Brief in Opposition to Petition for Writ Certiorari — Royal American Industries, Inc. v. Murphy

Supreme Court brief1967

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QUESTION PRESENTED --

TABLE OF CONTENTS

STATEMENT |

THE FACTS

THE PROCEEDINGS IN THE TRIAL

COURT |

‘THE PROCEEDINGS IN THE | ‘DIs-

icra ce COURT OF —

‘THE PROCEEDINGS IN THE SU-

PREME COURT OF. FLORIDA _-._

REASONS FOR DENYING THE’ WRIT —

CONCLUSION

APPENDIX

A federal question which is first raised on

petition for rehearing before a state

court of last resort is not timely raised

and; therefore, does not provide a basis

‘upon which this court may ‘acquire juris-

diction to review a decision of a state -

court,

There is no federal question of substance

in this case.

No public interest will be served ay per-

mitting review of the lower courts’ deci-.

sion: | *

—— _ - : on “1 . - ws

TABLE OF CITATIONS |

Nasa Page

“ \ - CASES

- Fuller v. Dilbert, ia Fs i. 196 (S. _D. N. Y.

1962) \ 7 = } 13

Gilligan, Will & Co. \ = Securities and Exchange

_ Commission, 267 F, 24 461, (2d.Cir. 1959). 18

- Hanson v. Denekla, 857 U.S. 235 (1958) eo, 8

Herndon v. State, 296 U. S. 441 (1985) - 8.

Radio Station wow v. Johnson, 828 U. S: 120 :

(1945) | ‘2.

Sitidaies & State, 116 U. S. 54 (1885) __. _ 8

Whitney v State, 274 U. 8. 367 (1927)

STATUTES

Securities Act of 1938, as amended, Sections cited—

15 USC. § 774 (1) oe

15 U.S.C. § T7e — ' | co, ae ee

- SUPREME COURT OF THE

UNITED STATES

' October Term, 1967

Saag eee E ) No. 566

ROYAL AMERICAN INDUSTRIES, INC. and

JOHN D. MacARTHUR, fan

Petitioners, —

DOLORES K. MURPHY, et al.,

Respondents.

On Petition for a Writ of Certiorari To the District Court

of Appeal of the State of Florida, Fourth District -

Pais

BRIEF FOR RESPONDENTS IN OPPOSITION: _

_ QUESTION PRESENTED

Whether sufficient reason exists for this Court to

_ review a decision of a state intermediate appellate court,”

which rested upon the. construction of a contract, when

the purported federal question urged as a predicate for

this Court’s jurisdiction was first raised ‘below on peti-

tion for sree before the state court of last resort.

EE LES AO LS A INE

4 . ‘ ’ . eemenuateenienen

. - ‘ .

- ° - . - * .

'. STATEMENT

Petitioners’ statement is argumentative, incomplete

and in —— respects inaccurate and misleading. .

A ‘THE FACTS ;

ar Respondents were the controlling stockholders of the

Fort Pierce Port & Terminal Co. Petitioner John A.-Mac-

. Arthur was. president and a substantial stockholder of

Petitioner Royal American Industries, Inc.

_ On August 1, 1962, Royal American, MacArthur,

Terminal Co, and Respondents entered into a written

agreement ‘whereby. Respondents agreed to exchange

1,293,980 shares of their Terminal Co. stock on a basis

‘of three shares of Terminal Co. for one share of Royal to |

American stock. (R. Vol. I, pp. 60-67).' , |

This Agreement contained the following provisions:

.(4) That ROYAL AMERICAN further agrees

that it will cause the stock to be transferred

to said STOCKHOLDERS to be registered

with the American Stock Exchange. with-

out reservation or restriction in order that

-gaid stock may be freely: exchanged or

_ traded thereon. ROYAL AMERICAN.

further agrees that if it becomes neces-

sary it will register or cause to be regis-

inte tesa ieimaneune: 4

Court at the October Term, 1967, and “A” to refer to the Appendix

. Of this brief of Respondents. == os) vs

tered said stock with the Securities

Exchange Commission and such other gov-

ernmental agency as\ may be required.

‘ROYAL AMERICAN further agrees that

if it is unable to procure such registration

as is required in accordance with the terms

of this agreement it will ‘pay to the said

STOCKHOLDERS the sum \of $2.50 per

share of ROYAL AMERICAN stock called

for under the terms of this agreement.

(5) ROYAL AMERICAN further | ‘agrees to

‘proceed with the registration within sixty

days from date of the closing of this trans-

action, and to proceed with such registra-

. tion continuously and diligently. ROYAL

AMERICAN further agrees that if said

registration is not completed within. six

‘months from the date of the closing of this

transattion it will pay to the STOCK- -

HOLDERS the sum of $2.50 for _ share

of ROYAL AMERICAN stock. .

(R. Vol. I, oh 61).

| At the closing on November 7, 1962, the certificates

of Royal American stock which were delivered to Re-

spondents bore a restrictive legend to the effect’ that the

shares -had been acquired for investment, had not been

registered under the Securities Act of 1933, and could

not be transferred in the absence of an effective registra-

tion statement under that act. (R. Vol. I, p. 8).

is Also, at* the closing each respondent signed a receipt

commonly referred to as an investment letter which, in

. addition to referring to the - agreement and the particu-

lar securities being exchanged, contained the following

ppt soe

This will acknowledge that’ I have represented -

to and agreed with you that I am purchasing

such shares for investment with no present inten-

tion of selling or otherwise disposing of same, |

subject only to my rights under such Agreement

and Addendum. (R. Vol. I, pp. 53-58; A. 19).

The Royal American stock was not registered’ with

the American Stock Exchange or the Securities and Ex-

change Commission within six months so as to become

freely exchangable or tradeable on the American Stock

Exchange. (R. Vol. I, pp. 105-108; Petition, Appendix B,

p. ani

‘The Respondents thereupon made isiiinnde upon

Royal American and MacArthur to comply with the

'. agreement and to buy back their Royal American stock

at $2.50 per share. Royal American and MacArthur re-

"fused to comply with the demands and Ge litigation

ensued.

