Petition for a Writ of Certiorari — May v. Midwest Refining Co.

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INDEX

Page

Petition for Certiorari 1-8

Summary Statement of Matter Involved... 2

Jurisdictional Statement 7

Question Presented T

Reasons For Granting the Writ 8

Brief In Support of Petition 9-33

Opinions below 9

Jurisdiction 9

Statement 9

Specification of Errors 9

Argument 10

CITATIONS

CASES:

Abilene National Bank Bldg., Co.; Wheeler v.,

159 Fed., 391, 393 (C. C. A. 8th Cire.) 29

Alaska Juneau Gold Mining Co. v. Ebner Gold

Mining Co., 239 Fed., 638, 643 (C. C. A. 9th

Circ.) 29

Albany and Susquehanna Railroad Company;

Delaware & Hudson Company v., 213 U. S.,

435, 447 17

Allied Chemical & Dye Corp. v. Steel & Tube

Co. of Amer. 14 Del. Ch. 1; 120 Atl 486

491-2 26, 27, 30

_ Amalgamated Copper Co.; United Copper Se-

curities Co. v., 244 U. S., 261, 263 16, 19

I

LF ANGE TMS CAGES SERENE ES TEE as

CASES—Continued: Page

American Glucose Co.; Harding v., 182 Il., 551;

55 N. E., 577, 603 18

Anaconda Copper Mining Company; Geddes v.,

222 Fed., 129, 133; 254 U. S., 590, 600, 602.28, 30, 32

Arnstein v. Bethlehem Steel Corp., 18 Fed. Supp.,

916 (D. C. E. D. N. Y.) 18

Bethlehem Steel Corp.; Arnstein v., 18 Fed.

Supp., 916 (D. C. E. D. N. Y.) 18

Blanstein v. Pan American Pet. & Tr. Co., 21

N. Y. S. (2d) 651, 712-3 29

Board of Tax Supervisors; Klein v., 282 U. S.,

19; 51S. Ct. 15, 16; 75 L. Ed., 140 13, 14, 22

Boatright v. St “nite Radio Corp., 46 Fed. (2d)

385, 388 (C. C. A. 10th Cire.) 14, 20, 23

Bogert ; Southern Pacific Co.; v., 250 U. S., 483,

489-90; 63 L. Ed., 1099 22, 28

Boggiano; Chicago Macaroni Mfg. Co. v., 202

Ill., 312; 67 N. E., 17 19

Burnet v. Com. Imp. Co., 287 U. S., 415; 53 S.

Ct., 198; 77 L. Ed., 399 14, 28, 24

Calumet & Hecla Mining Co.; Hyams v., 221

Fed., 529, 587 (C. C. A. 6th = eee nes 29, 31

Carrothers; Mason v., 105 Me., 392; 74 Atl, 1030 27

Chicago Macaroni Mfg. Co. v. Boggiano, 202 Iil.,

312; 67 N. E., 17 19

City of Davenport v. Dows, 85 U. S. (18 Wall.)

626; 21 L. Ed., 938 16,17

In Re Collins, 75 Fed. (2d) 62, 64 (C. C. A. 8th

Circ.) 23

Collins v. Penn.-Wyoming Copper Co., 203 Fed.,

726, 729 17

41 Columbia Law Review, 405, 421, 422 pay

II

CASES—Continued: Page

Com. Imp. Co.; Burnet v., 287 U. S., 415; 53 S.

Ct., 198; 77 L. Ed., 399 14, 23, 24

Comm. of Int. Rev.; Consumers Constr. Co., v.,

94 Fed. (2d) 731, 734 (C. C. A. 1st Cire.)........ 14, 22

Comm. of Int, Rev.; Old Colony Tr. Co. v., 69

Fed., (2d) 699, 701-2) (C. C. A. 1st Cire.).......14, 23, 24

Consolidated Oil Corp.; Wilhelm v., 84 Fed.

(2d) 739, 748 (C. C. A. 10th Cire.) oe 18, 19

Consumers Constr. Co. v. Comm. of Inf. Rev.,

94 Fed. (2d) 731, 734 (C. C. A. Ist Cir.)......... 14, 22

Cox v. Stokes, 156 N. Y., 491; 51 N. E., 316, 323 =. 25

Dabney; Whitten v., 171 Cal., 621; 154 Pac., 312,

316 16

Dana v. Morgan, 232 Fed., 85 (C. C. A. 2nd Cire.) 16, 18

Delaware & Hudson Company v. Albany and

Susquehanna Railroad Company, 213 U. S.

