467 F.Supp. 943 (1979)
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF MIAMI, Plaintiff,
v.
MORTGAGE CORPORATION OF the SOUTH, formerly known as Cobbs, Allen & Hall Mortgage Company, Inc., an Alabama Corporation, and Daniel B. Haralson, Defendants.
Civ. A. No. 75-M-2317.
United States District Court, N. D. Alabama, S. D.
March 19, 1979.
*944 *945 William M. Acker, Jr., Dominick, Fletcher, Yeilding, Acker, Wood & Lloyd, Birmingham, Ala., Robert S. Vance, Birmingham, Ala. (now Cir. Judge), Blackwell, Walker, Gray, Powers, Flick & Hoehl, Miami, Fla., for plaintiff.
James E. Clark, London, Yancey, Clark & Allen, Wm. G. Somerville, Jr. and Henry E. Simpson, Lange, Simpson, Robinson & Somerville, Birmingham, Ala., for defendants.

MEMORANDUM OPINION
McFADDEN, Chief Judge.

I. INTRODUCTION
This matter is before the court on the defendant's motion for summary judgment. This action seeks damages alleged to result from two loan transactions: a loan closed on June 1, 1973 and secured by a 170-unit apartment complex known as the Vestavia Park Apartments; and a loan closed on July 30, 1973 and secured by a motel referred to in the record as a "Quality Inn" or as a "Red Carpet Inn". The complaint is in three counts, Count I charges Mortgage Corporation of the South, formerly Cobbs, Allen & Hall ("CAH"), with violations of the federal securities laws. Plaintiff details fourteen alleged misrepresentations or failures to disclose material facts, each of which is alleged to constitute a violation of Section 17 of the Securities Act of 1933 (15 U.S.C. § 77q) and Rule 10b-5 as adopted by the Securities Exchange Commission pursuant to Section 10 of the Securities and Exchange Act of 1934 (15 U.S.C. § 78j).
In Count II, plaintiff alleges breach of its commitment agreements with CAH: (1) in that the defendant failed to inform plaintiff of material or adverse changes in the borrower's current financial condition; (2) in that the value of the property pledged as collateral was substantially at variance with the information provided plaintiff by CAH; and (3) in that the defendant represented, contrary to the facts, that the buildings and improvements contemplated by the commitments had been completed in a good, substantial, and workmanlike manner in accordance with the plans and specifications and fully equipped with first class equipment.
Count III of the complaint alleges that the misrepresentation and omissions detailed under Count I constituted a fraud and deceit under Alabama law.
In its answer, CAH has raised twenty-nine affirmative defenses. It presently has moved for summary judgment based on eight of these defenses which CAH contends entitles it to judgment as a matter of law on undisputed facts on record. The motion for summary judgment is based on the contention that:
1. The matters contained in the loan and commitment on which Count II is based are as a matter of law only conditions precedent to First Federal's obligation to perform under the commitments and correspondingly were not promissory undertakings, representations, or warranties, by CAH with respect to which an action for breach of contract can be maintained.
2. The two promissory notes on which suit is based are not securities within the scope of the Securities Act of 1933 or the Securities and Exchange Act of 1934.

*946 3. Count I charging Securities Law violations and Count III charging fraud and deceit are barred by the applicable statutes of limitations. Defendant contends that the bar of the Securities Law Claim is established whether the applicable limitations period is that of two years under the Alabama Blue Sky Law (Section 8-6-19, Code of Alabama 1975) or that of one year under Section 6-2-39, Code of Alabama 1975. Defendant contends that the fraud claim in Count III is barred by the governing limitation period proscribed in Section 6-2-39, Code of Alabama 1975.

II. BREACH OF CONTRACT
Plaintiff's claim for breach of contract is based on language contained in the two loan commitment agreements executed by the parties. The first agreement was dated June 22, 1972 and related to the loan for the financing of the Red Carpet Inn. The second agreement, dated March 9, 1973, related to a loan to be made to Joseph Sandner for the financing of the Vestavia Park Apartments. The language in each reads substantially as follows:
This commitment is made subject to the following General Conditions:
GENERAL CONDITION
1. Approval of General Counsel: The form and substance of each and every document evidencing the loan and its security therefor or otherwise forming a part of this transaction, and all proceedings incident thereto, and the state of the title to the Real Property must be satisfactory to our General Counsel.
2. Title Insurance: Title insurance, in form and issued by title company satisfactory to us, in the amount of the loan shall be delivered to us, insuring us as a holder of the indebtedness secured by the first mortgage provided for herein, subject only to such exceptions as shall be approved by our General Counsel. The title policy shall show no delinquent taxes and assessments affecting the real property or any part thereof on the date of closing.
3. Survey: . . .
4. Insurance: . . .
5. Commencement and Completion of Construction: . . .
6. Changes in Plans and Specifications: . . .
7. Construction: The buildings and all other improvements contemplated by this commitment, including grading, landscaping, and all other on and off-site improvements, shall be made and completed of first-class materials and in a good, substantial and workmanlike manner in accordance with the plans and specifications approved by us and to our satisfaction, and shall be fully equipped with first-class equipment, and we shall be furnished with evidence satisfactory to us that all the aforesaid are paid for or that adequate provision is made therefor.
8. No Material or Adverse Change: Except as may be otherwise provided herein, the loan, the cost, income and expense of the real property (including improvements) and all other features of the transaction shall be as represented by you in the mortgage loan application, or otherwise, without material change. No adverse change shall have occurred with respect to the credit or financial condition of the borrower or the real property or with respect to other features of the transaction; no part of the real property shall have been damaged and not repaired to our satisfaction nor shall any part thereof have been taken in condemnation or other like proceeding, nor shall any such proceeding be pending as of the closing. The borrower shall not be involved in any bankruptcy, reorganization or insolvency proceeding.
9. Compliance with law: . . .
10. Estoppel: . . .
11. Assignability and Amendment: . . .
12. Expiration Date  Date of Closing: . . .
13. Default: Failure by you to comply with the requirements herein set forth *947 within the time herein permitted shall constitute a default by you and unless waived by us in writing shall automatically cause this commitment to be canceled. If any of the conditions for closing shall not have been met as of the closing deadline, this commitment shall automatically be and become canceled.
14. Appraisal: . . .
15. Acceptance: . . .
16. Opinions of Your Counsel: . .
Plaintiff argues that this language imposes a legal duty on the defendants to inform the plaintiff of any material adverse change in the condition of the borrower or of the real property, and that the fact of the breach of this duty is a question for the jury. The defendants argue that the language merely lists a number of conditions precedent to liability under the contract and that breach of the condition does not give rise to liability.
It is well established that a condition creates no right or duty in and of itself, but is merely a limiting or modifying factor. If it is breached, or does not occur, the promisee acquires no right to enforce the promise. 5 S. Williston, Williston on Contracts, § 665 (3d ed. by Jaeger, 1978); 17 Am.Jur.2d Contracts § 320 (1964); Burns v. Board of Public Instruction of Okaloosa County, 212 So.2d 654 (Fla.App.1968); Fidelity & Casualty Co. of New York v. DeLoach, 280 Ala. 497, 195 So.2d 789 (1967). In determining whether the language in question creates a series of promissory undertakings or merely lists conditions precedent to liability, the court is bound to give effect to the intent of the parties as manifested in the language of the agreements.
The language in dispute relates to facts in existence at the time of the execution of the contract or events to occur prior to the execution of the contract. This is characteristic of conditions precedent. See Williston on Contracts, § 663 (3d ed. 1978). The use by the parties of the heading "General Conditions" indicates the intent to create conditions and not promissory undertakings. The introductory language to the conditions section provides: "First Federal Savings and Loan Association of Miami will purchase at par the mortgage loan identified below . . . based upon representations and application made by you, subject to each and all of the terms and conditions set forth herein having been satisfied prior to the date of closing of the loan." (Emphasis added.) The cases are replete with examples of contracts in which the drafters have stated that liability is "subject to" some fact or event, and the courts have consistently held that in the absence of other indications of the parties' intent, such language creates a condition precedent and not a promissory undertaking. Burgess Construction Co. v. M. Morrin & Son Co., 526 F.2d 108 (10th Cir. 1975); Ross v. Harding, 64 Wash.2d 231, 391 P.2d 526 (1964); Rubin v. Fuchs, 1 Cal.3d 50, 81 Cal.Rptr. 373, 459 P.2d 925 (1969). Plaintiffs have not suggested the existence of any evidence which would indicate that the language was intended to be anything other than what it purports to be  an enumeration of conditions precedent. Accordingly, the court is of the opinion that there can be no liability on the part of the defendant for the failure of the listed events and facts to occur.
Defendant's motion for summary judgment is due to be granted as to Count II of the complaint and the allegations contained therein are due to be dismissed.

