# Brief in Opposition to Petition for Writ of Certiorari — Snakard v. Frankfort Oil Co. (No. 488) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386420_0688%3A4 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief in Opposition to Petition for Writ of Certiorari - **Published:** January 1, 1960 ## Text IN Til — Court of the Gnited States Oeroner Term, 1960 No. 488. Wo. RF. SNAKARD. Petitioner FRANKFORT OLL COMPANY, i division of Joseph BE. Seagvram & Sons, Ine., he, spondent BRIEF IN OPPOSITION TO PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF a © THE TENTH CIRCUIT. | a a } Pine St New Y¥ b \ 1 fr akp |’. | ee \ au A dA ' Pine Str New York a [. Murray R Leon Sipe, Highto wer Buildiu KkKlakoma © ()k November 15. 1960 “ “~ PAGE NN NI aicscssnssckensanseincasenianstonenvpaghpovennespcossnted “Sale JURISDICTION ..02.0.200.-cnccsecccennenesnesees saneneses Miccccossaccemnsetrseies 2 QUESTIONS PRESENTED ............-.2+--s2-s:ssccesceeesesccceeeteneeetnes 2 Mieamamanatie ty ai UR OME inn sn sitncesssiccn ips vntonsnieninsinnsa 3 POU REMIE inc enccscrececcnsscvesess onssneenees Eoraacaccarsarcttacasaingaatvorsii - ' 8 T. The Court of Appeals properly reversed with- out remanding for further findings................... 9 II. The Court of Appeals properly dealt with | Oklahoma law and with the asserted fiduciary and other obligations of respondent....... oe! 17 CONCLUBION « .........0...cccecssccssececssrendesssenteecsnees eeenenenes. secre 20 ii TaBLe or Cases AND STATUTES. ‘Cases. Bach v. Friden Calculating Mach. Co.,-148 F. 8a 407 SU ne Burrell v. Martin, 232 F. 2d 33 (D. C. Cir. 1955) ates _ Campbell v. Campbell, 170 F. 2d 809 (D. C. Cir. 1948) City of Sumter ~. Spur Distributing Co., 110 F. 2d: Be. CE GIL I icicecsecinsthenscoceacsonseserntenssininns cicinsiinn Deering-Milliken & Co. v. Modern-Aire of Hollywood, Inc., 231 F. 2d 623 (Sth Cir. 1955)................ Dimick v. Schiedt, 293 U.S. 474... eee Fletcher v. Fletcher, 219 F. 2d 768 (D. C: Cir. 1955)... Helfer v. Corona Products, Inc., 127 F. 2d 612 (8th Pe I sone cherceicesdhduesionicceaees REIT SN Ste Hook v. Hook & Ackerman, Inc., 213 F. 2d sues Rk I eaiidaideiedie cacalnaithesscpintiatidiuntinati as atel te tea Hopkins v. Wallin, 179 F. 2d 136 (3d Cir. 1949).......... Hunter v. Scruggs Drug Store, Inc., 113 F. 2d 971 (4th Cir. 1940)... aaa Indemnity Ins. Go. vy. Midwest Transfer Co., 184 F. ee ee Ore Ge Bierce a Trish y. United States, 295 F. 2d 3 (9th Cir. ange Kelley v. Everglades Drainage District, 319 VU. WEY -cuskiscssniesdnaadasasepner sckianstdusaaa dan teoctaaladdccnssastek? acne: Kweskin v. Finkelstein, 223 F. 2d 677 (7th Cir. 1955) New England Oil é Pipe Line Co. v. Rogers. 154 Okla. 285, 7 P. 2d 638 (1931)... Paramount Pest Control Service v. Brewer, 177 F. Be Ce ie I sete csintieisacineeisssnceniteesnseresesconss Stella v. Graham-Paige Motors Corp.. 232 F. 2d 299 (2d Cir. 1956),-cert. denied, 352 U.S. 831 ... PAGE 13, . PAGE United Shoe Mach. Corp. v. Kamborian, 160 F. 2d WOR Chak Clr, NUT) nicer ees 15 United States v. Horsfall, 270 F. 2d 107 (10th Cir. DICE BS NONE H TREES Resa 15-16 Victory Towing Co. v. Bordelon, 219 F. 2d 540 (Sth | NN OEE mp eR Avrrecnn SeNE NET Secs von 15 Ward v. Mid-West &€ Gulf Co., 97 Okla. 252, 223 Pac. - es | ht _ | eee eerepeomennerverrrnnen sont -S calinaiaies 11, 16 Wilkerson vo W aSson, 110 Okla. 66, 235 Pac. 206 ee 5 OPA ORLA 17 Winter Park ‘Te eshone Co. v. Southern Bell Tel. & ‘Tel. Co., 181 F. 2d 341 (Sth Cir. 1990).................. 15 “ Statutes. 28 U. $. C.,§ 1254(1) (2950) encciccseccncescicescsinsnmnenrns ‘9 12 Okla. Stat. Amn. § 1445 (1937) ....-....cccsccccecccteeeee ees 16 IN THE Supreme Court of the Gnited States Octoser Term, 1960 No. 488. W. F. Swaxkarp, Petitioner, vs. Fran kKFort Ot, Company, a division of Joseph E. Seagram & Sons, Inc., . Respondent. BRIEF IN OPPOSITION TO PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT. . Opinions Below. The opinion of the United States Court of Appeals for the Tenth Circuit is reported at 279 F. 2d 436 and is also annexed as Appendix B to the petition. The United States District Court for the Western District of Oklahoma rendered judeme nt without opinion, Its findings of fact and conclusions of law are unreported but are annexed as Appendix A to the petition and are aleo contained in the printed record at pages 115-21 and 124-26. The judgment of the Court of Appeals