Court Opinion

ID: 9652588
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:27:16.556823+00
Date Added: 2024-06-11T18:12:52.610642
License: Public Domain

McDERMOTT, Circuit Judge
(dissenting).
*28This is the fifth appearance in the Courts of Appeal of this controversy over $50,000.-00 which the Continental Oil Co'mpany paid down on a lease it agreed to buy in April, 1926, and which it later concluded it did not want. Axelrod v. Osage Oil & Refining Company (C. C. A. 8) 29 F.(2d) 712; Osage Oil & Refining Company v. Continental Oil Company (C. C. A. 10) 34 F.(2d) 585; Continental Oil Company v. Osage Oil & Refining Company (C. C. A. 10) 57 F.(2d) 527, certiorari denied, 287 U. S. 616, 53 S. Ct. 17, 77 L. Ed. 535; Wilbur v. United States, 60 App. D. C. 326, 54 F.(2d) 437.
I cannot agree to a reversal for this reason : The only possible justification for permitting a second supplemental petition to he filed is because material facts have occurred since the first application was filed. Counsel for the Continental recognize this necessary limitation, and the first paragraph of the present application recites that it is filed “because of material facts which have occurred since the rendition of said decree and supplemental decree or order and .since these defendants filed and presented their former application for leave to file a supplemental hill in said cause.”
The first application was filed September 30, 1929, denied by the trial court April 15, 1931, and its order affirmed March 14, 1932. The present application rests, as it must, on two events: The order of the Secretary of the Interior of February 26,1930, disapproving the assignments, and the opinion of the Court of Appeals of the District of Columbia of November 9,1931. Both that order and opinion were before this court, elaborately briefed and argued, carefully considered and decided. Continental Oil Company v. Osage Oil & Refining Company (C. C. A. 10) 57 F. (2d) 527, 531, et seq. The Supreme Court denied certiorari, 287 U. S. 616, 53 S. Ct. 24, 77 L. Ed. 535. I can see no adequate reason for permitting these two matters— and that is all that is or can be before us on this second application — again to he litigated. While our former decision was not a technical adjudication, it is the law of the ease. In Turner v. Kirkwood (C. C. A. 10) 62 F.(2d) 256, an effort was made to re-argue, before a court of different personnel, questions decided on an earlier appeal, the effort being buttressed by the claim that on the first appeal, the court had decided the-ease on a ground not presented in the record or briefs. This court held that the first opinion was the law of the ease, and the Supreme-Court denied certiorari, 289 U. S. 724, 53. S. Ct. 522, 77 L. Ed. 1474. So here, this court has heretofore decided the points now presented; the conclusion of the majority is-therefore in opposition not only to our decision on the first appeal, but to our decision in Kirkwood v. Turner. I submit, with great-deference, that these two recent decisions of' this court ought to be followed or overruled in terms.' The rule as to “the' law of the-case” is a wholesome rule in any court; it is of particular usefulness in a court where the-shifting personnel of the court is a constant temptation to lawyers to try their luck before other Judges.
There is an intimation in the majority-opinion that the order of the Secretary and' the opinion of the District of Columbia Court were not properly before this court, on the other appeal and our decision thereon should be disregarded.1 Let us look first as to the order of the Secretary. On April 18, 1930, the Continental filed in the trial court a supplemental application for permission to-file a supplemental hill, reciting that—
“The Continental Oil Company now reports to this court that heretofore, on February 26, 1930, the Secretary of the Interior-disapproved the aforesaid assignments from the Osage Oil & Refining Company to the-Continental Oil Company, on the ground that the Osage lease had theretofore terminated and that there was not then any lease in force and effect subject to transfer.
“In addition to the matters to be set out in a supplemental bill, as alleged in its application heretofore filed on September 30th,. 1929, the undersigned desires to include in said supplemental hill allegations presenting to this court the action of the Secretary of the Interior pertaining to such assignments and the termination of said Osage lease.”
While no response was directed to this, supplemental application, the narrative statement discloses that upon the trial, held five months after the supplemental application was filed, it was stipulated by counsel that:
*29“Said assignment had then been presented to the Secretary of the Interior with a statement by the assignee that it claimed the said oil and gas lease had expired — there being a provision in the above mentioned order of October 11th, 1929, that the Continental Oil Company might, at all times, assert the invalidity of such lea,se. This assignment, above referred to, was disapproved -by the Secretary of the Interior several months prior to the date of this hearing.”
The order of the Secretary does not appear in the record of the trial coral proceedings upon the other appeal; the fact of the disapproval was before the trial court, and this court had before it the order itself, although this record does not disclose that fact.
The opinion of the Court of Appeals of the District of Columbia had not been handed down when the trial court decided the first application. Except as a persuasive legal authority, I have never been able to see the bearing which this opinion had on this ease. It was the Secretary who disapproved the assignments, and his order stands until set aside by the coral with jurisdiction over him. In our former opinion we recognized that his order was a valid and subsisting order. I now recognize it as such. The decision of the Court of Appeals of the District of Columbia holding that the Secretary had pleaded a good defense to a mandamus action does not add a cubit to the stature of an order eoncededly valid and subsisting.
