Crummer Company v. Du Pont

• Decision Date: 17 June 1958
• Docket Number: No. 16609.,16609.
• Parties: The CRUMMER COMPANY and R. E. Crummer & Company, Appellants, v. Jessie Ball DU PONT, etc., et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

255 F.2d 425 (1958)

The CRUMMER COMPANY and R. E. Crummer & Company, Appellants, v. Jessie Ball DU PONT, etc., et al., Appellees.

No. 16609.

United States Court of Appeals Fifth Circuit.

May 8, 1958.

Rehearing Denied June 17, 1958.

Warren E. Hall, Jr., Francis P. Whitehair, DeLand, Fla., Chris Dixie, Houston, Tex., for appellants.

Wm. H. Rogers, Taylor Jones, McCarthy Crenshaw, Jacksonville, Fla., Clyde W. Atkinson, Tallahassee, Fla., Richard W. Ervin, Atty. Gen. of Fla., Ralph M. McLane, Asst. Atty. Gen., H. M. Voorhis, W. H. Poe, Orlando, Fla., Charles R. Scott, Clarence G. Ashby, Davisson F. Dunlap, Jacksonville, Fla., Donald Russell, Columbia, S. C., for appellees.

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

TUTTLE, Circuit Judge.

This case is here on appeal for the second time. This appeal attacks the judgment of the trial court based on a directed verdict finding that the statute of limitations had not been tolled by reason of any fraudulent concealment on the part of the defendants in a treble damage anti-trust suit.

The question presented is whether there was any evidence from which the jury could have found fraudulent concealment of the cause of action, for if there was then the trial court could not properly take that issue from the jury.

The nature of the case and the groupings of the parties are well set out in the published opinion of the trial court when the complaint was originally dismissed for failure to allege facts on which a jury could find that the Florida three year statute of limitations, F.S.A. § 95.11(5), had been tolled, Crummer Co. v. duPont, D.C., 117 F.Supp. 870, and also in our opinion reversing that judgment, Crummer Co. v. duPont, 5 Cir., 223 F.2d 238, 240. We shall here attempt no more than a brief summary of the cause of action and the history of the case.

Brought by appellants, hereinafter sometimes called Crummer, once the most active dealers in Florida taxing unit bonds and other securities and later allegedly successful proponents of refunding plans for the alleviation of the widespread financial distress of both the Florida taxing units and the holders of their bonds, the complaint charged the defendants with violation of the antitrust laws of the United States to the appellants' substantial damage. The following statement of the nature of the case is taken from our previous opinion:

"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 antitrust 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."

In the earlier decision of this case we affirmed the ruling of the trial court that the Florida three-year statute of limitations applied. We found that this would cause the claim to be barred on June 30, 1949, nearly six months before it was filed on December 19, 1949, unless the running of the statute was tolled. Appellants contended that it was so tolled until December 27, 1947, by the fraudulent concealment of the facts by the appellees. As to that, the trial court, in its first decision, held that the amended complaint did not sufficiently allege fraudulent concealment. We reversed on this point, holding that the complaint did sufficiently allege facts that if proved would toll the statute of limitations.¹

When the matter came again before the trial court a pretrial order directed that only the issue as to fraudulent concealment should be submitted to the jury. The court entered the following order:

"Upon the trial of the single issue of fraudulent concealment in the above-styled cause, it will not be necessary for the plaintiffs to prove:

"1. That a conspiracy to violate the Federal Anti-Trust Laws existed among the defendants as alleged in the First Amended Complaint.

"2. That damages were sustained by the plaintiffs as the result of the conspiracy."

The theory of the order was, of course, that there need be no prolonged trial on the merits unless appellants could prove they were not barred by the statute of limitations. The effect of the order was that the court set out to try this question: assuming there existed the conspiracy alleged in the complaint and that it had damaged appellants, did the plaintiffs have knowledge of the cause of action prior to December 19, 1946 (three years prior to the date suit was filed), and if they did not was their want of knowledge attributable to fraudulent concealment of the facts by appellees?

After a trial lasting four weeks the case was submitted to the jury which deliberated for an hour and forty minutes one day, and for two hours and five minutes the next morning. Thereupon, the jury then being in disagreement, the court directed a verdict in favor of the defendants on the issue of fraudulent concealment. Such order is supportable, of course, only if there was no genuine issue of fact which the jury could have resolved in favor of the plaintiff.

Fraudulent concealment as a basis for tolling the statute of limitations comprehends two elements: successful concealment and fraudulent means. If in fact the alleged efforts of defendants to conceal their activities adverse to appellants' interests were not successful, that is, if in spite of such efforts appellants did learn of the existence of such a conspiracy resulting in their damage more than three years before suit, then it would not be necessary to inquire into the motivations back of appellees' efforts to conceal. We first consider then whether appellants carried their burden of making a prima facie showing that they lacked knowledge of the conspiracy.²

In order to prove lack of knowledge of the conspiracy due to fraudulent concealment the appellants did undertake to prove many facts relating to the conspiracy itself. Favorable to this position, the jury could find from the evidence, documentary and oral, the following: Following 1929 there was keen commercial rivalry between Crummer and the Ball interests; the financial fortunes of Ball were in some measure jeopardized by the refunding operations identified with Crummer; this led to an announced declaration by Ball to fight it out with Crummer on the taxing unit bond field in Florida; in 1941 Roger Main, an official of Ball, and Howard S. Wheeler, of Leedy, Wheeler & Co., brokers having a lucrative relationship with Ball, went to the office of the Chief Post Office Inspector in Washington and filed charges of mail fraud against Crummer;³ this initiated an investigation by the Post Office Department and the Securities & Exchange Commission that ultimately resulted in mail fraud indictments in Kansas City, Missouri, in August 1944; in the meanwhile the Florida State Legislature set up an investigating committee which used defendant Walter P. Fuller as...