». THE PROCEEDINGS IN THE TRIAL COURT .

é This eee was instituted by the filing of a Com-

"* , plaint in the Circuit Court for Palm Beach County, Flor-

ida, by Royal American.’ (R.. Vol. I, pp. 1-22). The Re-

spondents filed responsive pleadings seeking specific

performance of paragraph 4, 5 and 23 of the a

-(R. Vol: I, pp. 23-47).

“2All emphasis is ours unless otherwise indicated.

. « ‘ * ‘ ery

Oe ee ee ee ee eee ae a nee ll oe ee

. At a pretrial conference the parties entered into a

Stipulation whereby Royal American withdrew its Com-

plaint and the litigation proceeded on the Counterclaim of

_ the Respondents. Thereafter, the Respondents were re-

- ferred to as plaintiffs and the Petitioners were referred

to as defendants. (R. Vol. 11, p. 3).

A further stipulation arrived. at during the pretrial

conference. resulted in a delineation of the issues upon

which the action was to be tried. (R. Vol. II, p. 6-8). More

specifically, the Petitioners’ attorney, Mr. Pruitt, stipu-

lated. these issues to be:

MR. PRUITT: Yea, I said broadly toned, I

think it is better to just tear it down to the —

say that the issues on behalf of them, that we

failed to comply with the contract, and we are

talking about paragraphs four and five of the

contract. We failed to comply.

MR. GOLDMAN: Plus 23, which is MacAr-

‘ thur as guarantor.

MR. PRUITT: Four, five and 23. We failed to

‘comply with those provisions of the contract. Our

answer thereto is we complied, number one.

Number two, is that there was misrepresentation

- in inducing us to enter into paragraphs four,

: five and 23; that they hindered or prevented us

- from complying with paragraphs four, five and

23 and/or that they waived any rights that they

might have had under four, five and 23. a.

Vol Il, pp. 6-7). |

The matter was then tried on the stipulated issues.

The trial court found that Royal American had not com-

plied with the agreement and would be liable, under para-

graph (5) of the agreement, to repurchase the shares, but |

for the fact that said contract was modified in writing

at the closing by the investment letters. (R. Vol. I, pp.

105-108; pp. 53-59). Significantly, the Final Decree was

devoid of any reference to federal law. The decision was

based only upon the Chancellors’ construction of the con-

tract and the appmeation of principles of contract law.

C. THE PROCEEDINGS IN THE DISTRICT. .

COURT OF APPEAL

_ The-Respondents thereupon appealed the Final Decree

‘to the District Court of Appeal of Florida, Fourte Dis-

trict.

In their appeal, the Respondents urged that the Trial

Court had correctly construed the agreement but had erred

in its finding that the agreement had been modified at

the closing. (R. Vol. I, pp. 111-113; A. 14-15). The

Petitioners attempted to sustain the. Trial Court’s finding

-. upon the sole ground that the evidence supported the de-

. eree. Again, as shown by Petitioners’ Brief to that Court,

they made no reference to federal law..(A. 11-13).

In its opinion, the District Court of Appeal held that

_ the, agreement had. not been modified at the closing, and,

_further, that there was no evidence in the record to sustain

the Petitioners’ affirmative defenses of waiver and estop-

pel. As the Court’s opinion reflects, its decision was based

entirely upon applicable Florida law and did not involve

_ any purported federal question or issue.

¢ .

Accordingly, the District Court of Appeal reversed

the Trial Court with directions that a decree be entered

requiring Royal American, and upon its failure to per-

form, John D. MacArthur, to purchase- the stock from

the Respondents at a price of $2.50 per share. (R. Vol.

IV, p. 4; Petition, Appendix B, p. 23). ie

A Petition for Rehearing before the District Court

of Appeal by Royal American and MacArthur was de-

nied without opinion. (R. Vol. IV; A. 8).

D. THE PROCEEDINGS BEFORE THE SU-

' PREME COURT OF FLORIDA

The Petitioners then made application to the Florida

Supreme Court for a writ of certiorari to the Florida

Fourth District Court of Appeal urging that the lower

Court’s decision was ‘in conflict with a decision of an-

other District Court of Appeal or of the Florida Supreme

Court. Again, the Petitioners. did not urge federal law. |

To the contrary, the Petitioners expressly recognized in °

their Brief that the District Court of Appeal had ruled

on all three of their defenses, to-wit: modification, estop-

pel and waiver. (A. 10).

The Florida Supreme Court denied the Petition

stating that it was without jurisdiction. (R. Vol. IV, p. 7;

' A. 2). Petitioners then made application to the Florida

Supreme Court for rehearing. As a last resort, they in-

cluded in their Petition an argument that to require Peti-

__ tioners to buy back their own stock, pursuant to the terms

- of the agreement, would necessarily constitute a viola-

tion of the Securities Act of 1933.

The Florida Supreme Court. denied the Petition for

__ Rehearing without opinion. (R. Vol. IV, p. 8; A. 1). .

REASONS FOR DENYING THE WRIT

1, A FEDERAL QUESTION WHICH IS

FIRST RAISED ON PETITION FOR RE-

HEARING BEFORE A STATE COURT

OF LAST RESORT IS NOT TIMELY -

- RAISED AND, THEREFORE, DOES NOT

PROVIDE A BASIS UPON WHICH THIS

COURT MAY ACQUIRE JURISDICTION

TO REVIEW A DECISION OF A STATE

COURT.

A long settled principle to. which the Supreme Court.

of the United States has rigidly. adhered is that it has no

jurisdiction to review a judgment of a state court unless

_ it ‘affirmatively appears on the face of the record that a

federal question constituting an appropriate ground for

such review was presented in and expressly or necessarily

decided by the state court. Whitney v. State, 274 U. S.

357, 860 (1927) ; see also Simmerman v. State, 116 U. S.

54 (1885). Accordingly, it has been held’ on numerous

occasions that when a federal question is first raised on .

