Opposition Brief — Neely v. Houston Oilers, Inc.

INDEX.

OPrINions IN THE Counts BHO |... oon g.c cess

JURISDICTION ta turts 3G re eee nens

STATUTE INVOLVED

QUESTIONS: PRESENTED ............: Vererrieys

_ STATEMENT OF THE CASE f. .:.... Br iin eekis oa

_ STATEMENT OF FacTs .......:...... ene ee

ARGUMENT OPPOSING 43RANTING OF‘ THE WRIT

1.

_ the Tenth Circuit is Not in Conflict With

‘the Decision of the Court of Appeals for the »

_ Fifth Circuit in New York Football Giants,

The Décision of the Court of Appeals for

Inc. v. Los Angeles Chargers Football. Club,

‘Inc., 29% F.2d°471 (1961) ..............

The Court of Appeals Correctly Applied

..Texas Law in Holding that the Service Sta-

‘tion Agreement (Plaintiff’s Exhibit 7), One

of the Contract Documents, Meets the Re-

quirements of the Texas Revised Civil Stat-

ute of Frauds, Art. 3995, Texas Revised Civil

DR rs soon y te ee nee eee

. Ada Oil oer. was Not an 1 Indispensable -

Party. Bis Ny re BBR ee OT NN

- Petitioner Cannot Properly Reise for the

_ First Time in His Petition for Writ. of

Certiorari an Issue Not Urged in the Courts

Below That the Dallas Cowboys Football

Team Was an ap Party to this

Mg eo ce et en en

ARTICLE 3995, TExas -Revisep’ Crvit STATUTES

‘2?

(14

18

Puta fee... App. Bel

‘ u |

INDEX TO AUTHORITIES _

CASES : |

Allstate Ins. Co. v. Brown, (Tex.Civ.App. 1956) _

I oe Bebe cdicaceep ae. -

Best Building Co. v. Sikes, (Civ. App., Ft. Worth,

1965) 394 S.W.2d 57, writ ref’d n.r.e.

Butler ‘¥. Continental Oil Co., (Tex.Civ.App.)-

ae oie eases nacccage; -

Dallas Cowboys Football Club, Ipc. v. Harris, _

(Civ.App., Dallas, 1961) 348 S.W.2d 37, 42

Detroit Football Co. v. Robinson, 186 F.Supp. 933

‘Eastland County v. Davisson, (Tex.Comm.App.

oe EN A ee ne

Employers Mutual Liability Co. v. Mosqueda, 317.

sie La ae 2 en

Green) v. American .General Ins. Co., (Tex.Civ. .

App. 1962) 354 S.W.2d 616, writ ref’d nur.e.

- Kauffman v. Deignan,’ "(Tex Civ. App.) 227 ‘

Rl BO Se a ea

McElroy v. Danciger, (Tex.Civ.App.) 241+ "SW.

I ee ee Re vs do we 6 oa Ses «

Mission Independent School District y. Diserens,

(Sup.Ct. Tex., 1945.) 188 $.W.2d 568

National Labor Relations Board v. Pittsburgh

- Stearnship Co., 340 U.S. 498, 95 L.Ed. 497 _..

| Page

19

i

“9

New York Football Giants v. Los Angeles Chargers -

Football Club, Inc., (5th Cir.) 291 F.2d 471. 5,9, 10, 21

Pacific Mutual Life Ins. Co. -¥, Westglen Park;

Inc., (Tex.Sup.Ct. 1959) 325 S.W.2d 113 ©

|: a

Precision Instrument Mfg. Co. v. Automotive’ .

»Maintenance Machinery Co., 324 U.S. 806, 815,

eG Pal ns sles ees ,

Republic Molding Corp. v. B. W. _— Utilities

' (CA. 9) 319 F.2d 347 -

Rice v. Sioux Gity Memorial Park F nclontie Inc. ie

349 U.S. 70, 79, 99 L.Ed. 897, 75 S.Ct. 614 ~

_ 13

10

Ill

, CASES

ns v. Sedeeive, 349 USS. 48, 99 L.Ed.

es Oe a OE 5 eal cae wae dees fees

Page:

19

. Skeeters v. Granger ° (Tex.Civ.App,‘.1958) 314° °°

‘§$.W.2d 364, writ ref’d mre. ...............

Taylor v. Lester, (Tex. Civ,App. ) 12 SW. 2d 1097,

Ee ORG amet: See aE Pepe 7 nah et

+ Biller -v. Fields, (Tex.Civ.App. 1997) 301 S.W.

RENE Sie Sear Pee on nar nr ee een ea

Williams vv. Fanning, ss de US. 490, 92 L.Ed. 95,

68 S.Ct. 188 te. ghd stay a

STATUTES

ihn. 3995. Tex. Rev. Civ. Stats....°.... ee at a

pee A ). ene

34 Tex.Jur.(2d) 452 ......

16

17

16

19

Nh

19

No. 407 a 6

IN THE.

a Supreme Court of the United Susie

_ OCTOBER TERM, 1966

RALPH NEELY, Petitioner, —_« -

* V7.

HOUSTON OILERS, INC., Respondent.

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF .CERTIORARI

To The Honorable Judges of The Court:

Respondent HOUSTON OILERS, INC., prays that the By

. . Petition for. Writ of Certiorari of RALPH NEELY be

denied, and would show that the requisite grounds do not

exist for review of the Judgment of the United States

. Court of Appeals for the Tenth Circuit entered May 18,

1966.

OPINIONS IN THE COURTS BELOW ©

The Opinion of the Court« of Appeals is ‘printed in

Appepdix “A” hereto. The Findings of Fact and Conclu-

7

j/

OT a “ee a

ee ee 8 ;

bis “en

_ sions - Law of the District Court appear. ‘in | the record.

iat R. 121- 136)"

JU! RISDICTION

a

> The sis of the Court of “Appeals was entered

on May 18, 1966. (A.R. 4) ‘Rehearing was denied on June

23, 1966. (A.R. 10) —

Petitioner seeks’ to invoke jurisdiction es this Court

under Title 28, U.S.C., Sec. 1254(1). Respondent would

however show that aliave are neither special-nor important

reasons for reviéw of this cause on writ of certiorari; that

no conflict here exists between decisions of- Courts of

Appeals and that the Court of Appeals correctly applied

the Texas law pertaining to the Texas Statute of Frauds,

Article 3995, Texas Revised Civil Statutes.

“STATUTE INV. OLVED-

~The Texas’ ‘Statute of Frewle, Article 3995, Texas Re-

vised Civil Statutes is printed in Appendix “B” hereto.

QUESTIONS PRESENTED

1, Did the Court of Appeals abuse it? discretionary:

powers when it refused to apply the equitable “‘clean hands”

doctrine and granted injunctive relief to enforce a contract

‘provision in a case where a professional football: team and

a college football player, without fraud or deceit, entered

1The record is comprised of the Transcript. of Record from the

“Court of Appeals which incorporates the Record and Transcript of

the District Court. Each document begins with a page one. Refer-

ences to the various parts of the. record will be made as follows:.

Court of Appeals record—A.R.; District Court Record—D.R.: ‘District ;

Court Transcript—Tr.

4

into valid written contracts prior to a -post-season college

game, the parties had an extrinsic oral. understanding that

‘the existence of. the contract would not be’ publicized:

until after the game, and where the college player did ‘not .

play in the post-season game?