i is dated, and was enfered on, May 18, 1960. ° An extension of time until July 7, 1960 to file a petition for rehearing was granted. The petition for rehearing, applications for rehearing en banc and oral argument, qnd an alternative motion to remand to the trial court for find ings or further proceedings, were denied on J uly 21, 1960, The: jurisdiction ‘of this Court is invoked under 2s U.S. C. §1254(1) (1958). | Questions Presented. I. May a United States Court of Appeals reverse a United States District Court without remanding the case with instructions to the District Court to make a finding on - a matter of’ fact where no question was raised ‘elow in regard to the failure of the District Court to make a finding on the matter, where the finding sought by petitioner would not be supported by the record and would be’ inconsistent with the findings that had been made by the District Court - and left untonched by the Court of Appeals, and where the proposition that the case should be so remanded was fully presented to the Court of Appeals on a petition for rehear- ‘ing which was denied? IE. Did the Court of Appeals fail to follow Oklahoma | law or.otherwise fail properly to deal with petitioner's con- tentions with respect t» the fiduciary and other obligations claimed by petitioner to. be owing to him by respondent? . Statement of the Case. In October and November, 1954, petitioner and respond- ent executed vatious decuments which are annexed to the complaint as Exhibits A-F (PL Ex. 1A-1B, R. 18-53, 69, 177, 565, 568; App, 20a-55a"'). It is undisputed that they consti- tutece in ‘effect a single overall agreement. In one of these documents, petitioner agreed to assign to respondent a !. interest in twelve short-term oil and gas leases which petitioner had acquired in Lincoln County, Oklahoma (Finding No, 1, R. 116, App. la). The assignment was to be accomplished “forthwith” (R. 19, App. 29a}. Respondent agreed to pay $1.00 an acre for its !5 interest (Finding No. 1, R. 116, App. la). Respondent also consented to assume half of petitioner’ s expenses relating to title examinations and curative measures (ibid.). Respondent farther agreed that a test well would be drilled on the acreage at its sole expense and that petitioner | would feceive the drilling contract for the tést well; the rate at whieh petitioner was to be paid thereunder was set at approxi- mately twice the customary drilling cost.in the area, and was fixed te enable petitioner to make a profit ef approxi-— mately°$20,000 for his work in acquiring the leases (Finding No. 2, R. 116, App. la). * Respondent also acquired a right of first refusal to pur- chase any portion of petitioner's intere-* which he might thereafter determine to sell (Finding Ne, 4, R. 116. App. 2a). 7 The parties fur.her agreed that, if the test well were - productive’ of-oil or gas, respomlent was to become the tho’ is used herein to refer -to the reeord as printed for the use of the court below ind tiled in this Court with the petition ‘for Writ of certiorari; ** App.”" is used herein to refer to the appendices ‘ antexed to the petition; °° P."" is use fierein to refer to the text of the petition. se es ‘4 4 operator of the leases (R. Zi; App. S9a)oender the term. of an attached operating agreement (R. 29-51, App. 41a-7ha) , he operating‘agreement as amended provided that produc tion from the leases would be owned between the partis in the proportions of their interests in the leases, which Rer- st ted to be a Iyth working interest for petidoner, and a *xths working interest for respondent until it reeeuped ins drilling costs, at which time respondent was to transfer a 3,ths working interest to petitidner and each would there- after own half (R. 27-28, App. 39a-40a; R. 20, App. 45a). A number of the leases were to expire by their terms on July 1, 1955, but contained drilling clauses (Finding No. 5, R. 116, App. 2a), «£e., the customary provision that cern- mencement of drilling data anee would extend them beyond that date. The District Court (R. 120, App. 6a) and the Court of Appeals (279 F. 2d at 441, App. 21a) agreed that the test well was the only well which respondent had obligated itself to drill by execution of the agreements. _ However, the agreemen‘s. further provided that, after completion of the test well, if either party desired to - drill a well upon any of the remaining leases, it was to give