# Appendix — Don Rhoades Corp. v. American Institute of Marketing Systems, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1971
- **Citation:** 404 U.S. 882

## Text

IN THE SUPREME COURT
OF THE UNITED STATES

OCTOBER TERM, 1971.

NO,

DON RHOADES CORPORATION ,
a corporation, Petitioner,

vs.

AMERICAN INSTITUTE OF
MARKETING SYSTEMS, INC.,
a MfSsouri corporation, Respondent.

_APPENDICES TO
RESPONDENT'S REPLY TO PETITION FOR
- A WRIT OF CERTIORARI TO THE SUPREME

COURT OF THE STATE OF NiW MEXICO

Counsel for Respondent
SUTIN,\ THAYER & BROWNE
Irwin S. Moise and
Jonathan B. Sutin
800 Simms Bldg., P.O. Box 1945
Albuquerque, New Mexico . 87103

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‘eb F6 f& BOTY
eee |
> §-9369 (Magistrate Court,

é
ae

St. Louis County, Mo. ), attached
hereto as Exhibit 4. “s

9. Certified copy of the Judges.

Wel exemplified, in the action, Amer j -
can Institute of Marketing| Systems,
Inc., vs. Don Rhoades Corporation,
No. S-9369 (Magistrate Court, St,
Louis County, Mo.), attached ‘heres
to as pEnabae- >

a

. SUTIN, THAYER & BROWNE.
» Attorneys for Plaintiff

By s/Jonathan B. Sutin
Jonathan B. Sutin
P. O.° Box 1945-
Albuquerque,

New Mexico 87103

We Beveby certify that we
have mailed a copy of the

foregoing Pleading to.

oppes ing couse of record
this 24th day of June, 1969,
SUTIN,. THAYER & BROWNE

By s/Jonathan B. Sutin
.Jonathan B. Sutin

D

[Page 14 of Respondent's Reply refers.

att

to Exhibit "A" to the foregoing Motion for

Summary Judgment. The. pertinent portions
of the contract, the cenvenst being
attached as Exhibit "A" to the Affidavits
‘of Baker and Kinder which were themselves
attached to the Motion for Summary Judgment,
are set out below: }

CONTRACT, paragraph 5(g). [automatic
renewal provision]: | | :

. The initial term of this

is. 6 DER
agreement, shall be 36
months commencing on the.
date: the Agreement is
accepted by AIMS at its
home office, 111 So. So.
Bemiston Avenue, St. paid,
Nisacust 63105. oes °

[The original of the above quoted pro-

vision shows the number ''36"! crossed out and

the number ''6" inserted above with the

written initials "DER" which stands for

q Donald E* Rhoades," the principal of the

Petitioner. ]
[Page 16 of Respondent 's Reply refers

to the , foregoing Motion for Summary Judg-

ment (Appendix B). The attachments to the |

Motion are not made a part of these ap-

pendices. The attachments are, however,
listed: on the Motion. Number 5, the certi- =
fied copy of the Judgment, States that the

action was an "Action for Contract." -

Gis

“RESPONDENTS.
REPLY BRIEF

IN THE SUPREME COURT
OF THE UNITED STATES

OCTOBER TERM, 1971

NO.

DON RHOADES CORPORATION, : |
a corvoration, Petitioner,

vs.

AMERICAN INSTITUTE: OF
MARKETING SYSTEMS, INC., ©
a Missouri corporation, . Respondent.

RESPONDENT'S REPLY TO PETITION FOR
A WRIT OF CERTIORARI TO THE SUPREME

COURT OF THE STATE OF NEW MEXICO

Counsel for Respondent
SUTIN, THAYER & BROWNE
Irwin S. Moise and
Jonathan B. Sutin
800 Simms Bldg., P.O. Box 1945
Albuquerque, New Mexico 87103

. INDEX’

Page
Argument... ene eee ee ees ch ns hnun cu hdee 1L
UIE n ko cis suk ce TT aie dicessiocesl®

°
t

CITATIONS

Cases:

Albright v. Albright, 45.N:M. 302, 115

fe Be sere (cues ebnces b0
Baker v. Erbert, 199 Kan. 59; 427 P. 2d

461 (1967)... POT eee Te ee TC ECC EER Te 18
Christmas v. Russell, 72 U.S. 6G Wall.)