III. THE NOTE AND MORTGAGE AS SECURITIES
Plaintiff's suit under the securities laws, leaving aside the statute of limitations question, depends on whether or not the loan transactions are "securities" within the meaning of the federal securities laws. Section 2 of the Securities Act of 1933, 15 U.S.C. § 77b(1), defines a "security" as "any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest *948 in oil, gas, or other mineral rights, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing." Section 3 of the Securities Exchange Act of 1934, 15 U.S.C. § 78c contains a similar definition but also provides that "security" shall not include "currency or any note, draft, bill of exchange, or banker's acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited."
The courts have generally rejected the literal wording of the statute and have held that even though an instrument is a "note", it is not within the purview of the federal securities laws unless it can be characterized as investment in nature. The first case to follow this approach was Sanders v. John Nuveen & Co., Inc., 463 F.2d 1075 (7th Cir. 1972), in which the Seventh Circuit found that a note, although less than nine months in duration, was covered by the federal securities laws. The court noted that under S. E. C. v. W. J. Howey Co., 328 U.S. 293, 66 S.Ct. 1100, 90 L.Ed. 1244 (1946), the definition of a security is a flexible concept, capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits. The court also quoted Tcherepnin v. Knight, 389 U.S. 332, 335-336, 88 S.Ct. 548, 19 L.Ed.2d 564 (1967), for the proposition that in searching for the scope of the word "security", form should be disregarded for substance and the emphasis should be on economic reality. The court concluded that when Congress spoke of notes with a maturity not exceeding nine months, it meant commercial paper, not investment securities. 463 F.2d at 1080. In Zeller v. Bogue Electric Manufacturing Corporation, 476 F.2d 795 (2d Cir. 1973), the court rejected the literal wording of the statute and stated that notes of less than nine months duration would be deemed securities under the fraud provisions of the securities acts if the notes were sold to persons who stood in the positions of investors. "The Act is for the protection of investors, and its provisions must be read accordingly." 476 F.2d at 800.
With the exception of the early case of Lehigh Valley Trust Company v. Central National Bank of Jacksonville, 409 F.2d 989 (5th Cir. 1969), the Fifth Circuit has consistently followed the investment/commercial test of Sanders and Zeller. In both Securities and Exchange Commission v. Continental Commodities Corporation, 497 F.2d 516 (5th Cir. 1974), and Bellah v. First National Bank of Hereford, Texas, 495 F.2d 1109 (5th Cir. 1974), the Fifth Circuit applied the investment/commercial test to find that notes of less than nine months duration were securities within the meaning of the Securities Exchange Act of 1934.
The broadest application of the investment/commercial test by the Fifth Circuit to date occurred in the case of McClure v. First National Bank of Lubbock, Texas, 497 F.2d 490 (5th Cir. 1974). In that case the court was called upon to determine whether a one-year note was a "security". The court held that the investment/commercial test applied not only to securities otherwise exempt under the nine-month provision but also to notes greater than nine-months in duration which are literally within the definition contained in the act. A similar result was reached in National Bank of Commerce of Dallas v. All American Assurance Company, 583 F.2d 1295 (5th Cir. 1978). Thus, the notes in this case, although longer than nine-months in duration, must be judged according to the investment/commercial test.
The notes that are the subject of this lawsuit are the result of a practice common in the real estate industry of funding a project temporarily during its development and construction, and then seeking and obtaining long-term financing from another lender after the completion of the project. In this case the initial financing for both the motel and the apartment project was obtained from Cobbs, Allen and Hall by Joseph Sandner, the developer of the property. *949 During the initial stages of development, First Federal learned from Sonnenblick-Goldman Southeast Corporation, a Miami mortgage brokerage house, that permanent financing was needed for the Red Carpet Motel. After several trips to Birmingham by its representatives, First Federal decided to provide permanent financing for both the Red Carpet Inn and the Vestavia Park Apartments. Pursuant to the commitment letters executed on June 22, 1972, and March 9, 1973, the security interest in the subject property was transferred to First Federal in return for First Federal's assumption of the permanent financing of the project. There is some dispute in the facts as to whether the notes and mortgages were newly made by First Federal or whether First Federal merely purchased the completed notes and mortgages from CAH. It appears that First Federal had no direct dealings with Sandner until the foreclosure action was filed on the Vestavia Apartments, some time after the closing of the loans and the transfer of the notes. All supporting documents, including financial statements and appraisals, were submitted to First Federal by CAH. All negotiations pertaining to the terms and conditions of the transactions were negotiated with First Federal by CAH or by Sonnenblick-Goldman acting as the agent of CAH, and the commitment fees on each of the obligations were remitted to First Federal by CAH. The transaction in both substance and form was a sale of the notes and mortgages.
The cases in this circuit, while providing the general standard for determining whether the notes and mortgages in this transaction were "securities", provide little guidance on the particular facts here. In Bellah v. First National Bank of Hereford, Texas, 495 F.2d 1109 (5th Cir. 1974), the court considered a note of less than nine months in duration which was issued by a bank to a livestock venture. The court found that the bank merely intended to aid the owners in the operation of their livestock business and did not seek to profit from the successful operation of the enterprise. On this basis, the court, speaking through Judge Gewin, found that the notes were properly characterized as commercial paper and thus were not subject to the securities laws. In Securities and Exchange Commission v. Continental Commodities Corporation, 497 F.2d 516 (5th Cir. 1974), the court held that where a firm had issued notes to its customers in partial reimbursement of sums owed them upon the suspension of trading in commodities futures options, the notes were "securities" within the meaning of the federal securities laws. The court found that the firm had merely changed the form of the investment in the hopes that trading in futures options would resume. In McClure v. First National Bank of Lubbock, Texas, 497 F.2d 490 (5th Cir. 1974), the plaintiff owned 50 per cent of the corporation to which the bank loan was made and alleged that her husband had induced her to consent to the loan and had then used its proceeds to pay off his personal debts. The court held that two factors were influential in its finding that the note was not a security. The first was that only the bank and the corporation were involved in the transaction. The notes were neither offered to some class of investors, nor acquired by the bank for speculation or investment. Secondly, the court noted that the loan was extended solely for the purpose of allowing the corporation to pay off its business debt. The corporation did not obtain investment assets, directly or indirectly, in exchange for its notes.
Cases from other circuits which have adopted the investment/commercial test provide further guidance as to the characterization of the transaction in this case. In Great Western Bank & Trust v. Kotz, 532 F.2d 1252 (9th Cir. 1976), the court held that the duration of the loan was influential in determining whether the transaction was commercial or investment in nature: "[I]t is true that the longer one's funds are to be used by another, the greater the risk of loss." 532 F.2d at 1257. In both the district court opinion in McClure v. First National Bank, 352 F.Supp. 454 (N.D.Tex. 1973), and in C. N. S. Enterprises, Inc. v. G. & G. Enterprises, Inc., 508 F.2d 1354 (7th Cir. 1975), the court held that it is appropriate *950 to consider which party initiated the transaction: "[B]uying shares of the common stock of a publicly-held corporation, where the impetus for the transaction comes from the person with the money, is an investment; borrowing money from a bank to finance the purchase of an automobile, where the impetus for the transaction comes from the person who needs the money, is a loan. In between is a gray area . . .." 508 F.2d at 1359. This is merely another means of determining the purposes for which the loan was made. See McClure v. First National Bank of Lubbock, Texas, 497 F.2d 490, 494 (5th Cir. 1974).
Resolving all issues of fact in favor of the plaintiff as the court is bound to do in the case of a motion for summary judgment, the court cannot find that the notes sold by the defendants to the plaintiff were not securities within the meaning of the federal securities laws. The notes in this case were for a period of twenty years and constituted the bulk of the capital for the projects. Unlike McClure, where only the bank and the debtor were involved in the transaction, here a loan transaction was entered into between the developer and CAH, and then the loan "package" was transferred to First Federal. All the initial negotiations and administrative matters were handled by CAH and presumably the value of these services was reflected in the price paid for the notes by First Federal. CAH and First Federal also entered into a "servicing agreement" whereby CAH agreed to collect the payments and handle other administrative matters incident to the loans. There is little evidence that the loan was entered into for the purely commercial purpose of providing short-term capital to the corporation. The lender acquired a substantial security interest in the projects, and given the size of the loans, the lender was dependent on the expertise of the developer and CAH to insure it a return of any sort on its investment. The negotiations which preceded the purchase of the notes indicate an awareness on the part of all parties that the successful management and completion of the project would determine the value of the notes. The impetus for both loans came from First Federal which was at the time seeking loans of this nature throughout the country. First Federal was obviously not interested in merely the amount of the loan and the rate of interest. It shopped around and selected the Vestavia Park Apartments as a place to invest its funds only after rejecting other apartments suggested by CAH. This gives the strong impression that the physical nature of the property and its income-producing capacity were central in determining whether First Federal would receive a return on the money it advanced. The transaction in this case is neither a personal loan nor a consumer installment purchase. The transaction is, rather, a sizeable business investment on the part of First Federal. It is in such transactions that the securities laws are designed to operate. It is the abuses of the type alleged in this case which the securities laws are intended to prevent. Accordingly, in the court's opinion, for purposes of the defendants' motion for summary judgment, the notes purchased by First Federal are securities within the meaning of the federal securities laws.