(2.QDid the Court of Appeals correctly apply Texas law

‘in holding that the: service station agreement (Tr. 36,~

‘Pl.’s Ex. 7) meets the requirements of the Texas Statute

of Frauds, Art. 3995, Texas Revised Civil Statutes, where

the instrument is in writing, is signed by the parties, and

provides a method of certain and final identification of

the property by giving ‘one of the parties the unqualified

right of selection without the necessity of further agree-

ment by the other party? as

3. Is ‘the i issue ‘that Ada Oil Conair is an indispensable

party a proper one for consideration ‘in acting upon a

Petition for Writ of Certiorari where such issue has been

raised for the first time on Petition for Rehearing in the

Court of Appeals after Respondent has alleged, the Peti-

tioner has admitted, and the Court of Appeals has held,

that the contract involved was ‘made by saat ene and

Pétitioner? ~,

If so, then the question -presented is: whether or ‘not

Ada Oil Company is an indispensable party where it entered

into an agreement ‘on which it has secondary or derivative |

liability and with respect to: which Respondent is the real

party in interest. %

4. Is the issue that -the Dallas Comin Football team

is an indispensable party a proper one for consideration in

acting upon a Petition for Writ of Certiorari where such

issue is raised for the first time in the Petition for Writ

of f Certiogari?

4

‘ If so, then the question presented is whether the -Dallas

Cowboys Football team is an indispensable party to this

action by Respondent seeking a declaratory judgment that

a’ valid contract exists between the Houston Oilers and

- Ralph Neely and an injunction restraining the violation

by Petitioner of a provision of the contract because Peti-

tioner has made a. separate and distinct: contract with such

third party. 3

, STATEMENT OF THE CASE®

In this action filed in the United States District Court _

for the Western District \of Oklaho Respondent, _

_ Houston Oilers, Inc., seeks a declaratory judgment that ©

there. exists a valid, enteredsble written contract between

Respondent and Petitioner, Ralph Neely, that he play

professional football for the Houston Oilers team of the

American Football League, arid an injunction permanently

restraining and enjoining Petitioner from playing football

‘with any other team during the term of the. contract.

(D.R. 1-45)

a oe of the District Court was based upon iie-

sity of citizenship. Respondent is a Texas corporation.

Petitioner was, at the institution of suit, a resident of

Oklahoma. (D.R. 109-110)

After:a non-jury: trial, the District Judge entered judg-

ment that the contract: between the parties was invalid

and of no force and effect, denied the application _ for »

declaratory judgment and” for injunction, and dismissed the

Complaint with prejudice. (D.R. 136)

Respondent perfected an appeal ‘to the Court of Appeals

for the Tenth Circuit. The Court of Appeals held that .

the undisputed facts in the record disclosed a valid and

5

enforceable contract | (ALR. 3 p. 3); that there is insufficient

evidence to’ sustain a finding of material misrepresentation

on the part of Houston amounting to’ fraud which would

affect the validity ofthe contracts (A.R. 3 p. 12); that

the Standard Players’ Contracts, the Letter Agreement for

Additional Employment, and the Filling Station Agreement

ituted a‘single transaction (A.R. 3 p. 5).; that the

(clean: hands doctrine) admits of the free exercise:

ge ‘cal discretion in the furtherance of. justice (A.R.

13); that it is neither unlawful nor inequitable for.

=< football players to surrender their amateur status

and turn professional at any time (A.R. 3 p. 13); that

Houston was under no legal duty to publicize the contract

or to keep it secret (A.R. 3 p. 13); that the Player Con-

tract in New York Football Giants v. Los Angeles Chargers

_ Football Club, Inc., (Sth Cir.) 291 F.2d 471, was acquired

under circumstances much different: from those in this

case, (A.R. 3 p. 13) and that the service station agreement

is a writing which satisfies the Texas Statute of Frauds,

(A.R. 3 p. 14)" ;

The Court of A’ppeals séverned and mmented with in-

* structions to grant the injunction. (A.R. 3 p. 4)

Petitioner, for the first time while his Motion oie Re-

hearing was pendinggin the Court of Appeals, by motion,

(A.R. 5) made the contention that Ada Oil Company was

an_ indispensable party. The Court. of Appeals having al-

ready held on the undisputed record that the contract,

including the service station agreement was between Re-

spondent and Petitioner, such Motion. was overruled. (A.R.

3 p. 10) Petitioner, for ‘the first time in the Petition for

writ of certiorari has raised the contention that the Dallas -

Cowboys Football Club is an indispensable Party to. this

action. -

7

On Motion of Petitioner, ‘the mandate of the Court of

Appeals has . been » ‘stayed until final disposition by this

ON .

STATEMENT ‘OF FACTS

. Respondent owns and operates’ a professional football

team known as ie Houston Oilers which is a member of

the American Football League. Petitioner, Ralph Neely, on

December, 1, 1964 was a student at the University of

Oklahoma and a member of the Oklahoma University

football team (D.R. 109-110) which team was scheduled

to play in the Gator Bowl game‘on January 2, 1965.

(D.R. 112) Under the provisions of the American Football

League Constitution and By-Laws, (AFL Constitution and.

‘+ By-Laws, VIII, Section 10, PlEx.9,D.R. 113) Ralph Neely

became eligible to be selected: and placed under contract

_ by a member team of the American Football League at the .

time of the American Football League draft held on.

November 28, 1964. Ralph Neely was selected by the

Houston Oilers as one of its draft choices. He was also

selected by the Baltimore Colts in the National Football |

_ League draft held- the same day.

‘Ralph Neely ay his Salliiectestale: Robert A: Forte,

travelled to’ Houston, Texas, where they met with K. S.

_ Adams, Jr. and Carroll Martin of the Houston Oilers on

"November 30, 1964, and again on December 1, 1964 to.

discuss the terms under which Ralph Neely would agree

to play professional football for the Houston Oilers. (Tr.

47, 52)

Under the undisputed testimony at the time of the con-

tract discussions, Ralph Neely for tax reasons desired to ar

obtain ‘his $25,000 — bonus i ‘in 1964 so that the

Qe

7

- amount of di Lieties could be Satieaiinis in his 1964 income.

(Tr. 23, 49, 89, 205) Neely knew that if he took money

_ for playing football it would make him ineligible to play

college football. (Tr. 198) Neely was told by Mr. Adams

~ that if he wanted his bonus money in 1964 he would have

to sign a contract, (Tr.91) |

On December 1, 1964, Ralph Neely, K. S. Adams, Jr.,-

(Président and sole stockholder of both Houston Oilers,

~)Inc. and Ada Oil Company) and Carroll Martin executed -

_ the Houston contract documents, (Pl. Ex. 1-7, Def. Ex.

1-5, D.R. 170-194, 214-234) The Standard American

League Football ‘contract forms executed by the ‘Parties

wi in part: *

het ‘The term of this contract shall be from the date

of the execution: hereof until the first day of ‘May |

following the close of the football season commenc-*

. ver | |

“18. Upon its execution this contract shall be valid

_and binding immediately upon the parties hereto, A -

copy of this contract shall be filed by the Club with.

the Commissioner within ten (10) days after execu-

tion...” ‘

Ralph Neely received a copy of each of the Houston

contract documents, together with the Houston bonus -

money check. (PI.Ex. 8, “ss 111, Tr. 60)

A copy of each of the Auierican Football League Stan-

dard Players’ Contract forms, with attachments, ‘signed

by -Necly was submitted by the Houston Oilers to ‘the

American Football League Commissioner on December 9,

1964, pursuant to the contract provision that ‘‘a copy of

this contract shall’ be filed by the Club with the Com-

missioner within ten n days after execution. » The Commis-

‘

7

sioner took no action to distin or to terminate the

= contract,| (Tr. 124, 128; depositions of Woodard and Foss)

For a Spee ae period of* timé after he made the

arrangement with Houston, Neely admittedly’ was com- —

pletely satisfied vith it and intended to play football for

Houston, (Tr. 194) Dallas somehow obtained Neely’s Na-

tional ihe 3 League draft rights from Baltimore, Neely .

