Solliday v. District Court In and For City and County of Denver, 18148

• Decision Date: 24 June 1957
• Docket Number: No. 18148,18148
• Citation: 313 P.2d 1000,135 Colo. 489
• Parties: A. L. SOLLIDAY, Plaintiff, v. The DISTRICT COURT IN AND FOR the CITY AND COUNTY OF DENVER, State of Colorado, and the Honorable William A. Black, Judge of Division 6 of said Court, Defendants.
• Court: Colorado Supreme Court

Page 1000

313 P.2d 1000

135 Colo. 489

A. L. SOLLIDAY, Plaintiff, v. The DISTRICT COURT IN AND FOR the CITY AND COUNTY OF DENVER State of Colorado, and the Honorable William A Black, Judge of Division 6 of said Court, Defendants.

No. 18148.

Supreme Court of Colorado, En Banc.

June 24, 1957.

Hodges, Silverstein, Hodges & Harrington, William V. Hodges and Joseph G. Hodges, Denver, for plaintiff.

Hannett, Hannett & Cornish, Albuquerque, N. M., Lowell White, Walter A. Steele, Denver, for defendants.

SUTTON, Justice.

Stanolind Oil and Gas Company, a corporation, herein referred to as Stanolind, as plaintiff below brought a civil action in the Denver District Court against Paul H. Umbach and Brookhaven Oil Company, a corporation, as defendants. Umbach and Brookhaven Oil Company will be referred to herein when necessary by name or as defendants. Both companies are foreign corporations qualified to do business in the State of Colorado.

By its action Stanolind seeks to establish a constructive trust against defendants on certain oil and gas properties located in the States of Colorado and New Mexico. Plaintiff alleges these properties were obtained by improper use by the defendants of confidential geological information, and by the defendant Umbach in violation of a company rule of Stanolind prohibiting employees from engaging in the oil and gas business on their own account.

Defendants gave notice in the District Court action that they would take the deposition of one A. L. Solliday at Tulsa, Oklahoma, on June 27, 1956. Thereafter on their motion in that action a dedimus was issued to a Commissioner in Tulsa, Oklahoma, to take the deposition of Solliday in Tulsa. The judicial authorities of the State of Oklahoma, pursuant to an Oklahoma statute giving such power, issued a subpoena duces tecum, which was served upon Solliday to appear in Tulsa and testify and produce his personal income tax returns for the years 1939 to 1952, inclusive. Solliday appeared at the time and place scheduled, answered all questions propounded to him. He also produced, in response to the subpoena, copies of his personal income tax returns. He declined to permit inspection of those returns by anyone.

Thereafter defendants moved the Denver District Court for an order directing Solliday to produce copies of his income tax returns for the years in question for inspection by defendants. On September 11, 1956, that court entered an order requiring Solliday to produce his income tax returns for inspection.

It appears that Solliday is the Executive Vice President of Stanolind, has never been a party to the Denver District Court action and at all times pertinent hereto was a resident of Oklahoma and was at no time within the borders of the State of Colorado. One of the purposes of taking Solliday's deposition was to obtain evidence in support of one of the several defenses raised in the case pending in the Denver District Court, such defense being that various officials of Stanolind were dealing on their own accounts in mineral and royalty interests, and further that there was no company policy prohibiting such activities as evidenced by the fact that various officials of stanolind themselves engaged in the acquisition of such interests for their own accounts.

After the entry of the order of September 11, 1956, directing Solliday to produce his income tax returns for inspection, he petitioned this court for an order upon the district court to show cause why it should not be prohibited from enforcing its order upon him to produce his income tax returns for inspection. Solliday, though not a party to the District Court action, also proceeded in a separate action, Solliday v. Umbach, No. 18147, to sue out a writ of error in this court, 313 P.2d 1005, his attorneys stating they could not determine the precise procedure to be followed, this being a case of first impression.

In support of his petition for prohibition Solliday urges that the District Court order complained of was issued without jurisdiction; is not authorized by the Colorado Rules of Civil Procedure; is contrary to the due process clause of the Colorado Constitution, Const. art. 2, § 25, and of the Fourteenth Amendment to the United States Constitution; that it violates the provisions of the Colorado Constitution prohibiting unreasonable searches and seizures Const. art. 2, § 7; that it impairs the confidential character of his income tax returns; and that his proper remedy is relief in the nature of prohibition rather than by writ of error.