290, 18L.Ed. 475 €1GG6) ca ccccccccoce 2

El -Capitan:Land & Cattle Co. v. Lees, 13
, MoM, 407, GO PP, 924 (1906). ...6006.-Lh, 13°
Evens v. Keller, a2 M, 659, 6 P.2d 200

. (1932) .....50 ee OO ee ee 10
Gibson v. Epps, 352 StwW., 2d INP Mo. App.
1961). @eeee7#es951ioee#es#s#e#e7#2e7#ee#ee#e#e#e# eeeeneveeeee 9, 10

Harris v. Four Hills Development Corp.,
_ 79 NM. 370, 443 P.2d 863 (1968)....17
Hilton v. Guyot, 159 U.S. 113, 40 L.Ed
We CPE Rae a chon k cus 605.45 65065060066 2
Houston Fire & Casualty Ins. Co. v. Falls,
x 67 N.M. 189, 354 P.2d 127 (1960)....10
Levin v. Gladstein, 142 N.C. 482, 55 S.E.
o71, 32 L.R.A.N.S. 905, 115 Am, St.

BR ee CU oon hook sv kt eaccce cece 8
Liebendorfer v. Gayle, 217 So. 2d 37
Pe | ee cahanseeee's 18

Lincoln Safe Deposit Co. v. Continental
Life Ins. Co.. 213 Mo. ~~ 561,
RS > go | 3) re en 18

a

Page

May v. Anderson, 345 U.S. 528, 73 Sup.

Ct. 840, 97 L.Ed. 1221 (1953); tieeee
Milwaukee County v. M.. E. White Co., 296

U.S. 268, 56 Sup. Ct. 229, 80 L.Ed.

220 (1935). TeCe TT eee ee Te Pere ere ae
Mountain: States Fixtures Co. v. Daskalos, .

61 N.M. 491, 303 P.2d 698 (1956). ees 15
National Equipment Rental, Ltd. v.

Szukhent, 375 U.S. 311, 84 Sup. Ct.

411, 11 :. Ed. 2d 354 (1964) ...0..... a,7
Picadura’ v. Humphrey, 335 S.W. 2d 6 (Mo..

ee ee as sw kb we veh ae aaa ee. kaa’ 9
Reis v. Travelers Indemnity Co., 366 S. W.

me ee Gees Sem, GE, 1963)... ccee ck a,
Scott v. Scott, 441 SW 2d 330 (Mo. Sup.

Ct. 1969). ESTE CET ES TE Eee rx oa 40
Shumate v. Hillis, 80 N.M. 308, 454 P.2d

ceil eS ED ara 18

State of Missotri ex rel American Institute

of Marketing Systems, Inc. v. Cloyd,

433 S.W. 2d 559 (Mo. Sup. Ct. 1968). 19
Stewart v. Maxwell, 1 N.M. 563 (1873)

aff'd. 88 U.S. (21 Wall.) 71, 89 U.S.

(22 Wall.) 7, Be An Ed. 565 (1875)... 2, 10,

ll, 13
Union Nat'l Bank v. tia aa7 U.S. 38, . ;
« OF Sup. Ce..911,- 93 L.Ed. 1190 eee!
(1949)... eee. ee ee ee ee rere 4.

United States v. Throckmorton, 98 U.S.
(8 Otto) 61, 25 L.Ed. 93 (1878)..... 2
Venegoni v.. Givdicy, 238 S.W. 2d 17

ths Ae. 1990)... 07.00.50. cece. 9
Williamson v. Williamson, 331 S.W. 2d

fw GP. APRs 1960) oo 5 icc c cee em 19°
Text Books:

47 Am. Jur. 2d Judgments §§1218, 1224.
Ses ics cs a we eeee5e2eees (Ae eh hws een eh ae AO

- Page
50 C.J.S. Judgments §§ 888(b), 889
(1947) ccc encceccccrcerccrecrceeee ee lO

Rules of the Supreme Court:

United States Supreme Court Rule 19(1) (a)