written notice to the other, who would then have ten days ‘in which to decide whether to share in the costs of dritling the well (R. 32, App. 45a). If the second party chose to participate, the well was to be drilled for the joint account of the parties and the cotend party became obligated for half of- the drilling costs and entitled to hal! the proceeds of production (Finding No. 3, R. 116, App. 1a). . If the second party determined not to participate, the figst party was at liberty to drill the well at its own eost and expense (R. 32, App. 45a). Under the terms of the contracts, if petitioner elected not to participate, he was under no obligation to shar -and ¥% of the werking interest thereafter {Finding No. 3 oe the drilling costs and, if the well were a dry hole, the drilling costs would be borne solely by respondent cibid.). Tf such a well were productive, however, petitioner was to own the same share of production as from: the test well. ie. lath of the working interest until respondent had recouped itscosts, R. 116, App. la-2a). In contrast, if respondent eleeted not to participate and petitioner then drilled a productive well, respondent would have no interest whatever in stieh well (ihi0.), The test.well, while not a producer, indicated that the area was potentially prodnetive (Finding No. 6, R. 117, App. 2a). A seeond well, designated the Erwin No. 1. was then drilled and was completed as a producer in February, 1955 (Finding No. & R. 117, App43a). ; P By this time relations between petitioner and respondent had become strained. In part this had resulted trom the commencement of a suit against petitioner by one Burkett who claimed an interest in the leases which petitioner had agreed to assign to respondent (Finding Ne. 7, R. 117, App. 2a; R. 421-23). Pending the outcome of ths ltiga- tion, respondent withheld a portion ef the funds due petitioner (ibid.). In addition, despite the contractual toquirement that petitioner assign a '- :forthwith’’ (R19, App. 29a), petitioner had refused to interest in the leases te respondent . execute Such assignments exeept as to leases on which respondent drilled a well (Finding No. 23, R. 120. App. 6a; R. 422,-24). Respondent ‘s interest in such other leases was therefore unreedirded and unprotected. Respondent eon- tinued to press petitioner for such as. ‘more objectionable than the agreements, except for the claim of a % interest. By the contracts, as to all wells after the first, Frankfort, in wells in which . Snakard elected not to participate, had a 7 interest until reimbursed up to 200% of Snakard’s share of the drilling costs: Thus, in some instances, I*rank- fort’s interest was %g and in some 14. The Oklahoma rule is that the principal element in a suit for slander of title is malice. By filing the . caveat Frankfort was asserting an interest in the properties under its contracts with Snakard. It had a right to do this unless. it was aciuated by some wrongful motive which would establish malice. The question of malice is for the trier of the facts. The case at bar was tried to the court and the court made no finding of malice. No question is raised by Snak- ard in regard to the omission of such finding. It follows that the judgment cannot be sustained on the thcory of slander of title.*’ (279 F. 2d at 443, App. 24a) (Footnotes omitted) seo Thus, it is entirely clear that they District Court made no finding of malige and that the Cou ot Appeals clearly recognized that the makirg of findings was’for the District Court and did not usury that function. - 1] Furthermore, the findings of fact which were made by the District Court conclusively establish the ‘absence of malice. ‘ The Court of Appeals upheld the findings of the District Court in full. It vacated none of them, expressly or impliedly. It had before it a record sufficient to enable it finally to dispose of the case. The findings as entered by the District Court'were even expressly approved by the attorney for petitioner (R. 126, App. 14a). The findings of the District Court in this case, which the Court ef Appeals openly accepted and on which it rested its opinions fully meet the test of the cases cited by peti- ‘tioner, e. g.. Kelley v. Everglades Drainage District, 319 U.S. 415. They establish beyond a doubt that no malice was involved in the filing of the caveat by respondent.’ Under Oklahoma law concerning slander of title by assertion of a claim to another's property, malice is held to exist only where defendant has asserted a claim in which he has n&‘reasonable basis for belief. If-defendant is act ing in good faith, there is no recovery, Ward v. Mid-West & Gulf Co., 97 Okla. 252, 223 Pac. 170 (1923). Here the findings of the trial court demonstrate that respondent had ample justification for its netion in filing the caveat. Assignments of a! interest in the leases, for which respondent had paid in advance, were long overdue vet petitioner was still persistently refusing to exceuteé them (Finding No. 1, R. 116, App. la; Finding No, 28, R. 129, App. 6a; R. 423-24, 483). Respendent's }, interest therefore lay at the merey of petitioner, unrecorded and completely unpro ected against third parties. Equally unrecorded and 1 The test of the adequacy .of findings is not, as petitioner would contend, whether there is a findirig on each and every possible paint, ~ > . : ) ar SS eiean but whether the findings when viewed as & wh |e are sufficient to indicate tie basis of a decision. 12 unprotected was respondent's right of first refusal in the event of sale of petitioner's 's interest (ibtd.). And peti- . tioner’s rights in the leases were already under§ttack in the litigation brought fy Burkett (Finding No. 7, R. 117, App. 2a; R. 421-23). . : Respondent therefore determined to pretect its interest. In pursuance of that determination, and pursuant to advic» of counsel, it filed the caveat (Finding No. 12, R. 117-18, - App. 3a; Pl. Ex. 19, R. 15-16, 177, 589). That document referred to the contracts, described the leases, and warned any purchaser that respondent claimed a 7Xths interest ir the leases (tbid.). . Although the courts below have suggested that the caveat may have misstated respondeént’s interest in the leases by claiming a *xths interest rather than a ), interest (279 F. 2d at 443, App. 24a; R. 121, App. 7a), the contract involved gave respondent a present * — 18 This is iia what the Court of Appeals found to’ be "the applicable law: | “The relationship so created was fiduciary in char- acter and required the utmost good faith on the part of both parties.”’ (279 F. 2d at 443, App. 20a) The Court of Appeals also recognized that the scope of any obligation, including a fiduciary obligation, cannot be determined im vacuo. Accordingly, it went on to note that: | ‘*The extent and effect of such relationship is deter- mined by the written agreements between the parties defining and delineating the powers and rights of each. In such a situation it is presunied that they delegated all the powers they wished to confer upon . each other and withheld all powers or authority not | affirmatively ‘delegated. The relationships between them are contrelled by the terms of their agreements . voluntarily made.’’ (ibid.) (Footnotes omitted) | | | The conclusion.of law (not Finding of Fact) of the Dis- trict Court with respect to the asserted fiduciary obligations | of respondent reads as follows: ‘‘Moreover, defendant Frankfort or its fiducial duty owed plaintiff by failing to fairly and openly reveal the geological information it possessed directly bearing on the agreement’s subject matter, by overreaching plaintiff in connection with the pro- posed farm-out to Inland in affirmatively misrepre- senting the location af the second Wilcox producing structure, and by unwarrantedly claiming a 7ths interest in this lease block through the caveat placed of record on March 8, 1955:’’ (Conclusion of Law No. 6; R. 121, App. 7a) | The Court of Appeals dealt with the subject matter of this conclusion of law most carefully and most fully (279 F. 2d at 443-45, App, 20a-28a). \ 19 The Court of Appeals held that respondent did not. breach any fiduciary duty to petitioner with respect to the geological information it possessed (a) because respondent had no contractual obligation to divulge that information, (b) because the record showed that petitioner had his own opinion as to ‘the significance of matters of: geological information, which opinions were different from those of respondent, and (c) accordingly, petitioner could neither have been misled nor overreached. The Court of Appeals held that petitioner had not been overreached in connection with the proposed farm-out to . Inland (a) because as stated above petitioner had his own geological conclusicns, and (b) because of his own ‘volition he elected