Brief for the Respondent in Opposition — Tucker v. California Department of Corrections

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Table of Authorities Cited

Cases Page

Magnum Import Co. v. De Sportuno Coty, 262 U.S. 159, 67

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In the Supreme Court

OF THE

Rnited States

OcrToBerR TERM, 1964

No. 642

PiocHE MINES CONSOLIDATED, LNC., Ety |

VALLEY Mines, INc., and JOHN JANNEY,

Petitioners,

Vs.

HELEN DoutmMan, LAWRENCE Rest my

James KerrH MARSHALL, Jr, E. P. R. |

DtvaL, and KaTHERINE HANSBROUGH,

Respondents.

RESPONDENTS’ BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORAR!

Come now respondents above named and present

herewith their brief in ovposition to Petition for Writ

of Certiorari to the United States Court of Appeals

for the Ninth Circuit.

9

—

INTRODUCTION

The instant Petition for Writ of Certiorari pur-

ports to assert rights of certain corporate entities,

but no such corporate rights are invo!ved herein. An

examination of the judgment of the United States

Court of Appeals for the Ninth Cirenit (Appendix,

Petition for Writ of Certiorari, pages 35-37) shows

that the only party adversely affected by said judg-

ment is the individual petitioner, John Janney, to

the extent of a money judgment against him and in

favor of the corporate entities. As is shown in detail

below, the instant petition represents but a further

attempt by the said John Janney to utilize the cor-

porate entities for his own personal advantage.

Contrary to the contentions in the said Petition,

there are no general principles of law involved here,

which are applicable to others, neither is there in-

volved any conflict whatever between the decision of

the Court of Appeals on the points raised by | Peti-

tioner and any decision of any other Court of Appeals

or any decision of this Court.

The instant Petition constitutes but an attempt by

the said individual, jchn Janney, to have this Court

review certain factual determinations adverse to him

made in the trial court and affirmed by the Court of

Appeals. Such “second appeal’’ is, of course, not

within the purview of certiorari proceedings here.

Magnum Import Co. v. De Sportuno Coty, 262

U.S. 159, 163; 67 L. Ed. 922, 924.

3

QUESTIONS PRESENTED

Under this heading, Petitioner John Janney sets

forth certain ‘*questions’’ purportedly involved in the

instant proceedings. Such purported ‘‘questions’’ are,

in fact, not involved in these proceedings at all.

In order to demonstrate the truth of this statement,

it is necessary to examine the circumstances of the

case as the same are reflected in the official record.

Such official record differs considerably from the

‘‘statement of the case’’ advanced by Petitioner. This

latter ‘‘statement’’ is alsw ‘‘loaded with assertions,

innuendoes and assumptions,” (Appendix to Petition,

page 2) and it therefore becomes necessary to set

forth a corrected ‘‘statement of the case’ in order

that this Honorable Court may ascertain what really

are the ‘‘questions presented.”

STATEMENT OF THE CASE

For some twenty or thirty years, petitioner Janney

conducted the affairs of the corporations involved

herein, Pioche Mines Consolidated, Inc., and Ely

Valley Mines, Inc., as a one-man corporation, without

any stockholders’ meetings whatever being held, with

the possible exception of one in 1943 (T. 2372). The

secretary-treasurer of the corporations admitted that

he bad been appointed by Janney (T. 707), that he

never pricd into the minutes of the corporation (T.

708), that corporate minutes were maintained only

t

up until 1944 (T. 714), that he had never attended

any board of directors’ meetings in the several years

he had been there (T. 716), that he destroyed plain-

tiffs’ demand for stockholders’ meeting (T. 718), that

nothing was ever done with a demand for stock-

holders’ meeting from some 69 stockholders (T. 722),

that reauests for financial statements were ignored

(T. 718), that there was an almost complete failure

to maintain stockholders’ records (T. 735, et seq.),

that a purported list of directors filed by the corpora-

tions with the Nevada Secretary of State was not cor-

rect (T. 741), that none of the purported directors

had been elected by the stockholders (T. 760), that

no meeting of the purported directors had ever been

held except for one or two in 1942 (T. 761). Evidence

was introduced showing that one purported director

had resigned (T. 1419, T. 1415), another purported

director had had nothing to do with the companies

for thirty years (T. 1421), a third purported director

had denounced Janney for his outrageous frauds on

the corporations and their investors, reciting that all

of defendant Janney’s associates in the corporate ven-

ture had theretofore disowned him (T. 1422-1425).

