Smith v. Sperling

PETITIONER: Smith
RESPONDENT: Sperling
LOCATION: Congress

DOCKET NO.: 316
DECIDED BY: Warren Court (1957-1958)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 354 US 91 (1957)
ARGUED: Mar 27, 1957 / Mar 28, 1957
DECIDED: Jun 10, 1957

Facts of the case

Question

Media for Smith v. Sperling

Audio Transcription for Oral Argument - March 27, 1957 in Smith v. Sperling

Audio Transcription for Oral Argument - March 28, 1957 in Smith v. Sperling

Earl Warren:

Number 316, Charles B. Smith, Petitioner, versus Milton Sperling et al.

Mr. Williams, you may proceed.

Eugene D. Williams:

Mr. Chief Justice and members of the Supreme Court, at the recess yesterday afternoon, I had partially read to the Court the findings upon which we rely in this case and which I considered to be the very gist of the case.

And therefore, I shall, with your permission, proceed to read the further findings which I believe to be pertinent.

Finding 5 which appear on page 76 of the record is as follows.

"That it is not true either as alleged in the complaint or otherwise that all or a majority or any of the board of directors and officers of Warner Brothers Pictures, Inc., wrongfully participated in the acts in the complaint complained of, nor was said board of directors dominated or controlled by Harry M. Warner, Jack L. Warner, Albert Warner, Milton Sperling or anyone or more of them.

It is not true that if demand had been made upon the Warner Brothers Pictures, Inc., that those to whom such application would be made to institute such suit would have been disqualified from faithfully doing their duty as directors and officers of said corporation, because of any matters or facts set forth in said complaint, or otherwise, that no demand was made on the directors of said Warner Brothers Pictures, Inc., to institute this action and that such demand would have been futile, nor was any demand addressed to the stockholders of said corporation that the stockholders of the said corporation were not at the time of the execution of the contract complained of, or at any time, or at all, under the domination or control of the three brothers, Warner.

Nor was said corporation at any time herein referred to in hands or under control, antagonistic to the financial interests of said corporation and its stockholders."

And the court --

Of course, those findings are significant only if domination is a requirement.

Eugene D. Williams:

That's correct.

Because the Court -- if domination is not a requirement, the Court expressly found that a demand would have been futile --

Eugene D. Williams:

Yes.

-- and therefore, the absence of a demand would not officiate the jurisdiction?

Eugene D. Williams:

That's correct, Your Honor.

So that really, the findings beg the question as far as the problem we got here is concerned.

Eugene D. Williams:

Well, I don't know that they begged the question because the problem we have here may turn on the question of domination.

Well, if -- of course, if domination is a prerequisite than the findings, I would suppose you can't get over those.

Eugene D. Williams:

Yes, yes.

Well, of course as I can --

Domination is not a requirement.

This finding is beside the point for this particular purpose.

Eugene D. Williams:

That's correct, Your Honor.

Yes.

Eugene D. Williams:

Now, in connection with this matter of the demand would have been futile.

Counsel has not given Your Honors the complete picture on that.

The record shows, and I believe that -- it's at record page 588, the so-called admissions in connection with the futility of the findings and I think that the examination of the record is important because the record is what we're interested in.

It appears at pages 587 and 586 in which the Court inquired of May, I should assume unless there is some contention expressly made to the contrary that this corporation would never have brought this suit.

Is there any contention to the contrary?

And I say, we don't make such a contention.