IV. THE STATUTE OF LIMITATIONS
Although it is now well established that a private right of action is implied under Section 10(b) of the Securities Exchange Act of 1934, Superintendent of Insurance v. Bankers Life & Casualty Co., 404 U.S. 6, 92 S.Ct. 165, 30 L.Ed.2d 128 (1971), the act does not prescribe a period of limitations for an action, nor is there a general federal statute of limitations. Where Congress has failed to specify a period of limitations, the courts have looked to state law for an appropriate limitations period. Campbell v. City of Haverhill, 155 U.S. 610, 15 S.Ct. 217, 39 L.Ed. 280 (1895); McClaine v. Rankin, 197 U.S. 154, 25 S.Ct. 410, 49 L.Ed. 702 (1905); Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241 (1906); Englander Motors, Inc. v. Ford Motor Co., 293 F.2d 802 (6th Cir. 1961). In the absence of a specific provision, it is presumed that Congress intended for the appropriate state statute of *951 limitations to apply. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), AFL-CIO v. Hoosier Cardinal Corporation, 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966). The courts in this circuit and elsewhere have held that the limitation period to be applied to actions under Section 10(b) of the Securities Exchange Act and Rule 10b-5 is that which is applied by the forum states to the state remedy which bears the closest substantive resemblance to Rule 10b-5 and which best effectuates its purpose. Nortek, Inc. v. Alexander Grant & Co., 532 F.2d 1013 (5th Cir. 1976); Hudak v. Economics Research Analysis, Inc., 499 F.2d 996 (5th Cir. 1974); Sargent v. Genesco, 492 F.2d 750 (5th Cir. 1974); Vanderboom v. Sexton, 422 F.2d 1233 (8th Cir. 1970). Defendants argue that the appropriate statute of limitations is the one-year period applicable to fraud actions contained in Section 6-2-39, Code of Alabama 1975. Plaintiff contends that the applicable period is two years as provided in Section 18 of the Securities Act of Alabama, Section 8-6-19, Code of Alabama 1975. Plaintiff relies principally on Fifth Circuit cases where the court has applied the state's blue sky limitation period to 10b-5 actions. Hudak v. Economic Research Analysis, Inc., 499 F.2d 996 (5th Cir. 1974); Nortex, Inc. v. Alexander Grant & Co., 532 F.2d 1013 (5th Cir. 1976); and Dupuy v. Dupuy, 551 F.2d 1005 (5th Cir. 1977).
In Hudak v. Economic Research Analysis, Inc., supra, the court held that the applicable limitation period for Rule 10b-5 actions under Florida law was that contained in the Florida Blue Sky Law and not the general fraud statute. At the time that case was decided, the scienter requirement for 10b-5 actions had not been settled and in this court's opinion this fact was crucial to the court's decision. The court found a lack of a scienter requirement which was similar under either federal or Florida securities law and contrary to that required under common law fraud. After outlining the common law fraud requirements, the court noted:
In contrast, both this Circuit and, as the parties agree, the Florida state courts have relaxed such traditional notions of scienter and evil purpose in actions brought under their respective securities regulation provisions. See Smallwood v. Pearl Brewing Company, 5 Cir. 1974, 489 F.2d 579, 606; State v. Houghtaling, 181 So.2d 636 (Fla.1965). Though it would appear that Florida has not entirely abandoned the requirement of a showing of culpability, Sparks v. State, 256 So.2d 537 (Fla.App., 4th Dist.), nor yet embraced a pure negligence standard, the present hesitant growth of the Florida blue sky law accurately tracks the development of federal securities regulation in the Circuit. In our most recent statement on the scienter requirement in 10b-5 litigation, we observed that the law is presently in a state of considerable flux, and held it sufficient for the moment to note that "some culpability, beyond mere negligence, is required." Smallwood v. Pearl Brewing Company, supra, 489 F.2d at 606.
Id., at 1000. The court then went on to say:
We concur in the reasoned judgments of the Seventh and Eighth Circuits which, when faced with the present choice between a forum state's fraud and blue sky limitations periods for use in federal securities litigation, found the similarity between the blue sky and 10b-5 scienter requirements crucial to their determination. Parrent v. Midwest Rug Mills, Inc., 7 Cir. 1972, 455 F.2d 123; Vanderboom v. Sexton, 8 Cir. 1970, 422 F.2d 1233. Given the similarity of § 517.301(1) and Rule 10b-5, in both language and interpretation, and the congruence between the specific remedy sought here  return of the purchase money  and the remedy of recission for which Florida securities law provides a two-year statute, we hold that the district court erred in applying the three-year fraud period. . . .
Id., at 1000 (footnotes omitted).
The Vanderboom decision relied on by the Hudak court rejected the notion of scienter and held that Rule 10b-5 actions would lie *952 for negligent conduct. This rule was cited with approval in Parrent. The Supreme Court has put this matter to rest in Ernst & Ernst v. Hochfelder, 425 U.S. 185, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976). There the court expressly held that Rule 10b-5 incorporates a scienter requirement  an intent to deceive, manipulate or defraud. Negligence as a ground for recovery was rejected. The Hudak court's choice of a statute of limitations was based on the Parrent and Vanderboom reasoning which has been rejected by the Supreme Court. It must appear then that Hudak may be dubious authority.
Nortek, Inc. v. Alexander Grant & Co., supra, relied on Hudak without discussion. Dupuy v. Dupuy, supra, was decided after Hochfelder and applied the Louisiana Blue Sky limitation in lieu of Louisiana's "catchall" provision which applies in part to "offenses and quasi-offenses" and does not mention fraud or misrepresentations. The court there noted that with its differences the Louisiana Blue Sky Law still bore a closer resemblance to Rule 10b-5 than did the "catch-all provision dealing with a variety of offenses and quasi-offenses in the Louisiana Code." 551 F.2d 1023 n. 31.
The courts have established that with regard to private recovery for misrepresentation or fraud under the federal securities laws, a properly stated cause of action must establish the scienter of the defendant, the materiality of any misrepresentation or omission by the defendant, the extent of actual reliance by the plaintiff on the defendant's statements, and the justifiability of the reliance. As noted above, the Supreme Court has held that there can be no recovery for negligent misrepresentations, Ernst & Ernst v. Hochfelder, 425 U.S. 185, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976).
The common law remedy for fraudulent misrepresentation and the analogous remedy under Rule 10b-5 are very similar in nature. In each case, there must be a misrepresentation of a material fact, there must be reliance on the misrepresentation by the plaintiff and the reliance must be reasonable. The essence of an action under 10b-5 is fraud in the purchase or sale of securities. The fraud under this rule is essentially fraud of the common law variety in connection with the purchase or sale of securities. Recovery may be had by either a purchaser or a seller of securities. However, the Alabama Blue Sky Law differs markedly in several aspects from both the common law fraud action and the remedy provided by Rule 10b-5.
The civil cause of action under the Alabama Blue Sky Law is provided for in Section 8-6-19, entitled "Civil liabilities of sellers, agents, etc.: remedies of purchasers":
Any person who:
(1) Sells or offers to sell a security in violation of any provision of this article . . . [or]
(2) Offers or sells a security by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statement made, in the light of the circumstances under which they are made, not misleading, the buyer not knowing of the untruth or omission, and who does not sustain the burden of proof that he did not know and in the exercise of reasonable care could not have known of the untruth or omission . . .
is liable to the person buying the security . . .. (Emphasis supplied.)
This provision allows recovery by a purchaser for mere negligent misrepresentations. This section seems to be patterned in part at least on Section 12(2) of the Securities Act of 1933, 15 U.S.C. § 77l(2), which also states in part:
Any person who
(2) offers or sells a security . . . by means of a prospectus or oral communication, which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading (the purchaser not knowing of such untruth or omission), and who shall not sustain the burden of proof that he did not know, *953 and in the exercise of reasonable care could not have known, of such untruth or omission,
shall be liable to the person purchasing such security from him . . .. (Emphasis supplied.)
The Supreme Court in Hochfelder drew a sharp distinction between this (and other) sections of the 1933 Act and Rule 10b-5 in rejecting the argument that 10b-5 should extend to negligent conduct.
The Alabama Blue Sky statute, premised on the federal statute, allows recovery for negligent conduct. It sets up procedural restrictions similar to the provisions of the 1933 federal act and quite different from Rule 10b-5 and common law fraud actions. 15 U.S.C. § 77m specifies the statute of limitations triggered by knowledge of the untrue statements (or when discovery should reasonably have been made) but with outside limitations based on the offer to the public or the sale regardless of knowledge.
The Alabama Blue Sky statute likewise carries procedural requirements and a statute of limitation based on date of sale. This is quite different from 10b-5 actions. As the Supreme Court said in Hochfelder:
We also consider it significant that each of the express civil remedies in the 1933 Act allowing recovery for negligent conduct, see §§ 11, 12(2), 15, 15 U.S.C. §§ 77k, 77l(2), 77o, is subject to significant procedural restrictions not applicable under § 10(b). . . . We think these procedural limitations indicate that the judicially created private damages remedy under § 10(b)  which has no comparable restrictions  cannot be extended, consistently with the intent of Congress, to actions premised on negligent wrongdoing. . . .
96 S.Ct. 1375, 1388-89. This illustrates the difference between the 1933 Act amendments and 10b-5 and consequently the difference between the Alabama statute and 10b-5.
The Alabama statute is carefully drawn to permit a purchaser to recover for a violation, even if negligent, and is in sharp contrast to Rule 10b-5 which allows either a purchaser or a seller to recover provided the misrepresentation of a material fact is made with intent to deceive and the misrepresentation is reasonably relied on by the plaintiff. Alabama common law fraud closely parallels the 10-b action in requiring misrepresentation of a material fact with intent to deceive and in allowing recovery by either a purchaser or a seller. The 10b-5 action, in this court's opinion, is much closer to the common law fraud action.
The Alabama statute of limitations for fraud is one year under section 6-2-39, Code of Alabama (1975). Under section 6-2-3, Code of Alabama (1975), the year does not commence until discovery of the fraud. The courts have interpreted this to mean the discovery of the fraud or when the fraud should have been discovered. Johnson v. Shenandoah Life Insurance Company, 291 Ala. 389, 281 So.2d 636 (1973). The federal rule also provides that the period of limitations runs from the date when the plaintiff discovered or in the exercise of reasonable care, should have discovered the alleged wrongdoing. Azalea Meats, Inc. v. Muscat, 386 F.2d 5 (5th Cir. 1967); Goldenberg v. Bache & Company, 270 F.2d 675 (5th Cir. 1959); Schilleci v. Guaranty Savings Life Insurance Co., 367 F.Supp. 903 (N.D.Ala.1973). In contrast, under the Alabama Blue Sky Law the limitation period of two years runs from the date of the contract of sale. This further illustrates the closer affinity of the federal law under Rule 10b-5 to common law fraud than to the Blue Sky provision.
Under the federal rule and the common law fraud rule the test is an objective one, so that it need not be proved that the plaintiff had actual knowledge of the wrongdoing, but is sufficient if it is shown that he had knowledge of facts from which the wrongdoing would reasonably be inferred. Friedman v. Meyers, 482 F.2d 435 (2d Cir. 1973). Johnson v. Shenandoah Life Insurance Company, supra. The plaintiff is credited not only with those facts of which he has actual knowledge, but also those facts which he in the exercise of due diligence *954 should have discovered. Berry Petroleum Company v. Adams & Peck, 518 F.2d 402 (2d Cir. 1975); Azalea Meats, Inc. v. Muscat, 386 F.2d 5 (5th Cir. 1967); Goldenberg v. Bache & Company, 270 F.2d 675 (5th Cir. 1959). This court thus must engage in a two-part process: first, it must determine those facts which the plaintiffs knew or in the exercise of due diligence should have known; and, second, it must determine whether those facts gave the plaintiffs notice of the fraudulent activities complained of.
Count I of the complaint sets out fourteen alleged misrepresentations or failures to disclose material facts, each of which is alleged to constitute a violation of Section 17 of the Securities Act of 1933 (15 U.S.C. § 77q), and Rule 10b-5 as adopted by the Securities Exchange Commission pursuant to Section 10 of the Securities and Exchange Act of 1934 (15 U.S.C. § 78j). The conduct of which the plaintiff complains may be summarized as follows:
(1) Defendants failed to disclose the business interests of Haralson with the borrower;
(2) Defendants failed to disclose that Haralson would benefit personally from the transaction;
(3) Defendants failed to disclose that Haralson had business interests in certain suppliers of materials to the projects;
(4) Defendants failed to disclose that the apartments and motel were incomplete at the time of the loan transaction;
(5) Defendants failed to disclose that poor and substandard construction methods and materials were used on the apartments and motel;
(6) Defendants failed to disclose the poor financial condition of the borrower at the time of the loan;
(7) Defendants failed to disclose the fact that secondary financing was necessary for the completion of the project;
(8) Defendants failed to disclose that the motel and apartments were not constructed in accordance with the plans and specifications;
(9) Defendants failed to disclose that the fair market value of the property was much less than that represented at the time of the transaction;
(10) Defendants failed to disclose that the motel and apartments were not constructed in compliance with the ordinances of the city;
(11) Defendants failed to disclose that Haralson had a pecuniary interest in the project pledged as collateral;
(12) Defendants failed to disclose that Haralson had substantial financial interests in common with the borrowers;
(13) Defendants misrepresented to plaintiffs that the borrower was a man of substantial means; and
(14) Defendants failed to disclose that Haralson rather than the borrower was the real organizer and principal.
We must analyze those facts which were or should have been known to the plaintiff prior to December 22, 1974 (one year before the filing date of the complaint) to determine whether those facts gave the plaintiff notice of the conduct set out above so as to bar plaintiff's cause of action.
On March 18, 1974, the apartment property was inspected by Mr. Richardson and at that time First Federal, through Mr. Richardson, became aware of substantially all the alleged misrepresentations concerning the construction and condition of the property. In a memorandum to Mr. Ford following that visit Mr. Richardson evidences sufficient awareness of the fraudulent scheme as to put First Federal on notice of the conduct complained of. At the close of that memorandum, Mr. Richardson states flatly: "It appears to me that Mr. Harrelson, together with Mr. Sandner, had set out to defraud. The carpet deal, the missing appliances, etc., the multiplicity of deals arranged by Mr. Harrelson for Mr. Sandner, Mr. Harrelson's conduct within the CAH office (he personally handled the servicing and collections as regards the Sandner projects according to Mr. Dureen who normally should have serviced them), and the sudden firing of Mr. Harrelson in December with allegedly no explanation given in Birmingham. *955 . . . Our transactions with CAH should be researched in detail to find any grounds for misrepresentation, malfeasance, or fraud, etc. . . ." Interoffice Memorandum, at page 5. First Federal would have discovered the conduct on which this suit is based well prior to December of 1974 had they undertaken a proper investigation. Accordingly, the claims for misrepresentation under the federal securities laws are barred by the statute of limitations. Since the limitation period for an action at common law is also one year, the common law claims are barred as well.
The court is further of the opinion that even if the applicable statute of limitations for the claims under the federal securities laws is two years, those claims are barred on the facts before the court. The court is of the opinion that prior to December 22, 1973, the plaintiff had notice of the conduct complained of so as to bar its cause of action under the federal securities laws.
The only facts bearing on this point are found in the depositions of two individuals who were loan officers of First Federal at the time of the loan transaction that is the subject of this suit. Robert P. Ford, who was Senior Vice President for Loans, testified as follows:
Q: What information do you have that the financial condition represented by those financial statements changed between the time they were submitted to you and the time the loans were closed?
A: Well, we understood that Mr. Sandner didn't have anything near what was represented to be his holdings on his financial statement.
Q: Who did you obtain that understanding from, or what do you base that understanding on?
A: Well, the man never made any payments on his mortgage. . . . He ducked and ran out of the Red Carpet before the front door was opened, and Vestavia, he left it. And, if he had anything, and if he had had any equity in either one of them he surely wouldn't have done anything like that.
Q: So, your information in that regard comes primarily from the fact that Mr. Sandner never made a payment on either one of these two loans, is that correct?
A: That's probably the best indication to us that the man
Q: That information would have been available to you within two months of closing, would it not, of each respective loan?
A: No, not as a known fact. These little suspicions began to permeate your mind, and you do your best to beat them out. You fuss and pull and struggle and try to correct a situation, and it takes a while for a little light to light up back there and for you to figure out you have got a bad deal.
Ford Deposition, at 229-231.
Mr. Richardson, the officer in charge of the commercial loan department at the time of the purchase of the loan that is the subject of this lawsuit, testified as follows concerning his knowledge of the misrepresentations set out above:
Q: A further allegation is made that Cobbs, Allen and Hall failed to disclose that the apartment project and the motel were incomplete at the time of the purchase of the loans.
A: That's correct.
Q: Now, do you have any information to support that allegation?
A: That they weren't complete?
Q: Yes.
A: Right here. The visit in September, October of '73 by Fiorella and Thomas and a whole bunch of attorneys. Landscaping wasn't complete. Carpet wasn't complete. Washers and dryers weren't complete. That's what I wrote down. They were talking pretty fast; I don't recall what else they said.
Richardson Deposition, at 112-113. (It appears without dispute that this visit was in fact in August 1973, but the difference is immaterial.)
Mr. Richardson further testified:
Q: The allegation made that Cobbs, Allen and Hall represented to First Federal that the apartment project and motel project, fair market values, substantially *956 was $2,300,000 and $2,750,000. . . . Do you have any knowledge or information which would indicate that any employee of Cobbs, Allen and Hall, including Mr. Haralson, had any knowledge of the falsity of those representations or of the values reflected by those appraisals, if indeed they were false?
A: I had no indication of falsity of anything until the first thing was when the group came here in September or October of 1973. This was Fiorella and that group, and they alleged that the project hadn't been completed, and they needed more money to get it completed. That's the first indication I had of any misrepresentation because the representation was to us that at the time it was closed it was complete.
Mr. Richardson attempted to explain the credibility that he attached to the statements made at the meeting with Fiorella and Thomas and the others as follows:
Q: These people (referring to the people at the meeting), you didn't think much of their credibility, did you, sir?
A: No. . . .
Q: Here's what you thought of the credibility of those people, "The answer we got did not make much sense, actually the list of things needed to be done seemed to be phony." (Reading from the inter-office memorandum attached to defendants' reply brief.)
A: That's right. That is exactly what it was. Here the apartments had hardly been used, and they needed new carpets put in them, and they already had carpet in them. It didn't make sense until I saw the apartment six months later.
Q: You thought they were telling you lies?
A: We didn't give them a satchelful of money to go back with.
Q: So, at that time in your own mind as to the credibility of those people, you didn't believe them, did you sir?
A: We didn't believe we wanted to put more money in them.
Richardson Deposition, at 223-225.
From the evidence set out above, it appears that two years prior to the filing of the complaint First Federal had sufficient ground to at least inquire about the nature of the representations. The fact that Mr. Sandner had not been making payments on either of the two loans was sufficient in and of itself to give notice to the plaintiff that his financial condition might well not be as represented. Moreover, the information given to the plaintiff at the Miami meeting in the summer of 1973 concerning the condition of the apartments was sufficient to put plaintiffs on notice about the possible mis-representations on that issue. The evidence in the record indicating that First Federal did not believe the information to be true does not alter the situation. In the context of the negotiations being carried on at that time, plaintiff's failure to investigate further was not reasonable. Accordingly, we find that for purposes of the defendants' motion for summary judgment, the claim under the federal securities laws is barred by the statute of limitations, whether the one or two-year period is applied. Accordingly, the motion for summary judgment is due to be granted.