It was shown that defendant Janney had so main-

tained, or, more correctly, failed to maintain, stock-

holders’ records for twenty or more years, that it

was impossible to call a stockholders’ meeting (R.

730, T. 570, et seq., T. 735-738, T. 1603, et seq.).

The trial court, upon such evidence, correctly found

that ‘‘At all times mentioned herein defendant Janney

has wrongfully controlled, completely, all of the af-

N

mt

5

fairs of the above named defendant corporations, to

the detriment of the stockholders thereof’’ (R. 1246),

that corporate records of stockholders have noc been

maintained so that the stockholders of the corporaticns

cannot now be ascertained (R. 1247), that no vatid

stockholders’ meetings have been held since, m the

case of one corporation, its incorporation in 1928,

with one exception in 1942 or 1943, that no ‘‘valid

board of directors have been elected’’ (R. 1247).

Extensive additional findings were made by the

trial ccurt concerning defendant Janney’s wrongs to

the corporation performed by him as a result of his

one-man control. None of these findings of fact of the

trial court were disturbed by the Court of Appeals.

Because of the above state of affairs, plaintiff and

several other stockholders instituted a representative

action on behalf of the corporations, which stated a

cause of action against defendant Janney alone (R.

39). Defendant Janney’s contention, in the instant

Petition, that the additional piaintiff stockholders

had not authorized the action, is pure nonsense (T.

581, 592, 616).

For more than one year, defendant Janney re-

mained out of the jurisdiction to avoid service of

process ‘‘upon advice of counsel’? (R. 534, T. 324),

in order to ‘‘avoid harassment”’ (T. 1611, 1612). De-

fendgn+ Janney claimed to be detained in the East

by work on the corporate records at his home in

Virginia (R. 251), but the secretary-treaurer of the

corporations admitted that there were no corporate

records there (T. 1162).

6

Despite the fact that no cause of action whatever

was stated against the corporations (the corporations

having been made nominal defendants only for pur-

poses of jurisdiction), defendant Janney caused an

answer to be filed purportedly on behalf of the cor-

porations (R. 243) while he continue] to remain out-

side the jurisdiction.

Plaintiffs thereupon sought to take the deposition

of the corporations by and through their president,

defendant Janney (R. 305, 282). Janney failed to

appear (T. 709, 712). There was no protective order

from the Court, and motion for default was filed (R.

304). Subsequent attempts were made to take the

deposition of defendant Janney on three separate

occasions (R. 532, 648, 688). On none of these occa-

sions did defendant Janney appear (T. 323, 324, 382).

No protective order was ever obtained.

On the last mentioned occasion, the Court specific-

ally directed defendant Janney to appear (T. 467).

Upon the last mentioned occasion, counsel for de-

fendant Janney appeared and stated that his client

would not appear unless the Court, prior thereto,

granted certain demands made by him (T. 398, 460-

463). A claim of illness was made at that time, but

counsel for defendant Janney admitted that Janney

was at that time conducting his regular business, and

taking trips (T. 471, 402, 468). It was admitted by

Janney’s counsel that Janney could have attended

the hearing (T. 423-426), and, finally, that Janney’s

failure to appear was not because of his claimed ill-

7

ness (T. 942). Though the trial court offered to defer

action if defendant Janney would appear, counse! for

defendant declined (‘T. 482-486}. The trial eourt at-

tempted to verify the claim of illness by independent

physicians (T. 408), which attempt was refused (T.

428-424, 460).