-- a motion for rehearing before.a state court of last resort

and that court denies the motion without opinion, then

' it is not seasonably raised ‘and there is no basis for re-

‘view by the Supreme Court. of the United States. See, e.g.,

‘Hanson v.-Denckla, 357 U. S. 235, 243-244 (1958) ; Radio

; ‘Station. WOW v. Johnson, 8326 U. S. 120, 128-29 (1945) ;

-and Herndon v. State, 295 U. S. 441, 443 (1935).

. The case at bar falls squarely within these time-

nero

settled rules. The record clearly reflects that no federal

question of substance was properly raised at any stage

of the proceedings in the lower Courts. At the trial level,

this is demonstrated by the stipulation of the parties at —

the pretrial conference concerning the issues to be tried.

(R. Vol. II, pp. 6-8).- These issues were restated by the

Chancellor in his Final Decree as follows: -

“The plaintiffs bring ‘suit for specific perform-

ance of contract and the defendants rely upon

the general denial and affirmative pleas of

waiver and estoppel.” (R. Vol. I; pp. 105-106 ;

_ Petition, Appendix B, p. 25).

Further, the Chancellor’s findings and Final Decree show

that a federal question was not raised or considered. The

decree was based solely on a construction of the agree-

ment and the various other documents.

‘The only real question presented to the District

Court of Appeal was -whether the Trial Court erred in

concluding that the agreement had been modified at the -

closing by the execution of the investment letter. (R. Vol.

I, p. 108; Petition, Appendix B, pp. 26-27). The holding

_ of the District Court was limited to the resolution of that

question in favor of Respondents, with the exception that

the District Court: also concluded that an estoppel had-

not arisen by the execution of the letters and that the

same did ‘not constitute a waiver. (R. Vol. IV, pp. 4-5;

Petition, Appendix B, pp. 22-23). Moreover, the Peti-

tioners, in their Brief to that Court, defined the issué

before the Court as heing:

“Was there competent substantial evidence be-

fore the trial .court to support the legal conclu-

sion reached in the Final Decree.” (A. 13).

Further, the Petitioners did not cite one federal ae

in their Brief to that Court. (A. 11-12). Clearly, then,

- there is no indication that a federal question of substance

was either properly presented to or ruled upon by the

Fourth District Court of Appeal of Florida.

; It is also: evident that no federal question was pre-

sented to the Florida Supreme Court by the Petition for

Writ of Certiorari sought by Petitioners in that “Court.

This is clearly evinced by reference to Petitioners’ Brief

filed in support of their petition to that Court: As in their

Brief to the District Court of Appeal, Petitioners’ Points

on Appeal did’ not allude to the existence of a federal

- question, nor did‘ they cite a single federal authority to

‘ support the position which they 1 now ctrenuousty main-

tain. (A. 5-10).

In their Petition for Rehearing before the Florida

Supreme Court, the Petitioners requested the Court to

consider the points which they had urged in their pre-

vious petition and finally attempted to raise the existence

of a federal question. The Florida Supreme Court denied

’ the Petition for Rehearing without opinion.: (R. Vol. avs |

p. 8; A. 1).

It is ied: therefore, that i in the case at ber; the pur-

ported federal question now urged by Petitioners was

neither timely raised, presented to or ruled upon by the

Florida Courts. This explains why the Petitioners have

failed to comply with this Court’s Rule 23(1)(f) which

reads: ‘ we |

: | oil ay

“If review of the judgment of a-state court is

sought, the statement of the case shall also spe- °

cify the stage in the proceedings in the court of

first instance and in the appellate court, at

* which, and the manner in which, the federal

questions sought to be. reviewed were rais&; -

the method of raising them (e.g., by a pleading,

., by request to charge and exceptions, by assign-

ment of error); and ‘the way in which they were

passed upon by the court . . . as will show that

the federal question was timely and properly

‘ raised so as to give this court jurisdiction to re-

view the judgment on writ of certiorari.”

This also explains why the Petitiorl€rs, in an effort

to sustain the jurisdiction of this Cou®t, are forced to

rely upon a footnote reference to their memorandum to

the. Trial Court (Petition, p. 7, n. 5), a document de-

_ hors the record and not submitted to the Trial Court until

after the issues had been framéd and tried.

The purported federal question relied upon by the

Petitioners has been raised. too late, andthe Petition

_- should be denied for that reason alone.

2, THERE IS NO FEDERAL QUESTION OF . .

SUBSTANCE IN THIS CASE. :

_ Section 5 of the Securities Act of 1933 makes it un-

lawful for anyone, by any interstate communication or

use of the mails, to sell or deliver any security unless a

registration statement is in effect, (15 U.S.C. § 77 e). Sec-

‘tion 4(2) of that Act exempts from Section 5 trans- -

actions by any person other than an issuer, underwriter

or dealer and transactions by an issuer not involving a.

public offering—the so called “private offering: exemp-

tion.” [15 U.S.C. § 77d(1)].

In the case at bar, the-trial court found that invest-. -

ment letters had been executed at the closing by the Re-

spondents at the request of Petitioners. (R. Vol. I, pp.

106-107). The investment letters recited, after deserib- |

ing the Agreement, as follows: | 7

| This will acknowledge .that I have represented

to and agreed with you that I am purchasing

such shares for investment with no present in-

tention of disposing of same, subject only to my

: rights under such Agreement and Addendum.

(R. Vol. I, pp. 58-58; A. 19). ake | :

Despite this language of the agreement anni the

parties expressly recognized that the Petitioners ‘would

be obliged to buy back the. Royal American stovk if it

. were not registered within six months, the Petition herein

seeks to create the impression that the Petitioners were |

somehow deprived of their “federal right to rely upon

‘investment. letters executed by the purchasers of such

securities at the time of sale * * * .” (Petition, p. 2).

The plain fact of the matter is that the: Florida state

courts merely enforced the terms of the eat b and .

: slic sitinition: sides envtiten > tea neni dogs oh On

ee iin kamen dadives G provisions contained in_

15 of the Agreement, which were as follows: .

tis Any agreements to be ormed by either of the |

assem Chee ipa set forth in. this shall survive |

transfer of do By Ii aw ytd All parties shall be re- |

on: of the pa..e |

(RV

QQ 13

of the investment letters ‘themselves. The Petitioners

were not misled; they agreed to buy back tlie stock.

