Blanchard v. Commonwealth Oil Company

• Decision Date: 01 September 1961
• Docket Number: No. 18927.,18927.
• Citation: 294 F.2d 834
• Parties: William Gregg BLANCHARD, Appellant, v. COMMONWEALTH OIL COMPANY, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

294 F.2d 834 (1961)

William Gregg BLANCHARD, Appellant, v. COMMONWEALTH OIL COMPANY, Appellee.

No. 18927.

United States Court of Appeals Fifth Circuit.

September 1, 1961.

COPYRIGHT MATERIAL OMITTED

Wm. W. Beuhler, San Antonio, Tex., Charles Hancock, William B. Dazey, Houston, Tex., for appellant.

Thad Grundy, Houston, Tex., Thomas H. Anderson, Hutcheson, Taliaferro & Hutcheson, Houston, Tex., Anderson & Nadeau, Miami, Fla., for appellee, Commonwealth Oil Co.

Before HUTCHESON, RIVES and WISDOM, Circuit Judges.

RIVES, Circuit Judge.

This appeal is from a decision granting the defendant's motion to dismiss on the ground that a former action in a Florida state court is res judicata. The merits of the appeal may not be reached, however, until several preliminary matters are ruled on.

I.

The appellee claims that the notice of appeal was not filed within thirty days from the entry of judgment as required by Rule 73(a) Federal Rules of Civil Procedure, 28 U.S.C.A., and that therefore the appeal should be dismissed. The question is whether a memorandum decision filed on November 25, 1960, or a later formal order of dismissal filed December 13, 1960, is to be considered the "entry of the judgment" as used in Rule 73(a). If the former, the notice of appeal was not filed within the required thirty days.

Rule 58 with respect to entry of judgment provides in part that: "When the court directs * * * that all relief be denied, the clerk shall enter judgment forthwith upon receipt by him of the direction * * *. The notation of a judgment in the civil docket as provided by Rule 79(a) constitutes the entry of the judgment; and the judgment is not effective before such entry." In addition, Local Rule 24 of the United States District Court for the Southern District of Texas provides in part as follows: "(c) The clerk shall also keep a motion docket, upon which shall be noted all motions, etc., and all proceedings taken in reference thereto * * *. (d) Upon the disposition by the court of any such motions, etc., the clerk shall enter a notation of such disposition on the motion docket * * *."

On November 25, 1960, the district court filed what it called a "Memorandum of Court's Decision," the first sentence of which read: "The motion of the defendant to dismiss on the basis of res judicata is granted." There followed several paragraphs briefly stating the reasons for that ruling. The memorandum concluded: "Clerk will furnish counsel with a copy of this memorandum. Counsel for the defendant will prepare and present an order dismissing for res judicata." The Clerk's docket entry read: "11-25-60 (BCC) Memorandum, granting Defendant's Motion to Dismiss, filed. Counsel notified by mailing copies. Order to be presented."

On December 13, 1960, the district court filed what purports to be a formal judgment in which it "Ordered, Adjudged and Decreed that the second amended motion of defendant to dismiss the complaint be, and the same hereby is, granted on the ground of res judicata, and that the complaint in this cause be, and the same hereby is, dismissed." The Clerk's docket entry read: "12-13-60 (BBC) Order of Dismissal filed and entered." On January 12, 1961, Blanchard filed his notice of appeal.

In a case very similar to this, the Supreme Court recently considered the construction of the Rules with respect to the exact time of the "entry of judgment." United States v. F. & M. Schaefer Brewing Co., 1958, 356 U.S. 227, 78 S.Ct. 674, 675, 2 L.Ed.2d 721. The Court pointed out that under the Federal Rules no formal order or words are needed to constitute a judgment, citing United States v. Hark, 1944, 320 U.S. 531, 534, 64 S.Ct. 359, 88 L.Ed. 290; and pointed out that even an "opinion may embody a final decision." In such a case, "the later filing and entry of a more formal judgment could not constitute a second final judgment in the case nor extend the time to appeal." 356 U.S. at pages 232-33, 78 S.Ct. at page 678. Whether an "opinion" does embody a final decision "depends upon whether the judge has or has not clearly declared his intention in this respect in his opinion." And "it is necessary to determine whether the language of the opinion embodies the essential elements of a judgment * * * and clearly evidences the judge's intention that it shall be his final act in the case." Id., 356 U.S. at page 232, 78 S.Ct. at page 678.¹

There can be little question but that the memorandum opinion in this case filed on November 25, 1960 contains the necessary language to embody the essential elements of a judgment. For it clearly states that the motion to dismiss is granted and gives the grounds in detail. It does not appear, however, that the opinion evidences the Judge's intention that it be his final act in the case. For the final sentence of the opinion instructs counsel for the defendant to prepare an order dismissing the cause.² The mere fact that the clerk entered a notation on the docket is not conclusive on whether he was entering a judgment in accord with Rule 58, since the disposal of the motion had to be noted under the court's Local Rule 24. Further, the docket notation itself indicates the nonfinal nature of the entry by concluding: "Order to be presented."

