Coopman v. Superior Court

The admitted facts reflect that petitioner is, and at all times relevant was, the president of Nevada Electronics, Inc., a Nevada corporation; that he is a resident of the State of California, but he is not in this state for the purpose of transacting business for the corporation; that the corporation has at no time conducted business in the State of California, nor does it have its books or records in this state; and that all of the affairs of that corporation are handled by and under the control of agents and attorneys of the corporation located at Reno, Nevada. Neither petitioner, nor the corporation, is a party to the pending divorce actions.

The lower court granted the motion, and petitioner filed his petition herein. Relief was summarily denied in regard to the questions which the lower court ordered answered. There was no clear showing that they were not designed to produce, or at least to lead to other questions which would produce information concerning “the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts” (Code Civ. Proc., §2016, subd. (b)) concerning the nature, extent and value of the community property of the parties involved in the divorce action and the ability of the defendant therein to pay alimony. (See Code Civ. Proc., § 2016, subd. (b); and

Real party in interest points to that portion of section 1985 of the Code of Civil Procedure which provides: “It [the subpoena] may also require him to bring with him any books, documents, or other things under his control which he is bound by law to produce in evidence.” She asserts that petitioner, as president of the corporation, has control of its records, and may therefore be required to produce them. (See Filipoff v. Superior Court (1961) 56 Cal.2d 443 , 449-450 [ 15 Cal.Rptr. 139 , 364 P.2d 315 ].) The solution is not so simple. In seeking the corporate records real party in interest is in effect seeking to take the deposition of the corporation. (See Chronicle Publishing Co. v. Superior Court (1960) 54 Cal.2d 548 , 571-574 [ 7 Cal.Rptr. 109 , 354 P.2d 637 ] ; and see McLain v. Superior Court (1950) 99 Cal.App.2d 109 , 115-117 [ 221 P.2d 300 ].) Petitioner’s alleged control over the records, as president, is not derived from any facts having a situs in or from the law of this state, but is entirely dependent on the law of the State of Nevada. It is necessary therefore to determine whether or not the corporation itself is amenable to process within this state. In Riverside etc. Mills v. Menefee (1914) 237 U.S. 189 at pages 194-195 [ 35 S.Ct. 579 , 59 L.Ed. 910 ], the applicable rule is stated as follows: “ [I]t is indubitably established that the courts of one State may not without violating the due process clause of the Fourteenth Amendment, render a judgment against a corporation organized under the laws of another State where such corporation has not come into such State for the purpose of doing business therein, or has done no business therein, or has no property therein, or has no qualified agent therein upon whom process may be served; and that the mere fact that an officer of a corporation may temporarily be in the State, or even permanently reside therein, if not there for the purpose of transacting business for the corporation or vested with authority by the corporation to transact business in such State affords no basis for acquiring jurisdiction or escaping the denial of due process under the Fourteenth Amendment which would result from decreeing against the corporation upon a service had upon such an officer under such circumstances.”

Where the converse is true and the foreign corporation is for many purposes a resident of a second state because it holds its directors’ meetings within that state, has its principal place of business and does part of the corporate business within that state, and the directors reside within that state, the court of the second state may exercise jurisdiction over the corporation and its resident officers and directors to compel the perform

anee of acts without the state. (Hobbs v. Tom Reed Gold Min. Co. (1913) 164 Cal. 497 , 500-501 [ 129 P. 781 , 43 L.R.A. N.S. 1112 ].) The court in that case, however, recognized: “Our personal writs cannot run to persons who are not present in the state and they cannot be enforced upon real property beyond its limits. The writ of mandate cannot be invoked to compel performance of an act which cannot be performed within this state but must be done, if at all, at some place in another state. So far as these objections go the refusal of the writ was proper.” (164 Cal. at p. 500.) So here, in the absence of jurisdiction over the corporation, our courts cannot compel an officer over whom only personal and not representative jurisdiction has been acquired to produce the records of a foreign corporation, and thus do indirectly that which could not be done directly.

