Compania Transcontinental de Petroleo, S.A., v. Mexican Gulf Oil Co.

• Citation: 292 F. 846
• Decision Date: 18 June 1923
• Docket Number: 168.
• Parties: COMPANIA TRANSCONTINENTAL DE PETROLEO, S.A., v. MEXICAN GULF OIL CO. et al.
• Court: U.S. Court of Appeals — Second Circuit

292 F. 846

COMPANIA TRANSCONTINENTAL DE PETROLEO, S.A., v. MEXICAN GULF OIL CO. et al.

No. 168.

United States Court of Appeals, Second Circuit.

June 18, 1923

Writ of error to a judgment for $1,472,093.75 in favor of defendants in error against plaintiff in error. The parties will be referred to as aligned below. The cause was at law, and was tried before Judge Ward without a jury. The action was brought to recover damages for taking some 6,000,000 barrels of oil out of a part of lot 163 in the canton of Tuxpan state of Vera Cruz, Mexico, upon which plaintiffs claimed the exclusive right to explore for oil.

Chester O. Swain, of New York City (Richard V. Lindabury, of Newark N.J., Carl Kincaid, of Tampico, Mexico, and J. Edward Ashmead, of Newark, N.J., of counsel), for plaintiff in error.

Parker Marshall, Miller & Auchincloss and White & Case, all of New York City (R. L. Batts, of Pittsburgh, Pa., G. Carroll Todd, of Washington, D.C., Tom J. Lee, of Tampico, Mexico, H. L. Stone, Jr., of Pittsburgh, Pa., and H. Snowden Marshall, of New York City, of counsel), for defendants in error.

Before ROGERS, HOUGH, and MAYER, Circuit Judges.

MAYER Circuit Judge (after stating the facts as above).

This cause, difficult below in most of its aspects, comes here greatly simplified; this, because (1) the learned District Court has filed a comprehensive decision carefully and clearly discussing every essential question in controversy, and (2) because on writ of error few questions survive here. The District Court did not make special findings of fact, and in taking this course it acted within its unreviewable discretion. Dirst v. Morris, 14 Wall. 484, 490, 20 L.Ed. 722; Berwind-White Coal Min. Co. v. Martin, 124 F. 313, 60 C.C.A. 27; Joline et al. v. Metropolitan Securities Co. (C.C.) 164 F. 650; U.S. v. One Diamond Necklace (C.C.A.) 267 F. 696; U.S. v. Atchison, T. & S. F. Ry. Co. (C.C.A.) 270 F. 1, 4.

Many of the requests below for findings of law were really requests for findings of fact; but in any event, where, as here, the court has not made special findings of fact and has specifically ruled only on questions of law, and by its judgment has in effect made a general finding of fact, the only question left open on review in respect of the facts is whether the judgment is without any evidence to support it. As recently stated in Vicksburg, etc., Ry. Co. v. Anderson-Tully Co., 256 U.S. 408, at page 415, 41 Sup.Ct. 524, 527 (65 L.Ed. 1020):

'There being no special findings of fact by the court, its general finding has the effect of a verdict of a jury (Rev. Stats. Sec. 649 (Comp. St. Sec. 1587)), is conclusive upon all matters of fact. * * *'

See, also, St. Louis v. Western Union Telegraph Co., 166 U.S. 388, 17 Sup.Ct. 608, 41 L.Ed. 1044; Vicksburg, etc., Ry. Co. v. Anderson-Tully Co., 256 U.S. 408, 41 Sup.Ct. 524, 65 L.Ed. 1020; Humphreys v. Third Nat. Bank, 75 F. 852, 21 C.C.A. 538; Joline v. Metropolitan Securities Co., supra.

To the foregoing rule, Treat v. Farmers' Loan & Trust Co., 185 F. 760, 108 C.C.A. 98, is not an exception. In that case the cause was submitted upon agreed statements of fact, and the court pointed out that the questions involved were entirely of law, and that questions of law could be raised by requests to find. In other words, there was no dispute as to the facts, and the sole inquiry in the appellate court was in respect of the questions of law arising out of the facts as found below through the instrumentality of agreed statements.

We have not overlooked the cases, such as Clement v. Insurance Company, 7 Blatchf. 51, Fed.Cas.No. 2,882, Paul v. Delaware, L. & W. R. Co. (C.C.) 130 F. 951, 954, and Seep v. Ferris-Haggarty Copper Mining Co., 201 F. 893, 120 C.C.A. 191. An analysis of these cases will show that they are not really in conflict with the principle of 166 U.S. 388, 17 Sup.Ct. 608, 41 L.Ed. 1044, and the other cases cited supra; but, in any event, the rule of those cases is applicable here.

Indeed, we could, if necessary, treat many of the findings of law as findings of fact and reach the same result. United States v. Benedict (C.C.A.) 280 F. 76, affirmed March 5, 1923, 261 U.S. 294, 43 Sup.Ct. 357, 67 L.Ed. . . .; American Concrete Steel Co. v. Hart (C.C.A.) 285 F. 322. For instance, in finding in favor of plaintiffs' request IX, the court found: 'The oil extracted from the land in question by defendant * * * being the property of the plaintiffs. * * * '

This is but another way of stating, inter alia, that the court found as a fact that the oil was the property of plaintiffs.

Coming now to the facts, we refer, for brevity, to the opinion of the District Court, and thus it is necessary to state only the ultimate facts upon which the judgment below rests. Plaintiffs derived exclusive oil rights by grant dated August 23, 1912, from the heirs of one Antonio Fermin Cruz.

Defendant claimed the same rights under a grant from one Cobos, the original owner of the land, to Otonopec Company, dated February 28, 1917. Defendant drilled for and brought to the surface and used for itself upwards of 6,000,000 barrels of oil, and asserted its right so to do under the deed of Cobos and the rights which flowed therefrom. Cobos who was the grantor to Fermin Cruz, was guilty of fraud in refusing to return the deed which he borrowed from Fermin Cruz. This deed was not registered, but the District Court held that, as the consideration was less than 200 pesos, registration was not obligatory under articles 3056 and 3058 of the Civil Code of Vera Cruz, and that the deed of Cobos to Fermin Cruz was good against third parties; i.e., against all the world.

This and other questions of title were decided in favor of plaintiffs, after the court had heard the testimony of experts in respect of the construction and interpretation of the foreign law, and particularly of the applicable sections of the Civil Code of Vera Cruz. After concluding that plaintiffs had the exclusive right to extract oil from the land in question, and that defendant had no right whatever, the next step was to determine plaintiffs' further rights and their remedies. As succinctly stated by Judge Ward:

'A plaintiff's cause of action depends on the law of the place, while his remedies depend upon the law of the forum. Central Vermont Railway Co. v. White, 238 U.S. 507.'

The District Court held:

'VIII. Under the Penal Codes of Vera Cruz, also, the party to whom the owner has given the exclusive right to take oil, gas, or other products has a cause of action against a trespasser in such case for the value of the oil, gas, or other products taken by him.'

To support this conclusion, the curt had before it an expert for plaintiff, T. Esquivel Obregon, a lawyer, former Minister of Finance of Mexico and now professor of Latin-American law at Columbia and New York University, and various provisions of the Vera Cruz Penal Code and Code of Penal Procedure, and the decisions of Mexican courts in Barrera v. Diaz. In such circumstances, this court on writ of error does not independently construe ...