Crummer Company v. Du Pont

• Decision Date: 21 June 1955
• Docket Number: No. 15067.,15067.
• Citation: 223 F.2d 238
• Parties: The CRUMMER COMPANY and R. E. Crummer & Company, Appellants, v. Jessie Ball du PONT et al., As Trustees, Etc., Of The Last Will And Testament of Alfred I. duPont, Deceased, et al., Appellees. Clyde C. PIERCE and Clyde C. Pierce Corporation, Appellants & Cross-Appellants, v. R. E. CRUMMER & COMPANY et al., Cross-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

223 F.2d 238 (1955)

The CRUMMER COMPANY and R. E. Crummer & Company, Appellants, v. Jessie Ball du PONT et al., As Trustees, Etc., Of The Last Will And Testament of Alfred I. duPont, Deceased, et al., Appellees.

Clyde C. PIERCE and Clyde C. Pierce Corporation, Appellants & Cross-Appellants, v. R. E. CRUMMER & COMPANY et al., Cross-Appellees.

No. 15067.

United States Court of Appeals Fifth Circuit.

May 10, 1955.

Rehearing Denied June 21, 1955.

Atkinson, Atkinson, Folsom & Williams, Tallahassee, Fla., Rogers, Towers, Bailey & Jones, Jacksonville, Fla., for cross-appellants.

Francis P. Whitehair, DeLand, Fla., Chris Dixie, Houston, Tex., Taylor Jones, and Wm. H. Rogers, Jacksonville, Fla., Warren E. Hall, Jr., DeLand, Fla., Roger A. Prestwood, Andalusia, Ala., Clyde W. Atkinson, Tallahassee, Fla., for appellants.

H. M. Voorhis, Orlando, Fla., John W. Donahoo, Jacksonville, Fla., Chester Bedell, Jacksonville, Fla., Ralph M. McLane, Asst. Atty. Gen., Donald Russell, President University of S. C., Columbia, S. C., Harry E. King, Winter Haven, Fla., Henry P. Adair, and Clarence G. Ashby, Jacksonville, Fla., W. H. Poe, Orlando, Fla., Maguire Voorhis & Wells, Orlando, Fla., Richard W. Ervin, Atty. Gen., for appellees.

Robert Staufer, Winter Haven, Fla., King & Staufer, Winter Haven, Fla., of counsel, for W. R. Gall.

Mitchell, Donahoo & Rogers, Jacksonville, Fla., Bedell & Bedell, Jacksonville, Fla., of counsel, for Cummer Sons Cypress Co.

Davisson F. Dunlap, Jacksonville, Fla., for appellees, duPont Trustees, et al., and Jessie Ball duPont.

Charles R. Scott, Jacksonville, Fla., for appellee, St. Joe Paper Co.

Before HUTCHESON, Chief Judge, and RIVES and TUTTLE, Circuit Judges.

HUTCHESON, Chief Judge.

Filed December 19, 1941, under the anti-trust laws of the United States,¹ by the two Crummer companies, dealers in Municipal bond issues, as plaintiffs, against the Ball duPont group, Jessie Ball duPont, her husband, Edward Ball, and the other defendants named therein, and three other groups known and referred to respectively as Leedy-Pierce, Mansfield-Fuller, and Gall-Cummer, the complaint alleged damages to the Crummer Company and R. E. Crummer Company, respectively, in the amounts of $7,500,000 and $2,500,000, trebled in each case as required by statute, to make $30,000,000 in all, together with an injunction against further violations of the anti-trust laws.

Because its substance is set out and the complaint is analyzed in the opinion² of the trial court, we shall here attempt no more than a brief summary of its contents. Alleging: that between the years 1922 and 1928, a municipal investment dealer known as Brown-Crummer Investment Company, purchased a large number of the initial securities of various Florida taxing units and sold them to investor customers; that in 1934 R. E. Crummer & Company was organized and became successor to the business of the Brown-Crummer Investment Company; and that in 1942 the Crummer Company was organized to become successor to and take over the business of R. E. Crummer & Company, effective January 1, 1943; the complaint further alleges the unprecedented economic and financial debacle in Florida, involving its various taxing units, beginning in 1929, and the activity of the Brown-Crummer Investment Company, and its successor, in working out refunding plans, with the result that R. E. Crummer and Company obtained a pre-eminent position in the municipal bond field in Florida and from the year 1934 through 1942 made a large net profit on its operations.

