Wood v. Citronelle-Mobile Gathering System Company

• Decision Date: 21 April 1969
• Docket Number: No. 25676.,25676.
• Citation: 409 F.2d 367
• Parties: A. E. WOOD, Appellant, v. CITRONELLE-MOBILE GATHERING SYSTEM COMPANY, Ltd., et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

409 F.2d 367 (1968)

A. E. WOOD, Appellant, v. CITRONELLE-MOBILE GATHERING SYSTEM COMPANY, Ltd., et al., Appellees.

No. 25676.

United States Court of Appeals Fifth Circuit.

December 4, 1968.

Rehearing Denied February 12, 1969.

Rehearing Denied April 21, 1969.

J. Edward Thornton, Mobile, Ala., for appellant; Thornton & McGowin, Mobile, Ala., of counsel.

Irwin W. Coleman, Jr., Sam W. Pipes, III, Mobile, Ala., for appellees; Lyons Pipes & Cook, Mobile, Ala., of counsel.

Before JOHN R. BROWN, Chief Judge, and RIVES and McENTEE^*, Circuit Judges.

Rehearing En Banc Denied April 21, 1969.

PER CURIAM:

Jurisdiction is, of course, our first consideration. Appellate jurisdiction exists since the appeal is from a final judgment of the district court. 28 U.S.C. § 1291. Jurisdiction of the district court was asserted on the ground of diversity of citizenship, which requires that the matter in controversy exceed the sum or value of $10,000.00 exclusive of interest and costs. 28 U.S.C. § 1332.

The complaint sought the recovery of one thousand dollars ($1,000.00) in actual damages and one hundred thousand dollars ($100,000.00) in punitive damages on two different and alternative theories: (1) conversion by the defendants to their own use of crude oil of the value of $1,000.00, the property of the plaintiff; or (2) "willful, intentional, wrongful and malicious" refusal of the defendants to pay plaintiff $1,000.00 in money which defendants owed plaintiff. The actual damages claimed are not sufficient to confer jurisdiction. The claim of punitive damages is sufficient, unless it is apparent to a legal certainty that punitive damages in an amount sufficient to confer jurisdiction could not be recovered. Bell v. Preferred Life Assur. Society, 1943, 320 U.S. 238, 64 S.Ct. 5, 88 L.Ed. 15.

Under the first theory sounding in tort for trover or conversion, punitive damages are legally permissible if the conversion can be established. Roan v. McCaleb, 1955, 264 Ala. 31, 84 So.2d 358, 359; Wood v. Citronelle-Mobile Gathering System Co., 5 Cir., 1966, 362 F.2d 354. The difficulty under this theory is that in an interpleader suit between the same parties the Supreme Court of Alabama has held that the plaintiff Wood's claim as to the oil under his small lot (.27 of an acre) was part of a 40-acre tract in a unit operations and that Wood is entitled to his pro rata share of the net proceeds from the pool, rather than to the oil itself. Wood v. Citronelle-Mobile Gathering System Co., 1966, 279 Ala. 662, 189 So. 2d 346.¹ That determination is, of course, binding in this case by collateral estoppel. Ballard v. First National Bank of Birmingham, 5 Cir. 1958, 259 F.2d 681, 684. Thus no conversion is possible.

The second theory based on refusal to pay a debt sounds in contract, and under the law of Alabama the motive or intent of the debtor is not material. Western Union Telegraph Company v. Rowell, 1907, 153 Ala. 295, 45 So. 73, 78. In Alabama, as generally elsewhere,² punitive damages are not recoverable for breach of contract. Western Union Telegraph Company v. Rowell, supra; Western Union Telegraph Company v. Benson, 1909, 159 Ala. 254, 48 So. 712, 719; Treadwell Ford, Inc. v. Leek, 1961, 272 Ala. 544, 133 So.2d 24, 25.

It appears therefore that under neither of the plaintiff's theories is the recovery of punitive damages possible, and that the amount actually in controversy is less than the jurisdictional amount. The defendants' motion to dismiss for lack of jurisdiction should have been sustained. The allegation of jurisdictional amount having been traversed by that motion, the burden of establishing the requisite amount was upon the plaintiff. McNutt v. General Motors Acceptance Corp., 1936, 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135; Barron & Holtzoff, Federal Practice & Procedure (Wright ed.) § 24, p. 107 n. 50.2.

It does not matter that, before either of the two reported decisions in this case, the plaintiff had recovered a judgment against the defendants in trover or conversion for $446.49, which the defendants had paid without appealing. In answer to the contention that that judgment was res judicata of the interpleader suit, the Alabama Supreme Court said:

"The answer to this contention is that the interpleader action involves different parties, different money, different oil and different issues. The previous action at law was in trover. To support the action of trover the plaintiff must have, at the time of the conversion, the right of property, general or special, and possession or the immediate right of possession. These rights must concur in the plaintiff at the time of the conversion, or the action will not lie. Jordan v. Henderson, 258 Ala. 419, 63 So.2d 379, and cases there cited. In this action of interpleader, ownership of the oil was a vital issue."

Wood v. Citronelle-Mobile Gathering System Co., supra, 189 So.2d at 348-349.

It was there authoritatively held, in effect, that Wood's claim was to his pro rata share of the money and that he neither owned unqualifiedly or possessed any part of the pool of oil nor had the immediate right to its possession. The holding in the earlier trover action as to a previous lot of oil drawn from that pool was erroneous (unless there were different facts), and the error does not have to be repeated.

Instead of directing a verdict for the defendants, the district court should have dismissed the action for want of jurisdiction. The judgment is therefore reversed and the cause remanded with directions to dismiss the action for want of jurisdiction. Costs of appeal...