‘. Was contacted time and again by representatives of the

|. \Dallas Cowboys football team of the National Football

League and was told by them that his contract with Hous-

_ ton’ ‘was invalid, (Tr. 230, Joe Brandt deposition, p. 20)

On Drtcomaber 29, 1964, Ralph. Neely signed and caused

to be mailed. the letters. (Def.Ex. 6-7, D.R. 240-242) On

the same date ‘Robert A. Forte signed and mailed a letter

(Def.Ex: 8, D.R. 243) returning the Houston bonus check.

> (PLEx. 8, D.R. 195) 3

Neely received the $2 5,000 “Ballas Cowboy bonus check

on December 31, 1964, ptior to the~time he was declared /

ineligible ‘to play in the Gator. Bow] football game. He

reported the $25,Q00 ‘as 1964 income. (Tr. 161, 174-175).

. Neely himself told the Oklahoma University coach that

he had signed the Houston contract papers and had sent

_ the letters dated December | 29, 1964. (Tr. 200-202) On.

January 1, 1965, Neely was declared iacigitte 2 to play in

the’ Gator Bowl game. (Tr. 162) ,

On sanity 1, 1965, Neely signed contracts to play pro-..

fessiénal ‘football with the Dallas Cowboys of the National

Football League during the football seasons °commencing

in the. years 1965 through 1968. He, in, fact played with

: the Dallas team. during the 1965 season and admits that .

: @he will continue to. play” football for Dallas unless he ‘is

<

9

enjoined from so doing, It is stip Mend that Neely possesses -

special, exceptional, unique knowledge, skill and ability, as

a — player. (D.R. 111) ,

° ARGUMENT OPPOSING GRANTING

, OF THE WRIT

1. The Decision of the Canit of Appeals for the

Tenth Circuit is Not: in Conflict With the _

‘Decision of the Court of. Appeals For The .

Fifth Circyit in New York Football Giants,

Inc. v. Los Angeles Chargets Football Club,

Inc., 291 F.2d 471 | (1961),

' The.considerations governing review on certiorari, now

set out in Rule 19 of the Supreme Court Rules, make it~

clear that a review on writ of certiorari is not a matter °

. Of right, but of sotind judicial discretion and will be

granted only where there are special and important reasons.

therefor.

This — a said in National Labor Relations Board v.

” Pittsburgh Steamship Co., 340 U.S..498 at Page $02, 95

— 497, 482, that:

“Certiorari is granted only ‘in cases involvi ine prin-

~ ciples the setglement of which is of importance to the .

public as distinguished from that of ‘the parties, and

in cases where there is a real and embarrassing con-

flict of opinion and authority between the circuit

courts of appeal.’ Layne & Bowler Corp. v. Western

Well Works, 261 U.S. 387, 393, 67 L.Ed, 712, 714,

* 43 S.Ct. 422.”

10

A similar holding was made in Rice v. Sioux City Slewwovied .

Park Cemetery, Inc., 349 U.S. 70, 79, 99 L.Ed. 897, 904,

75 S.Ct. 614.

For the requisite real - embarrassing conflict of opinion

‘ and authority between the Circuit Courts of Appeal to

exist, the conflict must be well defined, An apparent in-

‘ consistency in the principles announced, or in the applica-

tion of recognized principles is not sufficient, The rulings

must be so for upon the same state of facts that the de-

cision of one case should be necessarily conclusive of the

decision. in. the other. -

_ The opinion of ‘the Courts of Appeal for the Tenth

Circuit in the instant case and that of the Fifth Circuit -

in the case of New York Football Giants v. Los Angeles —

Chargers Football Club, Inc., (C.A. ~) 291 F.2d 471, re-

veal that the two cases are plainly distinguishable on the

facts,

In New York Football Giants v. Los Angeles Gin, a

supra, the evidence supported the trial court’s findings of

fraud in the inducement of the contract, The testimony

of Mora, owner of the New York Football Giants,. un-

disputedly showed that hé had made material misrepre-

sentations to Flowers, the college player ‘there involved.

The Court of Appeals for the Fifth Circuit said (291 F.2d ;

at page 474):

“If there had been a _ straightforward execution 1 of

the document, followed by its filing with the Com- —

missioner, none of. the legal problems now presented

to this Court to untangle. would exist . . ..

“When it became apparent from.the uncontradicted

testimony of Mora that this deceit was practiced in .

order to bring into being the ‘contract’ sued upon,

11

the trial court should have dismissed the suit without

- more on the basis of the ‘clean hands doctrine.’ ” |

Thus it is clear that what the. Fifth Circuit did was to

invoke the “clean hands” doctrine to deny injunctive relief

where there was evidence of fraud which affected equitable

relations existing between the parties.

To the contrary, the Court of hile for the Tenth

Circuit found that there was insufficient evidence to sus- ©

tain a finding of material misrepresentation on the part

of Houston. amounting to fraud which would affect the

validity of the contracts. (A.R. 3, p. 12) There was no

_ fraud ih the inducement of the contract in the , instant

-. case because Neely was not deceived. He demanded. and |

got his bonus in 1964. As stated by the Court of Appeals

in its Opinion: |

“Any rational consideration of the evidence “leads.

to the conclusion that all the parties “knew that if

Neely signed a professional football contract and re- -

ceived: money therefor . . . he would consequently

become ineligible to compete in the post-season games.”

(A.R. 3; p. 5) , .

Also there is an important, basic difference in the con-

tract involved in the Flowers case and thé contract in the

. Neely case. One of the terms of the Flowers’ contract (291

F.2d 471, 473) was that:

“This agreement shall become valid and binding

upon each party hereto only my as, and if it shall

be approved by. the Commissioner. i :

This important contract difference was the: basis: for the:

decisions in Detroit Football Co. v. Robinson, 186 F.Supp.

12

933 and Los Angeles Rams Football Club v. Cannon, 185

F.Supp. 717. In the instant case, as stated by the Court of

- Appeals (A.R. 3, p. 6):

. The contracts provide in plain language that —

‘in shall be valid ‘and binding immediately upon ex-

ecution and that a‘copy shall be filed with the League

Commissioner within ten days thereafter.”

. | P

-

At the time he. signed the contract documents, Neely

asked that’ the signing not be made public, and .was told

that the signing would: not be publicized until after the

‘Gator Bowl football game: (Tr. 156, 257, 273) This verbal

assurance is not a part of the written contract which Re-

spondent seeks to enforce.

It is inebibinn unlawfu_ nor. unkhical -for-an amateur

athlete to turn professional at any time he desires to do so.

The only question of ethics arose with respect to Neely’s

conduct after he had signed the contracts. .From the stand-

point of the Houston Oilers, their actions, so far as the

American Football League was concerned, were governed

by the League’ s Constitution and By-Laws under which .

P ‘Neely was eligible to be signed toa player’ s contract.