435, 447 17

Dickerman v. Northern Trust Co., 176 U. S., 181,

188; 44 L. Ed., 429; 20 S. Ct., 311 ...... 16

In re Roe Run Lead Co., 283 Mo., 646; 223 S. W.,

600 25, 27, 30

Donnell v. Herring-Hall Marvin Safe Company,

208 U. S., 267, 273; 52 L. Ed., 481, 487 0. 13, 22

Dows; City of Davenport v., 85 U. S. (18 Wall.)

626; 21 L. Ed., 938 16, 17

Dubuque 47 Mach. Works; Graham v., 138 Ia.,

456; 114 N. W., 619, 621 18

Eagleson v. Pacific Timber Co., 270 Fed., 1008,

1010 (D. C. Del.) 27

Ebner Gold Mining Co.; Alaska Juneau Gold

Cent Co. v., 239 Fed., 638, 643 (C. C. A. 9th

ire. 29

III

CASES—Continued: Page

Ervin v. Oregon Ry. & Nav. Co., 20 Fed., 577;

27 Fed., 625 (C. C. S. D. N. Y.) . 26, 80

Gallagher v. Pacific American Co., 97 Fed. (2nd)

193 (C. C. A., 9th Cire.) _... 17

Gillis v. Jenkins Petroleum Process Co., 84 Fed.

(2d) 74 (C. C. A. 9th Cire.) 22

Graham v. Dubuque Sp. Mach. Works, 138 Ia.,

456; 114 N. W., 619, 621 18

Harding v. American Glucose Co., 182 IIl., 551;

55 N. E., 577, 603 18

Herring-Hall Marvin Safe Company; Donnell v.,

208 U. S., 267, 273; 52 L. Ed., 481, 487 ow. 18, 22

Hutchinson Box Board & Paper Co., v. Van

Horn, 299 Fed., 424 (C. C. A. 8th Cire.) ......... 18

Hyams v. Calumet & Hecla Mining Co., 221 Fed.,

529, 587 (C. C. A. 6th Cir.) 29, 31

Ingersoll; Johnson v., 68 Fed. (2d) 86 (C. C.

A. 7th Cire.) 18

Jenkins Petroleum Process Co.; Gillis v., 84 Fed.

(2d) 74 (C. C. A. 9th Cire.) 22

Johnson v. Ingersoll, 63 Fed. (2d) 86 (C. C. A.

7th Cire.) 18

Johnson; Sias v., 86 Fed. (2d) 766 (C. C. A. 6th

Circ.) . 18

Kavanaugh v. Kavanaugh Knitting Co., Inc., 226

N. Y., 185; 123 N. E., 148, 152 26, 27, 30

Kavanaugh Knitting Co., Inc., Kavanaugh v.,

226 N. Y., 185; 123 N. E., 148, 152 26, 27, 30

Klein v. Board of Tax Supervisors, 282 U. S., 19;

51S. Ct. 15, 16; 75 L. Ed., 140 13, 14, 22

IV

CASES—Continued: Page

Lime Rock R. R. Co.; Ulmer, et al. v., 98 Me.,

579; 57 Atl., 1001 23, 25

Litton; Pepper v., 308 U. S., 295, 306; 60 S. Ct.,

, 245 28, 29, 31, 32

Los Lugos Gold Mines Co.; Moore v., 172 Wash..,

570; 21 Pac. (2d) 253 25

MacArthur et al. v. Port of Havana Docks Com-

pany et al., 247 Fed., 984 (D. C. D. Maine,

S. D.) 26, 29, 30

Majestic Co. v. Orpheum Circuit, Inc., 21 Fed.,

(2d) 720, 724 (C. °C. A. A. 8th Cire.) peek 23, 24

Mason v. Carrothers, 105 Me., 39{.; 74 Atl., 1030 27

Thomas H. Mason v. Pewabic Mining Co., 133 U.

