Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

SAYLOR v. LINDSLEY

June 13, 1967

Saylor
v.
Lindsley, et al.


Irving Ben Cooper, District Judge.


The opinion of the court was delivered by: COOPER

Irving Ben COOPER, District Judge:

Plaintiff, a stockholder of defendant Tonopah Mining Co. of Nevada, brings this derivative action. He asserts, on behalf of his corporation, claims against its Directors, alleging violations of the Securities Act of 1933, 15 U.S.C. sec. 77a et seq., the Securities Exchange Act of 1934, 15 U.S.C. ยง 78a et seq. and the Investment Company Act of 1940, 15 U.S.C. sec. 80a-1 et seq. Defendants Lindsley, Stott, Zeckhausen, Northfield Mines, Inc. and Tonopah Mining Co. move for summary judgment, asserting that the claim is barred by res judicata and the statute of limitations.

 We find that as to the claim of res judicata there exists no genuine issue of fact. The only evidentiary affidavit submitted by plaintiff, that of Michael J. McLaughlin, controverts no fact put forth by defendants and essential to this decision. Summary disposition is accordingly appropriate.

 Res Judicata

 A prior stockholders action was instituted in this Court on July 26, 1957 by Ray Hawkins, a Tonopah stockholder, against most of all the present defendants. That action was dismissed with prejudice by Chief Judge Ryan on July 27, 1961, and an appeal taken therefrom to the Court of Appeals was dismissed on October 23, 1961.

 There is no question that the cause of action pleaded in the Hawkins complaint is, for purposes of the doctrine of res judicata, the same cause of action set forth by Saylor. An examination of both complaints reveals that both actions are based upon the same series of transfers made by the defendant directors, allegedly in breach of their fiduciary duties. Plaintiff's attorney, moreover, concedes in his Memorandum that both actions are based upon the same operative facts.

 Plaintiff now contends that the causes of action are different in that additional legal theories for recovery are now propounded. This is contrary to basic principles of res judicata. A judgment in the first action extinguishes all claims which were or might have been pleaded. Pleading additional theories of recovery in a subsequent action does not destroy the underlying identity of the claim. Cromwell v. County of Sac, 94 U.S. 351, 353, 24 L. Ed. 195 (1877); Koblitz v. Baltimore & Ohio Railroad Co., 164 F. Supp. 367 (S.D.N.Y. 1958), aff'd 266 F.2d 320 (2d Cir. 1959), cert. denied, 361 U.S. 830, 4 L. Ed. 2d 72, 80 S. Ct. 80 (1959); Mathews v. New York Racing Asso., 193 F. Supp. 293 (S.D.N.Y. 1961).

 The applicable principle was set forth in Williamson v. Columbia Gas & Electric Corp., 186 F.2d 464, 470 (3rd Cir. 1950), cert. denied 341 U.S. 921, 95 L. Ed. 1355, 71 S. Ct. 743 (1951).

 
The plaintiff having alleged operative facts which state a cause of action because he tells of defendant's misconduct and his own harm has had his day in court. He does not get another day after the first lawsuit is concluded by giving a different reason than he gave in the first for recovery of damages for the same invasion of his rights. The problem of his rights against the defendant based upon the alleged wrongful acts is fully before the court whether all the reasons for recovery were stated to the court or not.

 Chief Judge Ryan's dismissal of the Hawkins complaint on June 22, 1961 was amended on July 27, 1961 to specifically direct that the dismissal was to be "with prejudice." Such a dismissal with prejudice is a bar to a subsequent action. England v. Automatic Canteen Co. of America, 349 F.2d 988 (6th Cir. 1965), cert. denied, 383 U.S. 925, 15 L. Ed. 2d 845, 86 S. Ct. 928 (1966); Smoot v. Fox, 340 F.2d 301 (6th Cir. 1964).

 The orders signed by Chief Judge Ryan do not indicate the ground upon which he based his decision. However, the defendants' papers urged two reasons for dismissal: (1) Lack of prosecution (2) Failure to comply with the Court's order to post a security bond.

 Under the express provisions of Rule 41(b), a dismissal for either of these reasons operates as an adjudication upon the merits unless the court otherwise specifies. Chief Judge Ryan, amending his order solely to specify "prejudice," made his intention clear.

 We find plaintiff's reliance upon Costello v. United States, 365 U.S. 265, 5 L. Ed. 2d 551, 81 S. Ct. 534 (1961) to be inapt. The Supreme Court there specifically approved a dismissal for either failure to prosecute or failure to obey a court order as operating as an adjudication upon the merits. These dismissals - with the others enumerated in Rule 41(b) -

 
" . . . primarily involve situations in which the defendant must incur the inconvenience of preparing to meet the merits because there is no initial bar to the Court's reaching them. It is therefore logical that a dismissal on one of these grounds should, unless the Court otherwise ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.