First Equity Corporation V. Utah State University and Donald A
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Brigham Young University Law School BYU Law Digital Commons Utah Supreme Court Briefs 2001 First Equity Corporation v. Utah State University and Donald A. Carlton : Appellant's Brief Utah Supreme Court Follow this and additional works at: https://digitalcommons.law.byu.edu/byu_sc2 Part of the Law Commons Original Brief Submitted to the Utah Supreme Court; digitized by the Howard W. Hunter Law Library, J. Reuben Clark Law School, Brigham Young University, Provo, Utah; machine-generated OCR, may contain errors. Vernon B. Romney, Attorney Genreral; David L. Wilkinson; Attorneys for Respondent. Johnson and Spackman; Attorneys for Appellant. Recommended Citation Brief of Appellant, First Equity Corporation v. Utah State University and Donald A. Carlton, No. 13798.00 (Utah Supreme Court, 2001). https://digitalcommons.law.byu.edu/byu_sc2/942 This Brief of Appellant is brought to you for free and open access by BYU Law Digital Commons. It has been accepted for inclusion in Utah Supreme Court Briefs by an authorized administrator of BYU Law Digital Commons. Policies regarding these Utah briefs are available at http://digitalcommons.law.byu.edu/utah_court_briefs/policies.html. Please contact the Repository Manager at [email protected] with questions or feedback. IN THE SUPREME COURT OF RECEIVED THE STATE OF UTAH LAW LIBRARY 30MAR1S73 BRIGm YC'JMG 1M'7L5S!7Y FIRST EQUITY CORPORATION, a Florida J. Reuhan Ch;:: lew School corporation, Plaintiff-Appellant, vs. UTAH STATE UNIVERSITY, a body politic and corporate, CASE NO. 13798 Defendant-Respondent, and DONALD A. CATRON, an individual, Defendant. APPELLANT'S BRIEF IN SUPPORT OF PETITION FOR REHEARING Petition for Rehearing on Opinion of the Supreme Court of Utah Filed on December 23, 1975. JOHNSON & SPACKMAN 1320 Continental Bank Building Salt Lake City, Utah 84101 Attorneys for Plaintiff-Appellant VERNON B. ROMNEY Attorney General DAVID L. WILKINSON Special Trial Counsel 236 State Capitol Building FILED Salt Lake City, Utah 84114 Attorneys for Defendant-Respondent JAN 26 W6 Utah State University ^ T:::T^ IN THE SUPREME COURT OF THE STATE OF UTAH FIRST EQUITY CORPORATION, a ) Florida corporation, ) ) PETITION FOR Plaintiff-Appellant, ) REHEARING ) AND BRIEF vs. ) UTAH STATE UNIVERSITY, a body ) politic and corporate, ) Defendant-Respondent, ) and ) DONALD A. CATRON, an individual, ) Defendant. ) Appellant First Equity Corporation respectfully petitions the Court for a Rehearing of the appeal in the above-captioned case on the following grounds: The opinion of the Court, filed December 23, 1975, does not deal with a major issue considered by the court below and raised on appeal, namely, whether or not non-appropriated, non-public funds in the possession of USU could legally have been used for investment in common stock, thus rendering the University's con- tracts with its agent First Equity not ultra vires. DATED this 26th day of January, 1976. JOHNSON & SPACKMAN By c^Wt^?//y- MJtdatn Christine M. Durham CERTIFICATE OF SERVICE Certify I hand delivered a true and exact copy of the fore going Petition for Rehearing and Brief to the Office of the Attorney General, Utah State Capitol Building, Salt Lake City, Utah, this 26th day of January, 1976. (jA/tofkiif fo< £WW? Christine M. Durham IN THE SUPREME COURT OF THE STATE OF UTAH FIRST EQUITY CORPORATION, a Florida corporation, Plaintiff-Appellant. vs. UTAH STATE UNIVERSITY, a body politic and corporate, CASE NO. 13798 Defendant-Respondent, and DONALD A. CATRON, an individual, Defendant. APPELLANT'S BRIEF IN SUPPORT OF PETITION FOR REHEARING Petition for Rehearing on Opinion of the Supreme Court of Utah Filed on December 23, 1975. JOHNSON & SPACKMAN 1320 Continental Bank Building Salt Lake City, Utah 84101 Attorneys for Plaintiff-Appellant VERNON B. ROMNEY Attorney General DAVID L. WILKINSON Special Trial Counsel 236 State Capitol Building Salt Lake City, Utah 84114 Attorneys for Defendant-Respondent Utah State University TABLE OF CONTENTS Pa£e STATEMENT OF FACTS 1 ARGUMENT POINT I. THE OPINION OF THIS COURT FILED ON DECEMBER 23, 1975 DOES NOT DEAL WITH THE ISSUE RAISED IN THIS APPEAL IN REGARD TO THE POWER OF UTAH STATE UNIVER SITY TO INVEST NON-APPROPRIATED FUNDS IN SECURI TIES OTHER THAN THOSE LISTED IN SECTION 33-1-1, UTAH CODE ANNOTATED (1953), AND A REHEARING OF THAT QUESTION IS APPROPRIATE. 2 POINT II. THE COURT BELOW ERRED IN GRANTING UTAH STATE UNIVERSITY'S CROSS-MOTION FOR SUMMARY JUDGMENT BECAUSE UTAH STATE UNIVERSITY HAD POWER TO INVEST FUNDS RECEIVED FROM INDIVIDUAL GRANTS OR DEVELOP MENT CONTRACTS IN COMMON STOCK AND ITS CONTRACTS WITH FIRST EQUITY WERE NOT ULTRA VIRES. 