20 US Meek cd 00s 6s 600 445d e Ree
‘United States -Supreme Court Rule 23(1) (f)

OO US Si acahans es sceeeeee
United States Supreme Court Rule 23(4)... 4,5

Statutes:

482.090 (Supp. 1970)....18
S06 . 25002) . C8992) 05 cco ncae
517.050 (Supp. 1970)....18
517.080 (Supp. 1970)....19
517.100 (Supp. 1970)....19
517.110 (Supp. 1970).....19
517.770 (Supp, 1970)... ..19

Mo. Ann. Stat.
Mo. Ann. Stat.
Mo. Ann. Stat...
Mo. Ann. Stat.
"Mo. Ann. Stat..
Mo. Ann. Stat.
Mo. Ann. Stat.

MrAAAAA AN mM

IN THE SUPREME COURT
OF THE UNITED STATES

OCTOBER TERM, 1971

NO,

_ DON RHOADES CORPORATION , |
a corporation, _ Petitioner,
vs.

3

AMERICAN INSTITUTE OF |

MARKETING SYSTEMS; INC.,

a Missouri corporation, - * -Respondent,
RESPONDENT'S REPLY TO PETITION FOR
A WRIT OF CERTIORARI TO THE SUPREME

COURT OF THE STATE OF NEW MEXICO

The Respondent requests: the Court to -
deny the Petition for a Writ of Certiorari
to _ Supreme Court of the State of New

Mexico on the following sera:

A. THE NEW MEXICO SUPREME COURT HAS
- NOT DECIDED A FEDERAL QUESTION -
OF SUBSTANCE NOT HERETOFORE DE-
TERMINED BY THE UNITED STATES
_ SUPREME COURT

The Petition does not set forth a
federal question of substance not before
determined by the United States Supreme
court. United States Sisene Court Rule
19(1)(a). The United States hisbeus Court

has considered the question of collateral

. attack on foreign judgments based upon

fraud. See STEWART.v. MAXWELL, 1 N.M. 563
(1873), aff'd, 88 U.S. (21 Wall.) 71, 89
S, (22 Wall.) 77, 22 L.Ed. 565 (1875);

CHRISTMAS v. RUSSELL, 72 U.S. (5 Wall.)

290, 18 L.Ed. 475 (1866). Cf., UNITED

STATES v. THROCKMORTON, 98 U.S. (8 Otto)

61,,25 L.Ed. 93 (1878); HILTON v. GUYOT,
159 U.S. 113, 40 L.Ed. 95 (4895). The

United States Supreme Court has considered

oa =

the validity of service of process under a.
contractual provision wherein a party to
the contract appoints an agent in another

state as his agent for service of process.

NATIONAL EQUIPMENT RENTAL, LID. v.

SZUKHENT, 375 U.S. 311, 84 Sup. Ct. 411, 5

L.Ed. 2d 354 (1964).

B. THE PETITIONER HAS NOT COMPLIED
WITH SUPREME COURT RULE 23(1)(£)

The Petitioner states that it raised
fraud in the ‘inducement as a defense in its
Answer and on appeal, and that it raised a
pn note defense on appeal (Petition,
pp. 11, 12). The Petitioner failed, as
required by Supreme Court Rule 23(1)(f),
to: eu | |

a. State the way in which the ques-
tions were passed on by the nies

b. Quote pertinent portions of the

v

record;

G. Specifically refer to the place
in the record where these matters appeared.
oer THE COGNOVIT NOTE QUESTION, IF A

FEDERAL QUESTION, WAS UNTIMELY
AND NOT PROPERLY RAISED

‘As can be seen by negative inference
from the Petition itself,. the cognovit note
question was oie: a pate of Petitioner's
inane to the Complaint, aie cadaen by the
Petitioner at trial (Petition, p.. 12). The
New lente Supreme ‘Court did not oe en
this spt in its Opinion (Petition,
Appendix "BM, pp. 46-51). The Soguenie note
“question, even if a federal question elderly
raised in the Petition (see Part D, infra, \.
regarding Supreme Court Rule 23(4)), was
not timely and. properly raised so as to
give cttw Conse jurisdiction to review the

e

decision of the New Mexico Supreme Court on.

vin

writ of certiorari.