We respectfully submit. that che Court of Appeals cor-

rectly held that the’ Houston Oilers were under no duty

to publicize the signing of the contract and that it was

perfectly proper for Respondent to remain silent. ©

Regardless of what his intentions originally were, Neely

_ did not play in the post-season game. Prior to the ga

he disclosed to his’ coach the facts which brought about

a declaration of his —_— an 3, p. 12; Tr. 200-

on

13

An important distinction between the two cases with

respect to the applicability of the “clean hands” doctrine

is that Flowers, the player involved in Giants v. Chargers;

supra, played in the Bowl game, whereas in the instant case

Neely did not play in the. game. Consequently there was

no actual deception of the Oklahoma football team or of

the public generally. The claimed inequitable action was

-.not committed, but only discussed. Compare Republic

_ Molding Corp. v. B. W. Photo Utilities, (C.A. 9) 319°

F.2d 347, 350.

The opinions of the on of Appeal can be readily

reconciled on the facts, therefore the requisite réal and

embarrassing conflict of opinion and authority between the -

Circuit Courts of Appeal does-not exist and the petition

should be denied: The Court pf Appeals’ decision is con-

sistent with the pronouncements of this Court applying

the equitable “clean hands” doctrine. Petitioner does not

‘even assert that a conflict exists with prior decisions of

this Court, © s

This case merely involves the application of well-recog-

‘nized, established legal principles to the particular facts.

. It is not a case involving principles, the settlement of

‘which is of importance to the. public as distinguished

- from that of the parties. The Court of Appeals merely

éxercised’ its broad discretionary powers. As stated by the

Court (A.R. 3, p. 13): :

“The maxim admits of the ‘trea exercise of judicial -

discretion i in the furtherance of justice.”

_

In the language of this Honorable. Court in_ Precision

Instrument Mfg. Co. v. Automotive Maintenance Ma-

chinery Co., 324 U.S. 806, 815, 89 L.Ed. 1381, 1386: 3

14°"

_ “This maxim necessarily gives wide range to the

equity court’s use of discretion i in refusing to aid the

unclean litigant. It is ‘not bound by formula or re- .

strained by any limitation that tends’ to trammel the.

free and just: exercise. of discretion.’ Keystone Driller

Co. v. General Excavator Co. supra (290 U.S. 245,

246, 78 L.Ed. 296, 297, 54 ‘§.Ct. 146).”

The refusal of the Court of Appeals for the Tenth Cir-

cuit to apply the “clean hands” doctrine in a case which.

it found from the evidence did not involve fraud or de-

ceit on the part of the Respondent does not conflict. with

the decision of the Court of» Appeals for the Fifth Cir-

.cuit which’ applied the “clean hands” doctrine to deny

_ relief in a case where the Court found the evidence sup-

ported fraud in the inducement of the contract.

2.. The Court of Appeals Correctly Applied Texas

Law in Holding that the Service Station Agree-

ment (Pl. Ex. 7), One of the Contract Docu-

ments, Meets the Requirements of the Texas

Statute of Frauds, Art. 3995, Texas Revised

Civil Statutes. : .

The decision of the Court of Appeals x not in ‘conflict

with the applicable law of the State of Texas. ‘

On December 1, 1964 as a part of a single transaction |

(Tr. 113, A.R. 3, p.5) Petitioner, Ralph Neely, exe-

‘cuted the Houston<contract documents consisting of the

' Standard American Football League contract forms and the

Service Station Agreement. (Pl. Ex.7, D.R. .110-111)

K. S. Adams, Jr. who signed the Service Station Agree-

ment along with Neely, in addition to being the -presi-

dent and owner of all of the capital stock of the Houston

~ % e

15

Oilers, Inc., also was the. owner of Ada Oil Company and

had authority to make this agreement with Neely as a

part of the consideration to get him to play football for |

the Houston Oilers. (Tr. 115) : |

This Letter Agreement is in writing and is tied by

the parties. It therefore complies with the Texas statute

- of frauds unless it is held that the agreement as a written

memorandum, is not a sufficient: writing to comply with |

the statute. Such is not the case.

| The agreement states in plain language that Ada Oil

Company is to purchase a suitable service station site 9

Harris County, Texas, to be used for the sale of Phillips *6

products at a cost of from $30,000 to $60,000, and is to’

arrange for the -financing and construction ‘thereon of ‘a

service station of a designated type. Ada Oil Company

under the Letter Agreement is to also, upon the completion

- of the construction of the service station, to enter into

the standard two-party lease agreements with Phillips —

Petroleum Company and to procure a loan in an amount :

equal to the total cost of the service station site and im-

. provements, the amount of which loan_is to be paid in

two hundred and forty equal monthly installments under

the leases. ;

The parties did not pyrport, to contract: witht “respect

to a particular tract of property. However, because it is

clear from the unqualified language. of the instrument that

the service. station site, the type of station, and the financ-

ing thereof is to be determined by Ada Oil Company, within

the limits specified, and without the necessity of any

further. agreement on the part of Ralph N sd the’ writing

satisfies the Texas Statute = Frauds. :

>

”

The requirements of the Texas Statute of Frauds are

satisfied whenever the contract provides a method of cer- .

tain and final identification of the property.

Directly i in point is the case of Tiller v. Fields, (Tex. Civ.

App. 1957) 301 S.W. 2d 185 whenei the court said at

' page 190:

hiiiiithtiaiy in their brief cite the case of Stekoll

. Petroleum Co. v. Hamilton, 152 Tex. 182, 255 S.W.2d,

187. We think a careful analysis of this case will show

_ that it is supportive of ‘appellees’ position rather than

. that of appellants’ because it is clearly recognized: in

_ the Stekoll case that the statute of. frauds is met

' where the contract, instrument or agreement, gives

either party the unqualified: right or power to make:

a selection or determination of the details without the

‘necessity of further agreement or. approval of the -

‘ other party. Also in this connection see Taylor v.

Lester, Tex.Civ.App., 12 $.W.2d 1097, wr.ref.;- Gray

_y. Producers’ Oil Co., Tex.Civ.App., 227 S.W. 240;

Rountree v. Bridwell, "Tex.Civ. App., 269 S.W.2d 824, _

wr.ref., N.R.E.; Lingeman v. Shirk, 15 Ind.App. 432, °

43 N.E. 33; Peckham v. Lane, 81 Kan. 489, 106 P,

464, 25 L.R.A., N.S., 967. The lease pooling pro-

vision in question in this case clearly gives the lessee

the broad and unqualified power to select or deter-

‘mine the lands ake the immediate . vicinity) to be

placed in the unit . iB

Other cases which directly support Respondent’s position _ .

that the -writing in question meets the requirements of

- the Texas Statute of Frauds are Skeeters v. Granger, (Tex.

Civ.App. 1958) 314 S.W.2d 364, 366, writ ref’d n.r.e.,

and Best Building Company v. Sikes, (Tex.Civ. App. 1965)

394 S.W.2d $7, 62, writ ref’d n.r.e.

Under Tekas 1 law, an express or implied reference in one

doctment to another incorporates the latter into the former

| i

17

$o as to‘allow the two to be considered together in deter-

mining whether the statute of frauds has been -complied

with. McElroy: v. Danciger, (Tex.Civ.App.) 241° S.W. |

_ 1098; Taylor v. Lester, (Tex.Civ.App.) j2 S.W.2d: 1097, |

_writ ref’d; Kauffman v. Deignan, (Tex.Civ. App.) 227

'$.W.2d 271, 275. Therefore, the agreement is not made ©

invalid because it incorporates by reference the instru-

ments which describe the improvements. to be erected

‘upon the property, and the Phillips Petroleum Company's s

standard Two-Party Lease. Agreements.

The Phillips , Petroleum - ‘Company’s Standard Lease

Agreements or existing lease agreements used at Phillips

servicé stations all over the country. (Tr. 119) The service

‘station leases are to be between Ada Oil Company and ©

Phillips Petroleum Co, The Service Station. Agreement |

- (Pl. Ex. 7, D.R. 36) requires-that the lease rentals pay the

full cost of the service station site and improvements.