S. 50; 33 L. Ed., 524 25

Michigan Wiadarve and Truck Co.; Stebbins

v., 212 Fed., 19, 28 (C. C. A. 6th Cire.) a SSE 29

Missouri Pacific Railway Co.; Pacific Railroad

of Missouri v., 111 U. S., 505; 28 L. Ed., 498,

504 13

Missouri Pacific Ry. Co.; Sidell v., 78 Fed., 724,

(C. C. A. 2nd Cire.) 29, 31

Moore v. Los Lugos Gold Mines Co., 172 Wash.,

570; 21 Pac. (2d) 253 25

Morgan; Dana v., 232 Fed., 85 (C. C. A. 2nd

Cire.) 16, 18

Northern Trust Co.; Dickerman v., 176 U. S.,

181, 188; 44 L. Ed., 429; 20S. Ct., a 16

Old Colony Tr. Co. v. ‘Comm, of Int. Rev., 69 Fed.,

(2d) 699, 701-2 (C. C. A. Ist Cire.) 14, 23, 24

Oregon Ry. & Nav. Co.; Ervin v., 20 Fed., 577; 27

Fed. , 625 (C. C. S. D.N. Y.) 26, 30

Orpheum Circuit Inc.; Majestic Co. v., 21 Fed.,

(2d) 720, 724 (C. C. ’A. 8th Circ.) 23, 24

V

CASES—Continued: Page

Pacific Timber Co.; Eagleson v., 270 Fed., 1008,

1010 (D. C. Del.) 27

Pacific American Co. ; Gallagher v., 97 Fed. (2d)

193 (C. C. A. 9th Cire.) 17

Pacific Railroad of Missouri v. Missouri Pacific

Railway Co., 111 U. S., 505; 28 L. Ed., 498,504 13

Pan American Pet. & Tr. Co.; Blanstein v., 21

N. Y. S. (2d) 651, 712-3 29

Pearson v. The Railroad, 62 N. H., 587, 540........... 30

Penn.-Wyoming Copper Co.; Collins v., 203 Fed.,

726, 729 17

Pepper v. Litton, 308 U. S., 295, 306; 60 S. Ct.,

238, 245 28, 29, 31, 32

Pewabic Mining Co.; Thomas H. Mason v., 133

U. S., 50; 33 L. Ed., 524 25

3 Pomeroy’s Eq Juris. (4th Ed.) Sec. 1095, p.

2524-5 16, 18

Port of Havana Docks Company, et al; Mac-

Arthur et al. v., 247 Fed., 984 (D. C. D. Maine,

S. D.) 26, 29, 30

Porter v. Sabin, 149 U. S., 473, 478; 37 L. Ed.,

815, 818 17

Sabin; Porter v., 149 U. S., 478, 478; 37 L. Ed.,

815, 818 17

Sias v. Johnson, 86 Fed. (2d) 766 (C. C. A. 6th

Circ.) 18

Sidell v. Missouri Pacific Ry. Co., 78 Fed., 724,

(C. C. A. 2nd Cire.) 29, 31

Southern Pacific Co. v. Bogert, 250 U. S., 483,

489-90; 63 L. Ed., 1099 22, 28

Spokane Falls Gas Light Co.; Theis v., 34 Wash.,

23; 74 Pac., 1004 25, 27, 30

VI

2. ¢ WAM wet merits MELEE TEENY. ST EIA ES EE A eS OE TET NL SO RS

CASES—Continued: Page

Stebbins v. Michigan Wheelbarrow and Truck

Co., 212 Fed., 19, 28 (C. C. A. 6th Cire.) 29

Steel & Tube Co. of Amer.; Allied Chemical &

Dye Corp. v., 14 Del. Ch. 1; 120 Atl., 486,

491-2 26, 27, 30

Steinite Radio Corp.; Boatright v., 46 Fed. (2d)

385, 388 (C. C. A. 10th Cire.) 14, 20, 23

Stokes; Cox v., 156 N. Y., 491; 51 N. E., 316,323 25

Story’s Eq. Juris., Sec. 322 31

The Railroad ; Pearson v., 62 N. H., 587, 540... 30

Theis v. Spokane Falls Gas Light Co., 34 Wash.,

23; 74 Pac., 1004 25, 27, 30

Ulmer et al. v. Lime Rock R. R. Co., 98 Me., 579;

57 Atl., 1001 23, 25

United Copper Securities Co. v. Amalgamated

Copper Co., 244 U. S., 261, 268 16, 19

Van Horn; Hutchinson Box Board & Paper Co.

v., 299 Fed., 424 (C. C. A. 8th > SOE 18

Wheeler v. Abilene National Bank Bldg. Co., 159

Fed., 391,393 (C. C. A. 8th Cire.) 29

Whitten v. Dabney, 171 Cal., 621; 154 Pac., 312,

316 16

Wilhelm v. Consolidated Oil Corp., 84 Fed. (2d)

739, 748 (C. C. A. 10th Cire.) 18, 19

CRE. LIRICA:

Res LEAR ER APSR,

In The Supreme Court of The United States :

OCTOBER TERM, 1941

No.