Be that as it may, that opinion, together with a transcript of the record on that appeal containing the text of the order of the Secret ary, were before this court on the first appeal, briefed, argued, and an effort made, perhaps feeble and inadequate, to determine their effect.2 It is probable that this court could properly have examined the decision of as high a court as the Court of Appeals of the District of Columbia without its being formally introduced. But it was so formally presented. The records of this court disclose that on January 9, 1932, the Continental requested permission to file with this court a certified copy of the opinion of the Court of Appeals of tlie District of Columbia, with a supporting brief. The whole matter being in equity, and the authenticity of the opinion being conceded, the request was granted and the opinion filed with the clerk on January 9, 1932. The cause was heard on January 25, 1932, and the opinion of the Court of Appeals of the District of Columbia was orally argued by both sides. The transcript of the record and the briefs in the mandamus case were submitted as a part of that argument. A reply brief, discussing the effect of that opinion,- was filed by the Continental on February 9, 1932. An elaborate petition for rehearing, dealing with the opinion of the Court of Appeals of the District of Columbia at length, was filed on April 21, 1932, considered, and denied.
After this court considered at length this opinion and the elaborate briefs at the request of the Continental, for that company now to assert that wo had no business so to consider it, and to allege that it is new matter justifying a supplemental bill, is an argument that would be unworthy even in a better cause than this.
Having demonstrated, to my own satisfaction at least, that the only two events occurring since the application was made to file the first supplemental bill have boon before this court and decided, this dissent should end here. The majority opinion deals however with several other matters to which I desire to advert.
1. First, as to procedure. I concede that there has not been a technical compliance with formal procedural rules. Under the reservation in the 1927 decree, the Continental was entitled to file a supplemental hill bringing to the court’s attention its claims as to events transpiring after the 1927 decree — ■ that the Osage had failed to operate the lease ponding appeal, that it could not now make good title, and that the Secretary had disapproved the assignments. This eourt so held in Osage Oil & Refining Company v. Continental Oil Company (C. C. A. 10) 34 F.(2d) 585. The application to file such a bill should have been promptly granted, and the cause tried on the supplemental bill and *30the response. Instead, the Osage filed a response, going to the' merits, to the application instead of to the bill. But the supplemental bill tendered was in the record; the response went to the bill as well as the application; the case was tried on the bill and the response. The pleadings and the evidence being all in the record, this court on the first appeal overlooked the niceties of procedure and decided the ease on the merits. If we erred in so doing, it was an error in the interest of expediting this long-drawn out controversy, an error which prejudiced no one, and one which we had the power, if not the right, to commit.
It would perhaps have been better practice, in the court below in the present matter, to have permitted the application to be filed, and for the Osage by way of response to have drawn onto the record the facts as to- the conduct of the Continental in bringing about a disapproval of the assignments, as well as the fact that the point has been adjudicated. Since it was not done that way, I see no useful purpose to be subserved by sending the case back in order that the facts may be brought onto the record in a more formál way.
2. The majority opinion cites authorities on the question of when a lease expires by its terms. I take it that the purpose of this is to support the' Secretary’s refusal in 1930 to approve the assignments, based upon his finding that the lease expired, which is the event relied upon in this application for relief.3 Certainly the fact of expiration in 1923 is not, and cannot, now be before us for several reasons:
(a) It is not within the issues now presented for, as disclosed by the excerpt heretofore quoted, this application is and must be expressly limited to events occurring since 1929, and not those occurring in 1923 — before the lease was purchased, before the 1927 decree, and before the first application to file a supplemental bill.
(b) An attempt how for the first time to set up that the lease in fact expired in 1923, would be barred by the 1927 decree, as well as by the failure to bring it forward in the first supplemental bill. The first sentence of the 1927 decree, affirmed 29 F.(2d) 712, is “that the plaintiff, the Osage Oil & Refining Company is the owner of a valid, legal, and subsisting oil lease.” 4 It is true that the 1927 decree provides that the Osage must furnish good title to the lease before it is entitled to the $50,000.0.0. But a decree, like a contract, must be construed, if reasonably possible, to give effect to all its parts. Applying this settled rule of construction, the decree is entirely clear; it settled the question that a valid lease subsisted in 1927 and that the Osage owned it; since the decree contemplated that there would be the delay in complying with the decree incident to appeal, it reserved the question of any changes in title, by way of liens or otherwise, that occurred after the decree and before compliance, as well as the question of the Secretary’s approval of the assignment. That reservation cannot be construed as nullifying the finding that the lease subsisted in 1927 and was owned by the Osage. The decree of 1927 did not bar the Osage Tribe nor the Secretary, for neither was a party. But it does bar the Continental, in this litigation, from now asserting that no lease subsisted on April 29, 1927.
(c) Not only has the Continental not now attempted to set up a defense existing since 1923, but throughout this supplemental litigation it has recognized the futility of so attempting. I need do no more than quote two excerpts from the briefs of the Continental in this court on the prior appeal:
“It may be that as between the Osage Tribe and the lessee, the lease did expire prior to the entry of the 1927 decree, but we, of course, cannot and do not raise that question because as between the Osage Company and Continental Company the lease was found to be in force at the time of the entry of that decree.”
“It always scrupulously avoided any claim that lease had expired as between lessor and lessee prior to decree herein.”
If the fact of expiration in 1923 were involved herein, the question whether the Osage Tribe was estopped to assert a termination in 1923 by accepting royalties from oil produced by the expenditure of moneys on the *31lease after that date, is at least an interesting’ one. Orr v. Comar Oil Co. (C. C. A. 10) 46 F.(2d) 59. The fact of termination in 1923 not now being open for our determination, and having been expressly disclaimed by the Continental as a ground for relief, I leave the difficult law on that subject to some case which involves the question.5
3. The majority opinion deals at some length with the power of the Secretary to terminate a lease for failure to produce after the expiration of its term, nnder his power to cancel a lease for violation of its terms. Perhaps he has that power, although Judge Kcnnarner, in an opinion cited by the majority upon another point, has held that he has not, United States v. Brown (D. C.) 15 F.(2d) 565, and counsel for the Continental contends ho has no power to save it from expiring if there is a failure to produce.
This court, on the first appeal, did not enter this enticing hut controverted field of law, because we did not see that the Secretary’s power to terminate a lease for non-production is involved in the case, for he unquestionably has the power to approve or disapprove an assignment. lie did disapprove this assignment, and the validity of that order of disapproval is not challenged in this case, and cannot be since the Secretary is not a party hereto. Whether that order was legally made, whether it rests upon a finding that the lease had expired which ho had no power to make, whether a Secretary in 1930 can enter orders contrary to those of his predecessors in 1925 and 1929 upon which rights have vested, are all for the courts of the District of Columbia. It seemed inappropriate on the first appeal to express an opinion thereon, when the court could enter no order in support of its opinion.
Much of the majority opinion deals with the validity of the Secretary’s order disapproving the assignments. I concede it is valid until set aside by a court with jurisdiction over him. On the last appeal this court assumed its validity. The opinion on that appeal starts where the present majority opinion leaves off.
When the underbrush is eleured away, this case is a very simple one. Under the reservation in the 1927 decree, the Osage is not entitled to the $50,000.00 if the Secretary, without fault on the part of the Continental, disapproved the assignments. He has disapproved them, and his order so far has withstood attack by the court having jurisdiction over him and his order. If the ease ended there — where the majority opinion leaves it — it wo-uld be too plain for argument, and I would immediately concur; if the ease had ended there, the decision on the first appeal would have been otherwise.
But the case does not end there. The record on the first appeal disclosed, beyond the peradventure of a doubt, that the activities of the Continental in urging the Secretary to disapprove the assignments were in flagrant violation of the terms of the 1927 decree. That record contained 111 pages of evidence, much of it bearing npon the activities of the Continental in connection with the order now set up as a bar; this record contains none of that. With that record before us, we cited that part of the opinion of this court on the first of the three appeals to this court [34 F.(2d) 585] construing the 1927 decree as imposing upon the Continental the “obligation to accept the assignments tendered into court and to make an honest effort to secure their approval by the Secretary of the Interior.” We demonstrated, by facts in the record then before us, that the Continental had contumaciously refused to carry out that decree as so construed; that it declined even to accept the assignments until a specific order was entered to that effect; that it then rendered hut lip service to the court’s decree; that while formally requesting the Secretary to approve the assignments, it employed counsel to induce the Secretary to deny its written request. We held such conduct was not the “honest effort” which this court held it was obligated to make. We held that one who sought equitable relief must have done equity. To the eases there cited, I may now add the authoritative exposition of that maxim of equity by Mr. Justice Butler in Keystone Driller Co. v. General Excavator Co., 54 S. Ct. 146, 78 L. Ed.-.
I will not repeat the reasons given by *32this court in its earlier opinion. It was amply supported by the facts in that record; seemed then, and seems now, to be sound in law. The Supreme Court denied certiorari. It does not seem right that that decision should now be overruled, on another record, and with no mention of the point on which that decision was bottomed. '
Nor does it seem just that the Continental Oil Company should be permitted to evade its contractual obligation and to thwart the enforcement of a final decree of a court by the expedient of urging an Assistant Secretary of the Interior to disapprove an assignment which the court had ordered that it make an “honest effort” to get approved. In an unguarded moment, counsel for the Continental in a written brief boasted that “we have thwarted plaintiff in its efforts to have the Secretary of the Interior approve assignments to the Continental Oil Company, because we have refused to execute acceptance of such assignments and submit the same.”' That is to say, by flouting the obligation imposed upon it by the 1927 decree to accept the assignments and to make an “honest effort” to secure their approval, it has so far succeeded in evading its contract and in escaping compliance with a decree of' the courts of the United States. On the last appeal, this court held that such conduct could not be countenanced in a court of equity. I adhere to that view.
Believing that the order of the trial court should be affirmed, I respectfully dissent.

