Tucker v. New Orleans Laundries, Inc.

• Decision Date: 17 September 1962
• Docket Number: No. 286,286
• Citation: 145 So.2d 365
• Court: Court of Appeal of Louisiana — District of US
• Parties: Mrs. Odile V. Hubert TUCKER as a Stockholder of Crescent City Laundries, Inc., etc., v. NEW ORLEANS LAUNDRIES, INC., Crescent City Laundries, Inc. et al. (two cases).

Page 365

145 So.2d 365

Mrs. Odile V. Hubert TUCKER as a Stockholder of Crescent City Laundries, Inc., etc., v. NEW ORLEANS LAUNDRIES, INC., Crescent City Laundries, Inc et al. (two cases).

No. 286.

Court of Appeal of Louisiana, Fourth Circuit.

Sept. 17, 1962.

Rehearing Denied Oct. 15, 1962.

Certiorari Denied Dec. 10, 1962.

Richard A. Dowling, New Orleans, and William G. McRae, Atlanta, Ga., for plaintiff-appellant.

Sidney A. Wolff, New York City, Dufour, St. Paul, Levy & Marx, Leonard B. Levy, Lemle & Kelleher, Charles Kohlmeyer, Jr., Herbert S. Weil, New Orleans, Joseph F. Haas, Atlanta, Ga., Milling, Saal, Saunders, Benson & Woodward, H. H. Hillyer, Jr., Deutsch, Kerrigan & Stiles, Rivet & Rivet, Charles J. Rivet, Augusto P. Miceli, Louis A. Pilie, New Orleans, for defendants-appellees.

Before AYERS, DAWKINS and ALLEN, JJ.

JAMES R. DAWKINS, Judge ad hoc.

The two cases before us on this appeal are styled 'Mrs. Odile V. Hubert Tucker Etc. vs. New Orleans Laundries, Inc.', one bearing No. 310--040 on the docket of the Civil District Court in and for the Parish of Orleans, State of Louisiana, and the other bearing No. 315--261 on the docket of said Court. They were consolidated in the trial Court for the purpose of the trial of the exceptions, motions and pleas filed in that Court. Likewise, they have been consolidated in this Court.

After the filing of the two consolidated cases in the District Court and after the exceptions, motions and pleas, now before us, had been decided by the District Judge, the plaintiff, Mrs. Odile V. Hubert Tucker died, and by proper motion, her universal heirs were substituted as plaintiffs. The suits are now being prosecuted by Helen Poladura and Rita Poladura, universal heirs of of Mrs. Odile V. Hubert Tucker, as stockholders of Crescent City Laundries, Inc., on their behalf, and on behalf of others similarly situated, and on behalf of Crescent City Laundries, Inc.

The events which gave rise to the issues now before the Court in these consolidated cases, began in 1928. Since that time, and beginning in 1943, several suits have been filed in both the Federal and State Courts involving various and sundry related matters. For a review of the litigation that has dealt with issues involving the claim of Crescent City Laundries, Inc., hereinafter called 'Crescent', to certain stock of the National Linen Service Corporation, see: Kohler v. McClellan, 156 F.2d 908 (5th Cir.1946); Kohler v. McClellan, 77 F.Supp. 308 (D.C.1948); Kohler v. Humphrey, 174 F.2d 946 (5th Cir.1949); Tucker v. New Orleans Laundries, Inc., 90 F.Supp. 290 (D.C.1949); Tucker v. National Linen Service Corporation, 92 F.Supp. 502 (D.C.1950); Tucker v. New Orleans Laundries, Inc., 188 F.2d 263 (5th Cir.1951); Tucker v. National Linen Service Corporation, 188 F.2d 265 (5th Cir.1951); Tucker v. National Linen Service Corporation, 200 F.2d 858 (5th Cir.1953); Tucker v. New Orleans Laundries, Inc., 238 La. 207, 114 So.2d 866 (La.Sup.Ct., 1959).

After the suits were filed in the Civil District Court for the Parish of Orleans, the various defendants filed certain motions, exceptions and pleas. The trial judge maintained the exceptions of no cause of action and res adjudicata and dismissed the suits. An appeal was taken to the Supreme Court of Louisiana, and the judgment of the trial court was reversed and the case were sent back for further proceedings. The Supreme Court judgment reversing the judgment of the Court below was filed and made the judgment of the District Court on November 18, 1959.

Thereafter, citations were caused to be issued and served upon certain defendants in No. 315--261 who had not been previously cited and they filed motions to dismiss said case because the plaintiff had allowed more than five years to elapse without having taken any steps to prosecute the action as to them. Other defendants filed pleas or exceptions of prescription and no right of action. All motions and exceptions in both cases were consolidated for trial, evidence was adduced and concluded, and judgment was rendered maintaining the exceptions of no right of action, the various pleas of prescription, and the motions to dismiss the action as to some of the defendants, and the plaintiffs have appealed. The appeal was lodged again in the Supreme Court of Louisiana, but upon the Constitutional change of jurisdiction as to our appellate courts effected in 1960, the transcript was transferred to this Court for our decision.