Moreover, by requiring Petitioner Royal American,

the issuer, or, upon its failure to do so, Petitioner Mac-

Arthur, the guarantor, to reacquire the stock, the decision

of the District. Court of Appeal neither imputed to the

parties an intent to violate the Securities Act, nor = it

conflict with existing federal policy. ,

The principal and essential purpose of the Securities

Act is to protect innocent p asers by requiring regis- .

tration with the Securities and Exchange Commission of

certain information concerning securities offered for sale.

Gilligan, Will & Co. v. Securities and Exchange:Commis- —

sion, 267 F. 2d 461, 463 (2d Cir. 1959) ; Fuller v. Dilbert,

244 F. Supp. 196, 213 (S. D. N. Y. 1962). Here, innocent

purchasers are not enda by enforcing the contract

pursuant to the maridate the District Court of Appeal.

The stock is to be by the issuer, or, upon its

- failure, then by the guarantor, MacArthur. Thus, the

effect of the lower courts’ holding is nothirig more than

the enforcement of an arms length agreement between the

parties. Clearly, the purpose of the Act can not be trans-

gressed by réacquisition. by the issuer or his guarantor.

Such reacquisition can hardly be considered a public of-

fering or further distribution in view of the plain import

of the Act’s purpose. ,

. Furthermore, it is difficult to conceive how the ruling

of the lower court can be construed as imputing to the

parties an intent to violate the Securities Act, a conten- |

tion which has strenuously been urged by Petitioners

. in their Petition to this Court. The only conceivable

14:

manner in which such an effect can be imputed is if re-

acquisition by the issuer may be held to be a further dis-

tribution of the: stock. ‘However, a- construction of the

Securities Act to that effect would be incongruous. It is -

not the issuer which the Act protects, but rather the in-

nocent’ and uninformed purchaser. An issuer, or a'major

stockholder, can hardly be considered synonymous with

an- innocent purchaser, victgioed in the circumstances of

- this case.

itd Gictters, submitted that this case pate no

7 federal question of substance.

8 NO PUBLIC INTEREST WILL. BE

. SERVED BY PERMITTING REVIEW

_ OF THE LOWER COURT'S DECISION.

|The decision below turns upon its own facts and will

3 affect no one but the litigants. It is based upon the con-

- struction, pursuant to applicable Florida law, of an arms

eee mat transaction between the parties.

Also, the effect of the decision is to secure to the

Respondents their rights under the agreement as con- ©

. templated by both Petitioners and Respondents. This is

reflected in the record by an opinion letter written shortly

before the closing to Petitioner Royal American by its

own securities expert, the New York law firm of Simpson,

Thacher & Bartlett. , The a portions of this letter

are as. follows: |

ithe: helideeeiinssolths tacgaat:te tide uigmnction,

_ based on information supplied to us by repre-

oi a age clams “fo

The Compariy proposes to issue 438,401 shares of

its. Common Stock to six stockholders of : Fort

Pierce Port & Terminal Co. (FORT PIERCE) -

dn exchange for the 1,293,980 shares of FORT

'. _. PIERCE ‘stock owned by those stockholders. ‘The

Company has agreed to provide financing ar- —

rangements with respect to the payment of ~

$383,371 of FORT PIERCE liabilities and has"

advanced the’sum of $74,000 against these lia-

bilities. and an additional . $25,000 of working ;

capital. The stock of the Company will be isgued |

on a “restricted basis” for investment and the

“Company has agreed to proceed with the regis-

‘tration of the stock of the Company within.

sixty days after the closing of the transaction. If

such registration is not effected within six

months after the closing, the six stockholders

havea right to demand redemption of the stock

of the Company at $2.50 pér. share. The FORT

PIERCE stock is presently held in escrow. (R.

Vol. I, pp. 99-100; A: 16-18).

It is thus apparent from this letter that the Peti-

tioners’ concept of this transaction was identical with

that of the Respondents and the District Court of Appeal.

It is also apparent that, at the closing, Petitioners were

‘ fully aware that notwithstanding the investment letter,

they- would be required under the Agreement to register

the stock within six months or to repurchase the shares

upon demand. ;

7 We respectfully submit that it is not in the public

“interest to permit Petitioners to evade their contractual

commitment on a legal theory which directly conflicts . -

with the understanding of all parties concerned as formu-

lated by. the formal opinion letter rendered by Petitioners’ —

own expert counsel ecg to the consummation of the trans-

action. |

CON CLUSION ;

‘ Dee the Sian reasons, "Respondents respectfully

request. that this. Petition be denied. —

Resyecttahy submitted,

PHILLIP GOLDMAN

1414 First National Bank

Building

‘Miami, Florida.

Attorney for Respondents

Of Counsel: ENGLISH, McCAUGHAN

O'CONNELL AND. _— AND O’BRYAN.

COOPER. | 800 First Federal Building

' 615 Harvey Building, Fort Lauderdale, Florida .

West Palm Beach, Florida j

SCOTT, McCARTHY,

JONES, ADAMS, PAINE ~— STEEL, HECTOR AND

& FOSTER DAVIS |

601 Flagler Drive Court 1414 First National oo:

West Palm Beach, Florida Building —

. Miami, Florida

° 7 |

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— P00 LR OL IVOCL.” HE FALE OL PALL EL GOUT

Hy : eee es ee ee aot ee Be Eset | LBM oo ie

od ow. aigEE hist Cari “i ; Sane ee oe Denial of Petition for Rehearing by Supreme Z

| 2a ee esa eis at ; .. ? \ Court of it . io ee

i es ; Ae wae, raver, a e , | arta 2. Denial of Petition for. Writ of Certiorari by

(Lee oe ee oe. A eatin S| | Supreme Court of Florida | , AZ

a Denial of Petition. So Rehincion by. District

Court of Appeal of Florida, ae Dis- Pie

trict eee A.3

| 4, - Excerpts from Petitioners’ I Brief 4 before the Su-

preme Court of Florida

A. Citation of Authorities 2 ae

B. Points Involved ait : ye aes

C. Excerpt from Statement of the Case A. 10 4

_____ 5, Excerpts: from Petitioners’ Brief before the

ia _ + District Court of- Agpent of Florida,

Fourth District . |

A. Table of Citations’. . A. 11

B. Points Involved on Appeal < he

6. Respondents’ Assignments of Error filed in the

Circuit Court of Fifteenth Judicial Cir-

cuit of Florida, in and for Palm 2c,

— | A.14 |

7. Opinion Letter from) Simpson, Thacher &

' Bartlett to Royal, a Industries, “

~ aint ae iin AL19°

£ e wm 4 df

a : ° fj } : .