Therefore, the other provisions of the lease agreements are

_ of no concern to Neely and he is not required, under Texas’

law, to approve their terms. Pacific Mutual Life Ins. Co.

v. Westglen Park, Inc., _— 1959). 325 $.W.2d

113. .

Petitioner’s argument cancerning the effect of the ‘ale

ment below, if allowed to stand, borders on the ridiculous.

The well-established Texas law, concerning ,which there is

no dispute is that injunctive relief will be granted to re-

strain a violation by Neely of his covenant not to play

_ football for a club other than the Houston Oilets; but

that he cannot be required by mandatory injunction to." —

_. play for Houston. Mission Independent School District v.

Diserens, (Sup.Ct. of Tex., 1945) 188 S.W.2d 568; Dallas’

Cowboys Football Club, Inc. v. Harris, (Civ.App. Dallas,

_ 1961) 348 S.W.2d 37, 42, Should Neely elect to play foot-

18

. ball for Houston, then the service station site is obviously

a valuable part of the consideration for his playing foot- -

ball, probably worth under Neely’s own testimony at least

$100,000 by the end of twenty years. (Tr. 281) Neely has

made and is bound by his contract. This Court will not -

presume that Respondent, in the future, will not deal fairly

- with the Petitioner. However, Neely would not be com-

pelled to accept a conveyance of a service’ station site if

he chose for any reason not to accept it.

\.

3.° Ada Oil Company Was\ Not ° an Indispensablé -

Party. \

Respondent plead ©. R. 2) , \ Petitioner admitted,

(D.R. 61), and the Court of Appeals’ found (A.R.. 3,

p. 5) that the contract and agreement between Houston

Oilers, Inc. and Ralph Neely consisted of seven instruc-’.

tions; i.e., the bonus clause, four American Football League

‘contracts, the Real. Estate Salesman Commission Agreement, ig

and the Service Station Site Agreement which constituted

a single offer in writing made by the’ Houston Oilers and

accepted by Ralph Neely. The sole consideration. from.

Neely -for the conveyance to him of the station site was

his agreement to play football for Houston. (Tr. 49-5 0)...

Although Ada Oil Company appears as a pafty to the -

service station agreement, examination of all the contract

documents and thé evidence makes it obvious that Re-

_spondent, ‘Houston. Oilers, is the real party in interest ‘and

that Ada, an affiliated corporation owned 100%. by K. S.

-Adams, Jr. was named in the Letter Agreement to act for

the Houston Oilers merely because that company was the

jobber for Phillips ’66 products in the Harris County area

and=was in’ a convenient position to carry out what was

19

in fact the primary obligation of the Houston Oilers;

namely, to. pay Neely that part of the consideration for

playing football represented by the service station site.

Under Texas law whether it be considered ‘that wader

the circumstances there is an identity of parties between

the Houston Oilers and Ada Oil Company, that Houston

Oilers stand in the position of a guarantor of the per-

formance by Ada, or whether Ada is to act as an agent

of Respondent, the requisite relationship exists so that Ada

is bound under the doctrine of res judicata by the decision

of the Court of Appeals.

The law is well-established in Texas that a plea of res

judicata based upon a former suit is available against one

not a%party to the former suit who rests under a secondary

or derivative liability which must have been considered and

determined in the former litigation. Eastland Gounty v.

Davisson, (Tex.Comm.App. 1929) 13 S.W.2d 673, 676;

Butler v. Continental Oil Co., (Tex.Civ.App.) 182 $.W.2d

843, 845; Green v. American General Ins. Co., (Tex.Civ. .

. App.1962) 354 S.W.2d' 616, writ ref’d n.te.; Cf. Em- .

ployers Mutual Liability Co. v. Mosqueda, 317 F.2d 609;

"see also, Allstate Ins. Co. v. Brown, (Tex.Civ.App. 1956) —

289 $.W.2d 300; 34 Tex. Jur.2d 452.

Ada + Comipany was bound by the Judgment of the

Coprt-of Appeals and was not an indispensable party:

| Furthermore, this Court has held that the indispensability is

of parties is determined on practical. considerations. Shaugh-

_nessy v. Pedreiro, 349 U.S. 48, 99 LEd. 868, 75 S.Ct. 591;

.- Williams uv. Fanning, 332 U.S.°490, 92 L.Ed. 95, 68 S.Ct.

188. Applying that test, and under the record ‘before. the a

Court, Petitioner should not now be permitted. to ignore

the trial. pleadings and the findings from the evidence and

r, ° 7 ; e . e :

\ e ‘

| a ‘ ‘. .

. . : . .

} : . 9

° . ‘ es

‘8

' aa 20

So: ee

to how raise this issue of indispensable parties, Petitioner

first contended that Ada Oil Company was a necessary

party while Petition for Rehearing was pending in the

Court of Appeals. Petitioner should not be permitted by

, so doing to circumvent the finding 2 on the evidence

that this contract was in fact between the Houston Oilers

‘and Ralph Neely. = \":

The pending action in the .133rd District Court of

Harris County, Texas, styled “Ralph Neely, Plaintiff ‘y.

9 Ada Oil Company, Defendant; : referred to in the Petition,

isan action filed after the Court of Appeals for the Tenth.

re had rendered its decision rejecting the same con-

' tentions there and here made by Petitioner pertaining to.

the service station agreement. The Texas District. Judge,

“on motion of Respondent, has stayed the proceedings. in’

the Texas ‘case pending determination of the instant cause .

by this Court. | ;

; ~ © ‘ > aL’.

» 4. Petitioner Cannot Properly Raise For the First

Time,in' His Petition For Writ of Certiorari, _

an Issue Not Urged in The Courts Below That .

_: The Dallas Cowboys Football Team Was An

, Endispensable Party to This Action. |

“This i is an action hheniiihie by + a I tes declaratory -

‘_ judgment as to the validity of a contract between Respond-

ent and Petitioner, and to erijoin a violation by Petitioner

of the contract. The Dallas Cowboys Football Club is not

a party to the contract, no adjudication is asked as to any

“of its contractual zights, That Petitioner, Ralph Neely,

| made a subsequent, separate and. distinct contract with the

-. Dallas Footbal Club does not make it a necessary party ‘to

_ this litigation. This third sari ae ‘could not have been served

«

. c

eS 7

with process in the Western District of Oklahoma where,

this action was instituted.

The Court should ‘give no consideration to ‘the fourth

question presented by Petitioner because it was raised for _

the first time in the Supreme Court, and is not a proper

. ground for granting review on certiorari under Rule 19

of the Rules of the Supreme Court.

CONCLUSION |

' The,claimed | conflict between the decision of the Court

of Appeals for the Tenth Circuit and the decision of the

‘Court of Appeals for the Fifth Circuit in New York Foot- |

ball Giants, Inc. v. Los Angeles Chargers Football Club,

inc.; supra, does not exist. The Court of Appeals properly

construed and applied the Texas law pertaining to the

statute of. frauds, Petitioner’s tontentions pertaining to,

indispensable: parties are unfounded and do not raise issues

which are grounds for review by this Court on certiorari.

No special or ‘important reasons exist for review on cer- ~

tiorari by this: Court. Therefore, the Petition for Writ of

Certiorari should be denied. ;

Respectfully submitted, — F

aa ’

Gus ‘RINEHART °

2320 First National Building ee

rs - Oklahoma City, Oklahoma

WILLIAM D. DEANS, JR.