3 POINT III. FIRST EQUITY HAD NO OBLIGATION TO ASCERTAIN WHETHER OR NOT THE FUNDS USED BY UTAH STATE UNIVERSITY TO PURCHASE STOCK WERE APPROPRIATED OR NON-APPROPRIATED, ACCORDING TO THE PROVISIONS OF SECTION 21-1-5. UTAH CODE ANNOTATED (1953) APPLI CABLE TO THIS CASE. 9 CONCLUSION 12 i INDEX OF CASES AND AUTHORITIES CITED Cases Pages Sendak v. The Trustees of Indiana University, 260 N.E. 2d 601 (1970) 6-8 Constitution, Statutes and Regulations UTAH CODE ANNOTATED (1953), Sections: 21-1-1, et. se& . 11 22-1-5 11 33-1-1 2,3,5,10," 33-2-1 7,8 33-1-3 10 51-7-1, et seq 4,7 51-7-13 7 53-32-4 3,4,5,7-8, 53-48-10(5) 10 53-48-20 5 53-48-20(3) 10,13 ii IN THE SUPREME COURT OF THE STATE OF UTAH FIRST EQUITY CORPORATION, a Florida corporation, Plaintiff-Appellant, vs. UTAH STATE UNIVERSITY, a body politic and corporate, Defendant-Respondent, CASE NO. 13798 and DONALD A. CATRON, an individual, Defendant. APPELLANTS BRIEF IN SUPPORT OF PETITION FOR REHEARING STATEMENT OF FACTS Because of the extensive treatment of the facts heretofore presented in this appeal, Appellant respectfully refers the Court to its own summary of the facts in the first five paragraphs of the Court's Opinion filed on December 23, 1975, and to the Statement of Facts contained in pages 2-12 of Appellant's Brief filed prior to oral argument before this Court. -1- ARGUMENT POINT I THE OPINION OF THIS COURT FILED ON DECEMBER 23. 1975. DOES NOT TREAT A MAJOR ISSUE RAISED BY THIS APPEAL IN REGARD TO THE POWER OF UTAH STATE UNIVERSITY TO INVEST NON-APPROPRIATED. NON-PUBLIC FUNDS IN SECURITIES OTHER THAN THOSE LISTED IN SECTION 33-1-1. UTAH CODE ANNOTATED (1953). AND A REHEARING ON THAT QUESTION IS APPROPRIATE AND NECESSARY. The opinion filed by this Court in the appeal brought by First Equity specifically states: "[ t]he direct question presented here is whether or not Utah State University is empowered to invest in common stock with public funds." It appears that the Court ruled, on that question without considering the issues raised in the argu ments and briefs on appeal as to the lawfulness of investments in common stock with funds from private, non-public sources. The opinion further indicates that "USU has no specific designated power from the Constitution or the Legislature to invest its funds in securities outside those declared lawful by Section 33-1-1 and investments in common stock are ultra vires acts." In light of the fact that the opinion does not discuss specifically those statutes which indicate a power to invest non-appropriated funds in common stock, it is appropriate for the Court to grant a rehearing on that question. Further, if this Court determines that any funds, regard less of their limited nature, could have been used by the University to purchase common stock, the Orders of the Court below must be reversed. -2- POINT II THE COURT BELOW ERRED IN GRANTING UTAH STATE UNIVERSITY'S CROSS-MOTION FOR SUMMARY JUDGMENT BECAUSE UTAH STATE UNIVERSITY HAD POWER TO INVEST FUNDS RECEIVED FROM INDIVIDUAL GRANTS OR DE VELOPMENT CONTRACTS IN COMMON STOCK, AND ITS CONTRACTS WITH FIRST EQUITY WERE THEREFORE NOT ULTRA VIRES. Respondent Utah State University has argued in this appeal that prior to the enactment of Section 33-1-1 in 1939, the Univer sities and other public corporations had no power to invest their funds in anything in the absence of another specific code section detailing a permissible investment. See Respondent's Reply Brief, page 9. In support of that contention, Respondent refers to a 1936 opinion from the Utah Attorney General to the State Auditor to the effect that public monies, except for redemption funds, could not be legally invested in anything, but had to be deposited in selected banks. Appellant does not doubt the existence or con tents of that opinion, or that it may have been motivated in part by a reaction to depressed economic conditions, as Respondent sug gests in a footnote. However, Appellant points out that the opinion was clearly in conflict with a statute in full force and effect in 1936, which had been enacted eight years earlier. Section 53-32-4, Utah Code Annotated (1953) specifically provides in part: The Utah State Agricultural College [the University] in its corporate capacity may take by purchase, grant, gift, devise or bequest any property, real or personal for the use of any department of the college and for any purpose appropriate to the objects of the college. -3- It may convert property received by gift, grant, devise or bequest and not suitable for its uses into other property so available or into money. Such property so received or converted shall be held, invested or managed and the proceeds there of used by the board of trustees for the purposes and under the conditions prescribed in the grant or donation. [Emphasis added] The University was thus given the power to receive "any prop erty, real or personal11, to convert that property into money, and to invest and manage it.