Porter v. Robert Porter & Sons, Inc.

• Decision Date: 31 January 1961
• Docket Number: No. 6701,6701
• Citation: 68 N.M. 97,359 P.2d 134,1961 NMSC 10
• Parties: Robert P. PORTER, Jr., Plaintiff-Appellant, v. ROBERT PORTER & SONS, INC., a Corporation, Robert Porter Investment Corporation, a Corporation, Wayne Hudspeth, Herman Pitts, U. V. Skaggs, H. M. Black and J. D. Bavousett, Defendants- Appellees.
• Court: New Mexico Supreme Court

Page 134

359 P.2d 134

68 N.M. 97

Robert P. PORTER, Jr., Plaintiff-Appellant, v. ROBERT PORTER & SONS, INC., a Corporation, Robert Porter Investment Corporation, a Corporation, Wayne Hudspeth, Herman Pitts, U. V. Skaggs, H M. Black and J. D. Bavousett Defendants- Appellees.

No. 6701.

Supreme Court of New Mexico.

Jan. 31, 1961.

Rodey, Dickason, Sloan, Akin & Robb and John P. Eastham, Albuquerque, for appellant.

Garland & Martin, Las Cruces, for appellees.

MOISE, Justice.

In the complaint filed in this cause the plaintiff has sued Robert Porter & Sons, Inc. and Robert Porter Investment Corporation, together with the directors of the two corporations and one other individual in four counts. Under the first count it is alleged that the salaries of the defendant, who is not a director, and of one of the directors and possibly others have been raised by the defendants who are directors and prays that such action in raising salaries be set aside and any amounts received as increased salary be repaid to the corporation, and for attorney fees and costs. This count is based on the fact that in a previous suit between the same parties to determine the ownership of the controlling interest in the two corporations, an audit was being made pursuant to a Supreme Court mandate, and that the action of the directors in increasing salaries was contrary to the interest of the plaintiff.

In the second count plaintiff alleged that the defendant directors have or are about to take certain actions contrary to his interests and asks that they be enjoined from issuing any stock in Robert Porter & Sons, Inc.; from declaring any dividends in the corporation; from transferring any assets except in the ordinary course of business; from interfering with the relations of the corporation and its customers and suppliers; from authorizing any salary increases; and generally from doing anything to disturb the status of the corporation pending determination of ownership of the majority of stock in the corporation.

The third count is similar to count two except it applies to Robert Porter Investment Corporation.

Count four alleges that plaintiff is the owner of a 7/16 interest in certain real property occupied by Robert Porter & Sons, Inc. as an office and warehouse, and that he has not been paid his share of the rent thereon, and he asks that said corporation be ordered to pay him his share of back and accruing rent.

A restraining order as prayed in courts two and three was issued by Judge Reidy upon presentation of the complaint, and the matter was set for hearing on the application for a temporary injunction.

To the complaint the defendants filed a lengthy motion to dismiss the complaint and dissolve the temporary restraining order. This motion discloses a state of facts necessary for an understanding of the situation confronting the court which resulted in Judge Reidy recusing himself and designating Judge John R. Brand of the Fifth Judicial District to preside in the cause. After a hearing an order was entered by Judge Brand dissolving the injunction or restraining order entered by Judge Reidy and dismissing this action and ordering plaintiff not to file in any other court any further actions involving the subject matter in dispute in this cause, without first obtaining permission from the court. It is from this order that this appeal is prosecuted.

The order appealed from has a lengthy narrative recital of the history of the litigation which is generally uncontroverted and which we now condense as much as possible.