As I interpret the majority opinion, that is the nub o£ our disagreement. The fact o£ disapproval by the Secretary was stipulated upon the trial on the first application to file a supplemental bill. The text of the order was before this court on the prior appeal. I think that this court had a right to con-eider the text of the order. While the record on this appeal does not disclose the fact that tt was before this court, it seems to me that notice can now be taken of the fact. The order Is contained in. the transcript of the record on the appeal to the Court of Appeals of the District of Columbia, and courts often look to the record in a case to illuminate an opinion.

 The majority opinion labors the point os to what was decided by this court on the former appeal. There is nothing recondite about it. We had before us, at the instance of the Continental, not only the fact that the Secretary had disapproved the assignments because the lease had terminated, but the full text of the Commissioner's report and recommendation endorsed ‘‘Recommendation approved Feb. 26, 1930, and the assignment disapproved: Jos. JM. Dixon, First Asst. Secretary.” We also had before us HI pages of record disclosing the activities of the Continental in procuring that order. What we held, upon this point, was that the Continental was not entitled to invoke that order. Wo may have been technical in holding that ono who- had violated a court decree was not entitled to seek relief against it; but we had a right to be technical, and the Supreme Court declined to review our action. I can see no useful purpose to be subserved by sending the case back to the trial court to read the text of that order. Such procedure may be technically correct, but it seems to me it sacrifices substance to technique.

 It may be noted that the Secretary’s order of 1930 (set out in full in the transcript presented by the Continental on the other appeal) was not based on the failure to produce oil in 1923, as intimated by the answer of the Secretary in the proceedings in the District of Columbia, but on the failure of the Osage to operate after 1927. After reviewing the entire case, including the lack of production in 1923, the Secretary’s approval of an assignment in 1925 based upon a finding that “the lease has never expired in accordance with its terms but has remained and still is in force and effect,” and the failure of the Osage to operate during appeal, the recommendation, approved by the Secretary, concludes that the Osage was derelict in not making an honest attempt to bring the lease into production “after its title thereto had been cleared by the courts” in 1927.

 The majority opinion, in its statement of facts, omits this part of the decree.

 If the fact ‘of a termination of the lease in 1923 can now bo litigated in this action, it could have been litigated in 1927, for the same parties are now before the court as were before it then. The lease cither terminated in 1923, when it is said production .in fact ceased, or in 1930, when it is said the Secretary so determined. It could not have terminated on both chites; if it was terminated in 1930, it did not expire in 1923. If it terminated in 1923, the 1927 decree now forecloses that defense, under the accepted rule that a decree forecloses all available defenses. If it was terminated by the Secretary’s order of 1930, that was before this couri on the former appeal. To say it was a combination of the two events, is to assert our power to pass on the Secretary’s order when he is not before us, a power elsewhere denied, for even if the trial court should now find it did not expire in 1923 (as the Secretary found in J925) it still would be powerless to set aside the Secretary’s order of 1939.