Recurring then to the formation of the Ball duPont plan to capture and "virtually control the State of Florida by a general infiltration area-wise of the control of the financial, commercial, transportation and manufacturing institutions and resources of Florida", the complaint alleges: that the initial cleavage between R. E. Crummer and Edward Ball occurred in the year 1929; that from this point forward up to and including the time of the filing of the complaint, the defendant Edward Ball has continuously criticized the undertakings in Florida and all companies bearing the Crummer name; that from 1933 and continuing without any serious consequences until 1941, the Ball duPont defendants and the Leedy-Pierce defendants became active participants in the bond market and competitors of plaintiffs; and that sometime in 1941, at least before May, 1941, the exact date not being given because of the secrecy and concealment attending its formation and execution, the illegal combination, conspiracy, etc. complained of herein began. As detailed, these activities consisted of: acts of the Legislature of Florida calling for an investigation of the activities of all bonding companies in Florida; the issuance of executive orders and the appointment of committees by the Governor of Florida; investigations by the Post Office Department and the Securities and Exchange Commission; and the returning of two indictments against R. E. Crummer & Company and others, on August 3, 1944, in the United States District Court for the District of Kansas.

Alleging in effect that the bringing of these indictments and the unfavorable publicity attending their pendency until they were dismissed on June 10, 1946, "brought about the destruction of the plaintiffs' business and property, as was intended by defendants", the complaint went on, in paragraph 38(t) to say:

"The said criminal indictments remained upon the docket of the United States District Court until June 10, 1946. During the pendency thereof, plaintiffs\' business was paralyzed and eventually destroyed and plaintiffs were thereby effectively eliminated and suppressed as competitors in the municipal investment field in the United States. Enormous expenses for the preparation of the defense to the said criminal indictments were incurred. Plaintiffs and their officers and employees were substantially driven from the municipal investment field of the United States."

Alleging many overt acts, including the criminal indictments in Kansas, the two civil suits in Florida, the Lathrop suit in the Federal Court, and the Pasco suit in the State Court, ostensibly instigated and carried on by public authorities but, as complainants alleged, in fact instigated by, and carried on as a result of the conspiracy of, the defendants in violation of the anti-trust laws, to recover for which this suit is brought, the complaint further alleged that, though the confederation, combination and conspiracy, and the unlawful acts and things occasioned and done by defendants in furtherance of their predetermined purposes and objectives, began early in the year 1941, the existence of said illegal conspiracy, the name and identities of the persons participating in it, the purpose and objectives to be accomplished thereby, and the scheme by and through which it would be achieved, were not discovered by the plaintiffs until January, 1947.

While, as might be expected, with so much allegedly at stake and such a long period of time covered by it, the complaint, consisting of 53 printed pages, with 44 numbered paragraphs, was lengthy, argumentative, and replete with mere conclusions, the district judge thought it did contain factual allegations sufficiently charging the Ball duPont defendants and some of the other defendants with a scheme or plan to capture the bond business in Florida, and with a conspiracy, in violation of the Federal anti-trust laws, to destroy plaintiffs and their business.

He was of the further opinion, however, that, as to the claims made against the defendant, Edward Mansfield, of the Mansfield-Fuller group, a United States Post Office inspector, and against Walter R. Gall and the Cummer Sons Cypress Company, composing the Gall-Cummer group, it failed to state a cause of action. He, therefore, in the September order, filed September 8, 1953, dismissed the complaint as to them, though he denied the motions of the other defendants to dismiss the complaint for failure to state a case against them under the Sherman and Clayton Acts, 15 U.S.C.A. § 1 et seq., and, in the same order, he sustained plaintiffs' motions to dismiss the cross-claim which the defendants, Clyde C. Pierce and Clyde C. Pierce Corporation, had filed against the plaintiffs, countercharging them with violation of the Federal Anti-trust Statute to the damage of cross-complainants.

Thereafter, as to the plaintiffs' suit against the other defendants, the district judge took the actions, made the decisions, and entered the orders following. On October 26, 1953, of the opinion: that the Florida Three Year Statute of Limitations, F.S.A. § 95.11(5) (a), covering "an action upon a liability created by statute, other than a penalty or forfeiture", was the applicable limitation statute in this case; that the Federal Suspension Statute³ suspended the running of the statute from October 10, 1942 to June 30, 1946; and that the doctrine of fraudulent concealment applies in civil action under the Federal Anti-trust Statute; he entered an order so finding.

In the same order, he set for argument on December 1, 1953, the question whether the complaint alleged sufficient facts to require a trial of the tendered issue, whether the Florida Statute of Limitations was tolled for any cause and for any period of time beyond June 30, 1946, and the question coming on for argument and being fully argued, the district judge filed, on January 14, 1954, a thoughtful and careful opinion, note 2 supra, giving a negative answer to the question. In it, summing up the facts alleged in the complaint and considering and discussing the arguments addressed to them and the cases cited, he held: that they were not legally sufficient to toll the statute; and that plaintiffs' suit was barred and should be dismissed. So holding, he entered an order of dismissal which did not provide for leave to amend.

On January 20, 1954, however, appellants were granted leave to amend, and, on ...