Prior to Solliday's petition seeking relief in this court Stanolind filed a motion to vacate the order to enforce discovery, which motion was denied by the trial court. Stanolind alleged therein that Solliday was a resident of Tulsa, Oklahoma; was not a party to this action and was not before the court; that the court had no jurisdiction over such a witness; that the deposition was to be taken in Tulsa, Oklahoma, pursuant to the dedimus issued out of the Colorado court and that the subpoena duces tecum referred to as issued by a notary public in Tulsa, Oklahoma, was issued to a person over whom the Colorado court had no jurisdiction or control or authority in the premises. Stanolind further alleged that no good cause for the inspection of the personal income tax returns of Solliday was shown; that the income tax returns were Solliday's personal private papers and were not in the possession, custody or control of Stanolind and were not a part of its records. The claim was then made that the returns are confidential and privileged and that the witness so claimed at the taking of his deposition in Tulsa, Stanolind asserting that the attempt to inspect said witness' personal income tax returns was to embarrass, oppress and harass Solliday and was not made in good faith.

Though no mention is made thereof in the pleadings in this court we will proceed to treat the appearance of Solliday by his counsel as a special appearance for the purpose only of challenging the jurisdiction of the Colorado courts over him.

The first question to be determined is:

May a party under the facts herein presented seek relief in this court by way of an Order to Show Cause and for Relief in the Nature of Prohibition?

This question is answered in the affirmative. We only recently reaffirmed the proposition that under our Rules of Civil Procedure an aggrieved party may petition this court for relief when an inferior tribunal has allegedly exceeded its jurisdiction and no plain, speedy and adequate remedy exists and that such is a matter of great public importance. Stull v. District Court, 135 Colo. ----, 308 P.2d 1006, decided March 18, 1957. We also held in that case that Rules 106 and 116 are to be construed together.

The relief granted by this court under the rules after an Order to Show Cause is at issue is now denominated 'Relief in the Nature of Prohibition'.

Solliday's pleadings here make out a prima facie case for the relief sought. In this case we consider the district court as lacking jurisdiction rather than its acts being an erroneous exercise thereof. See Leonard v. Bartels, 4 Colo. 95.

The second question to be determined is:

Has a District Court in Colorado, in a suit pending before it, jurisdiction to order and compel a witness, not a party to the suit, domiciled and residing in a foreign state, to appear in the foreign jurisdiction and give testimony by deposition and to furnish his personal income tax returns at said hearing by virtue of a dedimus issued in Colorado and a subpoena duces tecum issued in the foreign state?

This question is answered in the negative. To resolve this point involving enforcement of discovery proceedings it is necessary for us to consider the Rules of Civil Procedure, our statutes and the applicable Oklahoma statute as applied to the facts. Defendants' ingenious premise that they were sued by a foreign corporation in Colorado, therefore all of the plaintiff's officers and employees located and domiciled outside Colorado are subject to the jurisdiction of our courts, must fail. We know of no such rule of law in this state or elsewhere. See Wigmore on Evidence, 2d Ed., Section 2195, Subdivision (2). Corporations are sui generis and a suit against a principal is not a suit against its agents or employees. Obviously no employer, corporate or otherwise, can compel its personnel to travel to a foreign state, or furnish his private papers for the use of its opponents. Such would be a strange rule indeed. Our Rules do provide, however, that under limited circumstances if corporate officials fail to testify in a suit concerning the corporation, as may be required by our courts, then certain pleading penalties may be invoked against the corporation. Rule 37 R.C.P. Reasonable discretion of course must be exercised in applying this rule and under the facts so far presented, penalties against Stanolind would not be justified thereunder.

Once this beclouding and false premise is eliminated an application of the proper facts to the law shows that the district court was proceeding without jurisdiction in this matter and that Solliday is entitled to his requested relief.

The applicable Oklahoma statute is entitled: 'Uniform Foreign Depositions Act' which reads:

' § 461. Citation of Act

'This may be cited as the Uniform Foreign Depositions Act. Laws 1951, p. 25, § 1.' 12 O.S.1951 § 461.

Title of Act:

'An Act relating to depositions; providing for the compulsion of testimony in connection therewith; providing for its interpretation as a uniform Act; repealing such legislation as is inconsistent therewith; and declaring an emergency.' Laws 1951, p. 25.

' § 462. Compelling witnesses to appear and...