70 N.J. Super. 196 (1961)
175 A.2d 219
ROBERT AMSTERDAM AND ROSE HOLDER, PARTNERS T/A EASTERN SALES FINANCE COMPANY, PLAINTIFF-APPELLANT,
v.
THOMAS DE PAUL, DEFENDANT-RESPONDENT.
Superior Court of New Jersey, Appellate Division.
Argued October 23, 1961.
Decided November 6, 1961.
*198 Before Judges GAULKIN, KILKENNY and HERBERT.
Mr. Monroe Jay Lustbader argued the cause for appellant (Messrs. Lustbader & Lustbader, attorneys; Mr. Irving Silverman, on the brief).
No appearance for the respondent.
The opinion of the court was delivered by KILKENNY, J.A.D.
Plaintiff holder of a negotiable promissory note sued the defendant alone, as alleged co-maker thereof. The Hudson County District Court, sitting without a jury, found that plaintiff was a holder in due course but that the defendant's signature on the instrument was the result of fraud in the factum unaccompanied by negligence on his part. Accordingly, it rendered judgment in favor of the defendant. Plaintiff appeals therefrom.
In a prior suit in another court, plaintiff had obtained a default judgment against the other two makers of this note, Ronald and Elizabeth Perkowsky, and that judgment remains unsatisfied.
The evidence supports the trial court's finding that De Paul signed the note in issue in reliance upon the false representation made to him by the maker, Ronald Perkowsky, that he was signing only a "character reference" which Perkowsky needed in connection with the purchase of merchandise from Bushberg Brothers of Union City, the payee of the instrument. Because of his subnormal mentality, his only schooling having been in a "special class" of the public school, De Paul was not able to read, except small words, and then he needed reading glasses for this purpose. *199 When he signed this note, he did not read it; he had no reading glasses with him, and the note was not read to him by Perkowsky or by the representative of Bushberg Brothers who witnessed his signature. It seems clear, therefore, that the district court was correct in finding that De Paul's signature was obtained as the result of fraud in the factum, without any negligence on his part.
Fraud in the factum is a good defense to an action on a negotiable instrument as against a holder in due course, provided there has been no negligence on the part of the maker. N.J. Mtge. & Invest. Co. v. Dorsey, 60 N.J. Super. 299 (App. Div. 1960), affirmed 33 N.J. 448 (1960). As stated in 60 N.J. Super., at p. 303:
"The rationale of the defense is the fundamental of contract law that one cannot be bound on an obligation he does not know he is entering into. Restatement, Contracts, § 475."
As stated in 7 Rutgers L. Rev., pp. 409-410:
"Controversies raising the problem of fraud in the execution usually involve a situation where the person asserting the defense is unable to read or write, is old and feeble, blind, ignorant, or signs the paper without reading it on the representation that he does not incur a financial liability. * * * Lack of intent to enter into a binding obligation is just as impelling a reason for relieving the person from apparent liability as is lack of capacity. In either case the law states that a person is not bound because he did not enter into a binding agreement."
See, too, Britton on Bills and Notes, sec. 130, p. 566; 10 C.J.S. Bills and Notes § 499 (b), pp. 1100-1101; and 160 A.L.R. 1296.
Plaintiff argues that since the fraud upon the co-maker was practiced by a maker and not by the payee, the defense was not available as against the payee or its transferee, the plaintiff. However, we find no validity in such a distinction. A negotiable instrument which is the product of fraud in the factum, unaccompanied by negligence, as distinguished from an instrument which is the product of fraud *200 in the treaty, is void, and not merely voidable. As stated in 17 C.J.S. Contracts § 140, p. 495:
"Where some trick is used to substitute another instrument for the one which it is intended to sign, as where a note is substituted for a receipt, and in like cases, the signature has no legal effect, * * *. Hence there is no agreement which can give rights to anyone, except where the signer is estopped by negligence or otherwise to set up the truth as against bona fide third persons * * *."
In McDonald v. Central R.R. Co., 89 N.J.L. 251, 254 (E. & A. 1916) the court said:
"A misrepresentation of the contents of a document by which one is induced to sign a paper thinking it is other than it really is is the typical case of fraud in the execution; it is a case where the defrauded party may properly say, `I never agreed to that, and hence the document is not my deed.'"
The defense of fraud in the factum unaccompanied by negligence is legally analogous to the defense of forgery. As noted in Cline v. Guthrie, 42 Ind. 227, 13 Am. Rep. 357 (Sup. Ct. 1873):
"It is well settled * * * that the party whose signature to a paper is obtained by fraud as to the character of the paper itself, who is ignorant of such character, and has no intention of signing it, and who is guilty of no negligence in affixing his signature, or in not ascertaining the character of the instrument, is no more bound by it than if it were a total forgery, the signature included."
In Trambly v. Ricard, 130 Mass. 259, 261 (Sup. Jud. Ct. 1880), a case in which a party's signature was obtained by fraud in the factum, the court stated that the party "is no more bound than if it were a forgery." So, too, in Whipple v. Brown Bros. Co., 225 N.Y. 237, 243, 121 N.E. 748, 750 (Ct. App. 1919), it was held that where there is a misrepresentation as to the nature of the instrument signed by a party, such fraud in the factum renders the writing void at law and "a party * * * is no more bound than if it were a forgery."
*201 In the case of Wooden v. Shotwell, 24 N.J.L. 789 (E. & A. 1854), the court said, at page 790:
"It is a self-evident proposition that where the law declares a contract to be void, the party can acquire no legal right under or by virtue of it."
The applicability of this principle to negotiable instruments was first laid down by the English courts in 1869 in Foster v. MacKinnon, L.R. 4 C.P. 704 (Eng.), in which an endorser had signed an instrument as a result of fraud in the factum and the court said:
"It is invalid * * * * on the ground that the mind of the signer did not accompany the signature; in other words that he never intended to sign and therefore in contemplation of law never did sign, the contract to which his name is appended."
Accordingly, we conclude that the defendant, Thomas De Paul, was not contractually bound on this instrument which was void ab initio, under the circumstances, so far as he was concerned.
Plaintiff contends further that the defendant was negligent as a matter of law by reason of his failure to read the instrument or to have it read to him. The maker's freedom from negligence is an integral part of the defense of fraud in the factum and the burden of establishing lack of negligence is upon the maker. Bancredit, Inc. v. Bethea, 65 N.J. Super. 538, 545 (App. Div. 1961). As noted in N.J. Mtge. and Invest. Co. v. Dorsey, supra (60 N.J. Super., pp. 304-305):
"The question of whether there has been negligence is one for the trier of fact, who must determine it from all the surrounding circumstances of the transaction, including the literacy, education, intelligence and capacity of the signer, and the reasonableness in the light thereof of his reliance on the fraudulent misrepresentations. Consideration is to be given to the relationships between the parties, the availability of third persons who could be called upon for advice, and whether or not reasonable prudence was exercised by the signer."
*202 We therefore conclude that in view of the uncontradicted testimony of the defendant in this case, the issue of his negligence was properly one for the trier of the facts, to wit, the district court judge sitting in this case without a jury, and his finding of no negligence is amply supported by the evidence.
Plaintiff's final point is that the testimony by the defendant as to the false representations by the maker, Ronald Perkowsky, as to the character of the instrument, was incompetent hearsay and as such inadmissible. We find no merit in this contention. To adopt the plaintiff's view would preclude a defrauded party from testifying to the false representations made by the deceiver whenever a suit is brought by a holder in due course. How else could a defendant establish the false representations, verbally made, except by his testimony as to what was said in the perpetration of the fraud? The trial court also noted significantly that "the payee's representative if not cooperating in the fraud permitted it by remaining silent. Nowhere in the law is there the right to benefit from the fraud of another when the fraud could not be perpetrated except for that silence."
The judgment is affirmed.