Upon this state of faets, the trial court entered the

default on plaintiffs’ complaint which, a: above noted,

stated a cause of action against defendant Janney

alone for his wrongs against the corporation. These

actions were upheld by the Court of Appeals (Ap-

pendix, Petition for Writ of Certiorari, pages 13-18).

The tria] court thereupon conducted a trial which

lasted one month (T. 507, 2514) which, though denom-

inated a default hearing, involved an exhaustive pre-

sentation of evidence in which defendant Janney and

his counsel fully participated. ‘Phe evidence concerned

Janney’s wrongs to the corporations and their stock-

holders and showed, among other things, that defend-

ant Janney, individually, misappropriated in excess of

one million dollars of corporate assets. The evidence is

reviewed in some detail by the Court of Appeals (Ap-

pendix, Petition for Writ of Certiorari, pages 20-23),

and need not be reviewed here.

The judgment against defendant Janney for one

million dollars (R. 1240), based upon proper findings

(R. 1248), was, of course, upheld on appeal (Appen-

dix, Petition for Writ of Certiorari, page 35).

This, essentially, is the judgment, affirmed on ap-

peal, that defendant Janney now seeks to have this

8

Court review, under the guise of asserting ‘‘corporate”’

rights. To whatever extent the corporate entities have

any interest to assert, as distinguished from the in-

terests of defendant Janney, those interests are as-

serted in their counterclaim, which has been ordered

reinstated by the Court of Appeals (Appendix, Peti-

tion for Writ of Certiorari, page 35).

It is therefore clear that the only true ‘‘question

presented’’ in the instant Petition is whether Peti-

tioner Janney may further use the corporate entities

for his own individual purposes. In effect, Petitioner

Janney is here attempting to assert that the corpora-

tions should not have the benefit of the million dollar

judgment entered in their favor and against him!

INDISPENSABLE PARTIES

Under this heading, and under the headings ‘‘In-

dispensable Parties Damaged by Judgment’’ and

‘“That the Judgment is ‘In Favor of Piéche Con-

solidated’ does not cure the Defect of Not Hearing

Indispensable parties,’’ Petitioner Janney argues that

the corporate entities are indispensabie parties in any

representative suit, citing a host of authorities foi

this basic proposition of law.

The plain and simple answer to this contention is

that the corporate entities are parties to the instant

litigation, and have been from the outset.

9

‘‘FUTURE LITIGATION”’

Under this heading, Petitioner Janney argues that

there may, be future litigation arising out of the facts

of this ease.

Whether true or not, this contention, of course,

furnishes no basis for the issuance of a writ of cer-

tiorarl.

‘‘BASIS FOR DEFAULT’’

Under this heading, Petitioner Janney, if we under-

stand correctly, argues that the trial court could not

enter his defauii since he had, prior thereto, applied

for relief under Rule 30(b) F.R.C.P.

Once again, the answer to this contention is clear

and simple. As is shown in detail in the decision of

the United States Court of Appeals (Appendix, Peti-

tion for Writ of Certiorari, pages 13-19), Janney’s

demand for relief under Rule 30(b) was rejected by

the trial court, which said action was almost com-

pelled by the factual circumstances described above.

It would indeed be extraordinary if a litigant were

permitted to control litigation, rather than the Court.

‘‘BASIS FOR JUDGMENT”’

Under this heading, Petitioner Janney argues, in

effect, that the factual determinations made by the

trial court, and sustained by the Court of Appeals,

are 1m error.

10

Here again, the correctness of the determination of

the trial court was reviewed by the Court of Appeals,

and sustained (Appendix, Petition for Writ of Cer-

tiorari, pages 20-23). This obviously furnishes no

ground for certiorari here.

CONCLUSION

It is respectfully submitted that Petitioner has

failed completely to show any valid ground whatever

for issuance of a writ of certiorari in the instant pro-

ceedings, and that the petition for the same should

therefore be denied.

Dated, San Francisco, California,

December 23, 1964.

ARTHUR H. ConNOiLy, Jr.

SULLIVAN, RocHe, JOHNSON & FARRAHER

Counsel for Respondents.

JAMES F'ARRAHER

Of Counsel.