By contrast, the language of the formal order filed on December 13, 1960, followed by the docket notation "Order of Dismissal filed and entered," indicates not only that the court considered this order to be its final act in the case but also that the opinion of November 25 was only in anticipation of this final order.

The Federal Rules are not intended to create procedural traps for the parties, forcing them to file premature appeals whenever some slight doubt arises as to the propriety of the court's way of entering judgment. With the intentions of the court as clear as they are in this case, we hold that judgment was not entered until December 13, 1960, and that the appeal was timely.

II.

Mr. Blanchard died pending this appeal. There has been and can be no serious objection to the admission of Blanchard's heirs³ as parties to this appeal and its revivor in their name as provided for by Fifth Circuit Rule 19, 28 U.S.C.A., and it is so ordered.

III.

The present litigation is preceded by 20 years of dealings and litigation over the oil and exploration rights to 7 million acres of land originally leased by William G. Blanchard from the State of Florida. The lease was granted to Blanchard on October 4, 1941, and is known as the Blanchard Concession. Blanchard assigned a ¾ undivided interest to one Scranton who was to carry out the exploration annd development of the Concession. Only a portion of the remaining ¼ interest in Blanchard is the subject of the present suit.

In 1943 oil was first discovered in other parts of Florida, adding immediate speculative value to the Blanchard Concession. There followed a number of suits wherein roughly 75% of Blanchard's remaining interest in the land was wrested away. One such suit concluded by decreeing undivided interests in three groups represented by J. L. McCord, Frank J. Pepper and William Blanchard. There were, however, several suits still pending. To expedite and co-ordinate the further development of the Concession, all the parties claiming an interest in the land got together to work out a settlement. The result was to form a corporation known as the Florida Exploration Company to whom all the parties conveyed their interests in the Concession in exchange for stock. A Settlement Agreement embodied the terms and provided for the distribution of the stock. One of the terms stated:

"5. It is understood and agreed that the by-laws of the corporation shall contain a provision that the Board of Directors shall consist of six (6) persons, three (3) of whom shall be McCord, Pepper and Anderson representing the interests of the McCord-Pepper group and three (3) of whom shall be Blanchard, Taylor and Hall representing the Blanchard interests, and that this provision shall not be repealed or modified in any way for a period of twenty-five (25) years."

Releases of all outstanding claims were signed and the corporation formed. A stockholder agreement repeated the substance of the Settlement Agreement and was entered in the minutes of the corporation. There then began the battle for control of the Florida Exploration Company. The Pepper-McCord interests, stymied on the Board of Directors, conveyed their interests to the Commonwealth Oil Company, appellee in this action, who then became the majority stockholder in the Florida Exploration Company with 72% of the stock. Commonwealth Oil Company then sought a merger of itself with the Florida Exploration Company wherein the Blanchard interests would be reduced to a small interest in the resulting corporation and would, of course, lose the deadlock on the Board of Directors assured to them by the earlier agreements.

From the proposed merger there stated a second round of litigation which resulted in the present suit, among others. In 1953 Blanchard filed suit in the Circuit Court of Dade County, Florida, on behalf of himself and all other stockholders similarly situated, declaring the merger a violation of the Settlement and stockholder Agreements creating the Florida Exploration Company and asking for an injunction. The injunction was denied. Blanchard then attempted to get the suit dismissed without prejudice, apparently with the intention of pursuing further remedies in the federal court. The dismissal was apparently authorized on appeal, Blanchard v. Commonwealth Oil Co., Fla., 72 So.2d 664, but in the trial court on remand dismissal was denied. See Ermentrout v. Commonwealth Oil Co., 5 Cir., 1955, 220 F.2d 527, 529, note 3. In any case, since the merger had been completed, Blanchard filed an amended complaint asking that the merger be voided and Commonwealth be enjoined from disposing of the assets of the Florida Exploration Company. In the alternative, he prayed that the...