not to pursue them at that time, although given an opportunity to do so. The Court of Appeals held that respondent did not breach any fiduciary duty to petitioner in filing the caveat, both for the reasons set forth in Point I above and because respondent had a clear right to‘give notice of its interest in the property. : In this branch of the argument, petitioner is simply com- plaining that the Court of Appeals reversed the District Court on the conclusions to be drawn from the record as a whole. If this sort of action on the part of the Court of Appeals is to be ground for review by this Court by peti- tion for certiorari, this Court would have to review virtu- ally every case in which a Court of Appeals reverses a District Court.. Petitioner’s final argument (P. 42-45) appears to com- plain of the fact that nobody below considered the case on . the legal theory that an intentional injury was inflicted upon him by respondent ‘‘ without just cause and excuse.”’ No such theory was advanced to the District Court and no such theory was advanced to the Court of Appeals, either i Pe aero eee: in connection with the argument of the appeal or in the | petition for rehearing. . | Furthermore, as _petitioner’s argument discloses, the theory seems to be inexplicably intertwined with a ‘‘mali- cious wrong’, and, in any event, the subject matter of this theory is fully disposed of by the opinion of the Court of . Appeals. Conclusion. The decision of the Court of Appeals was based on find- ings of fact made by the District Court and left undisturbed by the Court of Appeals, and on an accurate application cf _ the relevant law of Oklahoma. No issue is tendered which is appropriate for consideration by this Court. It is sub- ' mitted that the decision below was in all respects correct and that the petition for writ of certiorari should be-denied. aporene See eS eee ee ee perigee - Respectfully submitted, Matuus F. Correa, 80 Pine Street, ee New York 5, N. Y. | Attorney for Respendent. Ricuarp P. Lortvs, JoHn W. NIz.ps, Wruuo A. Jansen, 80 Pine Street, New York 5, N. Y. T. Murray Rosrnson, Leon Surep, Hightower Building, _ Oklahoma City 2, Okla. Of Counsel. November 15, 1960. AK Ar ¥ | [ Ottice Supreme Court. U.S, “DEC A 1960 ‘ IN THE Supreme Court of the United States Ocropen Trem, 1960 | , Neo. 488 W. FF. Saxavkarnp, Petitioner, 2 Vv. 1 FRaxkrort On. Company, a division of Joseph FE. e. Seagram & Sons, Ines Respondent. REPLY Pryton Forp 1000 Comneetient Awe. No OW: Washington. PD ©. Aftornae 4 for Pe bibioner Or Counsel: orp. Lansen, GREENE AND Ploman e Washingten, D.C. Joun BB Denrey, Ir. Drones! Deoriy & Deprry ‘ Ok'ahoma City, Oklahoma Cryer J. Wares: Looney, Waris, Looney & Ntettors Oklahoma Citw, OKlahbomie I. 1 Erwin Charedler, Oklahomi Hypow S Apaats, Wasniscton DC on i a INDEN . Privure OB. The Caveat Pareres s 2 sr een re ee ice okt ae ThA Real Conttiet Exists oo... {00..5. ee ee IL. Deterpretation-of the Contract). . eEeeay | Ore es “o IV. Respondent's Questions Prosentedl oo 06.00.04 et | 1 a Application of Oklehoma Law Srey et Ans 1 Fidneial Duties ....0000...00. ee en | B. Enfeet of General Finding rn ere 14 yt 3 Additional an ee ee “A PAL eS san a ee mein Vib. Summary nit ae ae TABLE OF CASES Mexandty “vy. ‘Nash Relator ee Ee ibe Se Be cas Sie es sate baste s ¥ ay ; Alexander ve Nash-Nelvinater, eT] F. 54 Saath ri Blaekstoek ve Castan., DS4 Oklal dst se an Yab Vas7 34 Surkhard v. Burkhard, 175 FL 2d SM ooo Th Central R. Sienal OH Co. ve Lenedem, CON 7) U4 gh Re: APRS epi pone rine Cree srs Pte Ae aN eae ie ee Helfer vo Corona Products, Ine. Te FP. 2d Gl oe. t.. t) Kingkade ve Phimimer, THT Okla. Dt 2su Po obs vale New Seger Oil and Pipe Line Co. vo Rowers, Tod te: A 2 ae ee ae a . ie Ornatra Har faders Lurubyt Co. yo BL Phi ‘Di Loareatoet ' Ce Bae ee ee oo eo eee : LEEDS fe t) Paramount Post Conteel Serviews *: Brewer, TH FF. * Ge De Po ia ee Ce eae ay ee acne a Paramount Pest Control Services ©. Brewer, ieee # OE Ok ess eta rasta ae et =f a Stanton: v. United States, we US ih -; re vaatcaes United States ve Horstall, 270 FL 2 doe : “Fs. Uonited States ve Naiser. na U a. Susy ceo are 21 - Ward v: Mid-West & Gulf Co. 97 Okla: 2o2, 225 r. tee A Wilkerson v. Kasoen, 1 WW Okla. 668, ho PL 208 IPs han Winn ve Warqer, 1a SAW? 2d ane f. Cin App s --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386420_0688%3A4. Public record. Not legal advice.