APPENDIX. Pct

1. Denial of Petition for Rehearing by Supreme Court

: of Florida PEAS Sas

IN THE SUPREME COURT OF FLORIDA _ i

-. JANUARY TERM A.D. 1967

THURSDAY, JUNE 8, 1967

= NO. -_

ROYAL AMERICAN: INDUSTRIES, INC., ET AL,

- Petitioners _

DOLORES K. MUEPHY, ET A,

" Rempendonte ,

On consideration of the Petition for Rehearing filed

by Attorneys for shar meen "

_ IT IS ORDERED by the Court that said petition: be,

and the same is s hereby, denied.

A TRUE COPY :

TEST:

SID J. WHITE

Clerk Supreme Court

2 Denial of Petition for Writ of Certiorari by Supreme

Court of Florida: f

‘IN THE SUPREME COURT OF FLORIDA |

ae JANUARY TERM, A.D. 1967 . .

"WEDNESDAY, MARCH 29, 1967

: _ CASE NO. 35,723 ' .

_ DISTRICT COURT OF APPEAL,

Ly Ree en Fourth District | '

ROYAL AMERICAN INDUSTRIES, INC., et, al.,

Petitioners,

V8: .

_ DOLORES K. MURPHY: et al.,

Respondents.

: This cause having ketetotere Some: submitted to the

- Court on Petition for Writ of Certiorari, jurisdictional

briefs and portions of the record deemed necessary to

reflect jurisdiction under Florida Appellate Rule 4.5. (6), .

and it appearing to the Court that it is without jurisdic-

tion, it is ordered that the Petition for Writ of Certiorari

ae be and the same is hereby denied.

- THORNAL, C.J., and THOMAS and CALDWELL,

JJ., and TAYLOR and WILLIS, Cireuit Judges, concur

_ ROBERTS, J., and McCORD, Circuit: Judge, dissent

a A TRUE COPY ay

: a eit

sD J. WHITE 3

Clerk Supreme Court.

Oe eae

3 Denil of Petition for Rehearing by Distret Court of

Appeal of Florida, Fourth District ed cate “ae

IN Lt DISTRICT COURT OF APPEAL OF THE

STATE OF FLORIDA, FOURTH. DISTRICT. hee

JULY TERM, 1966 ee :

CARE’ Ro. 178

DOLORES K. MURPHY, JOHN E. MURPHY, ~

_ ‘HAROLD L. LANE and C. C. CALLAWAY —.

as Co-Executors under the Last Will and Testament:

: of M. E. — et al.,

Appellant, ‘

"We

- a ROYAL islets INDUSTRIES, INC.

sig and JOHN D. MacARTHUR, © |

Appellees. a

24 August 1966. ee

Ages ORDERED that appellees’ eed for staat

' filed 10 August 1966 is now + —. )

A TRUE COPY ,

THOMAS acm eencre lh

- CLERK |

‘ce: Jones Adams Paine & Foster > ‘ see ee

O’Connell & Cooper - ; ete ee

English McCaughan & O'Bryan

Seqtt McCarthy Preston & Steel

Burns Middleton Rogers & Farrell

aia

4, Excerpts from Petitioners’ Brief before the Supreme

Court of Florida

A. CITATION OF ena’:

Cases

$2 So. 2d 870 (Fla. 1955)

-Ansin y. Thurston,

101 So. 2d 808 (Fla. 1958) >

Carolina Lamber Co. v. Daniel,

97 So. 2d 156 (1st DCA Fla. 1957) *

Cutri einer a Inc. v. Pan American

Bank of Miami,

115 So. 2d 592 (2d DCA Fla. 1959)

Enstrom v. Dunning,

136 Fla, 258, 186 So. 806 (1939)

First-Atlantic National Bank of Daytona’

Beach v. Cobbett,

Gunby v. Drew,

18, 15, 16, 18

45 Fla. 350, 34 So. 305 (1903)

Johnston v. Johnston, ;

122 Fla, 372, 165 So. 698 (1986) -

Macina v. Magurno, 7

100 7. 2d 868 (Fla. 1958) ..

36, 41

27, 28, 36, 38

Mangus v. Present,

135 So. 2d 417 (Fla..1961) ....... 18, 20, 21

Masser v. London Operating Co., | |

106 Fla. 474, 145 So. 72 (1982) ......... 27, 29

McBurnette v. Playground Equipment Corp.

137 So. 2d 563 (Fla. 1962) ' 18, 25, 28

-McEwen v. Schenck, |

108 Fla. 119, 146 So. 839 (1983) 7 36, 38, 39

_ Perry v. Perry, | i.

97 So. 2d 152. (3d DCA Fila. 1957) | 30, 34

Pinkerton-Hays Lumber Co. v. Pope, -

127, So. 2d 441 (Fla. 1961) .......... ead —. 18, B

Robinson v. Hyer, Crna set | |

85 Fla. 544, 17°So. 745 (1895): 13, 15, 16, 18

Salter v. Knowles, . a

97 So. 2d 188 (2d DCA Fia. 1957) 3 -.. 00, 38

Spann v. Baltzell, |

1 Fla. 301 (1847) 3 sis 13, 18

Steen v. Scott, .