Wiitiam R. EcKHARDT

2005 First City National Bank nay

-- Houston, Texas

a

Attorneys for Respondent “¢g

¢

22. ra

7 UL

Certificate of Service

I hereby certify that a copy of- the foregoing Brief was

miailed to Angus G. Wynne, 2808 Southland Center, Dallas, .

Texas 75201, and to James D. Fellers and J. Howard

Edmondson, 2700 First National Building, Oklahoma City,

Oklahoma 73102, counsel for Petitioner, on or

1966.

™

—@

APPENDIX “A”

Bnited States Court of Appeals

TENTH CIRCUIT

" NO. 8520 - MARCH’ TERM - 1966

- HOUSTON _@1LERS, INC., Appellant, .

et ll |

RALPH-NEELY, Appellee.

Appeal From The United States District Court

For The Western District of Oklahoma

- William R. Eckhardt of the firm of Vinson, Elkins, Weems

& Searls, Houston, Texas, and Gus Rinehart of the firm |

of Rinehart & re, Oklahoma City, ia for - -

Appellant. .

James D. Fellers of the firm of Fellers, Snider, pinta &

McLane, Oklahoma City, Oklahoma, and Thomas J. Mo-

_ roney, Jr., of the firm of Wynne, Jaffe & Tinsley, Dallas,.

Texas, (Angus G. Wynne, Dallas, Texas, and J. Howard

- Edmondson, Oklahoma City, Oklahoma, with them on the

brief) for Appellee. ;

Before PICKETT, HILL and SETH, Circuit Judges.

PICKETT, Circuit Judge. = «|

3 Pad

i

2 | ” Appendix A

Page 2 of Opinion

This appeal concerns the validity of a professional foot-

: ball'contract signed by Ralph Neely, a University of Okla-

homa football player, and Houston Oilers, Inc., a Texas

corporation which owns and operates a professional football _

team in the American Football League: Neely, a high school

athlete of great promise, graduated from the Farmington,

- New Mexico high school in 1961, and found his way to

the University of Oklahoma at Norman, Oklahoma, There

his proficiency in football continued to develop, and in his

senior year he became one of the nation’s outstanding col-

legiate football players. He intended to play professional

football and desired to take full advantage of the financial

benefits arising from the-rapidly growing popularity of

‘professional football and the rivalry. existing between the

_two major professional football: leagues, Upon completion

_ of ‘the regular football schedule at the University of Okla-

hhoma on November 28, 1964, the right to contract for

_ Neely’s services was awarded under a draft"process to the

Houston’ Oilers in the American Football League and to

the Baltimore Colts in the National Football -League.’ On

December 1, 1964, Neely signed American Football League

go Havers Contracts with Houston, each containing .

“no-cut” clause, for the seasons 1965 y sees 1968, and

iat therefor’ a $25,000 bonus check. Thereafter Neely

signed contracts with the Dallas Cowboys of the National

\

1 Under the rules of both leagues, -a club which selects 4 player

in the regular course of the:draft owns the exclusive right to con-

tract for the services of that wee:

&

Appendix A oar

Page 3 of Opinion

Football 3 which had acquired Baltimore’s draft ©

- rights to Neely, and returned the Houston contracts and

the $25,000 bonus check.

Houston thereupon ‘brought this action for a judgment,

declaring its: contract with Neely to, be valid and enforce-

able, and for an injunction-restraining him from playing

professional football with any team: other than Houston.

The trial court, in denying the relief sought, found that

the contract was tainted with fraud and violative of the

Texas Statute of Frauds. We hold that the undisputed facts

in the record disclose a valid and enforceable contract. —

Immediately after the draft on November 28, 1964, both

Baltimore and Houston had set in. motion their contract

machinery to acquire the services of Neely. On that date

~ Neely, while enroute to New York.City to accept honors

* awarded him as an All-American choice and to participate

in the Ed Sullivan television show, discussed his plans with

_ representatives of the Baltimore team and was given a firm

offer to sign a contract. On the same day, Breen, the per-

sonnel director of the Houston team, went to New: York

“for the sole purpose of obtaining. a commitment from

Neely. Neely was accompanied by his father-in-law; Rob-

ert Forte, an Oklahoma City businessman, who participated

~ in all the negotiations as advisor to Neely. In New York

City, Neely advised Breen of the Baltimore offer,’ - but

indicated @hat he preferred to play in the southwest. Neely

2This offer was stated to ‘be a $25,000 bonus and -a four-year ©

contract starting ‘at $16,000 -. — and en to $25,000 for

the fourth year.

-4 aoe Appendix A

| Haid 4 of Opinion

. told — that in any contract negotiations he- wanted to

_ discuss an afrangement. for off-season work. Breen assured

Neely and Forte that such an arrangement could be worked

“out, but only K. S. Adams, Jr., President of the Houston |

_ Club, could discuss such proposals.-For the purpose of con-

tinuing tract discussiorfy, the three traveled to Houston,

arriving Xs on November 30th. At a meeting attended

by Neely, Forte, Adams and Martin,. the club’s General

' Manager, a four-year contract with a “no-cut” clause was

offered to Neely. The offer provided for a $25,000 bonus

and a salary of $16,000 per year. In addition, Adams

agreed to secure employment for Neely with‘a local real

estate firm at a guaranteed annual income of not less than

$5,000. Adams also agreed that an oil company which he -

owned and controlled »would construct a “convéntional

Phillips. 66 Service Station” on a suitable location in Harris

‘County, Texas, at an approximate cost of $30,000 to $60,-

000, amd convey the same to Neely by special warranty

deed, subject to the Phillips 66 lease and a deed of trust.

Neely was impressed with the offer but desired further

time to-consider it..On December 1, 1964; Adams was

advised that the offer was accepted. In the meantime,

‘Neely had conferred with his wife and the owner of the

Baltimore Club. The Standard Players Contracts were then

prepared and executed by the parties,* but were left un-

3 These player contracts are identical to thdse signed by all

A.F.L. players and, in: substance, are the same as those ‘used in

the NFL. | ae r2'

‘us

or

Appendix A oe af 5

Page 5 of Opinion |

dated. The letter agreement for additional employment,

the filling station agreement; and the bonus check were

dated December’ 1; 1964, and executed and delivered on

_ that date, It is stipulated that these instruments constitute

a single transaction. From the beginning of the discussions,

Neely, for tax reasons, had insisted that the bonus money

must be paid in 1964, and further, that the signing of the

contraét and the acceptance of the bonus money be kept secret

to prevent him being declared ineligible to participate in the .

post-season Gator Bowl game on January 2, 1965, to which

the University of Oklahoma had accepted an 6 iatagied

Any rational consideration of the ‘evidence lea

conclusion that all the parties knew that if Neely signed

"a professional football contract and received money there-

for, under the rules of the N.C.A.A. and the Big Eight

Conference, of which the University of Oklahoma was a_

member, he would consequently. become ineligible to com-

_ pete in the post-season game. Neely and Forte were advised

that such a. large sum of money could not be paid without

.a signed contract. It was then agreed that. when the con-

tract was signed, the’ $25,000 bonus check would be made

payable to Forte as Trustee and that all the contract trans-

“actions would’ remain confidential, with no public an-

- <nouncement until ‘after the Gator Bowl game.

é : bs <0

After the contracts were executed, copies were -delivered

‘- Neely, he and Forte returned to Oklahoma. Later that

day Houston’s General Manager inserted. the date “De- .

cember 1, 1964” on. the Standard Players Contracts and

i a copies were filed with the A.F.L. Commissioner.