The plaintiff Robert P. Porter, Jr., formerly a resident of the state of New York, together with his brother Harry C. Porter, a resident of New Mexico, are the sons of Robert P. Porter, Sr., and Alice Porter, both now deceased. The parents had been divorced in 1936 but their property rights were never settled. Alice Porter died in 1953 and, thereafter, the father Robert P. Porter, Sr., prior to his death commenced suit in Dona Ana County, New Mexico, where he lived and the corporation had its main place of business, against the two sons, seeking a declaratory judgment to determine the ownership of the stock in the two corporations involved herein. This action which was cause No. 13,560 on the docket of the district court of Dona Ana County was appealed to the New Mexico Supreme Court and resulted in a conclusion that all property of Alice Porter and the plaintiff was community property as of the date of the divorce, and a mandate issued to the trial court to order an accounting between the parties based upon such conclusion. This case is Porter v. Porter, 65 N.M. 14, 331 P.2d 360. Such accounting is in process.

After the mandate and during the period when the accounting was taking place, according to appellant's statement of facts, not controverted by appellees, suit was filed by the two brothers against Robert P. Porter & Sons, Inc. (there is some dispute as to whether Robert Porter Investment Corporation was involved in this suit--it was not a named party) and various directors, officers and employees of that corporation to restrain issuance of 480 shares of stock in the corporation alleging such action to be fraudulent, and to require any such stock to be surrendered back, and to further restrain anything being done to alter the control of the corporation alleged by plaintiffs to be in them. This is cause No. 15,471 on the docket of the district court of Dona Ana County. Judge Brand was designated to preside in said cause, and at a hearing therein he enjoined the issuance of the 480 shares of stock and ordered any stock that had been issued be cancelled and further ordered the matter held in status quo pending completion of the audit then in process in cause No. 13,560.

From the motion to dismiss and the narrative contained in the other appealed from herein, it further appears that after the mandate was issued in cause No. 13,560, and while the Dona Ana County suit referred to above was pending, the plaintiff herein also filed suit in the United States District Court for New Mexico against the defendants in the Dona Ana County suit and seeking generally the same relief being sought therein; that, thereafter counsel sought to amend his complaint in federal court to accomplish what is being sought in this appeal, but was denied permission and the federal case was dismissed by the court. After this dismissal plaintiff filed the present case. Robert P. Porter, Sr., has died since the first case was filed, and Harry C. Porter has not joined in this action and was not a party to the federal court action.

It is clear from the order of dismissal herein that Judge Brand felt that the relief sought in this cause was the same as that being sought in the Dona Ana County case, and that if relief greater than that originally sought in Dona Ana County was deemed necessary, the proper forum was the Dona Ana County court. He also indicated that in his opinion it was improper for counsel for plaintiff to have undertaken this cause in Bernalillo County when the other case in which a temporary injunction had been issued and matters ordered held in status quo was still pending before the court.

On this appeal the appellant asserts that the cause of action here sued upon is different from that sued on in the Dona Ana County cause No. 15,471 and accordingly the court erred in dismissing it. Appellant also argues that this cause and Dona Ana County cause No. 15,471 are both in personam actions, and that the court erred in treating cause No. 15,471 as an in rem action and holding that jurisdiction having been first acquired by the Dona Ana County court, this jurisdiction was exclusive. As a third point appellant claims that action of the trial court in enjoining the bringing of other actions by appellant violated his constitutional rights.

It should be stated at the outset that we have a very sketchy and unsatisfactory record upon which to base our conclusions on the first two issues. We know nothing concerning the nature of the Dona Ana County cause No. 15,471, nor about the case in the federal court except what is recited in appellees' motion and the court's order of dismissal. True, appellant has attached as Exhibit 'A' to his brief what purports to be the first amended complaint filed in cause No. 15,471 on the docket of the Dona Ana County district court, and appellees have attached as Exhibits 'A', 'B' and 'C' to their answer brief what purport to be respectively the complaint, the first amended complaint attempted to be filed, and the order dismissing the federal court case.

Our Supreme Court Rule 17, subd. 1 being Sec. 21-2-1(17), subd. 1, N.M.S.A.1953, reads as follows:

'The Supreme Court in appeals or writs of error shall examine the record, and on the facts therein contained alone shall award a new...