144 Fla. 702, 198 So. 489 (1940) “eensuns LBy 2A

Story v. First National Bank & Trust Co... haat

108 Fla. 399, 189 So. 179 (1981) 36, 39, 40

Tampa Northern R. Co. v. City of Tampa, Es

_ 104 Fla. 481, 140 So. 311, 141 So. 298 (1982) .18, 21.

Treasure, Inc. v. White Star. Realty Co.,

101 So. 2d 866 (Fla. 1958) , 30, 34:

Withlacoochee River Electric Cooperative,

Ine. v. Tampa Electric Co.,

158 So. 2d 136 (Fla. 1963) lao 35.

a eponeanioanty ee en

B. POINTS INVOLVED

POINT I.

; THE DECISION OF THE DISTRICT COURT

_ OF APPEAL, FOURTH DISTRICT, IS IN DI--

RECT CONFLICT WITH THE FOLLOWING

PRIOR DECISIONS OF THE SUPREME

.COURT OF FLORIDA’ REGARDING THE.

LEGAL DEFINITION OF “CONSIDERA-

TION”: MANGUS v. PRESENT, 135 So. 2d

- 417 (Fla. 1961) ; TAMPA NORTHERN R. CO. v.

CITY OF TAMPA, 104 Fla. 481, 140 So. 311, 141.

So. 298 (1932); GUNBY v. DREW, 45 Fla. 350,

_ 84 So. 305 (1908) ; ROBINSON v. HYER, 35 Fla.

544, 17 So. 745 (1895) ; SPANN v. miceacueae

1 Fla. 301 (1847). ie :

(The conflict with these decisions arises from

the District Court’s holding that there was no

consideration to support the change or modifi-

cation of the contract when in fact the neces-

- sary elements of consideration were present to

meet the requirements of these cases.)

POINT I

THE DECISION OF THE DISTRICT COURT

OF APPEAL, FOURTH DISTRICT, IS IN DI-.

RECT CONFLICT WITH THE FOLLOWING

PRIOR DECISIONS OF THE SUPREME

. COURT OF FLORIDA REGARDING THE ES- _

SENTIAL ELEMENTS OF “ESTOPPEL”:

STEEN v. SCOTT, 144 Fla. 702, 198 So. 489.

(1940) ; ENSTROM v. DON MING, 136 Fila. 258,

186 So. 806 (1939). :

ASB

(The conflict here arises in two respects, i. @.,.

the District Court’s determination-.that Plain-

tiffs were not estopped because they received no

benefit, and secondly that the case cited as the

. controlling precedent by the District Court does

not stand’ for the principle of law. attributed

to oa ,

POINT Ill

_. THE DECISION OF THE DISTRICT COURT —

OF APPEAL, FOURTH DISTRICT, IS IN DI-

RECT CONFLICT WITH THE FOLLOWING

PRIOR DECISIONS OF THE SUPREME —

COURT OF FLORIDA REGARDING PROOF

OF “WAIVER”: MACINA v. MAGURNO, 100

So. 2d 369 (Fla. 1958), and MASSER v. LONDON

: ene co., 106 Fla. 474, 145 So. 72 (1982).

(The conflict arises heré in two respite, i i. e., the

showing of an intentional relinquishment of a”

known right does not have to be express, as

held by the District Court, but may be inferred

from conduct or acts putting one off his guard

and leading him to believe that a right has been

‘waived; and secondly, the case cited as con-

trolling precedent by the District Court does

not stand for the principle of law attributed to

g.) ...

POINT IV-

THE DISTRICT COURT OF APPEAL,

FOURTH DISTRICT, ABANDONED ITS

PROPER APPELLATE FUNCTIONS BY RE-

WEIGHING AND RE-EVALUATING THE

EVIDENCE, IN DIRECT CONFLICT WITH

THE FOLLOWING PRIOR DECISIONS OF

THE SUPREME COURT AND OTHER DIS-

-TRICT COURTS OF APPEAL: TREASURE,

. INC. v. WHITE, STAR REALTY CO,, 101 So. 2d

~ 866 (Fla. 1958) ; FIRST ATLANTIC NATIONAL

BANK OF DAYTONA BEACH v. COBBETT,

’ 82 So. 2d 870 (Fla. 1955); CUTRI ENTER-

PRISES, INC. v. PAN AMERICAN BANK OF

MIAMI, 115 So. 2d 592 (24 DCA Fla. 1959);

CAROLINA LUMBER CO. v. DANIEL, 97 So.

_ 2d 156 (1st DCA Fla. 1957); PERRY v. PERRY,

97 So. 2d 152 (3d DCA Fla. 1957); SALTER v.

KNOWLES, 97 So. 2d 138 (2d DCA Fla. 1957).

.(The- conflict arises here because the District

Court of Appeal made its own independent find-

ings of fact and substituted its judgment for

that of the Chancellor, rather than confining its

review to a determination of whether the de-

cision of the Chancellor was supported by com-

petent substantial evidence, as required by the

. law of Florida and rules of this Court.)

POINT V

THE DECISION OF THE DISTRICT COURT

OF APPEAL, FOURTH DISTRICT, PRECLUD-

ING THE CHANCELLOR FROM RULING ON’

DEFENSES RAISED AT THE TRIAL BUT

NOT DECIDED BY THE TRIAL COURT, IS

essen umes eases amaaaaaaaamaaaaaaaacaamaamcamaasacammmmmaamaaaaaa

A110 -

IN DIRECT CONFLICT WITH THE FOLLOW- -

ING PRIOR DECISIONS OF THE SUPREME \ ~~

— "MACINA v. MAGURNO,-100 So. 2d \ ,

369 (Fla. 1958); JOHNSTON v. JOHNSTON, °

122 Fla. 372, 165 So. 698 (1986); McEWEN v.

SCHENCK, 108 Fla. 119, 146 So. 889 (1938);

. STORY v. FIRST NATIONAL BANK & TRUST _

CO., 108 Fla. 399, 189:So. 179 (1981).