496 F.2d 850
Blue Sky L. Rep.  P 71,126Guy W. RUCKER, Appellant,v.La-Co, INC., et al., Appellees, and Union National Bank ofLittle Rock, Appellee and Cross-Appellant.
Nos. 73-1793, 73-1794, 73-1832 and 73-1891.
United States Court of Appeals, Eighth Circuit.
Submitted March 12, 1974.Decided April 22, 1974.

H. Clay Robinsin, Fort Smith, Ark., for Rucker.
Cyril E. Hollingsworth, Jr., Little Rock, Ark., for Lane.
Griffin Smith, Little Rock, Ark., for Union Nat. Bank.
Before GIBSON, BRIGHT and STEPHENSON, Circuit Judges.
GIBSON, Circuit Judge.

1
Plaintiff, under Arkansas law, sought a recission of a sale of corporate stock and monetary damages.1  We affirm the District Court's judgment dismissing plaintiff's action and awarding of costs, including attorney's fees, to defendant Union National Bank of Little Rock (Union).

2
Plaintiff-appellant, Guy W. Rucker, is a certified public accountant and lawyer with experience as a comptroller or accountant at several companies.  La-Co, Inc., a defendant in this case, employed Rucker as its Comptroller.  On March 10, 1969, Rucker purchased 500 shares of DBS, Inc.  (DBS) common stock from United Diversified, Inc.  (United Diversified) and seeks by this action to rescind that purchase and to obtain monetary damages.  On March 19, 1969, the DBS stock was issued to Rucker, but delivered to Union as pledged security for a $25,000 loan that Union had made to Rucker for the stock purchase.

3
On September 6, 1968, Harlan Lane, also a defendant, with Don Couch formed DBS as a one-bank holding company.  Lane was at that time Chairman of the Board and Chief Executive Officer of Union and Couch was its president.  Union was controlled by Lane through United Diversified, another defendant.  An exemption to the registration of the BDS stock as a private offering under Arkansas securities law was granted by the Arkansas Securities Commissioner pursuant to Ark.Stat.Ann. 67-1248(b)(9).2  Immediately thereafter the stock was sold to 20 purchasers, including United Diversified.  United Diversified subsequently sold its DBS stock in four transactions to five different individuals, including Rucker.

4
During December, 1968, NAPAR Chemical Corporation, Inc.  (NAPAR) representatives met with Lane representing United Diversified and DBS to discuss a merger, which was initially agreed upon on December 11, 1968.  In January, 1969, Rucker interviewed for the comptroller position of the new corporation and began work on February 2 or 3, 1969.  Rucker spent most of March gathering financial data on NAPAR to effectuate the merger, which was finally and formally agreed upon on March 12, 1969.

5
The new merged corporation, La-Co, Inc., came into existence on June 12, 1969.  In July, 1969, Rucker transferred his 500 shares of DBS for La-Co stock, which was also delivered to Union as substituted security for the same $25,000 loan described above.  Sometime later in 1969, Union demanded payment from Rucker on the $25,000 loan; Rucker paid the loan in its entirety; and La-Co stock was released to Rucker.  In December, 1968, and the first half of 1969, United Diversified sold 200 shares of DBS to Gladys Powell and 200 shares to Ladd and Clara Jameason, as joint owners.  After Rucker's purchase, United Diversified sold Lane 7,100 shares.

6
The District Court first held that the DBS stock fell within the private offering exemption pursuant to Ark.Stat.Ann. 67-1248(b)(9).  We agree.  The defendants have demonstrated that less than 25 persons were offered DBS stock, that DBS reasonably believed the purchasers were buying for investment, and that no commission was paid.  Further, the Arkansas Securities Commissioner exempted DBS stock from registration.

7
The District Court also held that the sale of the 500 shares of DBS stock to Rucker and the three other sales of DBS by United Diversified were exempted as 'isolated non-issuer transactions' under Arkansas law.  Ark.Stat.Ann. 67-1248(b)(1).3  We agree with the District Court that 'the small number of transactions, the 'insider' status of two of the purchases (by Rucker and Lane) and the infrequent nature of these sales clearly indicate that they are within the meaning of Section (b)(1).'  Cf. Arkansas Real Estate Co. v. Fullerton, 232 Ark. 713, 339 S.W.2d 947 (1960).  Rucker, a certified public accountant and lawyer, had several years of financial experience; he was well-acquainted with the financial operations of La-Co and actively assisted in completion of the merger.  Since Rucker was an insider to La-Co's entire financial operations, United Diversified should not be considered to be an issuer of the DBS securities in an isolated transaction to the knowledgeable comptroller of La-Co.  We have reviewed plaintiff's other arguments, including the purported liability of Union to Rucker for United Diversified's sale of DBS stock to Rucker, and find them meritless.  Union was not a seller nor a participant in the sale, but only a lender on the securities purchased.