; to the -_

6 | Appendix A —_

Page 6 of Opinion

Neely testified that he understood the arrangement to mean

that the contracts would not be effective or filed until

after the post-season game. However the contracts provide

in plain language that they shall be valid and binding

immediately upoh execution and that a copy.shall ‘be filed

with the League Commissioner within ten days thereafter.‘

The A.F.L. rules also require the filing of all eer. con-

tracts within 10 days after execution.

a

Immediately upon his return to Oklahoma, Neely was

‘advised that the Dallas Cowboys, another téam in the -

N.E. L., had obtained Baltimore’s draft rights and desired *

- contract discussions with him. Forte made several. trips on

behalf of Neely,. and, unknown to Houston, Neely’s con-

tracts were forwarded to Dallas’ attorneys for examination.

Neely signéd letters dated December 29, 1964, prepared

by attorneys for Dallas, addressed to Houston. and, Adams,

advising that he did not ‘consider himself bound by the

_.contracts and was withdrawing therefrom. The $25,000.

» bonus check was returned. These letters were received by

‘Houston and Adams on December 31st. Oa, that date the

(a . ir

'. 4Each of the Players Contracts contain this provision:

“18. Upon its execution, this contract shall be valid and binding

immediately upon the parties hereto. A copy of this: contract shall

be filed by the club with the ‘Commissioner within fen (10) days

after execution. Within ten (10) days after its filing in: the League

office, the Commissioner ‘shall have the right to terminate this

contract by his disapproval in accordance with and pursuant’ to

the powers: vested in him by the Constitution, and the By-Laws’

of the League. If so terminated, the Commissioner shall promptly

give both parties written notice of such termination and thereupon,

both parties -shall be relieved of aaad respective rights and obliga-

tions -hereunder.” \

ao

‘ Abpendix A ea ye

Page 7 of Opinion

Dallas Club deposited $25,000 to ‘the account of Neely in

a Dallas bank; Prior to any publicity 6f the matter, Neely,

appareatly: sensing trouble after the return of. the Houston

’ - contracts, advised his coach in Jacksonville, Florida, where

the Oklahoma team was preparing for the Gator Bowl

game, of his activities in-regard to the Houston contract.

At about midnight on December 31st, Neely was notified 7

that there had been some publicity concerning his signing -~

with Houston. On January 1, 1965, Neely was ‘advised

that he had been declared ineligible to participate in the

Gator Bowl game. There is no evidence from whickr it can

be inferred that any publicity by Houston brought about

this action. That evening Neely signed a contract to play

with Dallas for the 1965 through 1968 seasons, He played -

_ for Dallas during the 1965 season and will continue to do

so unless enjoined | therefrom.

‘Neely was over the age of 21 years, wit it is eriguleeed

that he had “special, exceptional, unique knowledge,’ skill

arid ability as a football player.”: He was competent #to

enter into a valid contract) to perform these services @x-

clusively for a designated person or organization, and upon

agreeing to so limit his ces, he was subject under Texas —

law, which the parties agree is controlling, to be enjoined

from perfeasting them for anyone else.* Dallas Cowboys

5 The players contracts signed by Neely provide: ;

“5. The Player promises and agrees that during the term of this

contract he will not play football or engage in activities related to

football for any. gther persons, firm, corporation or institution .

except with prior ‘written consent of the Club and Commis-

sioner . so : a Fae

ae ee Appendix A

| * Page 8 of Opinion ube eh aS

Football Club, Inc. v. Harris, Tex., 348 S§W.2d 37; Mission

Independent S@hool Dist. v. Diserens, Tex., 188 S.W.2d 5 68.

.Disagreement over the validity of these contracts dots not

arise out of the provisions contained therein, but from an

_ extrinsic oral understanding that their existence was to be

kept ‘secret until after the post-season game. ‘The essence

- of Neely’s contentions .befote the trial court’ and here is

that -the contracts aré . unenforceable because Houston

falsely ‘represented that the effective date of the agreé-

ment would be January 2, 1965, and that Houston’s filing

_ of the contract copies: with the Commissioner’ was a viola- ’

tion of its promise to keep the matter secret. The trial

court was of the opinion that these alleged misrepresenta-

tions constituted fraud in thé “inducement of the contract

which would subject it to rescission. As has been heretofore .

stated, each contract specifically provides otherwise. Neely

does not say he was so naive that he did ‘not know his

~ eligibility for further inter-collegiate football competition.

would be destroyed -when he signed a professional. football

. ° = 3 e.

contract and received the bonus money.® The record is

ba + _ @

; 6 Neely: testified: “«Q.. -But you’ did know that’ if you took money

for playing football that that would make you ineligible: to play

college football, didn’t you? A. Took money, yes sir.”

In regard to the acceptance of expense money for the trip to

Houston, which is also a Wolation of inter-collegiate rules, he -tes-

tified: “Q. Isn’t it true, Ralph).that you well knew that any time

nx

’ your expenses were paid by a- professional football team, that .

‘ made you ineligible to play football? A..I esac tun it, but I aaa

know. ad

Roe «

’ Ste,

a

Appendix A ore . Vey

Page 9 of Opinion .

" s too clear for oc hy misunderstanding that the purpose of

—— surrounding the execution ‘of the contracts was not

to preserve Neely’s eligibility, but rather to prevent his -

ineligibility from becoming ‘known; .otherwise there was

no need for secrecy. This is illustrated by his later dealings

with Dallas which similarly were not publicized; although

a $25,000 deposit was made to his credit on the 31st. day’ -

of Decembery 1964, thereby permitting him -to report that -

amount. as income for the year 1964 in his income tax

_ return, ‘The acceptance of this mongy.cnded his eligibility.

“2

.. The trial court’s aeniclagions: that Houstos, represented to

Neely that he would remain eligible if the contracts were

kept secret is not supported by. the. record. As has beerr

stated, it is apparent that Neely knew his eligibility. was .

lost the instant he completed the Houston transaction and’

took the bonus money. Furthermore, the o claimed vio-

lation of the secrecy agreement was that Houston filed the

contract ‘with the “League Commissioner. Nothing. issued

‘from ‘the Commissioner’s office occasioned the declaration

of ineligibility. The scheme to mislead Neely’s school, his .

coaches, his team,:and:the Gator Bowl opponents, no doubt |

would ‘have succeeded but for Neely’s own double dealing

with Dallas, resulting in his attempt to fe the Houston

contracts. .While we do not for a’ mofMent condone the’.

ruthless methods employed by professional football teams

in their contest for the services of college football players, ° ’

ed

ee ee Appendix A

Page 10 of Opinion | '

‘intelhig the lavish expenditure of. money,’ it must: be

conceded that there is no legal impediment- to. contracting

_ for the services of athletes at any time, and the above-.

mentioned conduct, while regrettable, does not furnish

athletes with a legal excuse to avoid their’ contracts for ©

reasons other than the temptations of a more attractive

offer. Although there are many dismal indications to the

contrary, athletes, amateur or professional, and those con-

nected with athletics, are bound by their contracts to the

same extent as anyone else, and should not be allowed to

repudiate them at their pleasure.

Fraud has been defined in Texas as “‘the successful em-.