D. THE PETITIONER HAS NOT COMPLIED
_-WETH SUPREME COURT RULE 23(4)

Under Supreme Court Rule: 23(4), the
Petitioner must "present with accuracy,
brevity, and clearness whatever is. essential
to a ready and adequate understanding of the |
points requiring consideration." The Peti-
tion is thee accurate, brief, nor clear.

The Petitioner "shot guns" its quest
for review by stating the question as
(Petition, pp. 4-5):

[W]hether the Court of a sister

state is required to give full

faith and credit to the judgment

of the sister state. under...

(Article 4, Section 1, U.S. .

‘ Constitution) blindly and without

any defense being allowed the

judgment ‘debtor of the state _

where full faith and credit is
| sought to be invoked by the judg-
. ~ ment entered in the sister state.

| A look at the Petitioner's "Reasons

=5-

for Granting Writ" (Petition, pp. 13-16)

_ Shows that the Petition seeks relief. under
‘the umbrella of "due process of law."' The
“reasons are gerieral, oratorical statements
with no specific application to the question
presented, It appears that the Petitioner ~
‘is contending that the Supreme Court of New
Mexico has denied the Petitioner due process
of law by not. permitting the Petitioner to
weiiats on the specific defenses of (1)
fraud in the Snnek tink ce: “nonce pttion" of
the contract, and (2) judgment ~ a cog-
novit note. But ereciesiy what the Peti-,

‘ tioner is contending is unclear, The
question should have heen nore -atcwcavely,
‘briefly, and clearly presented.

E. THE CONTRACTUAL: PROVISION RE-

LS

GARDING THE AGENT FOR SERVICE OF

era ne

PROCESS IS VALID oe

The Petitioner refers to and quotes

Sok Bones ea! , -6-

\
ek ea ORS OL TL Ne AR TORE AR id OM el vie es withenes, tis

ran f

paragraph 5(f) of the’ Respondent 's contract
(Petition, pp. 8-9). The Petitioner appears
to contend that this provision is unlawful
ona that the. New Mexico Supreme Court was
blind to its illegality.

, The Missouri Supreme Court,. sitting
en banc, has decided that the precise con-—
| tractual provision in isswe in a case,
paragraph 5(£) of the Respondent ' 8 contract,

‘is valid. STA OF MISSOURI EX REL AMERI-

CAN _ INSTITUTE OF MARKETING SYSTEMS , INC. Vv.

CLOYD, 433 S.W. 2d 559 (Mo. Sup.’ Ct. 1968).

The court held that service of process on

_ an agent in Missouri appointed by a citizen

of Arkansas under Section 5(£) of the AIMS .
contract was valid and binding.
The United States Supreme Court has

upheld a similar provision... NATIONAL EQUIP -

MENT RENTAL, Lm, Vv. SZUKHENT, 3750.8. 311,

ear nee

84 Sup. C(t. 411, 11 L.Ed. 2d 354 (1964).

F, THE JUDGMENT OF A SISTER STATE © °
CANNOT BE COLLATERALLY ATTACKED
BASED ON A DEFENSE OF INTRINSIC
FRAUD

®

The Petitioner admits that its phat
on ‘the Missouri judgment was based iki tha
defense of fraud in the inducement ,to enter.

“the contract (Petition, pp. 11-12, ,15).
“only: one of ‘the cles iaeae cited by the
| Petitioner .in support of its eee itiea dented
full faith and credit to a judgment of a

sister state, viz., LEVIN v. GLADSTEIN, 142

N.C. 482, 55.S.E. 371, 32 L.R.A.N.S. 905,
115 Am.. St. Rep. 747 (1906). LEVIN, how-
ever, is in point against the Bevis Sonne:
for it made it clear that full faith and
eredit will be denied a judgment only if

the fraud went to’the procurement of the

judgment - (extrinsic fraud), and not ifit

‘ -8-

went to the inducement of a contract (in- _

trinsic fraud). Indeed, the Petition, p.
. e .° —_- °

20, states this to be the law.

A reading of the two other cases cited

by the Petitioner (Petition, p. 19), MAY v.

ANDERSON, 345 U.S.*528, 73 Sup.’ Ct. 840, 97

L.Ed. 1221 (1953), and MILWAUKEE COUNTY v.