8
In the District Court, Union requested $2,463.70 costs and attorney's fees and was awarded $693.70 pursuant to 15 U.S.C. 77k(e).  On appeal Union again requests $2,463.70 and Lane also requests costs of defense, including reasonable attorney's fees, under 15 U.S.C. 77k(e) for expenses incurred prior to the voluntary dismissal of the alleged federal securities violations.  Rejecting the requests on appeal by Union and Lane, we affirm the District Court's award of $693.70 to Union for costs and reasonable attorney's fees incurred at the District Court before the dismissal of the federal securities allegations.  The award of costs and attorney's fees is within the discretion of the District Court.  The plaintiff here voluntarily dismissed the alleged violations under federal securities law against all defendants.  We think that the claim against Union, as only a security holder, was frivolous and an award of costs to Union is within the District Court's discretion.  Katz v. Amos Treat & Co., 411 F.2d 1046, 1056 (2d Cir. 1969).  We deny Lane's request for costs and attorney's fees, for he has not specifically demonstrated to us how Rucker's claims under the federal securities law were frivolous as to him.  Regarding the amount of costs and attorney's fees, we affirm the $693.70 award as within the District Court's discretion.

9
The District Court is affirmed.

1
 The Honorable Daniel H. Thomas, United States Senior District Judge, Mobile, Alabama, sitting by designation in the Eastern District of Arkansas, entered the unpublished judgment dismissing this action.  Plaintiff originally alleged violation 'including counts of common law fraud, violation of SEC Rule 10b-5, and violation of the disclosure provisions of the Arkansas Securities law'; however, plaintiff voluntarily before trial dismissed with prejudice 'all these claims except the one based on the allegation of a sale or issuance of a security which was neither registered nor exempt in violation of the provisions of the Arkansas Securities Act.'

2
 Section 67-1248(b) reads in part:
(b) The following transactions are exempted from sections 7 and 15 (regarding registration of securities and filing of sales literature):
(9) any transaction pursuant to an offer directed by the offeror to not more than twenty-five (25) persons (other than those designated in paragraph (8)) in this State during any period of twelve (12) consecutive months, whether or not the offeror or any of the offerees is then present in this State, if (A) the seller reasonably believes that all the buyers in this State are purchasing for investment, and (B) no commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyer in this state; but the Commissioner may by rule or order, as to any security or transaction or any type of security or transaction, withdraw or further condition this exemption, or increase or decrease the number of offerees permitted, or waive the conditions in Clauses (A) and (B) with or without the substitution of a limitation on remuneration * * *.

3
 Section 67-1248(b) reads in part:
(b) The following transactions are exempted from Sections 7 and 15 (regarding registration of securities and filing of sales literature):
(1) any isolated non-issuer transactions, whether effected through a broker-dealer or not; provided, that repeated or successive transactions shall be prima facie evidence that such transactions are not isolated non-issuer transactions * * *.


48 F.3d 532
Ruddv.Dunn*
NO. 94-60566
United States Court of Appeals,Fifth Circuit.
Feb 16, 1995
Appeal From:  S.D.Miss., No. 3:94-CV-12

1
AFFIRMED.

*
 Fed.R.App.P. 34(a);  5th Cir.R. 34.2


                    T.C. Summary Opinion 2007-101

                       UNITED STATES TAX COURT

                    STEVEN A. DYKES, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent

     Docket No. 6488-06S.                Filed June 20, 2007.

     Steven A. Dykes, pro se.

     Erin K. Salel, for respondent.

     DEAN, Special Trial Judge:    This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code.

Unless otherwise indicated, subsequent section references are to

the Internal Revenue Code as in effect for the year at issue, and

all Rule references are to the Tax Court Rules of Practice and

Procedure.    Pursuant to section 7463(b), the decision to be

entered is not reviewable by any other court, and this opinion

shall not be treated as precedent for any other case.
                                - 2 -

     Respondent determined for 2003 a deficiency in petitioner’s

Federal income tax of $3,909.    The issue for decision is whether

a qualified retirement plan distribution was attributable to

petitioner’s being “disabled” within the meaning of section

72(m)(7), thereby excepting him from liability for the section

72(t) 10-percent additional tax.

                             Background

     The stipulated facts and the exhibits received into evidence

are incorporated herein by reference.     At the time the petition

in this case was filed, petitioner resided in Yuma, Arizona.

     During the year in issue, petitioner was a detention officer

at Grays Harbor County Juvenile Court Services in the State of

Washington.    Petitioner had been a detention officer for 17

years.

     In the early 1990s, petitioner suffered an illness

characterized by profound fatigue which was later diagnosed as

hepatitis C.    Petitioner received medical treatment, and his

medical report noted that he “did well for a number of years with

excellent physical reserve and stamina.”

     At the end of 2002, petitioner began to develop some

fatigue, and he requested a medical evaluation.    Dr. William

Mitchell, petitioner’s physician, determined that petitioner had

an apparent viral recurrence of hepatitis C.    From approximately

March to August of 2003, petitioner received medication to treat
                               - 3 -

his illness.   In September of 2003, petitioner quitted his job

and moved to Arizona.

     The State of Washington’s Public Employees’ Retirement

System filed with respondent a Form 1099-R, Distributions From

Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs,

Insurance Contracts, etc., reporting that petitioner received an

early distribution of $39,087.10 in 2003 (distribution).     At the

time, petitioner was 50 years old.

     Petitioner filed for 2003, a Form 1040, U.S. Individual

Income Tax Return, reporting the distribution as income.

Respondent subsequently issued to petitioner a statutory notice

of deficiency for 2003, determining that petitioner is liable for

an additional tax of $3,909 for an early distribution from his

retirement plan.

                            Discussion

     The Commissioner’s determinations are presumed correct, and

generally taxpayers bear the burden of proving otherwise.1     Rule

142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).

     Respondent determined that, under section 72(t)(1),

petitioner is liable for a 10-percent additional tax on an early

distribution from his retirement plan.   Petitioner disputes

respondent’s determination, contending that he is not liable for

     1
      Since this case is decided by applying the law to the
undisputed facts, sec. 7491 is inapplicable.
                               - 4 -

the additional tax because he became disabled during 2003.

Petitioner claims that the distribution was used to cover both

daily living costs and medical costs.

     Section 72(t)(1) generally imposes a 10-percent additional

tax on premature distributions from “a qualified retirement plan

(as defined in section 4974(c))”, unless the distributions come

within one of the statutory exceptions under section 72(t)(2).

     The legislative purpose underlying the section 72(t) tax is

that “‘premature distributions from IRAs frustrate the intention

of saving for retirement, and section 72(t) discourages this from

happening.’”   Arnold v. Commissioner, 111 T.C. 250, 255 (1998)

(quoting Dwyer v. Commissioner, 106 T.C. 337, 340 (1996)); S.

Rept. 93-383, at 134 (1973), 1974-3 C.B. (Supp.) 80, 213.

     Section 72(t)(2)(A)(iii) provides an exception for

distributions “attributable to the employee’s being disabled

within the meaning of subsection (m)(7)”.   Section 72(m)(7)

provides:

          (7) Meaning of disabled.--For purposes of this
     section, an individual shall be considered to be
     disabled if he is unable to engage in any substantial
     gainful activity by reason of any medically
     determinable physical or mental impairment which can be
     expected to result in death or to be of long-continued
     and indefinite duration. An individual shall not be
     considered to be disabled unless he furnishes proof of
     the existence thereof in such form and manner as the
     Secretary may require.

     The determination of whether a taxpayer is disabled is made

with reference to all the facts of the case.   Sec. 1.72-
                                - 5 -

17A(f)(2), Income Tax Regs.   The regulations also set forth

general considerations upon which a determination of disability

is to be made, such as the nature and severity of the impairment.

Sec. 1.72-17A(f)(1), Income Tax Regs.   However, the regulations

emphasize that the “substantial gainful activity” to which

section 72(m)(7) refers is the activity, or a comparable

activity, in which the individual customarily engaged before the

disability.   Id.   Therefore, the impairment must be evaluated in

terms of whether it does, in fact, prevent the individual from

engaging in his customary, or any comparable, substantial gainful

activity considering the individual’s education, training, and

work experience.

     According to Dr. Mitchell’s medical reports, petitioner

experienced fatigue as a result of his illness.   Nevertheless,

petitioner was able to continue working.   In order to treat the

fatigue, petitioner was prescribed a medication called Ritalin.

Dr. Mitchell noted on petitioner’s subsequent visits that Ritalin

had made a significant difference in petitioner’s work

performance and that petitioner was having less problems with

fatigue and attention.

     Petitioner’s illness, however, ultimately prompted him to

switch to a graveyard shift which had a lighter workload.    See

Thomas v. Commissioner, T.C. Memo. 2005-258 (holding that the

taxpayer was still able to engage in substantially gainful
                                - 6 -

activity even though she was forced to switch from full-time to

part-time).    Dr. Mitchell’s medical reports indicate that

petitioner was not so impaired as to be unable to engage in any

substantial gainful activity during 2003.    See Dwyer v.

Commissioner, supra at 341 (holding that the taxpayer was not

“disabled” within the meaning of section 72(m) because the

taxpayer continued to function in his customary activity despite

facing clinical depression).

     Petitioner claims that, contrary to Dr. Mitchell’s reports,

he did not work from March to July of 2003 because of his

illness.    At trial, petitioner presented as evidence a letter

that was handwritten on a plain piece of paper from a Thomas

Morgan.    Morgan allegedly was a former Director of Detention

services at Grays Harbor County Juvenile Court.    Morgan stated in

the letter that petitioner took a leave of absence from his job

as a detention officer from approximately mid-March to the end of

July of 2003 because of a “major medical problem”.    The Court

finds that the letter, by itself and without more, is of little

probative value.

     Even if it is true that petitioner did not work while he

received treatment for hepatitis C in 2003, i.e., he did not

engage in substantial gainful activity, he must still show that

his illness was expected to continue for a long and indefinite

period to satisfy the meaning of “disabled” under section
                                - 7 -

72(m)(7).    Sec. 1.72-17A(f)(3), Income Tax Regs.   The term

“indefinite” means that it cannot reasonably be anticipated that

the impairment will, in the foreseeable future, be so diminished

as no longer to prevent substantial gainful activity.       Id.

     Petitioner testified at trial that he has recovered from his

illness and that he feels fine now.     Petitioner’s illness,

therefore, is not indefinite.