BEN MAY,

Petitioner,

Versus

THE MIDWEST REFINING COMPANY,

STANDARD OIL COMPANY, and

STANOLIND OIL AND GAS COMPANY.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES CIRCUIT COURT OF APPEALS

FOR THE FIRST CIRCUIT.

Ben May respecifully prays that a writ of cer-

tiorari issue to review the judgment of the United

States Circuit Court of Appeals for the First Circuit

in the case of Ben May, Plaintiff, Appellant, versus

The Midwest Refining Company, Standard Oil Com-

pany (of Indiana), and Stanolind Oil and Gas Com-

pany, Number 3637 on the docket of said Court, en-

tered on June 6, 1941 (R. 432) affirming the decree of

the District Court of the United States for the Dis-

trict of Maine in said cause (R. 400).

1

coma

SUMMARY STATEMENT OF MATTER

INVOLVED

This is a derivative and representative suit filed

on January 13, 1933, (R. 2-35) by Ben May as a mi-

nority stockholder of The Midwest Refining Company,

a corporation, against Standard Oil Company (of In-

diana), Stanolind Oil and Gas Company, its controlled

subsidiary, and The Midwest Refining Company. The

complaint as amended on April 7, 1937, (R. 256-288)

seeks in prayers (b) and (c) to set aside a sale of all

assets of The Midwest Refining Company to Standard

Oil Company and Stanolind Oil and Gas Company, and

an accounting for all revenues received from said prop-

erties of The Midwest Refining Company since the

date of said sale, upon the allegations that Standard

Oil Company, the dominant majority stockholder of

The Midwest Refining Company, by virtue of its

dominance and in breach of its duties and obligations

as trustee for the minority, had forced said sale to it-

self and its controlled subsidiary, Stanolind Oil and

Gas Company, at a price which was inadequate to the

extent of at least millions of dollars (R. 266), without

making any effort to sell said assets to any other pur-

chaser (R. 274). In prayers (d) and (e), the amended

bill seeks recovery in the right of The Midwest Re-

fining Company of approximately ten million dollars

alleged to be due from Standard Oil: Company, and, in

the alternative that said sale is not set aside, it seeks

to recover for The Midwest Refining Company over

five million dollars of the purchase price agreed to be

paid by Standard Oil Company for the assets of The

Midwest Refining Company (prayer f), and to estab-

2

a

lish a liability of Standard Oil Company to The Mid-

west Refining Company arising out of an alleged

fraudulent transfer of stock immediately before said

sale (prayer g).

On January 18, 1988, defendants filed a “special

motion” (R. 290) with two objectives, first, to strike

out and dismiss prayers (b) and (c); second, in the

event said prayers are stricken, to obtain a dismissal

of the suit upon payment to plaintiff or into Court of

plaintiff's share of any amounts that could be recov-

ered on behalf of The Midwest Refining Company

under the remaining prayers together with costs and

counsel fees. The motion alleges as the basis for strik-

ing said prayers (b) and (c) that plaintiff had not filed

a written dissent from said sale, from which is drawn

the legal conclusion “that by virtue of the provisions

of* Section 64 of Chapter 56 of the Revised Statutes

of the State of Maine * * the complainant is not en-

titled to the relief prayed for in said prayers num-

bered (b) and (c); that the defendants herein should

not be put to the great expense involved in the taking

of testimony, preparation and trial of the issues raised

by said prayers (b) and (c)” and are, for said reasons,

“entitled as a matter of law and equity to have said

prayers (b) and (c) stricken from the complainant’s

said amended Bill of Complaint.” (R. 292-3). In the

event, and upon the condition, that said prayers (b)

and (c) be stricken from the plaintiff's complaint, the

defendants offered “to submit to the demands of the

complainant as set forth in the remaining prayers of

his bill” and “to pay to the complainant his full share

of any amounts that could be recovered under the re-

maining prayers (d), (e), (f) and (g)” together with

3

WRG AIEEE LEP PARLE TALNSONGAEANED. PLLA LOS IB BLES APIS BEC SAIS AMONG SENOS Spica See Mi ss a

costs and counsel fees to be fixed by the Court (R.