M. E. WHITE CO., 296 U.S. 268, 56 Sup. Ct,

229, 80 L.Ed. 220 (1935) shows that neither
case supports the Petitioner: S position.

The law is tis that in an action on

a foreign judgment, fraud in the inducement,

ér intrinsic fraud, is not available as a

defense, REIS v. TRAVELERS INDEMNITY CO.

366 S.W. ad ll, 13 (Mo. 1963); VENEGONI Vv.

GIUDICY, 238 s WW, 2d vv (Mo. kee, 1951);

FICADURA Vv. HUMPHREY, 7 S.W. 2d 6 (Mo.

Sup. Ct. 1960); GIBSON V. _EPPS 352 S.W. 2d

45 (Mo. App. 1961). -

It. is Hornbook law that valid, final
and oubatitiin ‘judgments of a sister state
are entitled to full faith and credit under
Article IV, Section 1 of the United beaten
Constitution, when sued upon in another

state. HOUSTON FIRE AND CASUALTY .INS, CO.

v. FALLS, 67 N.M. 189, 354 P.2d 127 (1960);

MOUNTAIN STATES FIXTURES CO. v.: DASKALOS,

61 N.M, 491, 303 P.2d 698 (1956); ALBRIGHT

' vy. ALBRIGHT, 45 N.M. 302, 115 P.2d 59

(1941); EVENS v. KELLER, 35 N.M. 659, 6 P.2d

200 (1932); STEWART v. MAXWELL, 1.N.M. 563,

aff'd, 88 U.S, (21 Wall.) 71, 22 L.Ed. 564, _
on petition for rehearing 89 U.S. (22 Wall.)

77, 22 L.Ed. 565 (1875); SCOTT v. SCOTT, 441

-$.W, 2d 330 (Mo.. Sup. Ct. 1969); GIBSON v.

EPPS, 352 S.W. 2d 45 (Mo..App. 1961); 50

C.J.S.,; Judgments, g§ 888(b), 889 (1947);

47 Am. Jur. 2d, Judgments, §§ 1218, 1224

«106

(1969), Se

In STEWART v. MAXWELL, 88°U.S. (21
Wall.) 71, 22 L.Ed. 564 (1875), an action
of debt ‘as commenced in the district
court of New Mexico upon a judgment in one
of the shes wr feeere of Kansas. One of
the defenses was that the judgment sued upon
was obtained by false and fraudulent ppeor ns
tion of a contract, and by means of false
and interested testimony. The court said,
88 U.S. at 73:

In pubis caas v. Russell, 5 Wall,

304 [72 U.S. XVIII, 479], this.

court held that fraud’ could not

be pleaded to an action in one

state upon a judgment in another.
With this we are satisfied.

Since the case of Mills v. ‘Duryee,
‘7 Cranch, 481, it has been settled
in this court that nil debet is not
a good plea to an action upon a
judgment in a -

EL CAPITAN LAND & CATTLE.CO, v. LEES, .

me

13 N.M. 407, 86 P. 924 (1906), was a suit in
New Mexico on a Kansas judgment. Defendant |
contended that fraud, consisting of false

and perjured testimony, fraudulent conceal-
ment and collusion may be set up as a defense
to the foveten judgment . The evial eoute

did not accept this defense and rendered

judgment for the plaintiff, and defendant eee

‘appealed. The New Mexico Supreme Court
affirmed the judgment and said, 86 Pac. at

926:

é

ge Bearing in mind the law as declared
8 by the authorities above cited, it
ey fa is clear that the fraud alleged in
ae ' the answer is not such fraud as
would constitute an available de- |
_fense to the judgment’sued on,~ If
Hockett's testimony was false, even
to the extent of perjury, it is
evident that it was concerning a
matter either actually tried or |
which might have been tried in the
action in the Kansas court. In
fact, it appears that the judgment )
was rendered upon the testimony | ;
given by Hockett as to the correct- :

-1]2-

-

‘ness of the account, which is

alleged to have been false, and,

hence, the fraud alleged related

to an issue actually tried.

