Long Beach Dock & Terminal Co. v. PACIFIC DOCK & T. CO.

• Decision Date: 12 September 1938
• Docket Number: No. 8833.,8833.
• Citation: 98 F.2d 833
• Parties: LONG BEACH DOCK & TERMINAL CO. v. PACIFIC DOCK & TERMINAL CO.
• Court: U.S. Court of Appeals — Ninth Circuit

98 F.2d 833 (1938)

LONG BEACH DOCK & TERMINAL CO. v. PACIFIC DOCK & TERMINAL CO.

No. 8833.

Circuit Court of Appeals, Ninth Circuit.

September 12, 1938.

Walter M. Campbell, Jr., and Walter M. Campbell, Sr., both of Los Angeles, Cal., for appellant.

Farrand & Slosson, George E. Farrand, Leonard B. Slosson, and Edward W. Tuttle, all of Los Angeles, Cal., for appellee.

Before GARRECHT, DENMAN, and MATHEWS, Circuit Judges.

MATHEWS, Circuit Judge.

This was a suit by Pacific Dock & Terminal Company, a Delaware corporation (hereafter called the Pacific Company), against Los Angeles Dock & Terminal Company, a California corporation (hereafter called the Los Angeles Company), and Pacific-Southwest Trust & Savings Bank, a California corporation (hereafter called the bank), in the District Court for Southern California. The District Court entered a decree in the case on August 16, 1930. On May 25, 1931, we reversed that decree and remanded the case for further proceedings not inconsistent with our opinion. Pacific Dock & Terminal Co. v. Los Angeles Dock & Terminal Co., 9 Cir., 50 F.2d 557, 567.¹

In that opinion, we construed an option agreement between the Los Angeles Company and the Pacific Company's assignor, D. M. Reynolds, whereby the Los Angeles Company had granted Reynolds an option to purchase from it 220 acres of land in the Long Beach Harbor district in Los Angeles County, California, and Reynolds had agreed to construct a blast furnace on or adjacent to said land on or before July 8, 1927. We found that the option had been exercised, but that the blast furnace had not been constructed. We also construed a trust agreement² which had been executed by the Los Angeles Company and the Pacific Company and delivered to the bank, with a deed conveying to the bank, in trust, 75 of the 220 acres of land. We held that, for the breach of Reynolds' agreement to construct a blast furnace, the Los Angeles Company was entitled to actual damages, if any, sustained by it in consequence thereof, and that the payment of such actual damages, not to exceed $500,000, was secured by the trust agreement and deed above referred to, but that the Los Angeles Company was not entitled to the sum of $500,000 as liquidated damages.

Our mandate issued on December 5, 1931. On August 24, 1935, the Los Angeles Company applied to the District Court for leave to file a proposed amendment to its answer and a proposed counterclaim. On October 24, 1935, leave to file the proposed counterclaim was granted, and leave to file the proposed amendment was granted in part and denied in part. The part which the court denied leave to file was a reassertion of the Los Angeles Company's contention that it was entitled to the sum of $500,000 as liquidated damages. The denial was proper. To have permitted the Los Angeles Company to reassert or relitigate its claim for liquidated damages would have been a violation of our mandate.

Prior to November 10, 1936, The Pacific Dock & Terminal Company, a California corporation (hereafter called appellee), succeeded to all the right, title and interest of the Pacific Company in and to the subject matter of the litigation and was substituted as plaintiff in its place and stead. Also, prior to November 10, 1936, Long Beach Dock & Terminal Company, a Nevada corporation (hereafter called appellant), succeeded to all the right, title and interest of the Los Angeles Company and was substituted as defendant in its place and stead.

The District Court reheard the case on November 10, 1936. At the commencement of that hearing, counsel for appellee stated to the court and opposing counsel: "It is our position that, under the mandate of the Circuit Court of Appeals and the opinion in this case, there is only one issue left here to be tried by the court at this time, and that is the issue of the actual damages sustained, if any, by the defendant the Los Angeles Company for the failure on the part of the plaintiff the Pacific Company to build the blast furnace called for in the written document which was executed by the parties."

The court thereupon inquired of appellant's counsel: "May I ask the defense if they have the same impression?" To this inquiry, appellant's counsel replied: "I think so, your Honor; that the real issue of the case is the amount of damage, if any, that the defendant suffered by reason of the failure of the plaintiff to erect a blast furnace plant at the place indicated." Thus, it is seen, appellant's counsel recognized and admitted the obvious fact that, under our mandate, the only issue to be tried was whether, and in what amount, the Los Angeles Company was actually damaged by the non-performance of Reynolds' agreement to construct a blast furnace.

The court tried that issue and thereafter made and filed its findings of fact and conclusions of law. The principal finding was that, by reason of the failure to construct a blast furnace, the Los Angeles Company had sustained actual damage in the sum of $225,300. Accordingly, on October 13, 1937, the court entered a decree to the effect that, unless the sum of $225,300, with interest, was paid...