_ (The conflict arises here in that the defenses of

‘waiver and estoppel were never decided by the

trial court, yet the District Court directed the

‘trial court to enter judgment for Respondents,

thereby precluding the trial court from passing |

on these defenses, contrary to the law of Florida A on

‘ and rules of this Court.) |

—

C. EXCERPT FROM STATEMENT OF THE CASE

_In its decision, the District Court ruled on all three - :

of Petitioners’ defenses as follows: . 7

_(1) There was no consideration to support the

modification of the contract; (A 6-7) -

(2) There was no estoppel in that, Plaintiffs (Re-_. :

spondents) received no benefit from the signing ~

of the investment letters; (A 7) :

(8) There was no waiver in: that there was no ,

' .. showing of an intentional relinquishment of a

known right. (A 7)

Paes

en an’

_——~ 5, Excerpts from Petitioners’ Brief before the District

| Court of Appeal of Florida, Fourth District aya

A.’ TABLE OF CITATIONS

‘TEXTS

fe Page

56 Am Jur, Waiver, $16 i Ss ee

_ 2 Fla Jur, Appeals, $297 | sab gt

2 Fla Jur, Appeals, §314

| 2 Fla Jur, Appeals, §316 | | eae We a .

2 Fla Jur, Appeals, $346 a : ae 4

2 Fla Jur, Appeals, §847. 36.

12 Fla Jur, Estoppel and Waiver, §2. - 7

12 Fla Jur, Estoppel and Waiver, $5 68

12 Fla Jur, Estoppel and Waiver, $8 | 7

A. 12

CASES

Delabee Deter: Dies +: Brown (1936) 124 Fla. 47, 3

168.S0. 625 | : a?

First, Atlantic Bank v. Cobbett(1955 Fla.) 82 So.

2d 870 | 4

: Gilman v. Butzlott(1945) 155 Fila. 888, 22 So.2d 263 6,7.

Gulf vomes Ins. Co: v. Green (1955 Fla.) 30 com a2 6.

rae v. . West Palm Beach 1918) 76 Fila. 66, % So.

Kreiss Potassium Phosphate Co. vy. Knight (1929)

98 Fla, 1004, 124 So. we Se. | 6

| Masser v. London Operating Co. (1982) 106 Fla. 414, 7

145 So. 79 ; 6, 7

‘Nelson v. Dwiggins(1938) 111 Be 298, 149 So. 613 «6

: ‘Rader v. Prather (1980) 100 Fila. 501, 180 So. 15 gts. &

United States. Casualty Co. v. Godwin (1946) 158°

Fla. 64, 27 So.2d 612 | *

ee | 6, 7 :

re ame

Appellants pose three questions which they. deem. to

be the Points Involved in this appeal. We do not agree :

that the Points, so phrased, fairly present to this Court

the real nub of the legal proposition before. this tribunal.

; “Mindful as we are of the limited right of review where

an appellant seeks to reverse a trial Court’s legal con-—

clusions, and particularly. where appellants would re-

verse the Chancellor’s resolution of conflicting testimony,

it appears to us the only real Point involved here. is an

extremely simple one, viz: |

| WAS THERE COMPETENT SUBSTANTIAL

EVIDENCE BEFORE.THE TRIAL COURT TO

SUPPORT THE LEGAL CONCLUSION

REACHED IN THE FINAL DECREE?

\ The lower Court decided which of the witnesses he

was, going to -believe, .and, based on. such resolution of

conflicting testimony, reached a conclusion indicating that

- the affirmative defenses of the appellees had been estab--

lished as a matter of law. The lower Court’s enn

was,’ we contend, the only correct: one. :

A. 14

6. ‘Respondents’ Assignments of Error filed in the Cir-.

cuit Court of Fifteenth Judicial Circuit of Florida, in

and for ‘Palm rane County-

IN THE CIRCUIT COURT OF THE FIFTEENTH JU-

‘PALM BEACH COUNTY. IN CHANCERY NO.

68 G 1097-B

DOLORES K. MURPHY, JOHN E. MURPHY, HAROLD

.L. LANE and C. C. CALLAWAY as Co-Executors ‘under

the Last Will and Testament of M. E. MURPHY, M. A.

RAMSEY, ROBERT ELMORE, JOSEPH C. MACKEY,

WILLIAM ATWILL, JR., and GEORGE . KENNEDY,

| Plaintiffs,

‘ie

ROYAL AMERICAN INDUSTRIES, INC. and JOHN B

Defendants.

Plaintiffs, DOLORES. K. MURPHY, JOHN E..

‘MURPHY, HAROLD L. LANE and C. C. CALLAWAY as »

_ Co-Executors under the Last Will and Testament of M. E.

MURPHY, M. A. RAMSEY, ROBERT: ELMORE,

JOSEPH C. MACKEY, WILLIAM ATWILL, JR. and

- GEORGE KENNEDY (originally the Defendants in the

above rig action), file this their. Assignments of Error

and say:

“a

1. iS siiia Chiask aise Si piatian’ a eaniiing”*

that certain “FINAL DECREE” dated January 5, 1965,

and filed in the offices of the Clerk of the Circuit Court of : }

Palm Beach. County, Florida, on January 5, 1965, and ree

Pak Aa, Lie ded dT

. A. 15

‘~~ eorded in Chinen Order Book No. - at Page 7 of said ,

Circuit Court. ; e | |

& ‘The Lower Court b ceted in residing the Final

Decree in the defendants’ favor on the ground that the

agreement of August 1, 1962, had been. modified. “POS

eee The Lower Court erred in its finding in said Final

Decree that the agreement of August 1, 1962, was modified

‘in writing at the closing with reference to the stock being

freely tradeable and the time element of its registration.

4.- The Lower Court erred i in its finding i in said Final

Decree that at the time of the closing, the plaintiffs stated

that they received the stock for investment purposes, with —

_ no present intention of dees or — disposing of the

same, .

5. The Lower Court erred in its said Final Deeres in

failing to recognize that at the time of the closing, the

plaintiffs accepted the stock subject to their rights under .

mad the agreement of August 1, 1962.

6. The Lower Court erred i in its finding i in said Final

Decree that since there was no “present intention” of sell-.— }

ing or disposing’ of the stock by the plaintiffs, the time

—_ for — was rendered indefinite. \ ~ .