293), and moved the Court to “determine the amount

of the plaintiff's share in any recovery of the ful]

amounts set forth in the remaining prayers (d), (e)

(f) and (g) of said bill and determine the amount of

costs and counsel fees to which the complainant and

his counsel are entitled, and that upon payment by

these defendants to the complainant or into this Court

of the amount so determined, the complainant’s bill be

dismissed.” (R. 293).

As a predicate for the latter relief, defendants

alleged in said motion that all stockholders not repre-

sented or voting at the meeting at which said sale was

voted, as well as all stockholders who had voted for

said sale, had accepted their liquidating dividends

without protest, and that Standard Oil Company,

pending this suit, had acquired all of the stock that

had voted against said sale except the stock of plain-

tiff, and that of Norwin S. Bean, who had elected to

recover the value of his stock under the Maine valua-

tion statute. From these allegations defendants drew

the legal conclusion that there was no other stock-

holder similarly situated to plaintiff, or who had any

right to intervene or join in the suit, and, upon this

assumption, they alleged, as the basis of their motion

to dismiss the bill upon payment of plaintiff's share

of the recovery to which The Midwest Refining Com-

pany was otherwise entitled, that plaintiff's share in

any recovery under said prayers (d), (e), (f) and (g)

will be a small fraction of the expense to which de-

fendants will be put in taking testimony and prepar-

ing the cause for trial on the merits. (R. 293).

4

_—_-” PA Mie PES Yi Rind OREM ATE LNT CURES POLAR SESE TTP KAT ARN SB YAEL GNIS Silt MUS LIPS INT

The motion was submitted by defendants on ex

parte affidavits (R. 294-300) to the effect that the

records of The Midwest Refining Company showed

that plaintiff, while voting against the sale in question,

had never filed a written protest against the same;

that pending the suit, Standard Oil Company had ac-

quired all of the stock voting against the sale except

that of plaintiff, and that of Norwin S. Bean, who in-

stituted proceedings for valuation of his stock under

the Maine statute, and that all other stockholders, ex-

cept the holder of one share, had accepted their liqui-

dating dividends without protest.

There was no evidence by affidavit or otherwise

in regard to the alleged necessity for defendants to

take voluminous testimony at burdensome expense,

the affidavits offered to support the motion being en-

tirely silent on that subject. There was accordingly no

evidence to support the alleged burdensome expense

that would result to defendants from allowing plain-

tiff's suit to proceed according to established practice

to a recovery in the primary right of The Midwest

Refining Company.

The motion having been submitted by respondents

on said ex parte affidavits (R. 294-300) the Court

rendered an opinion that the motion should be granted

(R. 300-308), but instead of then entering a decree

granting the motion, withheld such decree, and later

entered an order appointing a master to take testi-

mony (R. 309):

“1. In relation to the amount which would

represent the plaintiff's proportion, based on his

5

ine, a eR TEBE. LARA LR NMEBE MSU TART ONL 22th AM EINE OEE GR

proportionate stock holding in Midwest Refining

Company, of the amounts claimed by the plaintiff

in prayers d, e, f and g of the bill, assuming the ©

allegations of the bill on which said prayers d,

e, f, and g are predicated to be true.

2. In relation to the amount allowable to the |

plaintiff for counsel fees and expenses arising out

of this litigation; * *.”

At the reference before the Special Master it was

stipulated by the parties through their attorneys of |

record, that assuming the truth of the allegations of ©

the amended bill in regard to prayers (d), (e), (f)

and (g), the total recovery under said prayers would

be under prayer (d) $10,243,225.53; prayer (e) $119,-

224.62; prayer (f) $5,091,164.96; and prayer (g) 101-

(66.47, or a total under the four prayers of $15,554,-

681.58, and that plaintiff's proportion thereof based

on his proportionate stock ownership in The Midwest

Refining Company is $1,246.22 as of November 1, 1932

(R. 389-90).

Based on this stipulation and testimony in regard

to counsel fees and expenses, the District Court en-

tered its final decree (R. 400) granting the special mo-

tion by striking prayers (b) and (c), by ordering the

payment into Court of $1,246.22, representing plain-

tiff’s share of the recovery under prayers (d), (e), (f)

and (g) with interest to the date of the decree; the —

payment into Court of $40,800.00 for plaintiff's coun-

sel fees; $2,346.27 for plaintiff’s expenses; plaintiff's

cost of court as taxed by the clerk; and by ordering

that upon the payment of said sums with interest to

cate that “the plaintiff's bill be dismissed.”

6