See Annot. 55 A.L.R. 2d 673, Fraud as
Defense to Action on Judgment of Sister

State, and supplements. ,EL CAPITAN, supra,

and STEWART v. MAXWELL, supra, are cited on
A

p. 702.
‘« There is no defense, nor evidence of
any defense that Rhoades Corporation intended
to contest the Missouri claim but did not do
so ieceuie of any conduct of AIMS. |
G. THE MISSOURI JUDGMENT CANNOT BE
_ COLLATERALLY ATTACKED BASED ON

-A_DEFENSE THAT THE JUDGMENT WAS
BASED ON A COGNOVIT NOTE

The Petitioner appears also to contend
that it snd. eeeana weak process of law be-
cause the Missouri judgment was based on a
cognovit note and the New Mexico Supreme

Court refused to allow the Petitioner's

-13-.:

\
scteene in that regard. The Petitioner's
aie aes baseless:
| First, the Petitioner did not raise

this jeews in the’ trial court. Further, :
the trial court made no Finding of Fact or
Conclusion of Law that the Missouri judg-
aank was based upon a cognovit note,’

| Second, the. Missouri judgment was.
based upon the automatic renewal provision
(5)(g) of the canteiet (Opinion of ew:
Mexico Supreme Court, Petition, Appendix
B, Pp. 48; see Exhibit oe Motion ‘for
Summary Judgment, Appendix "B", infra)..
The -note (Appendix HAM infra) and the con-
tract (Exhibit "A" to Motion for Summary
Judgment , Appendix "B", infra) were for mm
original term of six months; the Petitioner
paid for the first six months; the Peti-

tioner signed no new note, but rather its |

~

otha

ee

-

liability arose from the automatic renewal
provision. |

| Third feven if the judpeent were based.
_ on the eae ae. it would not me in- ,
valid and would still be entitled to full

faith and credit. MOUNTAIN STATES FIXTURES

v. DASKALOS, 61 N.M. 491, 303-P.2d 698
-(1956).:
Fourth, even assuming that the law in

New Mexico were not stated in MOUNTAIN

STATES FIXTURES v. DASKALOS, supra, the
ne of forum cannot defeat a foreign judg--
ment isewniuné it was based on a cause of

| action which the forum itself would not

have recognized. UNION NAT'L BANK v. LAMB,

337 U.S. 38, 69 Sup. Ct. 911, 93 L.Ed.
1190 (1949).
H, ‘THE NEW MEXICO SUPREME COURT HELD

THAT THE TRIAL COURT SHOULD HAVE
GRANTED SUMMARY JUDGMENT

ofSe

At the’ édmiey judgment staae of the
proceedings the Petitioner did not ee
its fraud defenses. | |
| The Respondent. filed a Motion for Sun-
mary Sadak (Appendix “p", ieee) in the
trial court. The Petitioner filed no
Counter -af fidavit oe. ‘ste document to rebut
the facts Stated in-the © Respondent ' s Motion
, foe Summary Suaeebue. | The’ trial court
| denied the Respondent 's Motion, although
the only facts iedperiy s2taee the court _
were those contained in the Respondent's |
Motion for Summary Judgment.

The Respondent's fie wnika oa appeal
to the. New Mexico Supreme Court was as i.
caliows : es

The trial court gaouta have sus-

tained Plaintiff's Motion for

Summary Judgment because the -

Missouri judgment was entitled
to. full faith and credit in

opis

e

,
4
-—

“

Néw Mexico as a matter of law,
and because there was no genuine
issue as to any material fact...

.

The New Mexico Supreme Court held (Petition,

p. 50) that the trial court should have

ie, ) ,
granted summary judgment,

The New Mexico Supreme Court had every

reason to reverse the trial court. The.

Respondent 's Motion for Summary Judgment
contained uncontradicted facts suffitient

to support a judgment as a matter of law.
The becicionas not only failed to elie eta:
defenses in the Hineouet trial court, is
also failed to raise and support them with

facts in responsé-to the Res pondent 's

Motion for Summary Judgment.

In New Mexico, where the facts are
clear and undisputed and the only issue is

the construction of documents as written,

summary judgment is proper. HARRIS v. FOUR

-l7

Albuquerque , New Mexico

‘Dated this Istday
“of September, 1971.

#20-

---

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