An examination of numerous cases dealing with the power to compel the production of records held outside the jurisdiction by process executed locally (see eases collected Annotation (1962) 82 A.L.R.2d 1403 ) reflects that enforcement has been predicated (1) upon the fact that the records belonged to a party to the action over whom or which the court had jurisdiction, or (2) the owner of the records was doing business within the jurisdiction and thereby subject thereto. Even in the latter cases some restraint has been exercised where branch operations are concerned and the records do not apply to transactions within the jurisdiction. (See Ings v. Ferguson (2d Cir. 1960) 282 F.2d 149 ,151-153.)

The situation is closely similar to that in John Deere Co. v. Cone (1962) 239 S.C. 597 [ 124 S.E.2d 50 ], There an intermediate court ruled that by service upon an agent designated pursuant to statute by a foreign corporation for the receipt of process, the South Carolina domestic relations court, contrary to its own ruling, had acquired jurisdiction (1) to require the production of original corporate records concerning the employment of the ex-husband by the corporation’s Atlanta, Georgia branch, (2) to order the corporation to withhold from his salary and pay to the former wife, or her attorney, current and delinquent alimony, and (3) to compel the president of the corporation to answer certain written interrogatories at Moline, Illinois. The Supreme Court of South Carolina stated: “The rule to show cause, although directed to John Deere Plow Company, was in reality a subpoena duces tecum insofar as it purported to require production in the Juvenile-Domestic Relations Court of the company’s original records, admittedly located in another state. In that aspect the attempted proce

dure was both faulty and ineffectual. It was faulty because a subpoena duces tecum should be directed to the witness in whose control are the records or documents sought to be brought into court. Of. Code 1952, Section 15-1154, relating to the issuance of such subpoenas by the Judge of the Juvenile-Domestic Relations Court. The procedure here attempted cannot be sustained as the permissible examination of an adverse party under the discovery provisions of Title 26, Chapter 7, of the 1952 Code, because the company was not a party to the action. It was ineffectual as a subpoena because the courts of this state are without jurisdiction over persons or property outside of its territory. Pennoyer v. Neff, 95 U.S. 714 [ 24 L.Ed. 565 ]; Tillinghast v. Boston & P. R. Lumber Co., 39 S.C. 484 [ 18 S.E. 120 , 22 L.R.A. 49 ].” (Pp. 602-603.)

In respect to the interrogatories the court ruled: “Having no jurisdiction over persons in another state, the Juvenile-Domestic Relations Court was without power to compel Mr. Hewitt, the President of John Deere Company, to appear at Moline, Illinois, and there answer the proposed interrogatories. That motion was properly denied.” (P. 604; and also see People v. Burgess (1927) 244 N.Y. 472 , 473 [ 155 N.E. 745 ].)

Although in this case petitioner is alleged to have control of the corporate records, he can only exercise that control through the powers conferred upon him by Nevada law. The service here is therefore just as ineffectual, if not as faulty, as that in the case last cited.

Real party in interest is not without a remedy. She may seek the aid of the Nevada courts in securing- such evidence as lies within that state. (See Ings v. Ferguson, supra, 282 F.2d 149 , 151-153; Code Civ. Proc., §§2024, 2025; and cf. idem. § 2023 and Nev. Rev. Stats. § 48.260 et seq.) The assertion that such proceedings may not be as revealing as proceedings under local law because of Nevada rules as to the scope of such an examination, or Nevada policy as to the disclosure of specific corporate information, is not justification for exercising jurisdiction where none exists. This state cannot impair the right of Nevada to control the property and affairs of an entity which it has created, and which has never left the protection of the parental domicile.

Let the peremptory writ issue permanently restraining respondent from enforcing that portion of the order of July 29, 1965, purporting to require petitioner to produce records of the Nevada corporation.

Sullivan, P, J., and Molinari, J., concurred.