€: Catone Comneneed atetete inetd Fina

Decree that Royal American —— with iiguee\ :

registering the tock.”

A. 16 .

A Opinion Letter from Simpson, Thacher &. Bartlett to

Royal American — Inc. .

‘cies 27, 1962

Royal American Industries, Inc.,

1001: Park Avenue thes

Lake Park, Florida _—

Dear Sirs:

You have requested our opinion as to whether or not

the issuance of 438,101 shares of Common Stock of Royal

. American Industries, Inc. (the Company) to six of the

present stockholders of Fort Pierce Port & Terminal Co.

requires registration under the Securities Act of 1933, as

amended (hereinafter called “Registration”).

“Our: understanding with respect to this transaction,

based on information supplied to us by canals of

the Company, is as follows:

| The Company proposes to issue 438,101 ate 0 of its

‘ Common Stock to six stockholders of Fort Pierce Port &

Terminal Co. (Fort Pierce) in exchange for the 1,293,980

shares of Fort Pierce stock owned by those stockholders.

The Company has agreed. to provide financing arrange-

ments with respect.to the payment of $383,371 of Fort

Pierce liabilities and has advanced the sum of $74,000

against these liabilities and an additional $25,000 of work-

ing capital. The stock of the Company will be issued on a

» “restricted basis” for investment and the Compay has

agreed to proceed with the Registration of the stock of the .

Company within sixty days after the closing of the trans- -

PRE GT RE OR IONE 9 2 oe ONT E S RES RIN

Ob ceninedl

A127

action. If such Registration is not effected within six

months after the closing, the six stockholders have-a right

to demand redemption by the Company or by Mr. Mac-

Arthur of the stock of the Company at $2.50 per share. The

Fort Pier stock is presently held in escrow.

Our opinion is also based on the further understanding

that: 7

- Since the Company issued an aggregate of.

14,725,287 shares of its Common Stock to John D. Mac- «

Arthur, Bankers and American Airmotive Corporation (the.

_ “Principal Stockholders”) on December 22, 1961 in con-

sideration for the conveyance to the Company of certain

real property, the Company has not issued any shares of its

Common Stock and the Principal Stockholders. have not

transferred or otherwise disposed of any shares of the

Common Stock of the Company, except that one or more of

the Principal Stockholders loaned certain shares of the

Company’s Common Stock to the Company for issuance for

investment to certain stockholders of Southern Realty &

Utilities Corp., and Bankers transferred Common Stock of

the Company to three employees of Bankers who agreed to —

acquire such shares for investment. -

(b) The Company does not ccsieunlate the issuance

in the near future of any shares of its Common Stock to

persons acquiring such shares for investment in connection

with transactions related to the transaction first outlined

above, except that the Company does contemplate the issu-

ance in the near future of an aggregate of 1,586,000 shares

of its Common Stock in connection with two unrelated

transactions. This understanding is based on the further

assumption that the Securities and Exchange Commission

A. 18

does. not consider-all or any of such transactions integrated

so as to require Registration of any or all of the shares in-

- volved in such transactions. As we have previously advised

you, if the Securities and Exchange Commission considers —

the above transactions to be parts or portions of a single

integrated offering, it may require the Company to file a

- registration statement covering some or all of such trans-

actions, and in addition it may: require the Company to

make a rescission offer. It is our further understanding

that the Company contemplates the Registration of certain

of the shares to be:issued in connection with the transaction

outlined above and of additiogal shares of its Common

Stock to be issued in connection with transactions not re-

lated to those referred to above.

Based on the rm we are of the opinion that the _

issuance.of the Company’s Common Stock in connection .

with the transaction outlined above will not require regis-°

tration. under the Securities Act of 1933, as amended, by

reason of the provisions of Section 4(1) thereof.

In the event authorized but unissued. Common Stock

of the Company is used in such transactions (instead of

shares borrowed by the Company from one or more of the

Principal Stockholders), a listing application must be filed

and approved by the American Stock Exchange prior to the

issuance of any such authorized but unissued Common

- Stock. |

Very truly yours,

/s/ Simpson Thacher & Bartlett )

SIL ROE PINS Me Cae gee On

ade Rant ath

wae Mee!

ilintintetenie nena ene ee en ee

Dew Bee

. Date: November 7, 1962.

‘ A. 19

8. ‘Investment Letter | i

Royal American Industries, Inc.

"1001 Park Avenue .

Lake Park, Florida

’ Dear Sirs:

+I ‘hereby acknowledge receipt of certificates Nos.

CU253, CU254, CU256, CU257 and CU259 through CU284, .

inclusive, issued in the name of M. A. Ramsey and repre-

senting’ an aggregate of 78,024 shares of your common

stock, par value of 10c per share, all pursuant to and in -

accordance with the provisions of that certain Agreement

dated August 1, 1962, and that certain Addendum (to such

Agreement) also dated August 1, 1962, both between you,

John D. MacArthur, Fort Pierce Port & Terminal Co., a

Florida corporation (the “Company”), me and five other

stockholders-of the Company and relating to the surchaie

by you and the sale by me and such other stockholders of —

shares of the common stock of the Company.

This will also acknowledge that I have represented to

and agreed with you that I am purchasing such shares for

investment with no present intention of selling or otherwise.

disposing of the same, subject only to my rights under such

Agreement and Addendum. |

. Yours very truly,

'- g/ M.A. Ramsey (SEAL)

-M. A. RAMSEY

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CERTIFICATE OF SERVICE -

I HEREBY CERTIFY that a copy of the foregoing

Brief For Respondents In Opposition and Appendix has

bem served upon each of the following:

ROBERT M. BEVIN

For

Ervin, Pennington, ee & Jacobs

' 805 South Gadsden Street

‘Tallahassee, Florida

and

BURNS, MIDDLETON, ROGERS & FARRELL

205 Worth Avenue

Palm Beach, Florida

attorneys for Petitioners, by mail, this QiTH a day of

he trata 1967.

Phillip Goldman

Attorney for Respondents

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.