulations require a party presenting a Treasury check to the government to guarantee that all prior endorsements on the check are genuine, and they grant the Treasurer the right to demand a refund if that guarantee is breached. The regulations are largely decisive in determining the relationships between City National and the government and supplant other sources of legal standards. Cf., Free v. Bland, 369 U.S. 663, 82 S.Ct. 1089, 8 L.Ed.2d 180 (1962); United States v. Shimer, 367 U.S. 374, 81 S.Ct. 1554, 6 L.Ed.2d 908 (1961); Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 68 S.Ct. 1, 92 L.Ed. 10 (1947).

There remains the question of whether the government should be es-topped from enforcing the Treasury regulation here because of its negligence in issuing checks to a deceased payee. City National urges that we engraft such an exception to the regulation. It cites United States v. First Nat. Bank of Chicago, 138 F.2d 681 (7th Cir. 1943), and United States v. National Rockland Bank, 35 F.Supp. 912 (D.Mass.1940), in support of its position. These cases do support City National’s contention that the government should be estopped by its negligence, but their validity was seriously weakened—if not destroyed— by the Supreme Court in National Metropolitan Bank. Certiorari was explicitly granted there to resolve the conflict between First National and Washington Loan and Trust Co. v. United States, 77 U.S.App.D.C. 284, 134 F.2d 59 (D.C.Cir. 1943), and the Supreme Court resolved the conflict by taking a position contrary to that taken by the Seventh Circuit in United States v. First Nat. Bank of Chicago, supra.

We are not persuaded that the authority of National Metropolitan Bank, with respect to the problem discussed here, has been eroded by the passage of time or the adoption of the U.C.C. by forty-nine states. See, United States v. Bank of America National T. & S. Ass’n, supra 438 F.2d at 1214. The Court there stated:

* * * [W]e cannot find that the Supreme Court has itself, since 1945, written anything which might cause us to conclude with reasonable assurance that its Metropolitan decision is no longer viable. This being so, we think that Metropolitan must now control the disposition of this appeal.

See also, United States v. National Bank of Com. in New Orleans, 438 F.2d 809 (5th Cir.), cert. denied, 404 U.S. 828, 92 S.Ct. 64, 30 L.Ed.2d 57 (1971), United States v. Philadelphia National Bank, 304 F.Supp. 955 (E.D.Pa.1969).

We accept the general proposition that the federal government, in its commercial transactions, should be treated as other business entities, see, United States v. First National Bank in Ogallala, Neb., 470 F.2d 944 (8th Cir. 1973), but we cannot extend such treatment here in the light of the Treasury regulations and the decision of the Supreme Court in National Metropolitan Bank. If a change is desired, Congress can enact a new statute, the Treasury regulations can be revised or the Supreme Court can overrule National Metropolitan Bank.

We affirm.

      . City National then brought a third-party action against Grand Avenue Bank, the depositary bank. That action was dismissed when Grand Avenue Bank agreed to indemnify City National if it lost the case.

      . 31 U.S.C. § 129 bars recovery for forged or altered checks submitted to the Treasurer more than six years before demands for reclamation.

      . That regulation provides:
      The presenting bank and the indorsers of a check presented to the Treasurer for payment are deemed to guarantee to the Treasurer that all prior indorsements are genuine, whether or not an express guaranty is placed on the check. When the first indorsement has been made by one other than the payee personally, the presenting bank and the indorsers are deemed to guarantee to the Treasurer, in addition to other warranties, that the person who so indorsed had unqualified capacity and authority to indorse the check in behalf of the payee.
      31 C.F.R. § 360.4 (1967).
      We note, however, that this regulation was not in effect when the checks were paid. A similar regulation was in effect during this period.
      (a) Banks presenting checks payable in Washington, D. C., direct to the Treasurer of the United States, under special arrangements with the Treasurer, shall be deemed to guarantee all prior indorsements including that of the drawer when the check is drawn in the drawer’s favor irrespective of whether a specific guaranty is incorporated in the bank’s indorsement.
      31 C.F.R. § 202.27(a) (1946).

      . Any person who by his negligence substantially contributes to a material alteration of the instrument or to the making of an unauthorized signature is precluded from asserting the alteration or lack of authority against a holder in due course or against a drawee or other payor who pays the instrument in good faith and in accordance with the reasonable commercial standards of the drawee’s or payor’s business.
      Uniform Commercial Code § 3-406.

      . In the light of our holding, we need not determine whether the United States was negligent; and if so, whether that negligence substantially contributed to the making of the unauthorized signatures. Compare, Anna C. Bagby, etc., et al. v. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Commerce Bank of Kansas City v. Traders National Bank, et al., 491 F.2d 192 (8th Cir. 1974).

      . But cf., Note, Clearfield: Clouded Field of Federal Commercial Law, 53 Colum.L.Rev. 991, 1004 (1953).

      . 31 C.F.R. § 202.27(b), (c) and (d) provides :
      (b) Return will be made to the presenting bank of any check on which payment. is refused, in which case the bank will make refund before the close of the next business day to the Treasurer of the United States, and if refund is not made by the bank the Treasurer of the United States is authorized to deduct the amount of the check from any amount that is due or may become due to the bank. If the check is required for use in connection with a criminal investigation or legal proceeding, it will be retained for that purpose and a photographic copy of the face and back will be furnished to the presenting bank.
      (c) In the event that any check which has been paid by the Treasurer is subsequently found to bear a forged indorsement, or to bear any other material defect or alteration which was not discovered upon payment by the Treasurer, a photographic copy of the check will be forwarded to the presenting bank with request for refund.
      (d) In eases of checks raised or bearing a forged signature of the drawer not discovered upon payment by the Treasurer, and in other eases where the Treasurer’s right to reclaim is in question, the check will be forwarded to the presenting bank with a request for refund or collection, if possible. A photographic copy may be returned in lieu of the check if the latter is required for use in connection with a criminal investigation or legal proceeding.