     Petitioner argues that he was disabled during 2003.      He

claims that hepatitis C is “indefinite” in the sense that it is

an incurable and permanent disease.     Although petitioner’s

hepatitis C is permanent, this condition is remediable through

medication.    The regulations provide that an impairment which is

remediable does not constitute a disability within the meaning of

section 72(m)(7).    Sec. 1.72-17A(f)(4), Income Tax Regs.    Section

1.72-17A(f)(4), Income Tax Regs., further provides that:

            An individual will not be deemed disabled if,
            with reasonable effort and safety to himself,
            the impairment can be diminished to the
            extent that the individual will not be
            prevented by the impairment from engaging in
            his customary or any comparable substantial
            gainful activity.

     Petitioner’s illness is not a disability within the meaning

of section 72(m)(7) because it is remediable and is not

indefinite.    Petitioner has not argued, and the record is devoid

of any evidence which would indicate, that petitioner is

qualified for any other exception to section 72(t)(1).
                              - 8 -

Petitioner therefore is not eligible for the disability exception

under section 72(t)(2)(A)(iii).

     Accordingly, the distribution is subject to the 10-percent

additional tax under section 72(t).

                                           Decision will be entered

                                      for respondent.


J-S04006-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

COMMONWEALTH OF PENNSYLVANIA,                   IN THE SUPERIOR COURT OF
                                                      PENNSYLVANIA
                          Appellee

                     v.

CURTIS A. SHEERER,

                          Appellant                  No. 1802 WDA 2014

                 Appeal from the PCRA Order October 8, 2014
                 In the Court of Common Pleas of Erie County
             Criminal Division at No(s): CP-25-CR-00002942-2012

BEFORE: BOWES, OLSON, and STRASSBURGER,* JJ.

MEMORANDUM BY BOWES, J.:                        FILED FEBRUARY 16, 2016

       Curtis A. Sheerer appeals pro se from the October 8, 2014 order

denying his first timely PCRA petition after counsel was permitted to

withdraw pursuant to Commonwealth v. Turner, 544 A.2d 927 (Pa. 1988),

and Commonwealth v. Finley, 550 A.2d 213 (Pa.Super. 1988) (en banc)

(“Turner/Finley”). We affirm.

       A jury found Appellant guilty of aggravated assault on July 23, 2013.

Appellant, despite notice, failed to appear for sentencing.         The court

sentenced Appellant in his absence on September 17, 2013. It imposed a

sentence of seven and one-half to fifteen years incarceration. Appellant did

not file an appeal. The underlying facts of this matter are as follows.

*
    Retired Senior Judge assigned to the Superior Court.
J-S04006-16

       The victim, James McCoy, was at the Lakeside Tavern, in Erie County,

with Kim Schmidt on the evening of June 13, 2012.        Mr. McCoy and Ms.

Schmidt were friends and, according to Mr. McCoy, dating at that time.

Appellant was previously romantically involved with Ms. Schmidt. Mr. McCoy

also had dated a woman named Tabitha Bromley, who at the time of both

the incident and trial in this matter was dating Appellant.     Ms. Bromley

arrived at the bar and began to order drinks for Mr. McCoy. According to Mr.

McCoy, Ms. Bromley was attempting to rekindle their prior relationship. Ms.

Schmidt telephoned Appellant and told him to come pick up his girlfriend,

Ms. Bromley.     Appellant arrived, displeased with Mr. McCoy and Ms.

Bromley.    Appellant chased Mr. McCoy around the parking lot of the bar

before Mr. McCoy left in his vehicle.     Ms. Bromley had also entered Mr.

McCoy’s car and left the bar with him. Appellant then began to chase Mr.

McCoy and Ms. Bromley in his vehicle.         Mr. McCoy pulled into a car

dealership and turned his car lights off and Appellant passed him.

       Mr. McCoy and Appellant did not have additional contact with one

another that night. The next day, Ms. Bromley called Mr. McCoy and invited

him to come to the home of Jennifer Bailey, with whom Ms. Bromley was

staying at the time. Mr. McCoy arrived at Ms. Bailey’s home around 6:00

p.m.    Ms. Bromley and her twenty-year old daughter, Samantha, were

present. Ms. Bailey was inside preparing dinner and another person named

Richard Fahey was also inside.

                                    -2-
J-S04006-16

        While Mr. McCoy and Ms. Bromley were outside smoking cigarettes,

and Samantha Bromley was also present, Appellant came around the corner

of the home and punched Mr. McCoy on the left side of his face, causing four

fractures and the loss of three teeth. Specifically, Mr. McCoy suffered two

acute sinus fractures and two orbital fractures. The blow to Mr. McCoy’s face

caused him to stumble toward the house. Although Mr. McCoy did not see

who struck him, when he turned around he saw Appellant. Appellant then

ran around the house. Ms. Bailey did not witness the attack, but she did see

a person she believed was Appellant, running away from her home.          She

provided a written statement to police identifying Appellant as the person

who fled from her home, but acknowledged at trial that she did not see his

face.

        Mr. McCoy called 911 and Officer David Pernice arrived to investigate.

Mr. McCoy identified Appellant as his attacker. Ms. Bromley also informed

Officer Pernice that Appellant had punched Mr. McCoy. She then transported

Appellant to the hospital. At trial, however, Ms. Bromley, who as mentioned,

was dating Appellant, declined to identify him as the assailant. 1 Similarly,

Samantha Bromley testified that Appellant was walking down the side of the

Bailey house after Mr. McCoy was struck in the face.       However, she had
____________________________________________

1
  The Commonwealth also introduced Facebook posts from Ms. Bromley to
Mr. McCoy, in which Ms. Bromley indicated that Appellant hit Mr. McCoy on
the day in question.

                                           -3-
J-S04006-16

earlier provided a written statement to police indicating that Appellant

punched Mr. McCoy.

       Ms. Schmidt testified that she received two text messages from

Appellant on June 14, 2012.          The first message arrived at 6:39 p.m. and

read, “I just punched James in the mouth.”             N.T., 7/23/13, at 49.   Ms.

Schmidt received a second message from Appellant at 6:45 p.m., which

stated, “I just dropped him in one hit.”         Id.    When questioned by trial

counsel as to whether she sent the messages herself, she denied it.        Based

on this evidence, the jury found Appellant guilty of aggravated assault. The

court imposed the aforementioned sentence on September 17, 2013.

       As noted, Appellant did not file a direct appeal.2 However, on June 20,

2014, Appellant filed his underlying pro se PCRA petition. The PCRA court

appointed counsel, who filed a Turner/Finley no-merit letter and petition to

withdraw.      The PCRA court granted counsel’s petition to withdraw and

provided Rule 907 notice of its intent to dismiss Appellant’s petition.

Appellant filed a response and the PCRA court dismissed his petition.

Appellant filed a timely notice of appeal and the PCRA court directed

Appellant to file and serve a Pa.R.A.P. 1925(b) concise statement of errors

complained of on appeal. Appellant complied by filing a boilerplate concise
____________________________________________

2
  PCRA counsel addressed this issue in his Turner/Finley no-merit letter.
Appellant does not contest that he was denied his direct appeal rights in this
matter.

                                           -4-
J-S04006-16

statement that parroted the PCRA statute but did not raise any specific

issues.   The PCRA court issued an order indicating that the concise

statement’s lack of specificity precluded it from authoring a decision

addressing     Appellant’s   claims.   The   matter   is   now   ready   for   our

consideration. Appellant presents three issues for our review.

      A. Was Appellant denied effective assistance of counsel,
         whereby, his trial attorney offered no defense when there was
         [a] defense available?

      B. Should the lower court have given Appellant an evidentiary
         hearing on “newly discovered evidence”?

      C. Was Appellant denied access to the court by not giving him
         (under court order of this Honorable Court, see attached
         Exhibit “B”, whereby he requested verious [sic] documents,
         police reports, witnesses statements and testimony
         transcripts?

Appellant’s brief at 2.

      In reviewing a PCRA appeal, we consider the record “in the light most

favorable to the prevailing party at the PCRA level.”       Commonwealth v.

Henkel, 90 A.3d 16, 20 (Pa.Super. 2014) (en banc).           In performing this

review, we consider the evidence of record and the factual findings of the

PCRA court. Id. We afford “great deference to the factual findings of the

PCRA court and will not disturb those findings unless they have no support in

the record.”    Id.   Accordingly, so long as a PCRA court’s ruling is free of

legal error and is supported by record evidence, we will not disturb its

                                       -5-
J-S04006-16

decision. Id. Where the issue presents a question of law, “our standard of

review is de novo and our scope of review is plenary.” Id.

      Preliminarily,   we   agree   with   the   PCRA   court’s   conclusion   that

Appellant’s issues in his Rule 1925(b) statement were boilerplate and that,

because they lacked specificity, it could not address his claims. Appellant’s

Rule 1925(b) concise statement set forth the following issues verbatim:

      A. Ineffictive [sic]     assistance of counsel which, in the
         circumstances of      the particular case, so undermined the
         truth-determining    process that no reliable adjuication [sic] of
         guilt or innocence   could have taken place.

      B. The inavailability [sic] at the time of trial of exculpatory
         evidence that has subsequently become available and would
         have changed the outcome of the trial if it had been
         introduce[d].

      C. The improper obstruction by government officials of the
         petitioner’s right of appeal where a meritorious appealable
         issue existed and was properly preserved in the records, and

      D. A violation of the Constitution of this Commonwealth and the
         Constitution of the United States which, in the circumstances
         of the particular cause [sic], so undermined the truth-
         determining process that no relable [sic] adjudocation [sic] of
         guilt or innocence could have taken place.

Appellant’s Pa.R.A.P. 1925(b) concise statement, 11/10/14.           These issues

merely repeated subsections of the PCRA statute.          As Appellant failed to

adequately preserve his first two issues in his Rule 1925(b) statement, they

are waived; further, they are without merit.        Insofar as Appellant’s third

issue leveled on appeal contends that he was not provided the necessary

transcripts to effectuate his appeal, we find that he is not entitled to relief.