‘ployment of cunning, deception, or artifice to circumvent,

cheat or defraud another to his injury.” International Life

Ins. Co. v. Herbert, Tex., 334 $.W.2d 525, 530. This court

has said that fraud “is never. imputed or presumed and the

court should not sustain findings of fraud upon circum-

' stances which at the most create only suspicion.” -Davis

v. C.LR., 184 F.2d 86, 87. The draft systém in professional

football limited Neely’ s ‘negotiations: intially to Baltimore

7 Thesé methods and their adverse effect upon amateur football

players were described by Judge Skelly. Wright in Detroit Footbail

Company ‘v. Robinsori, 186 F.Supp. 933, 934, where he said:

“This case is but another round in the sordid fight for football

players, a fight which begins before these athletes enter college

and follows them through their professional careers. It is a fight

characterized by deception, double dealing, campus jumping, secret

alumni subsidization, semi-professionalism and professionalism. It

is a fight which has produced as part of its harvest this current

rash of contract jumping suits, It is a fight which so conditions

the minds and hearts of these athletes that one day they can agree

to play football for a stated amount for one group, only to re-

pudiate that agreement the following day or whenever a better

offer comes along.” :

-

Appendix A ee

Page 11 of Opinion —

and Houstong His collegiate football record was such that :

- he and his father-in-law could anticipate that his services

would be in demand and would command a premium

contract. The opportunity presented to Neely would come

but once in his lifetime,: and it is understandable that the

situation would be exploited to the maximum. It was with.

‘this background that Neely negotiated with Houston and

Baltimore. Neely, a bright young man,° ably advised by

-his father-in-law, knew exactly what he wanted. With

commendable foresight, he sought not only a. favorable.

- contract, but also a business arrangement extending beyond

his football days. Houston, through its president, under-

* took to meet this requirement. Neely, after. consulting

’ his wife and father-in-law, and after further discussion

with Baltimore, accepted Houston’s final proposal, which

he characterized as a “fine offer.” Unexpectedly Dallas

arrived on the scene, and Neely found another bidder for

his services. He welcomed this fiew opportunity and ap-_

_ parently plans were set in motion, designed to convince.

- ~ him that he could ignore the existing agreements with

Houston. The first indication that Houston had of Neely’s

dissatisfaction with his arrangement was when the con-

tracts were received in the mail on December. 31, . 1964.

Up to that time there had been no: publicity, and .Neely

was in Jacksonville prepared to play in the January 2nd

game. Representatives of Houston were there to arrange

for the aati of a simulated contract-signing

8 Neely graduated from the College of Business Administration

* at the University of Oklahoma with a double. major in accounting a

and finance.

>

> e ge Appendix A

Page 12 of Opinion

~ ceremony immediately after the game. It was, Neely, not :

* Houston, who disclosd to his coach the facts which

brought about a declaration of his ineligibility. Even then

‘Neely had lost’ his eligibility through his transactions with

Dallas, There is insufficient evidence to sustain a finding _

of material misrepresentation on the part of Houston

amounting to fraud which would affect the validity of

the contracts, It is true that Neely testified that it was

his understanding that the contracts were not to become

effective until after the game on January 2nd. The con-

tracts, hawever, provided otherwise, and we are not at

liberty to rewrite them. Furthermore, the letter of em- \

‘ployment, the filling station arrangement, and the $25,000

bonus check which was delivered-upon the execution of

the contracts; were all dated December 1, 1964.

The erial: ee in dinisina the relief sought, apparently

applied the equitable maxim that “he who comes into

equity must come with clean hands.” This doctrine, funda-

_mental in equity jurisprudence, means that. equity will not

in any manner aid a party whose conduct in relation to

the litigation matter has been unlawful, unconscionable, or

inequitable. See, Garland v. Brown, Tex., 52 F. Supp. 401.

But the doctrine does not exclude all. wrongdoers from a

court of equity nor should it be applied in every case where

the conduct of a party may be considered unconscionable

or inequitable. Office Employees Internat’l Union v. Hous- -

‘ton Lighting & P. Co., Tex., 314 S.W.2d: 315; Kirkland

y. Handrick, Tex., 173 S.W.2d 735. The maxim admits

-Abpendix A : 13

pase 13 of Opinion | ~

. i * 4

of the free exercise ” judicial discretion in the furtherance

of justice. See, Johnson v. Yellow Cab Co., 321 “USS. 383.

While it is not contended here: that Houston did not have ‘

a legal right to sign Neely to a professional player’s con-

tract, it is: urged that when Houston participated in a |

scheme to conceal that fact for the purpose of permitting ,

an ineligible player to participate in a post-season game,

it was such deceit upon others that a court of equity should

"not ‘intervene to assist in the enforcement of the con-

tract: With this argument we cannot agree. ‘It is neither -

_ unlawful nor inequitable for college football players to:

surrender their amateur status and turn professional at

any tithe. Neely was free to bind himself to such a con-

tract on December 1, 1964 as he would have been after

—jJanuary 2, 1965. Nor was Houston under any legal duty

to publicize the contract or to keep it secret. Its agree-

ment to keep secret that which it had a legal right to

-keep secret cannot be considered: inequitable or unconscion-

‘able as those terms are ordinarily used in contract negotia-

tions. Neely relies on the case of New York Football |

Giants v2 Los Angeles Chargers F. Club, Inc., 5 Cir., 291 J

F.2d 471, where, in a somewhat similar situation, the court

- applied the clean hands doctrine. It is quite apparent that.

the player contract in that case was acquired under cir- - .

cumstances much different from those in this case, but if

the rule announced in that case was irttended to apply to

every instance im which a contract is entered into with a

=

~

se ~

a

/

ie si anoying en ee ao

= ) 14 ; i Appendix A

"Page 14 of Opinion

. college football esi bind a post- season’ gamie ii: an

* understanding that it be kept secret to permit that player

_ to. compete’ in the game, then we must Respectfully dis-

agree. with the conclusion. :

' ‘The trial court held that the givice station agreement -

violated the Texas Statute of Frauds, Art. 3995, Revised _ :

Civil Statutes of Texas; as amended; Vernon’s Anno. Texas —

Statutes, Art. 3995, in ‘that it is vague, indefinite, un-

> provides that the service station will be for the sale and

_ distribution: of Phillips *66 products and that Ada Oil

Company will arrange for the construction of a ‘“‘conven-

tional Phillips ’66 Service Station of either Series ER 2000,, mn

_ ARS 201 or DRS 201”, and: be financed-according to the!

plan selected. . It is ‘der: from the unqualified language

_of the instrument that the station site, the’ type of station, -

“and the financing thereof is to be determined by Ada Oil .

_ Company within the limits specified, without ,the necessity

of further agreement.’ Such writing satisfies the Texas

Statute of Frauds. Tiller v, Fields, Tex., 301- S.W.2d 185.

| a REVERSED and - REMANDED with: instructions to:

grant the ¢ injunction.

o.

certain and unenforceable. The letter agreement specifically

id |

pi

. APPENDIX “B”

_ TEXAS REVISED CIVIL STATUTES ~

_ Art. 3995. Writing required.

&N

No action shall be brought in any court in any of the *

following .cases, unless the promise or .agreement ‘upon

which such action shall be brought, or some memorandum.

thereof, shall be in writing and signed by the party to be °

charged therewith or by. some person by him thereunto

lawfully ‘authorized:

e

1. To charge any executor or sdihiniaerdeoe: upon any

" ‘promise to answer any debt or damage due from his testator

Or intesta ape, out of, his.own: estate; or,

- To charge any person. upon a promise to answer for

Ps debr, default or miscarriage of another ; or,

3. To charge any person. ae any agreement made

— consideration of marriage; or,

"4. Upon any contract for’ the sale of ore estate or the

__lease thereof for a | longer term than onie ‘year; or,

Upon any agreement which is not to be performed |

- withia the space of one year from the making. thereof.

° Acts 1840, P. "28; P.D. 3875; GL. vol. 4s P. 202.~

q