A full and detailed statement of the facts and circumstances involved in these cases is set out in the opinion written by Justice Hawthorne when the decree relative to the exceptions of no cause of action and res adjudicata was rendered. See Tucker v. New Orleans Laundries, Inc., 238 La. 207, 114 So.2d 866. Thus, we do not deem it necessary to reiterate all of the detailed facts and circumstances involved. It is our opinion that our learned brother of the Civil District Court has succinctly and sufficiently stated the facts necessary for the determination of the issues before the Court, when he stated: 'Suit No. 310--040 was filed November 30, 1951. It deals with the organization of National Linen Service Corporation in 1928. It is alleged that of 150,000 shares of common stock issued upon the organization of National Linen Service Corporation, 77,735 shares were due Crescent, of which 54,187 shares were diverted pursuant to a conspiracy alleged in the complaint. It is further alleged (Paragraph 57(d), supplemental petition) that in 1942 the Directors of Crescent entered into a conspiracy with some of the persons, who participated in the 1928 fraudulent diversions, to protect them from having to account to Crescent, and to divert a large portion of Crescent's remaining assets to some of the conspirators.

'It is alleged that the conspiracy included: (1) the formation of a Bondholders' Protective Committee to represent the $1,700,000.00 of bonds of Crescent which had been in default for some years; (2) the foreclosure via ordinaria filed in this Court on April 2, 1942 in Suit No. 244,180 and the confirmation of a default judgment on April 28, 1942; (3) the issuance of a writ of fieri facias to the Sheriff on June 2, 1942; (4) the sale by the Sheriff on July 9, 1942, following alleged fraudulent appraisement and improper advertisement; and (5) the Sheriff's Deed to the Bondholders' Protective Committee on July 10, 1942.

'Suit No. 315--261 was filed July 7, 1952, and is only an attack upon the Sheriff's sale of July 9, 1942, and the Sheriff's Deed as of July 10, 1942. The attack is based upon the same allegations as contained in Suit No. 310--040. This suit seeks recovery of the items described in the advertisement and Sheriff's Deed and in the alternative, the value thereof.

'On July 2, 1943 a stockholders' derivative action was filed in the United States District Court for the Eastern District of Louisiana entitled, 'Max N. Kohler vs. Byron C. McClellan, et al.' Civil Action No. 753. This suit was dismissed, and an appeal was taken to the United States Court of Appeal for the Fifth Circuit (156 F.2d 908, July 2, 1946). Rehearing denied August 8, 1946. Certiorari denied--329 U.S. 781, 67 Sup.Ct. 203, November 18, 1946.

'On February 3, 1947, Max Kohler filed a second supplemental and amended complaint which is reported in Kohler v. McClellan, 77 F.Supp. 308 (April 21, 1948), affirmed Kohler v. Humphrey, 174 F.2d 946. (January 10, 1949); rehearing denied July 21, 1949. In the second Kohler case Kohler changed his theory from a stockholder's derivative action to an individual tort action, as is evidenced by the holding of Judge Borah in 77 F.Supp. 308, 312 and by Judge Sibley in 174 F.2d 946, 948.

'The first Tucker case (Tucker v. New Orleans Laundries, Inc. et al., United States District Court, Civil Action 2509) was filed August 8, 1949. From the termination of the first Kohler case on November 18, 1946, until the filing of the first Tucker case on August 8, 1949, there was no litigation pending on behalf of Crescent involving the subject matter of this litigation. Since the filing of the first Tucker suit on August 8, 1949, numerous suits have been filed by the plaintiff on behalf of Crescent in both the Federal and State Courts involving the subject matter of this litigation. None of these latter actions is pertinent to the Exceptions pending now.'

It is our opinion that the most serious issue raised by the defendants in both of these suits is the right of the plaintiffs to assert the claim that they here attempt to assert, which is the issue raised by the exception of no right of action, for the defendants contend that the claims for the National Linen stock passed to New Orleans Laundries, Inc. by virtue of the Sheriff's sale in 1942. An understanding of the facts as alleged in the petitions (which must be taken as true) is necessary to understand this issue. The District Judge related such facts as follows: 'Laundry and Dry Cleaning Service, Inc., the predecessor of Crescent, owned and operated laundries and a linen supply business prior to 1928. In that year National Linen Service Corporation (hereinafter referred to as 'National') was incorporated. Immediately upon incorporation, Southern Linen Supply Company, Atlanta Laundries, Inc. and Crescent conveyed their linen supply business to National in consideration of the issuance by it of certain preferred stock and of $150,000 shares of its common stock, constituting the entire issue of common of that company. The stock was issued to voting trustees and voting trust certificates were distributed. It is claimed that a substantial portion (54,187 shares) of the National common stock was diverted to Officers and Directors of Crescent and certain other alleged co-conspirators.

The petitions further allege that to conceal the diversions of the National stock, some of the defendants entered into a conspiracy to wreck Crescent, and to put beyond...