                                       -6-
J-S04006-16

      Appellant argues that he was not supplied with his preliminary hearing

or trial transcripts. First, we note that Appellant’s claims do not relate to his

preliminary   hearing;   moreover,    Appellant     could   not   establish   actual

prejudice relative to issues that transpired at his preliminary hearing. See

Commonwealth v. Stultz, 114 A.3d 865 (Pa.Super. 2015). To the extent

Appellant claims that his trial transcripts were not provided, we acknowledge

that both the PCRA court and this Court entered orders directing that

Appellant be provided with his trial transcripts.

      The Commonwealth posits in its brief that it provided a copy of its file

to Appellant without the transcript and avers that original PCRA counsel

turned over his file to Appellant. Even assuming Appellant did not receive

his transcripts from either the PCRA court or PCRA counsel, he does not

argue how this omission prejudiced him in his ability to address his merits

based arguments.

      Appellant’s first issue on appeal relates to trial counsel not presenting

certain witnesses, permitting inculpatory text messages he sent that were

purportedly not turned over in discovery into evidence, and that another

person admitted to committing the assault. The only portion of Appellant’s

argument that relates to evidence that would have been part of the

transcript pertains to the text messages. There is no dispute by the parties

or in the record regarding those communications. Thus, the alleged lack of a

trial transcript could not have prejudiced Appellant’s ability to address his

                                      -7-
J-S04006-16

issue.    Appellant’s contention is that the messages were not contained in

discovery. PCRA counsel below inquired into this matter and learned from

trial counsel that these messages were provided in discovery.            Further,

additional evidence demonstrated that Appellant struck the victim in this

matter.

         Similarly, the absence of a transcript would have little impact on

Appellant’s ability to litigate his extra-record ineffectiveness claim relative to

counsel’s failure to present certain witnesses.          “To plead and prove

ineffective assistance of counsel a petitioner must establish: (1) that the

underlying issue has arguable merit; (2) counsel's actions lacked an

objective reasonable basis; and (3) actual prejudice resulted from counsel's

act or failure to act.”     Commonwealth v. Stewart, 84 A.3d 701, 706

(Pa.Super. 2013) (en banc). The failure to meet any of these aspects of the

ineffectiveness test results in the claim failing. Id.

         A claim has arguable merit where the factual predicate is accurate and

“could establish cause for relief.”     Id.   at 707.    A determination as to

whether the facts asserted present a claim of arguable merit is a legal one.

Id.   In considering whether counsel acted reasonably, we do not use a

hindsight analysis; rather, an attorney’s decision is considered reasonable if

it effectuated his client’s interests. Id. Only where “no competent counsel

would have chosen that action or inaction, or, the alternative, not chosen,

offered a significantly greater potential chance of success[,]” will counsel’s

                                      -8-
J-S04006-16

strategy be considered unreasonable. Id. Finally, actual prejudice exists if

“there is a reasonable probability that, but for counsel's errors, the result of

the proceeding would have been different.” Id. It is presumed that counsel

renders effective representation.

       Where the issue involves an attorney’s failure to call a witness, the

petitioner must prove: (i) the witness existed; (ii) the witness was available

to testify; (iii) counsel knew of, or should have known of, the existence of

the witness; (iv) the witness was willing to testify; and (v) the absence of

the testimony was so prejudicial as to have denied the defendant a fair trial.

Commonwealth           v.    Chmiel,      30   A.3d   1111,   1143   (Pa.   2011);

Commonwealth v. Cox, 983 A.2d 666, 692 (Pa. 2009).

       In his brief, Appellant specifically refers to Johnathan Schwab and

Forest Vannucci. These men, according to Appellant, would offer testimony

that another person, Bobby McClelland, admitted to them to striking the

victim.3    This evidence, if introduced for its truth, would be inadmissible

hearsay.4      Thus, the evidence could only be introduced as possible

____________________________________________

3
   There was testimony at trial that Mr. McClelland, eighteen years old at the
time of the incident, was present in the area. However, no one identified
him as the attacker. Mr. McClelland is now deceased.
4
    It is unclear whether Mr. McClelland was deceased at the time of trial,
thereby implicating the statement against interest exception to the hearsay
rule. However, such a statement must be supported by corroborating
circumstances that clearly indicate trustworthiness. See Pa.R.E. 804(b)(3).

                                           -9-
J-S04006-16

impeachment evidence.          Appellant does not develop any argument in this

regard and every witness to the incident either identified Appellant as the

assailant at one time, or acknowledged that he fled the area after the

assault.

       As to unnamed other witnesses whom Appellant claims would have

testified that the victim had a disreputable character and angered other

people who would have had a motive to assault the victim, his failure to

identify these witnesses is fatal.        Furthermore, Appellant has neglected to

proffer any admissible testimony that these alleged witnesses could have

provided.

       Appellant’s second issue leveled on appeal also does not require the

trial transcript to materially advance his position. That claim argues that he

learned of newly-discovered evidence in the nature of information from

Johnathan Schwab that another individual struck the victim and that Mr.

Schwab’s mother, Kim Schmidt, lied at trial about the text messages.5 The

initial portion of Appellant’s claim is inconsistent with his first issue where he

alleges counsel was ineffective for failing to present Mr. Schwab. Moreover,

Appellant fails to indicate in any manner how this evidence could not have

been ascertained prior to trial.
____________________________________________

5
  Appellant’s theory is that Kim Schmidt, the mother of Johnathan Schwab,
and Appellant’s former girlfriend, kept Appellant’s cell phone, and somehow
knew of the attack and then texted herself from Appellant’s phone.

                                          - 10 -
J-S04006-16

      This Court has explained in the PCRA context that a “petitioner must

plead and prove by a preponderance of the evidence ‘the unavailability at

the time of trial of exculpatory evidence that has subsequently become

available and would have changed the outcome of the trial if it had been

introduced.’   42   Pa.C.S.   §   9543(a)(2)(vi).”       Commonwealth          v.

Foreman, 55 A.3d 532, 537 (Pa.Super. 2012). In addition, this Court has,

in Commonwealth v. Padillas, 997 A.2d 356 (Pa.Super. 2010), opined

that a petitioner must show the evidence “(1) could not have been obtained

prior to the conclusion of the trial by the exercise of reasonable diligence;

(2) is not merely corroborative or cumulative; (3) will not be used solely to

impeach the credibility of a witness; and (4) would likely result in a different

verdict if a new trial were granted.” Id. at 363; see also Commonwealth

v. Walker, 36 A.3d 1, 14 n.17 (Pa. 2011). Failure to satisfy any of these

aspects of the test results in the claim failing. Padillas, supra at 363.

      Mr. Schwab’s proffered testimony that another person admitted to

committing the crime and that his mother stated that she lied at trial also

would be hearsay if introduced for its truth.        Further, after-discovered

evidence claims generally cannot succeed if the evidence will be used solely

for impeachment purposes.      In sum, Appellant’s first two issues are both

waived and without merit and his final issue does not entitle him to relief.

      Order affirmed.

                                     - 11 -
J-S04006-16

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 2/16/2016

                          - 12 -


              In the United States Court of Federal Claims
                               OFFICE OF SPECIAL MASTERS
                                        No. 16-761V
                                    (Not to be published)

*************************
                           *
KIMBERLY BEINING,          *
                           *
               Petitioner, *                          Filed: January 23, 2017
                           *
          v.               *                          Decision by Stipulation; Influenza
                           *                          Vaccine; Bell’s Palsy
SECRETARY OF HEALTH AND    *
HUMAN SERVICES             *
                           *
               Respondent. *
                           *
*************************

                                            DECISION

HASTINGS, Special Master.

        This is an action seeking an award under the National Vaccine Injury Compensation
Program1 on account of an injury suffered by Kimberly Beining. On January 19, 2017, counsel
for both parties filed a Stipulation, stipulating that a decision should be entered granting
compensation. The parties have stipulated that Petitioner shall receive the following
compensation:

       ●       A lump sum of $105,000.00, in the form of a check payable to Petitioner,
               representing compensation for all damages that would be available under
               42 U.S.C. §300aa-15(a).

        Under the statute governing the Program, as well as the “Vaccine Rules” adopted by this
court, the special master must now enter a decision endorsing that stipulation, and the clerk must
enter judgment, in order to authorize payment of the award. See § 300aa-12(d)(3)(A) and (e)(3);
§ 300aa-13(a); Vaccine Rules 10(a), 11(a).2

1
  The applicable statutory provisions defining the Program are found at 42 U.S.C. § 300aa-10
et seq. (2012 ed.). Hereinafter, for ease of citation, all "§" references will be to 42 U.S.C. (2012
ed.).
2
  The “Vaccine Rules of the United States Court of Federal Claims” are found in Appendix B of
the Rules of the United States Court of Federal Claims.
       I have reviewed the file, and based on that review, I conclude that the parties’ stipulation
appears to be an appropriate one. Accordingly, my decision is that a Program award shall be
made to Petitioner in the amount set forth above. In the absence of a timely-filed motion for
review of this Decision, the clerk shall enter judgment in accordance herewith.

IT IS SO ORDERED.

                                                          /s/ George L. Hastings, Jr.
                                                              George L. Hastings, Jr.
                                                              Special Master


                             UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 10-7128

BILLY G. ASEMANI,

                Petitioner - Appellant,

          v.

U.S. BUREAU OF IMMIGRATION AND CUSTOMS ENFORCEMENT,

                Respondent - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.    Richard D. Bennett, District Judge.
(1:10-cv-01875-RDB)

Submitted:   October 14, 2010              Decided:   October 22, 2010

Before MOTZ, KING, and DAVIS, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Billy G. Asemani, Appellant Pro Se.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

           Billy G. Asemani, a federal prisoner,                   appeals the

district court’s order denying relief on his 28 U.S.C.A. § 2241

(West 2006 & Supp. 2010) petition.         We have reviewed the record

and find no reversible error.           Accordingly, we affirm for the

reasons stated by the district court.           Asemani v. U.S. Bureau of

Immigration & Customs Enforcement, No. 1:10-cv-01875-RDB (D. Md.

Aug. 9, 2010).    We dispense with oral argument because the facts

and legal contentions are adequately presented in the materials

before   the   court   and   argument   would    not   aid   the    decisional

process.

                                                                      AFFIRMED

                                    2