Oakes v. Federal Oil MarketIng Corp.

42 F.2d 991, 1930 U.S. App. LEXIS 4380
CourtCourt of Appeals for the Eighth Circuit
DecidedAugust 13, 1930
DocketNo. 8807
StatusPublished
Cited by2 cases

This text of 42 F.2d 991 (Oakes v. Federal Oil MarketIng Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oakes v. Federal Oil MarketIng Corp., 42 F.2d 991, 1930 U.S. App. LEXIS 4380 (8th Cir. 1930).

Opinion

KENYON, Circuit Judge.

This is an appeal from a decree of the District Court of the United States for the Western District of Arkansas dismissing a petition in intervention for want of prosecution. The case is unique in the prolixity of pleadings, approximately five hundred pages of the record being devoted to setting out bills of complaint, amendments thereto and substitutions therefor, amendments to amended and substituted bills, objections to requests for leave to amend paragraphs of amended and substituted bills, exhibits, court orders, applications'for extensions of time to take depositions, responses thereto, applications to be permitted to file interrogatories under Equity Rule 58 (28 USCA § 723), and various other pleadings too numerous to be referred to.

Notwithstanding this veritable potpourri of pleadings giving the case a somewhat formidable appearance, when stripped of extraneous and immaterial matter, it presents the very simple question, viz., Did the court abuse its discretion in denying appellant’s motion for more time to take testimony and to allow an auditor selected by interveners to examine certain books of defunct defendant oil companies in the hands of receivers and under the control of the United States court for the Southern district of New York?

Appellees presented a motion in this court to dismiss the appeal on the ground that it was taken from certain orders which were interlocutory and not appealable. The complete answer to this is that the appeal is not taken from these orders, but from the final decree dismissing the case for want of prosecution. The action of the court as to these orders is of course assigned as error. The motion to dismiss is denied.

[992]*992It seems necessary, in determining whether there was an abuse of discretion by the court, to state the history of this litigation in as abbreviated form as possible.

August 15, 1924, one Joseph A. Phelan filed a bill of complaint against Middle States Oil Corporation in the District Court of the United States for the Southern District of New York, which corporation on the same date filed answer consenting to the appointment of receivers, and Julius M. Mayer and Joseph P. Tumulty were appointed receivers of said corporation.

August 21, 1924, Phelan filed an amended and substituted bill of complaint in said cause making additional parties defendant the Federal Oil Marketing Corporation, Western States Oil Corporation, Southern States Oil Corporation, and Sure Oil Corporation. These defendants filed answer consenting to the appointment of receivers, and the same parties were appointed receivers of these corporations.

In September, 1924, Phelan filed an ancillary bill of complaint against the Middle States Oil Corporation et al., in the District Court of the United States for the Western District of Arkansas, said bill showing that the Federal Oil Marketing Corporation, the Marr Oil Corporation, and other defendant corporations had assets within the Western district of Arkansas. The Federal Oil Marketing Corporation, Wichita Petroleum Company, and Marr Oil Corporation filed answer consenting to the appointment of ancillary receivers, and the court appointed Julius M. Mayer and N. T. Gilbert as ancillary receivers to care for the property of these corporations within the jurisdiction of said court.

March 28, 1927, the court permitted, against the objection of the Federal Company and its ancillary receiver, a bill of intervention to be filed in the ancillary receivership by Oakes, Vitek, individually and as trustee of the Vitek Company, et al., against the Federal Oil Marketing Corporation, its ancillary receiver, Gilbert, Southern States Oil Corporation, Western States Oil Corporation, Middle States Oil Corporation, Sure Oil Corporation, Joseph P. Tumulty, and Joseph Glass, who had succeeded Mayer as receiver under appointment of the New York court. This bill alleged that the Southern and Western Corporations had defrauded interveners by virtue of false representations concerning certain stock of said corporations taken by interveners under the following circumstanees: The Vitek Company was a common-law trust estate under the terms of a declaration of trust recorded in the office of the circuit clerk of Union county, Ark., which vested Vitek with title to certain properties. The interveners purchased stock in said trust estate and paid cash therefor. Vitek was the owner of 20,000 shares, and the other interveners 990 shares. Vitek entered into a contract of sale in 1923 with the Western States and Southern States Corporations, which were dominated by the group known as the Haskell interests, by which he sold the entire Vitek properties to said corporations, the consideration being the exchange of 50,000 shares of Southern States stock at $10 par value and 50,000 shares of Western States stock at $10 par value, at the ratio of 2 shares of the stock for 5 shares of the Vitek Company stock at $10 par value. The contract a’ppears in the record, but heed not be set out here. Interveners, who were stockholders of the Vitek Company, forwarded their stock certificates to these corporations to earry out the exchange. Vitek executed assignments of all properties of his company to the Sure Oil Corporation at the request of Western States and Southern States, whieh in turn transferred said properties to the Federal Oil Corporation.

The relief asked in interveners’ bill was to set aside these transfers and return the property to the Vitek Company, on the ground that "interveners had been induced to exchange their Vitek stock for stock in said corporations by false and fraudulent representations as to the value of said stock. They asked to have the sale rescinded and to be placed in statu quo. No claim was filed by them with the receivers in the Southern district of New York, or within the time provided by the order of the District Court of the Western District of Arkansas in the ancillary proceeding.

April 23,1927, interveners filed an amended and substituted bill of complaint substantially like the original bill, except it set forth more fully the citizenship of the various parties, and claimed that the action was to recover property, both real and personal, within the district where suit was brought and to enforce an equitable claim to personal property within the intent of section 57 of the Judicial Code (28 USCA § 118).

April 23,1927, the court entered an order upon motion of the Federal Oil Corporation and its ancillary receiver, requiring interveners to file a cost -bond in the amount of $2,500.

November 14, 1927, the Federal Corporation and its ancillary receiver filed a motion [993]*993to dismiss the amended and substituted bill of complaint of interveners on a number of grounds, among which was that the bill did not state facts sufficient to constitute a valid cause of action in equity, and that it affirmatively appeared upon the face of the bill that interveners were guilty of laches.

February 17, 1928, the court sustained this motion, and in a memorandum opinion said, in substance, that the motion to dismiss should be sustained because the facts were not sufficient to constitute a valid cause of action in equity, and, second, that the action was clearly barred by laches.

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Related

Phelan v. Middle States Oil Corp.
124 F. Supp. 728 (S.D. New York, 1952)
Federal Oil Marketing Corporation v. Cravens
46 F.2d 938 (Eighth Circuit, 1931)

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Bluebook (online)
42 F.2d 991, 1930 U.S. App. LEXIS 4380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oakes-v-federal-oil-marketing-corp-ca8-1930.